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Fandom Fitness Center in London: Business Plan Report (Assessment)

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Updated: Oct 26th, 2021

Introductory page

  • Company Name: – Fantom Fitness Centre1
  • Address: -17, XYZ street, London, UK
  • Name of the entrepreneurs:
  1. Rojar Milford
  2. Tomas Potter
  3. Davis Kotler
  • Telephone number: – (02) 000-123
  • Fax number: – (02) 000- 456
  • E- mail address: – [email protected]
  • Web site address: – www.fantomcare.com
  • Budget status: – Initial investment of £1100000 supplied by three
  • Partners and bank jointly.

Short view of the company

Fandom Fitness Center is a new gymnasium that will be established at 17, XYZ Street, London. The basic purpose of formulating this sort of association is to give an opportunity of maintaining physical fitness, wellness and recreation to the identified age of people. The exclusive facilities of the center will contain general fitness and exercise opportunity, circuit training room, whirlpool or hot tub, cardio- room, running or walking track, swimming facility etc. Based on partnership as the mode of ownership by the mentioned three young entrepreneurs, the center will initially need £1100000 in order to run for the next 3 years. It will use its own plot and building for serving the entire gymnastic and recreational offerings.

Executive summary

The business plan is going to focus the entire planning procedure of each of the attributes of a new venture named “Fantom Fitness Center” that is fitness and health care center aims to establish in a densely populated zone of London, UK. Emphasizing the rapid expansion of fitness and health care industry as booming towards all generation, this center will be initiated by three young entrepreneurs on the partnership basis. Since there exists more than 100 million people who need this sort of therapy, FIA assumes that there are merely 3300 health clubs in UK, huge demand and necessity of people causes a great possibility of being successful in this sort of business. Starting with personal capital and bank loan on the long- term basis, the estimated capital has been fixed as £1100000. Using its own land, building, accessories, facilities, equipments and other assets, FFC will be a core health club that is going to start its operation from January 1, 2009 with an aim of offering a number of diversified services involving aerobics, gyms, instrumental, yoga and other sort of games and practices necessary to keep us fit. For this, it has targeted customers ranging all ages based on needs. Starting with a short description of industry background, the entire plan will recognize planned activities of FFC for 3 years. However, this industry offers a number of problems and weakness that will be presented under SWOT analysis, political, economic, environmental and technological influences will also be discussed by PEST analysis. Description of venture will naturalized on top- to- bottom picture of the company, that means, what it is, where it wants to go and the procedure of going there with a narrow description of service, personnel and valuation process. Next, the marketing plan starts with FFC’s ultimate goal of achieving a strong place in the market that will be enough to become profitable in the long- run with a target of 400 customers. For this, estimation of FFC’s marketing mix variables will be essential as providing gymnastics and health- care services at a reasonable price ranging from £5- £300 with a single distribution and using advertising and sales promotion as promotional vehicles. Operational plan will describe the daily operational process of FFC, timing, number of total employees, salary structure of them and employment procedure as an important part of it. Organizational plan will determine the nature of ownership of the center along with an organizational designing chart that will ensure the entire leadership, management and decision- making bodies. Risk- assessment section will make alarming about some of the practical risks that it may face as well as measures of remedy of those issues. Financial plan will be an original projection of measuring the success and solvency of FFC since it will be an estimated projection of periodic income and loss factor, balance sheet and a break- even analysis showing the time and estimated revenue and cost through which it will reach at the no profit no loss segment. And finally, implementation time will disclose selected time frame for completing the construction and decoration of the center along with an expected timing to start the original operation of the business.

Industry background

The worlds sporting, recreation and professional health care industry has been growing at a significant rate since it offers a major sort of social concern, cultural polishing and the best utilization of human resources by earning revenue and employment generation including England, Australia, Japan, Queensland, U.S.A and many other concerned population in the world. Among this, the growing demand for fitness and health club industry is being positioned at top including Atlantic club in New Jersey, the Bel Air Club in Maryland, Forest Grove and Willow brook in Illinois, Columbia Athletic Clubs, Colorado Athletic Clubs, Heartland Fitness Center etc. because of a number of reasons as following:

  • People having physical fitness can achieve a number of personal success and fun, for this, the craze of health of consciousness, they are seeking the best route to lose their extra pounds to become more and more fit.
  • Now- a- days, a number of adult citizen of the country are being classified as “clinically obese” having the notable impact of stress and disability at a larger ratio resulting in ultimate loser of unable walking or sitting on a chair or a car. Since the rate of chronic illness, hypertension, anxiety, heart blockings, sleep disorders has been increasing significantly, a number of research activities have been conducting for the last 40 years that have proven that regular exercise acts as recuperative role for reducing such risks that offers the major opportunity for the expansion of world’s health club industry.

Thus, the background of this industry can be observed through a SWOT and a PEST analysis.

SWOT Analysis of the fitness and healthcare industry

Strengths: The industry enjoys a number of strengths. As:

  • Huge number of population are being suffering from mental and physical disability, diabetes, osteoporosis, sleep disorders etc types of problems that can be maintained by regular exercise and gymnastics practices.
  • More than 50% of the total resources of the households pass for the diagnostic and treatment purpose that can be minimized by preventing illness with a wide sort of regular exercise that influence people for the club membership.
  • Multiple depth of the market size.
  • Expansion as alliances or partnership with hospitals and beauty- parlors.
  • Capability of serving people in distinctive way within the family market.
  • Strong social position because of community respect.

Weakness: – Some weak points are:

  • Possibility of incurring high costs for importing the expensive gymnastic equipments.
  • Achievement of less persuasion of people towards the necessity of physical exercise.
  • Higher charges for several services cause less and specific customer traffic than the practical necessary groups.

Opportunities: Several scopes are:

  • Opportunity of serving youth, young adults, older and women segments by offering a complete range of all generation’s athletic, leisure, fitness and past- time requirements.
  • Scope of combining fitness and wellness issue like Baylor Medicine Center, Johns Hopkins hospital, and The New England Baptist Hospital.
  • Expansion of new era of providing standard certification tasks of training for the work efficiency of fitness professionals.

Threats: – Some risk factors:

  • Complexity of operating services as complementary of mainstream medical caring.
  • Grasp of convergence for abolishing the individual industry identity.

PEST Analysis

  • Political factors: Recently, government researchers are posing expectation about the growth fitness training and aerobics instruction along with a positive attitude.
  • Economic factors: Australia is earning £10 billion yearly from this segment from which many are earning 20%- 35% of their sales volume globally.
  • Socio- cultural factors: It attributes a major chance of being global like TSI, TCA of providing 24 hours ongoing operations having enormous impact on community health care through the maintenance of nurturing a balance with basic medicine.
  • Technological factors: The industry is highly technologically upgraded by utilizing numerous tools for personal fitness training, circuit training of PACE hydraulic exercise equipments, Microfit, aerobics, blood pressure, body weight and some other tasks.

Venture background

Fantom Fitness Center (FFC) is a professional family fitness and health care home which’s ultimate mission is “Stay you fit”. The major objective of this institution is to break the traditional obstacles preventing people the necessary care on health by offering quick and easy service in a comfortable atmosphere. FFC will be located on 17, XYZ Street, London involving outdoor and indoor features as complete fitness facilities, yoga, step classes, body pop, saunas, cardio- room, running or walking track, legs bums and tums, racquetball courts and Wally ball, body combat, body pup, activity room etc. Other information are-

Target customers:- Targeting single adults, youths, senior citizens and senior couples as desired customers, FFC tends to serve the segmented customers social, educational, leisure and most influentially athletic and fitness objectives with a major concern for the forthcoming members in mind.

Size: – Initializing with £1100000 of capital in cash, the fitness house will be established on 3000 square meter plot with the original two- storied building on 3000 square foot. Locating in a commercial zone, it will have car parking, lawn and adequate electricity, sewage, plumbing, gas and generator facilities.

Services and facilities: The core services and features that will be offered by FFC are following:

  • Fitness room- It will be composed with latest training materials allowing the customers above 14.
  • Circuit training room- It is a swift, enjoying and body movement with PACE hydraulic system that provides timely and orderly grow of heart rates for older than 10 years.
  • Swimming pool- 22 yard, 4 lanes, heated swimming pool with an aquatic plan associated with aerobics classes, swim team and instruction classes for adults and youths.
  • Running or walking track- Indoor and banked track for more than 10 years older.
  • Hot tub- Dip relaxation for more than 14 years older.
  • Cardio- center- Includes modern cardiovascular materials of stair climbers, elliptical cross trainers, recumbent and stationary bicycle, treadmills with an option of viewing cable TV for above 14.
  • Saunas- Dry saunas in locker room.
  • Racquetball courts and wallyball- Having two courts, it will give the facility of reservations.
  • Training for personal fitness- Comprised with priced session on the basis of hour and package.
  • Corporate membership- It will offer this for developing health of corporate employees.
  • Assessment center for health- It will promote the member’s activity by incurring fat.
  • Microfit- This automated evaluation module offers easiness of handling that involves:
  1. Strength
  2. Blood pressure
  3. Fitness level of aerobics
  4. Analysis and planning of nutrition
  5. Easy to move
  6. Composition of body and other fitness essentials.
  7. Others- Classes, youth adult open gymnasium, open swim lesson etc.

Personal and office equipments: – FFC will need a number of fitness equipments, materials, 12 pieces of cardio equipments, communication information displays, multi- gym machine, benches, racks, dumbbell set, weight mats, intercom, chair, tables, computers etc. and other needed interior and exterior decoration tools.

Background of the entrepreneurs: – Rojar Milford, Tomas Potter and Davis Kotler have been recently completed their graduation from CMC Business School being British by Birth with an additional training of gymnastics course.

Marketing plan

Projected services of FFC are aerobics, gymnastics, free- hand exercise, yoga, swimming etc. It will offer such services based on course work ranging from £100 to £300, month basis that ranges from £30 to £100 and short- term instant services on hourly basis from £5 to £15. FTC’s main goal is to establish itself as a reliable workshop for fitness and health care for formulating a handsome market share and profitability in the long- run. Thus, the marketing manager will have to prepare this plan to serve, constitute and customize intended services. Running by the initial capital, the company is expecting to reach at the break- even point from at the 1st year of 2009 and 10% increase in profit over that period.

Market situation

The number of health clubs has been raised by 40% since 1992 and the year 2010 has been targeted as to reach 10 million global members for health clubs among which U.S.A occupies the largest portion of 50 million members and other 50 million are placed by other nations in the world. The primary members are middle class health conscious single adults, youths, senior citizens and senior couples who want to keep themselves fit and take a routine care of physical and mental health at reasonable pricing in a healthy environment but do not invest in expensive health clubs. They want to get a complete service offered by a name they can trust.

Service situation

FFC will offer a number of services including free- hand, instrumental, aerobics, suggestions, classes, yoga, body pop, body pump, legs bums and tums, body combat, swimming etc.

Competitive situation

FTC’s major competitors in UK can be identified as Green health and fitness club, Dragons, Fitness Exchange, Fitness First, Fitness Express, Harpers, Kinetika, Living Well, Spirit Health Club of which most of them are connected with FIA. Many also pose a number of competitive advantages, like- Green health club has restaurant, aerobics studio, multi- optioned swimming pool etc.

Distribution situation

Gymnastics services will be offered directly by the main center at 17, XYZ Street primarily but it will consider of opening branches at other location up to public demand.

Macro –environment situation

About 90% family suffers from a number of chronic diseases that can be minimized through regular exercise according to clinical research. For this, more than 50% of the total populations are now showing consciousness of receiving regular therapy by admitting in a gym along with the youth’s desire to keep a fatless figure. Thus, the last 15 years have been resulted many gyms and now there are about 3300 health clubs in UK. As market approaches saturation, efforts must be turned to convince customers of having upgraded fitness care.

  • Stars are the high- growth, high share business with heavy investment and finance.
  • Question marks are low- share business unit in high- growth market.
  • Dogs are low- growth, low- share business.
  • And finally, FFC is expected to fall into Cash Cow criteria since the business will tend to generate a low- growth bur high- share in the market with the of less investment for holding its market share. It is also expected to generate cash by which the company pay bills and support other operations after the 1st 2 years.

Opportunities/ threats analysis for the proposed project

Opportunities:

  • People are showing increased interest in fitness and health care.
  • Established hospitals and beauty- stores will be interested to join with FTC.
  • Exclusive instruction and promotional offers (free suggestions on daily diet) will pose attraction to the potential customers.

Threats:

  • An increasing number of customers are participating with free membership at several hospital and beauty- parlors who may not be interested in FTC’s service.
  • Some competitors arrange counseling leaded by renowned physicians or foreign gymnastic expertise for instruction which will not arranged by FTC initially.

Strengths/ weakness analysis for the proposed project

Strengths:

  • Excellent location for easily attracting customers’ attention.
  • Considerable and flexible class schedule and practice caring the scope and facility of target customers.
  • Well trained instructors and staffs.
  • Safe and upgraded exercise instruments.

Weaknesses:

  • FTC is budgeting merely 9.10% of its total capital for advertising and promotion whereas some major competitors are spending more than that.

Issues analysis

FTC must consider the following basic issues:

  • Will FTC complete compete effectively? Or, should it divest service line?
  • Will it stay in fitness and health care business?
  • If it stays in this business, will it continue its present services, distribution channels, and price and promotion policies?
  • Should FTC increase advertising and promotional expenditures to adjust with competitors?
  • Should it introduce R & D to develop advance, exercising, dieting habit or standard suggestions for the members?

Financial objectives

  • Earning an annual rate of return on investment of 10% after the 2nd year of operation incurring taxes.
  • Achieving break- even at the end of 1st year.
  • Producing a positive cash flow by the end of 2010.

Marketing objectives

  • Achieve total service revenue of £129000 in 1st, £220000 in 2nd and £222000 in the 3rd year.
  • Expand customer awareness of FTC from 15%- 30% over the planning period.
  • Aim for the range of price from £5- £300.

Marketing strategy

  • Target market: Mid- class elder citizen, youth, adult, single parent etc.
  • Positioning: “The best caring of your health”.
  • Service line: Training, consulting, practicing services.
  • Price: Reasonable price somewhat below than competitors.
  • Distribution outlets: Single servicing center.
  • Customer service: Consistent service with training of instructors and staffs by the external expertise, follow- up registration cars and telephone call from different members for getting feedback, regular contact with members with newsletters, telephone call, e- mail or fax, continuous improvement of quality of services.
  • Service promotion: A number of promotional efforts will include free classes, consulting services, standard diet suggestions, premium, discounts and coupons for early membership, gift for family membership etc.
  • Advertising: Frequent advertising on the center will be promoted at newspaper, radio, billboard, newsletters etc.
  • Marketing research: Incur expenditure by 10% to improve knowledge of customer- decision making process and to monitor competitor moves.

Marketing costs

Total budget for marketing activities has been fixed £100000 that will be spent as following-

Advertisement £50000
Promotion £40000
Market research £10000

Brand positioning map

Through positioning FTC will be positioned in the customers mind on important attributes, like- training, serving, pricing etc. relative to the competitive efforts. That means, it will involve implanting the brand’s unique benefits and differentiation in the customer’s minds. In this regard, it will position itself as “The best caring of your health” to remind people that is offers the outstanding services and care of customers health better than others in market. Thus, FFC can go for a perceptual positioning maps that shows possibility of customers perceptions of this center versus others as following-

Action program

FFC will carry out its marketing tasks as following:

  • In the 1st 3 months of 2009, FFC will advertise in the newspaper as the exploration of a new health care center with modified gymnastics expertise at a reasonable price and free membership for the faster- comers.
  • From the next month to 6th, it will advertise in billboard and serve newsletters and all of this will cost for £25000.
  • 2010 and 2011 will incur £15000 and £10000 for this purpose.
  • Promotional programs will be carried upon 2009 at £15000, 2010 at £15000 and 2011 at £10000.
  • Consumer research during the 1st 6 months of 2009 and last 6 months of 2010 has been estimated by £6000 and £4000 respectively.

Facilities plan

The location of FFC will be in the lobby at 17, XYZ Street of London, this location is fruitful because it provides access to larger base of target and potential customers who pass their school and office going to and from job to the street as well as garaging purpose and the existence of commercial parks where the senior citizens tend to go for a walk. Estimates that daily traffic are between 4000 and 5000 individuals passing through the venue at each hour that projects 8000 to 10000 people per day among whom 10% is assumed to become our potential customers. The location will be bought by the entrepreneurs.

Operations plan

The entire plan will be generally handled and controlled by Chief Management Team composed of three entrepreneurs who will operate through four departments of operations, marketing, administration and finance and human resource.

Operations department will be required to handle daily services of the center. Marketing department will carry upon marketing functions of the FFC. Administration and finance department will be responsible to deal with monetary affairs like scheduling, conducting with members, receiving payments, handling of late payments etc. as well as registration and membership related issues.

HR department will be assigned to manage employee selection, benefits, compensation, training and motivational efforts.

Other details about operations of FFC are below:

  • FFC will provide service from Monday to Saturday at 8a.m to 7p.m. Classes will be held on two shifts. 1st shift will be ranged from 9.am to 11a.m and 2nd shift will be ranged from 3p.m to 5p.m., interested customers will have to conduct with administration manager for a timely membership either on course or month basis. Generally, there will be 6 prime instructors and 8 assistant staffs with 2 security guards, 1 cleaning man and 1 pool man.
  • Salary structure-
Instructor £8000- £9000
Assistant £4000- £4500
Other £2000- £2500

Besides those, among 4 departments, 3 will be operated by 3 owners except marketing for which external marketing expertise will be hired at £9000. Temporary and part- time staffs will be hired on condition basis.

FFC will operate in the following criteria:

  • Aerobics classes, swim teams, swim instruction classes and lap- swimming options will be operated by chief swimming instructor.
  • Stair climber, recumbent bi- cycle and treadmills etc. facilities will be provided by cardio- center.
  • Community walking passes on monthly basis will be served by running or walking track.
  • Private activity room service will be operated for the groups of 25 or less than that while meetings and parties are allowed to hire this room.
  • Extra facilities will be offered by the accommodation of company and office parties, special events and much more.
  • The operational objectives will also cover classes, adult and youth open gym, general gym, volleyball, wallyball, basketball etc.
  • According to the design of nutrition and diet expert, “one- on- one” weight counseling will be offered at three times weekly that will focus on “real” diets supplements.
  • Class schedule (everyday at 9a.m- 11p.m and 3p.m- 5p.m)-
Aerobics Monday to Thursday
Freehand Monday to Saturday
Instrumental Monday to Friday
Yoga Monday to Friday
Swimming Monday to Thursday
Others Monday to Friday
  • Open practice and gymnastics practice will be available at any time of the pick hour.
  • Consulting services will be available at Friday and Saturday from 5p.m to 6p.m.
  • Private activity room containing seating capability of more than 35 where meeting as well as parties will be organized.
  • Arrangement of company and office parties, sleepovers and gathering of church with rental service that can be hired by anyone by reservations.

HR planning of FFC

  • Talent instructors and staffs are the heart of FFC, for this, managing of such personnel lies at top of the influential factor of the operational planning. HR section will be responsible for hiring, evaluation, training programs but initially, this will not include employee benefits as health insurance and retirement pension.
  • Thus, all instructors will be initially selected on expertise basis including experience of at least 2 years in the related field. No experienced people can also be appointed on the consideration of expertise and efficiency.

Employment procedure

  • Becoming responsible with the hiring process, the HR department reviews the budget for determining the availability of funds. Then it will post the jobs, collect application and resumes and verbally interview the candidates. In this process, applicants who will pass in the initial interview will be assigned for a short physical test (varying for instructors and assistants). But before hiring of a new staff, the department will identify both intent and salary of employment. The status of employment of new staff will also be practical oriented focusing a true background checked by the company. The GM’s approval will ensure the position of employment.

Organizational plan

Major factors regarding organizational plan are presented below:

Forms of ownership: – FTC will be formed under partnership agreement by Roger, Tomas and Davis. General conditions are:

  • 60% of total capital will equally be invested by each partner as-
  • Partner 1: £220000
  • Partner 2: £220000
  • Partner 3: £220000
  • Each will actively participate in the Chief Management Team and operational practices.
  • Profits and losses will be shared equally.
  • Each will bear similar portion of liability.
  • The CMT will lie at the central power and control of the center that will be organized by three initiators who will also carry out and deal operations, HR, administrative and financing performance of the organization.

Assessment of risks

Number of risk factors of FFC has been assumed as:

  • Limited budget of marketing programs will make constraint to have people a clear and district idea about the center.
  • A number of competitors are running on diversified track to attract patricians’ attention while FFC is going to initialize some structural limitation.
  • Lack of connectivity with FIA that may hinder in building affluent community relationship.

A number of measures can be taken to overcome such risks. As following:

  • Diversified services in several criteria.
  • Shortage in capital would be removed through the steps to convert the ownership as Limited Liability Company (LLC).
  • Building up of long- term customer lifetime value or CLV will be helpful to create community relationship.

Financial plan

  • This plan begins with the total budgeting of the company of £1100000 that will be provided by 3 entrepreneurs by 60% and the rest 40% will be supplied by PLC Bank ltd. at a 5% interest rate within 10 years.

Break- even analysis

  • By analyzing the pro- forma income statement for the projected year, it can be idealized that at the end of the 1st year of operation, FFC will reach at break- even point where projected revenue will be £160000 and expenses £160000 that indicates no profit no loss situation which can be shown graphically

Implementation timetable

  • Operation manager will receive a report of progress through voice and e- mail since everyday problems and requirements can be best communicated with such mails.
  • The instructors, assistants others will perform under operations department for scheduling class, consultancy and practice since FTC will employee 3 instructors and 5 assistants during the 1st year, 4instructors and 8 employees during the 2nd year finally 6 instructors and 8 assistants during the 3rd year. Thus, top and bottom line management will constant during the time frame.
  • There will be a monthly meeting conducted after the first year with the members of the management team for success measurement of the center.
  • Finally, FTC is going to start its operation from January 1, 2009. Thus, construction, design, fittings, decoration of employees etc. are required to complete within December 20, 2008.

Bibliography

  • Addison-Penzak Jewish Community Center, (2008), Annual Report 2007/2008.
  • Boone County Hospotal, (2008), Heartland Fitness Center.
  • Diversified Health & Fitness (2008), Two Events That Changed.
  • Grand Valley State University, (2001), Business Plan for Bouncy Kids Child Development Center 2001.
  • Griffin, R. W. (2006), Management, 8th Edition, Houghton Mifflin Company, Boston New York, ISBN: 0-618-35459x
  • Hisrich, R. D., Peters, M. P. (2005- 2006), Entrepreneurship, 5th Edition, Tata McGraw- Hill Publishing Company Limited, New Delhi, ISBN: 0-07-048660-3
  • Hitt, M. A., Ireland, R. D., Hoskisson, R. E. (2001), Strategic Management, 4th Edition, South- Western Thosmson Learning, Singapore
  • Iowa State University (2006), Management of Health-Fitness Programs and Facilities.
  • Kotler, P., Armstrong, G. (2006), Principles of Marketing, 11th Edition, Prentice-Hall of India Private Limited, New Delhi, ISBN: 81-203-2825-6
  • Kotler, P. (2006), Marketing Management, 11th edition., Prentice Hall, NJ, ISBN: 0-13-0336297.
  • Paloni, B., (2003), . Web.
  • Porter, M. E. (2004), Competitive Strategy, Export Edition, New York: The Free Press, ISBN-10: 0743260880
  • Small Business Advancement National Center (2008), Business Plan Guidebook.
  • Stutely, R. (1999), The Definitive Business Plan, Pearson Education Limited, Great Britain, ISBN: 0273639307
  • Stoner, J. A. F., Freeman, R. E., Gilbert, D. R. (2006), Management, 6th Edition, Prentice-Hall of India Private Limited, ISBN: 81-203-0981-2

Appendix

  • Local trade license.
  • Photocopy of partnership agreement.

Footnotes

  • 1 Assumed
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