Description
of the Case
The management is planning to establish a health club.
Health club is widely accepted in the culture nowadays where health is
wealth. There is a great scope in the
establishment of health club business. According to census bureau statistics
there are around 21,283 business through US. For the increase in chances of the
health club survival management must come up with the helpful and proper plan.
The business plan includes developing a fitness center where
most of the people will be able to fulfill their fitness regime. We are going
to establish a new business that will be located in the good and proper
business area North Greenwich, London. The business might not be so well at the
beginning of the months but after the health club takes a proper place in the
society it will be fruitful for the both people and the management team. The
business will be a sole proprietor ship firm owned by the single person. But
major works will be done with mutual agreement between the workers, management
team and the director/owner.
The major services provided by the health club will be a
proper set of health exercise that are fit for all group of people. Priority of
the health club will be providing the space and equipment that would make even
the workout regime fun and wonderful. Also providing the exercising area for
the children and kids according to their age will set our health club apart
from rest of the business plan.
Health is wealth and more people are accepting this concept
day by day to live a healthy and happy life. People suffer from chronic diseases
and the only solution to this kind of problem is following a strict regime of
fitness. This major concept of developing a business plan for health club is to
provide a proper space for the people, who can be inspired and get inspired.
Many people are lethargic with the concept of health club, many would even not
given a second chance for going to the fitness regime. Our plan is to provide
them new hope, new thinking and concept for the health club. So that people
would adopt this in their daily life.
A proper set of thinking should be inside the management
team to make their vision into their reality, most of the planning are done
without the proper research and work, this will all lead to chaotic situation.
Business
Plan Overview
The management has considered of establishing a health club
which is nowadays important part of human life. With the increase in
inclination of people towards fitness more, it has opened the doors of
opportunities to the management. The health club is established with the vision
of providing fitness related facilities at the cheapest price possible. It also
has aimed to increase the awareness on health problems if the fitness is not
included in life of the people.
For the establishment of the business a proper market research
was done that showed about 80% people will be interested in joining the club if
they were provided member ship at cheaper rates. It helped the management to
fix the price rate if different kind of membership. Among then 50% were
students and working people.
The company has come up with the strategy where kids are
also allowed in the club and special training are provided to the kids. It will
help the parents to keep an eye on their children together with their workout.
This will also build a strong between the customers and club. With the help of
the health club we want to help the people who are suffering from self-esteem
problems. A healthy and beautiful body will also boost the confidence of the
person and will always motivate them to forward. The concept of marketing mix
is also applied where 4p’s are applied (price, place, promotion and product).
It is expected that there will be around 85 members at the
beginning of the business that will make the revenue of the company £196,450.
That will increase to 100 members in next year.
The estimated cost for starting the business is £150,000
including all the expenses from getting the place for the club to wages of the
staff. The population in the club is
also expected to increase to 15% in the coming years. With the proper business
plan the company will be able to achieve all its goals and objectives.
After analyzing the business positive and negative point,
management can easily find out the strength, weakness, opportunity and threat
for the company (SWOT). The business plan is to work hand in hand with the
staff member and employees to develop the concept of health club in a positive
way.
Proposed
Plan of Action
Each and every business organization should have an action
plan so that they can properly formulate in the later life. Mostly the success
of the business depends on the plan that is initially established. This will
also help the business firm to set specific objectives and see what the main
focuses in it are. Each and everyone’s thought will be shared prior to taking
any action that would help in executing only the best ideas for the development
of the business. Similarly, planning can help the management to set up a backup
plan that would be necessary for the business if the expected plan didn’t work
out.
The first step of establishing the health club is finding
out the proper area or the location where the business can be started. Location
of the health club will play very important role in finding out the right
customer for them. For making the business plan each and every one important to
the business should agree with the plan’s content. The main importance of the
business plan should include major three questions:
1.
Where is our current status?
2.
Where do we want to be?
3.
How can the goals be achieved?
The business plan of the business should revolve with in
this. If these three topics are monitored then the company can easily look
after plan the business well. Similarly, different equipment’s will be set in
the location selected above. After all the set up work are completed the
business will start its advertising campaign. This will attract the maximum
number of customers for the firm. Even though the initial inflow of the members
might be less but this does not mean the business is performing bad. Those
members will act advertisers if services provided to them is good.
Management should have a plan that would be helpful not only
for themselves but also for everyone.
Discussion
of Critical Success/Failure Factors
When starting the health club the management should also
consider the failure factor and act accordingly. Some of the reasons for the
failure are:
Lack of proper business plan
Before starting the business the management should come up
with the perfect business plan that would provide the knowledge of short-term,
long-term goals. The company should have the plan that is flexible in nature
and change according to the time and situation occurring. If the company is
stated with improper plan the management will face a huge problem and sometime
won’t survive at all.
Lack of capital
Capital is considered as the life blood of any business. If
the health club is started without sufficient amount .The club might have to
buy new equipment, or employ the right people but due to lack of the fund those
opportunities can’t be grabbed.
Not keeping track of finance
For all kind of businesses it is must to have a different
section for account who will keep track of all the finance. The management team
must be responsible when it comes to spending the amount on the business. The
expenses should be done according to the priority and the requirement of the
work.
Unsuitable location
The health club should be established in such a place where
there are potential customers. Places near the school colleges are the
appropriate location for establishing the health club rather than the places
where old people live.
Unachievable goals
The goals and objective of the business should be within the
achievable range. Even if the club is earning profits more than the expected
the management should not expand its target.
Not considering about the competition
For any business the competitions that exists in the market
will always affects negatively. Taking that competition too lightly will
provide great opportunity for the competitors. It won’t take time to lose our
customers if a better health club is established near. So the customers should
be provided with best services.
Lack of proper supervision
A good supervision form the manager will make effective work
in the organization. The functioning of the business will be effective and
proper. In addition to that a proper supervision will directly as well as
indirectly affect the membership base of the club. Health club business
required proper supervision all the time so all the members are motivated
enough to come back again and again to the gym.
Insufficient marketing and promotions
Only having a great club all the facilities will not make
the business successful. We need to let the people know about the facilities we
have and target marketing should be done. Once the initial marketing is done
and members are acquired, if we are able to stay consistent with the services
those members will provide the aid as a promotion.
2.5 SWOT
Analysis
The following is the SWOT analysis includes strength and
weakness within the company and opportunity and threats that are the external
cause for the company.
Strength
·
There is strong relation with the supplier and
can provide credit arrangements.
·
The staffs are stable and expert in providing
personalized customers care service.
·
The location of the business is at the perfect
place where there is large exposure.
·
There is good referral relationship.
Weakness
·
Heavy operational cost
·
Unpredictable cash flows
·
Less experience among the owners of the company
·
Seasonal changes and challenges
Opportunities
·
It is the growing market and has a lot of
potential in alluring more and more customers.
·
The changes in different method of exercising
will also create new chances.
Threats
·
The is high chance of increase in competitors
·
The resources might not be enough within the
time
·
The expectation of the customers might not be
met no matter how hard we try.
Porter’s
Five Forces analysis
By analyzing the business of the club the company, internal
and external factor of the business it will easier to forecast the future of
the business.
Threat of new entrants
There will be high chances of new entry in the health club
business. Profitable business will attract more new firms. This will result in
new entrants eventually decreasing the profit of the company. Until and unless
the company can block the new entry in the business this problem will exist in
the business. For example there are now large number of competitors existing in
the telecom industry resulting in abnormal profit.
Some of the reasons affecting the new entrants are:
·
government policy
·
capital requirement
·
brand quality
·
product uniqueness
·
customer loyalty
Threat of substitute
The presence of products similar to the ones of the company
increases the chance of switching from product to product. The potential
factors for substitution are:
·
price of the product
·
number of substitute product
·
easiness of product
·
availability of the close products
Bargaining power of the customers
Market of outputs is known as the bargaining power of the
customers. The customer play crucial role in determining the price of any product
or services in the firm. Different measures can be taken to reduce the buyer’s
power for example implementing the loyalty program. Most of the time the power
of the buyer is very low as they act independently. The potential factors
affecting the bargaining power of the customers are:
·
substitute product availability
·
price sensitivity of the product
·
bargaining power of the customers
·
existence of union
Bargaining power of supplier
Market inputs of the business is known as bargaining power
of supplier. Raw material supplies, labor, components, services for the firm
are the sources of power. The suppliers for the firm might deny to work for the
business creating problem for the company.
The potential factors for the bargaining power of supplier
are:
·
substitution inputs availability
·
strength in the distribution channel
·
labor union
·
Differentiation of inputs
Intensity of the competitive rivalry
The major determinant of determining the profitability of
the business is competitiveness of the company.
The potential factors affecting the business are;
·
competitive advantage
·
advertising expense
·
transparency business
With the analysis of the five forces, it provides the
checklist of the things to do and things to achieve. After the management team
should develop in such a way where all kind of work can be done accordingly.
Description of service
The health club will be using all kinds of modern tools. A
big television will be installed near the treadmill area so that the people can
enjoy along with working out. The financial work from membership, cash
transaction and other will done from the main office. All the three computer
will be made accessible to the members so that the renewal of membership can be
done by all the members. This will make the work of both the management and the
members easier.
Equipment and the material will be bought according to how
big and large do they want to keep the club. The basic equipment required will
be
·
boxing gear
·
gym flooring
·
Dum bells
·
weight plates
The other materials that would be needed for the day to day
operations are:
·
notice boards
·
pens
·
furniture
·
lockers
Staff uniform will also be needed. This will make the club
professional. A proper roster will be set the employees working in the job so
that the efficient utilization of the manpower can be done. Even though the
equipment will cost more a high as compared to other business establishment.
The supplies will last for the long time and will be providing benefit in the
business. Our club will have the access of 24/7. Even though the standard time
is usually from morning 6 to 8 for the clubs this service will be beneficial
for the people who have different working hours and timing in the business. It
will also be operating during the weekend time.
Nowadays people are also interested towards simple and
exercise that shows the result in no time. The exercise like Zumba, aerobics
and easy training method are applied in our training, the club will also be
providing training from the well-known professional in the field of fitness.
This will work as a motivational factor for them.
There are all kind of services that will be provided to the customers
from simple basic work to the most extreme one. Most of the people will be like
this concept as most of the people won’t be able to follow strict regime. Like
many people there will be women that are the main focus of the health club.
Business
Development Plan
Proper plan should be made to work out according to the
situation. Below is the proper format for developing the business plan from
start to the end.
Work or the task to be done
|
Start date
|
End date
|
Duration
|
Planning of the business
|
1/5/ 2015
|
10/10/2015
|
10 days
|
Market research
|
1/10/2015
|
25/10/2015
|
15 days
|
Establishing the club
|
25/10/2015
|
25/11/2015
|
1 month
|
Operation of club
|
26/11/2015
|
30/11/2015
|
4 days
|
Reviewing the business work
|
31/12/2015
|
5/1/2016
|
5 days
|
Figure: Business Plan
and Duration of Work
This division of work will and time will let know the team
if the work is being done in time or not. Major people will follow this as a
guidance. If some tasks are not done and fulfilled with in the time then the
above plan should be reviewed and new plan and format should be taken out the
plan to formulate.
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