Health has become the priority of the people currently after the coronavirus epidemic. Through studies, it was found that there is a need for the health club where people can come and take certain exercises to remain fit and healthy. Understanding the current need for an evaluation of the health club business plan is conducted in this report by analyzing the environment and other factors for operating it in Auckland, New Zealand. The report consists of various things like mission vision statement of the health club and the location where it needs to be started along with the resources required for starting the business and so on. It even conducts a risk analysis to find out the problems that the health club may encounter. It also gives the details of the processes or activities to measure the outcome of the goals set by the company to achieve as soon as it launches its business in the New Zealand market.
Availability of the resources
Strategic issues identified in terms of goals
Five years from now
Monitoring and evaluation process
Activities to measure the outcome
Fitness trends are changing at a very fast rate with the change in culture and people are becoming more aware of how to stay healthy and fit. They are getting conscious of selecting which place they should go for taking care of their body.
Starting any business is very difficult as it is backed up with unlimited surprises and setbacks. Opening a health club is no different, it can be even more difficult because there are a lot of factors that are responsible for its success like the demand of the resources, business goals, risks associated with them and so on. Resource demand of the health club is constantly growing because people are following a new trend they join only where they get all the resources which they want to be whether it is equipment's or trainers. Various kinds of resources have been listed above but the availability of each of them is important to run a health club successfully. Besides, this discusses the goals of the health club and issues that it might experience along with the tasks to accomplish them. Further, it emphasis on the risk associated with goals and how to measure them and ensure that business activities are properly monitored and measured. It also describes how the company is seeing its business growth in the next five years and how it will bridge the gap between these years.
At last, it concludes all the findings of the report whether it is safe to open a health club in Auckland or not.
Health clubs are bringing more live and demanding classes for their customers. Here are some common resources which are required by every health club.
Trained fitness staff would be required who would not only help the clients to perform the exercise but also have the capability to handle small injuries of them. This indicates that the human resource of the health club would r equire staff with CRP certification. Besides, this there would be a requirement of cleaning staff(Wehrmeyer, 2017). They would ensure cleanliness in the entire health club by dusting the machines, cleaning the club area and providing energy drinks to the clients when they ask for. While setting up, the owner needs to pay attention that a least one certified CRP member should be available during the day hours when people come and operate in the health club. There would also be a requirement to train some members of the staff to respond to the emergency that may arise at any point of time in the fitness club. Along with it to ensure the safety and liability the trainers of the organization must have professional training certification it will help in charging the client accordingly as they will take the benefit of professional training.
It is difficult to find the exact opening cost of the health club because there is no particular formula for it. The cost of the club will fluctuate depending upon the needs and requirements of the club. On an average, to open a health club it would require an investment of $50,000. This cost is based on the initial equipment’s and services required for facility refurbishment, rent and so on(Giarratana&Santaló, 2020). The financial cost decided is not enough, the company would also have to keep some cost aside for the unseen expenses as a lifesaver. The cost of the health club will also depend upon the location, size and offerings that it is going to provide to its customers. If in case the amount of operating the health club is vast that ins such cases the company can also take up loans from financial companies or even banks.
Seeing the COVID -19 situation it may happen that people would not able to come to the health club for conducting their daily exercises in such condition the company must be ready with the live classes. Live workout studio and gym will not only meet the current demand but will also help in increasing brand equity of the health club. It is observed that customers love to watch a live class rather than repeated ones. As they always want new content to listen instead of the same one. Providing them something new every time so that they remain engaged with the health club and improve their health condition simultaneously. The good social experience is a key driver of enhancing gym membership and taking live classes will enhance the experience of the companies.
On the technical front, there would be a demand of health club's website which will help in getting more customers towards it(Kim, Shin & Min, 2016). The website must be such that it would provide information about the services, opening hours, location and charges as per the
plans for the customers. It must have the facility for the customers to online book the slot timings and plan that they are looking forward to(Barney, 2018). Besides this, the company also need to establish its fitness apps because it is observed in most of the health clubs that customers are using fitness apps to check and measure their daily workouts. The health club needs to be technologically driven only then people would love to come, enjoy and at the same time stay fit.
To succeed in the New Zealand market, the company would also have to meet the intangible demands of the health care club-like increasing brand reputation among the customers, generating brand equity and so on. Other than this, there is another technical side which also needs to be completed by the owners these include operational and administration task. These include registering the business on both states as well as national levels to get a licensing certification from the local and national authority of the country(Monteiro, Soares&Rua, 2017). It also includes registration and tax paying. If the health club is also thinking of daycare child services than in that case the health club will require another separate license.
Generally, a health club or a fitness centre requires a lot of equipment and training services for the clients. There would be a demand of treadmills, weights, stationary bicycle, rowing machine, training bench, dumbbell set, barbell set, kettlebell set, fitness ball, pull up frame and bar, accessories and so on(Schriber&Löwstedt, 2015). If the health club also wants to provide other amenities like message then it would also require message booth, towels, robes and other similar items. Seeing the coronavirus epidemicin New Zealand health clubs need to even purchase COVID essentials like it even needs sanitizers, N-95 mask, disinfectant sprays, immunity supplements, disinfectant handwash, infrared thermometers and so on.
Let’s determine which resources are available and which needs to be obtained from other sources.
Availability of The Resources
The human resource which plays a vital role in the running and administrating a business is not currently available. It is because the need of the Gym is not to have an expert in managing the requirement is different here. Gym trainers and certified CRP are required which needs to hire for the organization. On the finance part, the health club has $50,000 but if I require an extra amount for setting up things than the company would be required to take a loan from the bank(Hasan & Habib, 2017). It does not have sufficient finance to do afford extra things that the health club might require. The good life health club has created a website for its customers. It is in the execution phase soon it will get launched in the market for the customers to register and take the live classes for now. Once the lockdown in New Zealand will get over the company would start its health and fitness club.
Application for tracking the workouts of the customers is in the developing phase. It would require time to get this work done. The tech team of the company is working on it and will launch the Goodlife health club for its valuable customers. In response to the intangible resources, the company has completed all its formalities of licensing and insurance in the local market. Once it gets established properly and get a breakeven point, it would start its health club centres at different parts of New Zealand as well(Kampf, Majerčák&Švagr, 2016). Health club currently does not have tangible items that are equipment's like treadmills, weights, ropes, stationary cycle and so on. It needs to find out a local dealer who would provide with all the equipment’s required for the health club. These steps would help the company to fulfil all the requirements and establish itself in the location that it has decided to start with.
Resources play a very significant role in establishing an organization thus needs to plan strategically. The initial investment of a company is very small and thus the members need to understand and find out strategies by which it can make the most out of the resources. All the resources defined above are important and none of them can be neglected because all of these helps in establishing the health club. To run it successfully the business owners must start with resource planning and they should align which things are important and which can be left for some time(Osotimehin, 2019). Like instead of purchasing all the tangible items the company must first get the most commonly used health fitness item like treadmill and stationary cycle.
These are the items which are used by every customer but there are some which can be introduced later like the message booth that the company is planning for in the health club can be introduced later to its customers once the health club starts getting the potential customers. The other essential equipment’s like kettlebell set used for activating a slightly different profile of the muscle, barbell set used by the people in Olympic can be purchased later. The health club must purchaseall the standard equipment items like a cable machine, smith machine, lever machine for fitness purposes(Hannah, Bremner&Eisenhardt, 2016). The company need to understand which things are important for their health club and must install only those it will save money for the organization at the initial stage.
Here are some business goals for the health club which the company is looking forward to:-
1. It’s very first goal is to make its member healthier by reducing the chances of cardiovascular and type 2 diabetes in the customers.
It is observed that people in New Zealand are suffering most from diabetes and cardiovascular diseases. Thus, there was a need for some health and wellness club where people can go not only to stay fit and active but also meet other people and increase their contacts. It also helps people to stay motivated and feel them with new enthusiasm.
2. It’s a second and most important goal is to generate profit after attaining a breakeven point.
Every company be it a health club or some other business, all run with a single motive that is to earn profits(Witthaut& von Delft, 2018). It also aims for the same but has aligned it with the wellness of its customers.
3. It’s another goal is to provide features worth the price paid by the customers(Heikkilä, Bouwman&Heikkilä, 2018).
The features and services provided should be such that all the customers remain satisfied with the amount that they are paying to remain fit and healthy. It has brought a lot of new concepts for the people in New Zealand like child care services. The mother can now take the services in health club while the staff member will take care of her child for the time she is practising with the machines.
4. It's one of the other goals is that it wants to make the plan cost-effective so that maximum people can make the use of the health club and the retention rate of the customers is high(Ascarza et al. 2018).
It is often observed that most of the people cancel their health clubs plans just because they cannot afford high prices and are devoid of the services which they can take to keep themselves healthy and fit. If the prices of the club plans would be low, everyone can attain services and can get benefits of it.
5. It wants to become the number one health club in the entire Auckland.
There are various other similar health clubs in the Auckland that are already flourishing in the market but to reach the top the company needs to plan something different which is not in the plans of the other health club. Bringing something innovative scheme can help attract customers towards Goodlife health club.
Strategic Issues Identified in Terms of Goals
One of the biggest issues for the health club is to attract customers towards it. Findings of the research state that more than 50 per cent of the people who step out into the fitness world does not like the exercises and the task they are given to perform. It may be because they are assigned to do the same task again and again. Their expectations are high and need a reality check because they are not changing their habits or diet. Despite these issues the health club needs to start offering more fun accessories and equipment’s, they need to start interacting with the customers more and needs to become more liable and transparent(Kasiri, Cheng, Sambasivan&Sidin, 2017). These steps will help in attracting new demographic people as well to the club.
Member retention is another issue as the health club has to constantly battle with the new studio opening in the market. To keep the members intact with the firm, the health club needs to keep the members engaged regularly. The health club can overcome this issue by surveying its members(Pizam, Shapoval& Ellis, 2016). It will give the members can the opportunity to raise their voice for the challenges they are experiencing. The trainers must ask the members whether they want a different piece of equipment in the health club. This type of feedback is imperative for the health club as it will help the members to remain engaged.
Consistent revenue generation is another issue for the club. It is revenue that runs a business. It pays for electricity, water, types of equipment and everything that is required to maintain it. Thus, it is very important to analyze and have a grasp of finance. Relying on an unorganized spreadsheet can let the business down. The need of the hour is to invest time in creating software for managing all the health club finance so that it becomes easy on a click for the company to get its financial reports any time. It is identified through research that the churn rate of the health clubs is 30 to 50 per cent. But by understanding the financial reports the health club can stay on the budget and at the same time can generate consistent revenue.
Here are the key tasks that the company is going to undertake to achieve its goals:
To make customers healthier, the health club will indulge in health assessment activities it will check the health status of the customers daily and plan workout based on the current health statistics of the person.
To increase its profit revenue, the health club will keep on revaluating its policies from time to time with the change in trends(Kainth&Vij, 2017).
To make customers feel that it is worth to pay and stay healthy, the company is thinking to provide personal trainers to its customers. The personal trainer will maintain safety and will also take the workout to the next level. It will also help the customers to work hard than the usual.
To decrease the boredom of the people and to retain maximum customers in the health club the company would try to bring variety in its health club. It can be done by providing an area for yoga and dance class as well.
To attain the topmost position in the market, the company will try its best to keep its customers motivated throughout the workout(Fornell, Morgeson, Hult&VanAmburg, 2020). It is a very important part of the organization cause if they lack motivation they will cancel out their plan and eventually it will affect the health club.
Five Years from Now
Currently, the business is at the initiation phase and it would take a lot of efforts to make it reach the position of the top health club in the entire country. It will expand its business by adding different areas of health like it will start spa health and so on. The company will give tough competition to its competitors in the market by engaging maximum customers. It will open its centres in other cities as well(Witthaut& von Delft, 2018).I will try to bridge the gap with the implementation strategies that I have discussed in the previous sections.
Risk analysis is a process to identify and manage all the potential problems that could affect business activities. Risk analysis is carried out by identifying the problems and then estimating their severity and likelihood to cause a problem(Hyatt, 2018). It also helps in managing the risk and mitigating its impact on the business. Risk analysis is a very essential tool for any startup to determine the risk involved in the business.
Here is some risk associated with the health club.
There is a huge difference between monitoring and evaluation process because monitoring is undertaken during the project development phase whereas evaluation is done at the end of the complete project(Ramdhani et al. 2019). Both the processes look and analyze what has happened and which activities have been implemented. These are used for assessing the performance of the project.
Activities to Measure the Outcome
These are some processes by which the health club can measure its success in the market.
Revenue per client - To measure the revenue of the health club per client.
Revenue per class- To measure the percentage of the people attending the yoga, aerobics and healing class.
Client retention rate- To measure the number of people retained after a certain period.
Lead conversion rate- To find out the percentage of the leads that are converted into sales (Callistus& Clinton, 2016).
Revenue per square foot- To measure the revenue of the health club based on square foot available.
Customer satisfaction rate- To calculate the percentage of the customer who expressed satisfaction towards the service provided.
Churn rate- To measure the percentage of the people who discontinued the health club.
The average length of the membership- To measure the length of the average member of the customer.
Net profit of the business - To calculate the net profit of the organization.
These process of finding out the churn rate, customer satisfaction, gross profit, average membership, revenue from the customer, lead conversions will help the health club to measure its success of the business. Without carrying out these activities to measure the percentage, it would become very difficult to find out whether the health club is flourishing in the market or not.
It can be concluded that the idea of starting a health club business would be great seeing the current situation of the people in Auckland, New Zealand. The people are becoming conscious of their health and are looking forward to someplace where they can not only take on the activities and services abut also feel good. They are looking for a place where they can meet people and motivate one another to improve their health condition. Goodlife health club is aiming to provide these things to its potential customer so that they not only become healthy and fit but also enjoy life.
It has therefore undergone various types of analysis like SWOT analysis, PESTLE analysis and so on to identify whether it would be a smart choice to start a health club business in the market or not. After realizing that it could be started, the business owner then started to determine the resource demand and started finding out the availability of these resources. The report also gives a detailed insight of the business goals that the health club is planning for along with the issues that it might have to experience in the future. At last, it conducts a risk analysis to find out the potential risk of the business and how to measure and monitor the business outcomes. After conducting the risk analysis it was found that establishing a completely new business is not easy but it is not impossible also.
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