COMPANY: Essence

Our business is to provide effective, sustainable, and maintainable fitness and nutrition programs clients can do anywhere at anytime.

COMPANY: Features vs. Benefits

Feature	Benefit
No gym-required training - Allows clients to complete their workout sessions at home, while traveling, at a park, and even at a gym. Global access to training possible. All a client needs is access to the internet to download the training. Comprehensive 12 Week E-Course designed to educate the client. Training programs and nutritional recommendations are based on sources other than mass media. Scalable Product Delivery Community So many features for a very reasonable price. Health and fitness advice without an agenda. It works. I don't mean that silly wrap you can put all over your body. Clients have a coach versus cheerleader.	Location flexibility leads to higher rates of compliance and better client results.  The downside to seeking professionally programmed training is the commitment to meeting with the trainer/coach to access this information. With the downloadable training programs, clients can access the professionally programmed training from anywhere in the world. The clients learn how to incorporate changes in their lives so they can achieve results without being a slave to a piece of cardio equipment. Traditional and mass media have been telling us half-truths and perpetuating our obesity epidemic. A major benefit of this program is the information it contains. This information is not readily found in the locations these clients are typically gaining their health and fitness information.  What would cost approximately $1,800 through in-person training can be obtained for a fraction of the cost.  Clients not only start to look and feel better, they are also included in the community aspect of SKF.  The value compared to the cost for the 12 week program is in the client's favor. Few programs cover the fitness as well as the nutrition piece together, and if they do, the price point is much higher.  It doesn't take long to see many health and fitness sites have some sort of underlying agenda ranging from anti-meat to an all out war on GMO. SKF keeps the health and fitness information focused on the health and fitness information.   We have watched clients who have nearly given up on their hopes of achieving their goals follow our program and for the first time realize it isn't just their genetics or their age that has been keeping the extra weight on. Social media makes it so easy for someone to call themselves an "online fitness coach" when the reality is they are more of a cheerleader than a coach.  Most virtual fitness coaches lack the experience, knowledge, and professional training required to effectively coach and instead just end up cheering people on. Which is fine... unless any problems arise.

COMPANY: Product/ Service mix

	Breadth
DEPTH	Virtual Subscription Services	Digital Downloads	Exclusive & Customized Coaching	Merchandise, Affiliate Products & Supplements	Advertising (Podcast, Email List & Website)
	The 12 Week SKFitLife E-Course - Women ($227)	Total Package Download ($197)	Premium Coaching & One-On-One Exclusive Coaching ($997/mo. for 6 mos. or $4997 up front cost for 6 mos.)	Tank Tops & Shirts ($25)	Stop Chasing Skinny Podcast
	SKFitLife Monthly Membership - Women ($54/mo.)	SKFitLife 12 Week Training Download ($97)		Business & Health Affiliates	Email Marketing
	The 12 Week SKFitLife E-Course - Men ($227)	Fitness Model Abs + Finisher Bonus ($27)		Supplements	Website
	SKFitLife Monthly Membership - Men ($54/mo.)	52 Weeks of HIIT ($27)
		30 Day Meal Guide + Recipes ($27)
		Supplementation Guide ($17)
		NO Equipment Vacation Training ($7)
		Vision Board Planning Tool Kit ($7)

12 Week SKFitLife E-Course & Monthly Training Memberships

The 12 Week SKFitLife E-Course is paid in a lump sum ($227). Once the 12 Week SKFitLife E-Course participants complete the 12 weeks of training, they are automatically enrolled in the monthly membership for $54 unless they opt out. We have found our retention rate increase significantly once the automatic opt-in was established versus having monthly members have to re-enroll for the monthly program. If the member cancels and returns at a later time, the monthly membership price is increased to $57 per month.

Benefits, coaching, and programming included in these programs are as follows: 

• Monthly Weight Training: In just 3 days per week at 45 minutes per session, you will build muscle, gain functional strength for LIFE, and shed body fat. NO GYM REQUIRED! Workout anytime... anywhere… ADVANCED Option available at no additional cost.
• Weekly High Intensity Interval Training: Effectively blast fat and get your cardio finished in about 20 minutes.
• 30 Day Meal Guide with Recipes: Nutrition doesn't have to be so complicated. With this meal plan, you will learn how to: Eat while traveling. Easily plan your meals. EAT MORE and LOSE MORE weight/body fat. RECIPES INCLUDED!
• Online Coaching & Support: Access to member's only private Facebook group for accountability, coaching, and support.

Exclusive, Customized Coaching Clients

$997/month, 6 month minimum or 6 months for $4,997 paid in full. Future destination, retreat-style activities to be included in Exclusive offerings. 

Digital Download Programs

9 digital download products are offered and can be sold individually or bundled together or with any of the 12 Week SKFitLife E-Course or Monthly Training Memberships. These products are priced from $197 down to $7 and include:

• Total Package Download ($197)
• SKFitLife 12 Week Training Download ($97)
• Fitness Model Abs + Finisher Bonus ($27)
• 52 Weeks of HIIT ($27)
• 30 Day Meal Guide + Recipes ($27)
• Supplementation Guide ($17)
• NO Equipment Vacation Training ($7)
• Vision Board Planning Tool Kit ($7)

Supplements, Shirts & Affiliate Products

SKFitLife recommends and earns a commission on the product line, Isagenix. Supplementation recommendations are infused in the entire SKFitLife program including the meal guide.

SKFitLife offers tanks tops and t-shirts. This offering is not consistent and has not proven to be a good source of revenue especially when compared to the amount of effort required to maintain the program. We are looking into using the company www.teespring.com for future shirt offerings. 

SKFitLife has affiliate relationships with several fitness equipment providers as well as complementary digital programs. SKFitLife offers an affiliate program as well and is in the process of creating an affiliate sales force for SKFitLife.

Podcast Sponsorship 

We used the podcast earnings calculator at http://www.midroll.com/podcasters/.

To calculate this figure, enter how many downloads each episode has. Then decide how many episodes a year, and how many spots in each episode. That helps to estimate potential annual gross ad sales:

1. How many downloads per episode?
2. How many 20 to 30-second pre-roll spots would you include?
3. How many 60-second mid-roll spots would you include?
4. How many episodes per year?

The largest income currently comes from the 12 Week Online Training Course, but the podcast sponsorship category ultimately has the potential to earn many times the amount of the 12 Week Online Training Course.

Industry Structure: Five Forces Model

Force 1: Competition among existing firms in the industry

The fitness industry is highly competitive, as well as highly fragmented. There is a very high degree of difference in the services provided in the fitness industry. According to professional trade journals, the fitness industry is once again growing and it is growing at a rate of 5% as of this year. 

While the highly fragmented aspect of the fitness industry makes the market more challenging, there is a high degree of differentiation in a growing market. This means competition is not solely based on price.

Force 2: Threat of New Entrants

The threat of new entrants into the online fitness space is extremely high. These days, it seems like anyone with a social media account can (and do) call themselves an online fitness coach. Fitness certifications are not hard to obtain and don't require a whole lot of intelligence to pass. 

The difference in the SKFitLife online approach is that we offer more than just some private Facebook group and emailed workouts. This is a 12 Week Program that takes the client step by step through the who, what, when, where, why, and how of fitness, nutrition, and mindset. 

Besides the working relationship the clients and the coach build, there is a built-in community which makes the cost of switching high.

Force 3: Threat of Substitutes

Threats of substitutes is very high. The fitness industry has a new fitness craze popping up every day. As technology evolves, so will the offerings for fitness. Some clients will leave to try the new technology. This has happened before, but many of them return when they find the new shiny technology doesn't solve their issues in fitness like SKFitLife did for them.

Force 4: Power of Suppliers

The suppliers in the online fitness business include hosting. This is a fixed cost and does not fluctuate. Additional suppliers include graphic designers, photographers, and administrative assistance. 

Suppliers have very little impact on my prices and ability to operate.

Force 5: Power of Buyers

Buyers in this case can be individuals or businesses (corporate wellness). With the international capabilities of SKFitLife and the ongoing and dynamic nature of health, our buyers are not concentrated. There is also a high switching cost associated with changing fitness programs since clients have formed relationships.

Industry Attractiveness Summary
While the fitness industry is highly competitive and the barrier to entry is low, there is a high degree to which I can differentiate my company and offerings from the competition. I am not at the mercy of suppliers, and I can attract buyers from all around the world, my profitability is not at risk nearly as much as many other fitness industry businesses. The community aspect of this business model also makes for high switching costs.

INDUSTRY: Overview

Discuss briefly industry size (in dollars) and annual growth rate (%); Where is the industry in its life cycle---emerging, early growth, rapid growth, early maturity, maturity, decline?

During the past five years, the Weight Loss Services industry has benefited from the growing number of overweight or obese Americans. Currently, about 69.0% of adults are considered obese or overweight, according to data from the Centers for Disease Control and Prevention (CDC). According to a CDC Vital Signs report, obese individuals incur higher medical expenditures per capita compared with healthy individuals, prompting public payers to focus on lowering the prevalence of overweight and obese beneficiaries to cut costs. Many physicians have also promoted weight loss as a form of preventive care to lower patients' risk for obesity-related ailments, such as heart disease, stroke and Type 2 diabetes. Nevertheless, the industry has contended with rising competition from do-it-yourself weight loss apps and nutrition plans, which have cut into industry revenue growth. Further exacerbating this trend, many clinics and hospitals have offered similar services, including nutrition programs, exercise planning and counseling, constraining industry revenue growth.

As a result, during the five years to 2016, industry revenue is expected to contract at an annualized rate of 1.0% to $2.3 billion. In 2016, however, revenue is anticipated to rise 2.1%, partly due to healthcare reform, which has required health insurers to cover obesity screenings and counseling without cost sharing (e.g. co-payments), making industry services more accessible to consumers. As a result, more obese individuals have received weight loss guidance from physicians and had access to referrals for services, including weight loss clinics. As a result, some health insurers have partnered with industry operators by referring patients and providing them with weight loss clinic membership discounts. Profit is expected to decline from 11.1% of industry revenue in 2011 to 7.8% in 2016, due to the poor performance of many key players, which have traditionally kept the average profit margin high for the industry.

The Weight Loss Services industry is in the mature phase of its industry life cycle. Industry products are well established and weight loss companies need to differentiate their product to generate robust sales volumes, which is typically indicative of an industry in the mature life cycle stage. During the 10 years to 2021, industry value added (IVA), which measures an industry's contribution to the overall economy, is expected to grow at an annualized rate of 0.7%. Comparatively, GDP is anticipated to grow at an average annual rate of 2.3% over the same period.

Industry growth

The number of companies operating in the industry is also expected to grow over the next five years. While the industry is already highly competitive, demand for weight loss services is expected to increase. In response, more weight loss companies will enter the industry, resulting in the number of industry enterprises increasing at an estimated annualized rate of 2.8% to 17,140 during the five-year period. Along with this growth, the number of employees is anticipated to rise at an annualized rate of 2.5% to 80,948, as large-scale operators continue to expand their reach and repurchase franchises. In particular, many small, independently operated enterprises will enter the industry to cater to relatively untapped markets, such as men’s weight loss programs. Additionally, many weight loss companies will enter specific regions, such as the Midwest and South, which have a greater number of obese individuals compared with the national average.

Currently, the majority of this industry’s clients are women, although a higher percentage of men are classified as overweight in comparison. According to a 2010 (latest data available) study from the Centers for Disease Control and Prevention, the proportion of men that are overweight or obese is about 73.3%, compared with 63.9% of women, with both figures anticipated to increase over the next five years. However, despite more men being overweight or obese, an estimated 90.0% of Weight Watchers’ members are women, a trend that is consistent for the majority of weight loss companies. In response, Weight Watchers has indicated that it will focus on men’s weight loss, with industry operators expected to follow their lead, given that men’s weight loss represents a large, untapped market for the industry.

Life Cycle Reasons

Industry value added is experiencing slow growth

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There is the slow entrance of new companies, which can be attributed to the key players' comprising a smaller share of revenue

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Competition is intensifying from app companies 

Highlight key trends in the industry. These can be found in the trade literature. Are costs going down or up? What about prices? Discuss any new products or developments, the rate of new product development, new markets and customers, new selling approaches, new pricing methods, new requirements or regulations, new entrants and exits, new technologies, and any other national or economic trends and factors that could affect the venture’s business positively or negatively.

While the obesity rate is rising, which may incite more individuals to purchase industry products, weight loss companies will be subject to rising competition. In particular, the proliferation of weight loss apps and nutrition plans will cut into demand for weight loss services. Still, the number of industry operators is expected to grow at an annualized rate of 2.2% to 17,140 over the 10-year period as new industry entrants attempt to tap into an industry that is becoming less concentrated. In the prior period, large weight loss companies, such as Weight Waters and NutriSystem, controlled a significant share of industry revenue. However, these companies' respective market shares have contracted, resulting in the industry becoming more fragmented.

As we pointed out in the paragraph above, industry revenue is anticipated to rise 2.1% versus the previous 1.0%, partly due to healthcare reform, which has required health insurers to cover obesity screenings and counseling without cost sharing (e.g. co-payments), making industry services more accessible to consumers.

According to data from WebMD and the CDC, about 42.0% of Americans are projected to be obese by 2030, up from 34.9% of adults in 2015 (latest data available). During the five years to 2021, industry revenue is forecast to increase at an annualized rate of 2.6% to $2.6 billion. While women currently account for the majority of weight loss clients, many industry operators will aim to attract male customers, as this demographic is a relatively untapped market for the industry.

During the next five years, the Weight Loss Services industry is expected to rebound from the previous five-year period. As more health-conscious individuals become aware of how weight loss plays an integral role in health and overall wellness, industry revenue will grow. Further benefiting industry revenue, many physicians and health insurance providers will promote weight loss as a form of preventive care in order to lower healthcare costs. For example, according to the Centers for Disease Control and Prevention, weight loss can lower an individual’s risk of heart disease, high blood pressure, diabetes and certain cancers, among other health ailments.

Over the five years to 2021, industry revenue is forecast to grow at an annualized rate of 2.6% to $2.6 billion. As more individuals become time strapped over the period, many obese or overweight individuals will purchase weight loss services to achieve their fitness, weight and nutritional goals in short time increments. Profit is expected to rise from 7.8% of industry revenue in 2016 to 9.1% in 2021, as many weight loss companies raise their membership rates, rather than offer discount and promotional pricing like the previous period.

Rising rate of obesity

Over the next five years, childhood obesity is expected to become more prevalent in the United States. According to data from WebMD, the incidence of childhood obesity is expected to reach 20.0% by 2030; however, some programs, such as Michelle Obama’s Let’s Move campaign, aim to lower the obesity rate by 5.0%. Over the five-year period, the incidence of adult obesity is expected to follow a similar upward trend. Generally, the rising rate of obesity can be attributed to growing portion sizes, increasingly sedentary lifestyles and unhealthy diets.

Nevertheless, the healthy eating index, which measures Americans’ compliance with the US Department of Agriculture’s recommended diet, is anticipated to rise at an average annual rate of 0.1% during the next five years. While the revitalization in consumers’ discretionary incomes will allow more individuals to afford healthy, high-protein meals, time-strapped individuals will still demand convenient, high-calorie foods. Moreover, as a larger share of the US population will have weight problems, demand for weight loss services will rise, particularly meal plans provided by the industry.

Determine the key success factors for the industry and draw conclusions. What are the winners able to do consistently that the losers or also-rans to not do?

Weight Watchers International Inc. is the largest provider of weight loss services in the United States, with over one million members. The company was founded in New York in 1963 and is currently headquartered in New York. The company offers services in over 25 countries, including the United States, the United Kingdom, Germany and Australia.

Weight Watchers has several services and products that it offers to members, including weight management plans, meetings, nutritional products, a weightwatchers.com subscription and mobile services. Its weight management plans are offered through the company's PointsPlus and ProPoints plans. The PointsPlus system assigns specific point values to food, based on its protein, carbohydrate, fat and dietary fiber content. Under the PointsPlus program, consumers are taught various techniques on how to lose weight by eating foods that are healthier and more satisfying. The ProPoints program was launched in Europe at the end of 2009 and, at the end of 2010, the company introduced the PointsPlus program in the United States and Canada. Additionally, Weight Watchers offers weekly meetings so that members can support one another and discuss experiences with weight-management challenges. In 2015, the company acquired Weilos, a California-based company that developed a mobile platform for health and weight loss.

The company also sells a range of products, including protein bars, snacks and cookbooks, as well as food and restaurant guides. Weight Watchers additionally has two internet subscription offerings, Weight Watchers Online and Weight Watchers eTools. Weight Watchers Online provides personalized resources so clients can follow weight-management plans via the internet. For example, eTools is an internet application that streamlines weekly meetings for clients.

Weight Watchers has been expanding its product offerings and geographic reach over the past five years. The company is expected to begin focusing on men's weight loss, as this presents a relatively unexplored market for the company, since 90.0% of the company's members are female. In 2011, the company began marketing its online offerings to men and signed Charles Barkley as a spokesperson in order to better target the men's market.

Conclusion:

Weight Watchers and the other key players have turned themselves into household names through their consistent marketing efforts and through offering a simple solution to an ongoing problem. They hit all of the main areas of weight loss from food to support. 

INDUSTRY: Information Sources

I will preface this by saying that most of the resources I found here with the "key players" and governmental organizations telling us to "Shape up America" are the number 1 reason we are in the situation we are in. Nutrition guidelines that promote weight gain (too many grains, not enough fat) and an industry that promotes chronic dieting and an overall unhealthy approach to our relationship with food, exercise, and our bodies.

The Library Resources I have initially selected are as follows:

IBISWorld Industry Report OD5451 - Online Weight Loss Services in the US, September 2014  |  Britanny Carter
This report covers internet membership programs which assist in consumers losing weight/maintaining desired weight. Just like my business, the revenue is generated through subscription-based accounts and product sales. 

IBISWorld Industry Report 81219a - Weight Loss Services in the US, February 2016  |  Sarah Turk

Companies in this industry provide nonmedical services to clients and assist these individuals with losing or maintaining a desired weight. Services typically include individual or group counseling, menu and exercise planning, and weight and body measurement monitoring. Industry operators may also sell food supplements and other weight-reduction products.

IBISWorld Industry Report 51913b - Internet Publishing and Broadcasting in the US, September 2015  |  Gavan Blau

This industry includes organizations and individuals that offer nonphysical products, such as news, music and video, exclusively through the internet. Revenue in this industry is derived from the sale of advertising space or subscriptions to consumers.

Weight Reduction Services by HOOVER
This report gives a good overview of the key players in the weight loss industry. This also gives numerous links to additional relevant information I will need for my business plan.


Entrepreneur on Fire Podcast Sponsorships
I had some trouble finding podcast sponsorship information in the library, but I know this resource shares their financials each month. The business model of earning income from selling sponsorships while also using the show as a sales tool for the coaching services offered is the same as what I am doing. 

M7 Now Offers Podcast Marketing and Production Services

I would like to follow this company and see what information they share about their podcast marketing services. Best practices for podcast marketing are important to me and knowing what to look for in a marketing company for my podcast is something I need to do.

Weight Watcher's Report

While I may not agree with how Weight Watchers does it, there is definitely something to be learned by watching what they do. There is a lot I can learn from their success and the statistics in this report will be beneficial when writing my business plan.

Radio Broadcasting in the US
While this report xcludes operators that function solely online, I found it contained valuable information pertaining to podcasting.

INDUSTRY: NAICS Code and Definition

My business encompasses 2 different NAICS codes, 713940 and 519130 for the fitness training aspect and podcast/internet radio aspect.

http://www.naics.com/naics-code-description/?code=713940
http://www.naics.com/naics-code-description/?code=519130

713940 Fitness and Recreational Sports Centers

This industry comprises establishments primarily engaged in operating fitness and recreational sports facilities featuring exercise and other active physical fitness conditioning or recreational sports activities, such as swimming, skating, or racquet sports.

519130 Internet Publishing and Broadcasting and Web Search Portals

This industry comprises establishments primarily engaged in 1) publishing and/or broadcasting content on the Internet exclusively or 2) operating Web sites that use a search engine to generate and maintain extensive databases of Internet addresses and content in an easily searchable format (and known as Web search portals). The publishing and broadcasting establishments in this industry do not provide traditional (non-Internet) versions of the content that they publish or broadcast. They provide textual, audio, and/or video content of general or specific interest on the Internet exclusively. Establishments known as Web search portals often provide additional Internet services, such as e-mail, connections to other web sites, auctions, news, and other limited content, and serve as a home base for Internet users.