Transmittal

Memo
Auto Deals of Westville
To: Management
From: Rachel Wiskari
Subject: Fitness Center Report
Date: 11/20/2017

Dear management team,

Enclosed is a detailed report on the effects a fitness center will have on our workplace. It will
inform the Auto Deals of Westville management team of the positive financial outcomes of this
proposed project, as well as demonstrate the intrinsic benefits for employees who utilize the
fitness center.
This report outlines both the health benefits and monetary savings of opening a fitness center,
features to consider in design and development, the estimated cost of building and hiring staff
to operate the center, and the expected profits it will generate, apart from the predicted
savings created as a result. Through in-depth research and preparation, it is clear that a fitness
center would be a worthwhile investment and is definitely something all companies should
consider developing.
This will give an idea of what to expect for the development of the fitness center if considered
for creation. If there are any further questions, please email rachelwiskari@autodeals.com or
call (847) 555-2456 at extension 1544.
Thank you!
Sincerely,

Rachel Wiskari
Assistant to the Project Manager
Auto Deals of Westville
333 Business Drive
Westville, IL 60789
(847) 555-2456 ext. 1544
rachelwiskari@autodeals.com

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 Fitness Center Report

Rachel Wiskari
Assistant to the Project Manager
Auto Deals of Westville

Distributed on December 3 2017

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 Abstract
There are many factors involved in opening a fitness center in the workplace. The health
benefits are one of them. This report outlines all the potential benefits earned from opening a
gym, from studies on stress levels and the productivity levels of employees, along with the
reduced cost of health insurance. The design and development of it is another important factor.
A list of equipment needed and a proposed blueprint is based on in-depth research and
affordability is included in the analysis. One of the greatest concerns for employers is the cost.
The report gives a recorded and analyzed cost of creating a fitness center and hiring staff, as
well as recommendations based on the evidence.

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Table of Contents
Transmittal .................................................................................................................................................... 1
Abstract ......................................................................................................................................................... 3
Executive Summary....................................................................................................................................... 5
Analysis ......................................................................................................................................................... 6
Introduction .............................................................................................................................................. 6
Benefits of an Employee Fitness Center ................................................................................................... 6
Reduced Stress Levels ........................................................................................................................... 6
Increased Productivity .......................................................................................................................... 6
Reduced Absenteeism .......................................................................................................................... 7
Reduced Health Insurance Costs .......................................................................................................... 7
Conclusion ............................................................................................................................................. 7
Proposed Design and Development ......................................................................................................... 8
Layout.................................................................................................................................................... 8
Equipment ............................................................................................................................................. 8
Conclusion ............................................................................................................................................. 8
The Expected Cost..................................................................................................................................... 9
Construction.......................................................................................................................................... 9
Equipment ............................................................................................................................................. 9
Hiring Staff ............................................................................................................................................ 9
Conclusion ........................................................................................................................................... 10
Recommendations and Conclusion ........................................................................................................ 10
References .............................................................................................................................................. 11

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 Executive Summary
Companies all over America are implementing wellness programs for their employees. Evidence
shows that having a workplace health club is beneficial in keeping employees healthy and
productive, while also saving the company money. The small design also eliminates a large
portion of the expense.
Fitness centers are proven to reduce stress levels of employees, creating a healthier work
environment (Physical Activity Reduces Stress, n.d.). Not only that, but they also increase
productivity by making workers healthier and more alert at work (Mack, 2017). Healthy
employees use less sick days, which decreases expenses normally lost to absenteeism by 28%
(Meissler, 2014). In addition, they decrease the cost of health insurance by over $1000.00 when
compared to someone who is physically inactive (Aldana, 2017). In summary, the fitness center
is designed to save companies money.
The gym should be relatively small, about 800 square feet. It should include both cardiovascular
and weight machines, such as the treadmill, elliptical, stationary bike, free weights, leg press,
and lateral pulldown machines, and other items such as towels, yoga mats, water fountains,
and weight scales. There should also be room for both a male and female locker room, as well
as employee office space. The cost of constructing, buying equipment, and hiring staff would
accumulate to an average total between $62,600 and $78,600 in the first year.
Considering the benefits, the expected savings, and the low cost, it would be in a companys
best interest to develop a fitness center for both employees and customers to utilize. Many
companies have already developed a gym, which sets a standard for most workplaces. Because
of this, it would be beneficial to begin the process of development.

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 Analysis
Introduction
Fitness Centers are a useful tool in maintaining physical health, whether it is someone who just
wants to stay healthy or an elite athlete driven by performance. However, the most common
reason people give for not exercising is a lack of time (Waehner, 2017). The best way to
eliminate this excuse is to create a fitness center for employees to use on their lunch break or
after work, or for customers who are waiting for their oil change appointment.
There are many health benefits to having a fitness center in a company. It will lead to reduced
stress levels and higher productivity in employees, leading to company savings normally lost in
absenteeism, low productivity, and health insurance costs. One thing to consider in the
development is the design and features included in the fitness center, and how these will most
benefit the employees utilizing the gym. There is an estimated cost of creating and hiring
employees for the new department included, along with some closing recommendations.

Benefits of an Employee Fitness Center

Reduced Stress Levels
There is a plethora of evidence proving corporate gyms reduce stress levels of employees,
creating a healthier work environment overall. The Anxiety and Depression Association of
America reports, Exercise and other physical activity produce endorphinschemicals in the
brain that act as natural painkillersand also improve the ability to sleep, which in turn reduces
stress (Physical Activity Reduces Stress,
n.d). With a fitness center that is readily
available for employees to use, it will
reduce the amount of stress in the
workplace, which saves companies
money that would normally be lost in
decreased productivity (Workplace
Stress, 2017).
Increased Productivity
Furthermore, employees that utilize an
on-site office fitness center will increase
the amount of productivity for their
company. According to Chron, making
Figure 1. Benefits of Corporate Wellness (Meissler, 2014). it easier for [the] employees to find
time to exercise will improve their
health and well-being, which can have significant financial benefits for [the] business, such as
increased productivity (Mack, 2017).

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Reduced Absenteeism
While productivity increases, absenteeism decreases. Figure 1 demonstrates that companies
who offer a corporate wellness program to their employees reduce their average sick leave
and absenteeism by 28% (Meissler, 2014). This could save companies a lot of money,
considering lost wages due to sick days cost companies an average of $225.8 billion per year in
America (Stinson, 2015). If there were less sick days per year, employees would be saving their
company money, which could go towards replacing outdated office supplies or for other
professional development.
Reduced Health Insurance Costs
In addition, a decrease in health
insurance costs is another
business. The Center for Disease
Control conducted a study on
the influence of company
wellness programs on health
insurance costs. Figure 2 shows
the results of that test,
demonstrating the most
physically active people paid the
least for health insurance
overall. With the convenience of
an on-site fitness center, more
employees can reduce their
health insurance premiums by
over $1000.00 if they remain Figure 2. Inadequate Physical Activity and Health Care Expenditures
physically active for at least 2 in the United States (Aldana, 2017).
hours a week (Aldana,
2017). Giving employees an outlet to engage in physical activity is vital in decreasing the cost of
health insurance for both the business and the workers.
Conclusion
To conclude, the benefits of opening a fitness center within a business are clear. They reduce
stress levels among workers, creating a pleasant work environment. They also increase
productivity, decrease absenteeism, and lower health insurance costs. All these components
work together to increase company savings and reduce preventable expenses.

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Proposed Design and Development
Layout
When designing a fitness center, one of the most important considerations is the setup. There
are a few important rooms needed in construction: A fitness center with equipment, locker
rooms, and administrative offices (Mion, 2017). Since the company has less space to work with,
those rooms are the
most necessary, and
other features, such as
a pool or gymnasium,
may not require
installation. Figure 3
shows a digital
floorplan of a fitness
center that would fit
the companys needs.
The layout includes a
large space with
Figure 3. Gym Floor Plan (n.d) equipment and free
weights, locker rooms for men and women, and a few administrative offices for conducting
interviews and department meetings (Gym Floor Plan, n.d).
Equipment
In fitness centers, the equipment takes up a large fraction of space, so knowing which
equipment to have in a gym takes precedence. Toyota created a fitness center in 2016 with all
of the amenities of a modern fitness center including a yoga room, free weights, treadmills and
other fitness equipment (Toyota Invests In New Fitness Facility For Associates And Families,
2016). The fitness center should include cardiovascular equipment, such as the treadmill,
elliptical, and stationary bicycle, as well as weight machines, like the lateral pulldown and the
leg press. Other things to include would be free weights, towels, yoga mats, drinking fountains,
and weight scales.
Using exercise equipment helps gym goers quickly increase their heart rate to their target
heart rate, and thereafter, maintain that level for a minimum of 20 to 60 consecutive minutes
which will allow individuals to make the most of their workout (Cardiovascular Workout
Equipment, n.d.)
Conclusion
In summary, having space for equipment, locker rooms, and administrative offices are
important in creating a fitness center. The equipment, such as the treadmill and the leg press,
help members maintain their physical fitness and stay focused during their workout.

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 The Expected Cost
Construction
The cost of renting space for a gym relates indirectly to its size. Smaller gyms are, on average,
800 square feet (Atilano, 2001), and usually the cost of renting a facility operates in cost per
square foot. For a smaller, cheap fitness center, an estimated cost would be around $30-$50
per square foot, meaning the construction would cost between $24,000 and $40,000 (Carter,
2014).
Equipment
Table 1 is a list of possible machines to have in a fitness center. This list includes some of the
most common pieces of equipment (Cavazos, 2017).
Table 1. List of Exercise Machines

Cardiovascular Machines Weight Machines

Treadmills Bicep Curl
Elliptical Lateral Pulldown
Stationary Bicycle Leg Press
Rowing Machine Assisted Chin Up
Stair Stepper Rotary Torso
Inner/Outer thigh
Triceps Extension
While each machine listed is not required, they are what most gym goers expect to see and use.
For a gym of smaller size, it costs about $10,000 for equipment (Primo Fitness Staff, 2016).
Hiring Staff
When it comes to any business, having employees is crucial. The most important ones for a
small gym would be a manager, receptionists, and personal trainers (Hiring Gym Staff: 8 People
you Need to Have, 2015). The cost of employees varies depending on title, experience, and
work performance. Figure 4 shows the cost of hiring two front desk workers within the first
year, a personal trainer in the second year, and a gym manager in the third year and their
expected salaries. In total, the estimated cost of employees in the first year based on figure 4
would be $28,600, and when considering the two new employees, it would cost about
$199,300 for the first three years.

Figure 4. Salary Expenses (ProjectionHub, 2014).

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Conclusion
Based on each factor of cost, the expected expense of developing a small fitness center is
between $62,600 and $78,600 in the first year. These numbers are determined by calculating
the sum of the expected construction cost, equipment cost, and staff cost. While it seems
expensive at first, the savings generated as an effect will outweigh the cost, and the positives
are another factor to consider.

Recommendations and Conclusion

Based on the evidence, creating a fitness center within a company would be profitable and
valuable. A workplace gym lowers the stress levels of employees, creating a healthier work
environment. It also increases productivity, reduces absenteeism, and decreases the cost of
health insurance. A small gym with a few employees is enough to start, and if the company
grows, there is always room for expansion.
To conclude, a fitness center is a great way to save a business money and increase company
profits. With many companies already developing one, it would be beneficial to follow suit.

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 References
Aldana, S. (2017, May 26). Inadequate Physical Activity and Health Care Expenditures in the
United States [Chart]. In Well Steps. Retrieved November 30, 2017, from
https://www.wellsteps.com/blog/wp-content/uploads/2016/11/WellSteps-inactivity-
768x565.png
Atilano, D. R., AIA. (2001). How Fit Is Your Fitness Center?. Retrieved December 01, 2017, from
http://www.lib.niu.edu/2001/ip010934.html
Cardiovascular Workout Equipment. (n.d.). Retrieved December 01, 2017, from
http://www.fitnesshealth101.com/fitness/general/programs/cardiovascular-equipment
Carter, B. (2014, May 01). The Cost of Building a New Fitness Facility. Retrieved December 01,
2017, from http://www.clubindustry.com/design/cost-building-new-fitness-facility
Cavazos, M. (2017, September 11). Most Popular Pieces of Exercise Equipment. Retrieved
December 01, 2017, from https://www.livestrong.com/article/373299-most-popular-
pieces-of-exercise-equipment/
Gym Floor Plan [Digital image]. (n.d.). Retrieved November 30, 2017, from
https://www.roomsketcher.com/wp-content/uploads/2015/11/RoomSketcher-Gym-
Floor-Plan-1502270.jpg
Hiring Gym Staff: 8 People You Need to Have. (2015, September 04). Retrieved December 01,
2017, from http://www.precor.com/en-gb/blog/2015/09/04/hiring-gym-staff-8-people-
you-need-to-have/
Mack, S. (n.d.). What Are the Advantages of Having a Corporate Office Gym? Retrieved
November 29, 2017, from http://smallbusiness.chron.com/advantages-having-
corporate-office-gym-57457.html
Meissler, S. (2014, February 18). Benefits of Corporate Wellness [Digital image]. Retrieved
November 29, 2017, from https://www.slideshare.net/StacyMeissler/corporate-
wellness-infographic71312?qid=a6a147dd-9f25-4474-ae1f-
571ff74dd796&v=&b=&from_search=3
Mion, E. G. (2017, March 22). Fitness Centers. Retrieved November 30, 2017, from
https://www.wbdg.org/building-types/community-services/fitness-centers
Physical Activity Reduces Stress. (n.d.). Retrieved November 29, 2017, from
https://adaa.org/understanding-anxiety/related-illnesses/other-related-
conditions/stress/physical-activity-reduces-st
Primo Fitness Staff. (2016, March 23). How much does it cost to open a gym? Retrieved
December 01, 2017, from https://primofitnessusa.com/how-much-does-it-cost-open-
gym/
ProjectionHub. (2016, November 20). A Powerful Financial Model for a Startup Gym. Retrieved
December 01, 2017, from http://blog.projectionhub.com/a-powerful-financial-model-
for-a-startup-gym/

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Stinson, C. (2015, January 28). Worker Illness and Injury Costs U.S. Employers $225.8 Billion
Annually. Retrieved November 29, 2017, from
https://www.cdcfoundation.org/pr/2015/worker-illness-and-injury-costs-us-employers-
225-billion-annually
Stromgren, E. (2015, September 28). AFS Report: Average Fitness Studio Revenue Was Less
Than $300,000 in 2014. Retrieved December 03, 2017, from
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less-300000-2014
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