MANAGEMENT REPORT
OPERATIONS DECISIONS
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September 11, 2020MANAGEMENT REPORT
Table of Contents
Table of Contents
Finance and marketing officer. 5
conclusion……………………………………………………………………………………………………………………………………………….9
Executive summary
The business outlined in this proposal is a fitness center that will offer a variety of exercise techniques, which target the female office workers, students, and tourists. This market is profitable and has the possibility of bringing in over $1.2 billion annually (Australian Bureau of Statistics (ABS), 2011, 4). ABS reports suggest that the memberships of private exercise clubs have been increasing yearly.
The ABC Fitness Center seeks to offer its members and patrons quality benefits and services, which are rivalled by no other fitness center. The investment will be used wisely in order to have sports facilities that caters for the needs of the customers. It has been identified that the top three profitable services are massage therapy, personal training, and health foods and beverages. The ABC Fitness Center will provide these top three services, thus increasing productivity.
Through our knowledge of the Sidney CBD area and the existing willingness to take risks, the ABC Fitness Center will be a to-go-to fitness center leading to profitability. The Sidney CBD where the fitness center will be located has a large population of female office workers and students. The location is also a high-traffic area for tourists. This, therefore, means that the clientele pool is large, and the target clients have the socioeconomic status that will be required to maintain our service.
The fitness center will be coordinated among four employees, including the owner to create “the ultimate sport’s fitness.”
The objectives of the ABC Fitness Center are the following:
- To exceed 75-% class capacity by the end of the first year of operation
- To enroll 350+ memberships by the end of the second year of operation
- Increase the number of new members by 15% by the end of the third year.
Mission Statement:
The mission of the ABC Fitness Center is the following:
- To create a quality client focused fitness environment that seeks to meet the fitness goals and promote confidence in the clientele.
The target market is the office female workers who are interested in an active lifestyle, students from the various colleges and universities who may not be able to afford the expensive memberships, and the tourists. The target market is good since there is a large volume of people in the category who are able to access the ABC Fitness Center.
Location of ABC Fitness Center is one of the most important aspects of the proposed business. The location will determine the number of office women, students, and tourists (the target market) who will be able to access the fitness center. The Sidney CBD where the fitness center will be located has a large population of female office workers and students. The location is also a high-traffic area for tourists. The identified rental space is conveniently located between the junction of Bathurst and Elizabeth Streets. It has a total floor space of about 10,000 square feet. It is not only ideal because it has sufficient parking area, but also because of the spacious area that allows for the hosting of several facilities. Additionally, it is easily accessible, and it is located in a high-traffic area. To lease the property, ABC would have to pay $2 per square foot monthly. It, therefore, means that the fitness center will pay $ 20,000 every month.
Owner- C.E.O
The owner will not draw any salary from the business for the first six months of operation. Thereafter, he will be paid $40 per hour.
Job description: to carry out the day-to-day management of the fitness center and to meet with the prospective clients, and financiers
Finance and marketing officer
Available position: one
The finance and marketing officer will be employed on a permanent basis. S/he will be paid $ 25 per hour.
Job description: come up and outline the marketing strategies that the fitness center will implement. Responsible for the maintaining the books of account of the fitness center
Trainers
Available positions: three
The trainers will be working on a commission basis, and they will be paid according to the number They will be paid $12 per hour.
Job description: the trainers will train the individuals to use the facilities in the fitness center safely to achieve maximum benefits.
Cleaner
Available positions: one
The cleaner will receive $ 5.80 per hour and will be a part-term employee: they will only be on call when there is work available.
Job description: ensure that all the fitness center’s facilities are clean. Pick up the luggage left behind by the members and mop the floors
Below isa list of Strengths, Weaknesses, Opportunities, and Threats (SWOT) for the ABC Fitness Center. The fitness center will use the list to maximize on its strengths and opportunities while at the same time minimize its weakness and threats.
| Internal factors | Strengths | Weakness |
| Product | Clean and stylish | Members do not have the option of group training |
| No long term commitment | No on-site extras such as spa and steam room | |
| Payment is staggered over a period of a month | ||
| Personal trainer | ||
| Price | Low monthly membership fee | The annual fee is payable regardless of the use of the members use of the facility |
| Low annual membership fee as compared to the competitors | ||
| Promotion | Many channels are available of reaching the customer | Some advertisements options are expensive. |
| External factors | Opportunities | Threats |
| Place | Located in a high-traffic area | Small facility that will eventually lead to a cap on the number of members |
| Competition | Membership for the existing fitness centers are higher | Most of the target market are already members in the existing fitness centers |
| Socioeconomic | There is an increasing trend in getting fit | Seasonal customers may not be willing to pay for the annual membership |
A fitness center is a service facility that provides physical health care and exercises to its members with the help of specialized equipment. The fitness center environment is casual to provide the customers with a comfortable experience. The health and wellness industry is highly competitive. Each fitness center seeks means of competing effectively within the industry. The high returns and the growing trend of the multitude of people to seek health and fitness centers attract new entrants into the industry. There are no significant barriers to entry of new firms. The threat of substitutes in the health care and exercise industry is negligible (Michael, Nicholas, and McGahan, 1998, 44). Physical health requires the use of special equipment and personalized guidance from a trainer: can only be accessed in a fitness center. The industry is customer oriented. Due to the cutthroat competition, the customers have a wide variety of offerings (Porter, E. 2008, 12-15)
Plans and Strategies to gain competitive advantages (strategic management process)
The ABC Fitness Center will provide and employ value proposition. It will ensure it acquires a state of the art facilities fitted with the latest equipment from quality manufacturers. Additionally, it will employ a low monthly and annual subscription plans. The members who sign up will enjoy personalized attention from the qualified trainers so that they achieve the results they want (Stauffer, D. 2003, 56-58). Implementing promotion strategies such as giving T-shirts and attire that has the company logo will also be used to further market the center. Organizing seminars and workshops for University trainers will also aid in selling the center to more people as the trainers will offer advice to the students on the benefits of visiting the Fitness center. It is also helpful if the center was to organize workshops in the neighboring universities to offer free training and lessons to the students and also to the companies so as to increase the popularity and the target of the company (Nelson and Nelson, 2008, 68).
The proposed start-up capital for the ABC Fitness Center is $300,000. The investor has put down half of the amount ($150,000) as part of the starting capital. There is, however a deficit of $150,000. The investor proposes to apply for a loan from the XYZ Bank to cover the deficit. The ABC Fitness Center has a unique opportunity to tap into the large number of people who are becoming health conscious. The target market of the employed women, students, and tourists will ensure there is the required cash flow to repay the loan.
Conclusion
In conclusion, through the strategies and the location of the fitness center, it is deemed to attract a lot of people who require fitness training in the area. The numbers will only increase as the center becomes more popular, and the revenues will, therefore, increase with the expansion of the clientele. The ABC Fitness Center will expand in the future and create more opportunities for other members and, from its objectives, expand to other regions in Australia. It is, thus, viable idea for funding from the bank. The structures and realistic budgets that the company has drafted are evident of the projected growth and prosperity of the center.
ABS (Australian Bureau of Statistics), 201. Perspectives on Sport.Commonwealth of Australia, Canberra.
Michael, P., Nicholas, A., Anita, M., 1998.An Interview with Michael Porter.The Academy of Management Executive16:2:44.
Nelson, S. S., & Nelson, S. S., 2008. Strategic planning for results (Fully rev. ed.). Chicago: American Library Association.
Porter, E. (2008) The Five Competitive Forces That Shape Strategy.Harvard business Review.
Stauffer, D., 2003. The Power of Competitive Intelligence. Cambridge: Harvard Business School Publishing.
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