Financial Plan for a Tech-Enabled Home Fitness Company
1. Executive Summary
This financial plan outlines a five-year projection for a tech-enabled home fitness company
that combines smart exercise equipment with a subscription-based digital platform. The
company intends to generate revenue through equipment sales, subscription plans, and
additional digital content. This plan includes detailed monthly financial projections for the
first year and annual projections for the subsequent four years, focusing on the Profit &
Loss (P&L) statement.
2. Key Assumptions
2.1 Revenue Assumptions
- Smart Equipment Price: The average price per unit of smart fitness equipment (e.g., bike,
treadmill) is set at $1,200.
- Units Sold: Year 1 begins with 30 units sold in January with a 5% growth in unit sales each
month, totaling approximately 500 units annually.
- Subscription Price: Monthly subscription fee is set at $30.
- Subscriber Growth: The company starts with 1,000 subscribers in January, growing at a
rate of 10% monthly.
2.2 Cost of Goods Sold (COGS) Assumptions
- Manufacturing Cost: $500 per equipment unit.
- Shipping & Packaging: $50 per unit.
- Platform Costs: $5 per subscriber per month for cloud hosting, video streaming, and
support.
- Payment Processing: 2.9% of total sales revenue.
2.3 Operating Expenses Assumptions (Monthly)
- Salaries & Wages: $40,000 covering founders, instructors, developers, and support staff.
- Marketing & Advertising: $25,000 primarily focused on digital channels.
- Platform Maintenance & Software: $5,000 for app hosting, updates, and SaaS
subscriptions.
- Office/Studio Rent: $4,000 for a small studio space.
- Insurance & Legal: $3,000 for liability insurance and legal advisory.
- Utilities & Internet: $1,500.
3. Year 1 Financial Summary
Revenue
- Equipment Sales Revenue: $631,567
- Subscription Revenue: $285,904
- Total Revenue: $917,471
COGS
- Equipment Manufacturing: $252,000
- Shipping & Packaging: $25,200
- Platform Costs: $60,675
- Payment Fees: $26,606
- Total COGS: $364,481
Gross Profit: $552,990
Operating Expenses: $942,000 annually
Net Income (Before Tax): -$389,010
Estimated Tax (15%): $0 (Net loss)
Net Income (After Tax): -$389,010
The first year reflects significant upfront costs in marketing, salaries, and infrastructure,
resulting in a net loss. This is typical for startups prioritizing user acquisition and market
presence.
4. Financial Outlook: Years 2 to 5
Over the next four years, the company expects to scale significantly. Key projections include:
- Annual unit sales growing by 50% year over year.
- Subscriber base increasing steadily with improving retention.
- Gradual reduction in platform cost per user due to economies of scale.
- Lower customer acquisition cost as brand recognition improves.
- Fixed costs like rent and platform development spread across larger revenue.
By Year 3, the company is expected to break even, with profitability increasing steadily into
Year 5. Revenue diversification (e.g., premium content, merchandise) will further improve
margins.
5. Conclusion
The financial projections reflect a strategic investment in growth for the first two years,
followed by profitability driven by scaling operations and expanding recurring revenue.
This plan positions the business for sustainable growth, strong investor interest, and long-
term market competitiveness in the fitness tech sector.
