Flip Factory Essay
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…
• 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.
˗ 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
˗ High salary expenses
˗ Insufficient income necessary for expansion
˗ Lease expires in two years
˗ Limited capacity of the building
˗ Competition from other gymnastic clubs
˗ Participants losing interest in gymnastics
˗ Possibility of training…