Leadership and Management

BUSINESS PLAN

2 Business Plan

BUSINESS PLAN

2 EXECUTIVE SUMMARY

2 BUSINESS BACKGROUND The company

The service

The Holistic Approach

Key personnel

4 MARKETING PLANS Market analysis

Marketing strategy

Pricing strategy

5 ACTION PLANS Personnel

Fee collection

Expenses

Resistance equipment

Fitness facilities

Financial Projections

8 BUSINESS PLAN FOR KNOWLEDGE MANAGEMENT

Knowledge Management

9 OPERATIONAL PLANS

Knowledge Management

10 SUSTAINABILITY

Sustainability Specifications

Business Plan 1

Business Plan

Executive Summary

Bounce Fitness relies on the proven skills of its founder to take advantage of the growing need for

fitness training, personal coaching and other related health enhancement services. Margaret House,

who brings more than two decades of personal training and life coaching expertise to the business,

leads the company as it was established, as a high quality fitness provider in three capital cities and

one major regional centre across Australia. Bounce Fitness initially focused on attendance generated

through advertising, tendering for training and general health enhancement. Currently memberships

provide the basis of funding and the tenders and casual visits and add-on options of life coaching and

health enhancement specialists generate larger profit margins.

Constantly evolving classes and advertising offer an opportunity to work smarter. But the increased

opportunity comes at the expense of increased complexity. Substantial market research establishes

that personal training coupled with life coaching and natural health enhancement is one of the fastest

growing service industries. Bounce Fitness is in a position to capture a significant portion of their

local markets in each of their localities, currently Cairns, Brisbane, Sydney and Melbourne. Further,

Bounce Fitness is projected to return a profit annually due in large part to the size of the market and the

relatively low investment required. 2XX1 year revenue combined from all centres is projected to exceed

$ $2,500,000.00.

Bounce Fitness continues to differentiate itself from its competitors through lower pricing and the

continuing development of unique classes, personal training and expanding on the one-stop-shop

for health enhancement. The one-stop-shop approach is expected to allow substantial gains in the

largest segment of a growing market. This focused approach also makes it easier for Bounce Fitness to

establish and retain a position as an industry leader.

Business Background

The company Bounce Fitness is a dynamic fitness corporation poised to capture substantial market share in one

of the fastest growing service industries in the country. Bounce Fitness is a Cairns corporation

incorporated in 2001 and wholly owned by Margaret House. A Board of Directors has been established

and the Head Office now has a team of General Manager Finance, Human Resources and Marketing,

an Executive Assistant and support staff. The Centres have a Centre Manager, Assistant Manager and a

team of various sizes composed of experts in health related and fitness disciplines. Bounce Fitness will

2 Business Plan

continue to have its base of operations in Cairns (Fitness Centre and Head Office), Brisbane, Sydney

and Melbourne. It is planned to open another Centre in Perth in the next two years. Bounce Fitness

intends to expand their number of centres as demand increases. It is envisaged that the investment per

centre would be approximately $300,000.

The owner and Chief Executive Officer, Margaret House, has extensive experience as a personal trainer,

life coach and manager of fitness centres. In addition, Ms House has approved a marketing strategy that

is well suited to building a larger market share. Bounce Fitness now has the potential to gain a reputation

for offering quality in health and life enhancement that provides value long after the classes end.

The service Bounce Fitness was originally created for the sole purpose of providing personal training services in the

Cairns area. The popularity has encouraged expansion in the services offered and locations.

The Centres are based in rented facilities located in or near the largest shopping centre in each city. The

facilities are easily accessible, have child care, a coffee shop, substantial parking, and are serviced by

public transportation. Where appropriate, however, Bounce Fitness will provide training at a customer’s

facility.

A key selling point to date is the price Bounce Fitness charges for its memberships. Because Bounce

Fitness has been able to negotiate favourable leases for facilities and equipment and has relatively low

overheads, it is able to offer customers a less costly membership option.

The Holistic Approach One method that Bounce Fitness uses to distinguish itself from others is through the holistic approach

developed by Ms House. The support on specific concerns of clients, focused attention and follow

up of staff, interesting and exciting new classes coupled with innovative new concepts were the keys

to Bounce’s early acceptance. The incorporation of life coaching, remedial massage and other health

services increases the use of the Centres and provides convenience for clients.

Key personnel Margaret House is the owner and Chief Executive Officer of Bounce Fitness. She has significant

experience and management skills developed as a centre manager.

Ms House was a remedial therapist and training instructor for eight years before becoming manager

of a centre fifteen (15) years ago. She holds a degree in sports physiotherapy, Graduate Diploma in

Management and a Trainer Certificate in Life Coaching. In addition to establishing Bounce Fitness, Ms

House oversaw the development of a series of comprehensive programs for life coaching. The innovative

process of combining personal fitness, maintenance health care and advanced life skill training will be

adopted in Bounce Fitness’s training programs.

Business Plan 3

Ms House originally coordinated a staff of five personal instructors and taught a number of these classes.

Utilising this education and experience, Ms House now is an asset in her role as Chief Executive Officer.

Because Ms House has a technical background, her staff often consult with her when complex issues

arise. This experience has proved to be especially valuable in day-to-day operations.

Marketing Plans

Market analysis Ms House undertook substantial research prior to establishing Bounce Fitness. The focus of this

research was on the growth of holistic life management including personal training and fitness and

on the geographic markets she planned to serve. The research results were quite encouraging. The

holistic health approach, personal training and Life Coaching were at the beginning of a period of

great expansion, according to the findings of several respected industry trade journals. Because of the

personal transformations desired in personal and business life and the anticipated positive impact of

health enhancement on daily life, many individuals and businesses are finding themselves overwhelmed

with the possibilities that these new concepts offer both their staff and ultimately their business.

Marketing strategy Essentially, Bounce Fitness markets itself as offering the same or better quality personal training than

its larger competitors, but at a more reasonable price. Bounce Fitness will focus on quality of staff,

equipment and Centres, all the while emphasising the ‘add-on’ benefits of the various other holistic

disciplines and motivation offered by its services. Particular focus will be in the corporate sector.

As part of this strategy, Bounce Fitness is advertising in several lifestyle magazines. In particular,

Ms House has received reasonable advertising estimates from three of the largest lifestyle industry

magazines and in each region, the free lifestyle magazines. On average, for $250 per month, per Centre

each of these will run a half-page ad in each weekly or monthly edition depending on frequency of

publication. After the initial six-month period, Bounce Fitness is also considering running a full-page ad

for $350 per month, per Centre.

The preferred mode of advertising is word-of-mouth. Bounce Fitness hopes to hold information seminars

on its services at all the Chamber of Commerce luncheons, service groups and schools within a 30-mile

radius of the business. In addition, Ms House has begun writing several articles for a national lifestyle

publication and will personally approach Human Resources managers in larger businesses. Research

results suggest that this type of marketing initiative can generate a significant amount of business.

4 Business Plan

Bounce Fitness also intends to continue with the tender processes, approach medical centres and

aged care centres to offer special arrangements for their people to improve their mental and physical

health through diet, exercise and companionship. This will be heavily subsidised and offered mainly as

a community service. She will not rely on a sales force to generate business.

Pricing strategy Bounce Fitness will charge less for similar services than the other firms because Bounce Fitness has

low overhead expenses and fewer employees than the larger firms. Based on a survey of fitness training

facilities in the major cities and surrounding suburbs, similar firms charge, on the average, $220 more

per person for a twelve month membership.

There are special arrangements and pricing for corporate partners, special interest groups and

community initiatives.

Action Plans

Personnel Bounce Fitness plans to continue to keep wage and salary expenses low. To achieve this objective,

Bounce Fitness has salaried their personal trainers rather than contracting services. The expectation is

that when not involved in delivering classes, or consulting with those for whom they are the personal

trainers, they will be volunteering their training services to schools, hospitals and other community

initiatives to raise the profile of Bounce Fitness.

Fee collection Bounce Fitness offers reduced cost for full payment options for membership services. Member payments

may be made monthly or quarterly at a higher rate than annually and with cash, EFTPOS or credit cards.

Payments for casual classes is set at a premium level and other related services are at least standardised

with others in the same locality and industry. The payments may also be made with cash, EFTPOS or

credit cards. Bounce Fitness will offer deferred monthly billing and a 25% discount to corporate clients

with 10 or more employees taking corporate memberships. Since the revenue generated from this client

segment is expected to be small, and the risk of non-payment is small, the accounts receivable and bad

debt expense should not be a consideration.

Business Plan 5

Expenses Rent, salaries and the cost of equipment leases are the largest expenses that Bounce Fitness faces.

Resistance equipment Following an exhaustive analysis of the financial and other implications of buying, renting, or leasing,

Bounce Fitness has decided to lease its equipment. A factor that played a large part in that decision

was the likelihood that any purchased equipment may become dated in a relatively short period of time.

Bounce Fitness must have equipment that is at least equal in sophistication to those desired by its

customers. The substantial initial cash outlay required to purchase equipment also played a part in the

decision to lease or rent.

Bounce Fitness obtained estimates from a number of distributors for the purchase of resistance

equipment. The most competitive price that Bounce Fitness found averaged $2,699 per machine. The

total purchase price was $46,855 per Centre including GST.

Based on estimates obtained from several leading rental firms, Bounce Fitness could expect to pay

approximately $8,450 a month to rent the same equipment.

Finally, in order to lease the equipment, the best price quoted was $33,500 per Centre, which includes

all maintenance of the machines. The lease would run for 36 months with interest at an 11% annual

rate. The total of the 36 monthly payments would be $37,855. The lease payment of $3,154 per month

is more than $5,000 below the monthly rental alternative quoted.

Fitness facilities Bounce Fitness considered several options regarding the type of service to offer to its clients. Because

Ms House does not wish to tie up funds on a long-term basis, the purchase of a training facility was not

considered a reasonable option.

Bounce Fitness has negotiated a favourable lease on all properties with the property management firm

that manages the centres in which the facilities will be located. The firm has offered Bounce Fitness a

three-year lease with a three-year renewal option. The monthly rent is $1,500 for the first year, $1,700

the second year and $1,900 for the third year. During the three-year renewal period, rent will increase by

5% per year. This rental amount includes water, waste removal, and all maintenance costs.

Financial Projections Based on a survey of 100 Fitness Centres across Australia, it was determined that a Fitness Centre with

five full-time staff members can be expected to train 30 new clients every week. Of this number, it is

expected that 25% will be repeat customers. That means that Bounce Fitness can expect to generate

120 new clients and continue with 30 previous clients every month.

6 Business Plan

The percentage breakdown of the number of clients who will select either a single class or the

membership option is based on statistics provided in the National Fitness study and a report included

in The Journal of Fitness, May 200X, Vol. 12. The findings of both of these reports reflected the fact

that individuals who have taken previous memberships are more likely to pursue additional membership

to gain even greater proficiency and health benefits. Using these statistics, Bounce Fitness estimates

that gross revenue this year from the combined centres will be more than $2,500,000 or over $5000 per

centre per month.

The financial goals for each Centre for the coming year are:

Return on investment of at least 15%

Increase net earnings by at least 10%

Achieve a market share of 15% in each area

Increase sales 5% by June 30 through marketing initiatives

10% new memberships

Because the demand for Bounce Fitness services is expected to grow in the current year of operation,

gross revenue for the second year is expected to increase to more than $3,000,000.

While these calculations are based on an average of the gross by month, Bounce Fitness, like many

businesses in the fitness industry, will be subject to common business cycles. Based on the above

mentioned study done by The Journal of Fitness, market research shows that the number of clients

participating in training January through March will increase by 10% to 25%. During the months of May

through August, the number of clients drops off by approximately 20%.

Fitness firms can expect a 20% to 30% increase in the number of clients during the months of September

through November. As with other non-retail businesses though, December sessions usually drop by

25%. One way that Bounce Fitness will try to counter the ‘holiday slump’ is by increasing tendered

classes and those for special interest groups.

Bounce Fitness plans on offering a holistic class in developing and maintaining a healthy weight initiative.

The class will also focus on how individuals can make gradual and comfortable but sustainable lifestyle

changes. Bounce Fitness will incur little additional expense by offering this new initiative and still

generate an additional 3% in revenues every month.

Bounce Fitness is planning for a 15% increase in membership sales in the coming year. For a detailed

analysis of the actual monthly budget, review the budgets in the Performance tab for each Centre.

Business Plan 7

Business Plan

Knowledge Management

Bounce Fitness Information and Knowledge Management System is called Bounce IT. It is a secure custom

designed holistic Information system developed just for Bounce Fitness.

Bounce IT covers all aspects of the business and collects data for many areas including the business Finance,

internal and external Client data base, Stock control and Client membership activity. The client data base includes

all internal and external personal details including: name, address, email, contact number, payment and finance

arrangements, their fitness goals and personal training sessions including preferred personal trainer, composition,

measurements and progress.

This system records all transactions for the business and has the ability to create varied reports. This includes

all transactions from memberships, casual visits, the café and the retail shop.

Managers use this system to total the business income each day and stock control. The owner uses this system

for payroll, income/expenses and taxation purposes.

Employees use this system to perform sales transactions, create new memberships, access client records and

record client results.

The information collected allows Bounce Fitness to track client membership activity, the business finances, stock

consumed within the business and securely retain internal and external clients personal information.

Bounce IT abides by all relevant legislation, regulations, codes of practice and standards for protecting their clients

safety and privacy.

The outcomes for Bounce IT:

Business Plan 8

Method Outcome

Review the system bi-

annually

1. To provide a simple holistic user-friendly knowledge

management system, unique to Bounce Fitness

2. To ensure accurate information and data is recorded in the

system

User Logs

Surveys 3. To collect information on the performance of the system

Operational Plan

Knowledge Management

Operational plan for Bounce IT:

Business Plan 9

• Clients

• Staff

• External consultants

• Industry professionals

• Government bodies

Gather Feedback in form of Surveys and User Logs from:

• System

• Policy

• Procedure

Review Information from Surveys and User Logs on the:

• What needs to be done?

• How will it be done?

• Who will do what?

• When does it need to be done?

Plan

• Steps to implement the planning faze

• Timeframe of each action to be completed

Take Action

• Set a review time

• Organise a panel to review the implemented system, policy and procedure / work practices

Review Implementation

Business Sustainability

Sustainability Specifications

Bounce Fitness is committed to making a difference in environmental sustainability by reducing their negative

environmental footprint. The strategies we will adopt to implement this include consultation with stakeholders,

allocating the necessary resources and a commitment to continuous improvement in sustainability approaches.

Bounce Fitness recognises sustainability as an opportunity to improve all aspects of the business. We believe

that once strategies are in place to address environmental issues; any concerns regarding economic and societal

sustainability, will also be improved. Bounce Fitness strives to abide by all environmental and sustainability

legislation, regulation, standards and code of practice related to the health and fitness industry.

Bounce Fitness sustainability goals are to:

1. Reduce their negative environmental footprint

2. Abide by all environmental and sustainability legislation, regulation, standards and code of practice

related to the health and fitness industry

3. Minimise their resource use, specifically in energy and water

4. Create better resource efficiency

5. Reduce hazardous chemical use

6. Develop and implement life cycle management approaches

7. Continuously improve Bounce Fitness sustainability practices and processes related to environmental

economic and societal issues

A sustainability policy and procedures will be developed to address our commitment to sustainability and the goals

as outlined herewith. The policy will be focused around addressing sustainability issues through best practice

approaches and in line with legislation, regulation, standards and guidelines. This policy will be applied in all

Bounce Fitness locations, nationally.

Business Plan10