Musclemaster.com Overview
- Executive
Summary
Musclemaster.com is a leading online health and fitness information source and retailer of nutritional supplements and vitamins. The company has successfully established itself as a presence within the $25.5 billion nutrition industry by creating brand-awareness and a strong bond with the online health and fitness community. The success of Musclemaster.com's web site, newsletters and catalog, along with its unparalleled devotion to customer service has resulted in sustained and significant monthly growth since operations commenced in January 1998. At Musclemaster.com we understand essential to success. Our willingness and to effectively implement strategies typically overlooks the significance of that the to listen to meet building ability to build and maintain a loyal customer base is to and understand what our customers want and need, those needs, has quickly set us apart in an industry that lasting, long-term customer relationships. health and fitness
Musclemaster.com will continue to listen to its market and evolve as the leading Super Store on the Internet by implementing the following steps: •
Providing unparalleled content and expertise to _h and fitness community. Musclemaster.com will launch its new web site on(_tober 8_ The site is designed to surpass any related site in terms of breadth of contenF'a_ leve_pertise. The new site will become an integrated resource for each of our market segments and will cater to each segment's health and fitness needs. Branding the Musclemaster.com name nationally by launching an aggressive marketing campaign designed to establish Musclemaster.com as the health and fitness site of choice, significantly increase customer acquisition and expand the Company's annual revenue to $72.3 million within four years. Building on the Company's industry-leading customer service advantage by continuing to make customer service and product fulfillment a top priority throughout every aspect of operations. This will result in the Company continuing to derive a significant portion of its revenues from repeat and complementary product purchases. Pursuing strategic relationships related businesses designed Musclemaster.com. aggressively, to generate including relationships with other web sites and customer referrals and web site traffic to
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Developing and employing state-of-the-art web sites, newsletters, catalogs, fulfillment Continuing Century. to hire talented,
technology in creating and updating the Company's systems, and customer retention programs. vision into the 21 st
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creative people to help carry the Company's
By building lasting relationships with customers, newsletter subscribers and web site visitors, Musclemaster.com is uniquely positioned for long-term growth and continued economic success. 1 Musclemaster.corn
Revenue
Sources
Since operations commenced in January of 1998, Musclemaster.com has achieved an average monthly growth rate of 15%. This growth has been maintained despite working with initial seed capital of only $25,000. Musclemaster.com anticipates generating revenues of $1.3 million in 1999 based on the Company's current growth pattern. With the additional funding being requested, the oCo_pany projects revenue to grow to $5.2 million in 2000, $19.6 million in 2001, $38.3 million in 2002 and $72.3 million in 2003. Musclemaster.com has achieved its current level of success by focusing its efforts on becoming a strong player within the health and fitness field. Initially, the Company primarily targeted the sports nutrition segment of the nutrition industry ($1.4 billion in annual U.S. sales). In 1999, Musclemaster.com expanded its target markets to include the weight loss segment and the general health and fitness segment (vitamins, minerals, herbs & botanicals). In total, these three segments comprise $13.5 billion of the $25.5 billion U.S. nutrition market. Musclemaster.com will continue to aggressively implement its vision by: • Expanding its product offerings to include a wide-variety of fitness equipment, books, CDs, videos, cassettes and apparel. This process will begin in the Fall of 1999. Launching Fit-tip.com, a second proprietary web site that will be the home of the "Fit-Tip-OfThe-Day email newsletter." This site will also have e-commerce capabilities to process the advertising revenues generated from this newsletter. Creating a number of additional high margin, proprietary health and fitness information products that will be marketed to our expanding customer base beginning in the Fall of 1999. Accepting paid advertising in its proprietary magalog, web sites and newsletters. Entering into commission based affiliate deals for other fitness related products and services that are offered on the Musclemaster.com web site. Entering into affinity relationships with as many relevant sites as possible to significantly expand our current affiliate program from its present level of 750 members.
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Musclemaster.com will achieve these goals by executing an integrated strategy that focuses on successfully implementing the Company's national marketing and branding programs. This will require the hiring of key management talent and/or consultants, the implementation of new technologies (including the launch of the new Musclemaster.com web site and the further development of a top-flight automated customer service program), and enhancement of our infrastructure to accommodate this growth. The Company has hired Testa _ H_t_LLP as its legal counsel, a top public relations consulting firm, and will-hire one/or more seasoned Internet marketing experts as part of its overall growth strategy.
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Historical
Traffic
and Revenue
Statistics
Musclemaster.com has established a strong pattern of revenue growth and a loyal customer base. As a result, the Company: • • • • • Will generate $1.3 million in sales in 1999 with an average sale amount of $88. Generated $221,000 in sales in 1998 with an average sale amount of $87. Has processed 10,100 sales transactions since January of 1998 and currently has 6,000 customers. Has repeat customer sales that account for approximately 55% of sales. Has an average number of items purchased per sale of 2.5.
Musclemaster.com currently generates an average of 60,000 - 80,000 unique web site visitors per month. The web site has served approximately 12.0 million total page views since inception in January of 1998. Content and Subscribers
Musclemaster.com also has three existing opt-in newsletters and a significant proprietary mailing list. • • • The Ultimate Muscle Newsletter is sent via email to 150,000 people each week and is growing at a rate of 5,000 subscribers per week. The VIP Specials Newsletter goes out weekly to 125,000 people and is also growing at a rate of 5,000 subscribers per week. The Fit-Tip-of-the-Day Newsletter was launched in August of 1999 and currently is sent to 10,000 subscribers with a projected growth rate of 7,500 subscribers per week. This newsletter resides at www.fit-tip.com and accepts paid advertising and sponsorships. The Company's in-house catalog mailing list of 40,000 is comprised of current customers and others who have requested our catalog over the past nine months. Musclemaster.com currently receives approximately 600 new requests for the print catalog each week. / Conclusion
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Summary
Musclemaster.com will become the leading health and fitness site on the Internet within our targeted market segments. The Company will create national brand awareness of Musclemaster.com while growing the Company's revenues to $72.3 million within four years. We are seeking initial funding of $5.0 million dollars in order to finance the next stage of Musclemaster.com's growth. Such funding will enable the Company to rapidly implement its technology plan, carry out marketing and branding initiatives, hire key management talent, continue to develop an industry-leading customer service program, and expand current product and Service offerings. With this initial funding, Musclemaster.com will be able to significantly increase its valuation and position itself to raise an additional $15.0 million within 12-18 months to further expand its brand name and reach within the marketplace. At that point, the Company will become an attractive acquisition target or candidate for an IPO.
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