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Transcript of Complete Business Plan
Ability Facility, LLC
Business Plan
May 4, 2004
Steve J. DiMichele
© Ability Facility, LLC, 2004
Table of Contents
Executive Summary……………………………………………………………...3
Vision, Mission & Goals…………………………………………………………6
Product Strategy……………………………………………………………........8
Service Strategy…………………………………………………………………..9
Market Analysis………………………………………………………………...11
Segmentation……………………………………………………………11
Industry………………………………………………………………….11
Competitor………………………………………………………………13
Economy…………………………………………………………………15
Marketing Plan…………………………………………….................................16
Overall Strategy……………………………………………………….....16
Sales Strategy………………………………………………………….....17
Advertising & Promotions……………………………………………….19
Public Relations………………………………………………………….20
Financial Plan…………………………………………………………………...21
© Ability Facility, LLC, 2004
Executive Summary
Company Direction
The Ability Facility will offer one-on-one physical training services for
anyone requiring them. The Ability Facility provides elite services to our
customers in a personal atmosphere where their safety and happiness is most
important to us. In five years, Ability Facility will expand into an Olympic
training center for amateurs and professional athletes alike. There will also be
dormitories to live in while training in five years. Ability Facilities’ ideal location
is in Southern New York. With our ideal location in place, we expect to be
profitable by the beginning of our third fiscal year.
Company Overview
Steve J. DiMichele - CEO
Ability Facility, Limited Liability Company (LLC)
Industry: NAICS Code = 71394; Fitness and Recreational Sports Centers
Current Status: Start-up
Ed DiMichele - Physical Trainer
Joe DiMichele - Wrestling Technician
Product/Services Strategy
The purpose is to promote a combination of exercise with dieting. Our
services are not only a support system; but also, we explain proper techniques.
Ability Facility believes the US as a country is the most obese in the world, yet
dieting alone is just not enough, so that is where exercise fits in. As far as
technology goes, we handle all invoices on a database of customers. We may need
© Ability Facility, LLC, 2004
3
to purchase new nautilus equipment if innovations erupt. We use rubber weights
because they are safer.
Market Analysis
My market is the amateur or Olympic wrestler who lives in the geographic
North-East Region of the United States. My target age range would the 18 to 24
year-old, middle-class, white-collar, male and female workers. The size of my
customer base includes Ohio, Pennsylvania, Vermont, New Hampshire, New
York, Maine, Rhode Island, Massachusetts and Delaware. The customer exercises
at all different hours of the day but primarily before work or after work hours. The
customers may need a workout plan made up or just assistance on proper
technique. Besides Ability Facility applies personal interaction with strong and
meaningful relationships that competitors, such as Bally’s Total Fitness cannot
compete. We differentiate ourselves through having wrestling mats for instance to
train on. Start-up costs are high; however, a high volume of customers will help
tremendously with operations cash flow. The opportunities are endless due to
differentiating yourself in a way that makes it a core-competency.
Marketing Plan
We will use gorilla-marketing techniques to promote the Olympic training
facility at Amateur wrestling events through public announcements that are free.
The public announcements will promote at surrounding college matches. We will
advertise in various wrestling magazines. Our sales promotion strategy is to allow
them to try out the facility free for their first visit then sell them through one of
the many plans we offer. Once we have built up a significant base then word of
© Ability Facility, LLC, 2004
4
mouth will continue to increase our customers. I plan to bring in past and current
Olympians to run wrestling camps when the training season is not at its peak.
Financial Plan
I currently own a home of which I am going to use as collateral for
building the fitness center. I am assuming my home is worth $100,000, which is
80% of its net worth. Friends and family are contributing another $50,000. Lastly,
I am taking out a bank note for $250,000, which is being backed by the SBA. The
purpose of this money is for the building and equipment expenses. The pro forma
income statement shows a gross profit margin of 12%. On a monthly basis, the
profit is used to pay on the principal and any interest accrued.
© Ability Facility, LLC, 2004
5
Vision, Mission and Goals
Vision Statement
Ability Facility, LLC will offer one-on-one physical training sessions for
amateur and Olympic athletes requiring them. Within 5 years, Ability Facility will
expand into an Olympic training facility. We will provide a nutritionist, whom
will write nutrition plans set for the wrestlers but also for anyone wanting the
service. We will be a full service living facility within 5 years while in the
training season for all athletes. Wrestling campers will occupy dorm rooms a few
weeks throughout the summer months.
Mission Statement
The Ability Facility, LLC provides elite services to all customers in a
personal atmosphere where their safety and happiness is most important to us.
We will help amateurs and excellent athletes attain their peak performance goals
as we provide these services. Our customers will use all state of the art equipment
from nautilus equipment to free weights. Our motto is, “An effort today gives
results your way.”
Goals & Objectives
1.) Have statistics on our target markets by March 2004
2.) Have a feasibility study done by the end of April 2004
3.) To have the Ability Facilities' ideal location selected in the North-East Region
of the U.S. by the last week in May 2004
4.) To obtain a start-up note for $250,000 to help fund the equipment
5.) Open for business by May 2005
© Ability Facility, LLC, 2004
6
6.) There will be nutritionists on staff by the winter of 2009
7.) Ability Facility will be profitable by the end of the second fiscal year.
8.) The installation of dorm style rooms will accompany the expansion of the
Olympic training facility by 2010
© Ability Facility, LLC, 2004
7
Product/Service Strategies
Product Strategy
Our products are free weights and nautilus equipment. There are eight
bench press sets. These sets include a bench, an Olympic style bar and barbells
weighing anywhere from two and a half pounds all the way up to forty-five
pounds. One set has four two and a half pound barbells, four five pound barbells
and four ten pound barbells. Also, two twenty-five pound barbells, two thirty-five
pound barbells and two forty-five pound barbells. There are ten curling bars. The
dumbbells start at three pounds and go up to one-hundred and thirty pounds.
There are four power clean stations as well as military press benches. The nautilus
equipment includes curling machines, neck machines, leg press, leg curl, leg
extension, calf raise machine, weighted dip machine, peck deck machine, cable
crossovers, pull-up and chin-up bars and much more. During non-peak hours of
business the equipment will be inspected and if there are any problems we will fix
them that day.
The features are state of the art innovations in machine development. The
machines have had many hours of R & D, which with new designs allows more
targeting on the different muscle groups. The machines are ergonomically
designed to eliminate extra strain that past machines have caused. All free weights
are rubber so that they may be dropped. Safety is as important as the customers’
satisfaction. The benefits of our products are the equipment promotes health,
muscular functions and development. Exercising on a regular basis gives a person
© Ability Facility, LLC, 2004
8
more energy throughout the day, enhances circulation and strengthens the heart
too.
The market includes both amateurs and excellent athletes. The need is for
athletes to be successful in their given sports especially wrestling. There is also a
problem with obesity in our country so the need is to live healthier lives. Our
customers include anyone with the desire to exercise. We compete with large
fitness chains including Bally’s Total Fitness and Gold’s Gym. The price to use
our product depends on the plan you choose. An all day pass is $7. A three month
membership is $120. A half-year is $250. The whole year costs $480 and we are
given two free months for a year membership so the real cost is $400. Currently
the product is still undergoing R & D but will be in the introductory phase as the
start-up gets underway.
Service Strategy
One service we offer is 24-hour access to the facility. If customers require
a physical trainer then they would need to plan out their schedule through one of
them. They will answer any questions you may have along with showing you
proper form for exercises. If you would like they will make workout plans for you
and guide you to your fitness goals. An additional service offered is nutrition
plans created by nutrition specialists. They will help you help yourself in the
battle against weight loss. The most significant service is the wrestling technique
and training camps offered. You will learn from past Olympians. The camps will
be designed for adolescents (ages 8-12), teens (ages 13-17) and adults (ages 18
and up). The price to have a physical trainer does not cost extra and is included in
© Ability Facility, LLC, 2004
9
your membership. The extra services such as having a nutritionist will cost you
extra as well as the wrestling camps.
The features are having one-on-one sessions with your physical trainer.
This allows for more relationship based interaction. We treat each customer as if
they were family. The next service is having a nutritionist which is rear in most
workout facilities and I believe it is one of the keys differentiating us from our
competitors. The wrestling camps are still being researched and planned for in the
up and coming years. There are going to be dorms for housing and living while
our Olympic athletes are training. The best feature Ability Facility has is the
location of the workout center. This benefits many athletes because they no longer
have to travel across the US for an Olympic training center. Plus once the dorms
are open they will be able to live connected to the training center. The facility is
opened seven days a week, twenty-four hours per day and three-hundred and sixty
days per year. Access to the facility during non-business hours can only occur
with valid swipe identification (ID) card.
© Ability Facility, LLC, 2004
10
Market Analysis
Segmentation
The target age range is 18 to 24 but ideal is a 24 year-old male. The ideal
gender targeted is males but females are a segment as well. The target income
level is between $24,000 and $40,000 and the ideal income is $30,000. The
reason for this income range is because statistics show more people as being
middle class. The target education level includes both high school graduates
as well as college graduates, but the more educated is better. The target
lifestyles are people that are health conscious and work late. The behavior
mindset of the target is focused around wrestling as well as other Olympic
sports. These athletes have an impeccable work ethic to achieve success in
their chosen sport. The average athlete’s workout plan is three to seven days
per week. The geographic location of Ability Facility is in Southern New
York because the distance from the targeted surrounding states is more
accessible based on distance traveled. The exact location is in a suburb of
Albany, New York. The target regions from which the athletes are coming
from are the Midwest and the North-East Region of the United States. Broke
down into states, they include: Indiana, Ohio, Pennsylvania, Tennessee, New
York, Maine, Vermont, New Hampshire, Connecticut, New Jersey,
Massachusetts, Delaware, Maryland, Rhode Island, West Virginia & Virginia.
Industry
The industry size of Olympic training facility’s is four all across
the United States. The closest is near Duquesne University and the others are
© Ability Facility, LLC, 2004
11
in South Carolina, California and Oklahoma. Each location was selected based
on someone’s idea to target the Northern states, Western states and
Midwestern states. The assumption in this industry is that people choose to
exercise as a daily regiment. The barriers to entry are high start up costs but
generally low variable costs when referring to equipment. The available
market includes athletes and non-athletes that are obviously health conscious.
We provide services for the majority of the athletes and all the Olympic
athletes within the geographic segment. Most if not all training facilities are
legally limited liability companies (LLC) because of the growing concerns
with insurance. More today than ever before companies are subject to being
sued by their members for injuries incurred in their workout facilities. The
other big issue has to do with contract law in that many companies are
ambiguous. The meaning of ambiguity is that companies often try to cover
loop holes in the contract. It raises the question was it done on purpose? If this
is the case, how can you prove it? There are no real significant government
regulations on the exercise side of training facilities; however, the Food and
Drug Administration (FDA) controls the distribution of supplements on the
nutrition side. Technology in the fitness industry is constantly improving on
already existing products. Differentiation of these products is not profound
enough to cause facilities to change from the existing nautilus equipment. The
trends do need to be monitored from time to time and change is something
that will happen but only in time.
© Ability Facility, LLC, 2004
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Competitors
The competition offers relatively the same products, from the types of
nautilus equipment to free weights. Some gaps include not having enough of a
particular machine to meet customer’s availability needs and wants. This means
the time factor as well as being able to exercise a certain muscle group in a
particular way with a certain machine. Competitors are Bally’s Total Fitness,
Gold’s Gym, Fit Works and other large fitness chains all across Ability Facilities’
geographic segment. Not only does Ability Facility differentiate itself by having
wrestling mats; but also, they provide a personable service. By personable, Ability
Facility looks to create long lasting relationships with their clientele. The physical
trainers go out of their way to help you achieve your exercise goals. The
determinants of price include the services of a personal trainer, dietitian or a
combination of a nutrition plan and workout plan that would guide you towards
your fitness goals. These are luxuries that most competitors do not offer, but
Ability Facility does.
The chart below this paragraph lists Ability Facility’s message relative to
their major competitors along with whom the target audience is and then explains
why their strategy is superior. Ability Facility is unique and differentiated from its
competitors that create curiosity. All of the other three competitors offer different
messages and targets which betters their strategy in their direct segments. This
chart shows that the competition is indirect. Direct competition is not a major
factor because geographic location is a significant player in achieving market
saturation.
© Ability Facility, LLC, 2004
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Competitors such as Bally’s Total Fitness have the image as the low cost
convenience center that gives the opportunity to have a personal trainer. As for Fit
Works, they have the image of the place to get cardio fitness that caters to those
people who squeeze in a quick workout before work, during lunch or even after
work. Lastly, Gold’s Gym, caters to the power lifting and bodybuilding markets.
In the competitor vs. competitor outlook, the strength of the competitors
at this point is name recognition. The weakness of my competitors is that they do
not differentiate themselves virtually at all. The customer vs. competitor outlook
strength is that customers are able to choose which fitness center or training
facility to workout at. The buying power is held in the customer’s hands. The
weakness is that customers show loyalty to those brands they know and trust
which means the experience of the chain stores will be hard to overcome. The last
relationship is the market vs. the competitor. The strength for the competitor
relative to the market is once you have incurred the start-up costs the variable
costs per month are not extraordinarily large. The weakness for the competitor is
that every once in awhile, they are going to need to update, maintain and process
the nautilus equipment. The capacity at any given point as far as the number of
© Ability Facility, LLC, 2004
14
people in Bally’s for instance is 200; whereas, Ability Facility’s capacity will be
near 300.
Economy
Business is affected by interest rates, Gross Domestic Product (GDP) and
the various consumer indexes. When interest rates are down people generally
spend more of their disposable income. When interest rates are high people spend
less on their wants and that may include joining a gym in the worst possible
scenario. The facts on industry numbers show that exercise is a high priority in
many people’s lives so regardless of fluctuations they will still pay for the use of
our equipment, accessories and the service we provide. GDP measures all the
tangible products produced so the lower GDP the higher businesses must charge
given a lower demand for products. The higher the GDP is the better for the
consumers because businesses can afford to run sales and increase purchase
volume even more. The most detrimental measure is the consumer confidence
index. This statistically measures how optimistic a consumer is about the
economy as a whole and measures their spending and saving habits around the
number. The consumer confidence index is based on current conditions and future
outlook. These are the major business risks that are taken into account most often
when making decisions; however, few consumers are that picky when it comes to
wants which in their minds is something they need. The only concern that may
exist is that of zoning requirements. Statistics on places where natural disasters
occur are also an important factor to consider. The area of Southern New York is
not near any high risk natural disaster areas.
© Ability Facility, LLC, 2004
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Marketing Plan
Overall Strategy
The Ability Facility distinguishes itself in entering a market that we can
offer a wide range of fitness activities in. Olympic training facilities are limited to
their targets based on location; and Ability Facility is no different. What is
common is that the lifestyle of the target markets is all health conscious people.
The quality of are workout equipment is not so much improved compared to
everyone else but rather differentiated in the extras we offer. Some of the extras
we offer include wrestling mats and gymnast equipment to name a few things.
Our customer service is raised above everyone else because of the Total Quality
Management (TQM) strategy initiated. The price of personal trainer services is
included in our membership fee whereas for a majority if not all competitors
charge an additional fee. With all the stress training brings, we want to provide
the most convenience, so we have a membership identification card that can be
swiped for entry 24 hours a day. The computer software has a query tracking
system which determines the twenty percent of customers which are most
profitable. We plan to advertise and promote the Ability Facility through sporting
venues such as gymnastics meets, track and field events and of coarse wrestling
tournaments in the geographic area that we are segmenting to. We will also
promote through various publications including magazines and newspapers. Later
considerably close to the time of the Olympic Games, we plan on getting sponsors
to run press releases.
Within our geographic location, we plan on gaining and then keeping loyal
customers through the extras we offer along with great customer service.
Uniqueness that catches the customer’s eye will bring people out of curiosity.
Once they have their first initial experience they will be hooked into all that is
available to them. The marketing mix we have allows us to gain name recognition
as well. Another way to get name recognition out in the industry is through trade
shows and possible strategic alliances. Logically the statistical results show
greater sales near the time when the Olympics begin.
Sales Strategies
The Ability Facility’s position in the market is not apparent as it is a new
start-up with a focus around building Olympic athletes for the United States. The
company image that Ability Facility holds dear is the extra mile is within the
reach of customer service. This extra mile refers to how the physical trainers work
with your time commitments allowing you to choose the time that is most
convenient to you. Also, Ability Facility wants to be seen as differentiated from
any other fitness center because they add non-conventional methods of getting
and staying fit to all the conventional ways. The non-conventional amenities
include the wrestling mats and gymnast equipment that competition lacks.
The pricing strategy that Ability Facility will use is market share pricing.
A significant and logical determinant is cost. The reality is that luxury does not
exist without a cost. Many people feel the need to exercise on a daily basis so they
will generally pay a little more; therefore, the pricing is not that sensitive.
However, there are always going to be some customers that will leave because
© Ability Facility, LLC, 2004
17
they have a limit in the price that they are willing to pay. Being that Ability
Facility offers luxury service, the likelihood of losing customers due to price
increases is limited. The reasoning behind this is that customers see the value
added with the services we offer. The position of price is also important and the
best method would be price skimming. When the time is right even the segment
of people that do not want to pay more will eventually see the price decrease into
their price range. Added benefits are given to customers who pay their
membership up front in full. Typically they would receive two free months. The
membership is $40 per month but if paid in full the two free months is a value of
$80 they would save. Also, the customer would receive free day passes to invite
friends in an effort to increase the customer base. The other pricing option used is
segmented for a concentrated market. That market is the geographic segment that
lives in the dorms and trains year round.
The Ability Facility is a single retail unit currently but there is always a
possibility to expand depending on growth in sales and further market analysis.
The ease of entering and exiting Ability Facility is really convenient in that the
file system is all electronic. The customer has twenty-four hour access with a
membership swipe card. The sales strategies are going to be direct sales. The
future holds possible personal trainer services outside the recreational center.
Where a personal trainer would actually come and show exercises that you can do
without weight or few weights from your home.
The clothing lines offered are manufactured through Cliff Keen athletics,
whom of which have been strong supporters of wrestling for many years. The
© Ability Facility, LLC, 2004
18
merchandise is sold as retail in the lobby of the facility. We are a retailer that has
teamed up with General Nutrition Centers (GNC) to offer supplements and both
low carbohydrate and protein bars. Other companies we teamed up with include
Pepsi who now owns Gatorade.
Advertising and Promotion
The Ability Facility advertises in many sporting magazines where their
profiled targets would be reached. Other promotional areas are offering a free trial
visit. This is to build positive relationships with prospective clientele while
tracking demographics. The results for Ability Facility are that they differentiated
themselves in a niche within the larger whole of the fitness market. The computer
software allows Ability Facility to be paperless; also, it makes tracking customers
easy by placing them in a database. This will show what customers purchase
goods as well as which customers use the facility the most. Knowing this
information we can give them discounts for every new member they can recruit
by word of mouth. We will purchase lead lists as well as create them. We plan on
purchasing leads from key magazines that we run advertisements in including
Wrestling USA, Gymnast Today and Runner. The leads we create will contain
both hot and cold leads which are determined by responses to a survey that is
filled out after their one free trial visit. The sales reps accounting for the most
sales will deal with the cold calling while the other representatives will work with
the hot leads. Anyone in between will be mixed into the contacts database. The
advertising budget is 10% of quarterly sales. The greatest cost to Ability Facility
will occur around the months preceding the Olympic Games. The higher sales
© Ability Facility, LLC, 2004
19
will compensate for the increase in cost of additional promotions. To limit costs
near the time of the Olympics, the public relations committee will be working
diligently to receive publicity.
Public Relations
The Ability Facility’s public image in the eyes of the media is an Olympic
training facility where the “average Joe” will receive the same quality customer
service as our nation’s best athletes. The media will be reached by an invitation to
tour our facility and promote that Ability Facility is where many of the United
States athletes train, so why not you to. The best time to due this again is during
the preceding months when the public initially begins thinking about the Olympic
Games yet to come. The publications Ability Facility will reach include sports
focused magazines such as Wrestling USA, Sports Illustrated and men’s and
women’s health and fitness magazines. Those would be the primary places;
however, customer feedback will help us determine which types are attracting our
targets and which are not. The main events that we would advertise at include the
large national wrestling tournaments, gymnastics competitions and track and field
events within the geographic segment. The Ability Facility’s slogan will be placed
on billboards sponsored by Pepsi, featuring Gatorade. For example, Ability
Facility’s motto is, “An effort today gives results your way [so train, work and
win].” Then Gatorade adds to the motto by saying, “Quench your effort today by
staying hydrated your way…Drink Gatorade.”
© Ability Facility, LLC, 2004
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© Ability Facility, LLC, 2004
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