Business Proposal For A Newly Venture Health Club And Fitness Business Essay. (70 Characters)

Provide a business proposal for newly venture health club and fitness business.

The fitness business and health club industry is mounting in the present day context. For creating a new business venture, management needs to evaluate every aspect of the business. Nowadays, the concept of venture and merger is widely used by the companies globally to achieve competitive advantages (Barrow, Barrow & Brown, 2012). The main objective of the paper is to provide a business proposal for newly venture health club and fitness business. The proposal contains business plan, which helps to identify the major aspects that it will focus to generate income and how will it reach to the targeted customers. This further aims to provide analysis of the fitness market. Based on the analysis, it will focus on formulating a business plan that comprises financial plan for the new venture, period to make profit as well. The paper summarizes the vision, mission, and the objective of the business proposal. The paper will focus on providing an effective plan that will help to achieve certain target and generate profit from the investment.

In the present day context, the fitness industry is in the growing phase. Every people are concerned about his or her health, as it is a significant part of one’s life. In the present scenario, people mainly focus on maintaining and presenting them to look pretty and handsome. Additionally, in this busy world, people are maintaining their health through exercises to live healthy normal life. Hence, people joined health club to do exercise, which leads to better and healthy life along with attractive personality. The economic theory has been the motivational factor for the entrepreneur. In the present day context, the health care industry has lots of opportunities (Barrow, Barrow & Brown, 2012).

Vision:  our vision is to develop as a leader in the fitness industry

Mission: we committed to provide exceptional physical education training to serve better to the client, which leads to their healthier life

Objective: our main objective is to grow sustainably in the health club industry

Rationale: our core values and underlying principle is to develop community by providing training, and education relating to health

The targeted customer of the enterprise will be the local resident near to the centre. The company will segment its customer from the age of 17 to 35 years. The company will be targeting both the male and female customers equally. The company will generate its revenue from the monthly charges and the initial admission fees. Additionally, the company will be selling some products such as protein powders, supplementary products, and milk packets among others. These will help it to generate revenue and earn considerable profit. The company will be creating value to the customers by collaborating fitness centre with the health club. Additionally, the company will be introducing a diverse range of advanced fitness equipments to meet the demand of its clients. The company will be providing proper training to its staff for providing quality guidance to the clients. The company will offer extensive range of services including, sauna, steam bath, yoga, spas, meditation, gymnasium, and massage. The company will also be focusing on introducing health related programs to aware people regarding the importance of health in this busy world (Burns, 2014).

Business Model

Figure: Business model CANVAS

Source: (Burns, 2014)

The market of fitness and health club is in booming phase. The member of UK health club and fitness industry increased to 1.5 million. Additionally, the proportion of the fitness members as compared to the population in UK was 1:8. The UK fitness industry has developed with the increased number of health clubs. It was notable that the UK fitness market has a growth rate of 5.4% in 2015, which is considerably high to the value in 2009 that was 2.4% (The Leisure Database Company Ltd, 2015). The growth was largely due to the low cost private sector fitness centres and health clubs. Since 2009, the fitness industry demand has increased by 3.6% (The Leisure Database Company Ltd, 2015). The fitness centres and health clubs are mainly focusing on urban places, wherein the population is larger than the rural areas in UK. The fitness and health club market has been fully dependent on the health of the UK customers. Estimations revealed that financial cost of obesity in the UK is 5 million pound in a year (The Leisure Database Company Ltd, 2015). Additionally, a large number of people from UK’s population are physically inactive. The health club and fitness market has been facing a tough condition during the last three decades, as the customer has been facing relatively low disposable income and high inflation. Hence, by understanding the complexity of their concerning health the UK population has understand the importance of physical exercise (The Leisure Database Company Ltd, 2015; WTS International, 2013; WTS International, 2015). PEST analysis helps to know the current market situation and the factors that influencing the business venturing.

Political

The health care industry has to deal with certain local laws and regulation. The taxes related to the fitness and health care can affect the cost and business risk. The political policies regarding the health club has been the major concern for opening new venture.

The healthcare industry has significantly influenced by the economical factor. Growing inflation, low disposable income remains a major factor for the industry to achieve growth.

The attitude, option that the society provides to the consumers affects the industry. The demographics such as age, income, gender have focused on improving their health issues.

The health care industry has been experiencing the technological development from past few years. The use of advance technology such as interactive personal station, online facilities, music system has provides the industry a new edge. This technological development helps to attract more customers to live a healthy life.

Market Analysis

Strengths

The main strength involve the well-trained staffs which provide our company competitive advantages. Additionally, the price strategy provides the company a good brand image.

The company lack adequate financial support to compete in the health care market

 The new venture will provide an opportunity to raise fund. The growing market of healthcare industry has remained a major opportunity for the company.

The growing competition of the high quality health club services providers has been its major threats. The high cost due to the legislation and taxes has also its threat.  

From the PEST and SWOT analysis, the venture can use opportunity to support the business plan. The form of business would be partnership, as the company is approaching to establish a new venture with fitness business. The company is already into a health club business and planning to venture with a fitness business, so the new venture business would be starting from the zero level or De novo. The business will be dreamer that has low risk and high innovativeness.   

The cost that will require for the start-up of new venture fitness centre and health club is approximately £70,000. The investors will provide approximately £50,000 and the rest amount of £20,000 will come from loan. The start-up costs include infrastructure development, employee cost, equipment cost, promotion, and others (Barrow, Barrow & Brown, 2012).

Start-up investment
Investors’ contribution                                                                                                    £50,000
Bank loan	£20,000
Total investment required	£70,000
Assets
Non cash Assets	£0
Cash requirement	£5,000
Additional cash	£0
Cash balance	£5,000
Liabilities
Current borrowings	£0
Long term liability	£20,000
Outstanding payable	£0
Other current liabilities	£0
Total Liability	£20,000

Figure: Forecasted Balance Sheet

The start-up expenses of the proposed venture will involve legal and licensing expenses, wherein the company will be allocating £1500. Stationary expenses involves towel, water bottle among others, wherein the company will allocate £1000. The company will be distributing £9,500 for the rent. Additionally, for the insurance the new venture will assign £5000. The main investment for the venture company will be the investment of equipment. For the equipment, the company will be allocating £25,000, as the focus of the company will be to provide superior customer services with advanced equipment. The company will be assigning £10,000 for the leasehold development. For the maintenance purpose, the company will distribute leasehold of £6,500. For the utility expenses, it will spend £5500 and other expenses will be of £6000.

The company should focus on obtaining its customer from the first month of its business operations. In the first month, the company will attempt to generate revenue of £ 20,000 from its customer.

Figure: Sales Forecast of First Twelve Month

Figure: Sales Forecast of 5 Year

Sales forecast reveals that the company will be generating its income from the beginning of the fourth year, as in the fourth year the company will be in break-even point, where the cost and revenue will be equal. By providing the high quality services with the advance equipment, the company will be able to generate revenue from its customer (Burns, 2014). By considering the sale forecast, and determining the possible break-even point in the fourth year, it is necessary to convey to the manager of the bank that the complete loan amount will be paid at the end of the fourth year.

Conclusion

From the above proposal, it is clear that the company needs to evaluate all aspect of internal as well as external factors such as partners, the activities that the company will perform while implementing the business plan, the budget allocation and the key resources that the company will utilise. The business proposal provides the insight of the fitness and healthcare market. It also provides the timeline for the profit making. Based on the sales forecast, it clearly identifies that the company will be generating profit from the 4th year of its operations. Thus, it is recommended to the investors to invest in the business that will derive above 10% interest on the investment amount. This business proposal will provide the company wide information about the budget for introducing the new venture business. The ‘business model CANVA’s will help to know the revenue generation mechanism for the company. The paper shows the analysis of the business model that helps to evaluate the value proposition for the proposed venture.  

References

Barrow, C., Barrow, P. & Brown, R., 2012, The business plan workbook. Kogan Page Publishers, London.

Burns, P., 2014, New venture creation: a framework for entrepreneurial start-ups. Palgrave Macmillan, USA.

The Leisure Database Company Ltd 2015, 2015 state of the UK fitness industry report published yesterday, viewed 26 January 2016, < https://www.leisuredb.com/blog/2015/6/19/2015-state-of-the-uk-fitness-industry-report-published-yesterday>  

WTS International, 2013. ‘Health Club Management Handbook 2013’. Start A New, pp. 1-236.

WTS International, 2015. ‘Health Club Management Handbook 2015’. WTS International, pp. 1-260.