Fitness Center
Fitness Center
Woodland Gym Ltd.
64 Palm Ave.
Beverly Hills, CA 90211
Gerald Rekve
Woodland Gym Ltd. is an established company in the fitness center industry in the affluent area of Beverly Hills, California. While the fitness market is ever changing, we feel based on our knowledge of the market we will be able to garner a large market share and profit from our targeted sector. The experience of our staff and management will put us in a winning position. Woodland Gym Ltd. was founded by one entrepreneur who has 18 years of fitness center business experience and has managed well–known fitness centers and fully understands the market potential and requirements for profitability.
BUSINESS OVERVIEW
Woodland Gym Ltd. fitness center is targeted towards men and women only, although children can join the family classes. Beverly Hills is an affluent area with many high–income housewives and mothers of school age children. There are also many professional men and women in Beverly Hills who need a more local fitness center to visit. There are over 860,000 people in the 5–mile radius of our store. The nearest competitor is two miles from Beverly Hills and does not offer the all the activities we propose.
Customers
Woodland Gym fitness center will be a premier, upmarket establishment. The main market sectors Woodland Gym will penetrate are:
- Housewives
- Men and professionals that require a work–out location convenient to their schedules
- Mothers of school age children
- Professional women
PRODUCTS & SERVICES
Core Product Offerings
- Aerobics instruction
- Strength training
- Endurance training
- Yoga
- Marathon training
- Cycling training
- Comprehensive gym facilities
- Beauty treatments
- General product/retail sales
- Vouchers
- Rekki
Gym Services
We will have three gymnasium areas that will house enough equipment to allow 55 people each to use the gym at once. The cost of the gym equipment and beauty room equipment is $40,000; all such equipment will be leased. Pricing will be $89 per month for unlimited use during peak times.
Organized Classes
We will have one main hall where all classes will take place. There will be three instructors to take these classes spanning peak times during the day (i.e. lunchtime) and evening and weekends. Classes to be offered will be for all levels of fitness from beginner to advanced, and these will be mixed during the week. Pricing will be $89 per month for unlimited classes.
Beauty Treatments
Body Therapy
- Tranquillity: This stress reducing massage helps improve sleep patterns by combining aromatherapy oils with deep relaxation movements and calming breathing techniques. (1 hour)
- Restorative: This tension reducing massage utilizes individually chosen aromatherapy oils combined with acupressure points to stimulate and release stress from the back, shoulders, neck, face and fee. This complete treatment can help to strengthen the nervous system and restore depleted energy. (30 minutes)
- Aromatherapy Massage: This highly personalized massage combines the actions of our highly therapeutic oils with the skills of the practitioner in order to relax and rebalance the recipient. Deep body techniques are complimented by a soothing scalp massage. (1 hour)
- Pre and Post Natal Massage: This treatment has been carefully designed for pregnancy and takes into account the special needs of mothers–to–be as well as those that are nursing. A specifically blended and safe essential oil has been created to take into account contraindications normally associated with pregnancy and breast–feeding. A well deserved relaxation hour. (1 hour)
Face Therapy
- Alliance Facial: Our use of botanical products is of the highest quality containing excellent nutrients including local flowers and herbs. The facial with its gentle lymph drainage of the face gives way to a deep exfoliating cleanse and tone, employing a face masque and scalp massage. Eye and lip balm complete the experience leaving you with a glowing sensation inside and out. (1 hour)
- Aromatherapy Facial: This beautifully tailored treatment with its replenishing and harmonising approach combines the exceptional attention to detail of the therapist with the exquisite array of natural products that are applied. From ingredients as luxurious as Egyptian rose and to green tea and honey, the synchronistic nature of the treatment culminates in a deeply relaxing scalp massage. (1 hour)
- Revitalizing Back, Face and Scalp Massage: This treatment commences with a deep cleanse of the back with our sea salt and essential oils which flows into a soothing back massage. A facial cleanse, massage and masque combining ingredients such as rose, green tea, honey is followed with a scalp massage. (1 hour)
- Replenishing and Nourishing Eye Treatment: Tired eyes will soon become soothed and refreshed as the therapist attends to this most sensitive of areas. This mini facial will awaken their hidden radiance beneath the surface. (25 minutes)
Nail Services
- Manicure: This holistic approach to the manicure includes a therapeutic hand massage with individually selected creams or oils. Cuticle push, file, colour, and shape aim to reveal the hands in all their glory. (1 hour)
- Pedicure: A wonderful massage with our trademarked foot paste product commences this therapeutic pedicure, which aims to soothe and relax the client as well as shaping, filing, polishing and painting the toenails. (1 hour)
Retail Products
The full range of skin and nail products we use will be offered for general sale to customers and passing trade.
MARKET ANALYSIS
The California economy has steady growth and the outlook is for this to continue. The fitness center business continues to be strong. In our area there is an untapped market with huge potential.
The current salon market in California comprises 12,370 outlets offering beauty treatments and is estimated to reach 14,425 by December 2005. Market turnover of salon–based outlets is expected to reach $1.15 billion by 2005 across 8,855 units, driven by strong consumer demand and increasingly busy lifestyles, greater affluence, and a growing focus on personal well–being and appearance. Greater media coverage of beauty and an ever–widening variety of beauty services available have also driven popularity and increased visits to fitness centers and spas over the past 2–3 years. These trends will continue to drive the market forward.
Key factors stimulating underlying growth have included increased public awareness of health and fitness issues, expansion in the private club sector, increased emphasis on niche market segments (such as females, the older generation, disabled users and the youth market), government schemes to encourage a health lifestyle and health service referrals.
The private sector accounts for around 78 percent of the total market in terms of value, with the public sector accounting for the balance.
The number of health and fitness facilities, including leisure centers, in the public sector is higher than in the private sector; however the nature of private clubs is that you generally pay higher prices, payment is in advance for membership (rather than paying for what you use), and the private facilities attract a larger number of paying members per establishment. In the private sector, one key recent trend has been the reduction in the share of revenue accounted for by joining fees, with clubs discounting on joining fees to attract established members, but attempting to balance this with increased membership charges. Some clubs do not charge joining fees. Ancillary revenue accounts for some 15 percent of all revenue, compared to around 40 percent in the US, suggesting that the California fitness centers will be seeking to generate additional ancillary revenue over the next few years. The majority of consumers change beauty product brands “often” or “sometimes”. “Value–for–money”, “tailored to skin type” and “brand name” are key factors for selecting a given brand, while therapists and friends/family are the main purchase influencers.
Key opportunities and threats in the sector will include the corporate health and fitness sector, which has been one of the key growth areas in recent years, exemplified by the number of established specialist management companies entering the market and their increasing contract portfolios. Nevertheless it remains a key growth opportunity for future market growth, particularly as both the government and companies themselves see general well being and fitness as likely to reduce the amount of sick days taken over the year.
Consumers in California are also spending more on beauty products than in the past, while pharmacies and department stores remain the most popular places to purchase beauty product brands.
Key Market Statistics
Salon and Spa Visitors
- 46 percent of salon customers surveyed state they visit fitness centers more now than in the past, with 66 percent of customers visiting salons and spas for beauty and relaxation treatments at least once a month
- The main reasons for selecting a salon are convenience of location and the therapist, with 77 percent of customers indicating loyalty to their salon
- Salon customers’ key health and beauty goals are “feel better”, “pamper myself”, and have “healthier skin”
- More than two–thirds of salon and spa customers believe themselves to be well–informed about the types of beauty products and services on the market
- “Value–for–money”, “tailored to skin type”, and “brand name” are key factors for selecting a given beauty product brand, while therapists and friends/family are the main purchase influencers
- The majority of customers change beauty product brands “often” or “sometimes” because they like to try established products, they noticed decreased effectiveness of their current products, or due to recommendations of their therapist, friends or family.
- While 45 percent of salon customers change brands often/sometimes to trial established products and gain more effective results, 35 percent remain highly loyal to their brands
Competition
There is one center that is 10 miles from Beverly Hills offering 60 percent of the range of products we will be offering. Our pricing will be on average 18 percent higher. We can charge a premium because we are local and the area is affluent. Our trainers will be qualified to the highest level and also offer personal training sessions. Our beauticians will be of a higher calibre than this competing salon to develop our presence.
Strengths
- Fitness center professional with 18 years project management fitness center experience
- High visibility premises in the downtown area
Risk Factors
- Not currently offering some of the items offered at the competitors’ locations
- No credibility with target audience within the established competition’s fitness center
- Copycat fitness center companies
- Economic downturn
There are no real outside threats to this business plan. It is driven by our own strengths in the market place.
Growth Strategy
- The affluent customers in Beverly Hills make for an untapped market place
- Potential customers within a 40-mile radius
- Develop the growth of offering beauty treatments
OPERATIONS
The premises beside our current location are rented on a 5–year lease and are currently being used as offices. We have already registered the business with the local civic department.
We have developed the fitness center layout to include:
- Two halls for aerobic, kinetics and yoga classes
- An equipped gymnasium
- Five beauty rooms for treatments
- Reception area for booking in customers and selling products
- Waiting area for consultation, sales and rest area
- Shower and changing area for body treatments
- Administration office
- Computer system for bookings, stock control and accounting
- Color scheme is pastel
- Shop signage and A board included
The center will be open from 6am to 11pm Monday to Friday and 7am to 8pm on Saturdays and Sundays.
Management Summary
Woodland Gym limited is an established company set up and run by Julie Pineran, who has 18 years experience in the fitness center industry. The owner has start–up funds of $50,000 to fund the set–up costs and first four months cash flow. The expanded premises Woodland Gym needs have been secured and were previously used as offices.
We will have three beauticians and a receptionist. The owner will also be acting as manager for the salon. We will have five fitness coaches who will also offer personal training sessions and swap with the fitness studio lessons as well as look after people using the gym. We will recruit to have staff employed three weeks before opening so there is enough time for training everyone.
MARKETING & SALES
Grand Opening
The opening is all too important for every salon. We will have the launch event on January 1. We will invite local media for free memberships to the reporters for one year and run a competition in the local newspaper to win free treatments and classes for a month for 100 customers.
Marketing Plan
In addition to the opening, we need to ensure we build a presence fast. We will therefore put into place a comprehensive marketing plan to commence two weeks before launch. This will develop interest and communicate that we will be open for business:
- Local/free press—Teaser adverts two weeks before opening moving to stronger advertising closer to launch and including the newspaper competitions to be the first to use the center. There will be follow up flyers within the local papers for three months after the opening
- Website—We will develop a website and have it linked from fitness center directories and the local website
- Location—Large board advertising the impending opening
- Local magazines—There are three local glossy magazines we will take advertising and have the editor write a feature about the established center
- Word of mouth—The proprietor will visit each local shop and hand out a leaflet offering 50 percent discount in the first month. He will also visit local businesses offering the same discount
- Mailers—The post office will deliver special opening flyers into the doors of residents within 5 miles of the shop
We have allowed $2,500 for the opening, competitions and initial marketing plan.
FINANCIAL ANALYSIS
Revenues and profitability
Revenues forecasting for the first year of operation are exceptional. Net profits are forecast to be higher than average before tax and interest. In the following years the profit position will be dramatically improved due to our quality and service.
Investment
The investment to make the location ready for customers is $15,000. The cost of gym equipment and beauty room equipment is $20,000. This cost will be deferred because we will lease the equipment instead of purchasing it for our location. We are to purchase $5,000 of stock products to sell. We will also invest $1,100 in staff uniforms, robes, slippers and towels.