October 14, 2024 | Author: Anonymous | Category: N/A
Establishment of a company to provide fitness classes in Malta and Gozo
Written by Mr. Jonathan Camilleri IADCS, who is referred to as “the entrepreneur” within this document, may be contacted on for further queries: Email:
[email protected]
Postal address:
33, L. Casolani street, Birkirkara BKR 4535, Malta (EU)
Online resume and testimonials are available online at http://mt.linkedin.com/in/jonathancamilleri. Version 1.0 (draft) written during June 2013
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Comment [Jon1]: Name of business? @Jon's Trademark? Financial projections? Authorizations, VAT, Trade license etc? Good value for money? Value Added Services and Customer/Supplier Relationship SEO/Viral Marketing USB Sticks with brands Ancillary services and projects Sub-contracting (India/Cote D'Ivoire) ESTA code and professional conduct Accreditation and accountability e.g. Equal Opportunity, Health and Safety, CIPD etc, when the business grows. Equality Access to persons with disabilities Physiotherapists, trainers etc Business First and legislation for small business entrepreneurs. The first 2 years are expected to be a learning curve for the entrepreneur. Statistics on the duration of businesses in Malta, and, the IS/IT requirements of startup businesses. MITA FP7 for MCST and Funding (Marie Claire Tonna) Parking space for clients? QPM Management leased it for 10 years and are sub leasing premises on each storey. Showers might have to be fitted in, to gather quotes. Road sign? Concave mirrors Sauna?
Confidentiality agreement The reader acknowledges that the information provided within this business plan is confidential, therefore the reader agrees not to disclose it without the explicit written consent of the entrepreneur.
It is acknowledged by the reader that information to be furnished in this business plan is in all respects confidential in nature, other than information which is in the public domain through other means and that disclosure of use of same by reader may put the reader as liable for the infringement of intellectual property.
It is assumed that the reader is familiar with business terminology, accounting, and, has a good grasp of the English language.
The document remains the property of the author, and, acceptance of reading this document is assumed to be an acceptance of this agreement.
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Executive summary The brand originated in Portugal in 2003 where we are the market leader of women’s centers, and now are quickly growing world-wide. Currently we are on 3 continents: Europe (Portugal & Spain), Asia (India, Singapore and in 2013 we will open in Qatar, and Abu Dhabi) and South America (Uruguay).
Our mission is to run a successful business with a quick return on investment helping women achieve results by creating healthy habits of physical exercise and nutrition. Vivafit offers its members a fun, easy, and fast ways to exercise, live a healthier lifestyle, and lose weight. At the core of the program is a 30-minute circuit exercise designed to deliver a total body workout. In addition, Vivafit also offers Pilates classes as well as 30min Les Mills classes. Vivafit Centers are comparatively small and therefore highly personalized reaching out to a special niche within the market place. Pedro Ruiz, Chief Executive Officer (June 2013) Information sourced through interviews and through official documents made available to the public through advertising channels. The company website is available [online] at http://www.vivafit.eu/.
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Company summary The external environment
Fitness classes in the Maltese islands are popular and in demand. A survey carried out amongst women indicates that dancing, weight training and cardiovascular are popular amongst the sample surveyed and that they are aware of their daily total calorie requirements. According to the National Health Service (NHS), UK, the average male adult needs approximately 2,500 calories per day to keep his weight constant, while the average adult female needs 2,000. US authorities recommend 2,700 calories per day for men and 2,200 for women. Sourced from http://www.medicalnewstoday.com/articles/245588.php, last updated on 21st May 2012.
Partnerships with existing brands and pursuit of expansion by engaging shareholders and seed funding are intended to make a cash cow of this business, targeting pricing that would be competitive within the local market where established brands are already established and popular, even amongst women. Viral marketing, web marketing (e-shop) and social media shall be mainly used used to promote the business. The loyalty scheme is intended to attract members to commit themselves to subscribe as members and keep up a lifestyle that promotes healthy living and regular fitness training. The location of classes and the scheduling of classes are targeted to fit the needs of interested persons, particularly women, who would like to go to fitness classes at a time when it is convenient for them. On the other hand selecting the location for providing classes is important because the entrepreneur would prefer not to engage in fierce competition with similar brands, who might target to out-market this business should they consider their business services to be at risk. Cost savings is passed on to the end-customer in the form of loyalty schemes and promotion. According to Prof. Scicluna1 there are positive signs of economic growth for the Maltese economy, and, this may encourage consumerism and more people to engage in a healthy lifestyle, which is a perception held in common according to persons interviewed by the entrepreneur.
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Prof. Edward Scicluna is the Minister of Finance in Malta, and, his profile is available at http://www.edwardscicluna.com/profile/. 4
The Small Business Act, which is being discussed at various business meetings, promises to reduce the time and cost of setting up a company, and, provide financial instruments of the Competitiveness and Innovation Framework Programme. Low risk Substitutes for all services
High risk
Similar services for nutrition advice, beauty and slimming and fitness/gym are available throughough the islands using established franchise names.
(see page 8 for list of services)
New entrants to the market
Medium risk
VivaFit is already an established brand worldwide. Other brands might provide a wider range of fitness products.
Buyers bargaining power
Competing fitness centres might provide different pricing schemes.
Suppliers bargaining Higher value orders power are expected to avail from bulk buying. Workers' unions are not expected to have a strong influence. Professionals may be offered employment on a part-time basis depending on availability, demand, and, willingness to commit themselves to a regular schedule, although some might prefer to provide services as a self-employed freelancer to the company. The anatomy of the business process is expected to be influenced mainly by demand and supply. Influence of the nation-state and regional authorities is expected to be low to medium with the exception of basic regulatory obligations related to health and safety, employment, environmental and other legislation which is required to comply with financial and other incentives that may be granted by the Government of Malta or one of its agencies and authorities.
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Strengths Flexibility and competitive pricing can be provided. Pricing scheme encourages members to commit themselves to a program. Premises is planned to be located within Birkirkara bypass, with close access to facilities.
Weaknesses Work-life balance of entrepreneur.
Opportunities Ancillary services such as nutritional supplements, nutrition advice, beauty and slimming tips might be attractive to potential customers. The firm may engage in donating a percentage of the income to charity institutions which have a cause that fall within the policies of the organization in view of corporate social responsibility and the fact that the entrepreneur highly respects ethics. Threats Local and international competition within IT Services, hence, higher price elasticity. Business development may be a challenge due to established competing brands in the Maltese islands.
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Human capital analysis For the time being, the entrepreneur intends to venture into setting up a one-person business – thus a micro-enterprise2, and business growth is perceived to be one of the performance indicators. Nutrition professionals, physiotherapists, gym instructors and possibly accounting staff may be engaged by the firm. Initially the involvement of an accounting professional is expected to be high. Their profiles will be available on the website for the purposes of public relations. The key persons would be involved and incentivized by being provided with share options that they can purchase at a nominal value of €2, and, this gives them a share of the profits during the company's annual shareholders' meeting.
Strategy and implementation summary In order to benefit from limited liability, the entrepreneur intends to set up a private company with the name of VivaFit Malta Limited. The entrepreneur shall pursue opportunities for business networking, in order to create collaborative ventures and seek seed funding for rapid business growth with providers of ancillary services, although there is a risk that competitors attempt to out-market the newly established firm. Therefore healthy business relationships need to be established with competing firms as well, such as being smart with the location of classes so as not to appear as poaching customers away from competition aggressively. Maltese business is perceived to compete non-aggressive competitive culture that welcomes competition as long as the enterprise has established itself in a manner that is ethical and does not attempt to poach customers in a manner that breaches competition legislation, although this might be an optimistic assumption made by the entrepreneur. Accounting, administration and management of the affairs of the business, will be carried out assuming that the business is a going concern. The location of the enterprise still has to be established since the entrepreneur is looking for a strategic location that provides visibility and ease of access to potential subscribed and walk-in customers.
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A micro-enterprise is a type of small business, defined by the European Union as those (businesses) that meet 2 of the following criteria: has less than 10 employees, has a balance sheet total of less than €2M, and, a turnover below €2M. The above information is available at http://en.wikipedia.org/wiki/Micro-enterprise, and, at the website of teh European Commission for Small to Medium enterprises at http://ec.europa.eu/enterprise/policies/sme/facts-figuresanalysis/sme-definition/index_en.htm.
Within the Maltese Islands, the Malta Enterprise (http://www.maltaenterprise.com/ is responsible for attracting inward investment and supporting enterprises. Commission recommendation 2003/361/EC concerning the definition of micro, small, and, medium-sized enterprises, is available online at http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:124:0036:0041:EN:PDF, which builds upon Commission Recommendation 96/280/EC concerning the definition of small and medium-sized enterprises, available online at http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31996H0280:EN:HTML. Independent business advisory, and, legal advice shall be undertaken by the entrepreneur.
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Financial projections The entrepreneur envisages gross revenue streams to total up to circa €165,000 per year, which are expected to provide no credit to members or customers. The following table illustrates the expected revenues, averaged over 5 years3: Fitness classes e.g. Pilates, Les Milles and personal coaching
€135,000
Nutrition advice
€30,000
Sale of beauty products
To be estimated
Sale of nutrition products €500,000
To be estimated
The entrepreneur aims business development to improve the overall business and market share of website development, and, consultancy projects, in the medium term. At a high level, assuming that the entrepreneur will pursue the enterprise as a part-time, and, thus won't require a regular salary. Business venture and networking in order to improve capital inflows would improve the business model, and, stimulate business growth.4
Start-up costs € Company start-up fees
€2,000
Software licenses
Depending on project requirements
Outsourcing of IS/IT and cabling
To be estimated
Trade licenses, compliance fees, and, other permits
To be estimated
Plumbing and electrical fittings
To be estimated – these are expected to be considerable, therefore requiring a loan.
3 It is expected that the initial 2 years shall be the learning curve of the start-up business, and, the value and volume of business will help the entrepreneur with the financial forecasts for subsequent years, although other external economic factors which are not predictable would be taken into consideration at the start of each financial year. Thus the forecast is illustrative, and, will be reviewed regularly with the business performance and financial indicators, in liason with a business consultant. The entrepreneur shall endeavour to match creditors' terms with the debtors' terms so as to reduce the impact of negative cashflow impacting the business, as a form of trade financing option. 4
Estimates and financial feasibility will be confirmed by an independent business advisor in due course. The financial forecasts will be reviewed accordingly, in line with relevant news.
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Operating costs Water and electricity Cleaning expenses Audit fees Stationery and office equipment Maintenance and cleaning of offices Communication expenses including mobile phone and internet Travelling expenses (including fuel) Insurance on buildings Professional indemnity insurance Sub-contracting and employment including entrepreneur's remuneration Health and safety Training, education and certification Marketing and public relations Compliance fees Research Franchise and branding Wages and salaries Lease of premises at Birkirkara
Stocks
€3,000 per year €1,300 per year €600 per year €600 per year €2,000 per year €2,500 per year €5,000 per year To be estimated Starting from €20,000 per year, and, revised on a project-basis. To be estimated €50,000 per year Not applicable € 100,000 upfront €950 yearly To be estimated €44,000 yearly excluding notarial fees, taxes and legal expenses, unless these are borne by the vendor. €5,000 yearly est.
The entrepreneur is expecting payback within 1.5 years, considering an upfront investment or total credit amount to around €200,000, which may include overdraft and start-up financing for fixed costs, repayable at the interest rates applicable by the banking institution and within the established terms and conditions of the facility.
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Start-up funding and financial model The entrepreneur has limited financial capacity at the moment, and, is therefore proactively seeking seed investors with experience within the nutrition, health, beauty and fitness industry as business partners to collaborate within the Maltese business market. Customers are expected to pay membership fees upfront according to the pricing model established within this business proposal. Additional services, payable in advance include one-to-one personal training and nutrition advice, the availability of a gym and equipment to do routine cardiovascular training and lifting weights. The entrepreneur shall seek to establish favourable credit terms with sub-contractors where services, supplies or their part thereof are sub-contracted, for example by seeking to negotiate favourable credit terms with suppliers and providers. The entrepreneur shall seek to participate in local business associations of choice and follow standards of good practice when it comes to credit management and due diligence when dealing with third parties, to ensure that the customers avail from goods of high quality and reputable brands. The entrepreneur is seeking to establish business partnerships with suppliers and no agreement has yet been reached on the brands of choice to be promoted.
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Pricing Technical support calls shall be charged at the following rates, unless other rates have been negotiated or agreed explicitly within a contract of service. Pricing option A - Membership Member subscription
Price
Monthly membership for basic fitness
€39 per month for 8 months
Monthly membership which includes basic fitness and Pilates
€49 per month for 8 months
Discounts, vouchers, and, free gifts such as make-up are available when signing up as a members. Members also avail from 2 hours of free nutritional advice in a group session, with our highly qualified nutritionist of choice. Pricing option B – Pay by class Basic fitness
€4 per class per person (30 minutes)
One to one nutrition advice
€40 per person per hour
Physiotherapy
€40 per person per hour
Nutritional supplements and other products sold by the firm are based on the cost of purchase and a mark-up of 30% as gross profit on each item ex-VAT. The entrepreneur estimates that a minimum of 10 persons need to book in order to organize a fitness class. When 10 persons are not available the entrepreneur shall re-visit the feasibility on an exceptional basis only. The relevant VAT needs to be charged on to customers at the relevant rates applicable by the VAT legislature. The prices shall be published through social media, and, is available upon request. It shall be reviewed from time to time by the entrepreneur in view of business performance, cost of living allowance increases which are allowed to human resources, consumer price index which is expected to reflect an increase in expenses, business growth, other internal factors, market conditions, compliance costs, and, other external factors such as taxation and obligations and commitments that the firm might be contractually bound with.
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