Detailed Report: Muscle Strength Gym Venture in Berlin, Germany

This report details the launch of 'Muscle Strength Gym' in Berlin, Germany, a new venture expanding from the UK market. It covers market segmentation (geographic, demographic, and psychographic), competitive analysis, and the allocation of tangible and intangible resources. The report includes a business proposal outlining the venture's objectives, financial projections, and benchmarking strategies. Furthermore, it highlights the essential skills required for entrepreneurs, such as risk-taking and decision-making, crucial for success in the fitness industry. The report also discusses promotional activities, monthly cash budgets, and legal structures for the venture, providing a comprehensive overview of the business plan.

Launching a New
Venture

INTRODUCTION
Starting a new venture is always a dream for an individual as it requires huge amount of
resources and struggle. Thus, it is difficult but possible to become an entrepreneur if having new
and innovative ideas that will easily meet the needs and requirement of people (Launching a new
venture, 2018). The perception and needs of people are different due to having different culture
and nations thus to identify them an entrepreneur must required to conduct an appropriate
research which motivates them to develop required attributes and capabilities to start a new
business and make it successful in the competitive market. The present report is based on
“Muscle strength Gym” which is newly venture deciding to establish in Germany after receiving
huge success in UK market. This Gym contains wide range of exercise activities including
aerobic, yoga and muscle strengthening etc. The report identifies the target market of Gym in
addition with this different types of resources including tangible and intangible which is used to
establish a new venture successfully. Along with this, formulation of credible proposal and skills
required to launch a new venture are properly mentioned. The report also discusses the
promotional activities and channels to adopt, monthly cash budget and suitable legal structure for
the venture.
TASK 1
P1:
Venture idea:
“Muscle strength Gym” is a new venture which is currently operated in UK and but their
owners decided to expand its business to other nation thus make decision to launch in Germany
so as to capture huge market share and revenue. This new venture provides different fitness
activities which includes aerobic exercises such as dancing, muscle training such as lifting
weighs, yoga and many other (Bergmann and Stephan, 2013). After getting success in UK, the
owners conducts research through which they identified that the people of Germany also prefer
to go Gym due to maintaining their healthy lifestyle (Fitness industry in Europe. 2018). Thus, the
owners decided to launch its new Gym venture in Berlin city where the numerous people are
willing to get membership of Gym. In Germany, Berlin becomes the highest populated city due
to which the owners pre-assumed to achieve huge success and sustainability in such market
(Number of social network users in Germany, 2018).
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Launching new venture into new market is not easy task at all as it requires maximum
support from various members in terms of obtaining sufficient amount of resources. Thus, the
business owner decided to launch new venture in partnership form by engaging the individuals
who are having an appropriate knowledge and skills related to using marketing techniques so that
maximum sustainability can be achieved within shorter time period. Along with this, sharing
roles and responsibilities with other members increases the effectiveness and efficiency level of
decision making which guaranteed success of business (Bijker and et. al., 2012).
The business owners acquired over 1200 square feet in Berlin to establish their business
with a lease of 5 years with an objective of running business in future without facing any
barriers. The partners of “Muscle strength Gym” invest 22,00,000 dollar in ratio agreed in
partnership deed.
The area where the funds has been allocated are mentioned as under:
Estimated Initial Investment
Objectives: Before establishing new venture into new market, it is important for business
owners to set SMART objectives so that all future activities will be executed accordingly. For
this, SMART Objective is framed by them in following way: Specific: Capturing 40% market share and 15% revenue in Berlin. Measurable: The performance level can be measured by comparing previous with the
actual performance level. For this, KPI tool is adopt by the business owner.
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 Achievable: By recruiting 20 trained staff who have proper knowledge about fitness
activities. Relevancy: It makes strong presence in German market.
 Time bound: Within 6 months.
Target market: The growth and success of new venture into new market can be possible
only if the needs and preferences of targeted customers are identified but before this, the business
owners segment the market through which they can easily identify their actual targeted
customers (Butler, 2014). Therefore the business owners segments the market of Berlin on the
basis of three segmentation such as demographic, geographic and psychographic. Geographic: It is the market segmented on the basis of geographical location where the
demand of gym are more. In Germany, Berlin is the city who is targeted due to providing
maximum amount of population in which most of the people are gymholic compared to
other cities. Demographic: In this, the market is segmented on the basis of gender, age, religion etc.
As after carrying out online research, it has been identified that mostly youths prefer to
go Gym to maintain their lifestyle in more healthy way. Thus, Youth has been targeted by
the “Muscle strength Gym”.
 Psychographic: At present times, the people having higher and middle income wants a
healthy lifestyle due to which they engaged fitness activities in their daily routine to
remain fit. Thus, these two income group has been targeted by the business owners of
“Muscle strength Gym”.
Competitive analysis: The main difficulty that the business owners of “Muscle strength
Gym” can get during its establishment is presence of rivals who provides similar activities in
Berlin from last many years. There are many rivals exist in Berlin such as McFit, Rent-A-
Trainer, Superfit etc. which may provide tough competition to “Muscle strength Gym”. Thus, it
is important for the business owners to analyse their strategies related to their offerings first and
accordingly update their existing plans and strategies so as to achieve huge sustainability in
Berlin market within shorter time period (Cosenz and Noto, 2018).
P2:
The business owners has started a new venture called as “Muscle strength Gym”. This
new venture require adequate amount of resources which can be classified into Tangible
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and Intangible resources. The brief explanation of the resources which will be required for
opening a gym-
Tangible resources- This type of resources are physical in nature. It can be seen, touched and
felt by a person . These resources can be easily liquidated and have a set value. The type of
tangible assets are fixed and current (Duggal and Sassoon,2015).
Fixed resources- These type of resources are fixed and do not vary with time as it is held for
long period of time and cannot converted into cash easily.
 Land & Building- This is the land on which gym will be build. This is a fixed tangible
resource without land a gym cannot be opened.
 Equipment- These are the physical assets of a venture which is used in operation of
business. “Muscle strength Gym” can only serve their customers if they have proper
equipment of gym.
Current resources- These type of resources are variable and vary with time. There are
following current resources-
 Cash- It is the important assets which fulfils the financial requirement of venture. The
fixed assets of gym can only be purchased through this current tangible resource.
 Inventory- It is the stock of goods that company produces to sale on their business.
Tangible resources are important to a business as it can easily be liquidated into cash
which reduces risk of the new venture through assuring that in situation of contingency they can
pay their pending. If the value of tangible assets is more it will result in safer position of
business.
Intangible Resources- This type of resources are not physical in nature. The valuation of
intangible assets is difficult to set. Intangible assets can be divided into definite and indefinite. A
company's goodwill is treated as indefinite tangible assets as it stays with the company for the
long time. A definite intangible assets are those which has specified limit or obtained through
agreement such as patents or copyright etc. Goodwill is the value of the venture not directly but
it is attributable to assets and liabilities (Fernández-Guerrero, Revuelto-Taboada and Simón-
Moya, 2012).
“Muscle strength Gym” is required to earn goodwill if the gym want to survive in future.
Intangible resources increases worth of the venture and it also helps in building a brand. “Muscle
strength Gym” is required to show their intangible assets in balance sheet. “Muscle strength
4

Gym” can create intangible assets and if it creates the intangible assets it can write off the
expenses from the process. Created intangible assets are not shown in balance sheet. The
intangible assets which are purchased shown in balance sheet at purchase price. The intangible
resources are equally important as tangible assets as both are essential for establishing a venture
and for growth and development.
TASK 2
P3:
Formulation of business proposal is must by the business owners which contains the
information related with the complexities faced by them during its establishment. It guides the
employees to utilise available resources in an optimum manner by overseeing the future market
contingency. Here the credible proposal for “Muscle strength Gym”:
Executive Summary “Muscle strength Gym” is introducing in Berlin city by the business
owners after getting positive response from UK Market. Expanding
business to other nation helps the partners or business owners to get
huge customer base and revenue which increases their global presence
as well.
Company description “Muscle strength Gym” is an organisation providing wide range of
health fitness programs and activities such as aerobics programs like
dancing, yoga classes, lifting weights etc. It help individuals to stay fit
by engaging gymming exercises in daily routine.
Market Analysis Conducting market research to evaluate the trends and actual needs of
customers is essential for the business owners of “Muscle strength
Gym”. It drives them to make corrective actions to meet customers
and business owners’ expectations. For this, there are different
analytical tools which can be used by them to analyse the market.
Such tools includes PESTLE, SWOT, Porter five forces etc. For
example, conducting PESTLE it help the business owner of “Muscle
strength Gym” to identify political and economic fluctuation of
Berlin, needs and preferences of society etc. which makes easy for
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them to make suitable policies before establishment.
Financial projection
It is essential for the business owners of “Muscle strength Gym” to
forecast the expenses that will be spend to launch in Berlin city so that
they can decide the sources from which they can source fund. It has
been forecasted that approx. 22,00,000 will be invested so raising
money from different mediums such as Banks, venture capital, angel
funding etc. can be opt according to their interest (Kuratko, Hornsby
and Hayton, 2015).
Benchmarking It includes target which has been set towards the members of “Muscle
strength Gym” to achieve within given time period. For this, business
owners first properly analyse the rivals strategies, customers
preferences, shareholders interest etc. and accordingly make actions
related to updating existing plans and policies.
P4:
Launching a new venture requires an appropriate skills and capabilities to develop by the
entrepreneurs or business owners of “Muscle strength Gym” as it help in achieving competitive
advantage which may help in leading the market. Some skills and capabilities required to
develop by the entrepreneurs of “Muscle strength Gym” are mentioned as under:
 Risk taking capacity : There comes a risk with the idea of launching a new venture
Every business starts with risks in it , as it is not necessary that the market that has been
chosen is fortunate it can be unfavourable too. The business owners of “Muscle strength
Gym” should be capable enough to bear all the risk related to the business.
 Decision making capacity : An individual with a confused mindset wont' be able to start
their own venture because in business at each phase there is a requirement to take
decision . A person with strong decision making power may lead in the market with their
new venture (Roseno, Enkel and Mezger, 2013)..
 Communication skills : An entrepreneur must have good communication skill to
establish a new venture as it is required at each point of time while negotiating with the
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supplier, dealing with the customers ,maintaining public relations and dealing with the
employees.
 Problem solving skills : It is impossible that starting a new venture will not involve
problems . To solve these problems the individuals should have good solution and skill to
solve the problem.
TASK 3
P5:
Promotional activities and channels for launching a new product : For a starter to
launch their product in the market adoption of an effective promotional channels is very critical
part, it involves various methods to promote new product in the market. There are various
promotional channels which can be adopted by the business owners of “Muscle strength Gym”
which are given as under:
 Using social media- Social media like Facebook, twitter, you-tube, Instagram,Pinterest
as well as many others offers various ways to promote products in the market . The use of
social media has made significance in the customers mind , they easily get attracted by
the content of social media . This is the key tool to promote products (Robb and Watson,
2012).
 Mouth publication : It is the easiest way to promote a product. People now a days focus
more on the experience of others with the product rather than first buying it.
 E-mail marketing : This is the only platforms which involves a great influencing power
to promote the product . 80% of people now a days open their mails on regular basis by
promoting product through email a person can succeed.
Social media marketing is best to adopt by the owners of Muscle Strength Gym as
compared to others as ample number of users are active on social media platforms on daily basis
which enables them to communicate with them and influencing their decision towards their
offerings in favourable way.
P6:
The business owners of “Muscle strength Gym” should frame marketing strategies for
both pre-launch and post launch in following way:
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Pre-launch: It is the stage when the business owners starts to communicate with their
targeted customers indirectly with the purpose of awaking them about their new business into
their area. At this stage, official websites on internet should be prepared which contains the
information about the new venture along with their services and its benefits to the customers.
Launch: Under this final stage, an entreprenuer firstly came with their new venture
directly to their customers through using various promotional channels such as conducting
conferencing, TV advertisement etc. Inviting media representatives to ask questions and further
communicate to the customers through TV telecasting help “Muscle strength Gym” in
influencing decision of targeted customers towards their offerings.
TASK 4
P7:
Cash budget refers to an estimation of expenses that will be incurred in execution of
desired project activities. It reduces unnecessary cost and wastage of resource which increases
the possibilities of receiving positive outcomes in near future (Zaremba, Bode and Wagner,
2017). In simple words, cash budget is a plan consisting of cash receipts and expenditures on the
basis of which decision has been made. Thus, the business owners of must prepare a cash budget
for both launch and after 12-18 months of in following way:
Cash flow Budget of The Hardcorp Gym for the Year of 2018
Pre launch cash budget
Cash Flow budget
Particulars Jan Feb
Ma
r Apr May June
Jul
y
Au-
gust
Septem-
ber
Octo-
ber
Novem-
ber December
Cash inflows
Investment 8000
Credit sales 2000 3000
300
0
450
0 1500 3500
42
00 1000 2000 800 1200 1500
Total inflows
1000
0 3000
300
0
450
0 1500 3500
42
00 1000 2000 800 1200 1500
Cash outflows
Fixed : Equipment’s 2000 2500
150
0
200
0 1200 1500
80
0 200 300 100 600 300
Variable : Direct mate-
rial 300 300 200 300 150 500
30
0 400 500 100 100 400
Total outflows 2300 2800
170
0
230
0 1350 2000
11
00 600 800 200 700 700
Net cash flow 7700 200
130
0
220
0 150 1500
31
00 400 1200 600 500 800
Opening balance 0 7700 790 920 1140 1150 ## 1610 16500 17700 18300 18800
8

0 0 0 0 ## 0
closing balance 7700 7900
920
0
114
00
1155
0
1300
0
##
##
1650
0 17700 18300 18800 19600
Post launch cash budget
Particulars Jan Feb
Ma
r Apr May June
Jul
y
Au-
gust
Septem-
ber
Octo-
ber
Novem-
ber December
Cash inflows
Investment 8000
Credit sales 1200 2000
750
0
300
0 5000 6500
12
00 3200 1500 8200 1250 3210
Total inflows 9200 2000
750
0
300
0 5000 6500
12
00 3200 1500 8200 1250 3210
Cash outflows
Fixed : Equipment’s 2500 1200
150
0
250
0 1100 1500
12
00 600 500 500 1200 700
Variable : Direct mate-
rial 350 300 250 150 100 500
50
0 250 450 250 1300 500
Total outflows 2850 1500
175
0
265
0 1200 2000
17
00 850 950 750 2500 1200
Net cash flow 6350 500
575
0 350 3800 4500
-
50
0 2350 550 7450 -1250 2010
Opening balance 0 6350
585
0
116
00
1195
0
1575
0
##
##
1975
0 22100 22650 30100 28850
closing balance 6350 5850
116
00
119
50
1575
0
2025
0
##
##
2210
0 22650 30100 28850 30860
P8: An appropriate legal form for the venture
Before starting a new venture, an entrepreneur decide the legal structure of company
which is mainly depends on the rules and regulations framed by the government. It makes huge
impact on their operations and net profitability. Here are the some legal structure which are
available for “Muscle Strength Gym” to select:
Sole proprietorship: It is type of structured which is controlled and owned by single
individual thus the business is small in size. It takes less time and follow few regulations at the
time of formation thus will be the best option to choose by the business owners of “Muscle
Strength Gym”.
Company: This is the structure which is run by complying with rules and legislations
framed by the government bodies. For an instance, the government restrict an organisation to
allot its share directly to the public. Thus, it can be adopt by the business owners of “Muscle
Strength Gym” but only if rules and legislation framed by governmental bodies are easily
understand.
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Partnership firm: It is kind of structure which is formed in sharing of two ore more
individuals through a partnership deed that contains the ratio of sharing roles and responsibilities
performed by each partner. The business owners of “Muscle Strength Gym” can adopt this legal
structure as if they have lacking in resources to run the business.
From the above legal structure, partnership is the best option of adopt as the business
owners of “Muscle Strength Gym” can easily launch in Berlin city of Germany if having
maximum support from different members who are having skills and knowledge in different
fields.
CONCLUSION
It can be concluded from the above report that establishing a new business is not simple
task as many challenges are there which can restrict the business owners to launch and establish
its new venture into new market. For this, the business owners must have a proper knowledge
about the market situation, competitors strategies, promotional channels etc. which are the
important aspects in making in new venture more successful. An an individual can become an
entrepreneur which they can acquire sufficient skills and abilities such as communication,
decision-making, risk taking skills etc. as dealing with market complexities requires these skills
to develop by an entrepreneur.
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REFERENCES
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<https://www.statista.com/topics/3405/fitness-industry-in-europe/>.
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