PUK Agency Business Plan
Purpose and uniqueness of business
PUK Agency is a health and fitness agency that provides skilled, suitable personal trainers to match the needs of its target customers. The agency will ensure privacy, convenience, flexibility from the personal trainers; the elements considered important to most people yet missing from regular fitness centres (Kelly, 2016). This is due to the increasing number of people embarrassed or uncomfortable to exercise in public fitness centres like gyms (Ansell, 2008). Putting the customers’ needs above all else, will facilitate the gap between people and healthier lifestyles. The agency will gather feedback from both clients and personal trainers on how best to satisfy customer needs (Grant & Jordan, 2015).
PUK will be an online business, offices located in Streatham (home-base) with a partnership structure. Focusing on providing employment to qualified and suitable personal trainers that can cater to the men and women of 18 years and above (Ton, 2014). Using the website, customers will have the chance to submit some information regarding their health and fitness (for example, the type of training/exercise required) also, select from a list of personal trainers as well as preferred training location. This allows clients to be more involved and in control of their training regime.
The city of London is the primary target for PUK’s new business plan. London is a city on the move and one that doesn’t sleep. There are more people living and working in London. The growth has been driven by the increasing employment opportunities which have attracted a type of professional that is target client for PUK Agency. The clients we are mainly targeting are looking for a different approach to exercise away from the prying eyes of the public (Trimble, 2010). At the Agency, clients’ needs will be the total focus of our personal trainers. The health and fitness industry has a wide range of gyms and health clubs that cater to different types of people for example, 24 hour gyms, ladies only gyms, traditional gyms to mention but a few (Tricker, 2015).
The growth of the industry is guaranteed as more people in the population are becoming health conscious. This is coupled with the fact that many people do not have enough time to attend the gym. There is also a good number of people that wants to train but are afraid of the intimidating gym atmosphere, where they fear being ridiculed, ashamed, harassed, or looked down upon. People have unique health and fitness needs that are not being met by public gyms.
Products or services
PUK is an online platform where customers can get connected with professional personal trainers for convenient training sessions at home or in the office away from the public eye (Grant & Jordan, 2015). PUK is a personal trainer agency focusing on providing private personal trainers to people looking for a fitness and healthy lifestyle except are unable to use a fitness centre. There is a growing interest in living a healthy lifestyle however, it has proved difficult to achieve for some people due to different reasons (Lawrence, 2009). There are many men and women who feel too embarrassed or uncomfortable to exercise in public fitness centres (Kelly, 2016). According to Mail Online, study found that 75% of women would like to exercise more but they live in fear of judgement (Parry, 2014). This is where PUK Agency can facilitate a platform that creates a relationship between personal trainers and clients in achieving this lifestyle privately.
Sales and marketing strategy
PUK Agency plans to roll out a heavy advertising campaign to introduce itself into the market and make a big impact from the onset (Kelly, 2016). Advertising is a type of communication by a business organization that strives to convince a target audience, including listeners, viewers, or readers to buy or take a particular action concerning a product, information, or service offered by a business. In order to determine the effectiveness of advertising and its impact on the buying behaviours of consumers, PUK Agency has investigated the associations and relationships between various independent variables, including emotional response and environmental response with behavioural aspect and attitudinal aspect of consumer purchasing behaviour.
There are different marketing approaches that can be used by PUK Agency. Mass marketing is one of the most common approaches used by businesses (Kelly, 2016). This is a common marketing strategy employed by businesses in an attempt to influence a huge number of consumers to buy their products and services. It takes huge finances to sustain large corporations and it is not surprising they invest huge sums of money in gathering important data needed to influence mass marketing decisions (Grant & Jordan, 2015).
Even though many fitness centres do not employ mass marketing to attract customers to their businesses, there are a few notable examples of fitness centres who are employing mass marketing successfully to attract customers to their gyms spread across different locations (Kelly, 2016). It is apparent fitness customers seldom celebrate working out in public, especially when they are just starting out or have not been to the gym in recent years.
PUK Agency will use digital marketing to promote its web-based business to the growing community of online users. Through digital marketing, PUK Agency hopes to become the most visited online health and fitness website in London with two years. It is apparent more customers are now able to access online services at relatively lower prices owing to the country’s strong currency, and most importantly, high incomes and desire to spend on fitness products and services (Grant & Jordan, 2015). Online commerce is associated with greater customer experience and service with PUK Agency offering fast and convenient service, and suggestions for personal trainers with the right skills and experience.
PUK Agency will customize its online experience to fit the target audience in terms of fitness needs and preferences (Coulson & Archer, 2009). The company plans to offer tailored services modelled around the lifestyles of customers to help them find time for fitness training within their busy schedules. These strategies will lead to massive successes for the company’s brand and prove that a customized fitness training experience based on an understanding of the niche market makes the differences to the health and fitness consumer. This proves PUK Agency has a unique model of marketing because it lacks physical gyms anywhere in the city, and its model almost resembles the model adopted by other online based businesses (Hill & Jones, 2010).
The PUK Agency brand will pay a big role in attracting and retaining customers once the business is well established. The emergence of brand marketing as a successful marketing strategy in the health and fitness industry has witnessed the entry of local, regional, and international brands into the London market. Even though London residents remain keen online users, it is apparent they also experience the dictatorship of distance when deciding to go to a physical gym. As a result, many fitness outfits acknowledge online marketing can have its drawbacks that can tarnish a company’s brand name and image. For instance, customers are frequently disappointed by late arrival of personal trainers and have problems switching fitness trainers that do not fit or match their perceived needs and preferences.
However, local fitness trainers employing brand marketing acknowledge experience will matter if they are to compete with physical gyms, as it is indispensable in offering a lasting brand experience in both online stores and physical gyms (Hill & Jones, 2010). Regardless of the means a customer uses to access a company’s fitness services, remaining real, trustworthy, and transparent are of utmost importance in building a lasting brand experience. Health and fitness customers need to feel respectable when paying for online fitness service and the pertinent question amongst marketers is how to bolster customer experience (Motohashi, 2015).
In order to succeed and stay relevant, health and fitness agencies should become media properties by working across various social platforms to market and promote hat they offer and do (Rajagopal, 2012). For instance, PUK Agency will become a fitness agency that remains savvy in this area and is reviving the conventional fitness training experience with a lively online experience, thrilling visual merchandising, and excellent customer service that will boost its brand name largely by ensuring customers are excited and engaged when using the services. Today, fitness trainers realize posting pictures of models wearing skimpy clothing cannot sufficiently cut across the increasingly crowded marketplace (Whyte et al., 2015). As a result, marketers are striving to understand their consumers and incorporate their fashion content with a particular lifestyle, ask consumers to post their images during training, encourage them to share favourite pieces, and offer them an opportunity to make proposals about their personal training regime (Grant & Jordan, 2015).
PUK Agency will have to perform a stakeholder analysis aimed at identifying all the parties affected by its operations directly and indirectly (Hill & Jones, 2010). It will focus on the issues, concerns and information needs of these stakeholders in relation to the agency’s sustainable development activities. In carrying out its activities, PUK Agency will strive towards maintaining the environment and respect for human dignity. There are many laws and regulations that govern business activities and make companies more accountable to all stakeholders (Vasi & King, 2012). Stakeholder analysis involves identifying various groups affected by the agency’s activities such as customers, regulators, suppliers, employees and the community. By understanding stakeholder needs, PUK Agency will be able to capitalise on new opportunities created (Grant & Jordan, 2015).
Breakeven analysis is a tool used by businesses to determine the targets they need to meet in order to become profitable (Dlabay & Burrow, 2007). It indicates how much revenue a business has to raise in order to cover the expenses. The following is the breakeven analysis for PUK Agency:
Break-Even Point Q = Fixed Cost / (Unit Price – Variable Unit Cost)
Fixed costs (per month):
Rent – £2000
Utilities – £200
Wages – £5,000
Total fixed costs = £7,200
Variable unit cost = £10
Unit Price = £100
Therefore: Breakeven point = 7,200 (100 – 10)
= 80 units per month
Projected revenue = (Number of units x Unit cost)
= (120 x 100)
Profit = Revenue – Expenses (fixed costs – variable costs)
= 12,000 – (7200 + 1200)
Sources of finance
PUK Agency will explore different sources of financing, both short-term and long-term, for its proposed business. Short-term sources targeted include overdraft facilities, trade credits, and factoring (Anolli et al., 2013). Overdraft facilities will enable PUK Agency to withdraw more money than it currently has in the bank. We will also ask for trade credits from our reliable suppliers then they can be paid once the business starts bringing in money (Rigby, 2011). If we are in urgent need of cash flow, we can sell our invoices to a factor such as banks to give us instant cash.
Long-term financing will come from Bank loans (Boubakri & Cosset, 2011). This will provide enough capital injection to get the business up and running on the path to profitability. PUK Agency has already identified Santander Bank as a suitable source of business loan to finance this venture. Santander Bank has been selected because they have a range of loan offerings to support small and upcoming businesses. The loans are tailored to suit different business models and their interest rates are relatively lower than other banks such as Barclays and Standard chartered.
Uses of finance
The capital outlay will go into getting new office premises, hiring qualified trainers, setting up business website, salaries, and advertisement and marketing campaigns. The agency will also invest in different fitness training equipment for customers who might be interested in them. See breakdown below:
Capital = £20,000
Office premises = £4000
Website = £100
Equipment = £1000
Marketing = £1,200
Total setup costs = £6,300
Salaries = £5,000
Rent = £2000
Utilities = £200
Total running costs = £7,200
Projected revenue (per month) = (Number of units x Unit cost)
= (120 x 100)
Revenue per year = 12,000 x 12
Profit (per month) = Revenue – Expenses (fixed costs – variable costs)
= 12,000 – (7200 + 1200)
Profits for year 1 = 3,600 x 12
Cash Flow Statement (For year 1)
From the above highlights, it shows that PUK Agency can break even and be profitable within the first year based on conservative estimates. A lot of initial capital will be required, but once the business manages to register 120 customers, it will start making profits as long as customers pay on a consistent basis. Based on the projected rate of growth, the business should have at least 200 paying customers within one year.
Once the business gets paid customers, revenue collected will be enough to keep operations on going (Nieuwenhuizen et al, 2008). The market process is enhanced as each individual pursues their own interests in a harmonious way, even if they sometimes fail to act in harmony with one another. The human factor is central to this complex network of fitness customer interactions. It is difficult for fitness activities under the framework of a training plan to overcome all coordination problems (Hill & Jones, 2010).
Customers for the fitness and training business have a relatively high buyer power because they have many options in the business (Dlabay & Burrow, 2007). Health and fitness services providers have to find a delicate balance between quality services and cost of services in order to avoid losing customers to their rivals. This kind of competition gives consumers more power (Stokes & Wilson, 2010). Fitness centres also have to deal with suppliers for various products and services needed at all its facilities. The suppliers provide general products and services that are easily available from other suppliers (Gowthorpe, 2005). Furthermore, small entities that are seen to be growing impressively are soon acquired by the bigger companies.
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Forecasting costs, revenue and profits – break-even analysis
Financial requirements & forecasts: To what extent has the student included well researched, credible information and understanding of the financial requirements of the business:
Comprehensive, accurate, realistic setup, capital and running costs.
Accurate, realistic sales/revenue and profit projections for year 1.
Accurate, realistic cash flow statement for year 1.
Commentary on the above figures including explanation of financial highlights, risks and assumptions.