Flip Factory Essay

1168 Words Jun 13th, 2016 5 Pages
Flip Factory


Background and Problem
• Flip Factory is a fitness centre located in Calgary which offers unique, noncompetitive, gymnastic based programs. They include circus arts, trampolining, demonstrative gymnastics and parkour.

• Services offered focus on 3 core areas:
˗ Youth, teen and adult programs
˗ Preschool programs
˗ Bookings (birthday parties, day camps, special needs groups etc.)

• More than 1,500 on site participants every week, over 450 birthday parties a year, over 2,000 participants in other on site events and more than 200 off site participants through Flip Mobile program.

• $786,503 of revenues in 2013

• Darlene Traviss, owner and CEO of the company
…show more content…
Flip Factory’s business model is not that difficult to replicate and new company could try to do it anytime.


Financial performance
• Steady growth in revenues over the last four years
2010 - $185,760
2013 - $786,503
• Very high expenses, almost matching the revenues
• Net income for 2013 was only $16,222
• Salaries are the main cost driver, and account for almost 48% of total expenses.

It appears that the company has a cost control problem. Income after taxes was dangerously low for the level of revenues. This leaves Flip Factory vulnerable to any negative changes in the business environment. Even a small decline in the number of participants or any unexpected expense could put the company in danger. Darlene Travis must find a way to cut operating cost to improve financial performance of her company. She may have to decrease the number of trainers or their salaries.

SWOT analysis

• Strengths
˗ Unique and innovative product
˗ Community of long term customers
˗ Darlene Traviss – enthusiastic entrepreneur, leader and visionary
˗ Experience in the industry
˗ Expert coaches with international experience
˗ Well-equipped facility
˗ Growing revenues

• Weaknesses
˗ High salary expenses
˗ Insufficient income necessary for expansion
˗ Lease expires in two years
˗ Limited capacity of the building

• Threats
˗ Competition from other gymnastic clubs
˗ Participants losing interest in gymnastics
˗ Possibility of training…

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