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Elevator Pitch: Prime Time Boxing

Prime Time Boxing helps people channel their inner Rocky Balboa. Can $500,000 take it another round?
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The Pitch: "We offer an intensive boxing fitness program for teenagers and adults. Our classes are not aerobics that imitate boxing -- our customers learn actual boxing skills. Because we have urban, industrial, and suburban locations, we know that our concept can thrive anywhere. We plan to expand by converting existing boxing and martial-arts gyms into Prime Time Boxing locations. We have a marketing partnership with Everlast, and we are finalizing a deal with an international sports company to co-brand the new gyms under that company's name. We are seeking funding for marketing and advertising and to hire a sales manager to support our expansion to five new locations."

CO-FOUNDERS: Angelo Nunez and Cary Williams-Nunez

LOCATION: Sacramento

EMPLOYEES: Two full time; seven part time

FOUNDED: 1998

LOCATIONS: Two company owned; one franchise

MONTHLY DUES: $139 to $249, depending on length of contract

2009 REVENUE: $566,000

2010 PROJECTED REVENUE: $750,000 without funding; $2 million with funding

GROSS PROFIT MARGIN: 10 percent

2010 PROJECTED GROSS PROFIT MARGIN: 30 percent

FRANCHISE FEE/ROYALTY: $27,000 up front/6 percent of sales

FUNDING SOUGHT: $500,000

The Investors Weigh In

EXPAND, WISELY

Prime Time Boxing's partnership with Everlast gives it credibility, and I like the idea of acquiring existing gyms. The company will need to have a good understanding of its customers and be careful choosing new locations. Entrepreneurs often make the mistake of thinking they can duplicate the success of one or two locations everywhere. Prime Time Boxing should also play up its authenticity. There are a lot of 40-year-old men who want to feel young again. Taking a class that teaches actual boxing skills would give them a chance to do that.

JOHN BURNS
General partner, Highland Consumer Fund
Lexington, Massachusetts

STEP OUTSIDE THE RING

Similar businesses have a low entry cost, and as Prime Time Boxing starts to grow, it could face tremendous competition. The company must think through its positioning carefully. I like that it has contacted legitimate brand partners, which brings huge clout. But it must be careful not to be too closely aligned with the sport of boxing, which does not have the same cachet that it did 15 or 20 years ago. In its marketing, the company should focus on the art of boxing and clearly communicate that its classes are for exercise and self-defense, not to train people to become Olympic boxers.

GEOFF HILL
Vice president, Roark Capital Group
Atlanta

TRY FREEBIES

The Nunezes have done a great job building their company. Our region has seen previous investment in this space, so there seems to be some affinity for this type of fitness concept. However, Prime Time Boxing's prices put it at the high end of the fitness market, and in a tough economic climate, people tend to scale back on things like this. I would suggest a lower introductory price or a free weeklong trial to help the company get in front of more potential customers. The company should also address safety issues. Boxing is a much higher-impact activity than traditional exercise, and that may concern investors.

JIM SCHRAITH
Member, Foothills Angels
El Dorado Hills, California

Last updated: Feb 1, 2010




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