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Elements of a business plan for fitness centres

What usually happens when a business plan needs to be drawn is: a calculation file is opened, it is divided for 12 months and the values of estimated costs and revenues are entered. These values are often the result of one's own experience and of personal sensations and perceptions. While the preparation of a cost and revenue forecast plan is critical for every company, this is only one part of the business plan.
Starting from this assumption, we should try to give a definition to the elements of a business plan: they are part of a document that provides economic and financial information with the objective of illustrating concrete data and objectives in the form of indicators and indexes.

In a business plan therefore it is important to include not only an estimate of costs and revenues, but also an in-depth economic and financial analysis. The absence of such analysis will impair the vision of the future of the company, thus increasing risks of deviations.

Knowing how to play is not only about hitting the ball well, but about making the right choice, knowing [...] how to hit it and where in the field to point it. Rafael Nadal

A second element to reflect upon is the reason why some numbers rather than others are to be included in your business plan. What is the rationale? How much more in depth do we need to go? At what point in time should such reasoning be developed?

Let's start by reflecting on the fact that inserting numbers on spreadsheets without careful and previous analysis involves both high risks of discrepancies in the final balance and stress during management. For this reason, each business plan drawn up in a complete and professional manner must include an introductory and extensive descriptive part. A superficial examination of this descriptive part will most likely lead to an unreliable business plan.

Business plan ’s phases

Let's list the main phases that make up a solid business plan:
1. Business description
The business description includes a careful analysis of the company's situation and the services it offers. It is important to explain how the offer is modulated by business areas (or macro-categories of service) and the reasons for which certain choices have been made. It will also be useful to highlight whether there have been any changes on the business strategy over the years and the reasons for such changes.
2. Context description
The context description describes the current performance of the sector and analyses the market forecasts, with the aim of contextualising the choices illustrated in the previous point. By Context it’s intended that set of factors directly and indirectly linked to one's business: from the propensity for movement of users living nearby to the income per capita; from the road network that allows the club to be reached more or less easily by car or by vehicle to routes dedicated to cyclists and pedestrians; from the performance of the Italian fitness market to events of international importance that positively or negatively influence the purchase choices of the final consumer. In summary, the more you know, the easier it will be to understand the historical context in which you are developing your business.
3. Strategies e positioning
The strategies adopted and the positioning of the industry underline the coherence between strategy and level of entrepreneurial risk. At this point the competitors are also analysed. In fact, both strategy and positioning are the result of a choice that the entrepreneurial team considers winning, but also the way in which its fitness centre differs from its competitors. For this to happen, it is essential to be informed about the other centres in the area, to know their offer, to monitor them and to understand their strategy, strengths and weaknesses as clearly as possible. Therefore, it is necessary to understand how to make the best use of this information, in order to take full advantage of it.
4. Operational plan
The operational plan consists of a manual on choices in terms of services offered, commercial plan and marketing. This is a very substantial phase that translates strategic thinking into a concrete, detailed action plan, whose timing and modes of action can be monitored. In order to ensure that this plan is also of high quality, it is important to be detailed and realistic. Meticulousness will help prevent stress from poorly planned projects.

If, for example, you want to sell 2,000 contracts in a calendar year between subscriptions and ancillary services (personal trainer, swimming school, free swimming, special courses, etc.), you need to establish how many of these contracts come from renewals, how many from outreach activities, and how many from web, initiatives and others. Then you need to develop a sales strategy, assign goals to individual vendors and set daily agendas for both sales and marketing staff. In other words, the individual tasks of the marketing department (which aims to bring new users to the club) and the commercial department (which allows me to sell and bill) have to be defined.

5. Structure and management
Given the importance of the staff in the wellness sector, the structure and its management are two very delicate points. Evaluating resources, identifying their roles, highlighting their strategic importance and making them clear in the company's organisational chart is very important. At this stage, an estimate of the possible need for recruitment in the coming years is also expected. As we have already established, the quality of the staff selected during the recruitment phase is fundamental for every fitness centre. Therefore, the entrepreneurial team must also be aware that it is co-responsible for the competence its staff. It is important, in addition to selecting the best resources for one's own situation, to define how and with what frequency it is deemed useful to increase the quality of resources through dedicated and specialised training courses.

In this phase it is also useful to explain the type of contractual relationship between the company and the individual staff member, in order to highlight what are the key elements on which to invest most.

6. Financing resources
This last phase includes a detailed analysis of the financial sources (both relevant and not) that the entrepreneurial team has activated and will activate to keep, grow and restructure its business. Accordingly, securities to back these financial needs will also have to be identified. This is a delicate analysis, especially if you are exposed to expensive financial sources. From leasing to financing, from overdraft to advances, invoices, interest rates and amortisation plans need to be carefully designed to be financially sustainable.
Only if all these elements have been thoroughly described in the business plan, it is possible to move on to the economic and financial documents that will make possible to value both expected profitability and capital requirements. These documents are the Income Statement, the Balance Sheet and the Cash Flow Statement. From these it will be possible to highlight major accounting indices such as ROI (return on investment), ROE (return on equity), RONA (return on net asset) and EBITDA (gross operating margin, or earnings before interest, taxes, depreciation and amortisation).

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