Introduction
The Kingdom of Saudi Arabia is one of the fastest developing economies in the Middle East and North Africa (MENA) region. The Eastern Province is one of the most populated parts of the country, with a population of over 4 million people. With the rapidly growing economy, the living standards of people in this region are relatively high. However, the problem of obesity affects a relatively high number of people, especially women (Khoja, 2016). In this initiative, the focus is to start a spinning studio in this province with the goal of improving their health and earning income for the entrepreneur.
Product Offering
The studio will offer the clients spinning classes that will last for about 40 minutes per person. The studio will have about 40 adjustable gear stationary exercise bikes and four trainers to guide the trainees. It means that in every single session, the studio will be capable of serving 40 clients for a session of 40 minutes. The trainers will ensure that the clients are safe when they are in the studio and that all the rules and guidelines are followed strictly. The clients will also receive regular advice on the kind of diet they should maintain to ensure that they remain physically fit and healthy. The studio will also have a counselor for extremely obese people who feel that their condition is hopeless and that they cannot overcome their problems through physical exercise. The goal is to ensure that clients are offered holistic products that meet both physical and psychological needs. Kumar (2015) argues that mental strength is critical when engaging in physically demanding activities. We intend to ensure that our clients are mentally prepared for the challenging and regular physical exercises in the studio.
Target Market
The spinning studio will primarily target men and women aged 25-65 years. According to Gilliland, Sglavo, and Tashman (2015), this is the worst affected population when it comes to the problem of obesity and overweight. The majority in this age bracket is in gainful employment and spends most of their time in offices or relevant workstations. They rarely get time to engage in regular outdoor activities. They easily gain weight not only because of limited physical activities but also because of diet. Mejia and Murphy (2017) argue that most of the traditional foods in Saudi Arabia are becoming less popular, especially among the younger population. Pizza, pita, chips, fried chicken, and red meat, among other high-calorie foods, are becoming very popular in the country. These fatty foods are dangerous, especially when the affected group fails to engage in physical exercise. This population was targeted because they already have the knowledge about the dangers of obesity and the relevance of spinning classes in fighting the problem. The initial market survey revealed that the current demand for these services is higher than the supply.
Industry
The physical fitness industry is one of the fastest-growing industries not only in the Kingdom of Saudi Arabia but also in the world. In the past, many people considered such services a preserve of athletes and super-rich members of society who could afford to assemble the expensive gym equipment in their homes. However, that perception is changing as doctors continue to urge their patients and members of the public, in general, to engage in regular physical exercise. A high number of people are now seeking these services, increasing the demand for physical fitness services, especially in urban centers. In the Eastern Province, a growing number of middle class people are finding it critical to engage in regular physical exercise because of several reasons. Given the highly demanding careers that most of them have, they find exercises such as spinning classes stress-relieving and mentally strengthening (McMains, 2015). The demand is increasing, but the supply is relatively low based on the initial market survey that was conducted. It means that this firm will not encounter stiff market competition. The biggest challenge that is foreseen in the industry is dealing with future market entrants.
Market Entry and Growth Plan
The firm intends to make a direct market entry into the selected market. The nature of services that will be offered by this entity makes it necessary to have a physical presence near the location of targeted customers. The goal is to identify the best location within the residential areas of Dammam. The city has a relatively high population and the living standard is also high. It is expected that more clients will be available at this location. The first studio will be in this city. Before spreading the service to other cities within the province, the firm will ensure that it has fully capitalized on this first market. More studios will be set up within the city to limit the capacity of new entrants to make a successful entry into the market. Clients will be paying for these services on a monthly basis. They will be required to pay 150 Saudi riyals. After a successful operation for four months, we intend to start our expansion strategy. At each studio, we intend to hand 40 standard adjustable gear stationary exercise bikes, 4 trainers, and a counseling officer who will also act as the center manager.
In our growth strategy, the goal will be to ensure that we serve almost all clients within the major urban areas of the province. It is evident that at the moment, the current players in the industry are not capable of meeting the needs of the customers. The strategy will be to meet their needs in a superior way that will discourage other rival firms from making an entry into the market. Marketing will be one of the major areas of long-term investment that the entity will incur. The marketing team will develop promotional campaign messages that will target customers within the province. The department will use both mass and social media marketing to reach out to its customers. Mass media marketing will primarily be based on television and radio. In social media, Facebook and YouTube will be the important channels that will be used.
Operations
According to Joyce and Rasheed (2017), the success of any start-up largely depends on the manner in which it is operated. Before starting operations, the owner will see that all the necessary government approvals and licenses are obtained to ensure that the entity operates legally. When the project is initiated, there will be only one manager who is also an entrepreneur investing in this business. The first studio will have seven employees. One of them will be a counseling officer who will also act as a supervisor. There will be four trainers who will be working with customers in the spinning class. The studio will also have two cleaners who will be reporting to the facility every morning. Cleaners will be expected to ensure that the facility remains tidy and hygienic at all times. In the initial months of operation, the facility will outsource services of experts to repair and maintain the equipment in good shape.
Furthermore, the management is keen on expanding the operations of this firm beyond the first location. As more branches are opened, the management will expand in line with the increasing number of employees. In each branch, counselors will also double up as center managers responsible for the operational activities within their area of jurisdiction. The entrepreneur will also consider hiring a regional manager to coordinate activities in all branches and to ensure that the needs of customers are met in the best way possible. The firm intends to identify a single supplier who will be responsible for availing the needed equipment. The firm will also hire its own specialist who will be moving from one center to the other to repair and maintain the training equipment.
Finances
It is critical to look at the issue of finances to ensure that the spinning studio achieves desired success. The studio must be sustainable in terms of meeting its own expenses. The initial capital will come from the owner of this business. The project will need 240,000 Saudi riyals that must come from the owner of the business. This will be broken down as shown in table 1 below:
Table 1: Expenses.
It is expected that within this period, the project will be self-sufficient. The owner will only need to consider making an investment in other facilities. Table 2 below shows the projected income from this project. It is important to note that there will be four gym sessions in the morning, and five in the evening. The facility will also be available for schools and clubs that may make special requests.
Table 2: Income.
The income and expense projection shows that this business is profitable and will be self-sustaining within the first six months. It is important to note that expenses for bikes will be covered only once in two or three years when a replacement is needed. It means that the profit will increase after the initial six months.
Conclusion
The Kingdom of Saudi Arabia has one of the fastest developing economies in the region. However, it is worrying that the health of its people is affected by the growing cases of obesity. This business plan focuses on starting a spinning studio to help people of the Eastern Province to remain physically fit and avoid obesity. Financials strongly suggest that if everything goes as per expectations, this business will yield impressive profits. Given the limited level of competition and the growing demand, this is a lucrative investment.
References
Gilliland, M., Sglavo, U., & Tashman, L. (2015). Business forecasting: Practical problems and solutions. Hoboken, NJ: Wiley.
Joyce, P., & Rasheed, T. (2017). Public governance and strategic management capabilities: Public governance in the Gulf States. New York, NY: Francis & Taylor Group.
Khoja, H. (2016). A global nomad in search of true happiness. London, UK: McMillan Publishers.
Kumar, S. (2015). Process management in spinning. New York, NY: Taylor & Francis Group.
McMains, J. (2015). Spinning mambo into salsa: Caribbean dance in global commerce. New York, NY: Oxford University Press.
Mejia, M., & Murphy, M. (2017). The men’s health gym bible (2nd ed.). New York, NY: Rodale Inc.