Legal Structure Of Sole Traders Commerce Essay
The location of the gym will be on a main road with good parking facilities. This will help the gym grow with members as it attracts people because of the location and give people advantages to join the gym with ample parking. There isn't much history about the gym because it is a band new business but the idea came to me about 5 months ago when i wasn't satisfied with what other gyms offered to customers.
The business is situated in the retail sector because it provides gym equipment to people who don't have room at their houses or they cannot afford all the equipment themselves. The Prime function of the business is to provide gym equipment to people as well as help them achieve their fitness goals. The gym offers a wide range of products and equipment starting from bags, drinks and clothing to dumbells, treadmills and benches. (Cambridge
Preliminary Business Studies - page 269)
Purpose of the Plan
There can be many purposes for a business plan. The plan should provide a firm with a clear direction for the future and identifies the main goals of the business. /
The goals of the gym would be social, financial and environmental goals. The social goals that the gym would like to achieve would be good service to patrons that use the facilities, helping the community through sponsorships of local sporting clubs and helping out schools through conducting sport lessons in the gym.
Financial goals that the gym would like achieve would be to increase the owner's wealth through increased market share, increased level of cash flow and increased level of liquidity. But increasing wealth is one of the objectives. The other financial objective would
be to minimise the wastage of money on items or products that will not help the gym grow and not falling into heavy debt.
Environmental goals that the gym would like to achieve would be to use electricity efficiently, install energy efficient appliances, minimise waste and disposing of the waste
properly. (Cambridge Preliminary Business Studies - page 269) v
Good assistance provided by employees
Great membership deals Cheap prices
Not enough employees when business is busy
Toilet facilities too small
• • • • •
(Cambridge Preliminary Business Studies - page 248)
Business Objectives and Strategies
The business objectives and strategies section of the business plan outlines what the business aims to achieve, including overall strategic goals. These goals will be based on research from the situational analysis.
The Objectives of the Gym are to try and eliminate the weaknesses in the business and make them one of the strengths by working on them with one another and also to improve on strengths and try to make them stronger.
Another Objective would be to take every opportunity possible to help the business grow and try to work around keeping threats away from the business.
The final Objective would be to improve financial wealth for the owner and to build a good reputation within the community so people feel invited and welcomed when they visit the gym.
These objectives can be accomplished through employees and owner working together. This means that employees can help one another with weaknesses and improve on strengths each person has to offer. Also, the owner must be willing to spend money for the improvement of the business. These improvements will include things like renovations
when needed, sponsorships and buying extra stock. (Cambridge Preliminary Business Studies - page 271)
Description of the service
The technology used will be modern. The use of big televisions near treadmills and cardiovascular equipment will help people enjoy themselves while exercising. Memberships, cash transactions, and general business will be done on computers set up on the front counter and in the main office. This will include eftpos facilities, printers, cash register connected to computer. If possible that all 3 computers be linked so memberships can be done on all 3 computers and make renewals, show current members, on these computers. This will make work more convenient.
Equipment and materials required will be based on how big the gym is and how quickly the business grows. Equipment required will be:
Medicine balls • Accessories • Boxing Gear
Gym flooring • Barbells • Cable Attachments
Weight plates • Benches • Dumbells
Materials that will be required will be things that are needed for day-to-day operations. These materials are:
Filing Cabinets . Noticeboard • Paper
Lockers • Shop Fittings . Pens
Fridges . Office Furniture • Chairs
Supplies that will be used will include:
Supplements • Gym Singlets . Membership Packages
Gym Equipment • Sports Drinks (Bag, Towel, Bottle)
Staff will need to have a Timetable/Roster to inform them when they are working. This roster will be completed every Saturday. For the Staff that do not work on the weekends or dont have a chance to see the roster, the roster will be emailed to all staff members on the Saturday. This will eliminate the excuse of not knowing when and what time staff are working.
The testing and evaluating expenses would be high because of the large amount of equipment needed to start up and also the sophistication of the technology used in the gym. The supplies would cost a bit because of the never ending need for it. (Cambridge
Preliminary Business Studies - page 271)
Personnel requirements and skills
The gym should recruit staff according to their qualifications and experience. Staff that are recruited should all specialise in a target area which they occupy during their work times at the gym. Examples of this would be some workers may only be on the front counter, working on the computers. Others may be working on cardio and strength exercises. This will keep things running smoothly and be more convenient for patrons to benefit from these people.
The staff would be qualified personal trainers with a certificate III and certificate IV in personal training. \ersonal trainers have added qualifications in weight loss, strength
training and fitness which are an added bonus. The employer should check to see if the possible employee is qualified because in that industry, there are unqualified people calling themselves personal trainers.
Training new and present workers on new technology that gets installed into the gym. Things such as new exercise machines and equipment need to be used in the right way to ensure things are safe and that equipment is stored correctly for safety.
Employees need to know what the expectations are when it comes to helping patrons and becoming a leader for new/younger employees. Also understanding what working at a gym involves in regards to how you conduct yourself in front of others, coming to work on time etc.
Employees should be able to stay motivated and maintain a good standard of work. This will happen if there is a reward system put in place where workers would get rewarded for doing something extra or working longer. This will become an initiative to keep workers working at a high standard, keep patrons happy and ensuring they come back to the gym knowing they are going to get good service.
A safe and healthy work environment is essential for workers to be able to work in a comfortable environment where they can feel relaxed and work to their full potential. This should include a workers office where they can sit and relax during lunch breaks, freshen up; keep all their belongings in a locker. This also shows them that you are thinking about how they feel and try to make things the best as possible.
Measuring employee performance would come from 3 main places. One of their evaluations,Will come from their work mates. Other evaluations would come from patrons through a short evaluation sheet which is optional to fill out after a worker has completed a training session with them. The last evaluation will come from the manager/boss talking to the worker themselves. This shows how the workers feels and get their honest opinion on how things could be improved around the gym. /
Challenges that would be experiences throughout the operations element would be the high costs in setting up the business and the first few periods where business is slow and not so busy. The equipment should be set out properly and this would be hard with a small area to work with. The qualified employees will be a challenge to find because they are already working or they are almost finished studying to become a personal trainer. This becomes costly because you have to offer the people that are already working a better pay per hour or better salary. Training them to work in a gym would be time consuming because it is based on being good around people and having confidence to talk to therm.
(Cambridge Preliminary Business Studies - page 272, http://en.wikipedia,org/wiki/Personal_trainer} C(.‘5
The target market the gym would aim at would be a various number of groups of people. One of these groups of people would be people looking to lose weight through proper exercises and having excellent to guide them through their weight loss journey. The other target market would be people looking to train and gain muscle size as well as muscular strength. The other group of people would be woman, men and teens that are looking for good cardio sessions with a qualified trainer. These sessions will be a combination of light weights, treadmills and bikes. The gym will aim to provide these groups of people with the facilities and good environment to exercise in.
As the gym grows, it needs to develop new things to attract people. Something that should be done is to invite local schools for their sport time and take them through a cardio session or a weights session depending on what the majority want to do. These activities should be free of charge for the first term, and a small charge for the sessions after the first term. This attracts teens to become a member and in turn, they will tell their mates to become a member. This leads to a quicker growth and a positive outcome on first timers.
Competitors are a very influential factor on your business. They are influential because they determine what you charge for your membership fees, visitor fees and for supplies like shirts and supplements. This means not only do your prices have to be competitive, but your products and services that you are offering have to be of high quality. This is because people are willing to pay a little extra for their good or service but know that they are spending that little extra for top quality. If your prices and quality of goods and services are better that your competitors, it ultimately gives you the competitive advantage over them.
(Cambridge Preliminary Business Studies - page 274)
Sales forecasting is an analysis of a firms sales figures based on individual products, sales representatives, geographic locations, seasonal or annual trends in sales, cash sales or credit card sales. These statistics are used to predict how much profit is going to be made by the firm in the future.
It would be hard to create a sales forecast with a newly opened business. This is because the statistics that are provided are short term. Statistics should be at least one year old to show trends in consumer spending.
One statistic that can show a future boom in the gym business is the winter season. People tend to join gyms during the winter, work out so their body looks good for the summer seasons. Another figure that is constant is the sale of supplements. These supplements are in constant demand and this is why the sales are always up. One other statistic would be the sale of supplies including towels, bottles, drinks, shirts and singlets.
With these statistics and overall plan, business owners will be able to predict when they need to get more supplies, hire or call in more staff, and prepare themselves for the times where business isn't very busy. This would give business owners an advantage because it can help them in deciding how much supply they need, and avoid over-hiring. (Cambridge
Preliminary Business Studies - page 276)
Marketing strategies will be directed towards achieving specific objectives that support the strategic goals of the business. Some goals may simply be based on increased sales, increased market share, entry into and establishment in a new market area, such as overseas, diversification of the product base and increased profits. Marketing strategies must be consistent throughout the marketing mix and take into consideration product, promotion, price and place.
Studies - page 278)There are many products and services that the gym offers. The products that the gym offers include gym apparel, bags, bottles and towels. These products are all of high quality and made by Skins USA. The packaging of these products are of high standard. They all come in sealed plastic bags. The size of the bags, bottles and towels are all practical in size. Not too big and not too small. The warranty on the products last for an extended period of time which suggests the quality is high and producers are confident that products are durable. If the product does fail, the gym will happily replace it within reason. Example, the bottle breaks because of misuse.
The price of the gym's products and services are all reasonable. The gym memberships are about $70 a month for adults and about $55 for people under the age of 18. This price also includes a free gym bag, towel and bottle when you first sign up. This price beats all other competitors by $10. The products that are offered are priced at $20 for a bag, $10 for a towel and $5 or a bottle. The cheap prices are a result of finding a supplier that has cheap prices on their goods with good quality. /
The promotion of the gym plays a crucial part in influencing people to join and become members. The strategy of inviting schools for a couple of free circuit sessions influences young people and also their teachers to join. Advertising through the local newspapers would be a cheap and effective way to bring people to the gym with advertisements about new membership offers or coupons that can be used to enter as a guest for free or a discounted price. Also, sponsoring local sporting clubs bring people of all ages to the gym and also give the business a good reputation for helping young people.
The place of distribution of our products would only be at the gym. This is because the products are exclusive to out gym only. The storage of the products would be in storage rooms located within the gym's premises; most likely in the office. (Cambridge Preliminary Business
New businesses need have a clear idea of the amount of funds they will need. This could come from debt financing, the original owners' equity or a future partner's equity. The business plan should provide a breakdown of how these initial or additional funds will be used.
The financial requirements needed to support the gym would be very high. The reasons for this would be the start-up costs of the business which includes things like buying the space, renovating and designing interior and exterior, purchases of new gym equipment and the employment of staff. This would be challenging for a sole trader, but with careful financial management the business can run smoothly, begin its establishment phase and not fall into too much debt too quickly./
Once the business has established itself and is on its journey through the growth stage, it must be able to support itself or else liquidity problems will develop. It is important that the gym owner manages the income wisely. This means not spending money on things that wouldn't be useful or not saving up for the times where business might not be as busy as he/she would like. The income made should be spent on the business with things such as maintenance of the equipment, buying more products for new members. This would allow
the gym to grow steadily. (Cambridge Preliminary Business Studies - page 281)
Planning must relate directly to the prime function of the business. It tells the owners if they can actually afford to produce the product or provide the service. The firm must make financial forecast based on information gained from market and product research. Financial forecasts can be made through one of the following: Forecasted cash flow statements, projected profit and loss statements, recent profit or loss statements if business is already established, projected balance sheet, break even analysis. Forecasted cash flow statements
show how much money is needed, when it is needed and where it will come from. Also reflect time frames such as weekly, monthly or quarterly.
The gym's forecasted cash flow statement would be based on the sales forecasting. This is because both statistics are based on predictions on future sales. These statements are useful for when the business is close to its establishment phase or into the phase. For a business that is starting up, a personal balance sheet will be the better option. This is because owner will need to be able to keep their personal commitments and still provide enough income for family to live on.
The balance sheet will explain how much money the gym is earning, where money is being spent in the gym, bill payments, workers' wages, money to purchase supplies, and keep the business running smoothly. This will indicate the stability of the business and calculate its net worth. This will provide future buyers or investors of the business information on risks
JClthey would be taking. (Cambridge Preliminary Business Studies - page 282) /
Small businesses need to keep accurate financial records for all transactions. They will need to have one of the following:
Cash flow statements
Budgets - marketing, operations, employment relations and accounting and finance.
For the gym, I have decided to use a balance sheet because it is easier and more convenient due to being a new business.
Projected up to 1 July 2011
Cash at bank
Non — current assets
1 182 500
Non — current liabilities
Long — term loan
414 800 C938 266
Total liabilities and owners' equity
Current Assets divided by Current Liabilities which substitutes into $192 500 divided by $150 400 which equals 1.28. This means i have one dollar and twenty-eight cents to pay back every dollar of short term debt. It would be preferable if i had a ratio of 2:1 so that my payments don't take up the majority of my revenue.
Total Liabilities divided by total Owners equity which substitutes into $510 400 divided by $414 800 which equals 1.23. This means that for every one dollar of equity it has one dollar
.1and twenty-three cents in debt. (Cambridge Preliminary Business Studies - page 283)
In each business, controls need to be set up to provide standards to which the firm can compare itself. Controls allow for corrective action to be taken to keep the business on a successful path. Without controls, a firm's ability to achieve success would be questionable.
Controls that the business would need to implement would be standards that will need to be met. These standards will be the basis for improvement. One standard would be that when the gym reaches a satisfactory number of members, that figure should be maintained/improved on. Another standard would be the service that staff offers to people using the gym facilities. The staff should always treat people with respect and provide assistance and knowledge to people that are in need or ask for it. e/ c ,ix
The major control that the gym will use would be setting a budget. This control is decided by the owner of the gym because they should know how much income and expenditure is coming in and out of the gym. The budget should help the business grow but at the same time, not fall into major debt. The budget for the gym would be constantly changing to
meet customer demands but the average budget would be about $5000 a week. (Cambridge
Preliminary Business Studies - page 283)
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