Financial Analysis and SWOT Analysis of Health Planet

Health Planet is a new business venture that aims to provide specialized fitness and health services to women. The company will offer various services such as swimming, group exercise classes, club room, and membership facility to cater to the needs of its target audience. With a focus on differentiation strategy, Health Planet plans to operate efficiently in a competitive market dominated by major competitors like Women's Fitness, Curves, and Places for People. A SWOT analysis reveals the company's strengths, weaknesses, opportunities, and threats, which will help inform business decisions. The financial projections indicate that the company will have an opening balance of $0, with total cash inflow of $150,000 and total cash outflow of $138,500, resulting in a net cash flow of $11,500.

BUSINESS PLAN

Table of Contents
BUSINESS CONCEPT...................................................................................................................1
RATIONALE OF THE CONCEPT................................................................................................1
BUSINESS LOCATION.................................................................................................................2
Market entry mode.......................................................................................................................2
MOVEMENT OF LOGISTICS.......................................................................................................2
RESOURCE REQUIREMENT.......................................................................................................3
MARKET ANALYSIS....................................................................................................................3
PLAN TO MITIGATE THE RISK.................................................................................................4
MARKETING MIX OF GYM NAMED HEALTH PLANET IN LONDON................................5
FINANCIAL PLAN........................................................................................................................6
PRODUCTS AND SERVICES.....................................................................................................10
COMPETITOR ANALYSIS.........................................................................................................10
SWOT ANALYSIS.......................................................................................................................11
REFERENCES..............................................................................................................................12

BUSINESS CONCEPT
The present business idea is based on opening of Gym named Health planet in London
through which large number of services will be delivered to people living in UK. The proposed
business concept is totally new as demand for Gym is strongly rising in the market and to meet
with the demand business such as health planet is feasible. Further, it is well known fact that in
the modern era people living in society are focusing more towards fitness and they prefer to
purchase services which are offered in the Gym for fitness purpose. Gyms operating in the
market supports in maintaining health with the help of different type of equipments. Apart from
Gym, Spa services are also delivered to the customers as this act as source of attraction and
through this business can easily survive in the market.
RATIONALE OF THE CONCEPT
The new business associated with opening up of new Gym for Women is unique where
demand for fitness services is increasing at faster pace. With the growth in economy of UK
demand for gym services in rising and it is beneficial for the businesses that are planning to carry
out operations in this field. Around 32 percent of gym users in the UK prefer to pay per visit and
30 percent of the individuals would like to pay flat annual fee (2015 STATE OF THE UK
FITNESS INDUSTRY REPORT PUBLISHED YESTERDAY., 2015). Further, the industry
analysis has shown that consumer spending on UK gym membership has soared by 44% as
compared with the last year. Discerning along with health conscious consumers are demanding
different effective ways with the help of which they can maintain their body.
Moreover, it is possible for them to take advantage of new technology such as wearable
device along with applications. Apart from this, rise in level of gym membership has increased
spending on eating near about 27%. Concept of budget gym is also rising in the market and this
has attracted large number of individual towards the gym services. They have basically targeted
the lower end of the market. Number of UK fitness members in the market of London has
exceeded 1.5 million for the first time. Overall level has raised which considers 5.8% in the total
membership and 5.4% in the overall market value (UK gym membership spending up by 44%,
2015). Further, total market value is estimated to be £4.3 billion. This directly represents that
market of fitness is highly healthy and this is providing large number of opportunities to business
who are carrying out operations in this sector.
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BUSINESS LOCATION
The new business will be located in prime location so that it is possible for each and
every individual to approach the place for fitness purpose. Further, the specific location selected
for opening up of new Gym is Hampshire which is a country on the southern coast of England in
UK. Further, it is one of the most ceremonial country in United Kingdom and by setting up
business in this country it is possible for the new business to grab large number of opportunities
which are being present in the market. Apart from this, many other Gyms are already established
in this location due to which it is one of the main reason regarding selection of this place for
setting up Gym for women.
Market entry mode
For any new business it is necessary to select the appropriate market entry mode so that it
is possible to enter into the market.
Differentiation strategy
The new business named health planet can enter into market through differentiation
strategy as through this it is possible for business to differentiate its services from those of
competitors in the market. Further, it is well known fact that market where new business will
operate is highly competitive due to which business is required to differentiate its services from
other companies. This strategy is most appropriate for business and can assist in attracting large
number of customers in the market. Apart from this, generally all the services delivered by Gym
to their target market are almost same and due to this basic reason differentiation strategy can
provide base to the new business so that all the Gym services can be offered to them easily. This
can build unique image of firm in the minds of target market where customers will perceive
services of health planet unique and they can be easily influenced to purchase them.
Cost leadership
Further, cost strategy will also support new business where all the fitness services will be
offered to women at low cost which may not be offered by other businesses in the market.
Therefore, this can also support business in gaining competitive advantage and can support in
attracting large number of customers keeping in view their expectations along with overall
requirement in the market. Therefore, the two strategies will be fruitful for business and can
support new business to accomplish its long term aims along with objectives in the market.
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Market entry strategy such as differentiation is beneficial for business as through this it is
possible for Health planet to differentiate its key services from those of competitors in the
market. Further, business will operate in the market where level of competition is high and this is
one of the main reasons behind selection of differentiation strategy for business. Apart from this,
cost strategy will also provide base to new business where all the services can be offered to
target market at low cost and this can assist in gaining competitive advantage. These two
strategies will provide long term benefits to the business and can support to sustain in the market
for longer period of time.
MOVEMENT OF LOGISTICS
For conducting business operations in effective manner it is necessary to have proper
logistics. For new business proper transportation facilities are available through which Gym
equipments and other type of machineries will move from one place to another. In short, success
and growth of business in the market depends on the type of logistics operations being
employment and movement of goods in timely manner can support business to carry out overall
operations in proper manner keeping in view expectations of its target market. In country like
UK proper transportation facilities are easily available due to which it is profitable for business
who are setting up new businesses in any particular sector.
Movement of materials will take place with the help of proper transportation facility.
Generally in case of Health planet equipments such as machines will be transported when
business will purchase them. So, movement will take place through road transport and it is
convenient for business also. All the equipments and machineries will be purchased from
London and same will be kept in the place where fitness services will be rendered to target
market.
RESOURCE REQUIREMENT
For conducting overall operations in appropriate manner it is necessary for business to
estimate well in advance the range of resources required. New business named health planet
requires range of resources which are human, financial, technological etc. Through all these
resources it is possible to offer fitness services to women in appropriate manner. Human as a
resource is necessarily required where firm will hire Gym trainers so that appropriate services
can be rendered to the customers. Apart from this, proper system of training will be organized so
that human resource can know about the range of Gym service. Effective hiring of workforce
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will provide proper support to enterprise and in turn customers can be easily served by the new
business in the market. Apart from this, technology is another type of key resource which is
required by business where business will use advanced tools and equipments for delivering
fitness services. Therefore, considering this resource will also be fruitful for business and in turn
can act as development tool for the enterprise. Further, finance as a resource is also required
where adequate amount of finance is required for purchasing machinery and other equipments.
Main sources of finance which will be considered in case of present business is owner’s capital
with the help of which operations can be carried out easily. It is well known fact that to establish
Gym business requires high amount of investment and for satisfying the overall financial needs it
is necessary to consider appropriate sources through which such needs can be satisfied easily.
Health planet will hire 10 trainers and on the basis of customers response more
employees will be hired by business for rendering services as per their expectation level. Further,
it will be ensured in advance that staff members are having proper knowledge regarding fitness
services as through this they will be able to serve customers in better manner.
Further, the main sources of finance considered by business are owner’s capital and bank
loan through which business will satisfy its financial needs. Apart from this, majority of the
amount will be obtained with the help of bank loan and this will be favorable for business.
Further, company will have to pay expenses in the form of interest for the amount obtained and
this will be one of the major expense for business.
MARKET ANALYSIS
Before establishing any type of business in the market it is necessary to carry out market
analysis so that overall need along with requirement of target market can be known easily. Total
market value of fitness industry is estimated to be at £4.3 billion, up 5.4% on 2014. Further, it
has been assessed that 13.7% of the population of UK are now registered as members of private
health and fitness club. Moreover, the total industry membership is regarded as one of the
strongest indicator up 5.8% to 8.8 million over the past (2015 STATE OF THE UK FITNESS
INDUSTRY REPORT PUBLISHED YESTERDAY., 2015). In the year 2015 around 191 new
public along with private fitness facilities have been opened and the main reason behind same is
rise in demand for fitness services. Therefore, new entrepreneurs are setting up business in this
sector. Apart from this, at present 6312 fitness facilities are present in UK wherein last year it
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was 6112. On the other hand, the overall growth in the industry continues to be driven by strong
performance from the increasing low cost market in the private sector.
PLAN TO MITIGATE THE RISK
The new proposed business of a Women Gym is going to run under some risks that are
pertaining to market and capabilities of business. However, the new entity has to be prepared
from mitigating such risks and being successful in the marketplace. There are three kinds of
major risk that the company has to face for operating business in the marketplace such as
competition, health and safety and financial risk.
Potential risk Ways to mitigate risk
Competition There are number of Gyms in the marketplace
that provides a strong competition to the new
business, however, the risk can be reduced via
taking strategical steps towards the business
and comping up with new concept. The unique
concept of new proposed business is women
finesses, therefore, the risk of competition can
be mitigated.
Health and Safety In the Gym concept, there can be seen a risk of
being injured of members of Gym. To mitigate
the potential risks Health and safety training
are to be provided to Gym trainers so as to
provide the best services to the members. This
is to be bring into notice that Gym is going to
arrange a training sessions for physical trainers
and going to appoint experience personas for
taking good care of people.
Financial risk In addition to that there is a potential risk of
finance for the new business. The availability
of financial sources is a major issue and the
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appropriate use of financial resources is going
to be done by the management (Guo-bin and
Ya-jun, 2012).
Risks
 Competition is one of the major risks which can influence efficiency of the business.
Market where health planet will operate in market where many companies are operating
in the market.
 Health and safety is another risk which health planet can face. It is possible that
employees may not be provided proper training due to which safety issues can be faced
by business and for the same corrective actions have to be taken.
 Financial is also one of the risks which health planet can face as it is possible that
situation such as inadequacy of finance may adversely affect business and to deal with
such type of situation business has to manage funds in appropriate manner.
Risk mitigation
Following are the ways through which business can easily mitigate risk
 There are number of Gyms in the marketplace that provides a strong competition to the
new business, however, the risk can be reduced via taking strategically steps towards the
business and coming up with new concept. The unique concept of new proposed business
is women fitness; therefore, the risk of competition can be mitigated.
 In the Gym concept, there can be seen a risk of being injured of members of Gym. To
mitigate the potential risks Health and safety training are to be provided to Gym trainers
so as to provide the best services to the members. This is to be bring into notice that Gym
is going to arrange a training sessions for physical trainers and going to appoint
experience personas for taking good care of people
 In addition to that there is a potential risk of finance for the new business. The
availability of financial sources is a major issue and the appropriate use of financial
resources is going to be done by the management (Guo-bin and Ya-jun, 2012).
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MARKETING MIX OF GYM NAMED HEALTH PLANET IN LONDON
Product Mix – The products of gym includes the machinery that are going to be provided to
have services to maintain health and safety health of female customers. The health services and
other aerobic steps, yoga classes and all other.
Price Mix – The prices of products and services are arranged in order to provide value for money
to the customers as well as to generate higher sales and profits (Lovelock, 2011). The Gym is
going to adopt the concept of competitive and premium pricing.
Place mix – The place play a crucial role in the process of providing better services and
sanctification to the customers. The ambiance of gym and the location is going to be designed
perfectly for making effective distribution of services. The timings will be 6 am to 9 pm where
female customers can join as per their convenience (Dapprich, 2010).
People mix – The people mix references to the human resources of the Gym who will provide
the services to members. The Gym is going to have efficient and skilled people and looks that the
staff will highly professional and skilled. These staff will be responsible of providing personal
trainers to the staff.
Process Mix – The process of providing services and products to the customers are very quick
and improved. The Gym is going to use improved machinery to provide good services such as
Upright and recumbent bikes, Step-mills, Treadmills, Steppers, Rower etc (Long, 2012).
Promotion Mix – The new Gym is going to adopt aggressive promotion campaign and is going
to adopt some traditional methods such as use of print media, e-business, discount on
membership and so on. In addition to that, social media marketing is going to be used for
connecting large number of customers.
Physical evidence – The physical outlets of Gym as well as use of improved and high quality
fitness machines, professional environment including the best atmosphere is going to be
supportive for business success (Guo-bin and Ya-jun, 2012).
FINANCIAL PLAN
To assess the financial feasibility of a business plan is required to identify the success of
business in future. For the new business , this is quite important to identify the suitable sources
of finance , the company is going to assess finance from two sources such as Owner's capital
and Bank loan.
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Owner's capital £100000
Bank Loan £50000
Revenue 0
Forecasted Income statement
Year 1
(£)
Revenue 144000
Less: Cost of goods sold 43200.00
Gross profit 100800.00
Rent 12000.00
Utilities and maintenance 6000.00
Salaries 26000.00
Insurance 500.00
Promotion and
advertisements 1000.00
Depreciation 10000.00
Miscellaneous expenses 3000.00
Preliminary expenses wr.of 3850.00
Total operating expenses 62350.00
PBIT 38450.00
Interest payment 3000
PBT 35450.00
Tax payment 7090
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Net profit 28360.00
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Balance Sheet
Year 0
(£)
Year 1
(£)
Assets
Fixed assets 50000.00
100000.0
0
Less depreciation 0.00 20000.00
Net fixed assets 50000.00 80000.00
Total fixed assets 50000.00 80000.00
Preliminary expenses 38500.00 34650.00
Current assets
Cash-in-hand 11500.00 43710.00
Accounts receivable 0.00 15000.00
Total current assets 11500.00 58710.00
Total assets
100000.0
0
173360.0
0
Liabilities
Long-term liabilities
Bank Loan 50000.00 40000.00
Short -term liablities
Accounts payable 5000.00
Total liabilities 50000.00 45000.00
Capital
Owners' capital 100000.0 100000.0
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0 0
Retained earnings 0.00 28360.00
Total capital
100000.0
0
128360.0
0
Total liabilities &
Equity
150000.0
0
173360.0
0
Cash flow statement
Pre-operating
year
Year 1
(£)
Money In
Owner's capital 100000 0
Bank Loan 50000 0
Revenue 0 144000
Total Money In 150000 144000
Cash Outflow
Purchase of Fixed Assets & equipment 100000 0
Legal fees 500 0
Infrastructure & Designing 30000 0
cost of goods 0 43200
Rent 0 12000
Utilities, maintenance & Delivery
charges 0 6000
Salaries 0 26000
Insurance 0 500
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Promotions and advertisements 2000 1000
Miscellaneous expenses 6000 3000
Interest 0 3000
Tax payment 0 7090
Loan Repayment 0 10000
Total Money Out 138500 111790
Net cash flow 11500 32210
Opening balance 0 11500
Net cash flow 11500 32210
Closing balance 11500 43710
PRODUCTS AND SERVICES
The present business named health planet will offer large number of services to womens
which are as follows:
 Swimming
 Group exercise classes
 Club room
 Membership facility
These are some of the serviced which will be delivered to customers with the motive to
satisfy their need in efficient manner. Apart from this, new services will also be added in the
present range so that loyal customers can be retained for longer period of time in the market.
COMPETITOR ANALYSIS
Health fitness will carry out operations in the market where competition level is quite
high in the field of Women fitness and the major competitors of business are:
 Women fitness (Women’s fitness., 2015)
 Curves (Curves., 2015)
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 Places for people (Places for people., 2015)
These three are the main competitors of health fitness who are offering fitness services to the
individuals in the market. Further, services of new business and its major competitor are same.
By focusing on differentiation strategy it is possible for company to operate efficiently in the
market.
SWOT ANALYSIS
Undertaking SWOT analysis supports new business in knowing in knowing its internal
strengths along with weaknesses. Further, external opportunities and threats can be easily
identified which business has to undertake while carrying out overall operations in the market.
Strengths
 Specialized fitness along with health
plans for womens
 Unique internal environment
 High quality services
 Knowledgeable trainers
Weaknesses
 Lack of online presence
 New business
 No brand awareness
 Weak supply chain
Opportunities
 Innovation in the field of fitness
industry
 Introduction of new services
 Technological development
Threats
 Intense competition
 Substitute services
 Mature market
So, the above shown is SWOT analysis of health planet which highlights the key
strengths of the business which will allow company to perform efficiently in the market.
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