Further information regarding the Case

The client has given some data and some more insights that maybe used.
Type of models:
1. Big Gyms: 6 in no.
2. Smaller gyms called Fluid Active: 4 in no.(company owned) and 2 in no.( Franchises)
Big Gyms: Gym, Steam and Showers for male and female, Group Activity Classes and Personal Training.
Area required: 3500 to 10000 Sq. Ft.
Current Numbers of Big gyms - 6 (company owned)
Investment - 1,50,00,000 - 3,50,00,000 per gym
Any time Active Member base - 500 - 1000 per gym
Staff Strength - 20 - 30 per gym
Monthly Turnover - 6,00,000 - 18,00,000 per gym
Monthly Expense - 5,00,000 - 12,00,000
Revenue from Personal Training - 4% - 12%
Revenue from Other Value Added services like Group activities etc - 0% - 7% (Some places have
aerobics, zumba etc. on chargeable basis and being outsourced and on some places its free or no
studio space is there)

Small Gyms: Gym, No wet areas, No Group Activity Classes, No Personal Training.
Area required: 1800 2700 Sq. Ft.
Current Numbers of Fluid Active - 4 (company owned), 2 (franchised)
Investment - 60,00,000 - 70,00,000
Any time Active Member base - 200 - 400
Staff Strength - 8 - 12
Monthly Turnover - 3,00,000 - 6,00,000
Monthly Expense - 2,50,000 - 5,00,000
Revenue from Personal Training - 0% - 5%

Real Challenges:
No training institutes for lower, middle as well as senior staff.
Uneducated staff, traditional way of working, no tracking of work-outs, customer relationship etc.
Unorganized sector
The customer feels that he was unable to get value for his money if he is not able to use the facility
for 6 days a week throughout the year and then he bad mouths about it.
An average of 1.5 - 2 hrs spent in gym which is not actually required and the quick workouts can be
delivered in 30 - 40 mins with total time spent can be reduced to 60 mins in the facility.
Competition leading to price war, staff attrition, commoditization of gym services without any USP
High reliability on equipment, encashing on equipment brand value.
High attrition of members with the guilt feeling of wasting of their money.
High Rental Value and the limited availability of the property.
Highly depreciable business without the rightful consideration because of the technology and no
availability of second hand market for the equipment.
Low footfall or inquiries.
Challenge in behavioral change of people who are trying to check the waters in the fitness. They
could not make going to gym a habit in small time. Their motivation flies away only in a couple of
days.
Family approval especially for females, fitness is still seen as balanced way of life and gymming is
seen as a style and flaunt statement.
Parking issues.
Expectation of instant gratification, quick results rather than a lifestyle change.
Limited peak hours majorly 7 - 9 am and 7 - 9 pm.
Low footfall in daytime and availability of employees and space. Underutilization of day time.
High expectation / Guaranteed returns from the franchisees.
Low availability of spare parts and high cost of Annual Maintenance Contract of the equipment. The
equipment comprises of 35% - 45% consisting of Treadmills, Cross-trainers, Bikes, free weights
etc.
Limited reach of 5 km radius.
People have to come physically to avail the services to get the value of their money.

Positive Aspect of the business:

Networking platform for customers.
Great platform for marketing of lifestyle products and services.
Ability to sell longer duration plans to increase the cash flow.
50% or more conversion rate for the inquiries.
Good business to flaunt, members planning to open their own gyms all the time.
Always have mentor members who stay with the brand forever.
People think this business easy to run in the planning stage.
Best option to have as a side business, also good alternative to consume black money.
People have a mindset of one time investment
Preventive in nature and going to boom due to lifestyle diseases, stress levels and high cost of
medical bills.
Being in the service industry, the average salary of any trainer is in the range of 10000 15000
Lot many value added services can be provided because the consumer has to physically come
every time to avail the services
As compared to buying any other product / service, it is the most affordable e.g. A treadmill costs
around 175000 - 1000000 or have a dinner costs around 3000 for a couple.
No educational entry barrier for the business owner.