Running head; POWERHOUSE FITNESS CENTER 1

Powerhouse Fitness Center

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Introduction

The reason for setting up a fitness center is due to the benefits it brings to the community.

The community conflates two different essentials in life physique and good health. Fitness

centers help in bringing good health to the community by helping people avoid diseases like high

blood pressure, obesity, cancer, and heart attacks. These diseases can be avoided also by eating

right one gets to avoid eating disorders like bulimia since one can work out to get the desired

body structure that one desires.

A fitness center is also beneficial in terms of revenue to be collected and also has little

cost in maintenance. The only cost that is incurred in a fitness center is maintaining the machines

by lubrication which is not an everyday chore. Another cost is for renting the place of

establishment and payment of the personnel employed in the business. The fitness center gives

room for future growth by profits increasing it creates room for future expansion. Lastly, the

present generation has abandoned natural foods and has gotten accustomed to genetically

modified foods which are expected to bring so many health issues which fitness centers can help

in maintaining good health for people (Sherlock, 2008).

SECTION 1: COMPANY DESCRIPTION

The goals of the fitness center are to make large amounts of profit. The member fees that

are set are not so low to discourage members on the quality of the services provided or very high

to chase away new customers. The price should be in a way to be affordable and also to ensure

maximum profits. The next goal is to have clients live longer by having a clean healthy life. The

members that join the gym should have better health by eating right that's by creating a good

meal plan and also having a better physique. The fitness centers help in strengthening the

cardiovascular muscles, this helps in retaining clients and bringing in new ones.
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The organizational structure used in running the business is the functional business

structure. A functional business structure is where each employee is set by the functions they

play in the business (Zotov, 2021). A fitness center has an aerobics and weightlifting area, there

is also the administration where there is a head coach. Another employee is the person at the

reception, the person who writes the people who have come in and issues the membership cards.

Another employee is the one responsible for the cleaning of the gym to avoid dust and dirt.

In Canada, women hold a large percentage than men and that also the age bracket of the

population is 14-65 years. Most of the population stays in the urban area which creates a big

market for the target consumer. The Canadian government has spent some money on health and

fitness awareness by having a fitness center it brings an avenue to capture many clients who wish

to have a healthy life. The age limit is young people and the majority of women are very

sensitive about their body figure this creates a large market for the fitness center to benefit from.

One of the competitive advantages of the powerhouse fitness center is first the meal

planning, the fitness center helps in creating a healthy meal plan for the clients based on their

needs. Second is virtual personalized training and also instructional visual and audio content

availability. To enable the fitness center to be available and accessible to anyone the virtual

personalized training is very advantageous. Thirdly there is technological procurement in the

powerhouse for monitoring important aspects of fitness such as the heart rate, calories burned,

and time spent at the gym. The last competitive advantage is personal accountability, that is the

gym focuses on the person and moves with the individual process of getting fit.

The business is a fresh start hence it needs much effort in building it. The value

proposition of this fitness center from others is that the Powerhouse Fitness center focuses on

personal growth and not just profit. When a client is helped then he brings in new clients and the
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business grows further. This is what differentiates the business from others and helps in

competing favorably.

SECTION 2: BUSINESS OWNERSHIP

Due to the nature of the business being a small enterprise a sole proprietorship business

ownership is appropriate. This is the simplest form of business ownership and requires less to no

paper works. This business owner has several advantages like simplicity, the sole proprietorship

is simple to start since it requires very few legal restraints like licenses, one can be exempted

from paying this registration and licenses making it cheap to start with. Another advantage is the

complete and utter control of the business. The absolute control of a business helps the owner to

make decisions without having to consult any person (Jane & Firnanti, 2018).In addition, the

sole proprietorship possesses a straightforward banking system since it does not require a

banking checking account.

There are disadvantages to using the sole proprietorship, first with the advantage that one

gets from the business being independent there some a problem of limited liability. That is the

business is considered to be self-employment to the owner hence no legal protections, this may

bring in risks from the business affecting an individual assist. With this business ownership

structure, it is very difficult to secure loans or credit. Funding one’s business using this type of

structure is hard using credit from the banks. If one opts to use personal lending it creates a legal

risk of someone claiming part of the business or the whole of it in case of late payment or no

payments.

The fitness centers are a high-risk area for Covid-19 transmission due to the high contact.

Many fitness centers lack the necessary ventilation of air which makes one susceptible to

contracting the virus. The sharing of pieces of equipment may also be a threat to the spread of
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the Covid -19 virus (Hanson, 2020). There are opportunities regardless of the pandemic first

there has been vast vaccination of individuals making the gym partially safe for training. There is

also virtual personal training for the Powerhouse Fitness Center this ensures that many people

are reached all at once. Regular exercises are said to help in reducing the risk of being infected

by the Covid 19 virus.

There is the different cost involved in fitness centers the varied and fixed costs. The

varied cost is the cost that is incurred depending on the services that have been done on that

month. For a fitness center, the first varied cost is the employee bonuses and benefits. With

increased payment from the clients, it leads to employees getting more benefits and fewer

benefits with fewer customers. Another varied cost is bathroom supplies, these are soaps and

tissues. Water bills are another cost that is incurred in different degrees depending on the number

of clients that have visited in the given month. Equipment repairs and maintenance costs are yet

another varied cost, other examples include office supplies and janitorial services.

The fixed cost is those that are incurred regardless of the services provided in that month.

In a fitness center, the fitness includes rent for the establishment where the gym is situated,

secondly, there are electric bills for running the machines included in the fitness center like

treadmills. Thirdly there is the security and monitoring cost, from the building and the

equipment's to be safe there are costs involved in guarding the machines. Another fixed cost

website maintenance, there is a fixed cost paid to maintain the website for the fitness center.

Lastly, it is the advertising cost this is paid regardless of the services being low or high.

The managerial control in the fitness center involves full control with other people in the

business able to offer any additional help. These management decisions are to be made entirely

from a profit-generating standpoint ("Benefit-cost analysis," 2018). If the decisions that I make
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are not productive then I get to suffer the consequences alone. The Covid-19 pandemic has led

to many businesses being shut off and employees being laid off for this reason I believe that

having the managerial decisions solely in my dominion is better for the business.

SECTION 4: SOURCE OF FUNDS

There are three sources of funds that are to be considered based on the type of business

and the needs of the business. Many startup fitness centers use as little as $50,000 in beginning.

The three financial sources that may be considered are personal investment the money that one

has saved and is willing to use as capital. The second financial tool is love money this is money

from spouse family or friends. Lastly, there are government grants or subsidies for instance there

are different ways to get government funds from the Canada Business Network Website. The

best source of funding is personal investment this is because they love money may lead to some

else claiming part of the business (Choi, 2018,). With the Covid-19 pandemic, personal

investment may be the best financial tool since the government may be preoccupied with

recovering the basic sectors that were disrupted by the pandemic.

Cost base analysis

In the fitness center the reward of starting and also certain projects involved in the growth

of the fitness center. The cost base analysis involves the choosing of fitness extension for

instance the starting of virtual personal training viewing this new technological technique

benefits and its cost before undertaking. There are several benefits like the reduction of covid 19

spread and also reaching several clients. The cost is that it is might be expensive, but in this case,

the benefit outweighs the cost. Since the undertaking of this method helps clients to be reassured

of continued exercising and the fitness center also continues to profit even with the pandemic

causing many businesses to lose customers and profits.

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References

Benefit-cost analysis. (2018). Economic Evaluation in Education: Cost-Effectiveness and

Benefit-Cost Analysis, 221-243. https://doi.org/10.4135/9781483396514.n10

Choi, H. (2018). How to handle fixed costs in business accounting. SSRN Electronic

Journal. https://doi.org/10.2139/ssrn.3179288

Hanson, T. A. (2020). Global economic impact resulting from COVID-19. The Business of

Pandemics, 55-69. https://doi.org/10.1201/9781003094937-4

Jane, C., & Firnanti, F. (2018). Effects of ownership structure and company conditions on

earnings management. Proceedings of the 7th International Conference on

Entrepreneurship and Business

Management. https://doi.org/10.5220/0008488700930098

Sherlock, J. (2008). Reye’s fitness centers, Inc.: The strategic HR

opportunity. https://doi.org/10.4135/9781473957589

Zotov, V. M. (2021). Organizational structure modeling of innovative company. Revista Gestão

Inovação e Tecnologias, 11(4), 1469-

1477. https://doi.org/10.47059/revistageintec.v11i4.2201
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