Interdependence Of Business Functions Ac Physical Fitness Training Business Essay


The business is a Gym and it is called A.C's Physical fitness training where it would be located at 13 Hoskins Avenue, Bankstown and the legal structure of this business is a sole trader, where i am the boss and i am responsible for all the decision's made within the business and is able to retain all profits, but the business is recorded as a unincorporated business which has unlimited liability where i take full responsibility for the debt made by the business. The amount of staff that has been applied to the business is 10 employees 2 managers, 4 trainers, 2 trainees and 2 part-time applicants. The prime function of the business is to gain a profit of $1000 minimum in the year and gain a number of memberships of 120 people by the end of the year. In the next 5 years the business would like to be able to expand the business and be able to place a pool and spa so it has an advantage over competitors. Then in the next 7 years the business would like to add a boxing ring and a boxing instructor to the to the business and also a boxing program if a consumer would like to enter the boxing circuit he/she is able to do so, also to bring in self defence classes. Also in the next 10 years hopefully the business can open up another store in the Greenacre or in the Moorebank area.

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I have located my Gym there because it has easy access for young and old people around the area as well as it has a park near it so if people wanted to work outside we could have a circuit at the park, it is large and it can ad different opportunities to place a pool for Aquatic Aerobics, also there is not much competitors in the surrounding areas apart from Fitness First, also it is close to suppliers which is Workout World.

Interdependence of the business functions

Even if a business provides an excellent good or service, the business itself may not be successful unless its support functions are also performing successfully. Many components of a business rely on each other in order for the business to continue to grow and survive in today's economic environment. All the business functions need to be working towards the same goals in order for the business to be successful. The operation function refers to the physical production of a good or the process of a service. The main or core task that the business performs is referred to as its prime function. The employment relations function deals with the relationship between the owners of a business and the people who work for the business. Its a support function that aims to find, attract, develop and motivate the people who can provide the services that the business requires. Therefore, this business function involves acquiring, developing and maintaining staff and if necessary, separating them from the business. The marketing function involves finding out what consumers need and want and linking these research finding to the business product. The accounting and finance is responsible for providing the financial information needed for sound and viable decision making. All these functions are interdependent. There is heavy reliance on the functions working together as a team, resulting in the business as a whole operating efficiently and profitably.

(Cambridge Preliminary Business Studies Foreword by Michael Doherty author Marianne Hickey, Tony Nader, Tim Williams. Date of access 10/7/10 pg 78-79)

Stages of a Business Lifecycle and challenges faced

Every business must go through the business lifecycle but different businesses go through the phases differently.


The Establishment phase in the business cycle is when the business first enters the market. The owner must make decisions on the location of the business, the type of products that the business will see, how to find motivated and appropriately trained staff and the most suitable legal structure for the business. But there are challenges faced to pick the business to its feet like:

-Generating sufficient revenue to cover costs and provide a profit to the owner

-choosing a suitable location for the business that does not add financial strain and is in close proximity to the potential customer of the business.

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-developing appropriate marketing strategies to create an awareness of the business and its products among potential customers.

-ensuring all government regulations are followed including business regulations and Occupational Health and Safety(OHS) and taxation.

(Cambridge Preliminary Business Studies Foreword by Michael Doherty author Marianne Hickey, Tony Nader, Tim Williams. Date of access 25/6/10 pg 24-25)

Growth Phase

The Growth Phase of the business life cycle offers the business many exciting opportunities and presents it with new challenges. During this stage, the business is experiencing increased sales. More customers are aware of the product and as such the business begins to gain increased revenue, profit and market share. But the problems faced are:

-have sufficient money for day to day operations

-Effective stock control management

-Just in time (JIT) inventory control

-Bring stock when needed

-management and organisation of support services

(Cambridge Preliminary Business Studies Foreword by Michael Doherty author Marianne Hickey, Tony Nader, Tim Williams. Date of access 25/6/10 pg 25-26)

Maturity Phase

In the maturity Phase of the business life cycle the business growth and market share begin to slow. The business faces increased competition from new entrants into the market, with consumers increasingly willing to purchase competitors products. For some business the market share achieved at this stage may be sufficient to provide investors with reasonable profits. The challenges faced in the maturity phase are:

-needed to develop strategies to maintain customers loyalty and interest in its product.

-motivating employees and management so that tasks do not become routine and boring.

-ensuring the financial position of the firm at this stage is sufficient to cover short-term and long-term expenses and provide investors with a sufficient rate to return.

-maintaining an active interest in the external environment of the business in order to be aware of the changing consumer patterns

(Cambridge Preliminary Business Studies Foreword by Michael Doherty author Marianne Hickey, Tony Nader, Tim Williams. Date of access 25/6/10 pg 26)

Post maturity Phase

The post maturity phase is the final stage of the business life cycle. During this stage, key decisions will be made that will ultimately affect the long term survival of the business. By now the business is an establishment organisation within the market. Increased competition and changing consumer preferences may centre the need for change, the 3 changes are Renewal where the business is re-establish, Steady state where the business stays the same and finally Decline where the business is closed by voluntary or involuntary cessation. The challenges they must face during the post maturity phase:

-be aware of its legal responsibilities in relation to its obligation to its creditors, suppliers and employees should it decide to close.

-motivate employees and create a culture within the workplace where change is embraced

-maintains an active interest in the business environment to be aware of changing consumer patterns

-choosing to renew the business, keep going how they are, think of closing the business and decline.

(Cambridge Preliminary Business Studies Foreword by Michael Doherty author Marianne Hickey, Tony Nader, Tim Williams. Date of access 25/6/10 pg 26-27)

A.C's Physical Fitness training will open up another store in the next couple of years in the Greenacre or in the Moorebank area to gain more customers and be more aware to the changing patterns around the business and to maintain the interest of the customers.



Strengths: There is a park near the location of the business if there is not much room in the Gym the trainers are able to take them to the park and have a training session there. There is a Workout World nearby as it can inform me about the new and best equipment coming so i can have an advantage towards the competitors. The business has a well trained staff and is very motivated to succeed and hope to gain a lot of experience and knowledge and it is easy to access the business for young and old customers and the trainers are able to train multiple age groups.

Weakness: Some of the trainers don't like each other as they continually fight for customers and then argue who is training the customer and then are not respectful to each other and are not respectful to the customer and start to forget about the business and put their own mentality and ego in front of it.

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Opportunities: The opportunities that the business has is that there is not much competitors in the surrounding area as well as there is a park near the location of the business if there is not much room in the Gym the trainers are able to take them to the park and have a training session there. There is a Workout World nearby as it can inform the business about the new and best equipment coming so the business can have an advantage towards the competitors.

Threats: The fitness first up the road has a better name and is able to talk to the Workout World nearby as it can inform them about the new and best equipment coming so they can have an advantage towards their competitors.

Interview 1 Products/services (28/7/10)

I went to Workout world and i asked one of the workers what was the best and newest equipment is. She said "the best i believe is the power force USA and the magnum fitness equipment where they are reasonably new and they have a reasonable price as they are good brands to use for training. They are also easy to assemble and easy to place anywhere at home at the gym and very simple to use and they are very safe to use, but used incorrectly it might give problems to the user but that is with all equipment." I learnt that the newer models aren't necessarily the best equipment to use as they may be unsafe to use around a certain area or maybe harder to use compared to the lower models, and buying for the name of a brand might not be good idea as sometimes the brand might make bad equipment sometimes. Some equipment must be easy to use so that anyone can use them from the elderly to young teenagers who don't know how to use the equipment as it can cause damage to the individual's body if they don't know how to use it. The equipment must be safe to use for everyone as they can cause serious damage if something may go wrong as it might kill a person.

Interview 2 Skills and experience (6/7/10)

I went to World Gym where i asked the owner how much skills and experience he has of owning and running a business and how much he needed to improve on them. He said "the experience i have of being a trainer is 12 years and i have recently opened my business and learnt how to run my business as i was a manager at a Fitness First and all the knowledge of managing a business was already taught to me and the skills which i have still needs to improve on as i am still learning on how to run this place. I am getting help with some of the older trainers who know how to run and i am also taking a business course in tafe so i can understand on how to run a business as i need a lot of improvement and help." I learnt that as much experience a person has they need as much help as possible so they can go through the easy problems and then the hard problems.


Interview 3 Staffing (21/7/10)

I went to world Gym where i asked the owner how he was able to choose his staff from the rest of applicants that applied for the Job. He said "the first thing that i was looking for in a trainer that he or she wanted to be here and some experience as a trainer, some had a lot more than others and as well as if they are able to talk to people and to help them our and they weren't rude to the customers and how they presented themselves to me and the customers so they can show respect." I learnt from this interview that experience is a critical part of an application but it is not the only thing you should worry about you should see how well they can talk to customers as well as other employees and how well they present themselves to the community and if they can show respect towards the community.

Interview 4 Staffing Requirements/needs (27/7/10)

I went to World Gym and asked what requirements the staff needed and he said that they need to have sufficient amount of pay so they can be happy because if their morale is down the business will go down as well, give them rewards if they complete tasks well or do more shifts then needed as it increase their morale if they get the day off or get an increase in there wage and it pushes them to do it again to get their reward. They also have to be happy in their environment because if they're not happy with your place they will want to go or want an increase of pay so that's more money out of your pocket and that they cannot be discriminated against or feel discriminated as they can sue you or if not destroy your business by treating the customers the way they have been treated and the business must exceed OHNS standards as the staff might get hurt." I learnt that the requirements and needs for your staff is very important as their morale controls the business and it helps you gain more customers by the god job they do and that the employees must get rewards for the tasks they do and if they do the tasks well and that if they are treated wrong it can have serious consequences towards the business and that the business must have a safe environment as it can hurt innocent people and also can have serious consequences.


Interview 5 Marketing (28/7/10)

I asked the owner of world gym how he presented himself to the market and attract customers. He said " the way i presented myself to the market was by making cards and then giving them out to my friends who then gave them out to their co-workers who gave it to their family members as well as my trainers told their friends to join as well and so people just started to come around the second day when we first opened up and then word of mouth started to happened and we were getting good reviews from the customers and so more and more people started to show and now we are strong business and have loyal customers." I learnt that giving people you know simple cards can open a variety of different communities to you and bring in a number of customers. I also learnt that the simple thing like word of mouth can help but also disadvantage you it can help because people give you a good review and then tell their friends about it and so they come to see it and mainly if there has been dramatic changes to the individual but it also has it disadvantages if someone does not like the business you loos customers and then profit.


Interview 6 Financial Forecasts (29/7/10)

I went to worlds Gym and i asked the owner on how he took care of financial work with his business. He said "the way i managed the financial works of the business was by predicting my cash flow so what money comes in and out of the business i then compare my profit and loss to last years and see if or where i need improvement and what times of the year i need to attract more customers. Then i will check my balance sheet and see if i am breaking even or am i falling short." I learnt that financial forecast is the most important thing as it controls your business because if you don't have money you cannot fix or buy equipment you can't advertise and it is hard to pay wages and the bills. I also learnt that you have to forecast your business because it helps you keep track on your business and see if you are hitting the goals you planned and wanted for and if you are not hitting the goals you know that you have to start working harder to start hitting your goals.

A.C's Physical fitness training Balance Sheet

Current Assets $ $ Current Liabilities $ $

Stock 45000 Bank overdraft 15000

Cash at Bank 31000 Accounts Payable 18000

Accounts receivable 2000

total 78000 total 33000

Non Current Assets $ $ Non Current Liabilities $ $

Building 130000 mortgage 171000

Equipment 41000

Total 171000 total 171000

Total:$249000 Owners Equity $ $

Capital 40000

Undistributed profit 5000

Total 45000


A.C's Physical fitness training Predicted Cash Flow

Cash flow from operating Activities $

Membership 275000

Sales of Supplements 75000

Payments to employees (150000)

Interest received 1000

Cash flow from investing activities

Payment for property (100000)

Cash flow from financing activities

Repayment of borrowing (85000)

Cash at beginning of year (10000) .

Cash at end of year $6000

By:Anthony Chahla