Business Proposal: a Fitness Center in Australia

Introduction

Fitness is a very effective way of reducing waste products and utilizing the excess energy stored in the body. Lazy people who do not exercise are more prone to medical conditions such as obesity and the likes. The unutilized fat in the body is stored underneath the skin and in the belly. After years of accumulation, people begin to increase in size and they become fat. A little time in a class of aerobics can avert such implications. Fitness is essential to all human beings, male and female alike.

Research has proven that fitness and physical activities have a great impact in reducing the risk of heart diseases (Libal 2006). Physical activities are very important because they help the body to function better. For instance, regular physical activities help in maintaining the maximum functioning of the lungs and the heart (Libal 2006). This also enhances the strength of the body muscles enabling individuals to be flexible. Physical exercise also improves the ability of an individual to endure harsh conditions.

Vision

To be the number one fitness center in the city and to set the pace in physical exercise for the benefit of the clients’ health

Mission

• Creative physical exercises sessions that are friendly and can fit within the clients’ schedule
• Make physical fitness a fun exercise that the client looks forward to attending
• Achieve excellent and effective results in improving the clients’ health
• To guarantee the safety of clients’ while in session
• To employ qualified and competitive instructors to achieve the highest results in improving the lives of our clients.

Objectives

• The fitness center seeks to achieve a level of services that are unmatched around the city.
• The center will be providing fitness sessions to working-class clientele.
• This is not a body-building gym but a fitness center for clients who want to maintain a healthy body through exercise.
• The goal is to provide health solutions for most fatigued office workers and overweight women.
• To safeguard the business’ reputation and assets through cautious supervision
• Maximize profit margins by attracting thigh-class clientele
• Meeting our customers’ expectations within specified deadlines
• Benefit the shareholders through financial gains

Target market

Fitness on many occasions is considered to be a luxurious activity. Although this is the notion that many people have about fitness, the health benefits that are attached to fitness and physical exercises cannot be overlooked (Bettis et al. 2012). However, physical fitness is an extra expenditure for most people because its benefits are not realized in a single day. Therefore, many people feel like it is a waste of resources. In this view, the target market for our services, therefore, will be the working class and young people who understand the importance of keeping fit.

Most educated individuals understand the need and benefits of a fitness program in their lives. Our target market, therefore, includes pregnant women, overweight individuals, and the young elite (Bettis et al. 2012). Targeting the financially stable individual is not intended to discriminate against anyone. Rather, we feel it is important to offer our services to the people who can afford them.

Location

The business will be located in Sydney, Australia. The practicability of a successful operation in the city is based on the current researches, which shows that 8% of the Australian population uses a gym (Williams 2009, para. 10). It is anticipated that this percentage will increase in the future as the locals are slowly accepting the role played by exercise in enhancing individuals’ health. The gym industry in Sydney has changed from a mere fitness activity to a health practice, which gives it more attention. However, getting into the Australian market has its own challenges and we are setting up this business with an alert mind (Bettis et al. 2012). The competition is very considering that many fitness centers and clubs are spread all over the city and the country as a whole.

Personnel plan

In order to perform effectively in any industry, a business must have effective personnel to support its operation and influence good outcomes. Having competent employees helps the business to grow and to deliver its services efficiently to satisfy the customers’ needs. Our business will have a general manager who will be involved in handling inter-business affairs and corporate responsibilities (Pinson 2004).

This will give our business the professional approach which is very important to improve the business’ image. People always want to be associated with reputable and professional gym services (Pinson 2004). We plan to employ three safety supervisors to guarantee the safety of our clients while in the gym. This is an important segment in our business because our clients need to feel safe while on our premises. This will definitely improve our business as the ideal fitness center.

SWOT Analysis

Strengths

Most of the gym clubs in Sydney do not offer program updates to clients and the few that offer such services charge an extra fee. Our major strength is in our ability to attach more value to our membership dues (Williams 2009, para. 7). We believe that service and guidance should be included in the fitness program and this will heighten customer confidence in the business. This creates an impression that the business cares about the customer and that it is interested in him/her achieving results (Williams 2009, para. 8). Our club will maintain a low membership to have effective one-on-one sessions. Our small club will reduce the cost and allow us to operate in an industrial space for lower costs (Williams 2009, para. 8).

Weaknesses

Our major weakness is our initial capital. Competing with the giant fitness clubs in Sydney will require a large amount of financial strength, which is a challenge to our startup business. Fitness clubs in Sydney spend a lot of money on marketing and with our limited financial backup, we might be overshadowed by the mighty presence of such competitors (Williams 2009, para. 12). This also goes to employee loyalty. In the current market, it is very difficult to find and keep good employees. Competitors are always fighting to keep their best workers through generous salaries and better terms (Williams 2009, para. 12). This may be a challenge given that we are a new entrant in the industry.

Opportunities

Although the competition may be stiff, there are a number of reasons to set up our business in Sydney. The gym culture is growing and more people are enrolling for clubs memberships daily (Williams 2009, para. 16). This has ultimately increased the demand for gym services not as a body-building activity but as a health exercise. The current fitness clubs are expensive for most of the population in Sydney. Therefore setting an independent fitness center with a relatively low membership price will attract many people who are looking for affordable fitness services (Williams 2009, para. 16).

Threats

The big clubs are likely going to come up with strategies to deal with the competitive small fitness centers like ours (Williams 2009, para. 19). The idea of getting into business is to make a profit and maximize financial gains. Since many clients are opting for independent fitness centers since they are affordable, the big clubs may develop models for the smaller markets (Williams 2009, para. 19). This will reduce the chances for new entrants to make a profit.

Industry analysis

Porter’s 5-force industry analysis has helped us to identify the supplier power, buyer power, competitive rivalry, threat of substitution, and the threat of new entry (Manktelow & Carlson 2014, para. 8). Due to the growth of the gym industry in Sydney, the supply of the types of equipment we need is not going to be a problem. Types of equipment are readily available and at an affordable price. As mentioned earlier, the gym will be targeting the working-class population hence offering services to individuals who are able to afford the service. The rate of unemployment in Sydney is very low so we expect very high enrollment. However, competition in the industry is also very high since many clubs are offering the same services (Manktelow & Carlson 2014, para. 8).

These are well-established clubs controlling almost the entire industry. Entering the market is not very easy especially for an independent club (Manktelow & Carlson 2014, para. 11). In this industry, there is no threat of substitution since there are no alternatives for fitness. However, the threat of new entrants is viable. Every day different entrants come into the market with very innovative programs and services that give the existing clubs stiff competition (Manktelow & Carlson 2014, para. 12). Therefore, while in the business one has to keep up with new trends and development in order to stay relevant.

Planning and management strategy

The managerial tasks in our business will include basic bookkeeping, scheduling, creativity management (Bettis et al. 2012). In addition, the manager will be expected to handle the business regulatory formalities to work within the rules and legal frameworks. A team of professionals and experienced gym attendants will be hired and taken through a refresher course to sharpen their professional skills. This is to enhance our service delivery and to influence the market to get a significant market share.

We plan to hire enough instructors to cater to our customers (Bettis et al. 2012). The number of instructors will however be changing from time to time depending on the growth of the business. Our employees are expected to be computer literate since we intend to use high-tech types of equipment. Interpersonal skills are vital for our employees since we are dealing with highly professional clientele. To gain an advantage over our competitors we intend to use the cost leadership strategy.

Capital

Having outlined our business plan, we seek the approval of the bank to grant us $150,000 to facilitate our intention to set up a fitness center in Sydney. This amount of money will enable us to rent a space in a commercial residence and buy some types of equipment to start our fitness center. We intend to purchase high-tech types of equipment in order to beat the competition in service delivery. In addition, these will enable us to hire some of the best instructors hence wooing customers to our business. With such a financial backup, we are confident that the business will pick up within a few months and this will be for our mutual benefit.

Conclusion

This is a business proposal seeking financial support to startup a fitness center in Australia. The proposal has listed the mission statement, vision, and objectives of the business. The target market has also been identified in the paper to show the feasibility of the business in Sydney. To show a clear understanding of the industry, the paper has discussed the strengths, weaknesses, opportunities, and threats anticipated in the market.

Keen interest has been laid on the competition and new entrants. Porter’s 5-force analysis has also been used to study the industry to be sure of the market situation. In addition, the paper has presented a plan and a management strategy that will give it an advantage over the other players in the industry. Lastly, this proposal details how the business intends to raise the initial capital. This proposal is therefore a clear presentation of a well-informed business plan where all possible outcomes, positive or otherwise, have been put into consideration.

Reference List

Bettis, B, Gambardella, A, Helfat, H & Mitchell, W 2012, ‘Strategic Management’, Strategic Management Journal, vol. 53, no. 9, pp. 1097-0266.

Libal, A 2006, The Importance of Physical Activity and Exercise: The Fitness Factor, Mason Crest Publishers, New York.

Manktelow, J & Carlson, A 2014, Porter’s Five Forces Assessing the Balance of Power in a Business Situation. Web.

Pinson, L 2004, Anatomy of a Business Plan: A Step-by-Step Guide to Building a Business and Securing Your Company’s Future, Dearborn Trade, Chicago.

Williams, E 2009, Independent operators beware – the times they are a changing. Web.