Revenue Sources

Our current beta test location 1275 W 86th St. Indianapolis, IN 46260 has proved valuable in affirming many of the assertions within the original business plan.  One of these is the need for a diverse revenue stream to allow each individual facility to flourish without placing financial strain on any one source of funds. 

Member families are required to pay for programming.  This revenue stream should equal roughly half of the cash used in supporting each local facility.  Currently in the Indianapolis beta site we have an average charge to member families of $7 per hour per child for programs.  The goal is to keep the rate to member families as low as possible so they can participate in as many program offerings as possible.  This will improve the relationship between Coach and individual, which in turn will increase retention.  As you add multiple children, multiple families across multiple programs, this revenue should be enough to serve as compensation to the Franchisee that is managing the facility.  Clearly the membership revenues will grow as the membership base and program offerings grow.

Additional Revenue Streams

Facility Rental:   Fee determined by amenities in facility

Those hosting birthday parties, team sport training, and family functions may be interested in having an open space for kids to run and play.

In-House Studio Rental:

Allocating space inside the training facility for specialty instructors (Tumbling, karate, Zumba, Dance etc.) to rent from the Franchisee would give additional revenue to the Franchisee www.SadhanaStudios.org, as well as bring potentially new athletes into the facility.  Small business operators would benefit because they don’t have the overhead associated with their own space.  Additionally, they could benefit from current members who want to take their classes, as well as parents who want to take classes and have the ability to use Sadhana Training Circuits for their childcare needs. 

The remaining percent of the funds that enter the organization are made up of donations, sponsorships and grants.  In the beta test, these funds would be used for things like rent, utilities, capital purchases and marketing.  As additional franchise locations are added, donations at the Franchisor level would be used for critical business functions like accounting, information systems, marketing and human resources.  With the acknowledgment of Sadhana USA as a public charity by the IRS in 2012, we will continue to soliciting these forms.  Future franchisees would be able to reduce their reliance on their own start-up capital by soliciting potential donors in their area.  In addition, franchisees would receive a portion of the proceeds received by Kingdom, International and National Sponsorships.

Expenses

The beta site, like future franchises has started small and only increased expenses when the growth of the membership base merited it.  In addition, the beta site had to incur many start-up expenses that future franchise locations would not experience (legal fees, brand strategy and planning, etc.).  The bulk of the monthly expenses experienced by the beta site and a startup franchisee would be in the rent of a warehouse style facility and the compensation of the franchisee who is delivering the programming.  Obviously other expenses exist like insurance, flooring, phones and utilities but these are smaller.  A future franchisee’s largest capital expenditure beyond the payment of his/her franchise fee would be in the loss of wages while they work to create their membership base.  A new franchisee should budget to receive their personal income last after all expenses have been paid for the first few years.  Having personal financial reserves will need to be proven to be considered for future franchisee locations. As a franchisee’s member base grows, it may become necessary to add a support or admin type person but in many situations, a volunteer can be found to support the organization.  As a last resort and only if the cash flows support, an administrative person can be added.  Volunteers are currently being utilized in our beta location with great success.  These volunteers are often, member parents, older siblings of members, young adults needing to obtain service hours as well as retired adults looking for intergenerational volunteer opportunities.