BUSINESS PLAN AND BUSINESS MODEL CANVAS
Executive summary
The report consists of the detailed analysis of the business plan and business model canvas for Elite health and fitness gym. The business plan will help to gain knowledge about the resources, competencies and activities to be performed in the future. The business model canvas is presented while framing the nine building blocks that consist of key resources, key partners, key activities, value proposition, channels, customer relationship, customer segment, cost and revenue of the business. Along with this, market analysis, human resources, technology and operations, and the financial structure of the business is analysed.
Contents
4.0 Operations and technology. 9
4.4 Sales and Distribution. 10
4.7 Moral and ethical issues. 10
1.0 Introduction
Business model and planning process is presented in the report. For any business or start-up business, it is important to ensure that a business model is prepared and a business plan is accordingly presented to focus on the success of the business. I have presented an idea of the new business in the fitness industry in Australia. The fitness industry in Australia is booming while the market is seeking ways to inspire. Elite health and fitness is the company which is planned and forecasted with business ideas and business model canvas. The business will be profitable as people are conscious of physical health. The new idea is to focus on physical and mental health as well. Some experts and trainers will ensure individual results for the client and customer while organizational performance will be expected by internal as well as external stakeholders. The report includes the business model canvas, market, operations and technology, human resources and finance of the business.
2.0 Business model canvas
A business model helps the organization to create value, deliver and gain value of the business with the business components (Sort & Nielsen 2018). A business model canvas tool is effective as the business model shares and describes the business ideas while assessing the business objectives and creating strategic alternatives (Huang & Pearce 2015). Elite health and fitness company in Australia will engage in the business model canvas as prepared with several components.
| Key partners Staff Expert trainers Customers Local business Hotels and resorts Counsellors Coach
| Key activities Fitness workshop Health awareness programs Provide physical fitness in the gym Community program Help build mental health Counselling
| Value Proposition Physical exercise Yoga Meditation Spas
| Customer Relationship Well trained experts High-quality services Affordable price
| Customer Segment Price sensitive customers Trainers as experts Workout buddies
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| Key resources Infrastructure Fitness equipment Spa
| Channels Online ordering Word of mouth Home delivery | ||||
| Cost Structure Fitness equipment cost Maintenance cost Spa cost Salary to experts and trainers Employee engagement cost Infrastructure cost
| Revenue streams High-level guidance Service benefit Event planning profit Membership benefit Additional service benefit of counselling | ||||
2.1 Key activities
The key activities that the business will focus on is to provide mental and physical health to the customers, work on health awareness programs, event planning, workshop programs and providing the importance of mental health to people. These are the core activities that the organization will engage with the help of strategic partners.
2.2 Key partners
The key partners of the business are staff, expert, trainers, coach, counsellors, local business and customers. These are the key partners that help to in the business activity while using key resources in the business. Key partners are the internal and external stakeholders of the business (Osterwalder 2010).
2.3 Key resources
Key resources of the business include the type of resources used by the organization to achieve the organizational goal (Ritchie, Komo & Ngugi 2013). The value propositions and customer relationships require the major aspect of physical, human, financial and intellectual resources. The fitness company requires a good infrastructure, human resources, fitness equipment and spa facilities.
2.4 Value proposition
A value proposition is a building block that helps to deliver effective results to the customers while focusing on the key objectives of the company (George 2011). Mental and physical health fitness is achieved to solve the problems and offer customer needs that help to gain customer satisfaction. Physical exercise, meditation, spa and mental health are the core factors and analysis of the business. The company performance is depended on the value proposition that the company provides to the customers.
2.5 Customer relationship
Due to affordable pricing, health awareness programs and high-quality services, customer relationship is built by the organization (Lund & Nielsen 2014). It is important to maintain customer relationship while providing benefit to the customer in terms of physical and mental stability. Personal trainers should be provided, self-service offers, community development and co-creation activities are the best activities that will help to build customer relationship.
2.6 Customer segment
To focus on a particular customer segment, it is important to assure that certain customers are the target that will help to create the value of the business. The most important customers in the fitness industry are workout buddies who always need a gym, trainers who wish to focus on bodybuilding and price-sensitive customers.
2.7 Channel
With the help of word of mouth, online service and home delivery service for mental health will help to gain customers and provide a brand image for the company. Special yoga trainers can be sent at home if there the customer needs it personally.
2.8 Cost structure
The overall cost structure includes infrastructure cost, maintenance cost, salary and employee engagement programs (Gilmore 2013). These will help to determine the cost of the business.
2.9 Revenue streams
Revenue streams include the profit of the company such as membership registration, event planning, high-level guidance for home delivery and counselling benefits that helps to increase the profit of the business.
3.0 Market
3.1 Size of the market
Australia’s gym market is at the saturation stage. Fitness centres have grown and the annual profit of the fitness industry is increasing. The market is growing with full capacity while the customers are concerned with the physical and mental health.
3.2 Growth rate
The growth of $2.2 billion was observed in 2017 while it is expected to grow in the year 2022 with 1.8%. The competition in the fitness industry is very competitive as there is several gyms and fitness centres that provide keen services and keeps on growing in the market. For the new competitors, the barrier for entry is the huge investment that needs to be done in the gym. Fitness equipment and infrastructure of the gym is costly. Brand image is the next thing that customers prefer in the fitness industry.
3.3 Trends
The market trends that negatively hinder the fitness industry is analyzed in detail. With the growth in the fitness industry, there is a rapid evolution of services and experiences for customers. The new fitness boutiques are the trends that are seen in the industry. Gyms have taken measures to focus on economic seismic shifts and make relevant measures to bifurcate the cost options for consumers. Boutique membership is a costly measure that is introduced to the consumers while there is flexible participation that ensures consumer preferences. Technology is a positive trend that provides online platforms for members to join and register in the gym. There are wearables such as smartwatches that track and evaluate the performance of an individual.
3.4 Market segmentation
The market segmentation takes place while dividing the customers and attracting those customers who are willing to join in a fitness centre. Market segmentation is based on geographic, demographic and socio-cultural segmentation (Cavalcant 2011). The fitness centre is located in Sydney Australia, thereby customers from the particular region are attracted. Customers ranging from 18-60 years are segmented based on the standard of living and new concepts. Gym buddies, working-class and students are attracted.
3.5 Target customers
Target customers range from 18-60 years who are fond of physical health and fitness. Working-class people are attracted to several strategies that ensure excellent customer satisfaction.
3.6 Product/Service
Currently, the customers are getting the services from other fitness centres that are well-known in the city. The major competitors of the fitness centre Elite are Anytime fitness, city gym and a gym.
3.7 Location
The business is located in Sydney, Australia. With the promotional and advertising strategy, the expected number of customers are 100-200.
4.0 Operations and technology
4.1 Technology
The options for developing the technology is designed by a contract as the technology is the pervasive statement of growth which is very important (Burns 2011). New equipment for the gym and the latest technology to get connected with customers need to be adopted. All the gym members should work on a specific app to control physical fitness.
4.2 Technological changes
The state of art plasma in the fitness industry is the new thing that is witnessed in Australia. Exercise demos are played and the timing of each exercise is demonstrated with specific wearables. Adopting this smart art plasma technology, there will be positive changes that will be witnessed in the company.
4.3 Service
The options for producing the service are entrepreneurship which can be handled by a single owner and can be managed by a number of staff and trainers in the business. The investment of AU$ 80,000 is the initial cost of the business.
4.4 Sales and distribution
Direct contact with customers can be made with the help of advertising technique. The owner can directly represent the idea and provide service to customers.
4.5 Resources
Resources used for the business are machines for exercises, vertical lifts, spa equipment, etc. The suppliers of the business are fitness equipment manufacturers, beauty service suppliers and alternate therapy services. Trainers are appointed to provide the best service to the customers as the customer expectations are higher while investing in the company resources.
4.6 Laws and regulations
Fitness Australia is largely related to Fair Trading practices and business works on Government on code. Fitness Industry Code of Practice is used by fitness centres in relevance to fitness plain terms. Several standards of training are applied and the business is bound to use this code.
4.7 Moral and ethical issues
There are ethical problems such as renewals, privacy, best interests, product issues, etc. These are the major issues that are claimed by customers while applying for club susceptible. Sexual harassment in the club and discrimination are few other problems.
5.0 Human resources
5.1 Management experience
Human resources management is important as it ensures managing its employees while dealing with important aspects like recruitment, paying, discipline, monitoring and organizing people in the business. Technical experience such as working on the latest systems to manage the HRIS and managing people in the organization is required in the business.
5.2 Owners
Entrepreneurs are the owners of the business. The role of an entrepreneur is to focus on opportunity recognition, opportunity evaluation and opportunity identification which leads to achieving the goal of the organization. Entrepreneurs seek to pursue the opportunity and develop effective solutions to achieve the needs of the organization.
5.2 Ownership structure
A company is a legal existence that is used by the personal efforts of the owners. There are tax advantages while forming the company, thereby an entrepreneur works towards engaging in forming a company as a business structure.
5.3 Manpower requirements
Human resource planning is very important in any business. Thereby to select the best employee that suits the right job is a complex process. In the first year, 10 employees will be needed, in the second year 15 employees will be needed as per the business expansion, finally in the third year while the company is in the development stage it will require more than 20 employees. Finding the right employee is a complex task, thereby it is important to work on a recruitment process. Employees will be compensated equally as the moral ethics of the company need to be maintained (Cosenz 2017). Employees will be compensated as per the knowledge and experience. Employee motivation is in the form of monetary and non-monetary form. The monetary term includes providing benefits to employees. In an ongoing basis, training in terms of using new technology, exercise and building a strong relationship with client and customers is important.
5.4 Growth strategy
Growth strategy of the company is to provide physical fitness to people who need it daily. Quality services are the prime key of attracting customers thereby it needs to be managed by providing the value of services that the customers are unaware. The information related to health and service will attract customers. Employees will be available for training customers and providing mental and physical health practices.
6.0 Finance
7.0 Conclusion
The report presents the business plan for Elite health and fitness business. The business canvas model is presented to ensure that the activities in the future will ensure growth and success. The business model represents the building blocks that engage and link with each other to produce effective results. The business plan consists of marketing analysis, human resource analysis, operations and technology and financial structure of the business. With the growth strategy, organization structure changes due to the increase of human resources, marketing activities and operational services.
8.0 References
Burns, P., 2011, Entrprneurship and Small Business – Start up, Gowth and Maturity, 3rd ed. London: Palgrave.
Cavalcant, S. K., 2011, Business model dynamics and innovation:. (re)establishing the missing linkages. Management Decision, vol. 49, no. 8, pp. 1327-1342.
Cosenz, F., 2017, Supporting start-up business model design through system dynamics modelling, Management Decision, Vol. 55 No. 1, pp. 57-80
Gilmore, A., McAuley, A., Gallagher, D., Massiera, P. and Gamble, J. 2013, Researching sme/ entrepreneurial research: a study of journal of research in marketing and entrepreneurship (jrme) 2000-2011, Journal of Research in Marketing and Entrepreneurship, Vol. 15 No. 2, pp. 87-100.
George, G. 2011, The business model in practice and its implications for entrepreneurship research. Entrepreneurship Theory and Practice, pp. 83-111.
Huang, L. and Pearce, J.L., 2015, Managing the unknowable the effectiveness of early-stage investor gut feel in entrepreneurial investment decisions”, Administrative Science Quarterly, Vol. 60 No. 4, pp. 634-670
Lund, M. and Nielsen, C., 2014, The evolution of network-based business models illustrated through the case study of an entrepreneurship project, Journal of Business Models, Vol. 2 No. 1, pp. 105-121.
Ritchie, G., Komo, L.W. & Ngugi, I.K., 2013, Key Success Factors of Small Business. Journal Business and Globalisation, vol. 11, no. 1, pp. 86-95.
Osterwalder, Y. P., 2010, Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers Paperback. jeroen kraaijenbrink
Sort, J. & Nielsen, C., 2018, Using the business model canvas to improve investment processes, Journal of Research in Marketing and Entrepreneurship
Appendices