BUSINESS PLAN REPORT

Business plan on (Sculpture Fitness Club)

Submitted in partial fulfillment for the

Award of degree of

Master of Business Administration

(2017-2019)

Submitted by

NEHA SHARMA

MAHARSHI DAYANAND SARASWATI UNIVERSITY, AJMER

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 ACKNOWLEDGEMENT

A project would not be successfully completed without the assistance and guidance from
appropriate persons. So, it is a time to express my sincere gratitude towards all persons
who have helped me to complete this project.

First and foremost, I would like to thank DR. DEEPIKA UPADHYAYA and PROF. R.S.
MATHUR for providing a worthy opportunity to undergo a BUSINESS PLAN REPORT.

I express my deep sense of gratitude and sincere thanks to my teachers for the endeavor
throughout the course confidence which helped me. In timely completion of this report,
under whose guidance this project has become reality.

I am extremely grateful to them for taking pains in checking preliminary reports and giving
valuable suggestion, help and encouragement, thank you all for co-operation and guidance
without which the project would not have been successfully completed.

Date: NEHA SHARMA

M.B.A.(DS) – PART II

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 DECLARATION

I hereby certify that the business plan report on badminton academy, submitted in partial
fulfillment for the award of Masters of Business Administration at Center for
Entrepreneurship and Small Business Management, Maharshi Dayanand Saraswati
University, Ajmer is an authentic record of work carried out by me. The matter embodied
in this report has not been submitted for the award of any other degree or diploma.

Date: Signature of the student

(NEHA SHARMA)

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 FACULTY CERTIFICATE

This is to certify that Ms. Neha Sharma student of class MBA (DS) semester III 2017-
2019 has completed her BUSINESS PLAN REPORT under my supervision.

To best of my knowledge and belief that it is an original work by the candidate and based
on her efforts and that this work has not been submitted in any other university or
institution for any award of degree or diploma.

I am satisfied with the quality and the standard of this work and recommend its acceptance
in partial fulfillment for the award of MBA (DS) semester III degree.

Dr. Deepika Upadhyaya

Center for entrepreneurship and small business management

Maharshi Dayanand University

Ajmer.

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Sculpture

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 EXECUTIVE SUMMARY

Sculpture Fitness Club is an organization of ensuring that people stay fit by exercising
regularly and maintain healthy lifestyle. We are going to be located at Choti Nagfani, Boraj
Road, Ajmer.

We are able to secure a standard facility along the road in the heart of the city. Our facility
will be equipped with modern technology. We will work towards ensuring that we provide
our clients /members with a daily program of exercise and diet that perfectly suit their
lifestyle and also to help them achieve their desired results and to help them create lasting
healthy habits that will last them for life.

One of our major goals of starting Sculpture Fitness Club is to encourage adults and
teenagers, to cultivate the habit of regularly exercising and to stay healthy. Our gym
facility is specifically designed and built to take care of adults and teenagers, we have
membership packages that is highly discounted for our regular clients.

We will run a fitness club that will help members who want to lose weight to achieve their
desire without little stress. We have a weight management consultant who will work with
individual based on customized fitness and nutrition needs.

Sculpture Fitness Club is an organization to provide all round health and fitness services to
the residence of Choti Nagfani, Ajmer, which is why we have been able to put up a facility
that can help us achieve the goal. We are optimistic that everyone who enrolled in our gym
and fitness club will definitely derive huge value for their money.

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 BUSINESS PLAN ON “Sculpture Fitness Club”

TABLE OF CONTENT

SERIAL NO. PARTICULARS PAGE

NO.

1 Introduction to the organization 8

Comparison with others 9

About the venture 9

3 Operation strategy 10

4 Marketing strategy 11

5 Financial plan 13

Investment plan 13

Forecasted Financial Statements 16

NPV and IRR of Venture 18

Sensitivity analysis of NPV 19

6 SWOT analysis 20

7 Growth prospective 22

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 INTRODUCTION OF THE ORGANIZATION

Gym business is gaining more grounds in recent times as it was in the 20th century. People
are now more aware of the immeasurable benefits they stand to gain when they enroll in a
gym. It is now obvious to a myriad of people that they can stay healthy, improve their
lifestyle and live longer if they exercised regularly.

Statistics has it that there is a steady increase in the number of people that enroll in gyms
and the fact that gym facilities is now closer to residential areas make this possible. In
order words, with the increase in the number of people that enroll in gyms, comes the
increase in the revenue generated by gyms.

Some people enroll in gyms not because they don’t have the money to purchase some of
the basic gym equipment, but because exercising regularly requires discipline and that is
part of what they stand to get when they enroll in a gym with an instructor at hand.

Different people visit gyms and fitness centers for various reasons. Some people register in
the gym basically to shed some weight through proper exercising, whilst others go to the
gym to train and increase their biceps (muscles) i.e. body building and other enroll in gym
for cardio sessions et al.

These are the services and amenities that will be made available to our clients;

 Personal Training
 Group Fitness Classes
 Spinning Classes
 Weight Management
 Nutrition Counseling
 First Aid Facility

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OUR COMPETITIVE ADVANTAGE

Sculpture Fitness Club is centrally located in a densely populated – residential area in

Choti Nagfani, Ajmer; this is obviously going to give us an edge amongst our competitors.
We equally have a team of highly qualified professionals who will work with all our clients
to achieve their aims or enrolling in our gym and lastly our membership package is one of
the best that anybody living in Ajmer can get; it is cheap and affordable.

We can confidently say that the location of our gym will definitely count as a positive for
us amongst any competitor that might start a gym and fitness business in same location
where ours is located. We will continue to work hard to ensure continuous improvement in
our facility and service delivery.

ABOUT THE VENTURE

Our Vision Statement
Our Vision is to contribute our quota to encourage families and residence in Choti Nagfani,
Ajmer, to engage in the regular exercising of their bodies, so as to enable them stay
healthy.

Our Mission Statement

The mission of Sculpture Fitness Club is to build a best gym and fitness club in Choti
Nagfani, Ajmer, where residents can comfortably train for health and for fitness; a place
where residents can connect whilst achieving their health goals.

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 OPERATIONAL STRATEGY

Sculpture Fitness Club is in business to become the leading family gym facility in Choti
Nagfani, Ajmer, and we are fully aware that it will take the right facility, management and
organization – structure to achieve our goal. We will ensure that we recruit only the best
hands that can help us achieve all that we are set to achieve.
Our business will not be built only for the purpose of giving our members / customers
value for their money, but also we will ensure that we make our work environment highly
conducive for all our employees. We will provide them with facilities that will help them
stay motivated and deliver on their various tasks and goals. In view of that, we have made
provisions for the following positions to be occupied by highly qualified and experienced
staff:

 Gym Manager (Owner)

 Trainers (2)

ROLES AND RESPONSIBILITIES

Manager (Owner):

 Responsible for providing direction for the business

 Creates, communicates, and implements the organization’s vision, mission, and overall
direction – i.e. leading the development and implementation of the overall
organization’s strategy.
 Responsible for fixing prices and signing business deals
 Responsible for recruitment
 Responsible for payment of salaries
 Responsible for signing checks and documents on behalf of the organization
 Evaluates the success of the organization
 Responsible for managing the daily activities in the gym
 Prepares budget and reports for the organization
 Responsible for payment of tax, levies and utility bills

Training Instructors (2)

 Creates training rosters for members

 Assists members during exercise session
 Guides members on how to make use of gym and fitness equipment.

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 MARKETING STRATEGY

Market research:
No matter how good the product or service is, the venture cannot succeed without effective
marketing. This begins with the careful, systematic research. It is very dangerous to
assume that you already about your intended market. Thus market research is conducted to
ensure the right track.
For this purpose, an observation technique is being used and it has been analyzed that there
is a need to open up a fitness club in Choti Nagfani.

Target customer:
The target market for gym and fitness centers can be categorized into three various groups.
The first group is the people who are looking towards shedding some weight through
proper exercising and under the guidance of a qualified instructor. The other group of
people are those who are interested in building their biceps (body building), and the last
group of people are those who just want to enroll for cardio sessions under the watchful
eyes of a qualified trainer. These sessions are a combination of light weights, treadmills
and bikes.
Sculpture Fitness Club will work towards providing services, facilities and environment
that will help us reach out to our target market. These are the category of people that we
intend marketing our gym and fitness club to;

 Corporate Executives
 Business People
 Household
 Sportsmen and Sportswomen
 Young Couples
 Teenagers.

Main focus will be in providing great opportunities to the middle class or upper middle
class section of the society in Ajmer.

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Marketing aspect/ channels:
The marketing channel that would be considered by the club would be simple and will aim
to satisfy and fulfill the customers need through the following –
 Word-of-mouth publicity
 Small social groups like friends, relatives, students etc.
 Social media like website of the club, page on face book.

SATISFIED CUSTOMER IS THE BEST MARKETING TOOL. THE PURPOSE IS

ACHIEVED IF THE CUSTOMERS ARE HAPPY WITH THE SERVICES THEY HAVE
RECEIVED.

Pricing strategy:
The pricing strategy is the mix of both – penetration pricing + psychological pricing.
Penetration pricing - The price charged for products and services is set artificially low in
order to gain market share. Once this is achieved, the price is increased.
Psychological Pricing. - This approach is used when the marketer wants the consumer to
respond on an emotional, rather than rational basis.

Promotional strategy:

To promote the club, I will be using social and print media advertising techniques. Ads will
be given in local news channels of Ajmer i.e. sare raah and swami TV and using pamphlets
and ad in local newspapers to promote the club.

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 FINANCIAL PLAN

The Venture will be funded by my father solely from his savings.

Initial Investment:

Particulars Amount(Rs.)

Renovation (F) 2,00,000

Machinery (F) 5,61,920

Furniture (F) 61,000

Rent deposit (F) 90,000

Electricity deposit (F) 3,000

Total 915920

Expected expenses which would occur:

Particulars Amount (Rs.)

Rent P.M. 30000

Salary P.M. 24000

Electricity P.M. 3000

Maintenance P.A. 3000

Advertisement expenses (Annual) 20000

Administrative expenses P.m. 1000

The rent and salary will be increased by 10% every Year and other expenses will increase
by 4% i.e. inflation rate of the Indian economy.

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Revenue generation:

S.No. Particulars Amount(Rs.)

1. For one month (1000*10*12) 1,20,000
2. For three month (2500*30*4) 3,00,000
3. For six month (4800*15*2) 1,44,000
4. For one year membership (8500*12) 1,02,000
5. For PT (9000*15*4) 5,40,000
TOTAL 12,06,000

Gym membership fees will stay constant for the following 2 years after commencement of
venture and then will increase by 15% on yearly basis.

Furniture Details Amounts

Counter 12,500
Chairs 5,500
Water Cooler 9,500
Music System 17,400
Fans 8,100
Led Lights 5,000
Switches & Boards 3,000

This is estimated to be a total of Rs. 61000 and will be annually depreciated by straight line
method with 10 % depreciation rate.

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 Machinery & Equipment Details Amounts
Treadmill 1,00,000
Leg Press 28,000
Cable cross station 32,000
Chin-up + Parallel Bar 12,000
Squat stand 20,000
Leg Extensions + Leg Curls 40,000
Pec Deck Fly 20,000
Lat Machine 12,000
Seated Rowing 15,000
Preacher Bench 7,500
Decline Bench 5,200
Flat Bench 5,200
Incline Bench 5,200
Dumbbell Stand 4,200
Weight Stand 4,000
Flat Bench Individual 2,000
Incline Bench Individual 2,200
Spinners 30,000
Dumbbells 95,040
Plates 46,980
Twister 2,000
Rod Stand 5,000
3 Olympic Rods 3,600
3 Feet 800
4 Feet 900
6 Feet 1,000
Yoga Mat 2,600
Stepper 2,700
Mirrors 40,000
Exercise Mat 15,000
Exercise Ball 1,800

The Machinery and Equipment are estimated to be cost around Rs. 561920 and have an
estimated life of total 7 years and after that their scarp value is estimated to be 10% of their
original cost. And at the end of 7th year new machinery and equipment will be purchased of
worth 50% of the year ending Capital.

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The Followings are the forecasted Income Statement and balance Sheet of the said
Venture:

Income and Expenditure Account

Particulars Year Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
0
Revenue 0
1,206,000 1,206,000 1,386,900 1,594,935 1,834,175 2,109,302 2,425,697
Less: Operating
Expenses
Rent 0
(360,000) (396,000) (435,600) (479,160) (527,076) (579,784) (637,762)
Salary 0
(288,000) (316,800) (348,480) (383,328) (421,661) (463,827) (510,210)
Electricity 0
(36,000) (37,440) (38,938) (40,495) (42,115) (43,800) (45,551)
Maintenance 0
Expenses (3,000) (3,120) (3,245) (3,375) (3,510) (3,650) (3,796)
Advertisement 0
expenses (20,000) (20,800) (21,632) (22,497) (23,397) (24,333) (25,306)
Administrative 0
Expenses (12,000) (12,480) (12,979) (13,498) (14,038) (14,600) (15,184)
EBITDA 0
487,000 419,360 526,026 652,582 802,378 979,309 1,187,888
Depreciation 0
(78,347) (78,347) (78,347) (78,347) (78,347) (78,347) (78,347)
EBT
- 408,653 341,013 447,680 574,235 724,032 900,962 1,109,541
Tax 0
(7,933) (4,551) (9,884) (27,347) (57,306) (92,692) (145,362)
PAT
- 400,720 336,462 437,796 546,888 666,725 808,269 964,179

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 Balance Sheet
Liabilities Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
Capital
915,920 915,920 1,316,640 1,653,103 2,090,899 2,637,786 3,304,512 4,112,781
Add: Current Year
Profit - 400,720 336,462 437,796 546,888 666,725 808,269 964,179
Total
915,920 1,316,640 1,653,103 2,090,899 2,637,786 3,304,512 4,112,781 5,076,960
Assets
Machinery &
Equipments 561,920 561,920 561,920 561,920 561,920 561,920 561,920 561,920
Less: Sales
- - - - - - - 56,192
Less: Accumulated
Depreciation - 72,247 144,494 216,741 288,987 361,234 433,481 505,728
Add: Purchases
- - - - - - - 2,538,480
Net Machinery &
Equipment 561,920 489,673 417,426 345,179 272,933 200,686 128,439 2,538,480
furniture
61,000 61,000 61,000 61,000 61,000 61,000 61,000 61,000
Less: Accumulated
Depreciation - 6,100 12,200 18,300 24,400 30,500 36,600 42,700
Net Furniture
61,000 54,900 48,800 42,700 36,600 30,500 24,400 18,300
Deposits
93,000 93,000 93,000 93,000 93,000 93,000 93,000 -
Misc. Expenditure
200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000
Cash & Bank
- 479,067 893,877 1,410,019 2,035,254 2,780,326 3,666,942 2,320,180
Total
915,920 1,316,640 1,653,103 2,090,899 2,637,786 3,304,512 4,112,781 5,076,960

If the same amount is invested in market, then the return would generate a return of 12% of
the total investment made i.e. Rs. 109910 yearly. The proposed venture promises to
provide a return of 44% on the total investment and 33% net profit margin on Revenue.
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The net present value of the project is calculated as below:

All the Future Cash inflows are discounted by 12% (market rate of return) i.e. expected
rate of return if the sum is invested in market. After discounting all of the cash inflows
NPV of the whole Project is 2,934,184.00 and the Internal Rate of return of the said

Particulars Year0 Year1 Year2 Year3 Year4 Year5 Year6 Year7

Revenue 1,206,000 1,206,000 1,386,900 1,594,935 1,834,175 2,109,302 2,425,697

Rent 360,000 396,000 435,600 479,160 527,076 579,784 637,762

Salary 288,000 316,800 348,480 383,328 421,661 463,827 510,210

Electricity 36,000 37,440 38,938 40,495 42,115 43,800 45,551

Maintenance Expenses 3,000 3,120 3,245 3,375 3,510 3,650 3,796

Advertisement expenses 20,000 20,800 21,632 22,497 23,397 24,333 25,306

Administrative Expenses 12,000 12,480 12,979 13,498 14,038 14,600 15,184

Contribution 487,000 419,360 526,026 652,582 802,378 979,309 1,187,888

Depreciation 78,347 78,347 78,347 78,347 78,347 78,347 78,347

Tax 7,933 4,551 9,884 27,347 57,306 92,692 145,362

Net Profit 400,720 336,462 437,796 546,888 666,725 808,269 964,179

Free Cash
Flow (915,920) 487,000 419,360 526,026 652,582 802,378 979,309 1,187,888

Less Tax (7,933) (4,551) (9,884) (27,347) (57,306) (92,692) (145,362)

Add
Deposits - - - - - - - 93,000
Add Scrap
Value - - - - - - - 56,192

Cash inflow (915,920) 479,067 414,809 516,142 625,235 745,072 886,616 1,191,717
project is estimated to be 55.90%. And the Pay-Back Period of Investment is 2 Years 15
days.

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Following shows the sensitivity analysis when the two core variables fluctuate i.e.

1. Market Rate of return or expected rate of return

2. Rate by which the membership fee is going to be increased after two years.

NPV Sensitivity analysis

Market Return

NPV 2,934,183.90 9% 10% 11% 12% 13% 15%

11% 2,818,146 2,714,876 2,617,203 2,524,756 2,437,190 2,275,451

12% 2,933,211 2,824,199 2,721,134 2,623,618 2,531,284 2,360,831

13% 3,050,997 2,936,095 2,827,497 2,724,780 2,627,555 2,448,164

Increase in 14% 3,171,560 3,050,613 2,936,338 2,828,286 2,726,044 2,537,487

Fees
15% 3,294,953 3,167,805 3,047,707 2,934,184 2,826,796 2,628,840

16% 3,421,234 3,287,725 3,161,654 3,042,519 2,929,855 2,722,261

17% 3,550,458 3,410,425 3,278,229 3,153,339 3,035,265 2,817,791

18% 3,682,684 3,535,960 3,397,483 3,266,693 3,143,072 2,915,469

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 SWOT ANALYSIS

Sculpture Fitness Club is in business to help its clients achieve their health and fitness
goals and at the same time to make profit. We are aware that there is competition in the
gym and fitness industry which is why we took out time to conduct an effective SWOT
Analysis, here is a preview of the result we got from the SWOT analysis:

 Strength:

One of the obvious strength that will definitely stand as a plus for Sculpture Fitness Club is
the fact that our facility is centrally located in a densely populated – residential area Choti
Nagfani, Ajmer; our location is in fact one of our major strength.
We equally have a team of highly qualified professionals who will work with all our clients
to achieve their aims or enrolling in our gym and lastly our membership package is one of
the best that anybody living in Choti Nagfani can get; it is cheap and affordable

 Weakness:

Having critically looked into our business model, we were able to identify two major
weaknesses. One is the fact that we are a new business and the second is the fact that we
may not have the financial resources required to match up with existing gyms in Ajmer
when it comes to acquiring latest gym equipment and generating the needed hypes that can
drive traffic towards our facility.

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 Opportunities:

 Growing demand for fitness: People are extremely focused on fitness and more and
more people have started frequenting the gym. This growing demand for fitness is
an opportunity that gyms can capitalize on.
 Value-added services: The gym can no longer afford to exist by just providing fitness
services. There is a strong need for value-added services like diet and nutrition and also
cafes and food courts. All this can be charged a premium which helps to improve revenue
prospects.
 Growing health concerns: With changing lifestyles like increased consumption of fast
food, obesity, lifestyle diseases etc. more and more people are trying to become part of
weight loss programs. This has created a growing need for gyms.

 Threat:

Some of the threats that are likely going to confront Fit as Fiddle Gym and Fitness Club is
unfavorable government policies, demographic / social factors, downturn in the economy
which is likely going to affect consumers spending and lastly, the emergence of new
competitors within the same location where our gym and fitness club is located.

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 GROWTH PROSPECTIVE / THE PATH AHEAD

Healthy diet and daily exercise are key things to stay fit and healthy in old age. The
awareness of the new generation about keeping a healthy body is far better from the
previous generations. As more and more population gets enlighten towards the necessities
of working out and keeping our bodies fit for better future the business of Gym is expected
to be grow on a rapid growth rate.

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