Revenue Structure
Revenue for PowerPal is mainly generated from membership fees, and the number of members is expected to increase every year as a consequence of continuous marketing campaigns and a stronger brand reputation. As the number of fitness studios and gyms grows on the platform, starting from the second year, PowerPal offers advertising options in the form of sponsored ads and banner ads to help them increase views and conversion rates within the platform.
| Revenue Type | Year 1 | Year 2 | Year 3 |
| Monthly membership | |||
| 50 credits | £35*600=£21000 | £35*800=£28000 | £35*1000=£35000 |
| 100 credits | £60*300=£18000 | £60*400=£24000 | £60*500=£30000 |
| 150 credits | £75*100=£7500 | £75*150=£11250 | £75*200=£15000 |
| Monthly membership (for companies) | |||
| 50 credits | £35*300=£10500 | £35*350=£10500 | £35*400=£14000 |
| 100 credits | £60*100=£6000 | £60*150=£9000 | £60*200=£12000 |
| 150 credits | £75*50=£3750 | £75*100=£7500 | £75*150=£11250 |
| Yearly membership (for companies) | |||
| 50 credits | £336*50=£16800 | £336*100=£33600 | £336*150=£50400 |
| 100 credits | £576*25=£14400 | £576*50=£28800 | £576*75=£43200 |
| 150 credits | £720*10=£7200 | £720*20=£14400 | £720*30=£21600 |
| Advertising | – | £200*20=£4000 | £200*40=£8000 |
| Total | £105150 | £171050 | £240450 |
Cost Structure
PowerPal will pay the fitness studios and gym 30% of the revenue when customers book their classes and successfully attend the classes. To facilitate the calculation, it is assumed that all of the members will use up their credits. Other main costs include marketing and advertising fees, which will greatly invest in the first year, as well as expenses that contribute to the operation of the business such as company registration fee, office rental fee, insurance fee, and employee salaries. As the company grows, PowerPal plans to recruit more employees to support the development of the company.
| Cost Type | Year 1 | Year 2 | Year 3 |
| Company registration fee | £8000 | £5000 | £5000 |
| Marketing and advertising fee | £12000 | £10000 | £10000 |
| Partner fee | £105150*30%=£31545 | £167050*30%=£50115 | £232450*30%=£69735 |
| Employee salaries | £20000*2=£40000 | £20000*3=£60000 | £20000*5=£100000 |
| Office rental | £200*2*12=£4800 | £200*3*12=£7200 | £200*5*12=£12000 |
| Insurance | £500 | £500 | £500 |
| Other expenses | £3000 | £3000 | £3000 |
| Total | £99845 | £135815 | £200235 |
Profit
Based on the forecasted revenue and cost, the profit of the recent three years can be derived, which are estimated to be £5305, £35235, and £40215 accordingly.
| Type | Year 1 | Year 2 | Year 3 |
| Revenue | £105,150 | £171,050 | £240,450 |
| Cost | £99,845 | £135,815 | £200,235 |
| Profit | £5,305 | £35,235 | £40,215 |
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