Business Perspectives for Fitness Center - Coursework Example

? BUSINESS PLAN FOR FITNESS ONE FITNESS CENTRE December 3, I. The Business Idea Type Of Business Proposed And Trading Status Fitness One is a thriving business-person's club but is also one of the only family-focused clubs in London. The target market are working men and women between 25 to 45 years old. Management aims to acquire its first 1000 member within the first year of operations. Fitness One will advertise via mainstream media will also utilize the Internet as secondary Sales and Marketing channel, aiming to tap the rest of England as potential expansion areas for the fitness gym in the next five years. The business will be financed with ? 100,000 by a sole proprietor and ? 200,000 through a business loan from a bank. Sales are estimated to reach about ? 52,000 average for the first and second year. A positive cash flow is projected at the end of the first year. 2. Range Of Products To Be Offered Fitness One shall offer club membership for access to various fitness and health programs, to include: a. Swimming b. Tennis c. Fitness Center with cardio vascular and weight training equipment d. Court Sports e. Massage f. Physical therapy 3. Geographical Location I have chosen the Covent Garden area due to its proximity to my hometown in Canterbury. London would be my home base as this offers better market reach. Covent Garden in London is popular for its shops, street performers, bars, restaurants, theatres and the Royal Opera House. It is an Italian style piazza holding restaurants, bars and fashionable boutiques and is known for being the capital’s premier entertainment and leisure destination. (Covent Garden Life.Com. 2007). Marlowe Arcade in Canterbury and Westgate Shopping Centre at Oxford are both popular destinations for both local residents and tourists. They are also the best places to put up Fitness One branches as they are situated along busy districts where the hustle and bustle happens. 4. Anticipated Customers, Target Market and their Distribution Fitness One will focus on the young urban professionals as its primary customer base. The programs will be designed to address the health and fitness needs of this target market. 5. Statement Of Viability/ Keys to Success Fitness One shall rely on the following Internal and External Factors as its Keys to Success: a. Market Knowledge – b. Service Quality - c. Targeted Marketing Campaigns – Fitness One will prepare and implement promotional campaigns that will create noise in the market. It will utilize its Internet Marketing Channel to ensure that it would be positioned in the right market. d. Right Marketing Mix – Fitness One’s aims to penetrate the target market via Internet Marketing. Its primary location in London assures the company of a solid footing, as this placed is recognized to be Europe’s Best City for Business by the European Cities Monitor 2004. (Visit London. 2007) e. A systematic cash flow – Membership costs shall be determined basing on the services offered and the target number of members per month. 6. Staff & Skills Requirements In Early Stages (If Needed) The minimum required skills and experience for the start up crew are as follows: Staff Assistant – At least two years experience doing administrative job. Must be skilled in basic accounting and bookkeeping. She is responsible in consolidating information and sales reports from the store and shall provide administrative support as well. Purchasing Staff – At least three years doing purchasing work for a retail company. Must be knowledgably in the processes in purchasing and as experience in supplier handling and relations. Store Supervisor – At least five years experience in store operations, two years as supervisor, with experience in Marketing and a graduate of any Business course Sales Staff – At least six months experience in sales in any kind of store industry Cashier – At least one year experience in store cashiering Inventory Staff – At least one year experience in Inventory Management 7. Explanation Of Basis For Planned Budget Size of the company Fitness One will basically be a small company. The management team will be composed of the owner and the club area supervisors who would be implementing all programs in the frontend. The projected budget shall cover all the expenses for the operations of the club, and the management of the company’s website as well. Marketing Plan Fitness One will go heavy on merchandising and on-line marketing activities, although it will also use print advertisements in health magazines to reach the target market. The budget allotted shall be allocated for the production and placement of print ads and the production and maintenance of outdoor banners and advertisements. A huge amount shall be allocated for the preparation and maintenance of the company website. This website shall be a venue for online orders. This will reach audiences in different cities in England. Targets The budgetary requirements have been spread all throughout the first year of operations to be able to determine the needed cash flow. A modest increase in membership count was projected per month and the targets may be changed depending on the actual sales trends and the feedback of the market on the designs and product line. 8. Profit Forecasts For Years 1 & 2 Profit would only begin to count after the first 18 months of operations. Only by then would the bank monthly amortization be completed and all other start up costs covered for and returned. On the 19th month, Fitness One would be gaining approximately 25% net profit from its club operations. This would be already being minus the operational and other costs. 9. Value Of Current Resources and Capital Available Fitness One will start from scratch. As the company will start under sole proprietorship, I will shoulder all start up expenses required. Current capital available would be from my savings, which amounts to ? 100,000. I will use this cost to initiate construction and designs of the three store branches, get necessary permits to start up the business and purchase capital expenditures. 10. Further Finance Required All start up expenses have been already identified and listed down in the Projected Cash Flow table. The company will adhere to this plan so as not to cause other incidental charges. In case other expenses arise, I would adjust the plan accordingly and reallocate the budget as needed. However, this is not encouraged as the projected cash flow has already identified the items for purchase and the projected sales for the three stores and the internet sales as well. 11. Potential Sources Of Finance To support the financial requirements, I would need to enlist the support of a few other investors who might be willing to lend me the needed cost to implement the start up activities. Otherwise, a bank loan would be needed for me to be able to proceed with the business. 12. Marketing Plan Roughly about 35% of Fitness One’s monthly operational budget shall be allocated to Advertising and Promotional strategies alone. This includes expenses to be incurred in utilizing mainstream media particularly print advertising; other alternative media; and design and production of merchandising and promotional materials. Mainstream-wise, Fitness One shall utilize print advertising particularly through tie-ups with different magazines. Although this would not be the company’s primary vehicle in promoting its products, it would just aim to maximize its relationship with these magazines whose websites Fitness One shall be utilizing in its online campaigns. By alternative media, it means that Fitness One shall utilize media channels other than print, radio and TV and online marketing. Merchandising and promotional materials include posters, flyers and mini billboards for display in strategic areas in London and in neighboring cities. Specifically, Fitness One shall undertake the following strategies: Internet Marketing Internet Marketing has become popular because Internet access is becoming more widely available and used. Well over one-third of consumers who have Internet access at home report to using the Internet to make purchases (What is Internet marketing 2004). Moreover, statistics show that Internet users increase at a rapid rate that in five years’ time, it is predicted that 80% of United Kingdom’s population will have a computer with Internet access at home (Advertising 2007). Since Fitness One’s target market are working women who, most likely have internet access either at the office or at home, it chooses to primarily utilize internet marketing to promote its products. First and foremost, Fitness One shall create a website that contains pertinent details regarding the company’s profile and its products. It would contain the company’s mission-vision and a statement of what the company wishes to achieve market-wise. It would also present the profiles of the designers creating its product line. More importantly, it would contain an updated catalogue of the services being offered. Online inquiries and payment would be available through tie-ups with affiliate credit card companies. The website shall be launched simultaneously with the main branch’s opening. Advertising in the listings on the Internet can provide a website with a number of viewers. As such, Fitness One shall do Search Engine Optimization (SEO) by subscribing to the most popular search engines such as Google and Yahoo, among others. Fitness One shall subscribe to advertising services such as Google AdWords, in which Fitness One’s website would appear immediately following key word searches from Internet browsers. This would prove to be cost-effective since Search Engines charge a company only whenever a person actually accesses its website. Further, this would guarantee that the advertising effort would reach the targeted market because one can limit its ad to appear only to people searching in a particular city, state or region. Fitness One would also do Online Banner Advertising, as this is an effective way to promote brand awareness. Online Banner Advertising allows a company to flash its brand name and other details to browsers upon prompting through specified keywords. Although this does not guarantee sales leads, it nonetheless promotes the Fitness One brand through its repeated appearance on the screen, consequently leading to brand awareness and recall. To save on cost, Fitness One would employ a “cost per lead” or “cost per acquisition” strategy to ensure that it only pays for quality viewers or for browsers who actually expresses interest by logging in Fitness One’s website. Fitness One would secure numerous key words to maximize the opportunity to flash its banners to Internet browsers. Fitness One will also initiate a tie up with affiliate magazines, particularly Fitness Magazine’s web site; to reach this publication’s already captured audience. Since Fitness Magazine targets the same market, it would be easier to create a client base among those already subscribed to this Magazine. Fitness One shall arrange to create a sub page or hyperlink in the magazine’s web page, create a link therein which automatically directs browsers to Fitness One’s official website upon clicking. Word-of-Web/ Online Promos Word-of-Web is actually a modified version of Word of Mouth Marketing, in which information is passed through verbal means. Word of mouth is typically considered a face-to-face spoken communication, although phone conversations, text messages and web dialogue, such as online profile pages, blog posts, message board threads, instant messages, chat exchanges and emails are also considered word of mouth. This might be informal, and non-quantifiable, but it is also a personal means by which information can be endorsed from one satisfied customer to a potential customer. Fitness One would seek to further modify this means of communication by coming up with rewards for every referral made through its official website. Fitness One shall launch the “Fitness One Exclusive Circle’, Registered members shall be given rewards or downloadable promo coupons for every 10 persons referred. Referral would mean that the club member has provided contact information regarding their referrals. Contact information such as email addresses shall be used to invite the referred customers to browse through Fitness One’s website or visit the branch. The registered member who provided referrals, meanwhile, may enjoy discounts for every purchase of products either at the Fitness One branch or if they purchase online through the use of the downloadable promo coupons. In addition to this, part of the efforts involved in word-of-web advertising is the use of direct mailers to be sent to club members and their referrals. Exclusive invitations to Fitness shows and galleries, invitations to special promotions shall be given to these referrals to further ignite their interest in Fitness One’s products and programs. Merchandising and Promotional Materials Fitness One shall further convey its message to its target market through using posters, leaflets and mini billboards as its media. These materials shall carry the company’s brand message and shall feature teasers on the programs that Fitness One carries. Particular attention shall be given to photo shoots that would feature the latest designs so that these materials would definitely catch the attention of onlookers. The layout should represent class and elegance, and should be an embodiment of the Fitness One Lifestyle. Mini billboards shall be displayed at areas where high foot traffic is present.. Design and production of these materials would constitute the remaining 30% of the overall advertising and promotional budget. A bigger portion of this allocation shall be used for the services of a good layout artist and photography team to ensure that the company’s key message is delivered right through Fitness One’s target market. These strategies were made in close reference to Fitness One’s marketing mix. Pricing-wise, subscribing to relatively low-cost advertising consequently leads to competitive pricing of Fitness One’s product line up. Promotions-wise, utilizing Internet marketing provides Fitness One with the opportunity to touch base with its target market and interact with them on a more personal level. Interacting with customers online, particularly through interactive activities such as online surveys and the like through the Fitness One Exclusive Circle gives Fitness One the chance to collect valuable feedback regarding its product line up. This enables management to be in constant check whether the products being carried continue to be competitive. This way, the management would be able to keep track of the needed improvements and move on to achieve an distinct advantage compared to competitors so that the target market may prefer patronizing its products over competitors’. As a whole, Internet Marketing would definitely play a big role in showcasing Fitness One’s product line up in the market since Fitness One has only one branch to physically carry and showcase its merchandise. 13. Statement Of Quality Standards and Customer Service Policies, and How These Will Be Monitored to Maintain and Improve Service. Since one of the company’s keys to success would be Fitness One’s signature Customer Service, a guideline shall be issued to each and everyone in the company. This handbook will serve as a bible for all employees whenever conducting transactions with customers. Specifically, the handbook shall contain the following rules: The Customer’s Welfare Comes First – In dealing with customers, it is their wants and desires that should be prioritized by the sales personnel. Further, they are also here to get real value from their hard earned money. The sales personnel should be quick to identify what would please the customer and instantly cite the things that would satisfy their needs and wants. The Customer is Always Right – Customers will never cease to cite examples, compare stores and brands with each other or complain on their current merchandise. Their opinions always matter. In fact, these are what matters most. That is why sales personnel are always encouraged to take time to listen to customers who give out their concerns and find ways to appease them. The customer must feel 100% satisfaction always Maintain a High Level of Quality in Terms of Products and Services – Sales personnel must always bear in mind that Fitness One always strives to be the best Start Up Fitness Club in the area. In support to this, may must always give their best in everything they do. 14. Monitoring of Sales and Changes in Marketing Trends A special software shall be used in which all sales data would be kept and consolidated in a centralized databank, which only I, being the owner, can access. Through these files, analysis and review shall be made to identify the current trends, and whether sales are going up or down. Fitness One will join groups of similar business ventures, and be part of a Retailer’s Club. This way, it will be able to expand its network and find potential partners sand suppliers. I will also be vigilant on any convention, forums and symposiums that are related to finance, marketing and Fitness. Connections shall also be established with current suppliers for possible tie ups/ sponsorships of Fitness shows that would open a wider market to the company. II. Implementation and Monitoring 1. Maintaining Compliance with Relevant Legislation Fitness One shall ensure to adhere to EK’s Regulations and Laws regarding Fitness Club Businesses. This includes the following: a. Adherence to the Electronic Commerce Regulations (The UN’s E-Commerce Regulations. 2008). - Since Fitness One shall also utilize Internet Marketing to get potential clients and customers, this detail should be registered as part of the business. This law aims to protect consumers from any trading/ sales done electronically. Fitness One shares in this thrust to put the consumers’ welfare first and would make sure that it follows the rules mandated through this legislation. b. Payment of corresponding Input and Output Tax for every item purchase and sold c. Payment of corresponding E-Vat for sales made above ? 61,000 (per annum) loan. 2. Longer-term Objectives for the Business, Once Established Fitness One targets to open a total of three outlets in the first three years of operations. It targets to open for franchising in the next five years. With this, it hopes to find opportunities to open stores in other regions and perhaps in other countries. It also hopes to be able to supply items to other smaller retail stores as well. 3. How You Will Measure the Success of the Business The strategies listed shall be evaluated at the end of every month to validate if these efforts have indeed contributed to the growth of the company or not. Fitness One is expected to immediately sell within the first quarter of its launch due to the fact London already has an existing and steady demand for the kind of clothing that the company offers. Within the first two years of launch, it is expected that 75% of the total number of customers would come from Internet marketing while 25% of which from merchandising or physical advertisements. The 75% as mentioned would be achieved both from online shopping and from customers who actually visit the store after accessing Fitness One’s website. In particular, effectiveness of these efforts shall be measured according to the following: Fitness One’s web site traffic or the number of online visitors per month – Fitness One targets to gain 600 viewings of the company’s website in the first three months and increase this at 20% per month for the succeeding months. Customer’s response to the invitation to join the Fitness One Exclusive Circle through actual online registration - Fitness One targets to gain 200 new members per month within the first three months and increase this at 15% per month for the succeeding months. Number of referrals made by club members - Fitness One targets to gain 2,000 new referrals per month within the first three months and increase this at 15% per month for the succeeding months. Actual Revenue – As a retailer, terms of consignment shall be set with the designers. As such, costs would be heavy on manpower, operational and advertising costs. Fitness One targets gross revenue of ? 50,000 per month and increase this at 15% per month for the succeeding months for the first 12 months and 25 % per month for another 12 months. Given the targets mentioned above, Fitness One expects to achieve its Return of Investment (ROI) within two years of operations. III. Summary Fitness One wishes to position itself as the preferred fitness club for working men and women. As such, it will utilize every opportunity available to be able to penetrate the target market and gain revenues to continue its operations. To meet its corporate objectives, Fitness One shall maximize the capital investments and ensure a positive cash flow through meeting targets and creating a workable profit and loss chart to monitor the transactions. Budget is tight for the first year and as such, management shall be more than careful in its decision making for the business. Employees shall carefully be chosen and the owner shall make sure that each personnel are oriented towards achieving its corporate goal, which is to start gaining profit by the end of the first year. Competition would be very stiff with the presence of other clubs that have already established their presence in major cities in London. However, London, Oxford and Canterbury are places that are very viable for establishing this type of business, and Fitness One is very positive that it can tap the target market to be able to take a share of the pie so to speak. Fitness One is also confident in being able to make gains through its Internet Business since this type of sales channel is very popular among the target market. Its Marketing efforts shall be intensified to ensure that the corporate message is brought across the target market. To cap this off, Fitness One wants to achieve two things with the business: to share style, lifestyle and Fitness through its quality products and to gain profits to ensure presence in the market for a long period of time. Works Cited Covent Garden Life.Com.. December 3, 2012, http://www.coventgardenlife.com/info/covent_garden.htm Visit London. December 3, 2012 http://business.visitlondon.com/why_london/business_p2.html Hawes and Curtis. December 3, 2012. http://www.hawesandcurtis.com/ The Building Regulations 2000. December 3, 2012. http://www.opsi.gov.uk/si/si2000/20002531.htm The UK’s E-Commerce Regulations. December 3, 2012. http://www.out-law.com/page-431 Read More