Athlete Training Business
Practice this advanced profitability case interview question in the Sports/Services sector. Includes detailed problem prompt, clarifying questions, structured framework, and expert recommendation. Part of ProHub's 835+ consulting case library.
This is a straightforward break-even analysis case requiring candidates to calculate how many locations are needed to cover fixed costs ($1M) and variable labor costs ($200k per location). The key is to work backwards from revenue (50 trainees × $500/month × 12 months = $300k per location) minus labor costs to find the break-even point of 10 locations. Strong candidates will also contextualize the business by noting limited customer lifetime value (1-2 years), minimal capex requirements, and high scalability potential.
Clarifying Information
- Exhibit 1. Athlete Training Program Details
- E2 plans to hire Elite Level Athlete Coaches
- Each participating location will be assigned one coach, who will work 40 hours a week
- The group utilization rate is expected to be 50%. E2 aims to achieve 100% utilization over time by building brand recognition among high school athletes
- E2 plans to spend $1M in marketing and overhead expenses per year for these new training programs
- Labor expenses are projected at $200k per year per location
- The team doesn’t expect any additional variable costs, as coaches and trainees will use the existing facilities