Financial Models

A gym or fitness center is often structured as a recurring revenue service that has members who join, stay for some time and then possibly leave (churn). This GYM financial model forecasts out for a period of 10 years and has startup and operating assumptions specific to the gym industry. Includes a DCF Analysis and IRR summaries as well as monthly and annual pro-formas. Note, there have been updates since the video.

The user will start out by entering the start year as well as the month revenue begins within that year. The starting member count is also entered (if this is a forecast for an on-going operation) as well as the expected new monthly member sign ups across each of the 10 years. Revenue drivers are really straight forward and involve an average monthly fee per member followed by an average monthly churn rate. Based on member signups, the aggregate effect is tracked over time to determine total recurring revenue each month. The startup cost schedule is a little more in-depth than normal so the user can identify specific equipment items they are purchasing to put in the gym. Funding sources include a traditional bank loan if necessary and any remaining negative cumulative cash is assumed to come from equity (investors and/or owners) and a percentage is defined for investor contributions. The user can account for an exit value based on the month of exit defined (if applicable) and the terminal value is based on a revenue or EBITDA multiple. Any debt left as of that month is assumed to be paid off and will come off of cash flow. The project and investor pool as well as owner pool have their own DCF Analysis, IRR, ROI, equity multiple results. Lots of visualizations help tell the financial story of this deal.