Business Plan for Ladybird Gym in UAE

This business plan outlines the objectives, mission, key to success, and areas of focus for Ladybird Gym in UAE. It also includes information on company ownership, start-up summary, and company locations and facilities.

Running head: BUSINESS PLAN
BUSINESS PLAN
Name of the Student
Name of the University
Author Note

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Table of Contents
1.0 Executive Summary...................................................................................................................3
1.1 Objectives..............................................................................................................................4
1.2 Mission..................................................................................................................................5
1.3 Key to Success.......................................................................................................................5
1.4 Areas of focus........................................................................................................................6
2.0 Company Summary...................................................................................................................7
2.1 Company Ownership.............................................................................................................7
2.2 Start-up Summary..................................................................................................................8
2.3 Company locations and Facilities........................................................................................11
3.0 Services....................................................................................................................................13
3.1 Service Description..............................................................................................................13
3.2 Competitive comparison......................................................................................................14
3.3 Fulfilment............................................................................................................................15
4.0 Market analysis Summary.......................................................................................................16
4.1 Market Segmentation...........................................................................................................17
4.2 Service Business Analysis...................................................................................................18
4.2.1 Business Participants....................................................................................................19
4.2.2 Distributing a service....................................................................................................19
4.2.3 Main competitors..........................................................................................................19
5.0 Strategy and Implementation summary...................................................................................20
5.1 Marketing Strategy..............................................................................................................20
5.1.1 Pricing strategy.............................................................................................................21
5.1.2Promotion strategy.........................................................................................................21
5.2 Sales strategy.......................................................................................................................22
5.2.1 Sales Forecast...............................................................................................................22
6.0 Management summary.............................................................................................................22
6.1 The Organizational structure...............................................................................................23
6.2 Management team................................................................................................................23
6.3 Management team Gaps......................................................................................................24
6.4 Personnel Plan.....................................................................................................................24
7.0 Financial plan...........................................................................................................................25
7.1 Crucial Assumptions............................................................................................................25

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7.2 Key Financial Indicators......................................................................................................27
7.3 Break even analysis.............................................................................................................27
7.4 Projected Profit and Loss for the firm.................................................................................30
7.5 Projected Cash Flow............................................................................................................32
7.6 Projected Balance Sheet......................................................................................................35
7.7 Business Ratios....................................................................................................................38
References......................................................................................................................................39
Bibliography..................................................................................................................................40
Appendix........................................................................................................................................42
The Loan Table..........................................................................................................................42

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1.0 Executive Summary
The Ladybird gym is a gym based in UAE which has been developed for the sole purpose
of providing a healthy lifestyle to the different women based in the United Arab Emirates.
Although there exists a considerable number of Gyms as present in the country, however, this
gym has a unique offering with respect to which, it can be rightfully understood that the firm will
be catering to the needs of only the women customers and lastly, they will also be coming up
with offerings which are unique and especially catered to those women who often get caught up
in their busy schedules and are unable to find time for their overall operations. In line of this, it
can be rightfully understood that, the gym will provide the different women with a sense of
freedom to work out peacefully and take care of their body needs without feeling conscious
about the different men surrounding them or they will not have any reason to feel unsafe.
Moreover, various gyms are often unable to provide flexible timings to the different individuals
and are either open during the morning hours or during the evening hours. However, it needs to
be understood that, this gym will be open at all hours so that the women who are working
professionals, who are home makers, who are mothers and those who are college students will be
able to take out time out of their busy schedule and are successfully able to give their health a
priority.
The health of the women needs to be kept at a considerably high because they can be
understood to be a foundation of the society. They often assist others in maintaining their health
but are often unable to ensure that they will be successfully able to cater to the needs of their
own health and do not make themselves the right priority. The Ladybird gym aims to make the
women a priority as it assists them in gaining long term success and will on the other hand, assist
the women to take care of their own health.

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Moreover, the given gym has been proposed to open in the UAE where there often exists
certain strict laws which have to be followed by the women with respect to the overall
operations. In line of this, it needs to be understood that, if the firm wants to ensure success, they
need to cater to these gaps. However, the income of the different individuals in the UAE can be
considered to be quite high and hence in line of this, they would be able to successfully attend
the gyms without worrying about the different costs as associated with it.
Year 1 Year 2 Year 3 Year 4 Year 5
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
$45,000,000
Highlights
Axis Title
1.1 Objectives
The overall objectives of the gym can be stated to be as follows:
1. The Ladybird Gym aims to provide welfare programs and relating health services to the
women in the United Aram Emirates
2. The firm also aims to provide flexible timings to the different women as per their own
needs which will also allow them to ensure that they are successfully able to manage their
health along with the overall general tasks they are associated with.

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3. The gym also aims to ensure that it will be successfully able to expand its operations in
the coming few years and also be able to engage into a lasting relationship with the
different customers.
1.2 Mission
The Ladybird Fitness Gym can be understood to be a gym, the idea of which has been
generated in order to ensure long term success of the women fitness freaks as present in the
United Arab Emirates. The gym wants the different women members to have good health and in
addition to this, it also wants them to have a successful personal gain and attain a balance in their
lifestyles. Moreover, when the women will get adequate time to focus on their health, they will
be able to attain an improved self-esteem and self-worth which shall create overall benefits for
their entire lives.
1.3 Key to Success
The Lady Bird Gym`s key to overall success in the long run can be understood to be as
follows:
 Marketing its services to the individuals as well as different colleges and companies.
 The firm also aims to hire experienced managerial talent
 The organization also aims to ensure that it is successfully able to focus on the dedication
and hard work of the founders.
 It aims to raise the overall productivity
 Moreover, another key to success for the Lady Bird Gym can be understood to be the
decrease in the overall costs.

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1.4 Areas of focus
Hence, in line of this, the business plan will focus on the overall managerial, financial as well
as marketing capabilities that the business would be required to make use of in order to ensure
overall success in the long run. The analysis of the overall business environment along with the
internal capabilities of the firm shall be provided.

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2.0 Company Summary
The Ladybird Gym aims to extend its overall operations in the in UAE and has been
developed and designed for the sole purpose of providing a healthy lifestyle to the different
women in the country. Although there are various businesses present in the country with the
same idea however, the idea which the firm aims to follow can be stated to be providing flexible
timings to the different women as present in the country. Moreover, the modern age women are
multitaskers and for this reason, the gym will provide timings for different types of women like
the office goers, the students and the home makers.
Fitness is an aspect which needs to be catered by all times of women and with respect to
this, it becomes considerably important for the firm to ensure that they are able to target those
women who want to give their health the primary priority and with respect to this, they are being
able to attend a gym which will provide different fitness facilities to these members. The
facilities which will be provided to them compose of Yoga classes, Zumba classes and general
fitness programs. The gym will be open at all hours and in line of this, it is crucial to understand
that this is to promote flexibility and allow the different women to visit the gym at considerably
flexible hours as per their convenience and time frame.
2.1 Company Ownership
The Lady Bird Fitness Gym has been designed as a privately held corporation and it will
be following all the legislative as well as regularity requirements of the country. This will ensure
that the firm is successfully able to carry out its different operations as present in the country and
is able to share the profits in the pre-decided manner.
 Rahul Bose: 30 percent
 Dave Stevenson: 30 percent

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 John Snow: 40 percent
2.2 Start-up Summary
Every business generally requires a considerate amount of investment in the beginning of
the project and in line of this, it can be largely understood that, even the Ladybird Fitness Gym
would be required to undergo this and invest soundly in the right places which will then assist
the business to find considerable success. The different aspects of the start-up investments and
the areas where the money will be invested in can be understood to be as follows:
Start-up Expenses
Buildings / Real Estate
Purchase AED 40,000
Construction 240,000
Remodelling 230,000
Other 23,000
Total Buildings and R / E AED 533,000
Leasehold Improvements
Item 1 AED 23,000
Item 2 40,000
Item 3 30,000
Item 4 40,000
Total L / H Improvements AED 133,000
Capital Equipment List
Furniture AED 400,000
Equipment 350,000
Fixtures 50,000
Machinery 23,000

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Other 55,000
Total Capital Equipment AED 878,000
Location and Admin Expenses
Rental AED 120,000
Utility Deposits 34,000
Legal and Accounting Fees 23,000
Prepaid Insurance 12,000
Pre-opening Salaries 30,000
Other 12,000
Total Location and Admin Expenses AED 231,000
Opening Inventory
Category 1 AED 40,000
Category 2 23,000
Category 3 23,300
Category 4 30,000
Category 5 -
Total Inventory AED 116,300
Advertising and Promotional Expenses
Advertising AED 50,000
Signage 23,000
Printing 1,200
Travel & Entertainment 30,000
Other / Additional categories 23,000
Total Adv and Promo expenses AED 127,200
Payroll and payroll taxes
Expense 1 AED 12,000

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Expense 2 12,000
Total Payroll and payroll taxes AED 24,000
Sources of Capital
Owners' Investment (name & % ownership)
Your name & % ownership
AED
3,000,000
Other Investor
3,000,0
00
Other Investor
4,000,0
00
Other Investor -
Total Investment
AED
10,000,000
Bank Loans
Bank 1
AED
1,000,000
Bank 2 -
Bank 3 -
Bank 4 -
Total Bank Loans
AED
1,000,000
Other Loans
Source 1
AED
-
Source 2 -

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Total Other Loans
AED
-
Summary Statement
Sources of Capital
Owners' and Other Investments
AED
10,000,000
Bank Loans
1,000,0
00
Other Loans -
Total Source of Funds
AED
11,000,000
Start-up Expenses
Bldgs / Real Estate
AED
533,000
Leasehold Improvements
133,0
00
Capital Equipment
878,0
00
Location / Admin Expenses
231,0
00
Opening Inventory
116,3
00
Advertising / Promo Expenses
127,2
00
Other Expenses
24,0
00
Total Start-up Expenses
AED
2,042,500

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2.3 Company locations and Facilities
The company aims to ensure that it is being successfully able to meet the needs of the
general audience and ensure that they are largely successful in increasing their operations. The
company shall be headquartered in Dubai and in line of this, they will be required to ensure that
all the paper work, hiring and the advertising task takes place. Moreover, there are various other
places like Sharjah as well as Abu Dhabi where the firm would like to expand its overall
operations.

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3.0 Services
The overall Business ratio analysis of the firm indicates that the firm will be performing
considerably well and in line of this, it can be rightfully understood that, the investment in the
particular initiative will being about considerable success in the overall operations of the
company and will ensure that the different owners of the business will be successfully able to
ensure a considerable market share in the long run.
3.1 Service Description
As mentioned earlier, the overall operations of the business can be understood to be
mainly catered towards the females who are the primary target market of the firm. In line of this,
the firm aims to provide flexible timings to the different customers who will then be able to
ensure that they are successfully able to attend the particular business at any time of the day as
per their busy schedule. Lady Birth Fitness centre aims to ensure that it is able to offer various
health as well as fitness programs to the different consumers and in line of this, the different
services which are largely offered by the firm can be stated to be as follows:
 Yoga: The gym will be offering various yoga classes to the different women as present as the
yoga is considered to be one of the most effective forms of meditation and in line of this,
engaging in the yoga therapy would go a long way in assisting the different customers to
achieve their overall objectives and also attain an inner peace of mind. In line of this, it is
also required to be understood that Yoga has various followers as present around the globe
and in line of this, it becomes considerably important to understand that the firm would
benefit from these operations.
 Zumba: The Zumba is a freestyle dancing exercise which is formulated for new fitness
enthusiastic as it goes a long way in ensuring that the firm is able to cater to the needs of the

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different users who will be willing to undertake the particular exercise and be willing to
concentrate on their overall health as well.
 Pilates: The Pilates is another form of the exercise which will assist the Fitness Centre to gain
considerable popularity as the Pilates is a good exercise which is specially designed for the
different women. Hence, for the Ladybird Gym can be considered to be a good initiative to
undertake this service under their basket of services.
 Body weight lifting: The Body weight lifting is another form of exercise which can be used
by the firm in its basket of exercises as it allows the different women who are fitness freaks
to develop their body and gain their requisite body weight which they have aimed for. In
addition to this, it is also important to understand that the body weight lifting is an extreme
form of exercise which are not offered by all the gyms as present around the globe. Hence, if
the Ladybird Gym offers this service to the different women as present in the target market
then it will become successful for them to ensure success in the long run.
 Free hand: The free hand exercise can be considered to be an integral offering which will be
made by the firm to the different women customers as present.
3.2 Competitive comparison
The competitive scope for the Ladybird Gym can be considered to be very fierce in
nature. This can be rightfully stated because, there exists a presence of more than 50 gyms which
offer the same service which is being offered by the firm (Anantadjaya 2013). In line of this, it
can be mentioned that, some of these popular gyms as present in the different parts of UAE can
be considered to be CrossFit Yas, RAK Ladies Gym, In shape Ladies Fitness gym, Gold`s Gym,
Rush Ladies Fitness centre among others. This particular set of gyms can be stated to be highly
popular and in line of this, it can be rightfully understood that, the Ladybird Fitness centre would
be required to ensure that it is successfully being able to meet the needs of the customers and

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provide them with adequate flexible timings through which they will be able to ensure that they
are able to gain a sustainable advantage in the long run.
3.3 Fulfilment
In order to ensure that the firm is successfully able to meet with the requirements of the
different members as present in the firm and that it is able to provide the customers with the right
type of equipment’s, the gym tends to maintain a separate set of distributors for that purpose and
in line of this, it can be mentioned that for the medical services, the firm tends to follow a
separate set of suppliers.

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4.0 Market analysis Summary
The global fitness industry has been increasing considerably and has been experiencing
considerable change. It can be rightfully stated that the industry has been undergoing a
considerable phase of change where it is important for the industry to ensure that it is
successfully able to achieve its overall objectives as well. According to Arabianbusiness.com
(2019), there are around 523000 members as present in around 800 fitness clubs in the UAE.
This makes it around 6% of the penetration of the total market available. The United Kingdom in
this case can be understood to be experiencing around 15% of the penetration which can be
considered to be a considerably good amount. Hence in order to achieve long term success in the
market it will become increasingly important for the club to provide the different customers with
offerings which are much higher than their overall expectations. This means that the different
fitness gyms would be required to come up with certain offerings which would be much more
than plain exercise regimes. The Ladybird Fitness would be required to essentially position
themselves in the exact manner which would then allow them to see to it the clubs have
progressed accordingly with time.
There has been a considerable change with respect to the pricing of the industry as well.
The average membership which a gym in UAE can be stated to be AED 440 in a month which
can be stated to be considerably high (Arabianbusiness.com 2019). Moreover, it also has to be
understood that many new gyms have been following the technique of affordable pricing which
will then allow them to perform considerably well. As the membership prices have been
increasing considerably, it becomes considerably crucial for the different firms to understand that
in case they want to segment the market into the premium then they would be required to present
a proper analysis of the same and come up with additional services which would encourage them

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to perform well. In addition to this, those gyms which are low pricing gyms would be required to
provide just the basic servicing so as to ensure that, they are successfully being able to serve the
customers in the right manner.
In the year, 2016, the UAE fitness market was worth AED 1.3 billion and by the year
2020 it is expected that the market will hit approximately AED 3 billion which can be considered
to be a considerably good number and will result in the new innovation and related aspects which
would encourage the different distributors, companies as well as suppliers to come up with new
offerings for the overall purpose of the firm.
There exists different Disruptors such as Gym Nation offer low cost products with
considerably big facilities which will then enable the firm to ensure considerable success and has
assisted the market in increasing the overall penetration. The different aggregators like the Class
Pass also tends to offer the different classes which then assist in making the overall operation as
unique. More initiative to penetrate into the market have also been provided like the Dubai
Fitness challenge which tends to spur the different individuals into the action and allows them to
attract millions of participants. Hence, on an overall basis it can be rightfully understood that the
overall challenge of the industry can be stated to be to attract the rest 94% of the population who
are not yet the particular gym members (Arabianbusiness.com 2019).
4.1 Market Segmentation
The market segmentation can be considered to be an integral component of the business
and in line of this, it is required to be understood that, if the firm wants to ensure success in the
long run, it would be required to expand its operations in the different parts of the country. The
different customer segments which the firm aims to cater its offerings to can be understood to be
as follows:

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 The working women: The working professionals are greatly engrossed in their overall work
and hence, the often do not get the appropriate time to carry out their different activities and
pay attention on the fitness regimes. Hence, by targeting them the firm will be able to ensure
that it is successfully able to meet the needs of the customer.
 The home makers: The home maker women often do not get the adequate time to look out
for their health aspects and in line of this, they will be targeted which shall allow the gym to
ensure that it is able to provide different exercises to this audience and attain considerable
success (Armstrong et al. 2015).
 The students: The college students and young school girls shall also be the appropriate target
of the firm which will enable them to ensure that they are successfully being able to meet the
needs of their health requirement and engage in considerable physical activity which shall
help them to engage in long term success.
 The fitness freak women: The fitness freak women can be stated to be the women who are
the regular visitors of the different gyms as well as the clubs. Ladybird gym can seek to
attract this crowd by providing them with services which shall meet their overall needs.
4.2 Service Business Analysis
There are a considerable number of fitness centres as existing in the UAE which tend to
provide similar, services to the different women as present. In line of this, it is required to be
understood that these gyms often fail to serve the needs of the women due to their limited
functional hours. Once the gym is unable to provide the flexible working hour flexibility to the
different consumers, it is unable to ensure that it will be able to find success. Hence, by offering
the unique services to the different customers and providing them with a custom plan and a
custom time operation, the firm would be able to achieve its target in the long run.

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4.2.1 Business Participants
As mentioned earlier, the different participants as present in the industry can be
considered to be very large in number and in line of this, it is required to be understood by
Ladybird Fitness centre that they are essentially required to ensure that they do not undertake any
initiatives which are similar in nature to these competitors. As mentioned various fitness centres
like Gold Fitness and Rush Fitness are global names which tend to attract a large number of
people. At the local level, very often the different individuals prefer joining a gym which is very
close to their places and this is where the role of the gyms like Gym Nation and class Pass
becomes considerably popular.
4.2.2 Distributing a service
As the country is a developing country, the gyms can be understood to be equally
distributed in the nature whereby a large majority of gyms are present in the main areas which
are located near the malls and the professional offices. These are the gym services which
generally tend to attract the maximum audience as the working professionals and the college or
school students find it very easy to commute to these gyms. However, there does exist a presence
of the gyms in suburban areas as well which attract the new settlers and additionally tend to be
bigger in size as they are developed in places which have a huge area.
4.2.3 Main competitors
The main competitors of the Ladybird Fitness centre can be understood to be as follows:
 Rush Ladies Fitness: The gym provides services like regular wellness programs as well as the
world class equipment’s which tends to make this gym a considerably popular one.

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 In shape Ladies Fitness gym: The In shape Ladies fitness gym is a gym which tends to cater
to the needs of the lowered incomed people. In this manner, they will successfully be able to
target those individuals who prefer cheaper gyms.
 Gold`s Gym: The Gold gym can be stated to be the gym which is a gym which is largely
targeted towards the motivated individuals and the dedicated working women who work
round the clock.
5.0 Strategy and Implementation summary
The overall strategy of the Lady Bird fitness can be understood to be based on raising the
overall productivity of the workers and alongside lowering the overall costs for the particular
business. The manner in which the gym should look out to attain this objective can be stated to
be by hiring and developing a healthy workforce. This means that, if the firm aims to ensure
success in the long run then in such a case, it will be required to hire a healthy workplace. In
addition to this, the different individuals who will be willing to join the particular gym will have
to be asked to look at the overall bigger picture. In line of this, it becomes considerably essential
for the business to ensure that they are successfully able to attract the right audience. The main
aim of the company generally lies to attract the audience in the right manner and highlight the
overall balance of a good health to them. As the firm plans to tailor the overall offerings as made
to the different women in order to ensure that they are successfully being able to gain the right
kind of popularity, it will become essentially important for them to see to it that these ladies are
able to understand that they need to prioritize their overall actions and similarly in line of this,
they will also be able to join the subscription.
5.1 Marketing Strategy
The Ladybird fitness will begin by first targeting the large corporations as well as
colleges which will provide them with an access to deal with the projected target market directly.

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In this manner, they will easily be able to achieve a large number of customers. By engaging in
this, Ladybird fitness will be able to easily find at least 100 to 150 customers per location.
Secondly, the Ladybird fitness has also planned to extend its operations to different home makers
as well and will be targeting these individuals using the medium of visiting the schools for the
mothers who drop and pick their children and additionally will also be targeting the shopping
malls and other beauty centres which are the regular places of visit for the different women.
Once the Lady Bird fitness will be able to establish a strong relationship with these places,
finding the gym subscribers will be considerably easy ((Arabianbusiness.com 2019).
5.1.1 Pricing strategy
The pricing which the Ladybird fitness aims to follow for itself can be largely stated to be
the higher pricing policy which can be understood to be in line with the higher end fitness
centres. The different fee structure per year can be understood to be AED500, AED700 or
AED600. These charges are varying depending on the kind of service the customer aims to adopt
which means that if they choose to adopt the basic services then the fees shall be a nominal of
AED500 whereas in case they plan to add other services to their portfolio then in such a scenario
the fees may then change and become to an average of AED700.
5.1.2Promotion strategy
The promotional strategy which shall be followed by the Ladybird fitness can be stated to
be very simple and systematic in nature which means that the firm will be required to undertake
initiatives to ensure that the plan which they are undertaking is successful (Hutt and Speh 2012).
Through this the firm would be using the medium of traditional marketing services like
newspaper advertising, billboards as well as advertising on radios as well as television.
Moreover, they Ladybird fitness will also aim to ensure that it is able to engage in social media

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advertising which will then enable to attain success in the long run. Various other media outlets
like mobile marketing and notifications shall also be made adequate use of.
5.2 Sales strategy
The sales strategy which the firm will be making use of can be largely stated to be the
direct sales strategy whereby the gym will be making the direct sales to the different customers
as present by engaging with them directly through mediums like shopping centres and direct
emails or mobile notifications (Hutt and Speh 2012). In addition to this, the firm will also be
following the medium of indirect sales processes through which the firm will be directing the
different colleges, offices and schools so as to ensure that the customers are able to subscribe to
the offerings as made by the firm.
5.2.1 Sales Forecast
6.0 Management summary
As mentioned earlier, the Ladybird Fitness Gym can be considered to be a corporate
venture which will be headed by three individuals. The posts of the three different people can be
understood to be as the Chief executive officer or the Sales manager. The second post can be
stated to be of the Director of health and fitness and the third will be the Direct of Accounting
and Finance (Beardwell and Thompson 2014). The Director of health and fitness can be
understood to be the individual who will be largely responsible for managing the different
individuals as present in the
firm and it will be their duty to ensure that they are successfully able to meet the different
supervisors, come up with new programs for the welfare of the different individuals and in
addition to this, the chief financial officer will be look after the various crucial financial

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requirements of the firm. In line of this, the CEO will be ensuring that all the operations are
carried out in a manner such that they are successful able to achieve their overall goals as well as
the overall objectives.
6.1 The Organizational structure
At present, as understood from the earlier analysis, only two branches of the firm have
been made which are the Accounting and Finance department and along with it the, Health and
Fitness department. Currently, these two branches have been provided with the sole opportunity
of managing the business on their own and in line of this, it can be largely understood that, the
firm will be managing it in this manner for now and it is in the long run that the firm will look
out to extend the operations of the company in the long run and come up with a more systematic
division.
6.2 Management team
1. Rahul Bose: As Rahul has been given the responsibility of becoming the CEO and
Director of Sales as well as Marketing. Mr. Bose will be required to be responsible for
providing adequate leadership, direction as well as be in charge of the control of the
various operations and will be responsible for seeing to it that there exists considerable
leadership in the workplace. Moreover, it is important to ensure that as Mr. Bose has
prior experience in managing and leading a firm, he will be the right person to do so.
2. Dave Stevenson: Dave will be the director of finance and administration who will be
required to control all the financial costs as associated with the firm and ensure that the
firm is successfully being able to engage in adequate profits in the long run. In addition to
this, it can be considered to be considerably important that the firm also engages in
effective auditing plans for itself in the long run.

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3. John Snow: : John would be responsible for the health and designing of various fitness
programs which would then assist the different supervisors in chalking out the various
plans which would be appropriate for themselves in the long run and would contribute to
the overall success of the firm.
6.3 Management team Gaps
The gaps which exist in the Ladybird Fitness comprises of the following:
 The lack of experience which exists in the fitness industry might act as a problem for the firm
in the long run.
 As they do not have prior experience in this area, then the management of finance and
accounting (Baden-Fuller and Haefliger 2013)
 Additionally, the mind-set of the firm generally revolves around immediate financial
prosperity with little patience for the minimum profitability.
6.4 Personnel Plan
The different employees who will be required to be hired in the firm can be understood to
be as follows:
 The fitness centre manager
 Program director
 Trainers
 Health and Fitness specialist
 Attendants
 Office staff
 Security

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7.0 Financial plan
It needs to be understood that a majority of the revenue as earned by the firm will come
from the service revenue whereby the firm will be providing services like gym and other
wellness programs.
The salaries and the cost of maintenance of the fitness centre can be considered to be the
two major expenses which will be incurred by the firm and in line of this, the firm would be
required to undertake considerable steps so as to ensure that they are successfully able to gain a
competitive edge.
7.1 Crucial Assumptions
The general assumptions which have been adopted in the case of the Lady Bird Fitness
can be stated to be as follows:
1. The firm will continue to grow at a stable rate without any recession or any boom.
2. There shall not take place any predictable changes in the fitness, medical and other office
equipment (Arnold 2013).
3. There shall not take place any event externally which will impact the overall profitability
of the firm.
The general assumptions can be taken to be as follows:
1. Year-one revenue expectancy
<Service
1>
<Service
2>
<Service
3>
<Service
4>
Number of units sold annually 500 600 700 500
Average sales price per unit AED13,000 AED13,50 AED14,00 AED15,00

26BUSINESS PLAN
.00 0.00 0.00 0.00
Annual revenue per Service AED6,500,
000
AED8,100,
000
AED9,800,
000
AED7,500,
000
Total year 1 revenue AED31,900
,000
2. Year 1 cost of goods sold
<Service
1>
<Service
2>
<Service
3>
<Service
4>
Expected gross margin per Service 20.00% 20.00% 20.00% 20.00%
Annual cost of goods sold per Service AED1,300,
000
AED1,620,
000
AED1,960,
000
AED1,500,
000
Total year 1 cost of goods sold AED6,380,
000
3. Annual maintenance, repair, and
overhaul
Factor (%) on capital equipment 10%
4. Number of years for straight-line
depreciation
5

27BUSINESS PLAN
5. Annual tax rate 30%
6. If long-term debt is being used to
finance
operations, enter the total loan
value.
1,000,0
00
7. Account receivable and payable
%
20%
7.2 Key Financial Indicators
In order to understand whether the firm will be a successful venture in the long run or not, the
following section will undertake the overall analysis of statements like the Cash Flow statement,
the Income statement and the Balance sheet to understand the overall aims and projections made
on behalf of the firm.
7.3 Break even analysis
The breakeven of the firm can be largely understood to be as follows:
Fixed
Expens
es
Fixed Expenses

28BUSINESS PLAN
Bldgs / Real
Estate
AED
533,000
Leasehold
Improvements 133,000
Capital
Equipment 878,000
Location /
Admin Expenses 231,000
Opening
Inventory 116,300
Advertising /
Promo Expenses 127,200
Other Expenses
24,000
Total Fixed
Expenses
AED
2,042,5
00
Variabl
e
Expens
es

29BUSINESS PLAN
Inventory or
Materials
10%
Direct labour
(includes payroll
taxes)
30%
Other expenses 20%
Other expenses 10%
Salaries
(includes payroll
taxes)
20%
Supplies 10%
Total Variable
Expenses
100%
Breakeven
Sales level =
AED2,0
63,131.
31
Year 1 Year 2 Year 3 Year 4 Year 5
Net income
(loss)
-
AED2,0
63,131.
31
AED17,
455,351.
13
AED17,
810,131.
49
AED18,
534,488.
36
AED19,
664,798.
72
AED21,
262,511.
57
Cumulative
income
AED15,
392,219.
AED33,
202,351.
AED51,
736,839.
AED71,
401,638.
AED92,
664,149.

30BUSINESS PLAN
82 30 66 38 95
Positive Cash
Flow?
TRUE TRUE TRUE TRUE TRUE
Undiscounted
breakeven year
1 years
Actual break
even period
0.12 years
7.4 Projected Profit and Loss for the firm
Year-by-year profit and loss assumptions
Year 1 Year 2 Year 3 Year 4 Year 5
Annual cumulative price
(revenue) increase
- 2.00% 4.00% 6.00% 8.00%
Annual cumulative inflation
(expense) increase
- 2.00% 4.00% 6.00% 8.00%
Interest rate on ending
cash balance
0.50% 0.50% 0.50% 0.50% 0.50%
Year 1 Year 2 Year 3 Year 4 Year 5
Revenue
Gross revenue AED31,9
00,000
AED32,5
38,000
AED33,8
39,520
AED35,8
69,891
AED38,7
39,482

31BUSINESS PLAN
Cost of goods sold AED6,38
0,000
AED6,50
7,600
AED6,76
7,904
AED7,17
3,978
AED7,74
7,896
Gross margin AED25,5
20,000
AED26,0
30,400
AED27,0
71,616
AED28,6
95,913
AED30,9
91,586
Other revenue [source] AED0 AED0 AED0 AED0 AED0
Interest income AED0 AED0 AED0 AED0 AED0
Total revenue AED25,5
20,000
AED26,0
30,400
AED27,0
71,616
AED28,6
95,913
AED30,9
91,586
Operating expenses
Sales and marketing AED127,
200
AED129,
744
AED134,
934
AED143,
030
AED154,
472
Payroll and payroll taxes AED24,0
00
AED24,4
80
AED25,4
59
AED26,9
87
AED29,1
46
Depreciation AED308,
800
AED314,
976
AED321,
152
AED327,
328
AED333,
504
Maintenance, repair, and
overhaul
AED87,8
00
AED89,5
56
AED91,3
12
AED93,0
68
AED94,8
24
Total operating
expenses
AED547,
800
AED558,
756
AED572,
857
AED590,
413
AED611,
946
Operating income AED24,9 AED25,4 AED26,4 AED28,1 AED30,3

32BUSINESS PLAN
72,200 71,644 98,759 05,500 79,640
Interest expense on long-
term debt
AED35,9
84
AED28,5
99
AED20,9
19
AED12,9
31
AED4,62
4
Operating income before
other items
AED24,9
36,216
AED25,4
43,045
AED26,4
77,841
AED28,0
92,570
AED30,3
75,017
Loss (gain) on sale of
assets
AED0 AED0 AED0 AED0 AED0
Other unusual expenses
(income)
AED0 AED0 AED0 AED0 AED0
Earnings before taxes AED24,9
36,216
AED25,4
43,045
AED26,4
77,841
AED28,0
92,570
AED30,3
75,017
Taxes on income 30
%
AED7,48
0,865
AED7,63
2,913
AED7,94
3,352
AED8,42
7,771
AED9,11
2,505
Net income (loss) AED17,4
55,351
AED17,8
10,131
AED18,5
34,488
AED19,6
64,799
AED21,2
62,512
Cumulative income AED17,4
55,351
AED35,2
65,483
AED53,7
99,971
AED73,4
64,770
AED94,7
27,281

33BUSINESS PLAN
7.5 Projected Cash Flow
Year 1 Year 2 Year 3 Year 4 Year 5 Total
Operating activities
Net income AED17,4
55,351
AED17,8
10,131
AED18,5
34,488
AED19,6
64,799
AED21,2
62,512
AED94,7
27,281
Depreciation AED308,
800
AED314,
976
AED321,
152
AED327,
328
AED333,
504
AED1,60
5,760
Accounts
receivable
(AED127
,600)
(AED260
,304)
(AED406
,074)
(AED573
,918)
AED0 (AED1,36
7,896)
Inventories (AED63,
800)
(AED130
,152)
(AED203
,037)
(AED286
,959)
AED0 (AED683,
948)
Accounts payable AED25,5
20
AED52,0
61
AED81,2
15
AED114,
784
AED0 AED273,
579
Amortization 0 0 AED0 AED0 AED0 AED0
Other liabilities 0 0 AED0 AED0 AED0 AED0
Other operating
cash flow items
0 0 AED0 AED0 AED0 AED0
Total operating
activities
AED17,5
98,271
AED17,7
86,712
AED18,3
27,744
AED19,2
46,033
AED21,5
96,016
AED94,5
54,776
AED0
Investing activities AED0

34BUSINESS PLAN
Capital
expenditures
AED0 AED0 AED0 AED0 AED0 AED0
Acquisition of
business
0 0 0 0 0 AED0
Sale of fixed
assets
(AED7,4
80,865)
(AED7,6
32,913)
(AED7,9
43,352)
(AED8,4
27,771)
(AED9,1
12,505)
(AED40,5
97,406)
Other investing
cash flow items
0 0 0 0 0 AED0
Total investing
activities
(AED7,4
80,865)
(AED7,6
32,913)
(AED7,9
43,352)
(AED8,4
27,771)
(AED9,1
12,505)
(AED40,5
97,406)
Financing activities
Long-term
debt/financing
(AED184
,627)
(AED192
,012)
(AED199
,693)
(AED207
,680)
(AED215
,988)
(AED1,00
0,000)
Preferred stock 0 0 0 0 0 0
Total cash
dividends paid
0 0 0 0 0 0
Common stock 0 0 0 0 0 0
Other financing
cash flow items
0 0 0 0 0 0
Total financing
activities
(AED184
,627)
(AED192
,012)
(AED199
,693)
(AED207
,680)
(AED215
,988)
(AED1,00
0,000)

35BUSINESS PLAN
Cumulative cash
flow
AED9,93
2,779
AED9,96
1,787
AED10,1
84,699
AED10,6
10,582
AED12,2
67,523
AED52,9
57,370
Beginning cash
balance
AED8,95
7,500
AED18,8
90,279
AED28,8
52,066
AED39,0
36,765
AED49,6
47,347
Ending cash balance AED18,8
90,279
AED28,8
52,066
AED39,0
36,765
AED49,6
47,347
AED61,9
14,870
7.6 Projected Balance Sheet
Assets Initial
balance
Year 1 Year 2 Year 3 Year 4 Year 5
Cash and short-term
investments
AED8,9
57,500
AED18,
890,279
AED28,
852,066
AED39,
036,765
AED49,
647,347
AED61,
914,870
Accounts receivable AED6,3
80,000
AED6,5
07,600
AED6,7
67,904
AED7,1
73,978
AED7,7
47,896
AED7,7
47,896
Total inventory AED3,1
90,000.0
0
AED3,2
53,800.0
0
AED3,3
83,952.0
0
AED3,5
86,989.1
2
AED3,8
73,948.2
5
AED3,8
73,948
Prepaid expenses 0 0 0 0 0 AED0
Deferred income tax 0 0 0 0 0 AED0
Other current assets 0 0 0 0 0 AED0
Total current assets AED18,
527,500
AED28,
651,679
AED39,
003,922
AED49,
797,732
AED61,
269,191
AED73,
536,71

36BUSINESS PLAN
4
Buildings AED533
,000
AED533
,000
AED533
,000
AED533
,000
AED533
,000
AED53
3,000
Land 0 0 0 0 0 0
Capital
improvements
AED
133,000
133,000 133,000 133,000 133,000 133,000
Machinery and
equipment
AED
878,000
878,000 878,000 878,000 878,000 878,000
Less: Accumulated
depreciation expense
0 308,800 623,776 944,928 1,272,25
6
1,605,7
60
Net
property/equipmen
t
AED1,5
44,000
AED1,2
35,200
AED920
,224
AED599
,072
AED271
,744
(AED6
1,760)
Goodwill AED0 AED0 AED0 AED0 AED0 AED0
Deferred income tax 0 0 0 0 0 0
Long-term
investments
0 0 0 0 0 0
Deposits 0 0 0 0 0 0
Other long-term
assets
0 0 0 0 0 0
Total assets AED20, AED29, AED39, AED50, AED61, AED73

37BUSINESS PLAN
071,500 886,879 924,146 396,804 540,935 ,474,95
4
Liabilities Initial
balance
Year 1 Year 2 Year 3 Year 4 Year 5
Accounts payable AED1,2
76,000
AED1,3
01,520
AED1,3
53,581
AED1,4
34,796
AED1,5
49,579
AED1,5
49,579
Accrued expenses 0 0 0 0 0 0
Notes payable/short-
term debt
0 0 0 0 0 0
Capital leases 0 0 0 0 0 0
Other current
liabilities
Total current
liabilities
AED1,2
76,000
AED1,3
01,520
AED1,3
53,581
AED1,4
34,796
AED1,5
49,579
AED1,5
49,579
Long-term debt from
loan payment
calculator
1,000,00
0
AED815
,373
AED623
,361
AED423
,668
AED215
,988
AED0
Other long-term debt AED0 AED0 AED0 AED0 AED0 AED0
Total debt AED2,2
76,000
AED2,1
16,893
AED1,9
76,941
AED1,8
58,464
AED1,7
65,567
AED1,5
49,579

38BUSINESS PLAN
Other liabilities 0 0 0 0 0 0
Total liabilities AED2,2
76,000
AED2,1
16,893
AED1,9
76,941
AED1,8
58,464
AED1,7
65,567
AED1,5
49,579
Eq
uit
y
Initial
balance
Year 1 Year 2 Year 3 Year 4 Year 5
Owner's equity
(common)
AED
10,000,0
00
AED10,
000,000
AED10,
000,000
AED10,
000,000
AED10,
000,000
AED10,
000,000
Paid-in capital 0 0 0 0 0 0
Preferred equity 0 0 0 0 0 0
Retained earnings 0 0 0 0 0 0
Total equity AED10,
000,000
AED10,
000,000
AED10,
000,000
AED10,
000,000
AED10,
000,000
AED10,
000,00
0
Total liabilities and
equity
AED12,
276,000
AED12,
116,893
AED11,
976,941
AED11,
858,464
AED11,
765,567
AED11
,549,57
9

39BUSINESS PLAN
7.7 Business Ratios
The different financial ratios which have been calculated for the purpose of the business.
Ratios Year 1 Year 2 Year 3 Year 4 Year 5
Debt to Equity
Ratio
0.21168
9
0.19769
4
0.18584
6
0.17655
7
0.15495
8
Current Ratio
22.0140
1
28.8153
6
34.7071
9
39.5392
4
47.4559
2
Quick Ratio
19.5140
1
26.3153
6
32.2071
9
37.0392
4
44.9559
2
Return on
Equity
1.74553
5
1.78101
3
1.85344
9 1.96648
2.12625
1
Net profit
margin
0.68398
7
0.68420
5
0.68464
7
0.68528
2
0.68607
4
These financial ratios tend to reflect that the overall operations of the company have been
going considerably well and with respect to this, it can also be understood that, if the firm
continues to grow in this rate, it will be gaining long term success.

40BUSINESS PLAN
References
Anantadjaya, S.P. ,2013. Entrepreneurs vs. Business Plans: A study of Practicality and
Usefulness.
Arabianbusiness.com 2019. Business of Fitness UAE [online]. Available at:
https://www.arabianbusiness.com/lifestyle/wellness/377764-business-of-fitness-uaes-380m-
exercise-industry-enters-new-cycle (Retrieved on: 15 May. 2019).
Armstrong, G., Kotler, P., Harker, M., and Brennan, R. ,2015. Marketing: an introduction.
Pearson Education.
Arnold, G., 2013. Corporate financial management. Pearson Higher Ed.
Baden-Fuller, C. , and Haefliger, S. ,2013. Business models and technological innovation. Long
range planning, 46(6), pp.419-426.
Beardwell, J. , and Thompson, A. ,2014. Human resource management: a contemporary
approach. Pearson Education.
Hutt, M.D., and Speh, T.W., 2012. Business marketing management: B2B. Cengage Learning.

41BUSINESS PLAN
Bibliography
Best, R. ,2013. Market-based management. Pearson Higher Ed.
Boons, F. and Lüdeke-Freund, F. ,2013. Business models for sustainable innovation: state-of-
the-art and steps towards a research agenda. Journal of Cleaner Production, 45, pp.9-19.
Bratton, J., and Gold, J. ,2017. Human resource management: theory and practice. Palgrave.
Burns, P., 2016. Entrepreneurship and small business. Palgrave Macmillan Limited.
Bygrave, W.D. and Hofer, C.W., 1992. Theorizing about entrepreneurship. Entrepreneurship
theory and Practice, 16(2), pp.13-22.
Chwolka, A. ,and Raith, M.G. ,2013. The value of business planning before start-up—A
decision-theoretical perspective. Journal of Business Venturing, 27(3), pp.385-399.
Drucker, P., 2014. Innovation and entrepreneurship. Routledge.
Eckhardt, J.T. and Shane, S.A., 2003. Opportunities and entrepreneurship. Journal of
management, 29(3), pp.333-349.
Hodgetts, R.M. and Kuratko, D.F., 2001. Entrepreneurship: A contemporary approach. South-
Western/Thomson Learning.
Keller, K. L., and Kotler, P. ,2016. Marketing management. Pearson.
King, R.G. and Levine, R., 1993. Finance, entrepreneurship and growth. Journal of Monetary
economics, 32(3), pp.513-542.
Kuratko, D.F., 2016. Entrepreneurship: Theory, process, and practice. Cengage Learning.

42BUSINESS PLAN
Mullins, J., Walker, O.C., and Boyd Jr, H.W. ,2013. Marketing management: A strategic
decision-making approach. McGraw-Hill Higher Education.
Parker, S.C., 2018. The economics of entrepreneurship. Cambridge University Press.

43BUSINESS PLAN
Appendix
The Loan Table
Loan payment calculator
Annual interest
rate
4.0% Note: This calculator can generate
principal and interest payments for a
period of up to 30 years (360 months).Monthly rate 0.33%
Loan amount 1,000,000
Term of loan
(months)
60
Payment (AED18,384.
27)
Month Principal
balance
Principal
payment
Interest Payment
1 AED1,000,00
0
(AED15,111) (AED3,27
4)
(AED18,38
4)
2 984,889 (15,160) (3,224) (AED18,38
4)
3 969,729 (15,210) (3,175) (AED18,38
4)
4 954,520 (15,259) (3,125) (AED18,38
4)
5 939,260 (15,309) (3,075) (AED18,38

44BUSINESS PLAN
4)
6 923,951 (15,359) (3,025) (AED18,38
4)
7 908,592 (15,410) (2,974) (AED18,38
4)
8 893,182 (15,460) (2,924) (AED18,38
4)
9 877,722 (15,511) (2,873) (AED18,38
4)
10 862,211 (15,562) (2,823) (AED18,38
4)
11 846,649 (15,613) (2,772) (AED18,38
4)
12 831,037 (15,664) (2,721) (AED18,38
4)
13 815,373 (15,715) (2,669) (AED18,38
4)
14 799,658 (15,766) (2,618) (AED18,38
4)
15 783,892 (15,818) (2,566) (AED18,38
4)
16 768,074 (15,870) (2,514) (AED18,38
4)

45BUSINESS PLAN
17 752,204 (15,922) (2,463) (AED18,38
4)
18 736,282 (15,974) (2,410) (AED18,38
4)
19 720,308 (16,026) (2,358) (AED18,38
4)
20 704,282 (16,079) (2,306) (AED18,38
4)
21 688,203 (16,131) (2,253) (AED18,38
4)
22 672,072 (16,184) (2,200) (AED18,38
4)
23 655,888 (16,237) (2,147) (AED18,38
4)
24 639,651 (16,290) (2,094) (AED18,38
4)
25 623,361 (16,344) (2,041) (AED18,38
4)
26 607,017 (16,397) (1,987) (AED18,38
4)
27 590,620 (16,451) (1,934) (AED18,38
4)
28 574,169 (16,505) (1,880) (AED18,38

46BUSINESS PLAN
4)
29 557,665 (16,559) (1,826) (AED18,38
4)
30 541,106 (16,613) (1,771) (AED18,38
4)
31 524,493 (16,667) (1,717) (AED18,38
4)
32 507,826 (16,722) (1,662) (AED18,38
4)
33 491,104 (16,777) (1,608) (AED18,38
4)
34 474,328 (16,831) (1,553) (AED18,38
4)
35 457,496 (16,887) (1,498) (AED18,38
4)
36 440,610 (16,942) (1,442) (AED18,38
4)
37 423,668 (16,997) (1,387) (AED18,38
4)
38 406,671 (17,053) (1,331) (AED18,38
4)
39 389,618 (17,109) (1,276) (AED18,38
4)

47BUSINESS PLAN
40 372,509 (17,165) (1,219) (AED18,38
4)
41 355,344 (17,221) (1,163) (AED18,38
4)
42 338,123 (17,277) (1,107) (AED18,38
4)
43 320,846 (17,334) (1,050) (AED18,38
4)
44 303,512 (17,391) (994) (AED18,38
4)
45 286,121 (17,448) (937) (AED18,38
4)
46 268,674 (17,505) (880) (AED18,38
4)
47 251,169 (17,562) (822) (AED18,38
4)
48 233,607 (17,619) (765) (AED18,38
4)
49 215,988 (17,677) (707) (AED18,38
4)
50 198,310 (17,735) (649) (AED18,38
4)
51 180,575 (17,793) (591) (AED18,38

48BUSINESS PLAN
4)
52 162,782 (17,851) (533) (AED18,38
4)
53 144,931 (17,910) (474) (AED18,38
4)
54 127,021 (17,968) (416) (AED18,38
4)
55 109,053 (18,027) (357) (AED18,38
4)
56 91,025 (18,086) (298) (AED18,38
4)
57 72,939 (18,145) (239) (AED18,38
4)
58 54,794 (18,205) (179) (AED18,38
4)
59 36,589 (18,264) (120) (AED18,38
4)
60 18,324 (18,324) (60) (AED18,38
4)