MPAcc 809(04) BODO Fitness
BODO Fitness
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Marvin Painter, Ph.D.
University of Saskatchewan
EdwardsSchool of Business
Master of Professional Accounting
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MPAcc 809
Entrepreneurship and Small Business
Lecture 04
Summer 2009
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By
Rohan Raheja
Amrit Sanghera
Clinton Tisnic
Maxine Wong
July 3, 2009
1
Rohan Raheja, Amrit Sanghera
Clinton Tisnic, Maxine Wong
MPAcc 809(04) BODO Fitness
Table of Contents
1.0 Executive Summary
2.0 BODO Fitness Business Plan
3.0 Marketing Plan
3.1 Industry Overview
3.2 Product
3.3 Price
3.4 Place
3.5 Competitors
3.6 Promotion
3.7 Use of Trainers for Marketing
3.8 Marketing Expense
4.0 Operations Plan
4.1 Legal Structure
4.2 Management Team
4.3 Site Location
4.4 Floor Plan
4.5 Average Day of Operations
4.6 Service Providers
4.7 Capital Budget
4.8 Operating Expenses
4.9 Working Capital
5.0 Human Resources Plan
5.1 Job Descriptions
5.2 Training
5.3 Wages & Benefits
5.4 Human Resource Strategy
6.0 Financial Plan
6.1 Projected Financial Statements
6.2 Capital Structure
6.3 Dividend Policy
6.4 Risk Analysis
7.0 Summary of Business Plan
8.0 Appendices
8.1 Appendix I – Demographics
8.2 Appendix II – PESTE Analysis
8.3 Appendix III – SWOT Analysis
8.4 Appendix IV – Proposed BODO Fitness Location
8.5 Appendix V – Organizational Structure
8.6 Appendix VI – Floor Plan
8.7 Appendix VII – Example of a Weekly Training Schedule
8.8 Appendix VIII – Leasehold Improvements
1
Rohan Raheja, Amrit Sanghera
Clinton Tisnic, Maxine Wong
MPAcc 809(04) BODO Fitness
1.0 Executive Summary
BODO Fitness (BODO) is a one-of-a-kind, high intensity, sport-specific training facility that allows athletes and teams to develop their skills, bringing them to another competitive level. BODO is built on the concept of functional sport-specific movements, high intensity conditioning, and strength training for football, soccer, and hockey. Located in Surrey, BC, BODO serves Metro Vancouver.
The key success factors of BODO are its trainers, its state-of-the-art facility, and its marketing strategy. BODO will seek well-recognized individuals who will not only train our athletes;they will also have an ownership interest in the business in order to attribute to its long-term success. The rigorous and specialized training sessions will be carried out in the custom developed training facility that employs top-quality equipment and offers all the amenities that the athletes require.
In order to market its services, BODO will leverageits trainers to attract athletes of all levels and ages within the sporting community. These trainers will hold presentations and workshops for organized sports leagues, school sports, and information sessions in the BODO facility. As the trainers will be the face and reputation of BODO, they will be able to communicate effectively with the target market in order to build credibility within the sporting community. BODO will also hold drop-in training sessions to gain exposure and increase demand through an active word-of-mouth marketing strategy.
BODO will offer trainer-led sessions for athletes at pre-scheduled times depending on certain variables, such as sport, athletic level, and time required by each individual.
Investors of BODO will expect to receive an average return on equity of 16%. Furthermore, the net profit margin is expected to be 21%. This shows great success potential from the project.
2.0 BODO Fitness Business Plan
BODO Fitness (BODO) is a non-traditional fitness centre that has been designed to provide specialized sports training programs to amateur athletes of all skill levels for skill development in hockey, soccer, and football.
BODO’s Mission Statement
“To promote physical training and sports education to athletes of all ages and skill levels within the Vancouver community.”
BODO’s Goals & Objectives
The mission statement will be achieved by incorporating:
- High intensity sports training
- Physical strength and conditioning
BODO’s key success factors are its world-class trainers and specialists that provide unique and customized training sessions, our one-of-a-kind fitness facility, and the specialized workout methods developed by BODO trainers.
As individuals have been engaging in more active lifestyles over the past few years, and as the sporting environment is growing in focus, BODO bridges the gap between these two aspects of healthier living through the services it provides.
BODO understands that developing essential relationships within the Vancouver sporting community is of paramount importance to its overall success. As such, BODO will concentrate much of its efforts on marketing throughout the initial phases of business.
BODO’s anticipated open date is January 2010.
The following provides an in-depth analysis on the proposed BODO’s business plan.
3.0 Marketing Plan
3.1 Industry Overview
Operating a non-traditional sports training fitness centre in Vancouver, BC is a promising endeavour as there is an increasingly important focus placed on the need to live healthier and more active lifestyles. In Statistics Canada’s General Social Survey of 2005[1], between the periods of 1992 to 2005, Canadians were noted as being more active on an overall basis. Further to this study, it found that the highest participation rate of active leisure participants were within the British Columbia region – 28%. This is the highest participation region rate within Canada. This helps illustrate that British Columbia is an embracing culture – living a healthier lifestyle compared to other areas of Canada. Therefore, this area provides BODO with the greatest potential for business success.
When assessing the proposed specialized sports training programs BODO will offer, the American College of Sports Medicine’s (ACSM) article, Worldwide Survey Reveals Fitness Trends For 2009[2] revealed that sport-specific training has been an interesting trend over the last few years as it has shown increasing levels of attention, attracting a new market by offering a different type of service that could potentially increase revenues. This provides additional reinforcement that BODO will be capitalizing on an increasing fitness movement that has been gaining more recognition worldwide. A demographic analysis on the organized sports teams within the Vancouver area show a promising target group from which BODO can offer its services. Please refer to Appendix I for the demographic analysis.
An analysis on the political, economic, social, technological, and environmental business environment (PESTE Analysis) has been prepared. Please refer to Appendix II. From this analysis, the overall business environment is quite stable and there are factors present within the social environment that BODO can capitalize on. In addition, an analysis on the strengths, weaknesses, opportunities, and threats (SWOT Analysis) has been conducted in order to assess the full potential of the business opportunity. Please refer to Appendix III. From this analysis, the opportunities and strengths outweigh the potential threats and weaknesses facing the business proposition.
3.2 Product
BODO Fitness will be offering customized sports training class services for individual athletes and teams specializing in football, soccer, and hockey. These services will incorporatethe following body exercises:
functional movements tailored for each sport
core and stability training
strength and endurance conditioning
Olympic lifting
Stretch yoga
cardio and power enhancement
These exercises will help athletes develop further and become specialized in each of their respective sporting events. These services will be provided by world-class trainers specialized in the above listed areas of expertise.
3.3 Price
For the purpose of this analysis, an average pricing method has been used for BODO Fitness. Actual pricing will depend on the following variables:
- Frequency of training sessions required per week
- Sport training level required for the athlete
- Age of athlete
- Athlete to instructor ratio desired per session
Average pricing has been determined to be $17.50 per session. An average athlete is expected to be at BODO for 4.5 times per week, participating in an average session size of 10 athletes per trainer. From this, the average pricing per athlete per month will be $315 (semi-annually: $1,890; annually: $3,780).
From an analysis conducted on comparable services offered (i.e. training camps and personal training sessions), the following average prices have been noted:
- Soccer training per hour: $65/hour
- UBC Soccer Camp: $250/week
- VancouverHockeySchool: $350/week
- BC Lions Football Camp: $75/session
From the above, an average hourly rate of $45 has been computed for such services. This shows that the pricing of BODO’s sessions are significantly lower, which represents the affordability of this program on a year round basis (optional semi-annual participation during the offseason).
Furthermore, the pricing is appropriate given the Vancouver market as demographics from Stats Canada[3] show that there is an increasing amount of individuals that are breaking the $100,000+ income level. In 2006 alone, there were approximately 225,000 individuals who maintained this income level. It is more than reasonable to assume that these individuals can afford to enrol themselves or their family members into this type of training program. Further, based on the knowledge gained from the PESTE analysis, BODO will be able to capitalize on the current trend of an active lifestyle.
3.4 Place
Based on the demographic placement of Vancouver residents, the BODO Fitness centre has been strategically placed in Surrey, BC. Please refer to Appendix IV for the map view of this location. This location was chosen due to its accessibility to the general public. It is located just off of a commonly used major highway within Vancouver, allowing for greater vehicle access. The Surrey Central SkyTrain station is located within blocks of the fitness centre and the “Expo” bus route also allows for bus access. Further, this fitness centre is located in a less densely populated area of Vancouver (compared to downtown Vancouver or Richmond), allowing for cheaper leasing costs, and providing the clientele with accessibility to ample amounts of parking spaces.
3.5 Competitors
As there is currently no other specialized fitness businesses offering similar sports training services like BODO within the Vancouver area, it has been established that there is no direct competition to BODO. However, there are still other types of fitness facilities that do act as a form of indirect competition as they offer other types of fitness services that could be thought of as substitute services. In addition to this, there are sports camps offered at different intervals during the year. Although the services offered at these fitness centres and sport camps are not year-round specialized sport training classes, they have still been considered within BODO’s competitive scope. The following list presents the competitors that are closest to the BODO Fitness centre that could potentially hinder the success of the BODO business.
Competitor Within Area / LocationFitness World Fitness Centres / 13821 103 Avenue, Surrey, BCV3T 5B5, Canada
(604) 588-1517
Great West Fitness / 200-1938 152 Street, Surrey, BCV4A 4N6, Canada
(604) 531-9906
Optimum Fitness / 275 8128 128 St, Surrey, BCV3W 1R1, Canada
(604) 591-1110
Fit For Women Gym Ltd. / 10039 136A Street, Surrey, BCV3T 4G1, Canada
(604) 581-6262
Fitness World Studio II / 13821 103 Avenue, Surrey, BCV3T 5B5, Canada
(604) 582-0777
Hari Om Yoga / 102-20230 64th Ave, Langley, BCV2Y 1N3, Canada
(604) 539-0566
Fitness World Centres / 4300 North Rd, Burnaby, BCV3N 4N4, Canada
(604) 421-7999
Fitness Challenge / 9-19889 96 Avenue, Langley, BCV1M 3C7, Canada
(604) 881-0007
Bikram Yoga Surrey / 15310 103A Ave, Surrey, BC V3R, Canada
(604) 951-9642
Anytime Fitness / 101-18655 Fraser Hwy, Surrey, BCV3S 7Y3, Canada
(604) 574-4777
3.6 Promotion
The advertising plan for BODO will not use the traditional marketing channels due to the nature of the business and BODO’s selected target market. The target market for BODO will include minor sports teams in the Vancouver area in the disciplines of hockey, football, and soccer. The associations to be targeted will be:
Hockey / Football / SoccerNorth Vancouver Minor Hockey Association / Vancouver Mainland Football League / Vancouver Youth Soccer Association
West Vancouver Minor Hockey Association / BC Community Football Association / Vancouver Girls Soccer Club
Vancouver Minor Hockey Association / BC High School Football Association / Vancouver Metro Soccer League
Thunderbirds Minor Hockey Association / - / West Vancouver Soccer Association
In the attempt to reach the targeted market, the advertising plan will be very selective and directive in the advertising activities to segregate the intended clientele. The advertising plan will consist of the following activities:
Official Trainers of UBC’s - Vancouver Thunderbirds
By training the Thunderbirds, a well respected elite level organization, BODOwill be able to attain a prestigious reputation for its high quality trainers and their specialized expertise. This will be a key success factor for BODO’s reputation and marketing strategy going forward. By partnering with the Thunderbirds, BODO’s credibility will be enhanced within the Vancouver sports market. With this, BODO will partner with the Thunderbirds and be part of its official training program for its hockey, soccer, and football programs. The training costs associated with this strategic marketing plan (i.e. trainer salaries) will be absorbed by BODO as a marketing expense to generate word-of-mouth within the Vancouver industry. BODO views this investment as priceless as the incremental benefits it would receive from this partnership outweigh the costs associated with the training program.
Sponsorship of Amateur Events
Another key success factor will be to get BODO’s name out to minor sports teams in the three major targeted areas of hockey, soccer, and football. BODO will achieve this through the sponsorship of minor sporting events. Such sponsorship will include the advertising of these events, i.e.: title sponsor of a major tournament.
Team Information Sessions
BODO’s primary source of advertising will be through free informational sessions. These sessions will be organized similar to the concept of an open-house. One week per month will be dedicated to inviting a select number of teams to the fitness centre for an allotted time period. During this time, BODOwill take the team through a sport specified training class, demonstrating what BODO has to offer. This is done to promote additional teams/individuals to sign up as fulltime clients. The expense to BODO will mainly be the wages for the employees, with the upside of acquiring as many new select clients from BODO’s target market as possible. The timing for when the open-house will be offered will be adjusted based on BODO’s need to obtain more clientele.
BODO Fitness Website & Website Advertising
The final source of advertising will be through a BODO Fitness website and advertising through minor sports websites. The BODO website will be multifunctional – marketing and selling the services it has to offer. In addition, the company site will be interactive and informational. It will contain tips from the BODO trainers, nutritional facts and recommendations, and the philosophy behind functional movement training. BODO will further reach its target market through the advertisement on the minor hockey, soccer, and football association websites. These association websites have consistent hits/visits and provide a direct link to the desired target market. Currently, each of these association websites track the standings and statistics of each team within the respective league. BODO will advertise here and have its advertisement link back directly to the BODO website.
Lastly, the remaining component of the advertising strategy will be through a monthly column on each of the association websites – discussing various sports fitness topics written by BODO Fitness trainers. BODOplans to obtain the column space by leveraging its advertising and sponsorship contracts on the association websites.
3.7Use of Trainers for Marketing
The cornerstone of BODO Fitness is its well-recognized and reputable trainers within the sporting community. As such, BODO will leverage the trainers in order to attract potential athletes and teams. These trainers will act as representatives for the BODO business as they are best suited to communicate and understand the needs of the target market.
3.8 Marketing Expense
Marketing expense has two components. The first component is the salaries of the marketing manager and the trainers. In the first year of operations, it has been assumed that the trainers will be spending 65% of their time marketing BODO services, with the remaining 35% dedicated to training. These salary costs allocated to marketing also considers the time spent promoting BODO at the team information sessions. The percentage of time dedicated for marketing with the trainers will be adjusted based on clientele levels, but it has been anticipated to remain at a steady state of 40% starting in year 4 and onwards.
The second component has been budgeted at $20,000 for the following expenditures:
- Advertising
- Promotional items
- Recruiting and giveaways products
- Travel related costs
4.0 Operations Plan
4.1 Legal Structure
BODO Fitness will be incorporated in British Columbia, under the British Columbia Corporation Act. The incorporation structure is necessary to limit the liability to the owner and the individuals owning shares within the corporation. The board of advisors will be composed of the management team and the company lawyer.
4.2 Management Team
The management team will be composed of the following. Please refer to the organizational chart prepared in Appendix V.
- President/CFO
- HR and Marketing Manager
- Fitness Manager
- Fitness Specialists
For the breakdown of management responsibilities, please refer to 5.0 – Human Resources Plan.
4.3 Site Location
The most optimal location for the fitness center would be in Surrey, BC as this area will allow us easy access to the Vancouver, Burnaby, Richmond, Langley, and Surrey market. The unit will be located at10239 King George Highway, with a monthly lease cost of $4,950, and a square footage of 4,950. As mentioned earlier, the site is located at the heart of Surrey’s CityCenter, and is only a short walk from Surrey Central Sky Train station. Leasing the premise will help keep capital costs low in the initial start up years. In addition, the lease agreement will include security of the premises and surrounding area. Please refer to line 2 of Schedule B (in corresponding excel worksheet) for the on-going lease cost on an annual basis.