Business Proposal - Gym Cafeteria - Essay Example

?Business Proposal - Gym Cafeteria Business idea My business idea is a GYM with cafeteria facility in London to provide GYM members with suitable food pattern. The suggested business idea is unique in this area because many of the GYM centres do not have cafeteria facilities or they do not pay attention to their members’ diet. Even though such GYMs provide their clients with modern exercise equipments, they are unable to promote sustainable health. As a result, their clients are forced to depend on external sources to maintain diet. In most cases, people do not give much attention to their dietary habits even though they are willing to spend long hours in GYM centres. GYM instructors opine that regular exercises alone will not make an individual stronger unless he practices systematic diet pattern (Headquarters, Department of the Army, 1998). That means, people who practice in traditional GYMs do not get intended benefits in the long term. In this context, the proposed idea is of considerable significance as it addresses overall bodybuilding needs of the clients. Moreover, the integrated operation of the GYM facility and the subsidiary cafeteria service will be able to offer fee concessions to clients. In addition, the planned facility will offer increased convenience to clients as they get exercise equipments and necessary healthy foods under a single roof. For the suggested business idea, highly developed exercise equipments and experienced and trained instructors are required. This proposal has great growth potential since people are more concerned about their health nowadays because of the increasing prevalence of obesity and heart related diseases. Hence, it is possible to develop the proposed venture over years. The market Although this business proposal has higher potential for growth, the marketer needs to face a sequence of challenges whiling going on with this project. Firstly, the marketer has to identify target groups. For this purpose; referring to Cant et al (2006), one must conduct an extensive market research to get a detailed view of the people’s health perception (pp.158-159). Traditionally, young males are the only group who visit GYM centres. However, this situation has been changing for the past two decades and it is observed that all categories of people including women and children are visiting GYMs to keep themselves stronger (Healthkicker, 2010). According to Hanc (2010), the practice of aged people visiting GYM centres is on the rise. Hence, the marketer must focus on all types of people without gender and/or age based disparities. Zikumund & Babin (2007) indicate that the market research process is helpful in accurately identifying main target market and its special characteristics (p.20). Under this business, it is necessary to consider tastes and preferences of individual customers since health concerns may be different from person to person. In the opinion of Stephenson & Thurman (2007), the market research strategy would benefit the venture developer to create customer profiles and thereby customise service offerings (p.13). Mohr et al (2009) suggest that traditional questionnaires, online surveys and automated call surveys can be deployed to conduct the market research programme (pp.190-191). The marketer must also consider historical statistical data to assess changing trends in GYM business. Referring to Chaturvedi & Chaturvedi (2009), after identifying the main target market, it is strongly recommendable for the marketer to develop proper and effective communication channels to interact with his clients (p.37). According to Guffey and Almonte (2010); in the modern business environment, online communication channels including company websites and emails and telephone communications are strongly suggestible (p.34). As per the idea put forward by Miletsky (2009); to promote the business venture, the marketer may use infinite scope of internet, especially social networking sites such as facebook and twitter (p.54). It is advisable to create GYM demonstration videos and publicise throughout the media (online media and traditional media like television). Referring to the recommendation of Kennedy (2006), the marketer may also hire celebrities like football players to promote his business venture (p.60). While marketing the business venture, the connected cafeteria service must be specifically highlighted. Similarly, intense market competition also raises a set of potential challenges to the proposed GYM project. There are numerous GYMs and fitness centres including Gymbox in the London city and majority of them are well established (Mall secrets, 2011). Under such a market environment, it would be a very difficult task for the marketer to introduce this new business idea into the market. Hence, the marketer must gather necessary competitor information through the initial market research programme and identify who his potential competitors are. According to Capon (2009), while evaluating his competitors, the marketer must thoroughly scrutinise their relative strengths and potential weaknesses (pp.69-70). This strategy would assist the marketer to frame a detailed marketing plan containing strategies for sustainable growth. The fee for GYM services in London ranges from ?30 to ?70. Most of the GYM service firms in London offer a wide variety of exercise equipments and well experienced instructors. However, majority of them are struggling with issues like increased rate of staff turnover, inconvenient location and higher costs. It is better for the marketer to adopt a competitive pricing strategy because the innovative subsidiary cafeteria service may assist him to gain competitive advantages over his rivals under this pricing policy. Financial issues For the proposed business venture, it would be necessary to invest a start-up cost ranging from nearly ?175,000 to ?200,000. The major portion of the investment (say 80%) is to be used towards the building facilities and purchase of GYM equipments. The remaining 20% of the funds have to be set aside for the planned cafeteria facility. Once the GYM centre is established, there are fewer needs of running costs which mainly include electricity charges and staff remuneration. However, the marketer has to reserve some funds for meeting equipment maintenance costs. Possibly, the annual maintenance costs may be well below ?5000. Demand for the GYM services may be lower at the initial phases of the business as there are already a number of well established GYMs with great market stature. It is possible to expect annual revenue in the range of ?15,000 to ?25,000 in the first financial year. At the primary stages, it is not required to raise additional funds for expansion and hence cash flow considerations would not be a complex task. Since a GYM centre requires only fewer operating costs, major portion of its revenues becomes business profit. The marketer may depend upon bank loans, personal credits, and other borrowings to finance his venture’s operation. However, availability of this type of funds is greatly dependent on the creditworthiness of the marketer. In addition, higher interest rates may be also an issue if the venture does not bring expected returns. Operational issues While implementing the proposed business venture, the marketer needs to comply with the country’s licensing requirements and other legal regulations. GYMs need to attain special health license to commence their operations (Association for Applied Sport Psychology, n.d). It is necessary for the marketer to obtain separate license for each serves offered at GYM, including massage services, martial art sessions, or tanning booths. As the venture is planned to begin as a small business, the marketer would face a series of difficulties including working capital deficiency, lack of skilled instructors, and policy amendments. Staffing is one of the major identified issues in GYM business because there are only fewer people who are skilled in body fitness training. Inadequacy of skilled instructors coupled with low wages result in higher rate of employee turnover in GYM business. Staffing turnover seriously hurts operational efficiency of GYMs because this issue may cause clients to lose their interests in the GYM. For a good GYM facility, extensive infrastructural engineering is required (Fitness Innovation Technologies, 2012). However, it is very difficult to find such a large area in the City of London. In addition, the marketer may find difficulties in finding potential suppliers in order to ensure effective supply of modern exercise equipments. While offering an additional cafeteria service, the marketer needs to employ additional employees who are knowledgeable about healthy dietary habits. References Association for Applied Sport Psychology., n.d. Fitness industry guidelines task force, [Online] Available at: [Accessed 02 April 2012]. Cant, MC, Strydom, JW, Jooste, CJ & Du Plessis, PJ., 2006. Marketing Management, South Africa: Juta and Company Ltd. Capon, N., 2009. Capon's Marketing Framework, England: Wessex Publishing. Chaturvedi, PD & Chaturvedi, M., 2012. Business Communication, India: Pearson Education India. Fitness Innovation Technologies., 2012. Fitness infrastructure consultancy, Fit, [Online]: Available at: [Accessed 02 April 2012]. Guffey, ME & Almonte, R., 2010. Essentials of Business Communication, USA: Cengage Learning. Healthkicker., 2010. The types of people at gym, [Online] Available at: [Accessed 02 April 2012]. Hanc, J.,03 March 2010. In America’s gyms, more than a touch of gray, New York Times, [Online] Available at: [Accessed 02 April 2012]. Headquarters, Department of the Army., 1998. Physical fitness training, pp. 1-241, [Online] Available at: [Accessed 02 April 2012]. Kennedy, DS., 2006. The Ultimate Marketing Plan, USA: Adams Media. Mall Secrets., 2011. Westfield Stratford City gymbox gym & fitness centre details, [Online] Available at: [Accessed 02 April 2012]. Mohr, J, Sengupta, S & Slater, S., 2009. Marketing of High-Technology Products and Innovations, New Jersey: Jacky Mohr. Miletsky, J., 2009. Principles of Internet Marketing: New Tools and Methods for Web Developers, USA: Cengage Learning. Stephenson, J & Thurman, C., 2007. Ultimate Small Business Marketing Guide, Canada: Entrepreneur Press. Zikmund, WG & Babin, BJ., 2007. Exploring Marketing Research, USA: Cengage Learning. Read More