Location In The Lifestyles Fitness Shopping Center example essay topic

Lifestyles Fitness Center Lifestyles Fitness Center May 16 (Updated with Financial data 01-28-2001) Jav on Jones Chief Executive Officer Lifestyles Fitness Shopping Center Someplace, CO 64093 (303) 555-5555 Prepared with the assistance of The Institute for Entrepreneurial Studies and Development And Small Business Development Colorado State University Table of Contents 1 Executive Summary 3 Present Situation 5 Objectives 6 Management 8 Product / Service Description 10 Market Analysis CustomersCompetitionFocus Group Research Risk 14 Marketing Strategies Pricing & Profitability Selling TacticsDistributionAdvertising & Promotion Public Relations Business Relationships 18 Appendix Financial Projections 12-Month Budget 5-Year Income Statement Cash-Flow Projection Pro Forma Balance Sheet Break-Even Analysis Sources & Uses of Funds Summary Start-Up Requirements Use of Funding Proceeds Lifestyles Fitness Center Executive Summary In 1995, Lifestyles Fitness Center was formed to provide a full service fitness center to provide for all segments of the populace in Lifestyles Fitness and the surrounding area. Although there is an existing work out center in Lifestyles Fitness, the existing facility does not provide the support for the senior members of the community. Our mission is to provide a center that will provide not only an area for dedicated weight lifters, but also for the person seeking to maintain fitness. We want to provide a center that supports aerobic, cardiovascular, and weight training for all segments of the community. The ability of Lifestyles Fitness to provide both an indoor track combined with certified training is a capability unique to private fitness centers in this area. The center will also provide showers and changing rooms for their clients to use.

The center will also provide workout apparel for each individual (if preferred). This service will expand the marketability of Lifestyles Fitness. We have also added to our existing services. We have developed plans to introduce a health and protein drink bar and provide exotic coffees for customers. In addition, we also offer a nutritional ist and a cafeteria.

It is considered that this will also provide an area that the client al can cool down, relax and get the proper nutrition after a work out. This will also provide additional income for the center. Management Our management team consists of persons with a broad background in both the fitness area and business management, and it is fully supported by the Institute for Entrepreneurial Studies and Development and Small Business Development Center at Colorado State University. The management staff consist of Old McDonald CEO and supervisor of training, Dad McDonald director of Marketing, Dad McDonald assistant director of facilities, and Mom McDonald Vice president. Old has a broad background in the fitness training industry, currently carrying a training certification from the AAIA / ISMA.

He is currently working on a degree in business with emphasis on the fitness industry. He has held several different titles in both track and field and football. In high school he was selected as All-American Football Linemen, was All-State his junior and senior years in track and his senior year in football, and was All-Conference his freshmen year in college. Dad has a BS, MS, and EdS degree, and is currently working on specialized training in industrial marketing. He has a broad background in business, having worked for the SBDC for four years. Dad McDonald is highly qualified having worked as a Multi- Purpose Building Supervisor for four years on the Lifestyles Fitness Colorado State Campus.

He is highly cognizant of the needs of the fitness business in the area of facilities management and service. Mom has a vast background in the telemarketing industry having been manager for Florafax International. She has worked as a member of the management staff for several different companies. Lifestyles Fitness Center intends to use every facet available for marketing and advertisement.

One of our concepts is to use area facilities such as restaurants and nightclubs as sources of advertisement. We already have four area businesses that have given us verbal commitment for assistance by placing banners and placards in their business places and distributing fly ers to their customers. Our target market will be primarily be the student / young adult and senior citizen, but Lifestyles Fitness will not be limiting itself to this market alone. We believe that the fitness industry is open to all individuals and should be made available to all markets. By having a broader clientele our income base would not be limited, we will literally tap into every category of markets and try to reach as many of them as possible through strategic advertising. Present Situation This company is a start up venture that has secured a tentative lease agreement on the perfect site for a large fitness center.

The new site is located perfectly in Lifestyles Fitness by many small shopping centers and businesses with easy access from highway. The facility is located in a modern and progressive strip mall that supports numerous businesses and has a high volume of potential customer traffic. This high traffic area is the ideal location for easy access to both college and local citizens. It assured memberships by many Lifestyles Fitness citizens since it will be a short walk or drive to the location and the site will provide ample and safe parking.

The location in the Lifestyles Fitness Shopping Center is located in the southeast end of the building with ample parking and a great entrance that gives it the perfect image. With the parking lot having fifty plus parking spaces, it is assured that no customer or member would have problems finding a comfortable close range space. The building provides some 9,000 square feet of space, more than enough for a large fitness center and indoor track. This should be very appealing to persons looking for a comfortable air-conditioned indoor track in which to burn a few calories. We are currently researching different fitness centers located in the surrounding area. Some of these are located in the Big City area, of which many are very impressive gyms.

The local gyms are a far cry for what a city this size needs. One of the main competitors, a gym located in down town has a history of poor management and limited service in addition to being limited in space and having inadequate equipment. Because of the lack of competition, this fitness center has been able to remain in business. The addition of a new and expanded center could truly dominate the market and give the town it's appropriate fitness and weight training needs. Market Environment The marketplace is undergoing a rapid change for several years.

Because of the increased interest in the fitness and health industry we are poised now to enter into an expanding market place. With increased knowledge of the benefits of exercise that is being promoted on TV, radio, and in newsprint, it is felt that a large market has been created. Lifestyles Fitness and the surrounding area contain over 15,000 young persons under the age of 25. This potential market alone could support several fitness centers, and we feel that obtaining a 10% share of that market is well within reach of this center. The other market that has been overlooked for a long time in this area is that of the older or retired persons. This is a rapidly growing market that contains many individuals that have lead an active life, but because of their age no longer can tolerate the extremes of heat and cold found in this area.

It is felt that by offering a center that provides for this clientele with special hours and equipment, additional sources of memberships can be gained. With the baby boomers now approaching middle age a new awareness of fitness has become apparent. This group is not as interested in the maximum development of muscle mass as they are in optimum fitness for health benefit. With the development of aerobic and circuit training areas combined with a modern, well lighted, and clean center will draw favorably from this group. It is felt that a clean and well staffed center will develop a strong following in this area from students, Army personnel, SSU personnel, and residents of the area. By providing a strong support staff in this center we will create a diverse, but dedicated following among all of these diverse groups.

Pricing and Profitability Pricing for Lifestyles Fitness would be very affordable, although more expensive than that of Downtown's membership fee. Our fitness center would be worth the small extra amount in membership dues. The pricing is as follows: Bronze package Silver Package Gold Package 467$ yearly 573$ yearly 650$ yearly 38.50$ monthly 47.50$ monthly 54.70$ monthly Objectives. The primary objectives of our organization are to: Objectives: The primary objectives of our organization are to: A first goal is to develop a service oriented fitness facility. B The second goal is to develop a profitable facility that is totally self-supporting. C The third goal is to generate a gross income exceeding$100,000 for our first year in operation.

To accomplish these goals, we are developing a full-scale plan of action. We are currently negotiating for a location with the maximum number of square footage for bottom dollar prices. We are also seeking the best quality equipment at the lowest price, which will fulfill the wants and needs of a large and diverse client base. We are conducting research to determine specific client needs and expectations in the local. The one dominant driving force is the projected needs of a large and multi-faceted client base.

With the University, Army base, and local clients utilizing the existing facilities, it is felt that the window of opportunity for a new and expanded fitness center would be of perfect financial timing. With the profit potential presented by this type of operation, it is felt that a potential return on investment of 150 percent is possible within five years. This pessimistic projection is based on lower than average expectations. By reviewing financial data supplied with this plan it is possible to foresee a total return on investment within three years. Rationale Based on our research and previous experience we feel that this type of enterprise is both profitable and highly desirable from a business point of view. With a fixed base asset facility, it has been proven that under proper management and supervision minimal reinvestment is needed to maintain a highly desirable facility.

This business is following the success trend of the 90's by being a service-oriented enterprise. It will provide the health care benefits and training so highly prized by the professional white-collar businessperson. Position for Growth 1. Understand customers, competition and industry. 2. Product / service /channel / customer congruency.

3. Product / service life cycles. 4. Growth by fields of interest. 5. Balance people / management /business goals.

6. Develop values and culture. 7. Hire the best people.

Management How We Are Starting The legal status of the company is a sole proprietorship at this time, but the move over into subchapter's incorporation is being investigated. The logic behind the sole proprietorship concept is in the terms of management, what would be best for the company starting out. This concept would provide the least problems during the business start up phase. I feel that with one person in charge and having ultimate control during the initial phase of start up, the first phases of incorporation would work out better in the decision-making area. Management Team The majority of positions will be filled only when the projected need arises to provide for conservation of funds.

The responsibility of hiring and firing positions will rest solely with upper management. During the start up phase there will be only two positions filled with paid personnel, and several positions will be filled with non-paid support persons. The Institute for Entrepreneurial Studies and Development and Small Business Development Center will provide assistance during the initial start up of the business, until such time that the company can afford to bring more personnel on board. President-CEO Old McDonald has a broad background in the fitness training industry, currently carrying a training certification from the AAIA / ISMA. Vice President - Operations Mom has a vast background in the telemarketing industry having been a manager for Florafax International. Vice President - Marketing Dad has a BS, MS, and EdS degree, and is currently working on specialized training in industrial marketing.

He has a broad background in business, having worked for Lifestyles Fitness U for four years. Assistant Director-Facilities This position will be held by Dad H. McDonald. He is highly qualified to hold this position having worked as a Multi-Purpose Building Supervisor for four years on the Lifestyles Fitness State Campus. Outside Support An outside Board of Directors, including highly qualified business and industry professionals / experts, will assist our management team to make appropriate decisions and take the most effective action. They will not be responsible for management decisions, but will provide guidance and direction. Service Description Proprietary information is available to investors upon signature of Non-disclosure Agreement.

The service that we sell is memberships to an outstanding fitness facility. A facility with modern equipment, indoor track, women's weight room, machine weight room, men's and women's locker rooms, and possibly even an indoor half court basketball court. The facility would even house a juice bar with a pro shop conveniently located to either side of the bar. The characteristics of our service will be that of great patience in order to help our members feel happy and successful in their fitness quest. Service would be that of the highest grade and quality with complete understanding and complete reliability. Other products and services which will be sold at the fitness center include an arrangement of different health products and other health services such as fluid replacement drinks like that of Carbo Pump.

Other services would even include protein shakes and health food along with vitamin and mineral supplements. The pro shop would sell body building clothing for both men and women and other health oriented clothing. The pro shop could even sell magazines ranging from body building magazines to that of power lifting magazines. The possibilities are endless. Pay Back The projected pay back on this business is five to seven years, with an optimistic side of four-year pay back. It is felt that the business can be free and clear of all outstanding debt with in a five-year period of time.

It is projected that the loan for start up can be paid off over a ten-year term, but it is felt that the loan will be paid off in less then six years. Useful Purpose And Benefits Lifestyles Fitness would be able to give the service of being an outstanding fitness facility with a product no one else in this area can give, which is a good training facility with minimal cost to the client. Lifestyles Fitness would not only be able to give this service but give it with great service. Making the client feel secure and safe thus making the client want to return. Lifestyles Fitness should be able to pull in a variety of customers due to its low membership fee and outstanding atmosphere. I believe that with the right chemistry of equipment and management that in the very near future Lifestyles Fitness could dominate this portion of Colorado for fitness centers.

Feature Highlights The key feature to Lifestyles Fitness would be it's indoor track with aerobic center featured in the center. Aerobic classes would be daily and the track opened constantly. Some minor features which would be rather impressive are and in detail. Weight room with new and up to date equipment, which would allow for the greatest intensity for each client. Women's weight room that is slightly smaller and fewer weights than that of the free weight room, also different in color to appeal to women.

A full-court basketball court, this I believe would be perfect for anyone wanting to burn a few extra calories after a workout or before, also a great attraction to fitness enthusiasts. Both men's and women's locker room equipped with showers and lockers. Also located at the entrance would be a juice bar with pro shop selling drinks and snacks, this would really be attractive to members since the local fitness center sells nothing. Market Analysis Key points in defining the market for Lifestyles Fitness would be that of three main categories. The first one is young adults between the ages of 15 to 25 years of age. This age group is more than plentiful since Lifestyles Fitness is a college town.

This age group tends to workout to look more attractive to the opposite sex. The second target group is middle-aged couples. This age group tends to workout for overall fitness and health. The last target group is older individuals and couples. Since this age group tends to live in retirement homes it is thought that it would be beneficial to the company to give an encouraging discount to the homes in hopes of maybe getting some type of contract or agreement. I would love to see a fixed time in which all the older people could come in and workout as a whole.

Not only would this be beneficial to them but this would ensure the company of a long-term agreement, which would help secure financial success. The fitness segment of the market is generally based on weight training and aerobics with retail prices being in the range from $200 to $1000 dollars per year. Lifestyles Fitness would have a yearly membership for $467 which is not including group or personal discounts. This price is thought of to be highly competitive since a vast majority of the health clubs have below standard equipment for above average prices. Lifestyles Fitness would have a reasonable fee for outstanding service and quality. The growth rate of the health and fitness industry is rapid.

This was shown by the results of a survey completed by the International Racquet Sports Association (IRS A) which concluded that many people are engaging in some form of physical activity and that top leading industries and major corporations are understanding the benefits of having their employees participate in a physical fitness program. Lifestyles Fitness feels as if can capitalize off this growing trend. By talking to the owners and managers of some of the bigger businesses in Lifestyles Fitness and giving them a 10% off coupon to all of their employee' it is felt that a big financial gain is possible. It is felt that the industry is in the early stages of its growth cycle, and this assumption is supported by the increasing numbers of people who are beginning or maintaining exercise programs.

These life cycle indicators show the tremendous market demand for fitness services. It is imperative that the club be responsive to these demands by giving the clientele what they want. A good club at a good price with good service. Opportunities The upside potential for Lifestyles Fitness is incredible, with very little competition in such a vast market the profitability is great. Other existing fitness facilities are outdated, the demand for anew fitness facility are great.

With the clientele of varying age groups ranging from 15 years of age to 70+ years the number of memberships should be vast. Customers The clientele for Lifestyles Fitness is in a tremendous range. Where most fitness facilities shoot to attract the teen to early 20 categories we at Lifestyles Fitness wish to attract every category. The customers would range from the mid-teens to older retired couples seeking better fitness. The possibilities for members is great, with Lifestyles Fitness having a growing population and the Army Base a few miles down the Highway and also the college it seems possible in a few years to have 2,000 members.

Lifestyles Fitness doesn't believe in trying to appeal to just one age group. By doing this the company is reducing the potential income of this type of business. Instead Lifestyles Fitness is going to try to appeal to a broad spectrum of lifestyles and age groups. By being diverse and unique I feel that this goal is possible. Below is a listing of the categories of people in which Lifestyles Fitness would like to attract: Student Age: 18-25 Income: Fixed Sex: Male / Female Family: Distant Geographic: Suburban Occupation: Student Attitude: Early Majority Housewife Age: 35-55 Income: Fixed Sex: Female Family: Full nest Geographic: Suburban Occupation: White collar / Blue collar family Attitude: Early majority Young Professionals Age: 25-35 Income: Medium to high Sex: Male or Female Family: Bachelor or married Geographic: Suburban Occupation: White collar Attitude: Innovator Young Married Couples Age: 35-55 Income: Medium to high Sex: Male or Female Family: Married or no children Geographic: Suburban Occupation: White collar Attitude: Early adapters Wealthy Rural Families Age: 35-55 Income: High Sex: Male or Female Family: Full nest Geographic: Rural Occupation: White collar Attitude: Early majority Older Couple Age: 55-70 Income: High or fixed Sex: Male or Female Family: Empty nest Geographic: Suburban Occupation: White collar or none Attitude: Late majority Elderly Age: 70+Income: Fixed Sex: Male or Female Family: Empty nest Geographic: Suburban Occupation: None Attitude: Late majority Competition Life styles Fitness offers many thing other gyms don't.

We offer experienced employees, state-of-the art equipment, dining facilities, and a lifestyle that will lead to a longer and healthier life. Other gyms don't offer these things. What we have done is compiled a list of complaints and flaws the people have noted at other gyms. 1. Poor lighting 2.

Poor equipment 3. Unprofessional management 4. Crowded workout areas with no air conditioning 5. No locker room facilities or showers 6. No drinking fountain 7. Uncertified training staff Lifestyles Fitness would use this list of complaints to ensure that our facility doesn't fall short of fulfilling our members every need.

Lifestyles Fitness would be classy and cheerful, with plenty of space and new equipment. Lifestyles Fitness would be everything that other gyms aren't (i.e. : Bally's, 24 hr Fitness, Better Bodies, Downtown Fitness) Observations & Conclusions With the above information it is plain to see that the fitness market in Lifestyles Fitness, Colorado is virtually untapped, and with the right fitness center and management it could be a huge dominating success. Other gyms have failed to employee many tactics for advertising. The management has always showed lack of interest in it, and this is the main reason I feel the company is going through difficult times.

Lifestyles Fitness will employ all tried and trued tactics for advertising and marketing. Marketing Strategy The marketing effort for Lifestyles Fitness will be very intense, with several different marketing schemes used. The primary strategy will be the use of several telemarketers using a Lifestyles Fitness and campus phone books and inviting residents to the Center. This type of marketing and promotion is not just limited to the city of Lifestyles Fitness but also to surrounding cities. This approach would allow for maximum publicity at a very minimal cost. This is also one of the best means since it would be on a one to one basis.

While on the phone the telemarketer would give a brief sales pitch, and then offer the family or individual come down and receive a free days pass to test out the new facility. While they are in the fitness center they would be treated utmost courtesy and service. Before they leave the Center would offer them a 10 percent discount if they joined the club on the same day. There would also be several other types of marketing strategy used.

Another would be the use of fly ers and banners strategically placed in and around Lifestyles Fitness. Another possible promotion would be the use of the local newspaper by running a full-page ad for two to three days a week for the first few weeks along with a coupon. The best way to sell memberships is to have as many people visit the facility and look around to see how good the service and equipment is. By using these and other means of promotions I am absolutely sure the Center will attract a large portion of the population to come in and look, and buy memberships. Comprehensive Plan The overall marketing plan for Lifestyles Fitness is based on the following fundamentals: 1. The desire to open and run my own fitness center.

2. Attracting as many individuals or groups from the seven main categories 3. Using reasonable and intense means of marketing and advertising. With these fundamentals applied to the business I am sure the rewards would greatly outweigh that of the effort and time spent on this project. The rewards would be that of a long-term fitness facility with that of a large clientele.

Positioning The client al base should be able to perceive Lifestyles Fitness as a goal oriented facility. While also being laid back and in general a fun place to be. I would want it to be in everyone's thoughts that Lifestyles Fitness is also a family oriented fitness facility also being geared towards everyone's wants and needs. I would like every to conceive the idea that Lifestyles Fitness is professional in every way. Being professional would also give people the security of knowing they are around a group of people who knows what they are doing, and would feel secure knowing that. Reposition the Competition When Lifestyles Fitness becomes fully operational it would more than devastate the current fitness center.

With Lifestyles Fitness having more equipment along with a better atmosphere and better management I would only guess that it would only be a matter of months before other gyms would go bankrupt. Given the following comparisons between the two facilities one would be able to make the same assumption... Lifestyles Fitness would be better equipped with both machine and free weights... It would have a cleaner more respectable appearance than that of other gyms... The size of the two gyms would be a totally wide margin; Lifestyles Fitness would have 9,000 square footage while other gyms have only 4,000... Other gyms have no locker rooms and barely have any bathrooms.

Lifestyles Fitness would not only have bathrooms but also large and spacious locker room with daily and monthly lockers for rent... The management at other gyms is poor and grumpy. While the management at Lifestyles Fitness would be that of pleasant and helpful. With just these few comparisons I would say that the assumption made would be closely accurate, and that assured domination in the fitness area in the Lifestyles Fitness area is almost assured with good management. Selling Tactics Lifestyles Fitness Fitness's marketing strategy incorporates plans to sell our line of services through several channels: .

Executive Selling. Direct Sales. Telemarketing. Literature / Discounts. Banners / Sings Advertising We intend to reach a broad segment of the local population by using several different methods. These methods will consist of a multi faceted campaign.

First, telemarketing will be employed before the grand opening telling the prospective member of the new facility. During the conversation the telemarketer will give the prospect a free days pass to come in and look around. While there we will give a discount incentive to the individual to sign within that day. Another means of advertisement would be TV or radio commercials. These would show people working out and having a good time. While maybe being a bit expensive but well worth the price.

There are other means of advertisement that could be used, such as direct mail, fly ers, promotions, and billboards. These are all useful means, which would also employed to max out our membership capacity. Public Relations In addition to the standard advertising practices, we will gain considerable recognition through consumer programs that are advantageous and press released. Promotions and Sponsorships of athletic events are also seen as being very advantageous in the public's eye, and public image is everything.

Pricing and Profitability We feel that our prices are very reasonable for such a fitness center. The profitability seems to be very great for a two-year projection. With our prices being high enough to allow for a good annual income but yet being affordable enough for every lifestyle. Selling Tactics Direct Sales The majority of sales will be through direct sales by the sales staff. Lifestyles Fitness plans on hiring additional sales representatives to cover additional territories, retailers, distributors, and markets. We have chosen to use a direct sales force because our services require considerable customer education and post sales support -- directly from the company.

Our price point, pricing structure and profits are such that our costs of sales warrant a sale to be handled on an individual basis in this manner. Advertising and Promotion Lifestyles Fitness realizes the key to financial success is through proper advertising. This allows for the greatest publicity and the greatest means of sales. Through proper advertisement we believe that Lifestyles Fitness could become the premiere fitness facility in Colorado. Direct Mail Lifestyles Fitness would also send fly ers and brochures to individuals whom we believe are interested in joining the club. We would only incorporate this method after a telemarketer had talked to the prospect.

Business Relationships Lifestyles Fitness realizes to become a leader in the fitness industry we must become associated with all of the larger influential businesses in this area. By doing this we hope to gain social status among business owners and leaders. This can only be beneficial to Lifestyles Fitness both financially and to its's status as a local business.