1.0 Executive Summary
The purpose of his business plan is to secure a $75,000 business loan for the development of a Brazilian jiu-jitsu gym based in Chevy Chase, Maryland. MD Jiu-Jitsu (“the Company”) was founded by Matthew Deutsch, a noted white belt in the sport of jiu-jitsu. Full scale, revenue, generating operations will commence in the third quarter of this year.
Operations
The business will principally generate its revenues from the ongoing membership driven programs that will provide for unlimited access to the Company’s facilities. The location will be operational six days a week and several sessions will be held during the course of the day. This will allow for rapid onboarding given the level of convenience that is offered to enrollees.
In addition to membership fees, the Company will also provide private lessons. This will be a moderate secondary income center for the business. The Company’s tertiary income will come from the sale of apparel (gis) that is used during the course of Brazilian jiu-jitsu.
The third section of this document will further document the operations of the business.
The Financing
As noted above, the company is currently seeking a business loan of $75,000 to commence operations. This Business Plan assumes that the company will receive an eight-year loan carrying a 7% interest rate. Primarily, the funds will be used for the following:
• Location renovation
• Mats and general FF&E
• Working capital
As the business will produce highly recurring fees of revenue from its membership driven operations, the Company could easily secure ongoing capital in order to expand the business especially if additional locations are going to be established within Maryland. Acquisition of additional capital is not expected to occur within the first five years of operation.
The Future
Through several marketing strategies, MD Jiu-Jitsu will continue to onboard numerous individuals (adults and young athletes), that are seeking to gain a deep understanding of the sport of Brazilian jiujitsu. The Company will on board a number of highly qualified practitioners that will serve as coaches. As noted above, there is the potential to develop additional locations. This is not expected to occur for a significant period of time.
Market Overview
As of this year, the total population of Montgomery County is 1.08 million people among 390,000 households. The median income is $129,000. Approximately 22.5% of the population is under the age of 18. The Total Addressable Market is 243,000 people (among younger people). The Service Addressable Market (SAM) is 100,000 people. The Service Obtainable Market (SOM) is 38,000 people. This presents an enormous market opportunity for MD Jiu-Jitsu.
Revenue Forecasts
2.0 The Financing
2.1 Funds Required
The funding discussed the executive summary will be used as follows:
2.2 Management and Investor Equity
Matthew Deutsh retains a 100% ownership interest in the business.
2.3 Exit Strategies
The divestiture of this Brazilian jiu-jitsu gym would be somewhat complex given that an equally competent practitioner would need to transition the business to their ownership. In the event that Mr. Deutsch wishes to retire or relocate, the Company will work with its staff coaches via a buyout program for the business. The Founder has no intention of selling this business for at least ten years.
3.0 Operations
As discussed in the executive summary, MD Jiu-Jitsu will be actively involved with providing a wide range of instruction specific for the mastery of the sport of Brazilian jiu-jitsu. Over the past 15 years, the sport has become extremely popular among young people as well as adults. It is a unique sport that operates as with a martial art as well as a personal defense system.
The Company intends to charge a fee of $100 per month for unlimited access to the facilities. This will provide for rapid onboarding of clients that have varying time schedules as well as individuals that want to have a more intense experience versus a more passive experience. The Company will automatically charge each member’s credit or debit card on a monthly basis.
Through the expansive number of coaches that will be retained, on an independently contracted basis, the business will produce significant fees from private instruction. It is expected that most of these sessions will be geared towards adults that are looking to refine their skills.
The business will also generate moderate reams of revenue from the sale of apparel that is used during the course of instruction.
4.0 Overview of the Organization
4.1 Registered Name
MD Jiu-Jitsu LLC. The business is registered as a limited liability company in the State of Maryland.
4.2 Commencement of Operations
Revenue generating operations will commence in the third quarter of this year.
4.3 Mission Statement
To provide comprehensive Brazilian jiu-jitsu instruction at the cost-effective price for the Chevy Chase community
4.4 Vision Statement
To become a widely recognized Brazilian jiu-jitsu training facility in the state of Maryland.
4.5 Organizational Objectives
• Implement numerous marketing strategies during the pre-launch phase so that members could be onboarded quickly
• Established relationships with youth athletic directors that will provide ongoing referrals to the location, especially among wrestling coaches.
• Implement numerous protocols to ensure the safety of all participants at MD Jiu-Jitsu.
• Properly retain highly qualified Brazilian jiu-jitsu practitioners that will serve coaches.
• Maintain an expansive online presence that will ensure that when searches for Brazilian jiu-jitsu training facilities are completed, the business can be found quickly.
• Foster a sense of passion within the sport of Brazilian jiu-jitsu among enrollees.
5.0 Market and Industry Analysis
5.1 External Environmental Analysis
This section of the business plan will discuss the current economic climate, the industry, the customer profile, and the ongoing competition that the business will face moving forward.
At this time, economic condition in the United States is moderate. As a result of changing trade policies – there has been a certain degree of volatility introduced to the market. The Federal Reserve as well as major central banks are taking appropriate measures in order to reduce the ongoing inflation risks associated with this matter.
However, MD Jiu-Jitsu will only face modest economic challenges despite the current climate. Most importantly, the Company will produce highly recurring streams of revenue from its ongoing membership operations. Furthermore, Chevy Chase is an extremely wealthy area that will fully support the operations of business.
5.2 Industry Analysis
There are currently 40,000 facilities that provide martial arts instruction, including Brazilian jiu-jitsu to the general public. Each year, these businesses generate more than $19 billion revenue while providing jobs for 85,000 people.
Of all of the martial arts disciplines, Brazilian jiu-jitsu has become the most popular within the United States. Its fusion of multiple forms of combat sports has allowed it to rapidly become one of the preeminent martial arts in the country. MD Jiu-Jitsu will be able to capitalize it on this trend in the coming years.
5.3 Customer Profile
The following demographic profile will be used during the course of marketing operations:
• Household income of $100,000+
• Will spend $100 per month on access to the training facilities
• Lives within 15 miles of the MD Jiu-Jitsu location
5.4 Competitive Analysis
This Brazilian jiu-jitsu gym business plan was written specifically for sample purposes only. In the event that we would have completed a business plan of this nature for a client, a full analysis regarding the number of competitors within the target market would have been included. It also would have included a discussion regarding how the business would be able to effectively differentiate itself.
6.0 Key Strategic Issues
6.1 Sustainable Operations
MD Jiu-Jitsu will have sustainable operations as a result of the following:
• Matthew Deutsch is a highly experienced and proficient Brazilian jiu-jitsu expert (three-stripe white belt) that will be able to leverage his expertise during the course of instruction.
• The business will produce highly recurring reams of revenue that will allow the business to remain profitable at all times.
• Strong demand within the Chevy Chase market and its surrounding areas for comprehensive martial arts instruction.
• The business will have numerous highly qualified instructors that allow the business to scale as demand increases.
6.2 Basis of Growth
The Company will expand via the following methods:
• Continue to establishment of relationships with academic institutions that will provide referrals, especially among wrestling teams.
• Established additional locations within Maryland or neighboring Virginia.
• Continued expansion of the Company’s operations to include tournament events, which will increase brand-name in visibility.
7.0 Marketing Plan
7.1 Marketing Objectives
• Use multiple forms of online marketing that will attract the attention of families within the Chevy Chase and Montgomery County market.
• Leverage Matthew Deutsch is existing notoriety within the field of Brazilian jiu-jitsu to onboard clients.
• Established ongoing relationships with elementary schools, middle schools, and high schools throughout the market for referrals.
7.2 Revenue Forecasts
7.3 Revenue Assumptions
Year 1
• First year revenue will reach $319,000.
• The business will use multiple onboarding techniques during this time.
Year 2
• Revenue will reach $358,000.
• Income will increase by 12%.
Years 3-5
• By the fifth year of operation, revenue will be $503,000.
• The Company may establish additional locations.
7.4 Marketing Strategies
The Company intends to use numerous marketing strategies, including prior to the launch of the business in order to on board members. Most importantly, Matthew Deutsch (as a highly skilled Brazilian jiu-jitsu practitioner) will be able to leverage his existing notoriety to attract individuals who want to learn the sport. Through his notoriety, he will be able to conduct direct outreach with schools throughout the greater Chevy Chase and Montgomery County market area, especially among wrestling coaches that are seeking to have their students improve their skills. As Brazilian jiu-jitsu is a related sport to wrestling, there is an immense opportunity to receive referrals through this type of marketing.
The business will maintain a proprietary website, which will go undergo search engine optimization specific for the Montgomery County area. The website will feature information about membership, the gym, hours of operation, and information about the Founder. The platform will feature e-commerce functionality so that individuals can enroll in programs directly through the platform.
The business will also maintain a significant presence among social media pages and ongoing images and videos of the location will be featured. The Company will also use targeted advertising on social media platforms among individuals have that have recently expressed interest in learning Brazilian jiu-jitsu and live within 10 miles of the Company’s location.
Management and staff coaches will frequently attend Brazilian jiu-jitsu tournaments in order for increased brand visibility. The apparel offered by the company will feature the logo of the business.
8.0 Organizational Plan
8.1 Organizational Hierarchy
8.2 Personnel Costs
9.0 Financial Plan
9.1 Underlying Assumptions
• The company will secure a $75,000 business loan to establish operations.
• Matthew Deutsch will contribute $25,000 towards venture.
• MD Jiu-Jitsu will have a compounded annual growth rate of 12%.
9.2 Financial Highlights
• Strong demand within the Chevy Chase area for access to comprehensive Brazilian jiu-jitsu training.
• The Company will use independent contractors as coaches, which will reduce costs.
9.3 Sensitivity Analysis
The Company’s revenues will remain relatively stable, even during challenging business climate. As it has been one of the themes throughout this document, the Chevy Chase area is extremely wealthy market. As such, its substantial economic staying power will ensure that the business is able to maintain its membership even during a recession.
9.4 Source of Funds
9.5 Financial Proformas
A) Profit and Loss Statement
B) Common Size Income Statement
C) Cash Flow Analysis
D) Balance Sheet
9.6 Breakeven Analysis
9.7 Business Ratios
Appendix A – SWOT Analysis
Strengths
• The highly recurring nature of revenue also contributes to the security of this business.
• Limited competition among Brazilian jiu-jitsu training facilities within the Chevy Chase area.
• Strong demand, especially among families, to have their children learn a comprehensive martial art.
• The business will foster a sense of passion for Brazilian jiu-jitsu, which will ensure member retention.
• A highly experienced Founder, Matthew Deutsch, that will be able to render extensive training to members.
Weaknesses
• The business will need to engage in an aggressive marketing campaign to acquire members.
• Competition from martial arts studios that teach each other personal defense disciplines.
Opportunities
• Establishment of additional locations within Maryland.
• Continued expansion of the Company’s tournament operations to increase brand visibility.
• Continued to hiring of additional coaches so that a greater number of training sessions can be offered.
Threats
• Potential liabilities from on-site injury, although this is a limited risk given the waivers that will be in place.
Appendix B – Critical Risks
Development Risk – Low
Matthew Deutsch has already sourced the potential location that will be used to house the operations of MD Jiu-Jitsu. As noted at this document, he is highly qualified Brazilian jiu-jitsu training professional. The primary matter that needs to be addressed to securing the funding in this document.
Financing Risk – Low/Moderate
The $75,000 a debt capital so this document will allow MD Jiu-Jitsu to quickly reach profitability. A significant portion of this funding will be used for the build out of the facility as well as for furniture, fixtures, and equipment purchases.
Marketing Risk – Low
The comprehensive marketing plans outlined earlier in this document will be complimented by Matthew Deutsch notoriety in this field. He is committed to establishing MD Jiu-Jitsu as the preeminent training facility within Maryland.
Management Risk – Low
Matthew Deutsch has operated numerous Brazilian jiu-jitsu training facilities throughout the United States. Through this experience, he will be able to establish a well-regarded brand name.
Valuation Risk – Low
The valuation risk is offset by:
• Limited payroll costs.
• The business is operating in population dense market.
• The operations of this Brazilian jiu-jitsu enterprise are highly scalable.
Exit Risk – Low
As noted earlier, there are certain complexities that are involved with selling this business to a third-party. The most likely scenario will include a buyout among retained coaches. This is not expected to occur for a minimum of ten years.