A BUSINESS PLAN FOR

“FITNESS FIRST” HEALTH CLUB IN GOA

Submitted By SHYAM SHET , E2009045 PGP –PT 2009-12 SUBJECT: PROJECT APPRAISAL & FINANCE

“FITTNESS FIRST” HEALTH CLUB IN GOA

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Contents
Contents.............................................................................................................................. 2 Executive Summary............................................................................................................. 3 General Company Description..............................................................................................4 Mission and Vision:..............................................................................................................4 Strengths and Core Competencies:......................................................................................5 Challenges:.......................................................................................................................... 5 Industry Analysis..................................................................................................................5 Services Overview................................................................................................................6 Services:...............................................................................................................................6 Benefits and Features:........................................................................................................7 Why people need this service?............................................................................................7 Marketing Plan...................................................................................................................... 7 Market Description...............................................................................................................7 Industry Life Cycle:.............................................................................................................. 8 Cyclical trends in Industry:..................................................................................................9 Market Facts:.......................................................................................................................9 Market Demand:................................................................................................................ 10 Market Trends:..................................................................................................................10 Market Opportunities:........................................................................................................11 Barriers to Entry:............................................................................................................... 11 Service Potential:............................................................................................................... 11 Location:............................................................................................................................ 11 Targeted Audience:............................................................................................................11 Competition:....................................................................................................................... 12 Marketing Strategy............................................................................................................. 12 Value Proposition:.............................................................................................................. 12

“FITTNESS FIRST” HEALTH CLUB IN GOA

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.17 Personnel:.......................................................................13 Marketing Objectives:................................ 6..................................... 13 SWOT Analysis............................... Heart disease and obesity are on record high causing increase in health club demand...........................................................................16 Legal Environment:....................................................... Fitness First will offer low cost services to all segments of customer...............17 Management and Organization....................................................................................................................Branding:........................................................................................................................15 Operational Plan........................ “FITTNESS FIRST” HEALTH CLUB IN GOA Page 3 of 20 ...13 Strategy:.............................................................................18 Executive Summary 1.......... 16 Service Execution Timeline:...... 4......................................................................................................................................... Low income market segment is ignored by key competitors............. A large segment of market is still untapped............................... 5..................... Fitness First will provide health care and body workout services.................................................................................. Health care market is on the boom in India.................................................................... 2........................................................................................................................................................................ 14 Marketing Mix.................17 Financial Plan. 7.............................

Fitness First will have their own training facility with state of the art health care equipment from quality manufacturers. 10. A special focus will be to target young college students and working professionals. have their in-house training facilities. Special discounts will be offered to corporate clients. Not all MNC’s in Goa. Increasing awareness. 12. Companies are now realizing the value of health employees. 9. obesity and heart disease are the driving forces for market growth. Health club market is competitive but provides equal growth opportunities. Hence corporate customers will also be specially targeted.8. 11. General Company Description Mission and Vision: Vision: To create awareness about healthy lifestyle and its benefits Mission: To provide strategies and training programs related to health care “FITTNESS FIRST” HEALTH CLUB IN GOA Page 4 of 20 .

Strengths and Core Competencies: • • • Lowest cost of services in comparison to competitors Certified trainers from top ranked health care institutions Owner’s commitment and dedication towards health care services Challenges: Fitness First will face a challenging situation in creating its brand image and attracting customers towards their services due to presence of already established players in the local market such as • • • • • • Basilios Health Club Dorians Xtreme Fitness Fitness Zone Norberts Fitness Studio Body Sculpture Gym Power Flex Gym & Fitness Centre Industry Analysis A health club can be described as a service facility that is intended to provide physical health care exercises with the help of specialized equipment. “FITTNESS FIRST” HEALTH CLUB IN GOA Page 5 of 20 . It normally serves both male and female customers but in some cases females are provided special attention by providing them female only health clubs in which all staff including trainers are also females. the environment is made casual to provide customers comfortable experience that helps them performing bodybuilding and other exercises with ease. Normally.

It has been growing at a compounded growth rate of 15%.The total fitness industry in India is estimated at around 2900 crore. Services Overview Services: Fitness First will provide following health related services: • • • • Aerobics Cycling Boxing Yoga Page 6 of 20 “FITTNESS FIRST” HEALTH CLUB IN GOA .

Personal qualified trainers to help our members achieving results without wasting much time Why people need this service? Health care and fitness club market in Goa has been serving to a high income segment of late. The state registers an annual population expansion of 14.7% of the “FITTNESS FIRST” HEALTH CLUB IN GOA Page 7 of 20 . In a developed state like Goa which has one of the highest per capita income and enjoys a young and educated population. quarterly and annual subscription plans. Goa has a population of around 1. With greatest literacy rate in India.• • Pilates Muscle Training Diabetes & Obesity Control • Benefits and Features: • • • State of the art facility with latest equipment from quality manufacturers Low cost with monthly. This leaves a large segment of low-income customers with unmet needs. there is scarcity of genuine good fitness centers. Goa is all set to emerge as one of the foremost profitable provinces in india. Marketing Plan Market Description The total fitness industry in India is estimated at around 2900 crore. Fitness First will strive towards providing quality health care facility at affordable prices without compromising on the quality of service. Fitness First will primarily exist to provide health care facility to the lower income class without compromising on quality of service.9%. Goa which is one of the most developed states in India in context of literacy and public infrastructure. Diseases like obesity.34 million. diabetes are on the rise. It has been growing at a compounded growth rate of 15%. Around 49.

Every girl wants to have a size zero like Kareena Kapoor. It is growing at compounded annual growth rate of 20%.populace resides in the city zones.Many factors play a part in fueling the success of this largely recession-proof industry . Heance there is ample scope for a new entrant to fill this vaccum by providing affordable quality service. only 1.not the least of which is the growing trend among the young people who are willing to part with their money to stay fit and healthy.5 per cent of the urban population regularly do workout. Industry Life Cycle: The fitness industry continues to be a lucrative market opportunity for small businesses and entrepreneurs.1 per cent. It is estimated that in Goa there are about 220 health clubs big and small. “FITTNESS FIRST” HEALTH CLUB IN GOA Page 8 of 20 . . The national average is even lesser at 0. all youngsters want to have a body like Salman Khan & Hrithik Roshan. Bollywood has been the strong ambassador of fitness industry. against the global figure of 15 to 20 per cent. he said. Organised players in the fitness industry are expecting to grow in the coming years despite the economic slowdown as they take up the responsibility of developing the market by creating awareness about better health practices. existing gym members remain reluctant to give up their health club memberships choosing to save money instead on big ticket items such as vacations reaffirming the fact that "buying" fitness is no longer perceived as a luxury item but a fundamental part of our everyday lives. However there are only a handful of theses which are as per international standards providing all round health care facilities.In the Rs 2. In addition. Goa has one of the highest literacy rates in the country upto 82%. the organised sector expects to double its share from the current level of a mere five per cent in three years’ time. Despite a rapid growth in awareness levels during the past four years.500 crore fitness industry. With most of the actors having good physique. The health and fitness industry is estimated at around 2900 crore.

With diseases like Obesity. Although medical research has pointed out several benefits of body fitness and • • • workout. still almost 90% population in India is yet to attend health clubs. then ever before. “FITTNESS FIRST” HEALTH CLUB IN GOA Page 9 of 20 . On average health club member attends 92 days per year in their club. Average annual income of health club member is 18. following are the key points related to health club members in India.000. 60% are male and 40% female. Most widely used health club program is personal training. the Health care industry is on the expansion drive.Cyclical trends in Industry: Health club business is not affected by different seasons and keeps running smoothly throughout the year. Factors Causing Market Growth: Health Care Expenditure: Health care expenditure is increasing in India. With strong economic growth over the last decade. People are today more conscious about their health. the disposal income of households has increased. Diabetics on the rise. Market Facts: Health club market in India has grown rapidly in the last 10 years. • • Out of the total health club members in India.

Individual usage of fitness and health care training equipment has increased. Effectiveness of Exercise: Members are very demanding over results of the exercises which they are performing.4% Market Trends: Health care club industry has been changing its trends very quickly of late. 2. An expert trainer can be helpful in setting a proper exercise plan for the members so they can work out accordingly. see the chart below for details of growth rate in per capita income which is almost 5. Factor Causing Market Demand Per Capita Income Increase: Continuously increasing per capita income in the last decade has enable people of India to focus more on their health related issues such as spending time in health care clubs and gyms. Following are the common demands that have arise in recent past. 2. are interested in subscribing to a customized health care plan according to their requirements or as per the recommendation of medical expert.Market Demand: Health care club market in India is getting more and more demanding with the passage of time. Customization: People who already have membership or those who are willing to have one. 1. “FITTNESS FIRST” HEALTH CLUB IN GOA Page 10 of 20 . Body work out and exercise has become a daily life routine of many Americans in the last decade. Last five years have seen major changes in trends such as following: 1. 3. Health care expenditures are directly fueled by this increment in per capita income. Ease of Service: People are looking for exercises that are easy to adopt and are performed by expert trainers.

we have chosen Panjim as our preferred location. have their premises around Panaji. 2. With cases of obesity and diabetes even among young adults the focus will be on these young adults below 45 years of age. Research shows that about 8-12% children’s in India are overweight. Service Potential: Initially Fitness First will only be focusing on developing a fitness and health care facility.. A special focus will be to attract corporate customers as off late more and “FITTNESS FIRST” HEALTH CLUB IN GOA Page 11 of 20 . Treatment cost of obese patients is India is very expensive. They constitute major target for the health club industries. Companies are including health memberships as part of employee remuneration package. Miramar road. etc. as they are more conscious about their physique. Apart from a young college going population. Targeted Audience: Fitness First will be targeting the young college going students and working professionals. Panaji houses some of the largest corporate in Goa. in the age group below 25 years. A huge percentage of our population are affected with obesity. A big chunk of our population is young. Even doctors advice people to hit the gym 5.3. but in the future they are planning to extend its operations for creating public awareness about different disease and heath care issues on no profit basis. Location: Fitness First will start its first branch in Goa at Panaji. 4. The location is strategically chosen as it is the prime location in Goa. Diseases like Diabetics & Hyper tension are on the rise among the people. 3. Market Opportunities: Health care club industry offers a huge lot of opportunities for existing and potential investors. A lot of the major educational institutions like GMC. Marketing is growing for many reasons. Goa College Of Pharmacy. Goa University. Barriers to Entry: No such barriers in the entry of health care clubs in India. and also not easily available. working professionals. Fitness memberships are increasingly getting popular in office environment of India. Hence keeping the majority of the target audience who happen to be young college going students. some of them are following: 1. Goa College Of Architecture. GDC.

more companies have realised the value of healthy employees. Personal qualified trainers to help our members achieving results without wasting much time. With yoga now gaining popularity among old people. “FITTNESS FIRST” HEALTH CLUB IN GOA Page 12 of 20 . quarterly and annual subscription plans. we will have yoga gurus who will cater to the old people who may be unwilling to do physical exercise Competition: Although there are more then 50 small & medium gymnasiums in around Panaji. Fitness First will face a challenging situation in creating its brand image and attracting customers towards their services due to presence of already established players in the local market such as • • • • • • • Basilios Health Club Niomi’s Fitness Club Dorians Xtreme Fitness Fitness Zone Norberts Fitness Studio Body Sculpture Gym Power Flex Gym & Fitness Centre Marketing Strategy Value Proposition: • • • State of the art facility with latest equipment from quality manufacturers Low cost with monthly. Starting from as low as Rs 900 per month for basic body workout exercises.

specially women. They will convince people about the benefits and needs of wellness programs. as well as providing subscription online. They will also build close association with leading nutritionists and health therapist. This will be accomplished by aggressively pursuing interaction and relationships with peoples in public health awareness programs and by sending newsletters and emails through website. Marketing Objectives: Fitness First will focus on creating a brand image. to undertake their exercise without any disturbance. radio and printing brochures. Branding: Fitness First will create their official website for creating a brand and company image in the market. Special provision to take of children. They will participate in the major events of health care awareness and education programs in Goa. television. We will try and establish contact with the “FITTNESS FIRST” HEALTH CLUB IN GOA Page 13 of 20 . We will do extensive marketing through advertising on newspaper.• • Special discounts for corporate customers. Special focus will be on attracting corporate customers. Strategy: Fitness first will start by targeting the young college going and working professionals of market. thus enabling working parents.Incetives for annual/ 6 month subscription.

Lowest cost of service in the entire market of Goa. • • Opportunities: • • • • Health care club market is rapidly growing. SWOT Analysis Strengths: • • • Management committed towards to a result orientated approach to attract and maintain customers in a highly competitive market. • Weaknesses: • • Personal training services can be high in costs. Threats: • Recession and economic downturn can slow down the growth of health clubs. Company will hire qualified and trained staff. A large segment of market is still untapped. Fitness First is low in staff that can be problem in providing service to a large pool of members. Graphical Presentation of SWOT “FITTNESS FIRST” HEALTH CLUB IN GOA Page 14 of 20 . Increasing heart and obesity disease are causing people to pay importance to exercise and health care activities. Fitness First being a new entrant in the market will take time to establish its brand It may find difficult to find large business clients immediately. Health care program is well-thought according to the need of layman. low income area will be of special focus for Fitness First which is totally ignored by the rivals.HR departments of some of the leading MNCs in GOA and try and impress upon them our facilities. We may even provide them with some lucrative discounts in return of corporate memberships. People are getting use to have gym and health clubs in their daily routine of life.

Product: • • • • • • • • Health Care Services: Aerobics Cycling Boxing Yoga Pilates Muscle Training Diabetes & Obesity Control Price: Penetration Pricing: Fitness First will face a challenging situation in highly competitive market of Goa.Marketing Mix Fitness First health club’s marketing mix is based on the following factors of product. cost. distribution. This is less than “FITTNESS FIRST” HEALTH CLUB IN GOA Page 15 of 20 . advertising and publicity. Therefore health club will offer quality exercise and body work out services at Rs 900 per month.

Place: Direct Supply / Direct Sale : Fitness First will have their health club facility at Miramar Road. local television like Prudent Media & Goa 365 and Radio Mirchi as the medium of advertisement. 1000-1500. we will offer special discounts to encourage loyalty. Besides special incentives will be given to corporate customers. We will offer basic body workout and exercise service for only Rs900. they will be distributed in major health care seminars and events where officials from Fitness First will participate. In addition they will print 5. Panjim with future plans of opening up branch in south Goa. local newspapers like NH.existing market standard of Rs. in addition they will offer other services low in cost to compete with the market. Promotion: Media Advertising: Fitness First will use internet. which is maintained by other players.000 brochures for creating awareness in the market about their health care services. For customers who go for annual subscription. Herald. “FITTNESS FIRST” HEALTH CLUB IN GOA Page 16 of 20 . Operational Plan Service Execution Timeline: Fitness Plus will follow this service execution model to enter in the health club market.

Management and Organization Management Strength: Shyam Shet: Shyam (Myself) will be the owner and manager of overall operations of Fitness First.They are going to be the back bone of the business. we will recruit 2 helpers. Bankers: That will be decided based on the requirement of feasibility of business. and currently doing MBA from GIM. Apart from them.Legal Environment: There are no current legal obligations for Fitness Plus health club. I am a Mechanical Engineer. nutritionists. I have a total of 7 years of work experience in the field of sales & supply chain. I have been a great enthusiast of health care activities and is involved in them since my academic age. Advisor: “FITTNESS FIRST” HEALTH CLUB IN GOA Page 17 of 20 . Hence they will be recruited after a lot of scrutiny. and Homework. This will include qualified trainers. The total staff will be 8. who will assist them. yoga gurus. and will determine the success of the fitness club. Personnel: Fitness Plus will start with a total of 08 initial staff members. Besides the owner will actively participate in the say to day activities.

Financial Plan The start-up expenditures for Fitness First are summarized below: “FITTNESS FIRST” HEALTH CLUB IN GOA Page 18 of 20 .Miami Athletic Club & Wellness Center is the advisor of Fitness Plus.

Year): Sales Forecast (3 Years) Fitness First Health Club Memberships Year 1: 6600 Year 2: 7920 Year 3: 9504 Year 1 5940000 7524000 9028800 Year 2 Year 3 PROFIT & LOSS PROJECTION ( 3 YEARS) Year 1 “FITTNESS FIRST” HEALTH CLUB IN GOA Year 2 Year 3 Page 19 of 20 .Start-up Expenses(All Expenses in Rupees) Health club Development Personnel Capital expenditure Consulting service Promotion TOTAL 1400000 1250000 1200000 300000 200000 4350000 Revenue Forecast (3 .

000 2.30.com www.in “FITTNESS FIRST” HEALTH CLUB IN GOA Page 20 of 20 .20.69.000 2.000 13.21.bplans.000 3.510 5940000 5940000 7524000 7524000 9028800 9028800 References: www.000 3.goastatics.google.790 38.500 54.000 12.com www.com www.000 32.goa.50.63.79.00.90.000 2.gov.00.42.52.87.83.000 3.300 16.000 35.300 nil 15.59.500 14.000 12.000 12.03.20.000 9.95.700 29.50.37.00.Revenue Sales Health club memberships Total Revenue(Sales) Operating Expenses Health club development Personnel Capital Expenditure Consulting services Promotion Total Operaing Expenses Profit before tax Taxes( 30%) PAT 1700000 12.000 42.000 46.45.75.000 3.000 nil 13.12.

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