Business Development Proposal for a Gym and Fitness Business

1.1 BACKGROUND

Opening a gym and fitness business is a very profitable and interesting venture. In the 21st century, Gym and fitness business is gaining more grounds than it was in the past decades. People are now health conscious, and are more aware of the benefits they stand to gain after they enroll in a gym (Bull et al. 2016, p.102). Moreover, individuals from all diversities know they can improve their lifestyle, stay healthy, and live longer if they exercise regularly. Statistics indicates that there is steady increase in the number of individuals who enroll in gyms. Therefore, with the increase in the population enrolling in gyms, it means there is increase in the revenue generated by gym and fitness business (Heikkilä, Bouwman, and Heikkilä 2018, p. 107). Some people don’t enroll in gyms due to lack of money to buy some of the basic equipment, but because exercising regularly needs discipline. Moreover, several factors are accountable for the springing up of gym business in various locations in UAE, especially in Dubai (Christopher 2016, p.32). Currently, in a growth phase, gym and fitness industry in Dubai has enjoyed a seismic shift over the last 2 to 3 years in response to various driving forces. The most primary reason for gym and fitness business is the increase of obese population. Obesity is a risk to people’s health, which is why obese people who want to remain healthy and fit enroll in gyms close to them (Markula 2017, p. 12). Additionally, different individuals visit gym and fitness centers for several reasons. Some enroll in the gym basically to lose weight through thorough exercising, while others visit the gym to train as well as increase their biceps or muscles (Markula 2017, p.12).

The paper intends to suggest a business development proposal for a gym and fitness business. The proposed company is “Comfort Fitness Club” and will be situated in Dubai, UAE. The proposal seems to have a great potential since people in UAE are more concerned about their health nowadays due to increasing prevalence of heart-related diseases and obesity (Heikkilä, Bouwman, and Heikkilä 2018, p. 107). Currently, according to UAE statistics, Dubai’s health and Fitness industry is gaining 15 percent growth every year. The specific purpose of the new venture is to offer gym and fitness programs to the all adults (20 to 45 years) located in Dubai. Furthermore, the company will be nurturing long-term changes of the life style for its prospective patrons through nutrition and exercise for their well-being. The company plans to offer unique amenities, features, and services which will separate it from its competitors hence leading to its success, growth, standard revenue, and independence for all its initial founders. Moreover, the gym and fitness company will open up as limited liability Corporation that offers its members a state-of the art gym and fitness center hence meeting the desires and needs of every client. The firm is also going to provide an assortment of universal and updated equipment with various features to make sure the workout is of the highest quality for all its prospective customers at a friendly and affordable price. The members of the company will be granted freedom to work out at their own free will or take the option of adhering to one of the firm’s detailed workout plans for all adults. The membership of the fitness company will be divided among the investors and founders of the firm.

Additionally, in contrast to other businesses whose focus is to exceed the profit margin, and concentrates on the financial performance of the business, the proposed firm will prioritise the needs of the customers (Attlee et al. 2018, p.92). The trainers and dieticians will be encouraged to build a good customer experience and relationship which will promote referrals to the business, especially when the clients are satisfied with the services offered by the firm. Developing a strong rapport with the customers will be used as an instrument to gain the clients loyalty to the firm’s services (Kim and Ling 2017, p. 1). Furthermore, the business will be guided by the goal of increasing clients’ life time value. The company will also go further to educate the community about the benefits of staying healthy as a way of marketing its services hence attracting customers (Pickett et al 2016, p. 200).

The company will also prioritise creativity and innovation in regards to the products and services provided by the club which will give the business an edge over other fitness centers in Dubai (Claire and Fax 2009, p.471). “Comfort fitness club” is going to have a research and innovation department that will develop the best exercise and techniques to be implemented. The R&D department will also be obligated to offer the firm with the new and advanced techniques that will lead to customer satisfaction. Finally, the founders of the proposed company will ensure that the employees have a complimentary demeanor (Pickett et al 2016, p. 206). The recruited trainers need to have to passion to work in a gym-and-fitness center, as added advantage of having qualifications and basic education in the field.

1.2 SCENARIO SELECTION

“Comfort Fitness Club” company should consider various aspects when choosing a scenario the start-up business will use to penetrate in a competitive market. The scenario must be effective, either in the long run or short run (Lum 2017, p. 9). The company will consider a scenario of establishing a new start-up by partnering with an existing company owned by an entrepreneur. A partnership with another entrepreneur will help reduce the start-up burden such as raising capital (Ren 2016, p. 12). An entrepreneur who has been in the market before will be useful when setting up the business since he or she has the required skills, knowledge, and experience (Kiel 2014, p. 25).

1.3 THE BUSINESS OPPORTUNITY

1.3.1. Rationale behind the business idea

In the proposal, the business idea is influenced by both the business opportunity and the benefits behind starting up a gym and fitness business in Dubai, UAE.

Currently, most people are health conscious which in return is increasing the demand of Health and Fitness services (Král and Králová 2016, p. 5169). The trend is, therefore, leading to a high demand of gym and fitness services which are not fully satisfied by the existing companies in the industry. Furthermore, the small emirate and city hosts several gyms but still there seems to be opportunities for starting up new gyms and fitness centers due to continuous increase in the number of gym goers. As the population of expats is speculated to increase in the future in Dubai as a result of job and business opportunities, the trend of gym is also expected to grow (Kiel 2014, p. 41). The demand of gym is not only increasing in Dubai but there are also new and improved fitness techniques adopted by gym centers, and individuals are taking significant interest in these modern fitness techniques. Therefore, there seems to be no sign of gym industry diminishing in the near future, but instead the number of people enrolling in gyms will be on the increase hence translating more revenue to the gym business entrepreneurs or owners. Moreover, the population of UAE is not getting any healthier, with levels of obesity striking at twice the global average (Guo et al 2016, p. 132). The World Health Organisation reported that 67% of women and 70% of men aged 15 years and above in the nation are considered overweight (Heikkilä, Bouwman, and Heikkilä 2018, p. 121). Furthermore, there are several fitness centers in Dubai which have proven track of success, hence proving that starting a gym and fitness center in UAE is attainable. However, the availability and space of the beautiful buildings in Dubai will allow the management to locate “Comfort Fitness Club” in a place where clients will access the facility easily (Lizzy and Jean 2014, p. 85).

Furthermore, starting up a business in the UAE is less stressful compared to other regions. A business start-up in Dubai only needs enough capital to equip the gym facility and fulfill the standards expected by the gym users. As per the statistics done by the World Bank, UAE is ranked position thirty-one in regards to the easiest nation to start-up a business (Lagrosen and Lagrosen 2016, p. 669). For instance, the UAE’s fitness industry has no regulations to some other developed nations, where fitness professionals are obligated to update their credentials after a period of two years (Kostas 2018, p. 24). Moreover, establishing a gym and fitness business in Dubai, the company acquires significant cost benefits which are not commonly available internationally. For instance, the gym and fitness business will not be submitted to taxes or any trade quota and barriers. Therefore, the proposed business is going to be located in Dubai as a way of taking advantage of the economy in Dubai to generate revenue. However, UAE is a country that is increasing supporting overseas investment and businesses due to its open and free economy. UAE has a conducive environment to do business as it is the hub of the Middle East as well as the primary regional stop for tastemakers, multinationals, and conventions (Heikkilä, Bouwman, and Heikkilä 2018, p. 107). UAE is also a fast moving nation with a population of approximately ten million comprised of young, multiethnic, and diversified people (Guo et al. 2016, p. 125). A large population means there is possibility of high demand for gym and fitness services within the country. Additionally, the economy of the UAE boasts an ambitious combination of commerce, cost, and environmental merits that make an appealing and ideal investment for gym and fitness business (Markula 2017, p. 9).

1.3.2. Target market

The “Comfort Fitness Club” target market will cut across individuals of various walks of life especially those people who live near the center. The firm will segment its customers from the age of 20 to 45 years. The company will be targeting both the female and male customers equally. Due to the fact individuals enroll in gym and fitness clubs for several reasons, the enterprise will categorise its customers into three different groups. The first group be composed of obese people who are looking towards losing weight through proper guidance as well under the observation of a qualified trainer (Sweaney 2015, p. 24). The other category will comprise of individuals whose needs is to build the body especially biceps. The last group of the target customers will be of people who want to enroll for cardio sessions under careful guidance of a qualified instructor (Sweaney 2016, p. 12). The sessions will involve a combination of bikes, treadmills, and light weights. Additionally, the proposed enterprise will also work towards offering services, environment, and facilities which will assist the firm reach out the target market. Therefore, the enterprise intend to market its services to people such as young couples, universities, business people, household, Corporate Executives, as well as sportsmen and sportswomen. Additionally, the enterprise will be located in a busy street or highway where people will be able to identify it and know of its existence.

1.3.3. Business Model

A client will have access to the gym and all the equipment within the training premises at a fee. A client who enrolls for a membership of one year or more will be granted a discount and other benefits. The company will employ professionals to instruct clients and supervise those exercising alone hence assuring customers’ satisfaction as they will receive the best services worth their money.

1.4 AIMS AND OBJECTIVES

The primary goal of “Comfort Fitness Club” is to grow sustainably in the gym and fitness industry. The firm aims to create an image in the customer’s mind as a cost-friendly enterprise which offers premium gym services hence winning their loyalty (Thompson 2014, p. 16). Therefore, the enterprise will work towards providing the clients not only variety of services but also a healthy customer relation. At the end of the first year of operating in the gym and fitness business, the enterprise aims to exceed with 70 percent class capacity. “Comfort Fitness Club” aims to have 200+ memberships at the end of the first year, which means there will be high brand awareness across the streets of Dubai. Additionally, by the end of the second year “Comfort Fitness Club” will try to increase its membership with 30 percent. Furthermore, the company targets to increase its profit margin within the first year of the business operation as well as reduce the production cost through keeping large margins. After earning customer loyalty and huge profits, the enterprise will expand the business to the rest of UAE.

Objectives

Ø To grow sustainably in the gym and fitness industry.

Ø To create an image in the customer’s mind as a cost-friendly enterprise.

Ø To exceed class-capacity with 70% within the1st year of operation.

Ø To attain 200+ membership within the 1st year of operation.

Ø The membership to increase with 30% at the end of 2nd year of operation in the gym and fitness operation.

1.5 STRUCTURE OF THE PROJECT

The present business proposal is made up of five sections. The first part covers the introduction part which discusses the background of the business, scenario, the rationale of the business ideas, as well as the aims and objectives of the proposed enterprise. Chapter 2 covers the business concept and business opportunity, explaining the idea, products, vision, mission, position, and market growth expectation. Chapter 3 is the core section of the business proposal as it entails extensive market research on the selected firm. Additionally, the section discusses the profile of the organisational and financial feasibility. Chapter 4 covers the business model and strategic analysis of the business idea. Chapter 5 covers the business plan inclusive of marketing, finance, operation, as well as organisation.

CHAPTER 2: BUSINESS OPPORTUNITY

2.1 BUSINESS OPPORTUNITY

The gym and fitness industry in Dubai is awash with opportunities (Noack 2014, p. 22). As per Signature which is among the leading suppliers of fitness and well-being equipment, health and fitness industry is experiencing fifteen percent annual growth as mega leisure projects create demand (Gray et al. 2015, p. 26). Firstly, in Dubai most people are subjected to office jobs which are characterized by high pressure of meeting the goals of the corporation (Picazo 2016, p. 112). Therefore, there is a business opportunity of establishing a gym and fitness center in the region as people need a physical fit and a peaceful mind to cope up with the daily challenges of life.

The other business opportunity in gym and fitness industry is that majority of UAE adults deal with a weight problem. The current scenario of the Dubai population portrays that there are seventy-five percent overweight incidences hence meaning in every three persons out of four are obese or not in their proper shape (Bucko 2017, p.42). The World Health Organization reports that obesity in UAE can be as a result of various factors including geographic location, medical conditions, genetics, economic status, as well as individuals’ lifestyle (Guo et al. 2016, p. 118). Therefore, with reports obesity and overweight incidences in UAE, the situation creates a vast opportunity in the region for entrepreneurs in the field of gym and fitness industry. Furthermore, through the increase of number of obese and overweight adults annually in UAE, there is also a growing trend towards people taking a more active role in managing their health and physical conditions (Bucko 2017, p.40). The WHO reports also show that every year, more individual enroll in gym and fitness clubs for training sessions or classes in efforts to change dietary habits, lose weight, and develop long-term healthy lifestyles (Bucko 2017, p.40). Additionally, the thought of emerging better every day and huge competition are the primary reasons behind a stressed mind. The problem is intensified due to abnormal lifestyle choices (Picazo 2016, p. 112). However, most people in Dubai rely on fast food instead of home-cooked delicacies which are significant contributors to obesity in the city. Thus, due to the health and fitness problems people are facing in the city, the business opportunity of gym and fitness business in Dubai steps in which will help to make a huge progress. Additionally, the advent in internet and social media platforms, is educating the current population regarding maintain a good shape, although the main challenge is they lack the ideal venues to do the physical exercise (Aversa et al. 2015, p. 162). Therefore, the “Comfort Fitness Club” company will explore the opportunity through offering the individuals with a well-standardized center where they can do their physical exercises and get nutritional guidance. Additionally, the population in the city is becoming aware of its well-being, which assure the fitness centers a secure and a good future (Pickett et al 2016, p. 206). The other business opportunity in Dubai is the number of individuals seeking for a healthy mind and a fit body is rising day by day. “Comfort Fitness Club” company will significantly turn the tables and set the bar of standards high, including a spa where the stressed population can relieve some stress. The firm will also provide a perfect platform where the stressed people can obtain good guidance from the fitness professionals and consult with the dieticians on matters concerning proper nutrition.

Growth potential of gym and fitness industry in Dubai also creates business opportunity for entrepreneurs or investors (Pickett et al 2016, p. 206). The health and fitness industry has gained several benefits from most people in UAE developing interest in healthier lifestyles, which is apparent in the outcomes of 2017 Franchise 500, Entrepreneur magazine ,where the strongest and the most financial sound franchises are in the gym and fitness industry (Clare and Faye 2009, p. 472) . Furthermore, as people take an active role of their physical fitness, they are in turn becoming more comfortable to spend money on physical exercise training and any other related therapeutic treatments. For gym and fitness franchises, the situation can translate into more revenue or profits as clients perceive expenses of health and fitness services as worthwhile investments (Pickett et al 2016, p. 206). Additionally, the influence of the baby boomer generation on the gym and fitness industry is also accountable for the growth potential of related businesses. Even though in Dubai most fitness clubs report that majority of their members tend to be between the ages of 18 and 44 years, members who are over the age of 35 years are observed to be the most active users (Gray et al. 2015, p. 26). On average, club members of age 35 and above were reported to enroll for physical exercise 20 to 50 percent more often than the ones less than 35 years (Gray et al. 2015, p. 26).

Lastly, business opportunity also arises a result of characteristics or features of gym and fitness industry in Dubai (Gereffi and Fernandez-Stark 2016, p. 2016). The health and fitness industry continues to expand in UAE as people become conscious of the benefits of maintain and achieving a healthy lifestyle (Dhār 2017, p. 50). As the costs of health care upsurges, clients realize it is more economical to invest their money and time in attaining good health instead of spending on conditions treatment attributed to unhealthy habits (Attlee et al. 2018, p. 90). Additionally, declining unemployment rates and increase in per capita income in Dubai have also helped the gym and fitness industry to experience growth (Christopher 2016, p.47). Moreover, the health and fitness industry is characterized by specialization. Novel and new regimes of fitness as well as personal care treatments seems to attract attention in markets which may be saturated with competition (Kiel 2014, p.24). A successful gym and fitness business has to generate outcomes to develop client loyalty and maintain members. Even among all-purpose gyms, the most strong and unique business have a distinguishing identity and focus on a specific type of experienced for a defined clientele (Bull et al. 2016, p. 99). For instance, ‘Comfort Fitness Club’ aims to be a successful venture, though it will provide very varying type of experiences. The firm will cater for serious weightlifting, bodybuilding, and nutritional coaching. The firms programs will emphasize of aiding members succeed by getting fit and stronger. Additionally, in Dubai, the gym and fitness industry is characterized by low start-up costs, although they differ widely depending on the size of the club and innovation (Dogan 2015, 41). Business in the adults segment can be opened with as low as $20,000 for some home-based franchises, while the ones that need a specialized equipment and a specific location can involve investments of more than one million dollars (Sweaney 2016, p. 12). In a gym and fitness, cost factor is the business requirement for physical space. Some gym ventures need the purchase or the rental of a physical location together with proprietary equipment for workout (Markula 2017, p.12). Other investors rent training space from schools or churches on as-needed basis, hence reducing the ongoing and initial costs (Sweaney 2016, p. 24). Therefore, the lowest start-up cost seems to be from services, such as dental and medical billing, that are designed for trainers to work at home without the need for physical facilities (Markula 2017, p.12).

2.2 BUSINESS CONCEPT

2.2.1 Business idea

The business idea is to start a gym and fitness venture which will offer training services (both private and group training) and nutritional coaching. To ensure success of the venture, “Comfort Fitness Club” will serve as a profitable market as well utilize a clear and simple business model (Miller, Williams, and Yohn 2018, p. 68). The firm will stay focused on offering customers with quality services which will lead to the growth in the fitness industry. Additionally, the club will be located in a place that is convenient for the target customer to easily enroll in training classes in several times a week. Moreover, the firm will match its service offerings and the price point (Ravanfar 2015, p. 56). Regardless of the modality, customers will have to pay monthly fee or subscription to enjoy supervised and trainer-led instructions. In group training, the monthly subscription will be $200. Private training will be offered by trainers for 40 minutes every session and the clients will be able to subscribe with $850 per month. Furthermore, the dieticians will be in place to offer nutritional guidance or advice to the clients, where the clients will be required to pay 175 dollars per month.

2.2.2 Mission

The mission of the “Comfort Fitness Club” company is to create an adult-focused (20-45 years) work out environment that nurtures confidence in its prospective customers. The company also looks forward to promote success of its customers in meeting their sustainable fitness level. Finally, “Comfort Fitness Club” has the mission to make sure that the clients acquire the best experience during their enrollment in the facility. Facility’s continuous improvement and upgrading of the equipment utilized during the gym sessions will be important in ensuring that the enterprise has a competitive advantage over other businesses offering similar service in Dubai.

2.2.3 Vision

The vision of “Comfort Fitness Club” is to help customers meet their needs within few months of enrolling into the gym training classes as well as the corporation becoming one of the popular gym and fitness clubs in UAE. Although, the firm’s motivation is customer-centered, it will be important for the firm to generate maximum revenue and profits.

2.2.4 Products or services.

“Comfort Fitness Club” company will offer a vast of services to the prospective customers. The firm services will be offered by professional and trained instructors to ensure clients receive quality training hence there satisfaction. Each instructor will be certified and has to meet the standards of CPR and first aid. Besides, every trainer will be required to have specific training and qualifications that enhances them to treat every customer in a special way depending on the needs or desires.

“Comfort Fitness Club” will offer a large selection of gym equipment that are bio-mechanically designed for adult’s body. The equipment to be found at the training centre will include Stairmaster, Stepmills, Rower, Gravitron, Elliptical trainers, Steppers, and Cross aerobic trainers among many others. Additionally, the firm will offer a floating foam-floor for various steps such as yoga classes, muscle conditioning, and Aerobics.

The company will also provide training services that is both private and group fitness classes. Private training classes will be conducted either within the clubs’ facilities or at clients’ home. Group exercises will be conducted by professionals who will be required to make the sessions enjoyable but stimulating. A favorable environment and availability of advanced equipment will be grounded on the idea of satisfying customers. The company will also provide Pilates classes which will help clients in building strength without bulking. Due to the current situation where most people are reported to be overweight in UAE, the company will take advantage of the need to reduce the rate of obesity which is rising in the country through offering nutritional coaching services (Picazo 2016, p. 110). Exercise sessions will range from beginner to professional level. The program will be instrumental in helping the customers employ resistance technology in training. A personal gym locker will be provided, where the clientele can store their belongings, and be assured of security. The evaluation of personal goals of the customers will be instrumental in ensuring progress in terms of results. A spa incorporated in the gym facility will ensure comfort and relaxation of tired clients by employing professionals who will offer reflexology and massage services. The business will also set-up a sauna, which produces heat to make the body sweat, hence causing relaxation and improving cardiovascular health.

2.2.5. Positioning

As per Zao, Libaers, and Song et al (2015, p. 450), positioning helps a firm to establish the identity of its services or products within the eyes of the purchaser and distinguish it from the competitors in the market. However, the positioning strategy of a company is influenced by several variables associated with customers’ requirements and motivations as well as by its rival’s actions. Therefore, the way an entrepreneur or investor positions a start-up business have a critical effect on the buying decision of a customer (Kuroda, Iwami, and Sakata 2016, p. 1342). In other words, positioning builds an image in mind of the company’s target customer or segment about the startup and its product in relation to the available alternatives hence the need the clients know about the company and its services.

Kuroda, Iwami, and Sakata (2016, p. 1342), decribes positioning as the process of a company or startup trying to occupy a market impression or niche of its business in the mind of a customer. Moreover, positioning is about the way a firm what clients to perceive about its services and products, therefore, defining firm’s position in the market must be one of the first things the entrepreneur or investor should try to do in the startup venture or marketing plan (Zao, Libaers, and Song et al. 2015, p. 450).

“Comfort Fitness Club” short-term position will be “in the market gap”, where there exists no or few competitors. It is the best position where the club will easily provide a friendly and affordable price. The main challenge for the process of positioning will be reaching the target market or group segment and planning for the first meeting, in order to make presentation of sales as well to convince the clients in high quality of service and potential to conduct the venture (Rothaermel 2015, p. 17). According to Rizwan and Anu (2014, p. 50), long-term plan of positioning should be based on continuous satisfaction of the clients in order to receive good referrals or recommendation that help in building future image and developing the brand of the company.

Furthermore, a corporation with good positioning strategies obtains a competitive advantage over the rivals in the industry or market (Mckenzie, Chiliya, and Chikandiwa 2016, p. 645). “Comfort Fitness Club” will make sure that it attains the aforementioned objectives and participate in an effective competition in the fitness market, hence; build a quality brand that will differentiate its products from those of the competitors in Dubai. The club will be set up as a premium gym and fitness services center where the membership of the client will act as a mark of quality and a status symbol. The strategy will be targeting the clients from all diversities who are ready to spend their dollars in exchange of the exclusive services offered by the club. Additionally, the club will have a refreshment juice bar, offering beverages and drinks, to make sure the clients are energized throughout the exercise training. The bar will also offer supplements of nutrition such as protein shakes.

Additionally, the marketing department will be obligated to launch a referral program which will be seeking customers’ to recommend the club to their friends and families. To encourage the rate of referrals, the firm will offer discounts on every customer who brings in new colleagues or friends to the gym facilities. Furthermore, the business will ensure it has an evolving technology as a strategy to help the business have competitive advantage, through offering free internet access in the gym. As an added advantage, to the club’s clients, nutritional experts will be