Business Plan on The Fitness Club - Essay Example

? Business Plan The Fitness Club Contents Executive Summary 3 Financial Highlights 4 Start-up Costs 4 Expected Growth in Revenue 4 Expected Growth inProfit 5 Company Description 5 1.1Company Overview 5 1.2Mission & Vision 5 1.3Strengths and Competencies 5 1.4Challenges 6 Industry Analysis 6 2.1 Overview 6 2.2 Industry Locations 6 Marketing Plan 7 3.1 Marketing Opportunities 7 3.2 Barriers to Entry 8 Marketing Strategy 8 4.1 Value Proposition 8 4.2 Branding 9 4.3 Marketing Objectives 9 4.4 Marketing Strategy 9 4.5 Marketing Budget 10 SWOT Analysis 10 Products and Pricing 12 Works Cited 13 Executive Summary The Fitness Club will provide workout and various fitness routines. It will also help develop individual diet plans for its members. Health clubs and gyms business is booming all over the world and UK is no exception. People are getting interested in losing weight and eating healthy. Staying in shape and looking ‘good’ is the new trend and people are willing to invest money in their health plans and the Fitness Club is here to help them. What sets this club apart from other health clubs is the variety it offers at a very low cost. It can be afforded by people from all walks of life. They not only get the place to get in shape but coaches customize their diet plans and encourage them to keep up with the schedule. The coaches and nutritionists at this club are highly qualified and experienced in their respective fields. They have helped so many people achieve their dream body figure. Other than the fitness trend, the fact that a huge market area is till untapped justifies this business plan. People are also joining health clubs to stay away from obesity and its related diseases. According to a survey, 17% of boys and 16% of the girls in UK between ages 12-15, have some form of obesity (BBC, 2012). That is why it is a great opportunity to cash in this factor and get people motivated to achieve a healthy life style and this club exactly does that. Competitors in the health and fitness industry mostly ignore low income people and a perception has started to develop that health and fitness clubs are only for rich people; paying for the club, the coach, getting time off of working to exercise and most importantly eating healthy and nutritious food is out of reach of low income people. This perception is completely wrong and needs to be taken off the market. Even though the fitness market is extremely competitive but there is a lot of room for growth. Health awareness and fashion clothing are the main contributors towards motivating people to join health clubs. State of the art equipment will be available for all members of The Fitness Club. Financial Highlights Start-up Costs Expected Growth in Revenue Expected Growth in Profit Company Description 1.1 Company Overview The Fitness Club will start its central office in Bicester Oxon, UK this June 2012. Later on, more branches will be opened throughout UK starting from Edinburg. The company is also looking forward to opening health centres in areas of UK that haven’t been tapped by fitness industry. The Fitness club is planning to provide great quality fitness services at extremely competitive costs. The objective is to appeal to the affordability of the customers so that people from all walks of life could join in. 1.2 Mission & Vision Vision: To create sentience among people about healthy lifestyle. Mission: To provide custom made exercises and meal plans for the mass market. 1.3 Strengths and Competencies State of the art fitness equipment available to use at the lowest price Highly qualified and experienced trainers and nutritionists Dedicated staff that actually inspires and motivates people 1.4 Challenges Despite of having the advantage of highly qualified coaches and nutritionists, there are few competitors that can cause neck to neck competition. The Fitness Club will have to plan its strategy of promotion and marketing by keeping an eye on ‘The Fitness Company’, which operates exactly in the same area where the central office will be built (Bicester Oxon) (Fitness Company, 2012). Other than physical gyms, there are many online and DVD health and fitness programmes that only raise the bar higher for The Fitness Club. Industry Analysis 2.1 Overview After struggling for almost a decade, the fitness industry has hit big in UK. People have finally started taking health and fitness clubs seriously and it has opened doors for innumerable financial opportunities. Up till now, there are over 8.7 million people across UK that have gotten themselves a gym or a fitness centre ownership and it constitutes about 17% of all adult UK population. Growth potential is still significant but not as lucrative as it was back in 2000s. Financial forecasts for fitness industry of UK estimates an increase of 2.4% per annum in revenue with a total of ?747.3million for the next five years (IBISWorld, 2012). The market value for fitness facilities built in last 12 months alone is worth ?3.8bn (Leisure Database Company, 2012). 2.2 Industry Locations Fitness centres and gyms in UK are mostly concentrated in the urban areas. The main reason for this concentration is the population. Majority of the population gets membership from the gym near their house and revenues attract other fitness centres to make a place for themselves in the fitness industry. Another factor that contributes to the location of gyms in urban areas is the fact that there are no alternatives for physical exercise in those places. Despite the fact that population is the major factor for the growth of gyms and fitness centres in certain areas, the revenue generation is maximum in high income areas. For instance, London holds almost 12.4% of the whole UK population but surprisingly contributes 29.1% of the total revenue of fitness industry. This huge difference in revenue generation can be explained by the differences in income per person which is different across UK. Gyms and fitness centres charge higher from high income people and generally provide additional facilities of a personal coach or trainer (IBISWorld, 2012). Marketing Plan 3.1 Marketing Opportunities The Fitness Club is an excellent opportunity for potential investors. The fitness market is booming and the potential for growth for this new company is remarkable. This can also attract investors who have not yet invested in any fitness industry yet. Moreover obesity is generally seen by a common man with disgust and people who are obese generally want to get rid of it. The fitness industry is booming because of this change in lifestyles and attitude towards healthy living. This is such a huge marketing opportunity, if properly tackled, can bring in huge investments and profits. Obesity itself is considered dreadful but there are also many diseases that are associated with obesity such as heart problems, hypertension and high cholesterol. Many researches have proved that a healthy lifestyle which includes proper amount of nutrition and physical activity can considerably reduce heart risks and hypertension. Market potential is great for many reasons, some are; Nearly 300 million people are struggling with obesity all over the world People are becoming more aware of health problems by not participating in physical activity People are concentrating more on avoiding diseases in the first place than to seek medical treatment after getting sick There is a huge number of people suffering from diabetes and high blood pressure all over the world 3.2 Barriers to Entry There are no barriers to entry for establishing The Fitness Club in the UK. Marketing Strategy 4.1 Value Proposition The Fitness Club will offer its members, state of the art gym equipment and food supplement. Not only the material stuff, the company will also provide customized coaching and training, plus a lot of motivation and inspiration. All of this will be provided at very competitive and affordable rates. The low cost strategy will be the main contributor to the success of this project. Monthly, quarterly and annual subscription plans will be offered to customers for their personal convenience. All of these fantastic plans will start from a basic workout plan for as low as ?20. All members, regardless of their membership plan, will be offered the services of a personal trainer who will guide them through the process of achieving a healthy lifestyle. Coaches and trainers will have frequent discussions and conversations with the members and help solve their health issues. Members will find a new home in the form of The Fitness Club but only healthier. 4.2 Branding Branding is really important to make a place in the member’s hearts and create customer loyalty. Various promotional seminars and conferences will be held at many places across UK. Many artists have been hired that will perform at promotional concerts for brand marketing The Fitness Club. There are also plans for naming various workouts and exercises that will be copyright protected, this way people will recognize the name of the company in a better way and will talk about it. 4.3 Marketing Objectives The Fitness Club will concentrate on establishing itself as a new brand in Southern UK. Later on (after a year or so) new branches will be introduced in the North as well. Various educational programs are also in the pipeline to aware people about healthy living and staying away from obesity and health diseases. 4.4 Marketing Strategy Low cost strategy has remained successful in many markets across the world. There will be a crucial collaboration with the people in public health awareness programs as they will be creating awareness about health as well as promoting the brand name of The Fitness Club. Phase 1 of the strategy is to tap into the physical market and phase two will include aggressive marketing in the electronic media. Online fitness classes will be promoted at all social platforms. DVDs will also be marketed as a regular product for the company. There is a lot of potential in the electronic media. People love the idea where they can receive fitness lessons from expert coaches and nutritionists at the comfort of their home. People generally don’t have any issues converting a specific part of their home into a small gym (it can be the living room too). For these reasons, it would be absolutely necessary to tap into the electronic media where more customers can be converted into revenue. 4.5 Marketing Budget An initial budget of ?5500 has been assigned for the year 2012. Later, marketing budget will be adjusted according to customer response as well as the response of competitors. SWOT Analysis Strengths The management and the owners are devoted whole heartedly to the success of this business plan. Motivation, inspiration and the marketing spur are the results of management’s enthusiasm The concept of health and fitness centres have been fabricated according to the needs of a low income layman Lowest possible cost for state of the art fitness facility in all of UK The Fitness Club already has a team of highly qualified professional coaches and fitness experts, and search for the best staff is in progress Weaknesses The trade-off between maintaining low price and providing good quality is very tough, moreover personal and customized training is very costly to provide Right now The Fitness Club is short on staff, it can create problems in the future as the company is expecting a huge inflow of people Marketing budget is not as big as needed to compete directly with the competitors Opportunities Due to increased awareness about health, more and more people are joining gyms and fitness clubs around the world An increase in heart diseases and obesity complications has really motivated people to adapt to a healthy lifestyle. A new trend has set in, where going to a club of gym is rapidly becoming a part of the daily routine Despite of rapid growth in the last decade, there is a huge market sector that has been ignored by the leading fitness companies, the low income sector, and that is where The Fitness Club will capitalize Threats Financial crunches and recessions can be major setback for the whole project and considering the fact that The Fitness Club is specifically targeting the low income community, a financial downturn will affect this part of the population more severely than any other sector, and ultimately The Fitness Club can suffer Well established competitors can also try to lower the rates just to get even with the Fitness Club. The probability of this occurring is very high for the first year of running the business As of this moment, there is still no budget available to launch fitness machines and products and therefore it is a huge risk, contingent to the fact that if other manufacturers start producing and selling home based equipment at cheaper rates, the club membership can drop drastically Products and Pricing The Fitness Club has constructed its strategy focusing on the untapped mass market. The marketing plan for the first year is not very aggressive but for the second year (as competitors will have reacted by then), a new marketing strategy will be introduced. But for now, the marketing strategy for The Fitness Club is based on the following products and pricing. Products Here are the products of The Fitness Club; Plyometric Kenpo Weight Training Breathing and Yoga Boxing Dancing Synergistic Exercise Program Nutrition classes Motivational Lectures Pricing Strategy The pricing strategy for The Fitness Club is all about attracting the customers. Member’s affordability is the number one priority for this fitness club. Membership plans start as low as ?20, and in this small price, the basic workout plus individual coaching is provided. Moreover, for a little extra charge, electronic communication with the coach will also be provided. This will help keep the customers stay in touch with the fitness experts and they would get all kinds of advice and guidance regarding the workout or the diet plan. Minimum membership plan doesn’t necessarily have to be over a month’s period; 64% of the customers at Fitness4less return even after getting 1 month membership (In-Depth Analysis, 2012). Works Cited BBC - Health: Fitness for children and young people . 2012. BBC - Health: Fitness for children and young people . [ONLINE] Available at:http://www.bbc.co.uk/health/treatments/healthy_living/fitness/motivation_young.shtml. [Accessed 19 January 2012] Fitness Company. 2012. Fitness Company. [ONLINE] Available at: http://www.fitnesscompany.co.uk/. [Accessed 19 January 2012]. Gyms, Fitness Centres in the UK Market Research | IBISWorld. 2012. Gyms, Fitness Centres in the UK Market Research | IBISWorld. [ONLINE] Available at:http://www.ibisworld.co.uk/market-research/gyms-fitness-centres.html. [Accessed 18 January 2012] Growth in Health & Fitness Industry Bucks National Trend | The Leisure Database Company. 2012. Growth in Health & Fitness Industry Bucks National Trend | The Leisure Database Company. [ONLINE] Available at:http://www.theleisuredatabase.com/news/news-archive/growth-in-health-fitness-industry-bucks-national-trend. [Accessed 19 January 2012]. Gyms tone up to take on their new low-cost rivals | In-Depth Analysis | Marketing Week. 2012. Gyms tone up to take on their new low-cost rivals | In-Depth Analysis | Marketing Week. [ONLINE] Available at:http://www.marketingweek.co.uk/analysis/features/gyms-tone-up-to-take-on-their-new-low-cost-rivals/3027713.article. [Accessed 19 January 2012]. Health Club Business Plan. 2009. Fitness Plus Inc. [ONLINE] Available at: http://www.bizplancorner.com [Accessed 18 January 2012] Read More