Executive Summary

Business idea was to run a health and fitness club in Brisbane Australia. For this purpose a

business plan is developed which indicates that the health and fitness club to be opened in

Brisbane would be named as Ladies Fitness Club. The purpose of this club is to provide a

platform to women of Brisbane where they can get physically and mentally fit. The club will be

different from its competitors as it is just not offering the exercises but the environment which

will give both physical and mental fitness. Ladies Fitness Club will gain competitive advantage

because of offering supplements with exercises with proper dietary plan from high qualifies

instructors and trainers. Mix of such services will thus attract more customers as they will get

best value for money service. Quality of services will be extraordinary but not in high price in

fact in competitive price which will attract customers as they will get all in one place. In result of

more customer attraction and satisfaction profits of the Ladies Fitness Club will drive in five

years of time thus total sales by the end of 2019 reaching up to $258325. Whereas, net income by

the end of five years will be $70,140 with owners equity reaching up to $137928 and cash

balances of $120385. Therefore, investment in Ladies Fitness Club will be profitable.

Company and the products

Business overview

The purpose of the Ladies Fitness Club is to provide a platform to women where they can

physically and mentally maintain themselves. It will mainly be socially and environmentally

conscious for providing women best quality services. Therefore, women may realize best value

for money services. The mission statement of the business is to provide ladies mental and

physical fitness, which will be done by guidance from well trained staff and making correct use
of equipments. For the purpose of customer satisfaction Ladies Fitness Club will provide best

quality services to customers in competitive prices. Following are the objectives of the company:

 10% growth in profit after the end of each year of operation.

 Best quality services for the purpose of increasing members by 15% by the end of first

year of operation and increase of 20% by the end of next four years.

 Serving 1200 members by the end of first year of operation.

 Another objective of the company is too become one of the leading health and fitness

club in Brisbane.

Product overview

The fitness club will provide services to women of different age group considering their needs.

The services offered will be personal training, cardio classes, yoga, mind/body/spirit classes,

group fitness classes, Pilates, relaxation massage, swimming classes and other non cardio

classes’ i.e. Sauna, Jacuzzi & steam bath. Club will also provide dietary programs for women

who are health conscious but are not allocating time on maintaining their health because they are

busy in their studies, jobs etc. Club will also offer supplements for women, by making use of

these supplements women can boost the immune system, improves heart health, builds stronger

bones & muscles and promotes fat loss. Dietitians will properly guide regarding the use of these

supplements according to individuals physical health. Following benefits will be gained by

women after joining Ladies Fitness Club:

 Meditation practices encourage overall health and wellness. It thereby releases mind

stress and provide peace to the mind.

  The digestive system gets back on track, when stretching in yoga is coupled with a

healthy organic diet. Stretching and holding of postures also causes muscles to lengthen

which gives the body a perfect look.

 Mind-body integration is achieved which is lead by proper posturing and exercising thus

result in releasing all the stress.

Further benefits are detailed in Appendice1.

Marketing plan

Present market situation

Market size and growth

Market overview

Market of gym industry has been becoming intense with the competition. New gyms have been

formed in nearly five year thus increasing the competition. Most popular women gyms in

Brisbane are FERNWOOD, curves etc. whereas, FERNWOOD has many outlets in different

areas of Brisbane i.e. Everton park gym, CAPALABA gym etc. Rivalry is however increasing

due to similar products offered by number of competitors. Moreover, these gyms are reducing

membership prices to retain more customers. Therefore, market of fitness club is facing high

competition as the services offered by these competitors are of best quality.

Market growth

The market of gyms and fitness centre for women has considerably grown and is further growing

adopting new technologies and offering new services. The main reason of the growth is the

increasing health awareness and higher levels of obesity among people which had led them

towards the gyms and fitness clubs (IBIS world, 2015). Industry’s contribution to the overall

economy of the country has estimated to rise at compound annual rate of 3.3% in upcoming
years to 2019-20 (Smart company, 2015). However, during global financial crisis this industry

contribution dropped gradually but after the crisis industry has show rapid development and

growth in the revenue. Moreover, Gyms and fitness centers industry seems to be in mature phase

of its lifecycle as indicated by high level of market saturation, limited technological change and

slow moving changes to the structure of gyms required. Currently 2854 businesses are operating

in this industry in Australia. In 2010-2015 revenue contributed was of $1 billion and industry has

employed 19279 people (IBIS world, 2015).

Underlying trends

Social trend

 According to the ABS 2008 national survey it has been identified that exercise &

aerobics and fitness & gym is more popular among women i.e. 30% and 17%

respectively (ABS, 2011).

 It has also been analyzed that participation of women in aerobics, fitness or gym

activities has increased from 13% in 2005-2006 to 14% in 2009-2010 (ABS, 2011).

 Women are becoming more health conscious as participation in jogging and running has

increased from 4% in 2005-2006 to 14% in 2009-2010 (ABS, 2011).

 Weight training awareness has increased from 1% in 2006 to 2% in 2009-2010. Thus the

increase in participation rate in these activities suggest that women are becoming more

aware related to their health (ABS, 2011).

Technological trend

There have been many technological developments in gyms and fitness sector. However, many

new developments are expected in near future. Recently technology has been developed, i.e.

gyms have installed new 3D cameras and sensors which now monitor movements and asses how
one is doing relative to others. It thus motivates people to do better than others (Australian gym

Guide, 2015).

Political and legal trend

The Australian department of health and ageing promotes the National Physical Activity

guidelines for adults which explain that physical activity of 30 minutes is required for every

individual preferably all days (ABS , 2011). Furthermore, Fitness Australia has revealed new

principles relating to fitness industry which will provide following benefits to businesses if they

followed:

 Provide more efficiency to business in implementation of quality standards.

 Guide organizations to help consumers considering their needs rather than just

compliance on defined set of rules

 Despite considering the difference in regulation overall the Australia, it provides

organizations the basis of quality assurance in business practice. (Fitness Australia, 2015)

Further information relating to trends is given in Appendice2.

Market Niches

Market niche identifies the market segment which is targeted by Ladies Fitness Club. It is the

market segment considering the needs of which business plan is made. The market to be focused

by Ladies Fitness Club will be of women resident in Brisbane Australia. This market include

women with different age groups i.e. girls of 15-19 years, young women from age group 20-27

years and working class ladies of age group 28-45 years. These are the age groups which are

more conscious about their health and fitness.

Current rivals
Current rivalry in the underlying market is identified by considering porter five force model

(Charles Hill, 2009). Currently many ladies and fitness gyms are operating in Brisbane,

providing high quality of services and many facilities to their members. Following are some

competitors with few of their characteristics:

COMPETITIORS 24/7 service Wellness Group Result

programs training oriented

approach

FERNWOOD  _  

Fitness First gym   _ 

Anytime fitness   _ 

club

JETTS    _

All these competitors i.e. FERNWOOD (FERNWOOD, 2015), Fitness First gym (Fitness first,

2015), Anytime fitness club (ANYTIME FITNESS, 2015), JETTS (jetts, 2015) are providing

high quality services with high competitive prices attracting customers by their attractive deals of

work out. There is intense competition among these gyms, besides providing high quality

services they are offering many deals to attract and retain customers. The focus point of Ladies

Fitness Club will be to provide best quality services to the customers to remain competitive in

this market. Moreover, Ladies Fitness Club will focus on value maximization strategy that focus

on providing qualitatively better services than rivals that are also not much expensive

(Trigeorgis, 1996).

Potential rivals and substitutes

Potential rivals

Porter five forces are considered for analyzing the threat of new entries in health and fitness

industry faced by Ladies Fitness Club and other competitors (Charles Hill, 2009). Entry barriers

are high in case of entering in fitness and health industry, as currently many competitors are

present offering good quality services and cheaper prices. Moreover, legal requirements of

trading in this industry sector are also stringent i.e. organizations has to follow Fair trading

(health and fitness industry code) regulations 2007 (GOVT, 2012). Furthermore, fitness centers

are also required to follow Fair Trading (Fitness Industry) Code of Practice 2009 (GOVT, 2009)

which identifies suppliers’ obligations. Under such stringent laws and code threat to new entry

barrier will be high.

Substitute products

Furthermore, considering porter five forces availability of substitute products impose threats on

the industry’s profit. Threat of substitute product is however high in gym and fitness industry as

new technological developments are taking place i.e. a new app has been designed known as

gym pocket guide which guide people suggest them workouts and how to perform these

workouts. Thus preventing people to go to gyms and save their time by doing workouts at their

home and become fit (Bender, 2014). Moreover, cycling is a substitute of gyms and fitness clubs

as people can loss their weight just by cycling at no cost which otherwise would be incurred if

they join gyms and fitness club. Similarly jogging in parks is mostly preferred physical activity

that leads to fitness and reduction in weight loss. To prevent the effect of substitute products

Ladies Fitness Club will offer more than that available by substitute products i.e. proper

guidance from highly qualified and experienced fitness instructors related to personal health and
the best possible solution to overcome the issues which cannot be identified by making use of the

substitutes.

Strategic Advantages

Competitive advantages

Ladies Fitness Club will receive initial competitive advantages by offering the following services

to the customers:

 Body relaxation massage, Sauna, Jacuzzi and steam bath at reduced rates than

competitors.

 Presence of audio-visual training systems inspite the presence of professional trainers.

 Result based approach considering the needs and expectations of consumers.

 Presence of state of the art equipment that will be bio-mechanically designed for women.

 Dietitians providing proper guidance related to health products and supplements required

considering the health history of consumer.

Above initial competitive advantages will lead Ladies Fitness Club to gain future sustainable

advantages. These advantages will be due to result oriented approach followed by the club to

attract and maintain the customers. It will ensure that customers are getting best value for their

money which will satisfy them. Moreover, club will launch well designed and researched

programs for health valuation of its customers which will ensure that customers are taken care of

in the long run health perspective which includes the changes which occur with time and their

impacts on the health of customers. Embedding audio-visual training systems through which

customers will not get bored but even will enjoy their workout. Furthermore, intensive trained

staff will provide competitive edge to club as it will ensure the smooth run of operations and
satisfaction of customers. Their good behavior will motivate the customers as a result of which

customers will be retained.

Key success factors lead to provide competitive advantage

 Customer relationship management by providing best quality services through highly

trained professional.

 Result oriented approach is a critical success factor as it will provide best value for

money to customers in result increasing customer satisfaction and retention.

 Maintain proper communication with customers discussing the benefits they are realizing

over time from services provided

 Proper timely training of the employee for the purpose of delivering higher quality.

Resource based analysis of the sources of sustainable competitive advantage

Resource based theory identifies that the best use of resources leads to gain sustainable

competitive advantage (Prof. Dr. Thomas Mellewigt, 2008). Resource based theory is based on

the VRIO framework which indicates that if the resources are valuable, rare, costly to imitate and

organized to capture value than sustainable competitive advantage is obtained. Therefore,

resources of Ladies Fitness Club will be according to the VRIO framework thus providing

sustainable competitive advantage to the organization in future. Following are the resources:

 Fitness equipments like spin bikes, PILATES equipment, strength equipments etc and

other gym accessories i.e. fitness monitors, balance boards etc are the tangible resources

of Ladies Fitness Club. However, these resources will provide sustainable competitive

advantage not because competitors don’t posses but the reason is that the use of

equipment and accessories will be done by proper guidance and considering individual

health and fitness requirements. For the purpose of delivering best value for money to the
 consumers which will built their confidence and lead to sustainable competitive

advantages.

 Resources of Ladies Fitness Club also include supplements i.e. pre work out

supplements, fat burners and Thermogenic diet pills, carbohydrates supplements etc. the

use of these supplements will provide competitive edge in long term as these supplements

are specifically to boost internal system of women which lead to the fitness.

 Highly educated, experienced and trained professional trainers and dietitians which will

deliver best quality services to the customers.

Strategic options and alternative chosen

Alternative business models

Alternative business model refer to the other business ideas which can be considered. Currently

the business idea is for the establishment of Ladies Fitness Club but alternatively fitness club for

men or for both men and women will be consider. Advantages of all three business models are

discussed in following table:

BUSINESS MODELS ADVANTAGES DISADVANTAGES

Fitness club for women  Women are becoming  Women prevent to go

more health conscious to gym because of

then men and for shortage of time as

relieving stress they they possess higher

prefer fitness centers. responsibilities of

 In Brisbane women managing job, studies,

population is more children and house

than men i.e. 99mens work.

 per 100 women (ABS,

2012).

 Increase awareness and

more health issues as

compare to the men

attract women to the

fitness centre.

Fitness Club for men  Due to increased  Not much beneficial

obesity level men will because men mostly

also become health avoid gyms due to

conscious. presence of exercise

equipments in park.

As, in Brisbane more

than 80 of parks have

exercise equipment

installed where

exercising is free of

cost.

 Men prefer sports

more as a physical

activity then going to

gym.

Fitness Club for both men and  Targeting both the  More expenses
women genders will attract incurred.

more customers.  Separate centers would

be required result in

increased cost.

Business model chosen and rationale

Business idea considered is to develop fitness club for women that will provide specialized

environment to women of different age group to achieve their fitness goals through expert

coaching, high quality equipment, convenient scheduling, dietary adjustment and recommended

exercise program. Moreover, the business model chosen is for providing physical and mental to

fitness to women at one place as women have fewer alternatives to become physically fit as

compare to the men. The business model chosen will benefit both Ladies Fitness Club and

customer. These benefits are as follow:

Benefit to Ladies Fitness Club

 More customers, as women are more health conscious.

 Increased women population as compare to men.

 More physical changes occur in women.

Benefits to customers

 Releasing stress.

 Reduced weight leads to perfect figure as women are more conscious in this perspective

as compare to men.

 Maintain proper diet to remain healthy and fit.

 Stronger immune system.

Target market

Market to be targeted by Ladies Fitness Club is women who live in Brisbane. In 2013, the total

population was 4,655,011 persons. Furthermore, there were 99.8 men/100 women; however there

were proportionally more women than men with age group of 30 to 59 years. Moreover, the

median age of females has increased from 36.8 to 37.3 years (Queensland government, 2014).

Therefore due to increased number of women, the age group that will be targeted by Ladies

Fitness Club will be following:

 Teenagers 15-19 years

 Young women 20-27 years

 Working class ladies 28-45 years

Following are the reasons of targeting women of different ages:

AGE GROUPS REASONS

Teenagers 15-19 years  Growing age

 More attracted towards fashion and

health

Young women 20-27 years  More motivated to remain fit and

attractive

 Habit of remaining fit

Working class ladies 28-45 years  Attracted towards gyms due to changes

taking place in body because of aging

 Mostly married women, depressed

Marketing Strategy
Marketing strategy used by the Ladies Fitness Club will be ‘Pull strategy’. Therefore, Ladies

Fitness Club will target women and will make strategies to provide best quality service direct to

the consumer of the service (Yeshin, 2006)

Product design strategy

Marketing strategies consider product design as an important part. However, Ladies Fitness Club

will be a service providing company. Therefore, the focus of the company is to provide best

quality services to the women. These best quality services can thus provide women physical and

mental fitness as required by them. These services will be in proper way which after delivering

will satisfy the customer and keep them happy.

Pricing strategy

Pricing strategy that will be adopted by the Ladies Fitness Club will be according to the

competition present. As, in Brisbane many women gyms and fitness clubs are operating giving

services on the competitive prices. Therefore, Ladies Fitness Club will adopt competitive pricing

strategy which indicates that the company will offer the products and services on the price same

as offered by the competitors. Ladies Fitness Club will therefore offer the price same as the

competitors are charging. The purpose of adopting such a price strategy is due to the presence of

intense competition. In line with the competitive prices Ladies Fitness Club will provide best

quality services which will give it benefit upon its competitors. Because customers will be

attracted because they will be charged the price same as that of competitor but quality of services

better than that offered by the competitor. Therefore, competitive pricing strategy will benefit

Ladies Fitness Club in attracting more customer thus increasing revenue.

MEMBERSHIP PERIOD MEMBERSHIP FEE

3 Months membership* $235.5 OR $78.5/month

4 Months membership* $430 OR $71.6/month

1 Year membership* $777.6 OR $64.8/month

*All membership fees are inclusive of supplements charges.

Promotional strategy

The strategies that will be used for the purpose of promotion are the following: Free 8 days pass

that will attract more customers as currently competitors are offering 7 days free pass. Free entry

in awareness programs initially held for creating awareness among consumers of the quality of

the services offered. Special programs describing the use of supplements and small sample of

supplements provided for free so after realizing the positive results women will be more attracted

and it will further attract more consumers to Ladies Fitness Club. Promotional strategy will also

include advertisement both in print media and digital media i.e. MAGAZINES and television

channels respectively. As, it has been investigated that people mostly like to look an

advertisement on their favorite MAGAZINE i.e. Brisbane city magazine and favorite T.V

channels i.e. seven network, nine network (The sydney morning herald, 2014). Furthermore,

Ladies Fitness Club will develop its own website, which will be also handled by the marketing

manager discussed below. The purpose of this website is to make awareness among customers

i.e. before calling and making enquiry they may visit the website which will show the outlook of

the club and all the services offered. Moreover, website will be updated with new offerings from

the club with different pictures of equipment and specific areas of gym.

Ladies Fitness Club will adopt other strategies too for the purpose of achieving marketing

objectives. These strategies are:

 Holding one free entertainment program per month.

 Performs outdoor workout to get public attention.

  Creating partnerships with Local Fitness Businesses to Boost Membership.

Distribution strategy

Ladies Fitness Club will be opened in Burpengary in Brisbane as it is highly populated area.

Therefore, more customers will be attracted.

Location map is given in Appendice10

Operational Plan

Company structure and ownership

Ownership

Business name Ladies Fitness Club will be incorporated as a ‘sole proprietor’ under the country

law. A single owner Mr. X will run the business and any strategic decisions will therefore be

taken by him after considering the perception of managers. Mr. X will be the CEO of Ladies

Fitness Club. All other personnel will work under him and following and implementing the

orders of Mr. X.

Company structure

Managers

The top management hierarchy will include two Master trainers and their qualification must be

Certificate III in Fitness (SIS30313), Certificate IV in Fitness (SIS40210) with 8 years of

experience in relevant role. These two master trainers will control all the training related staff

and will report to the owner. Furthermore, one manager of research and development will be

having same qualification as that of master trainers but must have experience of 10 years in

fitness and health development research department. Moreover, finance department will include

one manager CPA qualified with 3 years of experience.

Operational staff
Operational management will include 2 fitness instructors having Certificate III in Fitness

(SIS30313) with 5 years of experience and 2 personal training specialist having Diploma of

Fitness (SIS50213) with 5 years of experience and 1 group exercise instructor having Certificate

III in Fitness (SIS30313) with 4 years of experience.

In finance department 1 employee will be further hired who will assist the finance manager.

This employee will be the qualified from any of the professional accountancy body globally e.g.

ACCA. All the operational employees will report to their relative department managers for any

issue related to the operations.

Operations

The operations of Ladies Fitness Club will be based on the employee as the purpose is to provide

best quality services to consumers. The way the operations will run is described in the table

below:

Serial no.

1
Person

Master trainers
Role

 Master trainers will supervise all the staff

e
g
n
a
D
&
R
.X
r
M
  Will report to the owner

 Will implement appropriate strategies for the

purpose of maintaining best quality services.

2 Group exercise  Will provide training in groups

instructor  Ensuring all team members of the group are

being dealt equally

 Resolving any problems arise in group

 Monitoring the activities of group members

3 Personal training  Will deal with the customers require special

specialist trainings

 Ensure proper and accurate advice is given to

them

 Proper managing of the issues arise in delivering

the services

4 Fitness instructor  Identify the health issues and best way to

overcome by use of supplements

 Best suitable exercises considering health

perspective of individuals

 Proper dietary plans being provided to

consumers

Research and development

Research and development department will include one manager as discussed above and 2 key

employees. These employees will be the mix of individuals having fitness, health and nutrition

knowledge. The purpose of the research and development staff will to identify key developments

taking place in the industry. Furthermore, Ladies Fitness Club will get registered with an

organization named Physical Activity Australia (Physical Activity Australia, 2015). This

organization has been supporting, advising and guiding fitness professionals since 1982. The

benefit of registering with the organization will provide confidence to the customers of

reliability. Furthermore, it will also benefit in identifying any further new technological

developments taking place.

 Research and development team will identify the new developments which will facilitate

expansion of Ladies Fitness Club in future geographic markets. The future geographic

markets that will be targeted are Sydney and Melbourne because these are the top ranked

populated cities of Australia with current population of 4,373,433 and 4,181,021

respectively (Glenn, 2014).

 In future organization will expand offering services to both genders. Expansion will not

only include the increase number of outlet but increased number of services too.

Expansion in terms of services includes good health. Research will be sports activities

and other recreational activities that will further contribute in maintain made in these

expansion area and technological developments that will take place in future in health

and fitness.

Key success factors

 Increased number of new outlets.

 Increased number of new services.

  Increased number of equipment, accessories and supplements.

Risk Reduction Strategies

Ladies Fitness Club will face risk after the operations begun. For this purpose, the risks faced by

Ladies Fitness Club are discussed below with the solutions to overcome those risks. Following

are the risks with their solution of mitigation:

No-1: There is the risk that due to breaching of laws and codes Ladies Fitness Club went out of

business. For this purpose following risk mitigating strategies will be considered;

 Insurance of the company

 Registration with Physical Activity Australia (Physical Activity Australia, 2015)

 Proper monitoring systems in place

 Embed the culture of work on the basis of codes and principles

No-2: There is risk of injuries while using equipments in wrong direction or carelessly which

will increase the costs. The risk will be mitigated in following ways:

 Proper guidance to customers relating to the use of equipments.

 Trainers will have an eye on the customers that they are making correct use of equipment

 Investigate any injury immediately, record it and take corrective action

 Services of the equipments after every 6 months

No-3: liability may be incurred from personal trainers and member because of issues regarding

inappropriate advice, sexual harassment and physical injuries. These are mitigated as follow:

 Trainers will work under proper rules and regulations. It must be ensured while hiring

 Proper controls in place for avoiding physical injuries and fights

 Special training programs for employees to keep their knowledge up to date

Other risks
Other risks faced by Ladies Fitness Club may include the risk of lower profit than budgeted.

It can thus be avoid by focusing more on marketing and promotional strategies, creating

innovative ways to compel customers to join the club i.e. by making bags with logo of the club,

by sending trainers to the schools and colleges for events, by arranging outdoor workouts etc.

Furthermore, there is a risk that employee may leave. For this purpose binding contracts must be

in place or if still they leave than there alternative selection must be present.

Exit and Harvest Strategies

Harvest strategy is a strategy used to take business out of the maturity or declining phase back to

the growth phase. The strategy is used when competition has become intense and company lack

strengths to remain competitive. The strategy requires company to cut down its capital

investments and generate positive cash flow which would be in return of the market share losed

by the company (Charles Hill, Strategic Management: An Integrated Approach, 2007).

Moreover, an EXIT strategy is a strategy used by the owner of the company of to get out of an

investment made in establishing the business (Caplan, 2012). Both of the strategies i.e. Harvest

and exit are the strategies in which owner will convert its investment into the cash. Following are

the harvest and exit strategies which will be adopted by the owner of Ladies Fitness Club at the

time when he want to get discharge from the ownership:

 Sell the business to any family member

 Will go to the liquidation i.e. sell all the assets and convert investment back into cash

 Sell business to employees

 Sell the business to open market

 Made available it for initial public offer

Financial Plan
Assumption

Following are the assumption taken for the preparing the financial plan of Ladies Fitness Club:

 It is assumed that sales are the amount of memberships gained for the year.

 Membership will be totaling to 1200 by the end of first year of operation

 Growth rate in memberships will be 15% after the first year and 20% onwards for the

next 3 years

 Cost of sales are calculated on the basis of expense incurred on providing service to

members

 Tax rate for sole proprietor is assumed to be 0

 Expected growth rate for the next 5 years is 3.3% (Smart company, 2015).

 Start-up fund is assumed to be $170000.

 Price per membership is calculated by taking average of price of all 3 types of

memberships i.e. 3 months, 6 months and 1year.

 Useful life of assets taken for the purpose of depreciation is 5years

 Interest related expense and income are assumed to be 0

 Investment would be totally equity financed as according to finance theory there is

optimal mix of debt and equity in mature firms (Pascal Quiry, 2011) but for the new

venture gaining debt is less likely unless sales have already begun.

Conclusion

The above business plan is made for the purpose of opening a club in Brisbane the capital city of

Australia. The plan was made to advice the investors about the viability of opening a health and

fitness club for women of Brisbane. The plan indicates that Ladies Fitness Club will provide best

value for money services which will attract more customers in such a highly competitive
environment. To remain competitive Ladies Fitness Club will provide a platform where not only

physical fitness but mental fitness will also be gained. Ladies Fitness Club will gain competitive

advantage because of providing high quality of services through highly trained staff. Services

will not only include exercises but the use of supplements and proper dietary plan according to

individual health will provide further benefit in becoming fit. The presence of such high quality

services will leads to more customer satisfaction that will not only benefit in rising profit in 5

years but will also lead to high market share in long run of the organization. After becoming

highly reputed in the market Ladies Fitness Club will open further outlets in Brisbane, Sydney

and Melbourne both for women and men with mission of providing high qualitative services in

competitive prices.

Appendice-1

Services Benefits

Cardio classes  Improves energy

 Enhances circulation

 Increases heart and lung capacity

 Reduces health risks

 Help in losing weight

Yoga  Prevents cartilage and joint breakdown

 Betters the bone health and protect spine

 Increases blood flow, drains lymphs and boosts immunity

 Release mind stress

 Relaxes overall body system and improve balance

 Maintain nervous system and releases tension from limbs

Pilates  Improved core strength and stability

  Improve body flexibility

 Prevention and treatment of back pain

 Helps in maintaining posture and balance

Sauna  Increase heart rate

 Blood vessels become flexible

 Ensures a thorough cleaning of skin

 Stimulates the immune system

Jacuzzi  Reduces stress

 Provide ease to muscle pain

 Improve blood circulation

Supplements 

Appendice-2

Underlying trends Social trends

 Exercise & aerobics, 30% and 17%

respectively.

 fitness or gym activities has increased from

13% in 2005-2006 to 14% in 2009-2010

(ABS, 2011)

 jogging and running has increased from 4%

in 2005-2006 to 14% in 2009-2010 (ABS,

2011)
Technological trends

 3D cameras and sensors

 Training applications

 Fitness pro magazine

Political trends

 2015 budget announced with investment in

health and sport activities to increase to

$69.7 billion (Fitness org, 2015)

 New principles to guide fitness industry

(Fitness.Org, 2015)
Appendice-3

Ladies Fitness Club     Income Statement ($000s)  

   
  2015 2016 2017 2018 2019
   
Price/unit ($) 855 864 869 880 891

Units volume (000s) 6 26 50 145 290

TOTAL SALES   5321 22114 43654 127465 258325
   
Unit direct cost ($) 459 438 427 414 404
COST OF GOODS SOLD   3224 12531 23788 66631 129969
% of Total Sales 61% 57% 54% 52% 50%
GROSS PROFIT   2098 9583 19866 60835 128356
% Gross Margin 39% 43% 46% 48% 50%
   
OPERATING EXPENSES (See schedules)          
Setup costs 170 0 0 0 0
Sales and Marketing 202 808 4688 11311 22419
General and Administrative 261 328 373 736 1796
Depreciation of P&E 34 34 34 34 34
Depreciation of R&D & IP 27 80 47 69 92
TOTAL OPERATING EXPENSES   694 1250 5142 12149 24341
% of Total Sales 13% 6% 12% 10% 9%
   
INCOME BEFORE INTEREST & TAXES 1403 8333 14724 48685 104015
   
Interest income 0 0 118 289 672
Interest expense 0 0 0 0 0
NET INTEREST INCOME   0 0 118 289 672
   
INCOME BEFORE TAXES   1403 8333 14842 48975 104687
Taxes on income 0 0 0 16162 34547
NET INCOME   1403 8333 14842 32813 70140
% of Total Sales 26% 38% 34% 26% 27%
   
GRANTS RECEIVED   0 0 0 0 0
   
Retained Earnings (opening) 1212 8771 19813 46575 105255
Available for Distribution 1403 9736 24578 57391 127531
Dividends Paid 0 0 0 0 0
RETAINED EARNINGS   1403 9736 24578 57391 127531

Appendice-4

Ladies Fitness Club     Balance Sheet ($000s)  

   
0 2015 2016 2017 2018 2019
ASSETS  
CURRENT ASSETS  
CASH & MARKETABLE SECURITIES 1243 9416 23150 53727 120385
A/R Opening Balance 0 0 1666 4442 9857
A/R Closing Balance 0 0 2761 8226 16338
ACCOUNTS RECEIVABLES   0 0 2761 8226 16338
   
INVENTORY (% of Cost of Goods Sold) 0 0 0 0 0
TOTAL CURRENT ASSETS   1243 9416 25910 61953 136723
   
PLANT AND EQUIPMENT (see schedules) 170 170 170 170 170
Less: (Accum. Depr) 34 68 102 136 170
NET PLANT AND EQUIPMENT   136 102 68 34 0
   
R&D AND INTELLECT. PROP. (See
schedules) 252 526 819 1154 1521
Less: (Accum. Depr) 27 107 155 223 315
NET INTANGIBLE ASSETS   225 419 664 931 1206
   
TOTAL ASSETS   1603 9936 26643 62918 137928
   
CURRENT LIABILITIES  
Short term Debt 0 0 0 0 0
Accounts Payable 0 0 1864 5326 10197
TOTAL CURRENT LIABILITIES   0 0 1864 5326 10197
Shareholders Loans 0 0 0 0 0
Long Term Debt 0 0 0 0 0
TOTAL LIABILITIES   0 0 1864 5326 10197
   
OWNERS' EQUITY  
Common Stock 200 200 200 200 200
Retained Earnings 1403 9736 24578 57391 127531
TOTAL OWNER'S EQUITY   1603 9936 24778 57591 127731
   
TOTAL LIABILITIES & EQUITY   1603 9936 26643 62918 137928
Appendice-5

Ladies Fitness Club     Cashflow Statement ($000s)  

   
0 2015 2016 2017 2018 2019
CASH INFLOW FROM OPERATIONS  
Sales Revenue 5321 22114 43654 127465 258325
Plus: A/R opening balance 0 0 0 2761 8226
Less: A/R ending balance 0 0 2761 8226 16338
CASH INFLOW FROM OPERATIONS 5321 22114 40893 122000 250213
   
CASH OUTFLOW FROM OPERATIONS  
SETUP COSTS   170 0 0 0 0
Cost of Goods Sold 3224 12531 23788 66631 129969
Plus: A/P opening balance 0 0 0 1864 5326
Less: A/P ending balance 0 0 1864 5326 10197
CASH PURCHASES   3224 12531 21923 63169 125098
   
Sales & Marketing Expenses 202 808 4688 11311 22419
General & Administrative Exp 261 328 373 736 1796
Research & Development 252 274 293 335 367
Intellectual Property Protection 0 0 0 0 0
Taxes payable 0 0 0 16162 34547
Net increase in Inventory 0 0 0 0 0
Net increase in Equipment 170 0 0 0 0
CASH EXPENSE DISBURSEMENTS 885 1410 5354 28543 59128
NET OPERATING CASH FLOWS   1043 8173 13616 30288 65987
   
CASH INFLOW FROM FINANCING  
Interest earned 0 0 118 289 672
Grants Received 0 0 0 0 0
Equity funding 200 0 0 0 0
Proceeds from Debt funding 0 0 0 0 0
CASH INFLOW FROM FINANCING 200 0 118 289 672
   
CASH OUTFLOW FROM
FINANCING  
Interest payable 0 0 0 0 0
Debt retirement 0 0 0 0 0
Cash Dividends 0 0 0 0 0
CASH OUTFLOW FROM FINANCING 0 0 0 0 0
NET FINANCING CASH FLOWS   200 0 118 289 672
   
NET CASH FLOW   1243 8173 13734 30577 66658
OPENING CASH BALANCES   0 1243 9416 23150 53727
YEAR ENDING CASH
BALANCES   1243 9416 23150 53727 120385

Appendice-6

DEPRECIATION SCHEDULES 2015 2016 2017 2018 2019

PLANT AND EQUIPMENT  
Asset Purchases 170 0 0 0 0
Cum. Plant and Equipment 170 170 170 170 170
TOTAL ASSET DEPRECIATION   34 34 34 34 34
Cumulative Depreciation 34 68 102 136 170
NET PLANT AND EQUIPMENT   136 102 68 34 0
   
R&D EXPENDITURES  
Chief Research Officer (CRO) 96 106 121 146 160
R&D Senior Staff 72 76 87 96 105
R&D Junior Staff 60 63 72 80 88
Benefits (% of Salaries) 0 0 0 0 0
TOTAL R&D SALARIES/BENEFITS 228 244 281 321 353
R&D Project Materials 24 30 12 14 14
TOTAL R&D EXPENDITURES   252 274 293 335 367
IP Rights 0 0 0 0 0
TOTAL R&D AND INTELL. PROPERTY 252 274 293 335 367
Cum. R&D and IP Expenditures 252 526 819 1154 1521
DEPRECIATION - R&D AND IP   27 80 47 69 92
Cumulative Depreciation 27 107 155 223 315
NET R&D AND INTELL. PROPERTY 225 419 664 931 1206
Appendice-7

HUMAN RESOURCE WORKSHEET 2015 2016 2017 2018 2019

RESEARCH AND DEVELOPMENT  
Chief Research Officer (CRO) 1 1 1 1 1
R&D Senior Staff 1 1 1 1 1
R&D Junior Staff 1 1 1 1 1
TOTAL R&D STAFF NUMBERS   3 3 3 3 3
   
SALES & MARKETING STAFF  
Chief Marketing Officer (CMO) 1 1 1 1 1
Marketing Staff 1 3 16 47 92
Chief Sales Officer (CSO) 1 1 1 1 1
Sales Staff 0 0 0 0 0
TOTAL SALES & MARKETING STAFF 1 1 1 1 1
   
GENERAL & ADMINISTRATIVE STAFF  
Chief Executive Officer (CEO) 1 1 1 1 1
Chief Financial Officer (CFO) 2 2 2 2 2
Chief Operating Officer (COO) 5 5 5 5 5
Administrative Staff 0 0 3 8 16
TOTAL GENERAL & ADMIN. STAFF 8 8 11 16 24
   
TOTAL STAFF PROJECTIONS   12 12 15 20 28
Appendice-8

CATEGORY EXPENSE DETAILS 2015 2016 2017 2018 2019

SALES & MKT SALARIES/BENEFITS  
Chief Marketing Officer (CMO) 96 110 127 152 167
Marketing Staff 0 146 943 2084 6584
Chief Sales Officer (CSO) 0 110 127 152 167
Sales Staff 0 0 0 0 1
Commissions 0 0 437 1275 2583
Benefits 0 0 0 0 0
TOTAL SALES & MKT SALARIES/BENEFITS 96 366 1633 3663 9503
Marketing Materials 106 442 3056 7648 12916
TOTAL SALES & MARKETING EXPENSES 202 808 4688 11311 22419
As % of Sales 4% 4% 11% 9% 9%
   
GEN & ADMIN. SALARIES/BENEFITS  
Chief Executive Officer (CEO) 120 132 152 182 200
Chief Financial Officer (CFO) 0 0 0 0 0
Chief Operating Officer (COO) 0 0 0 0 0
Administrative Staff 7 33 162 474 1516
Benefits 1 1 3 30 17
TOTAL G&A SALARIES/BENEFITS 129 166 317 686 1734
   
MISCELLANEOUS GEN & ADMIN
EXPENSE  
Lease Expenses (as % of Plant & Equip) 3 2 0 0 12
Business Travel 46 36 8 8 8
Gen Expense (IT, Supplies) 24 24 8 8 8
TOTAL MISC GEN & ADMIN EXPENSE 154 134 47 50 62
           
TOTAL GEN & ADMIN EXPENSES   283 300 373 736 1796
As % of Sales   5% 1% 1% 1% 1%
Appendice-9

Item Detail Price

$
construction gym construction and maintainance cost 25,000.00
$
  Annual rental 19,875.00
$
Cardiovascular Eqt 5Treadmill 4,990.00
$
  5 Recumbent Cycle 5,975.00
$
  2 Upright Bike 5,110.00
$
  5 Rower 7,575.00
$
Gym Accessories 10 Exercise ball 249.50
$
  10 yoga exercise mats 199.50
$
  10 power bands 169.50
$
  3, 70 kg Barbell weight sets 537.00
$
  10 commercial medicines balls 1-10kg 125.00
$
  5 exercise bikes 5,975.00
$
  Pack of all functional and training equipment 7,000.00
$
  2 Force USE multi system+155kg rubber weights 5,578.00
$
  5 Body work inversion machines 1,745.00
$
  1 package of all aerobic equipment 1,500.00
$
Weight Losing Equipments 15,000.00
$
Supplements All type of dietary and nutrition supplements 20,000.00
     
$
Boxing Studio Boxing Equipments 5,000.00
  Accessories $
 1,000.00
     
$
Pilates Studio Pilates Equipments 15,000.00
$
  Accessories 5,000.00
     
$
Audio Visual General Area Sound System (+PA) 1,000.00
$
  Head phones and other accessories 1,592.00
$
  2, 50" Plasma TV's 11,998.00
$
  DVD Players 1,200.00
$
jacuzzi 2 oasis portable Spa 9,900.00
$
Hardware/Software Club Management Software 1,500.00
$
  3 Acer aspire v3 Laptops 1,470.00
$
  2 Printers 2,000.00
$
  Receipt Printer 500.00
$
  Telephones 500.00
construction of steam bath, sauna & swimming $
Other pool 15,000.00
$
  Loose Furniture 5,000.00
$
Start Up Costs Recruitment, Travel, Marketing 10,000.00
$
Total Start-up cost   169,388.50
Appendice-10

Location map