Executive Summary
Mountain View Fitness Center is a fitness center aimed at offering practical lifestyle and therapy to its members in a bubbly, safe and adult-oriented atmosphere. The facility promises the best in class services to the highest level of personal service, attention and accommodative to diversity. Members will be offered therapeutic services and fitness techniques. The programs at custom made to individuals as well as groups and corporates. Fitness programs offered include tone and fit, corporate fit, karate fit, boot camps, yoga control, and private fit. The programs are geared to accommodate beginners to professional. The facility targets adults aged 20 and above. The programs will be bundled such that it caters for adults aged 20 to 35 and 36 and above.
The management of Mountain View Fitness Center will be structured in a way that long term growth and sustainability will be achieved. The day to day operation of the center will be managed by a 5 staff team.
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The fitness industry has experienced significant growth in both enrollment and prices. There are about 55 million people registered in 38,477 fitness centers across the US.
Business Description
Mountain View Fitness Center is a unique fitness center with a strong attention on offering practical lifestyle and therapy to its members. The company will offer adult-oriented services aimed at both individuals and groups.
The company will be located in 1897 Alaskan Way, Seattle, Washington. The fitness center plans to expand after two years of operation. The company location is given on Google Map and allows customers a walk through the center and its surroundings.
The services are bundles into two sections, 20 to 35 and 36 and above because of the motivation of the two groups. LaRose et al (2013) who analyzed data from the National Weight Control Registry found the motivation between the two groups to be different. The data revealed older adults were motivated to visit fitness centers because of health concerns and medical requirements. Motivation among young adults came from wanting to feel good about themselves, the need to improve their social life and maintain a good appearance. The data also revealed there was some aspect of “social pressure to keep fit” that motivated young adults.
The day to day services will include tone and fit, private fit, karate fit and yoga control. The center will on occasions organize boot camps on intensive fitness and weight loss program geared to superior results. Moreover, the company will also offer nutritional advising, internet cafe and sell fitness kits as a way to diversify.
The Market
Industry Analysis
The global fitness industry was in 2017 valued at $85.20 billion in 2017 and is projected to reach $105 billion by 2023 ( Statista, 2018 ). The industry has been experiencing an annual growth rate of 2.7 percent. There were roughly 153,160 fitness clubs around the world ( Statista, 2018 ). The North American market was valued $32 billion with around 90 percent of attributable to the US. The US market which remains the single biggest market in the world, had 38, 477 fitness centers which employed 533,200 people in 2017 ( Statista, 2018 ). The fitness industry in the US has been growing at the rate of at least 3-4 percent annually.
Figure 1: Projected growth of fitness industry. (Statista, 2019)
The growth in the fitness industry is attributed to the rising awareness among people to avail lifestyle, increased number of lifestyle-related diseases, and rising incidences of obesity ( Midgley, 2018 ). Additionally, the increasing cost of healthcare means that healthy people are cost less to insure hence most offer fitness membership as a discretionary benefit. Budget-friendly gyms have also shifted the market from being a reserve for the wealthy to being accessible to the middle-class segment.
Market Analysis
The Seattle metropolitan region is the 18th largest metro area with a population of 3.5 million inhabitants. The population of Seattle is estimated to be 724,000 ( Seattle.gov, 2019 ). Three-quarters of Seattle residents are adults aged 18 and 65 with an especially higher concentration of young adults (25-34 years) ( Seattle.gov, 2019 ). Seattle had the largest median household income in the Washington state at $82,133 in 2017 ( Seattle.gov, 2019 ). Moreover, the unemployment rate stood at 2.9 percent against the average national rate of 3.8 percent ( U.S. Bureau of Labor Statistics, 2019 ).
The statistics align with our target market characteristics which aim at the middle to upper-income bracket, age group of 20 and above, and geographic location of 8-10 kilometers driving distance from the center. We target the segment seeking an active lifestyle, and whose prime concern relates to health and wellness.
Critical Success Factors
For the business to be successful, it must meet several critical success factors unique to the fitness industry. Polyakova and Mirza (2016) observed that client retention is particularly important in order to maintain a constant membership which translates to meeting projected sales. Using the right fitness technology is also essential. The integration of mobile apps into fitness technologies is a game-changer and ensures services are tailored to their specific needs. Pricing appropriately is also crucial. Pricing should match the target market as well as the services being offered ( Polyakova & Mirza, 2016 ).
Competition Analysis
Over the past 10 years, the fitness industry in Seattle has become competitive. Well financed companies with existing national presence have invested in the city. In the face of this competition, our fitness center aims to capitalize on the club culture, branding, and personalized training. The center will also rent a large space to ensure the training can meet the expected number of membership.
Some of the competitors in Seattle include Seattle Fitness which has a strong internet presence and has a huge list of programs under it ( Seattle Fitness, 2019 ). Others include Bodycenter Studios, Rival Fitness, Seattle Athletic Club and Community Fitness among others ( Yelp.com, 2019 ).
Marketing Strategy and Sales
The marketing strategy will be aimed at creating awareness in order to achieve early customer traction. The marketing campaign will teach and train people on how to schedule their fitness sessions and how they can make decisions when joining a gym.
The 4Ps of marketing, positioning, product, pricing, promotions will also be used.
Promotion Strategy
The marketing campaign will be done through online adverts, email advertising, free park exercises, as well as participating and sponsoring fitness and charity events.
Pricing Strategy
The pricing strategy will be based on competitive market pricing. Pricing targeted at groups will be inexpensive compared to individuals. Long term members will have their charges discounted.
Product strategy
The fitness programs will be geared to enhance customer retention. The center will emphasize personal training since it is a leading area of growth within the fitness industry. The small group personal training will aim at attracting couples, friends, families as they look to receive close supervision at an economical cost.
Positioning Strategy
Mountain View Fitness Center will position itself as a unique fitness center offering result-oriented fitness programs and exceptional customer experience. The center will also be positioned as a high-end gym which will be reflected in the quality of the equipment, décor, lighting and space utilization.
Sales Strategy
The company will develop unique selling points to attract new members and attract potential partnerships. The sales strategy will involve continuous survey on member’s satisfaction, use the front desk as a selling vehicle to provide members with information and benefits, use of referrals to attract potential members and regular survey on competitor’s strength and weaknesses.
Management
The company’s organization will have aimed at easy flow and implementation of sales, marketing, and customer service. The company will have the owner as of the managing director and 4 employees.
| Position | Task |
| Managing Director |
Will oversee the business. Will be responsible for scheduling, billing and administrative concerns. Will partly be involved in training. |
| Sales Administrator |
Will oversee sales and marketing function as will also be responsible for increasing membership and pricing research. Will partly be involved in training. |
| Maintenance Supervisor | Will be responsible for ensuring the facility and equipment are clean. |
| Trainer 1 | Will be tasked with tasked with group training activities and customer service. |
| Trainer 2 | Will be involved in training personal activities and program improvement. |
Operations
Operation Strategy
The day to day operations of Mountain View Fitness Center will aim at delivering high-quality training services in an optimistic and friendly atmosphere. The company will place emphasis on customer service and meeting the needs of clients. The scope of operations of the team will work towards meeting the mission of the company. All staff will continually work to build the reputation of the company.
Part of the operation plan will be to hire the right staff for the job. Those recruited will have to have 3 years’ experience in the fitness industry. Moreover, they must demonstrate their communication and customer service skills. They must also be good motivators.
Operation Expenses
The company expects rent expense to take the significant portion of the revenue. Size in square footage is crucial at providing training space. Office and training equipment will also take up a huge chunk. However, these are part of a long term investment. Other operation expenses will be drawn by insurance, marketing and advertising, payroll and salaries, telephone and marketing and utilities.
Financials
Table 1: Expected Startup Expenses Statement
| Item | Year 1($) | ||
| Lease Payment |
3000 |
||
| Lease Deposit |
3000 |
||
| Advertising and Marketing |
1000 |
||
| Legal Costs |
250 |
||
| Cash |
550 |
||
| Fixtures and Equipment |
35000 |
||
| Salaries |
30000 |
||
| Telephone |
250 |
||
| Other sporting equipment |
15000 |
||
| Refurbishment of premises |
10000 |
||
| Unanticipated expenses |
5000 |
||
| Total Startup Expenses |
103050 |
||
Source of Financing:
Personal = $42000
Venture capital= $26000
Equity offering= $30000
Funding Request
In order for the venture to launch and become operational, the management team estimates an initial budget startup of $103050. The capital will be drawn from personal savings, equity offering, and venture capital funds. Mountain View Fitness Center will offer attractive returns and attractive offers to investors.
Risk/Opportunity
The risks that the venture is likely to face are market risks and execution risk. Unhealthy competition from established fitness centers may impact negatively on our initial capital. Once established, the largest source of risk will be litigations from injuries on members. The national growth in the sector is promising enough to warrant entry into the market.
References
LaRose, J. G., Leahey, T. M., Hill, J. O., & Wing, R. R. (2013). Differences in motivations and weight loss behaviors in young adults and older adults in the national weight control registry. Obesity , 21 (3), 449-453. doi:10.1002/oby.20053
Midgley, B. (2018, September 26). The Six Reasons The Fitness Industry Is Booming. Retrieved from https://www.forbes.com/sites/benmidgley/2018/09/26/the-six-reasons-the-fitness-industry-is-booming/#5fbccedc506d
Polyakova, O., & Mirza, M. T. (2016). Service quality models in the context of the fitness industry. Sport, Business and Management: An International Journal , 6 (3), 360-382. doi:10.1108/sbm-04-2014-0015
Seattle Fitness. (2019). Seattle Fitness – Your Goals Are Our Priority. Retrieved from http://www.seattlefitness.com/
Seattle.gov. (2019). Population & Demographics - OPCD | seattle.gov. Retrieved from https://www.seattle.gov/opcd/population-and-demographics
Statista. (2018, October 12). Topic: Health & Fitness Clubs. Retrieved from https://www.statista.com/topics/1141/health-and-fitness-clubs/
U.S. Bureau of Labor Statistics. (2019). Seattle-Bellevue-Everett, WA. Retrieved from https://www.bls.gov/eag/eag.wa_seattle_md.htm
Yelp.com. (2019). Top 10 Best Fitness Clubs in Seattle, WA - Last Updated September 2019. Retrieved from https://www.yelp.com/search?find_desc=Fitness+Clubs&find_loc=Seattle%2C+WA
