Financial Plan for Anytime Fitness

Discuss About The Integrating Online And Offline Strategies?

A business plan is essential for the start-up business, as this allows the business organizations to evaluate the strengths and weakness of the organization and the market. The main aim of the report is to prepare a business plan for the start-up of a fitness center named Anytime Fitness in Perth, Australia (“Perth – Anytime Fitness”, 2017). The company aim towards establishing partnership by considering the opinions and viewpoints of the members of the fitness club along with the companies that provide different types nutritional supplements. In order to increase the value of the fitness business, Anytime Fitness has segmented the potential customers (“Anytime Workouts | Free Fitness App – Anytime Fitness”, 2017).

The startup cost for the fitness center Anytime Fitness includes the blueprint of the overall business plan and structure. The components of the startup cost include funding of the owner, average monthly cost, and the fixed cost. The total funding of the owner has amounted to $100,000.

As commented by Han, Lu & Leung (2012), customer segmentation allows the business organizations to develop products or services and the price based on the demands and income of the customers. Therefore, appropriate customer segmentation will allow Anytime Fitness to develop products, services, and price according to the target customers. The main target customers for Anytime finance include the different types of members in the fitness center. Other than fitness facilities, the center provides facilities such as steam bath, spa, toning, resistance training, and bodybuilding. Additionally, the fitness center will be operating 24 hours thereby, providing an opportunity for the customers to avail the fitness facilities according to their convenience (Floh et al., 2014).

 The fitness center has also categorized the members in order to offer maximum services to the customers based on the price paid by them (Hamka et al., 2014). The customer categorization includes VIP training, personal training, special service, membership and direct membership. Additionally, identifying the distinctive nature of the secondary customers has helped Anytime Fitness to consider the interest of the non-members for using the services of the fitness center. The non-members of the fitness center avail the services for buying health supplements, nutritional consultation and other exclusive services (Hjort et al., 2013).

Considering the market competition and the convenience of the customers, Anytime Fitness will be operating 24 hours a day. The operating time of the fitness center will be beneficial for the organization initially. Firstly, the main aim of the fitness center is to recruit personal trainers that will help in providing suitable guidance to the members. According to Boulding et al., (2013), customer relationships are significant for the companies as this enables success y fulfilling the needs and demands of the customers. In order to build customer relationships, Anytime Fitness plans to use internet facilities such as web and social media. Additionally, the company also plans to use SMS and WhatsApp for building an effective customer relationship. According to the value proposition, the fitness center needs to consider the different values (Mithas, Krishnan & Fornell, 2013). Moreover, in order to improve the service of the fitness center, Anytime Fitness needs to consider the feedbacks of the customers or the members of the gym.

Customer Segmentation

The primary aim of Anytime Fitness is to build a single workout environment so that the customers are able to get personalized fitness solutions. In addition to, the fitness center emphasizes on the age group of 15- 66 years. Targeting the customers within the age group will allow the company to develop services according to their health needs (Andrews et al., 2013). The fitness center has also opened the option of online blogs that will provide an opportunity for the customers to share their viewpoints, opinions, and suggestions. The company can consider the customer feedbacks for developing their business (Armstrong et al., 2015). Other facilities provided by the company website includes various types of mix and match opportunities. The opportunities will act as suggestions for the customers so that they are able to decide the appropriateness and suitability of the health facilities. The primary aim of the Anytime Fitness is to create a higher value for the customers at an affordable price (Osterwalder et al., 2014).

As commented by Patino , Pitta & Quinones (2012), marketing is the most crucial aspect for the business organizations as this helps the company in communicating the product to the target customers thereby, increasing the sales. Therefore, business organizations use both online and offline market channels for communicating with their target customers. Similarly, Anytime Fitness will use both online and offline channels for marketing the exclusive fitness facilities to the target customers. The principle offline marketing channels include posters, organizing events and campaigns along with television commercials. The use of offline marketing channels will help the company in communicating with the customers that do not use internet facilities (Roberts & Zahay, 2012). Additionally, the various online marketing channels include promotion through Facebook, Instagram, and YouTube.

As commented by Tuten & Solomon (2014), social media is the most widely used internet platform in the modern world. In order to remain updated and maintain effective communication people around the world use the social media. Reports suggest that Instagram has more than 180 million fitness users (Saravanakumar & SuganthaLakshmi, 2012). This is because Instagram allows the users to view posts of professionals and enthusiasts of fitness. It has been observed that customers are interested in live videos from the fitness professionals or brands. Therefore, Anytime Fitness can use Instagram for posting videos from the partners thereby, entertaining and engaging the target customers.

As the target customers are aged between 15-66 years, some of the customers might find using social media difficult. Therefore, considering this aspect, Anytime Fitness will also implement offline methods of communicating with the target customers. The offline methods implemented by Anytime Fitness include SMS, posters and television commercials. Sending messages at regular intervals to the customers will help in engaging the customers. Additionally, television commercials and posters will also help in engaging the target customers along with providing them with suitable knowledge about the services provided by the fitness center.

Relationship with target customers

Facebook is the most widely used social media recently. The users in order to follow various brands and remain communicated use Facebook. Therefore, Anytime Fitness can use Facebook for engaging the customers. Anytime Fitness will include YouTube as an online medium for engaging the customers thereby, increasing the customer base and business. Thus, the use of different social media will allow Anytime Fitness to establish them successfully in the fitness industry. The use of Facebook, Instagram and YouTube will provide an opportunity for the Anytime Fitness to post and share live videos that display the different services provided by the fitness center.

The principal resources for the business organizations will help Anytime Fitness to establish their business appropriately (Abecassis-Moedas et al., 2012). The key resources for Anytime Fitness include the suppliers of the nutritional supplements and gym equipment. Therefore, Anytime Fitness will only tie up with the suppliers that will provide the best and most affordable price for the products. The secondary key resources include the health professionals that will provide suitable training to the members.

The key activities of the business organizations need to be aligned with the aim and objectives of the company thereby, enabling success (Ward, 2016). Therefore, based on the aim and objectives, the key activities for Anytime Fitness include training for the members of the fitness center along with developing diet plan according to the health needs of the members. The additional key activities include body massage and a steam bath that will help the members lose weight and experience the leisure.

 The topmost fitness equipment brands are the principal partners of Anytime Fitness. Other than them, the suppliers of the nutritional supplements will also be the key partners for Anytime Fitness. This will help the company in establishing them thereby, attracting the customers.

The company has categorized the members of the gym in terms of Personal and VIP training, direct membership and special service membership. Based on the categories, the principal cost of the company includes the cost of the nutritional supplements and the fitness types of equipment. $9250 is the break-even revenue of the startup business. The startup cost for Anytime Fitness is furnished below:

Start-up Expenses
Fixed Costs	Particulars	Amount (USD)
	Monthly Rent	10,500
	Staff Remuneration	35,000
	Marketing Fees	1,036
	Exercise Equipment	4,500
	Flooring	6,500
	Interest on loan 10%	2,500
	Cleaning Supplies	1,650
	Office Equipment	1,250
	Gym Supplies	2,250
	Other Gym Supplies	1,650
	Lease payments	8,000
	Market survey	1,975
	Preliminary Expenses	1,200
	Total Fixed Costs	$           78,011.00
Average Monthly Costs
	Infrastructure	$                875.00
	Lease payments	$                666.67
	Interest on loan 10%	$                208.33
	Cleaning Supplies	$                137.50
	Flooring	$                541.67
	Staff Remuneration	$             2,916.67
	Total Average Monthly Costs	$             5,345.83
	x Number of Months:	$                  12.00
	Total Monthly Costs	$           64,150.00
Total Startup Expenses		$         142,161.00
Start-up Assets
Owner Funding
	Owners Fund	$         100,000.00
	Total Owner Funding	$         100,000.00
Loans
	Bank Loan	$           22,200.00
	Other
	Total Loans	$           22,200.00
	Total Start up Funds	$         122,200.00
Assets
	Gym Equipments	$           27,000.00
	Land & Building	$         125,000.00
	Total Fixed Assets	$         152,000.00
Total Start-up Assets		$         274,200.00

Year	0	FY-1	FY-2
(a) CAPITAL
Capital Employed		100,000	103,000
Loans		22,200
Loan repayments		0	15,000
(b) SALES FORECAST
Special Service Membership		26,000	28,600
Direct Membership		37,000	40,700
Personal and VIP Training		33,300	34,965
Projected Sales		96,300	104,265
(c) COST OF GOODS SOLD		88,800	93,240
(d) EXPENSES (Overhead)
Monthly Rent		10,500	10,500
Staff Remuneration		35,000	36,750
Marketing Fees		1,036	1,088
Exercise Equipment		4,501	4,726
Flooring		4,810	5,051
Interest on loan 10%		2,220	2,220
Cleaning Supplies		1,221	1,850
Office Equipment		925	971
Gym Supplies		1,665	2,450
Other Gym Supplies		1,221	2,125
Lease payments		5,920	6,216
Market survey		1,462	1,535
Preliminary Expenses		888	932
(e) FIXED ASSETS
Gym Equipment		27,000	36,000
Land & Building		125,000	128,750

(1) SALES FORECAST
Year	0	1	2
Projected Sales		96,300	104,265
(b) Cost of Goods Sold		88,800	93,240
(2) CASHFLOW FORECAST
Year	0	1	2
CASH INFLOWS
Cash from Sales		96,300	104,265
Directors loans	0	22,200	0
Capital Employed	0	100,000	103,000
TOTAL CASH INFLOW	0	218,500	207,265
CASH OUTFLOWS
Payments for Operating Expenses		88,800	93,240
Monthly Rent	0	10,500	10,500
Staff Remuneration	0	35,000	36,750
Marketing Fees	0	1,665	2,450
Lease payments	0	5,920	6,216
Corporation Tax		1,124	1,716
Market survey costs	0	1,462	1,535
Other preliminary expenses	0	888	932
capital expenditure
Gym Equipment	0	27,000	36,000
financing repayments
Loan repayments			15,000
TOTAL CASH OUTFLOWS	0	172,359	204,339
Cash flow summary
NET CASH FLOW FOR PERIOD	0	46,141	2,926
OPENING CASH BALANCE	0	0	46,141
CLOSING CASH BALANCE	0	46,141	49,068
(3) DEPRECIATION SCHEDULE
Year	0	1	2
Fixed Assets
Gym Equipment	0	27000	36000
Land & Building	0	125,000	128,750
Total book values (i.e. net fixed assets)	0	152,000	164,750
Annual Depreciation
Gym Equipments-10% straight line		2,700	3,600
Land & Building-20% reducing balance		25,000	25,750
total annual depreciation		27,700	29,350
(4) PROFIT AND LOSS FORECAST
Year	0	1	2
Revenue	0	96,300	104,265
Cost of sales	0	88,800	93,240
Gross profit	0	7,500	11,025
Gross Margin		90,812	95,888
Expenses/overheads
Monthly Rent		10,500	10,500
Staff Remuneration		35,000	36,750
Marketing Fees		1,036	1,088
Exercise Equipment		4,501	4,726
Flooring		4,810	5,051
Interest on loan 10%		2,220	2,220
Cleaning Supplies		1,221	1,850
Office Equipment		925	971
Gym Supplies		1,665	2,450
Other Gym Supplies		1,221	2,125
Lease payments		5,920	6,216
Market survey		1,462	1,535
Preliminary Expenses		888	932
Profit before tax		6,612	10,093
Tax @ 17%		1,124	1,716
Profit after tax		5,488	8,377
Transfer to reserves		6,612	10,093

Breakeven Analysis
Breakeven Sales Value =	average fixed cost/% contribution
Contribution %	50%
Revenue	Contribution	Fixed Cost	Profit
96300	48150	364.08	47785.92
104265	52132.5	364.08	51768.42
910.2	455.1	364.08	91.02
1092.24	546.12	364.08	182.04

Balance Sheet
Assets	FY-1	FY-2
Current Assets
Cash	$           181,609.04	$                   225,166.74
Accounts receivable	$             96,300.00	$                   104,265.00
Total current assets	$           277,909.04	$                   329,431.74
Fixed (Long-Term) Assets
Gym Equipments	$             27,000.00	$                     36,000.00
Land & Building	$           125,000.00	$                   128,750.00
(Less accumulated depreciation)	$             27,700.00	$                     29,350.00
Intangible assets	$             50,700.00
Total fixed assets	$           175,000.00	$                   135,400.00
Total Assets	$           452,909.04	$                   464,831.74
Liabilities and Owner’s Equity
Current Liabilities
Accounts payable	$             24,000.00	$                     25,000.00
Accrued Rent	$             10,500.00	$                     10,500.00
Bank Charges Payable	$               3,000.00	$                       3,000.00
Short-term loans	$             10,000.00	$                     10,000.00
Income taxes payable	$               1,124.04	$                       1,715.74
Accrued salaries and wages	$             35,000.00	$                     36,750.00
General Expenses	$               1,665.00	$                       2,450.00
Lease Payment	$               5,920.00	$                       6,216.00
Current portion of long-term debt	$           150,000.00	$                   140,000.00
Total current liabilities	$           241,209.04	$                   235,631.74
Long-Term Liabilities
Long-term debt	$             22,200.00	$                     90,000.00
Less: Loan Repayment		$                     15,000.00
Deferred income tax	$           189,500.00	$                   154,200.00
Total long-term liabilities	$           211,700.00	$                   229,200.00
Total Liabilities	$           452,909.04	$                   464,831.74
Owner’s Equity
Owner’s investment	$           100,000.00	$                   103,000.00
Net Profits	$               5,487.96	$                       8,376.86
Reserve and Surplus	$               6,612.00	$                     10,092.60
Total owner’s equity	$           112,099.96	$                   121,469.46
Total Liabilities and Owner’s Equity	$           565,009.00	$                   586,301.20
Common Financial Ratios	FY-1	FY-2
Net Profit Ratio (Net Profit/Sales)	6%	8%
Debt Ratio (Total Liabilities / Total Assets)	1.00	1.00
Current Ratio (Current Assets / Current Liabilities)	1.15	1.40
Debt-to-Equity Ratio (Total Liabilities / Owner’s Equity)	4.04	3.83

Sales Forecast
Particulars	January	February	March	April	May	June	July	August	September	October	November	December	Total Units Sold
Sales	30000	40000	35000	30000	35000	45000	35000	50000	40000	45000	50000	45000	480000	96300
Cost of Goods sold	25000	30000	25000	25000	25000	25000	30000	30000	25000	35000	35000	20000	330000	88800
Gross Profit	5000	10000	10000	5000	10000	20000	5000	20000	15000	10000	15000	25000	150000	7500
Particulars	January	February	March	April	May	June	July	August	September	October	November	December	Total Units Sold
Sales	30000	45000	35000	35000	45000	40000	30000	40000	40000	60000	75000	45000	520000	104265
Cost of Goods sold	25000	35000	30000	25000	35000	30000	25000	25000	25000	50000	35000	35000	375000	93240
Gross Profit	5000	10000	5000	10000	10000	10000	5000	15000	15000	10000	40000	10000	145000	11025

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