The average monthly subsciribtion will be around 50 pounds which is more then what the average gym costs.
The main strengths of the the neigbouring gym is that it`s cheaper and well established with an existing customer base, however the high quality or standards and resources the fitness gym offers will make up for the price.
I am confident that `Alshaban fitness centre`will continue to grow and compete with other competetion in the industry mainly because it offers unique services that very few gyms offer in the kingdom along with prices that are very affordable to all target markets which include both male and female adults and teenagers.
Growth plan
Revenues and customers will naturally increase in time as the business progresses, it will break-even and profits will start to emerge towards the last few months of the first year, from then the fitnes gym is expected to have a rapid growth in profit as extensive advertisements are impleneted.
Towards the be beginning of the third year,strategic decisions could be set in motion as ideas to set-up more branches to cover other areas, or consider a strategic alliance with an established strong competetion.
3. Business strategy
Business strategy for the next year
The main goals and objectives for the fitness centre is to continually provide the highest quality services, but the main scope will be to intesivley keep build a large customer database, this will be met with extensive financial spendings on advertisments and promotions during the first year.
The fitness centre will continue to use advertisements, promotions,to keep building it`s customer database.
The depreciation of the fitness gym`s equipment means that the 5 year life expectancy it has will save on expenses which will result in rapid growth of the business.
Business strategy for next 5 years
The fitness gym will break-even and make profit at the end of the first year,from then the fitness gym is expected to accumalate large amounts of profit, thus leading the way for strategic decisions to expand and grow, aiming to be one of the most well known gym`s in the country.
Finane spent on adverts and promotions will subtstantially decrease from the start of the second year, as the estimated growth of customer base shows on the business forecasts conducted below predict.
Tactics
The fitness centre is in the introductory stage where its focusing on aquiring customers where it has established its target consumer.
In-order for the Fitness centre to reach the maturity stage which is one of the main objectives; the business will have to focus its marketing effort to establish a clear identity of the fitness centre, and distinguish itself among other competers.
The fitness gym will use its competetitive advantage which is the private hall provided for muslim females who wish to train, the location is also a crucial factor as their is only one competetion within the large city of Arad.
Studying and analyzing both customers trends and the competetion through extensive market research is a crucial aspect that the management must thoroughly study, this will discussed more thoroughly in a later section in the business plan.
Strategic issues
Next year-The low net profit total the fitness gym is expected to get is natural as the costs of expenses are high, however most of the expenses are from the purchase of the high quality gym equipment that has atleast a 5 year life expectancy.
The current revoulotion on-going in the kingdom of bahrain might pose as political factor and affect the business, as the people are being divided into becoming either anti government or pro-government,regardless of the political views of the management; it will not intervene and voice an opinion regarding the revoultion on-going.
Next 5 years- Existing competetion can pose as a significant external threat to the fitness centre as it will compete with other business`s who are already established and have a wide customer database.
The more any given business advances in growth the more risk that the government rules and regulations could intervene and affect the fitness centre`s, for example the governmnet could introduce a legislation that could affect the fitness centre`s plans to expansion.
The business will seize any oppurtinity to grow and expand but only after analyzing the financial situation of the business.
Core values
Core values are very important as they form the foundation on which the `Alshaban fitness centre` is built upon.
Commitment-commitment of the management and staff to continuely work with motivation to serving the highest quality resources and professional services in the fitness gym, this will build loyalty from customers, and will result in growth in customer base.
Efficiency-the efficient use of long life expectancy of the high quality equipments,along with ridding of unneccessary resources or services.
Safety - ensuring the Safety of the customers is vital and a priority,but it is imposiible to ensure that the gym will be a risk-free environment, as there are always risks that a person gets injured whilst training in the fitness gym.
However the fitness trainer will give clear instructions and enquiries on how to use the equipment and give safety advice to all the members.
This will expectidly minimize the risks of injury and play a role in building a reputation of excellence in service and safety to the long-term business success.
4. Marketing
SWOT Analysis
Strengths
Excellent location where it`s situated in a vast area with only one gym 10 miles away which doesn’t offer a private floor for females to train as opposed to ‘Alshaban fitness gym’.
Well trained and experienced fitness trainers qualified to offer advice to members.
Safe and high quality equipment that have been tested to ensure the safety of members.
Weaknesses
Brand image- the fitness centre is in it`s introductory phase, thus it Is normal that it has still not yet established a strong brand image.
High start-up costs; equipments, safety precautions etc.
Opportunities
Growth of interest in exercise and fitness- in the last couple of years there has been a substantial increase in people subscribing to gyms, as people are more aware now of the benefits of exercise and fitness from the large western media exposure.
Internet integration-`Alshaban fitness gym` is planning in the future to create an online website where customers can purchase their monthly subscriptions, read through the services offered in the gym, or even contact the management team directly if they had any enquiries they wish to ask.
Expansion-`Alshaban fitness gym` main goal for the next 5 years is growth and expansion by adding more branches to other areas.
Threats
Competition from larger well established competitors in further areas.
Copycat gyms that offer same services such as implenting the private hall service for female muslims to train, this can`t be avoided, however ‘Alshaban fitness gym’ is expected to build a strong reputation within the first year which will limit their threats.
Critical factors for `Alshaban fitness gym`
Effective marketing which is a key component in building a sufficient customer database.
Secure financing for growth and expansion.
Sustaining customer satisfaction is crucial to keep the customers loyal and increase.
Market research
Primary research was conducted where no difficuilties were faced as i live in the same area the fitness gym is located in which meant i have a good background knowledge in the area.
Only one small gym within the area that has could be classified as a competetor, the gym is called ‘Fadi bodybuilding’ and has been operating for six years with a small but sufficient customer database.
However,`Alshaban fitness gym` offers a unique service that creates a competitive advantage over the neighbouring gym `Fadi bodybuilding`; which is the private floor accessed only by females, as Bahrain is populated by muslims which means a female can`t show certain body parts to males example-hair,legs etc.
Thus broadening the target market that extends to female muslims as they will have all privacy they need as opposed to the neighbouring gym`Fadi bodybuilding`.
If a female is comfortable with training in the presence of males(non-muslim) then they can train in the first floor.
The seven O`s in marketing
Occupants- customers:both male and female, and other fitness gym`s.
Object- a high quality resources and profesional services for each and every member in the fitness gym.
Objectives- members will subsribe to either lose weight, grow muscles as anyone will be interseted in looking better.
Organisation- any person male or female who wish to train his/her body in a gym
Operations- by registiring at the reception desk paying either by cash or card and choosing the subscribtion options such as; three month package, 6 month package etc.
Occasions- all throughout the year, an increase in customer base might be in the summer as people tend to pursue new acrivities in the holidays.
Outlets- the fitness gym is situated in the city of Arad.
Types of buyer behaviour
The fitness gym would be classified as a ‘High-Involvement product’ where the is prepared to spend time and effort in searching for the best place to train his/her body. There are significant differences between brands which means complex buyer buying behavior as the quality of the resources and services vary from gym to gym.
Target market
Adults
Teenagers
Muslims
Non-muslims
Distribution channels
The current marketing reach of my business is local, as their is only one branch located in Arad.More branches are planned to open in other areas in the next 3-5 years depending on the financial state of the business.
Internet sites such as Facebook,twitter etc will be a crucial aspect to reaching customers of as these sites are vastly populated by teenagers and young adults.
Fliers will be distributed across every single household in Arad town as well as placing adverts in local papers and magazines that contains pictures and services offered in the gym.
‘Alshaban fitnes gym’ will focus on broadening it`s market by expansion and growth within the next 3-5 years depending on revenue generated by the business.
Strategic alliances
Introducing an alliance to the fitness centre could be possible in the next 3-5, as it would certainly help the business expand and be very benficital to the business,as the number of customers will natuarally increase with the alliance of a strong well established competitor,risks will be minimised,and profits will also be shared.
For the time being no plans have been set towards a strategic alliance, however this will be planned and thought in 3-5 years depending on the financial situation of the fitness gym.
E-commerce and technology
‘Alshaban Fitness Gym’ is planning in launching an internet website that will allow customer`s to buy the items the fitness gyms online, customers could also or re-new their subsribtions by directly paying online using their debit or credit card.
Subscription can be purchased directly from the website at a slightly lower price; this will encourage customers to visit the website which will attract more members to join the gym.
Tactical promotion plan
The main promoting channels will be from advertsing in popular interet websites (Facebook,Youtube,Twitter) which are used and visited on a daily base.
Heavy financing will be put the first year on placing Pictures and promotions popular magazines and newspapers, as increasing the customer base is one of the fitness gym`s main targets for the first year.
Marketing budget
The marketing budget for the first year will be 1,800 pounds which will spent on promotions,creating posters and fliers.the following years the marketing budget for adverts will decrease as shown in profit and loss forecast below.
5. Team and management structure
Skills, experience, training and retention
‘Alshaban Fitness Gym’ is a solid business,with the management team comprised of members with many years of experience in the business industry.
The CEO and managing dircetor is Mr Isa Juma Alshaban who has over 10 years of experience in the business industry, he`s also head of his own business ‘Alsafat’ situated in Oman. Strategic decisions have to be confirmed by him. Mr Isa carries a masters degree in internationall business from the universtiy of Bahrain.
Ms Sarah hussain carries the title of public relations manager,with a master degree in marketing from Polytechnic university.Her responsibilities include dealing with sponsors, advertisements and promotions ensuring a positive strong image for `Alshaban Fitness Gym`. Ms Sarah is also incharge of the marketing budget where she decideds how much the fitness gym is going to spend on advertisments and promotions.
Mr Ali Abdulrahim is the director of operations, his main role is ensure day-to-day process`s run smoothly without disruption, he reviews and evaluates the business procedures reporting directly to the CEO.
Mr Ali has 7 years of experience working alonsgise CEO director Mr Isa Alshaban`s company `Alsafat`.He has a degree in business management aquired from North East University of Oman .
The staff workers consists of Two qualified fitness coaches,who will be appointed in the gym,one in each floor. Their main role will be to give advice and instuctions to the members, and show them how to use the gym equipment.
Two receptionists will be appointed to deal with clients and visitors,one will have a desk in each floor. Their role will be to collect money from potiental clients wishing to subscribe, as well as dealing with any enquiries about the gym.
Advisors
CEO director Mr Isa juma Alshaban acts as his own mentor as he plenty of experience and knowledge in the business industry, a financial officer is called upon whenever requested to sort out the legal financial issues of the fitness gym.
Management systems
CEO director Mr Isa Juma is responsible for providing leadership, direction, and control for all aspects of the business decisions targeting optimum profits that successfully allows the short-term and long term plans for the business to proceed as planned.he`s also incharge of the payroll of the employees.
There is no specific dress code for staff to wear, however staff are expected to dress professionally and each has a card badge to be worn around the neck that states the name and job specifiaction of the worker.
The fitness centre will offer and provide a variety of services and resources to the customers, all the body building and weight training equipment will be provided in the gym such as treadmills, dumbells, excercise bikes etc.
One fitness instructors will be available in each floor, a male instrustor will be available at the first floor prividing help and advice for both the males and females training,whilst a female instructor will be available in the second floor which is only accessed by females.
Both fitness trainer will give daily safety instructions and precatitions on using the equipment and machinery , this will expectidly minimize the risks of injury and play a role in building a reputation of excellence in service and safety to the long-term business success.
Taxes and VAT are not included in the Business plan and forecasts because their are none in the Kingdom of Bahrain .
6. Financial budgets and forecasts
Profit and loss forecast
Sale of subsriptions is expected to grow steadily over the years at the assume increase in cusrtomer base,thus advertising costs will be high initially, but will then increase at a decreasing rate.
Net profit will gradually increase as natural as the business grows.
One of the key factors contributing to the growth of profit is the depreciation of the gym equipment where they have atleast 5 years of life expectancy.
Cash flow Forecast
Cash flow data is presented in the chart and table above.
The flow of cash in and cash out is highly noticable as the gym is exepensing a lot of cash in the first year, however the money coming in the business will substantially increase,due to the expected cash generated from operations and the addition of the expected profit the gym is expected to generate each year to the new financial year.
Balance sheet forecast
*10k pounds (OM) + 20k pounds (CEO) and 42k pounds (Loan)
beyond the year 2012, where its expected to make 68,183 in the first year, Alshaban fitness gym is expected to grow solidly in net worth in a steady rate each year, the following year the net profit total is expected to increase by 12,033 thousand pounds to reach a total of 80,216 at 2013.
The following years are expected to have a subtantial growth in profit where Alshaban fitness centre is expected to reacg a net profit of 179,427 at the end of 2016.
Break-even analysis
Alshaban fitness gym is expected to earn 44617 thousand pound a year to break-even in the year 2012,as the years progress the break-even point gradually decreases.
10k pounds (OM) + 20k pounds (CEO) and 42k pounds (Loan)
Business plan prepared Month Year Page
by
burgernugget (student)
