Finance and Resourcing Dissertation Report: City Family Fitness Centre

This dissertation report focuses on the financial aspects of establishing a family fitness center. It includes projected sales and profit forecasts based on membership fees, expected cash flow statements, and a two-year profit and loss statement and balance sheet. The report identifies implementation strategies, assumptions behind the financial projections, and potential risks such as recession, inflation, and competition, along with strategies to mitigate these risks. The financial analysis is supported by various assumptions including wage rates, taxation rates, and customer behavior. The report includes references to relevant literature and appendices with detailed financial data, providing a comprehensive overview of the financial planning and risk management for the fitness center, with a focus on resourcing and sustainability. The report also analyzes the importance of adapting to customer needs and adopting new technologies to stay competitive.

DISSERTATION

Table of Contents
FINANCE AND RESOURCING....................................................................................................3
35 Expected sales and profit.......................................................................................................3
36 Expected cash flow statements...............................................................................................3
37 Projected Profit and Loss and balance sheet for two years....................................................3
38 Identification of implementation strategies and assumptions for projected statements.........4
39 Identification of risks and strategy to manage these..............................................................4
REFERENCES................................................................................................................................6
APPENDICES.................................................................................................................................8

FINANCE AND RESOURCING
35 Expected sales and profit
Revenue of this family fitness centre are fortecasted on teh basis of member ship fee
charges from the customers on montly basis (Bose, 2006). This centre runs for 8 hours and 54
days in a week in order to facilitate all theior custoimers with their oprecious services and
facilties. The average capacity of this place is taken as for 20 families of standard four member
per family. The sales are foreacted for this centre in a category of threesiuch as normal
membership which charge around $428, Membership witbpersonal trainers charges $471 and last
option is membership with additional facilties charges around$518 per families. The number of
familities in year one taken aas small ratio of 21 familoies whicxh graduuallt increases as per the
budget and capacity generated by the enterprise (Davies and Drexler, 2010). The additional
facilities provided by this enterprise is chid care services which allow a mother to take care about
their health as the child are takencare at teh bsame place.
36 Expected cash flow statements
The cash flow statements are given below in appendices are prteaprerd by taking into
considerations all the reveneues and incomes generated by this enterprise and all expenses are
also form part of this cash flow forecast (Dayananda, 2002). The rates of utilities and
maintenance are taken asd per the standard rates of utilities bills in Newzealand. The rent opf the
place in which this centre is located are also taken into considerations as per the monthly. The
wages are taken as per the national standard wage rates of Newzealand that is $14.5 of hour rate.
It is charded to all the workrs for 2hrs in a week of 5 days (DaDalt and Coughlin, 2016). The
salarries of the personal trainers are taken as 20 per hour as per 8 hours in a day and for another
trainers the rate is 30 hour oper day as thehir capabilities experienxce are more than this trainer.
The expenses also included payment of bnbank loan taken to initiate the business proceedings.
37 Projected Profit and Loss and balance sheet for two years
The cash flow forecasting is used as a basis for preparing profit and loss statement in
order to ascertain the profitability of this small scale enterprise. It will consider the salers figure
generated from cash flow forecasting abnd all optyher operating expenses in form of salariers,
wages, marketing promotion expenses (Fletcher, 2016). It also considered taxation rate of the

country as it has observed that the profiut in first yesr is 20351 which increases in 2 year with
huge amount of percentage change of more than 50% and again gets increases in third year.
38 Identification of implementation strategies and assumptions for projected statements
There are several assumptions taken by an enterprise while pojecting their financial
outocomes generated by this firm in near future.The sales and revenues are taken on the
membership decided by the owbner as per their average families taken up by an enitity in their
fist year. The expenses are are also backed up by different assumptions on teh basis of wage rate
that is styandard wage rate of $14.5 per hour, hourly rate oif salaries for oersonal trainers are 20
and 30 (Hira, 2016). The taxation rate is taken as 28% as per the specific nature of teh business
and income produces by the business.
39 Identification of risks and strategy to manage these
Business plan is based on some specific assumptions about the future interest rates,
exchange rates, tax rates, market growth and behaviour of customers and competitors, etc. So,
small changes in these assumptions may affect the whole business performance in negative
manner (Hosain, 2016). So, business owner needs to use appropriate risk assessment and
management strategy for identifying and managing different types of risk in starting a new
fitness centre. The major risks that may affect the overall business in negative manner will be
recession, inflation, government rules and regulations, tax rates fluctuations, changes in customer
needs, technical risk, legal risks, financial risks, quality issues and competition risks, etc. All
these risks will have negative impact on overall sales and profitability of the fitness centre.
Recession and inflation have direct impact on purchasing price of customers or clients of
fitness centre so, business owner needs to forecast economic position of the country in advance
which will have help in making the appropriate strategy for managing such type of risk (Kostova
and Nell, 2016). Along with this, changes in government rules, regulation, tax rates and
legislation business owner of City Family Fitness Centre should develop organizational policies
with considerations of all rules and regulations because these will help in developing appropriate
strategies for managing business performance. Including this, due to the changes in life style
fitness center can face the problem of changes in customer’s needs also (Hiro and Sofat, 2010).
So, business owner needs to provide customize services for satisfying needs and
requirements of customers, it will help in managing such type of risks in effective manner. Along

with this, for managing technical risks City Family Fitness Centre should adopt the latest
technologies for exercise which will help in improving the quality of services as well as this
strategy will also attract customers. For managing financial business owner will use appropriate
financial tools such as budgeting, investment appraisal method, and activity based costing and
financial statements (Jorgensen and Rotter, 2016). These tools and techniques will help in
managing financial performance of the company in effective manner. Further, for reducing
competition and attaining competitive advantages City Family Fitness Centre will differentiate
its services from existing competitors. For example, new business will shed light on Yoga with
exercise which will help in making differentiation in services with existing competitors.
Therefore, these will play important role in managing competition risk in effective manner.
Overall, all the above discussion strategy will play significant role in managing risks and
improving performance of City Family Fitness Centre in effective manner (Hill and Clarke,
2013).

REFERENCES
Books and journals
Bose, C., 2006. Fundamentals of Financial Management. PHI learning.
Coronel, C. and Morris, 2016. Database Systems: Design, Implementation, & Management.
Cengage Learning.
Correia, C. and Flynn, D., 2012. Financial Management. Business Enterprises.
DaDalt, O. and Coughlin, J. F., 2016. Managing Financial Well-Being in the Shadow of
Alzheimer’s Disease. Public Policy & Aging Report. 26(1). pp.36-38.
Davies, H. and Drexler, M., 2010. Financial Development, Capital Flows, and Capital Controls.
InThe Financial Development Report 2010. Geneva and New York: World Economic
Forum. Pp. 31–47.
Dayananda, D.,2002. Capital Budgeting: Financial Appraisal of Investment Projects. Cambridge
University Press.
Ehrhardt, M. and Brigham, E., 2016. Corporate finance: A focused approach. Cengage Learning.
Elearn, 2013. Financial Management Revised Edition. Routledge publication.
Evans, M. and Porter, R., 2010. Real estate financial reporting and accounting. Journal of
Property Investment & Finance. 28(5). Pp. 105-111.
Fletcher, F., 2016. Solutions: Business Problem Solving. Routledge.
Hill, V. R., and Clarke, J. D., 2013. Cost-Benefit Analysis of the African Risk Capacity Facility.
Intl Food Policy Res Inst.
Hira, T. K., 2016. Financial Sustainability and Personal Finance Education. Springer
International Publishing.
Hiro, P. and Sofat, R., 2010. Basic Accounting. Delhi: PHI Learning Pvt Ltd.
Hosain, M. S., 2016. Impact of Best HRM Practices on Retaining the Best Employees: A Study
on Selected Bangladeshi Firms. Asian Journal of Social Sciences and Management
Studies. 3(2). pp.108-114.

Jorgensen, P. W. and Rotter, 2016. Ecosystem services assessments in local municipal decision
making in South Africa: justification for the use of a business-based approach. Journal of
Environmental Planning and Management. 59(2). pp.263-279.
Kostova, T., Nell, 2016. Understanding Agency Problems in Headquarters-Subsidiary
Relationships in Multinational Corporations A Contextualized Model. Journal of
Management. 26(1). pp.36-38.
Online
Advantages and Limitations of Ratio Analysis, 2014. [Online]. Available through: <
http://accountingexplained.com/financial/ratios/advantages-limitations>. [Accessed on 26
October 2016].
A profile of the New Zealand Fitness Industry, 2015 [Online]. Available through: <
http://www.nzihf.co.nz/media-resources-1/articles/a-profile-of-the-new-zealand-fitness-
industry>. [Accessed on 26 Oct 2016].

APPENDICES
Cash flow forecasting
Particulars Details
Total capacity of fitness centre
20 families (with
average of 4 members
in each family)
Average capacity of fitness centre (number of members) 80
Working hours of fitness centres (in hrs) 8
Time devoted in one shift (in hrs) 2
No. of shifts 4
Number of members that can be served in a day including all shifts 320
Number of families that can be served 80
Particulars 0
Jan
.
Fe
b.
Ma
rch
Ap
r.
Ma
y
Jun
e
Jul
y
Au
gus
t
Se
pt.
Oc
t.
No
v.
De
c.
Initial investment
Bank Loan
$1
2,0
00.
00
Owner's capital
$1
8,0
00.
00
Total initial $3

investment
0,0
00.
00
Number of
customers/families
Normal membership 4 5 8 10 10 10 12 12 12 13 13 14
Membership with
personal trainers 1 1 2 2 2 3 3 3 4 4 4 5
Membership with
additional facilities
such as child care
section, etc. 3 4 6 6 7 7 10 10 10 11 11 12
Total no. of families 8 10 16 18 19 20 25 25 26 28 28 31
Monthly membership
fees per family
Normal membership
(in NZD)
$4
00.
00
$4
00.
00
$4
00.
00
$4
00.
00
$4
00.
00
$4
00.
00
$4
00.
00
$4
20.
00
$4
20.
00
$4
20.
00
$4
20.
00
$4
20.
00
Membership with
personal trainers
$4
40.
00
$4
40.
00
$4
40.
00
$4
40.
00
$4
40.
00
$4
40.
00
$4
40.
00
$4
60.
00
$4
60.
00
$4
60.
00
$4
60.
00
$4
60.
00
Membership with
additional facilities
such as child care
section, etc.
$4
20.
00
$4
20.
00
$4
20.
00
$4
20.
00
$4
20.
00
$4
20.
00
$4
20.
00
$4
40.
00
$4
40.
00
$4
40.
00
$4
40.
00
$4
40.
00

Total Member ship
fees
£1,
26
0.0
0
£1,
26
0.0
0
£1,
26
0.0
0
£1,
26
0.0
0
£1,
26
0.0
0
£1,
26
0.0
0
£1,
26
0.0
0
£1,
32
0.0
0
£1,
32
0.0
0
£1,
32
0.0
0
£1,
32
0.0
0
£1,
32
0.0
0
Revenue per month
through membership
fees
Revenue- Normal
Membership
$1,
60
0.0
0
$2,
00
0.0
0
$3,
20
0.0
0
$4,
00
0.0
0
$4,
00
0.0
0
$4,
00
0.0
0
$4,
80
0.0
0
$5,
04
0.0
0
$5,
04
0.0
0
$5,
46
0.0
0
$5,
46
0.0
0
$5,
88
0.0
0
Revenue- Membership
with personal trainers
$4
40.
00
$4
40.
00
$8
80.
00
$8
80.
00
$8
80.
00
$1,
32
0.0
0
$1,
32
0.0
0
$1,
38
0.0
0
$1,
84
0.0
0
$1,
84
0.0
0
$1,
84
0.0
0
$2,
30
0.0
0
Revenue- Membership
with additional
facilities
$1,
26
0.0
0
$1,
68
0.0
0
$2,
52
0.0
0
$2,
52
0.0
0
$2,
94
0.0
0
$2,
94
0.0
0
$4,
20
0.0
0
$4,
40
0.0
0
$4,
40
0.0
0
$4,
84
0.0
0
$4,
84
0.0
0
$5,
28
0.0
0
Total Revenue
$3,
30
0.0
0
$4,
12
0.0
0
$6,
60
0.0
0
$7,
40
0.0
0
$7,
82
0.0
0
$8,
26
0.0
0
$1
0,3
20.
00
$1
0,8
20.
00
$1
1,2
80.
00
$1
2,1
40.
00
$1
2,1
40.
00
$1
3,4
60.
00
Total cash inflow
$3
0,0
00.
00
$3,
30
0.0
0
$4,
12
0.0
0
$6,
60
0.0
0
$7,
40
0.0
0
$7,
82
0.0
0
$8,
26
0.0
0
$1
0,3
20.
00
$1
0,8
20.
00
$1
1,2
80.
00
$1
2,1
40.
00
$1
2,1
40.
00
$1
3,4
60.
00

Expenditures
Utilities and
maintenance
$1
65.
00
$2
06.
00
$3
30.
00
$3
70.
00
$3
91.
00
$4
13.
00
$5
16.
00
$5
41.
00
$5
64.
00
$6
07.
00
$6
07.
00
$6
73.
00
Rent
$1
50.
00
$1
50.
00
$1
50.
00
$1
50.
00
$1
50.
00
$1
50.
00
$1
50.
00
$1
50.
00
$1
50.
00
$1
50.
00
$1
50.
00
$1
50.
00
Interest
$4
5.0
0
$4
5.0
0
$4
5.0
0
$4
5.0
0
$4
5.0
0
$4
5.0
0
$4
5.0
0
$4
5.0
0
$4
5.0
0
$4
5.0
0
$4
5.0
0
$4
5.0
0
Accessories such as
Yoga Mates etc.
$5,
00
0.0
0
Marketing and
promotion
$2,
00
0.0
0
50
0
50
0
50
0
Wages of workers (2
workers working for
2hrs per day for 5
days @$ 14.5)
$6
67.
00
$6
38.
00
$6
67.
00
$6
38.
00
$6
67.
00
$6
38.
00
$6
67.
00
$6
67.
00
$6
38.
00
$6
67.
00
$6
38.
00
$6
67.
00
Salaries of personal
trainer -1 (working 8
hours per day at 20
per hour)
$3,
68
0.0
0
$3,
52
0.0
0
$3,
68
0.0
0
$3,
52
0.0
0
$3,
68
0.0
0
$3,
52
0.0
0
$3,
68
0.0
0
$3,
68
0.0
0
$3,
52
0.0
0
$3,
68
0.0
0
$3,
52
0.0
0
$3,
68
0.0
0
Salaries of personal $1, $1, $1, $1, $1, $1, $1, $1, $1, $1, $1, $1,

trainer -1 (working 8
hours per day at 30
per hour)
38
0.0
0
32
0.0
0
38
0.0
0
32
0.0
0
38
0.0
0
32
0.0
0
38
0.0
0
38
0.0
0
32
0.0
0
38
0.0
0
32
0.0
0
38
0.0
0
Miscellaneous
expenditure
$8
2.5
0
$1
03.
00
$1
65.
00
$1
85.
00
$1
95.
50
$2
06.
50
$2
58.
00
$2
70.
50
$2
82.
00
$3
03.
50
$3
03.
50
$3
36.
50
Payment of bank Loan
$2
00.
00
$2
00.
00
$2
00.
00
$2
00.
00
$2
00.
00
$2
00.
00
$2
00.
00
$2
00.
00
$2
00.
00
$2
00.
00
$2
00.
00
$2
00.
00
Taxation
$7,
91
4.6
2
Total expenses
$7,
00
0.0
0
$6,
36
9.5
0
$6,
18
2.0
0
$6,
61
7.0
0
$6,
92
8.0
0
$6,
70
8.5
0
$6,
49
2.5
0
$6,
89
6.0
0
$7,
43
3.5
0
$6,
71
9.0
0
$7,
03
2.5
0
$6,
78
3.5
0
$1
5,5
46.
12
Total cash outflow
$7,
00
0.0
0
$6,
36
9.5
0
$6,
18
2.0
0
$6,
61
7.0
0
$6,
92
8.0
0
$6,
70
8.5
0
$6,
49
2.5
0
$6,
89
6.0
0
$7,
43
3.5
0
$6,
71
9.0
0
$7,
03
2.5
0
$6,
78
3.5
0
$1
5,5
46.
12
Net cash flow
$2
3,0
00.
00
-
$3,
06
9.5
0
-
$2,
06
2.0
0
-
$1
7.0
0
$4
72.
00
$1,
11
1.5
0
$1,
76
7.5
0
$3,
42
4.0
0
$3,
38
6.5
0
$4,
56
1.0
0
$5,
10
7.5
0
$5,
35
6.5
0
-
$2,
08
6.1
2
Opening balance 0 $2 $1 $1 $1 $1 $1 $2 $2 $2 $3 $3 $4