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TERM PAPER

OF

ENTREPRENEURSHIP

DEVELOPMENT
TOPIC: BUSINESS PLAN ON
HEALTH CLUB

About The Fitness Club


 24x7 Fitness Club Is a Unisexual Club.
 24x7 Fitness Club is fully Air-conditioner Club.
 24x7 Fitness Club Provide Locker Facilities.
 24x7 Fitness Club Also Having Steam bath Facilities.
 24x7 Fitness Club Also Provide You Yoga and Meditation.

Objectives

 To Provide Perfect Body Fitness


 To give healthy Environment to City Phagwara
 Aware The customer about the fitness

Activities and Services


 Cardiovascular and Weight Training.
 Physiotherapy
 Yoga
 Aerobics
 Spa.
 Meditation
Features
Marketing Plan
Market Analysis-
1. Standard of living.
2. More Numbers Of youth.
3. Old Age people for yoga, Cardiovascular and Meditation.
4. Also attract the working class people.

Target Market
 For Youth- Gym, Aerobics, Spa etc.

 Old age people - Yoga, Meditation, etc.

Market Analysis Summary

The population has grown by 15% each year for the past three years. The current
population of Phagwara is 100,0000. Most importantly, the growth has been fueled by the
increased employment in the city's high-tech companies. This has attracted a type of
professional that is the target customer for the 24x7 Fitness Center.

4.1 Market Segmentation

The 24x7 Fitness Center will focus on the young urban professionals as its primary
customer base.

Market Analysis
2002 2003 2004 2005 2006
Potential
Growth CAGR
Customers
Young
10% 100,000 110,000 121,000 133,100 146,410 10.00%
Professionals
Other 0% 0 0 0 0 0 0.00%
Total 10.00% 100,000 110,000 121,000 133,100 146,410 10.00%
Strategy and Implementation Summary

 24×7 Fitness Center will expand and create a larger childcare facility. In addition,
new equipment will be purchased for the childcare center. The new facility will be
able to entertain up to 75 children including 25 infaAnts.

Gym Plan
Simple Gym Plan
1 Day - Rs. 50
1 Week – Rs. 200
1 Month -Rs. 600
3 Month - Rs. 1600
1 year – Rs 6000

(*Rs 200 Extra For Registration)

Standard Plan (Gym +Steam Bath)

1 Day - Rs. 100


1 Week – Rs. 500
1 Month -Rs. 1200
3 Month - Rs. 3000
1 year – Rs 10,000
(*Rs 200 Extra For Registration)

For Yoga & Meditation


Its Totally Free Of Cost, for all Members Of 24x7 Fitness club.

4P’s Of 24x7 Fitness Club

 Product- The Product Quality fitness centre Is High In Quality Equipments,


Machinery, Convenient Scheduling And Exceptional exercise program.
 Price- The Price Of the Fitness Centre Is Not Much As It Provides Services to the
Customer
 Place- The Area where the Fitness Centre is located is Busy or crowded Area.
Gym Is not Congested and having proper gap between the machinery
 Promotion- Its Promotion Strategy consists of word of mouth, local
Advertisement, E-mail and SMS promotion, Hoardings.

SWOT
 Strength- Knowledgeable and Friendly staff

 Weakness-Although it is a New Fitness centre.

 Opportunity-Growing market, Internet possibilities.

 Threats - Declining Economy, Competitors, Copy Cat Training Services By Gym


and Independent Trainers

Financial Plan

 Requirement – The 24x7 fitness Centre requires land, machinery, Equipment,


workers.
Use Of Funds-The Fund will be used to lease a commercial space and Buy Necessary
Exercise Equipment. Marketing expenses and initially accounting software will also
be purchased with these funds. A Portion of the funds will be used for operating
expenses until profit are realized.

Assets

 Land & Building -Rs 10,50,000


 Plant & Machinery – Rs 5,25,000
 Furniture & Fittings – Rs 1,50,000
 Copyright & Trademark patents- Rs50,000
 Brokerage- Rs 40,000
 Advertisement expenses- Rs. 35,000
 Payment In advance – Rs 20,000
 Cash In Bank- Rs.80,000
 Cash In Hand- Rs 20,000
Total =19,70,000

Sales Forecast
2008 2009 2010
Sales
Memberships 364,000 480,000 620,000
Childcare 314,000 325,000 341,000
Massage 120,000 125,000 130,000
Physical Therapy 156,000 165,000 174,000
Fruit Bar Drinks 144,000 154,000 160,000
Total Sales 1,098,000 1,249,000 1,425,000

Direct Cost of
2008 2009 2010
Sales
Memberships 0 0 0
Childcare 0 0 0
Massage 60,000 62,500 65,000
Physical Therapy 84,000 92,000 98,000
Fruit Bar Drinks 24,000 27,000 30,000
Subtotal Direct
168,000 181,500 193,000
Cost of Sales

Personnel Plan

The personnel for the 24x7 Fitness Center are as follows:


• Manager
• Assistant manager
• Childcare manager
• Tennis manager
• Pool manager
• Center staff (16)
• Childcare staff (8)

Personnel Plan
2008 2009 2010
Center
48,000 50,000 52,000
Manager
Assistant
36,000 38,000 40,000
Manager
Center Staff 240,000 270,000 300,000
Childcare 34,00
30,000 32,000
Manager 0
Childcare 170,00 200,00
147,000
Staff 0 0
34,00
Pool Manager 30,000 32,000
0
Tennis
30,000 32,000 34,000
Manager
Total People 23 28 32

Total Payroll 561,000 624,000 694,000

Financial Plan
The following is the financial plan for 24x7
Break-even Analysis
The table and chart below show the monthly break-even point.
Break-even Analysis

Monthly Revenue Break-even 71,739

Assumptions:
Average Percent Variable Cost 15%
Estimated Monthly Fixed Cost $60,763

Projected Profit and Loss


The following table and charts highlight the projected profit and loss for three years.
Pro Forma Profit and Loss
2008 2009 2010
Sales 1,098,000 $1,249,000 $1,425,000
Direct Cost of Sales 168,000 $181,500 $193,000
Other Production Expenses 0 $0 $0
Total Cost of Sales 168,000 $181,500 $193,000
Gross Margin 930,000 $1,067,500 $1,232,000
Gross Margin % 84.70% 85.47% 86.46%

Expenses
Payroll 561,000 624,000 694,000
Sales and Marketing and Other
48,000 55,000 60,000
Expenses
Depreciation 12,000 12,000 12,000
Leased Equipment 0 0 0
Utilities 12,000 12,000 12,000
Insurance 12,000 12,000 12,000
Rent 0 0 0
Payroll Taxes 84,150 93,600 104,100
Other 0 0 0

Total Operating Expenses 729,150 808,600 894,100

Profit Before Interest and Taxes 200,850 258,900 337,900


EBITDA 212,850 270,900 349,900
Interest Expense 29,255 35,051 36,752
Taxes Incurred 51,479 67,155 90,344

Net Profit 120,117 156,694 210,804


Net Profit/Sales 10.94% 12.55% 14.79%

Projected Cash Flow


The following table and chart highlight the projected cash flow for three years.
Pro Forma Cash Flow
2008 2009 2010
Cash Received

Cash from Operations


Cash Sales 823,500 936,750 1,068,750
Cash from Receivables 219,908 304,742 347,499
Subtotal Cash from Operations 1,043,408 1,241,492 1,416,249

Additional Cash Received


Sales Tax, VAT, HST/GST Received 0 0 0
New Current Borrowing 70,000 0 0
New Other Liabilities (interest-free) 0 0 0
New Long-term Liabilities 120,000 50,000 30,000
Sales of Other Current Assets 0 0 0
Sales of Long-term Assets 0 0 0
New Investment Received 0 0 0
Subtotal Cash Received 1,233,408 1,291,492 $1,446,249

Expenditures 2008 2009 2010

Expenditures from Operations


Cash Spending 561,000 624,000 694,000
Bill Payments 425,735 457,950 503,931
Subtotal Spent on Operations 986,735 1,081,950 1,197,931

Additional Cash Spent


Sales Tax, VAT, HST/GST Paid Out 0 0 0
Principal Repayment of Current Borrowing 13,392 13,392 13,392
Other Liabilities Principal Repayment 0 0 0
Long-term Liabilities Principal Repayment 9,600 9,600 9,600
Purchase Other Current Assets 72,000 40,000 30,000
Purchase Long-term Assets 0 50,000 50,000
Dividends 0 0 0
Subtotal Cash Spent 1,081,727 1,194,942 1,300,923

Net Cash Flow 151,682 96,551 145,326


Cash Balance 201,682 298,232 443,558

Projected Balance Sheet


The following table highlights the projected balance sheet for three years.

Pro Forma Balance Sheet


2008 2009 2010
Assets

Current Assets
Cash 201,682 298,232 443,558
Accounts Receivable 54,592 62,099 70,850
Other Current Assets 122,000 162,000 192,000
Total Current Assets 378,273 522,332 706,408

Long-term Assets
Long-term Assets 200,000 250,000 300,000
Accumulated Depreciation 60,000 72,000 84,000
Total Long-term Assets 140,000 178,000 216,000
Total Assets 518,273 700,332 922,408

Liabilities and Capital 2008 2009 2010

Current Liabilities
Accounts Payable 39,148 37,505 41,770
Current Borrowing 126,608 113,216 99,824
Other Current Liabilities 0 0 0
Subtotal Current Liabilities 165,756 150,721 141,594

Long-term Liabilities 210,400 250,800 271,200


Total Liabilities 376,156 401,521 412,794

Paid-in Capital 0 0 0
Retained Earnings 22,000 142,117 298,811
Earnings 120,117 156,694 210,804
Total Capital 142,117 298,811 509,615
Total Liabilities and Capital 518,273 700,332 922,408

Net Worth 142,117 298,811 509,615

LICENCE REQUIRED TO START THE HEALTH CLUBS

(a) Each individual place of business of each health club shall obtain a license from the
Department of Consumer Protection prior to the sale of any health club contract.
Application for such license shall be made on forms provided by the Commissioner of
Consumer Protection and said commissioner shall require as a condition to the issuance
and renewal of any license obtained under this chapter (1) that the applicant provide for
and maintain on the premises of the health club sanitary facilities; (2) that the application
be accompanied by (A) a license or renewal fee of two hundred fifty dollars, (B) a list of
the equipment and each service which the applicant intends to have available for use by
buyers during the year of operations following licensure or renewal, and (C) two copies
of each health club contract which the applicant is currently using or intends to use; and
(3) compliance with the requirements of section 21a-226. Such licenses shall be renewed
annually. The commissioner may impose a civil penalty of not more than three hundred
dollars against any health club that continues to sell or offer for sale health club contracts
for any location but fails to submit a license renewal and license renewal fee for such
location not later than thirty days after such license's expiration date.

(b) No health club shall (1) engage in any act or practice which is in violation of or
contrary to the provisions of this chapter or any regulation adopted to carry out the
provisions of this chapter, including the use of contracts which do not conform to the
requirements of this chapter, or (2) engage in conduct of a character likely to mislead,
deceive or defraud the buyer, the public or the commissioner. The Commissioner of
Consumer Protection may refuse to grant or renew a license to, or may suspend or revoke
the license of, any health club which engages in any conduct prohibited by this chapter.

(c) If the commissioner refuses to grant or renew a license of any health club, the
commissioner shall notify the applicant or licensee of the refusal, and of his right to
request a hearing within ten days from the date of receipt of the notice of refusal. If the
applicant or licensee requests a hearing within ten days, the commissioner shall give
notice of the grounds for his refusal and shall conduct a hearing concerning such refusal
in accordance with the provisions of chapter 54 concerning contested matters.

(d) The Attorney General at the request of the Commissioner of Consumer Protection
is authorized to apply in the name of the state of Connecticut to the Superior Court for an
order temporarily or permanently restraining and enjoining any health club from
operating in violation of any provision of this chapter.
Salient features of the health club

Physical Fitness (Exercise Room)


The Physical Fitness (Exercise Room) space type is a space specifically designated for
exercise, fitness training, and physical wellness activities. Also included are toilets,
office, and general storage normally found in a Physical Fitness (Exercise Room)
space to meet codes and regulations.
Fitness space types do not include: high bay court games (basketball, racquetball),
saunas, hot tubs, steam rooms, swimming pools, food preparation, and service or sporting
goods retail.
Space Attributes
The Physical Fitness (Exercise Room) space types provide a comprehensive, varied
program of physical activities to meet the individual training regimens of its occupants.
Indoor fitness programs can typically be divided into four categories of exercise: warm-
up/cool down, free weight, circuit training, and cardiovascular. Each area that houses a
particular exercise category should be designed around the requirements of the necessary
equipment, including spatial, utility, and HVAC requirements, as well as circulation and
control. Also important to the design of this space type is the durability of finishes,
flexibility of space, and acoustical control.

Functional / Operational

• Spatial Requirements of Equipment and Exercise Activities: A minimum 12'


ceiling height is generally required in this space type to accommodate the
clearances needed for daily equipment usage. Special surfaces are also required
for many athletic activities such as cushioned training surfaces, mirror walls, or
impact-resistant walls. Anticipate circulation, in particular controlled circulation,
using a flow diagram at the beginning of the design process.

• Durability of Structure and Finishes: Increased structural steel is typically


provided to reduce vibration transmission. Exercise and weight rooms, including
equipment storage rooms, should be designed for a 150 LB/SF live load. Finishes
should be durable and easy to maintain in anticipation of maximum use.
• Acoustical Control: Reduce noise impact generated by physical activity, by
including sound baffles at all acoustically rated partitions, in particular exercise
and weight rooms and tenant demising partitions.
• Occupancy: Occupancy Group Classification is Business Occupancy B, with
sprinklered protected construction and GSA Acoustical Class X space where
noisy operations are located.
PHYSICAL FITNESS

Sum Tenant
Description Qty SF Total Tenant
Actual Usable
Tenant Occupiable Areas . Each SF USF
SF Factor
Front Lobby 80
Entry Lobby 1 80 80
Lockers 1,400
Male Lockers (70 lockers) 1 490 490
Male Toilets (3 stalls) 1 180 180
Male Showers (4 showers) 1 100 100
Female Lockers (50 lockers) 1 350 350
Female Toilets (3 stalls) 1 180 180
Female Showers (4 showers) 1 100 100
Exercise Facilities 4,320
Free Weight Room 1 960 960
Exercise Station Room 1 960 960
Aerobics Machine Room 1 1,200 1,200
Fitness Instruction 1 1,200 1,200
Support Spaces 320
Equipment Repair/Storage 1 200 200
Housekeeping 1 120 120

Tenant Suite 6,120 6,120 1.16 7,076

Tenant Usable Areas 7,076

Plant Layout
Plant Inner Layout

Technological Plan
Machines

For Legs
For Lats (V-
Shape)
Weight stand 1
Bench Press 1
Upper Bench Press 1
Lat Machine 1
Lat Machine 2