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by

“Mentors””
The University of Asia Pacific

Group: Mentors

(MHR-303)
“Entrepreneurship Development and Small Business”

Report on
Establishing a New Business Plan

Submitted to:
Jesmin Sultana
(Course Instructor)

Submitted by:
Mritunjay Biswas (07)
Md. Nasim-Bin-Alam (25)
Nusrat Jahan Urmi (05102901)
Md. Rashedul Islam (18)
Rafia Ahmed (22)

Date of Submission:
05-09-07
September 05, 2007
Jesmin Sultana
Course Instructor, DBA
The University of Asia Pacific.

Subject: Submission of Report on Business Plan.

Dear Madam,

We are pleased to submit the following report as per your verbal


instruction dated on 25 th July, 2007. We are submitting this report as
a part of our course requirement which has helped us broaden our
views on the practical illustration of Business Plan.

This report has been prepared under your guidance and due to our
limited knowledge there might be some errors in our report which we
hope that you will pardon us considering the fact we are still students
and within a learning process.

Yours sincerely,

Nusrat Jahan Urmi

------------------------
Mritunjay Biswas

------------------------
Md.Rashedul Islam

------------------------
Md. Nasim-Bin-Alam

------------------------
Rafia Ahmed

------------------------
Our heart –felt thanks to Almighty Allah, our creator and

sustainer for His energizing helps in turning our long-cherished

dreams into realty. We have also deeply acknowledged to the

following persons and entities for their direct and indirect

contributions in compositions of this report.

We like to give special thanks to Jesmin Sultana, Course

Instructor, MHR-303, who has helped a lot during the period

of making this report

We are acknowledging to, Debnath Chalkraborty has helped us by

providing the crucial information of the organization “Fitness

World.”
Fit Body & Be Happy
Table of Content
Serial Content Page
1. Executive Summary

2. Introduction to Business Plan

2.1 Introduction

2.2 Origin of the Report

2.3 Objectives of the Report

2.4 Scope of the Report

2.5 Sources of Data

2.6 Methodology of the Report

2.7 Limitation of the Report

3. Company Profile

3.1 Name of the Business

3.2 Address of the Business

3.3 Partners

3.4 Partnership Agreement

3.5 Consideration of the Government


Rules & Regulations
3.6 Regulations Which Affect Our
Business
3.7 Current Financial Position

3.8 Services

4. Data Collection

4.1 Description of the Firm

4.2 Market Place


Serial Content Page
4.3 Market Size

4.4 Customers

4.5 The Competitors

5. Strategy Formulation (Market Strategy)

5.1 Developing a Marketing Plan

5.2 Visiting Cards

5.3 Logo

5.4 Publicity

5.5 Location

5.6 Customer Response

5.7 Transportation

5.8 Survey

5.9 Pricing

5.10 Sales Plan And Credit Plan

5.11 Sources of Marketing Information

6. Management Strategy

6.1 Core Management Team

62 Job Description of the Employee

6.3 Organization Management Organogram

6.4 Information Flow

6.5 Salary Structure

6.6 Work Policy

6.7 Risk

Serial Content Page


6.8 Solution
6.9 SWOT Analysis

7. Forecasting Results

7.1 Market Share

7.2 Sales Forecast

7.3 5 Years Sales Forecasting

7.4 Financial Requirement

7.5 Cash-flow Statement

7.6 Income Statement

7.7 Blanca Sheet

7.8 Break-even Analysis

7.9 Ratio Analysis

08. Pictures of Our Health Club

09. Future Scenario of Our Customes

10. Important Instruments of Our Health Club

11. Conclusion

12. Bibliography
A business plan is a document that is used as a base for future action of the

business venture. After realize the environment we decide to make a

business plan on HEALTH CLUB to provide services different level of people.

Most of the time customers facing different types of health problems like

physical fitness, execs fat, dieses, beauty of the body etc. We want to start

this business; the people who are needed to take such services on the basis

of survey we found that a large number of people in Dhaka are need to

conscious about their health and must be control their body as a smart

person and also to be health-strong.

Our main business vision is to satisfy customers by building their body

shape, reducing fat, making them strong and fit for every event as a smart

person. We are going to set up our health club service business as a

partnership business. The name of our health club service business is “Fit

Way” a promise to fit for the world.

The following services will be offered through our business: Weight Loss,

Weight Gain, Belly Reduction, Hip Reduction, Physical Fitness and Body

Building, Reduce extra fat, Increase Stamina and energy etc. Such kind of

businesses is so easier to form and have a vast profit. This type of business

is totally different service business which basically depends on the target

customers’ willingness to be modern, choices, and level of personality.

1
Our business will be situated beside the Stamford University, House No:

16/A, Road no: 19, Shatmosjid road, Dhanmondi Dhaka where we will get a lot

of customer who need these types of services. We offer trained instructor,

appropriate price, suitable environment, sufficient electronic instrument

with: Cardio Vascular, Training, Strength Training Machines, Weight

Training, Fitness Assessment, Medical Consultant, Nutrition, Aerobics,

Steam Bath, Sauna and Massage.

The partners who are related in different sectors share the overall

marketing strategy. We purchase the machines and other equipments form

the VIP Sports, Tazgoan, Dhaka and Flora computer ltd. Computer City, IDB

Bhobon, Dhaka. We have two visiting cards for the customers.

The health club “Fit Way” provides services. The general service of our firm

is that how do we help the customers and how can we satisfy the customers'

need. Our main service as a health club is the customers’ fitness and body

building. We also provided body messaging service. The most important

things for the business are market area, size and characteristics.

In business, reasonable competitions serve to develop the quality of business

performance. In health club business, there have several target market.

There are only three health clubs that provide almost same services who are

our main competitors. Our main competitions as health club are “Fitness

World”, “King shook”, & Lady Line.

2
Introduction to
Business
Plan

3
2.1 Introduction:
A business plan is a document that is used as a base for future action of the

business venture. Researchers termed business plan as a document that

provides entrepreneur’s road map for successful enterprise. The person who

takes risk for establishing new venture or who has the capability of taking

moderate risk is an entrepreneur.

The pioneering role of entrepreneurship in changing an economy towards

growth and development are well recognized in the economic literature. As a

catalyst agent an entrepreneurs creates the forces of change and utilizes

the same in accelerating the socioeconomic

Our vision is to provide the best quality services in reasonable price under

friendly environment with the consumers. Our main business policy is to

satisfy customers. Our Slogan is “you fit… World fit….”

Now a days, people very much conscious about their health. If a person’s

health is fit, he will be able to do everything properly. So in order to attain a

good health, people are interested to go to health club. Considering this

point of view, we are going to establish a health club named “Fit Way” on

January, 2008.

Today increasing demand of health club expands the market. To fulfill the

customers’ demand, we want to establish our health club “Fit Way”.

4
Our target customers are the people, specially studying in Collages and

Universities or aged from 18 to 45 years, because they can feel the

importance of building for good health.

Mritunjay Biswas is the Director of our firm and Md. Nasim-Bin-Alam is the

General Manager. Our business is a partnership business and we have five

Partners. To bearing all the expenses to start business we need TK. 53,

00,000 as capital. Our initial investment is TK. 70, 00,000 by sharing each

partner equally. In the very first year, our cash in hand is TK.7, 72,400 and

bank balance is TK.34, 05,000. Out total cost is TK. 58, 13,300. it is required

to complete the development of the firm. The money will be supplemented by

revenue generated from service to cover the total financial requirements

for the first year operation. The business will be self sustained by the end

of the second year.

2.2 ORIGIN OF THE REPORT:

This report is prepared as a part of our course requirement was told

us by our “Entrepreneurship Development and Small Business” course

instructor Jesmin Sultana on the very first day of our MHR-303 class.

5
2.3. OBJECTIVES OF THE REPORT:

Primary objective:

Our primary objective is to write this report to learn how

organizations in the real, practical world develop the services of a

health club to create demand for the customers.

Secondary objective:

Our respected teacher has kept a considerable percentage for this

report which we feel is important for us to improve our grade and our

overall perception as a student. With this report we believe we have

showed how serious and obedient we are in our “Entrepreneurship

Development and Small Business” course.

It is also our objective to know about the Customer Services of “Fit

Way” and in future if we want to establish such type of business then

we will be able to provide the best services to the customers that we

are learning in this course.

2.4. SCOPE OF THE REPORT:

These are several health clubs in Bangladesh but we have focused our

report on the Services of “Fitness World”. As each and every member

of the “Fitness World” were extremely busy we could only get a quick

look of their services and have tried our best to show their customer

service in this report.

6
2.5. SOURCES OF DATA:

Primary source:

The primary source of information was collected through interview of

Shoag Hasan, Accountant of “Fitness World” . The questions asked to

him were on the basis of our health club knowledge.

Secondary source:

Debnath Chalkraborty, Instructor of “Fitness World” provided us three

paged printed brief histories of “Fitness World”. He also provided us

a list of Customer services. We also collected some crucial

information by using internet, browsing through HEALTH CLUB

website and by reading some relevant reports from the magazine

published by the Health club of Bangladesh.

7
2.6. METHODOLOGY OF THE REPORT:

The methodology of the report includes the evaluation of the

following:

• When we faced problems we talked also to our “Entrepreneurship

Development and Small Business” course instructor and she helped us a lot.

• We talked to Debnath Chalkraborty, Head Instructor of “Fitness

World”

• We collected the information by using internet.

• We discussed with our group members and also discussed with our

senior and junior friends.

2.7. LIMITATIONS OF THE REPORT:

• Lack of practical knowledge and experience.

• Lack of the crucial information.

• Shortage of time.

• Some time one or two student did not participate due to personal

problems

8
9
3.1. Name of the Business:

10
3.2. Address of the Business

House no # 16/A

Road no # 19 (Old)

Dhanmondi, Dhaka-1209

Bangladesh

Partners:

Mritunjay Biswas

Md. Nasim-bin Alam

Md. Rashedul Islam

Rafia Ahmed

Nusrat Jahan urmi

11
3.3. Partnership agreement:

1. Name and address of the firm:

Fit way:

House No: 16/A

Road no: 19 (Old)

Shatmosjid road,

Dhanmondi Dhaka-1209.

2. Name and address of the partners:

Mritunjay Biswas

25/10,3rd floor Munshibari Lane, Jigatola

Dhanmondi Dhaka- 1209.

Md. Nasim-bin Alam

House: 116/A,( 2nd floor)

Road: 15 (old), 8/A (new)

East Rayeer Bazar,

Dhanmondi- Dhaka 1209.

12
Md. Rashedul Islam

House: 9/1/A

Road: 4/A

Dhanmondi, Dhaka 1209

Rafia Ahmed

165/1 Lalbag road,

Dhaka-1211

Nusrat jahan urmi

9 No. Bhagalpur Lane

Hazaribug,

Dhaka-1205

3. Types of business:

“Fit Way” is a health club. We have a along desire to provide maximum health

benefit to the people so that they can enjoy a healthy & happy life. That’s

why we are going to open a health club which makes people fit.

4. Amount of investment:

Each partner contributes 14 lakh. We are 5 partners that’s why our total

investment is (14*5) =70 Lakh.

13
5. How profit and losses will be shared:

As all parterres contribute equal amount of money, profit & losses will be

shared equally.

6. How much each partner can draw out:

Each partner can draw out tk.2lakh at a time. If a partner wants to withdraw

money, he/she must pay interest on withdrawals. This interest will be

accumulated to our bank deposit.

14
7. A job description detailing duties & responsibilities of each

partner:

Director:
Mritunjoy Biswas

Duties & responsibilities:


• Developing new services.

• Analyzing new customer needs.

• Motivating employees.

• Innovation new idea.

• Overall planning & controlling functions of the firm.

• Applying effective decision.

• Sanctioning of money for different purposes.

Manager:
Md. Nasim- Bin-Alam

Duties & Responsibilities:


• Supervision of firm’s activities.

• Authorization of transaction vouchers.

• Checking of record, maintains of circular, office files, etc.

• Evaluation of employee works.

• Preparing payroll.

• Analyzing cash flow.

• Supervise subordinate.

• Manage total business.

15
8. A limits on the action each partner can take without

consent of other:
If one partner takes any action without consent of others, it may break the

partnership. So, to take any action each partner has to get the consent of

other partners. A partner can’t do anything without the consent of others.

9. A method for resolving disputes: If a partner faces

disputes to other partners,


All the partners of the business discuss about the matter. By discussing, we

resolve. The disputes among ourselves.

10. A process for dissolving partnership:


Our firm may be dissolved on any of the following grounds.

• By agreement: Our firm may be dissolved any time with the consent of

all the partners of the firm. Partnership is created by contract; it can also be terminated by

contract.

• Compulsory dissolution: Our firm is dissolved if all of the partners or

one of the partners becomes insolvent. Again, our firm is dissolved by the happening of any

event which makes the business of the firm unlawful.

• On the happening of certain contingencies: Our firm is dissolved by

the death of a partner.

• By notice: Our firm may be dissolved by any partner giving notice in

writing to all other partners of our intention to dissolve the firm.

• Dissolution by the court: At the suit of a partner, the court may

dissolve a firm if one of the partners becomes unsound mind or permanent incapacity due to

illness.

• Publish advertisement in newspaper, leaflet, and billboard.

16
11. A process for expelling partners:

If any partner takes bribe from a person or an organization, he will be

expelled from the partnership or if a partner gives any secret information

to the competitors or others, he will be expelled.

3.5. Consideration of government rules &

regulation:

Any business is a subject to a number of laws and regulation under the

jurisdiction of the strafe provincial governments or municipalities. In

partnership business, it is our personal responsibility to understand and

comply with their regulation. Government regulations have been established

for the protection of:

• Employees

• Consumers

• Competition and

• The environment

17
3.6. Regulations which affect our Business:

As mentioned previously each category of business will have differing

regulation. The regulations which will affect our venture in our district are:

• Business registration

• Licensing requirements

• Sales tax

• Income tax

• Labor legislation

• Checklist of legal requirements

• Good public relations

The protection of consumers is also ensured mainly by legislation from the

central and ministries of consumer and commerce affairs. The laws cover

employees and consumers headline of credit.

3.7. Current Financial Position:

100% equity finance.

18
3.8. Services:

‘Fit way will provide services which are essential for building a person’s body.

It is not only beneficial for building a person’s body, but also beneficial for

protecting various types of diseases. Here we will educate our members

about how to exercise properly so that they can achieve maximum benefit

from their fitness programs. The services which we offer are:

• Trained Instructor

• Suitable Environment

• Cardio Vascular Training

• Weight Training

• Medical Consultant

• Aerobics

• Sauna

• Appropriate price

• Sufficient Training Machines

• Fitness Assessment

• Nutrition

• Steam Bath

• Massage

19
20
4.1. Description of the firm:

“Fit way” is a health club which will be established to build good health.

The firm’s business address is:


House no—16/A

Road no---19 (Old)

Dhanmondi, Dhaka-1209

The activities of our health club will be started on January, 2008. At

present, the company does not have any fulltime employee. The two

principals of the firm are:

• Mritunjay Biswas, Director

• Md. Nasim Bin Alam, General Manager.

We, five partners, including Mritunjay Biswas & Md. Nasim bin Alam,each

own equal share of the firm. Any questions relating to business plan is

to be directed to Md. Nasim Bin Alam.

21
4.2. The Market place:

The market place for ‘Fit way” are throughout Dhaka especially in

Dhanmondi,Shamoli, Mohammadpur, Zigatola, Kalabagan, Lalmatia, etc.

Because, Fit way will be established in Dhanmondi. That’s why, the

target customers for our business is in Dhanmondi or near Dhanmondi.

4.3. Market size:

Approximately, we will be able to sales tk.25, 85,700 in 2008 & tk.30,

14,500 in 2009.The market is expected to grow at an annual rate of

30% over the next five years. The following market values are based on

an average:

Selling price by Fit way: -----------------------Tk.6464 per person.

Estimated size of the total Bangladeshi

Market over the next 5 years--------------------652 people

Total Bangladesh market sales volume

Potential over the next 5 year-------------------Tk. 42, 14,528

22
4.4. Customers:

The young people are conscious about their health and are interested to fit

their body. That’s why our target customer is young people studying in

colleges and universities. In order to fulfill our customer’s demand, we want

to establish our health club ‘Fit Way’ in Dhanmondi. Because there are so

many colleges and universities in Dhanmondi or near the area.

4.5. The competitors:

There are 3 competitors in Dhanmondi for our business. They are:

• Fitness world

• Lady line

• King shook

“Fitness world” is located in Dhanmondi 2/A. It owns the largest share of


the market & the amount of market share is 30%. Fitness world is our main

competitor as it owns the largest market share. It provides many facilities

to its customers. It charges tk.3000 per customer on yearly basic for

admissions and tk. 600 for monthly payment & tk. 1500 per customer on

semi-annually basis for admission & tk. 600 for monthly payment.
23

“Lady Line” is located in Dhanmondi 9/A. It owns the 20% share of the

market. On yearly basis it charges tk. 4500 per customer for admission and

tk. 700 for monthly payment. On semiannually basis it charges tk. 2500 for

admission & tk. 600 for monthly payment. Lady Line is only for women. That’s

why; they prefer this health club than others.

“King shook is located in Dhanmondi 32/A. It owns the 22% share of the

market. It charges tk. 3500 for yearly admission and tk. 650 for monthly

payment. On semi- annually basis, it charges tk. 2000 for admission tk. 700

for monthly payment.

“Fit way” is located in Dhanmondi 19(Old). It tries to own a large no.

of market share. That’s why we have collected the information of our

competitors to analyze them and set the pricing. We will charge tk.

4000 for admission & tk. 500 for monthly payment on yearly basis. On

semiannually basis, we will charge tk. 1500 for admission & tk. 800 for

monthly payment.
24
25

5.1. Developing a Marketing Plan:

Image:

Developing an image for a business is very difficult. It requires analysis and

a huge amount of money. For developing the image of our business, we will do

the following things:

Sales promotion:

Sales promotion is a short term incentives which increases the amount of

sales. It is an effective technique for increasing sales. The sales promotions

which we will give are as follows:

• Discount on admission fee for the first 50 persons.

• Refreshment.

• 10% admission for group admission (at least 2 persons)

• Specials discount for ladies.

• Health competition will be held and prizes will be distributed.

• We will organize social activities such as:

-Blood donation

-Relief works like flood affected, winter cloth distribution.

26
Customer Services:

Customer is our main focus. We want to give the best quality services to our

customers. By satisfying our customer, we can reach to our goal. The

services which we will provide to our customers are s follows:

• Free monthly medical check up.

• Trained instructors such as specialists for each section like weight

loss, Weight gain, body building, cholesterol control, etc.

• Steam bath facility.

• Reasonable price

• Suitable environment is provided such as wide space, locker, A/C, well

decorated fresh room, fresh drinking water facilities,etc.

• Electronic machine helps customer to a great extent and customers

have a great demand on this. That’s why, we will provide electronic machine.

• To fulfill the customers demand, we will provide massage facilities.

• Fitness assessment is given to our customers so that they will

understand their development.

• Entertainment like TVs, music systems, tennis court, etc, will be

arranged.

27
Advertising:

We will publish our ad in newspaper, magazine, and leaflet.

Slogan:

A slogan effects in customers minds. A successful slogan is a strong

weapon against our competitors.

Our slogan: You fit -----

The World fit -----

28
5.2. Visiting Cards:
“Fitway” as the health club service business; it has two visiting cards for

both Directors and Managers:

29
5.3. Logo:

30
5.4. Publicity:

The impact of publicity for a business is very important. Publicity can create

a large number of sales. So, we have to careful about our publicity. We will

use the following media for publicity:

Newspaper:
For our business we have selected Daily Star, Prothom Alo, Janakantha etc.

We will published our add on Friday, Saturday and Tuesday.

Leaflet:
We will provide our leaflet near different schools, universities, restaurants

etc. in Dhanmondi.

Magazine:
We will publish add in magazines like e-biz, science world etc.

31
5.5. Location:

Location analysis is an important decision for any business. We have to

consider cost for analyzing location. For finding location, we have considered

a suitable location where customers are available for our business. The

following things are given preference:

5.6. Customer response:

For our health club, the main customers are young people. There are so many

schools, colleges and universities in Dhanmondi. So customer’s response is

the main issue for which we have selected Dhanmondi for our business.

5.7. Transportation:

The communication system is another important issue. Customers can come

Dhanmondi through any easier transportation.

32
5.8. Survey:

We have conducted a survey where we have found Dhanmondi as the best

location. Most customers have preferred Dhanmondi.

5.9. Pricing:

For the new company at the introductory stage is especially challenging. We

introduce a new company no one does not aware our company, so face the

challenges of setting price for the first time.

For our company’s product we sets the market penetration price mean we set

a low initial price in order to penetrate the market quickly and deeply to

attract a large number of buyers and win a large number of share in market.

We set the low initial price for three reasons.

Price is very sensitive issue to our customers. Slightly changed price can

create a large impact on our business. For setting price we have considered

the following issue:

• We have conducted a survey and have found the price which is the

most desirable to our customers. Then we have selected that price.

• We have collected the information of our competitor’s price and our

price is lower than the competitors.

• Our selected price covers our cost.

33
5.10. Sales plan & credit terms:

At first we concentrate on developing our business in Dhanmondi. When we

will be able to make profit, we will expand our business in another area. Any

types of purchasing decisions are taken by manager. For increasing our sales

we publish our ad in newspaper, magazine & leaflet. The customers will be

admitted on yearly basis & semiannually basis. On yearly basis, customers

have to pay lower monthly payment than semiannually basis. Any types of

credit facilities will not be given to the customer.

5.11. Sources of market information:

The market and sales data were collected by a combination of a market

survey & research of published information.

The market survey was conducted primarily in Dhanmondi, Zigatola,

Mohammadpur, Kalabagan & Samoli. Information was also obtained from the

following publications:

• The Daily Star (newspaper)

• The Business Journal (magazine)

34
35
6.1. Core Management Team:

The current members of the management group are the principals of the Fit
way. Mritunjoy Biswas is the managing director of the firm. His main
responsibility is to innovate new idea which is beneficial for our business.
Md. Nasim Bin Alam is the manager of the firm whose main function is to
evaluate employee works and manage the total business.

6.2. Job Description of Employees:


Director:

• Developing new services.


• Analyzing new customer needs.
• Motivating employees.
• Innovate a anew idea.
• Overall planning & controlling functions of the firm.
• Applying effective decision.
• Sanctioning of money for different purposes.

Manager:

• Supervision of firm’s activities.


• Authorization of transaction vouchers.
• Checking of record, maintains of circular, office files, etc.
• Evaluation of employee works.
• Preparing payroll.
• Analyzing cash flow.
• Supervise subordinate.
• Manage total business
• Publish advertisement in newspaper, leaflet, and billboard.

36
Accountant:

• Keeping Expense/income records.


• Paying the bills.
• Budgeting.

Trainer:

• Give direction to the customers such as how they operate machine,


diet chart etc.
• Make routines for each customer.

Assistant:

• Help customers to do their work properly.


• Clean the instrument.

Cleaner:

• Clean the flat daily.

Receptionist:

• Receive phone calls.


• Give information to the customer.

37
6.3. Organization Management Organogram

To manage our business we require the following number & types of employees.

Serial no. Designation No of employee

1 Director 1 person
2 Manger 1 person
3 Trainer Male... 3 person
Female… 2 person
4 Accountant 1 person
5 Doctor 1 person
6 Cleaner 1 person
7 Receptionist 1 person

6.4. Information Flow:

Director

Manager

Doctor Trainer Receptionist Assistant Cleaner

38
3.5. Salary Structure:

Serial Designation No of employee Salary

1 Director 1 person 18,000


2 Manger 1 person 15,000
3 Trainer Male... 3 person 8,000X3=24,000
Female… 2 person 8,000X2=16,000
4 Accountant 1 person 6,000
5 Doctor 1 person 8,000
6 Cleaner 1 person 2,000
7 Receptionist 1 person 3,000

6.6. Work policy:


Expectations from employees:

We have some expectations from our employees. The expectations are:

Skill:
We need a skilled employee to operate our business. A skilled employee has
the capability to run a business smoothly.

Manner:
An employee’s manner can bring the success of a firm. If the customers are
satisfied with the manner of employees, it will bring a long term profit for
the firm.

Sincerity & punctuality:


The sincerity and punctuality of employees bring success for a firm. If
employees are not sincere, the firm will not be developed.

39
Commitment & loyalty:
A committed 7 loyal employee can reach a firm to its goal. That’s why we
want committed 7 loyal employees.

Expectations from employers:

Employees also have expectations from employers. For maintaining


employee’s family life, they expect few confederations from their
employers. The expectations are:

Salary:
Salary is the most important expectations. Because it affects the
employee’s lifestyle. We will give our employees reasonable salary.

Working environment:
Employees want a good & healthy working environment. We will provide our
employees a suitable environment from where they will be motivated to do
their work properly.

Benefit:
Our time schedule is flexible. Our employees can utilize this opportunity. If
our employees can hire customers, we will give them commission.

40
6.7. Risk:
Each business faces different types of risk to operate their business. We
have identified some risks. If we don’t handle these risks carefully, it will
affect our business. The risks are as follows:

Competitors:
Competitor is a major risk for our business. Our competitions are “Fitness
World”, “King shook”, & "Lady Line". They have captured maximum share of
the industry. That’s why; we have to compete with them with a strong
marketing strategy so that we can get a large number of customers.

Customer Response:
As we are a new entrepreneur of this business, customer response is lower.

Services of instrument:
To operate our business successfully, we have to use a lot of instrument
daily for a long time. These instruments may out of order at any time. If any
instrument is out of order, it will hamper our daily work schedule. Many of
our customers will deprived of using that instrument and may become
dissatisfied.

Accident of customers & trainers:


We need a large number of electronic equipment. If the customers and
trainers are not careful about handling this instrument, it will create an
accident.

Fire:
If our flat is burnt by fire, our instrument will be turned into ash.

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6.8. Solution:

In order to reduce risk, we can do the following things:

 In order to gain a large number of customers, we will give better


facilities than competitors. We will provide trained instructors to our customers. Our
monthly charge is lower than the competitors. But the quality of our service is greater
rather than the competitors.

 By increasing promotional expenditure, we can get a large number of


customers.

 If we buy our instrument from a reputed company and handle these


carefully, we will be able to reduce our cost.

 To protect our instrument we will open an insurance policy. It will give


a security which will reduce the uncertainty of our business.

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6.9. SWOT Analysis:

S= Strength

W= Weakness

O= Opportunity

T=Threat

Strength:

 We offer lower price.

 We provide the best quality service.

 FitWay’ is established in a suitable location.

Weakness:

 Our company is not well known because we are at staring level.

 Our competitors has captured larger market share.

 Most people don’t know the importance of exercise.

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Opportunity:

 There is a scope of expansion.

 As demand increases among our customer, service might become more

popular.

Threat:
 Competitors are the main threat for us.

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45

7.1. Market Share:

Company % of market share


Fitness World 30
Kingshuk 22
Lady line 20
Fitway 28
46

7.2. Sales forecast:

The following sales forecast which we have made is considered to be a


conservation estimate based on the responses from the companies surveyed.
Additional sales can be anticipated with increased market penetration.

Year-1
Month Customer no. X Monthly fee Monthly

1 25(25X500) 12,500

2 17(25+17)X500 21,000

3 21(63X500) 31,500

4 17(80X500) 40,000

5 24(104X500) 52,000

6 21(125X500) 62,500

7 20(145X500) 72,500

8 24(169X500) 84,500

9 17(186X500) 93,000

10 18(204X500) 1,02,000

11 22(226X500) 113,000

12 24(250X500) 125,000

Total 250 =8,09,500

Yearly Admission Fee (4000x250) =1000000

Total =18,09,500
47

Semiannually:

Month Customer no. X Monthly fee Monthly


1 9(9X800) 7200
2 12(21X800) 16,800
3 13(34X800) 27,200
4 11(45X800) 36,000
5 10(55X800) 44,000
6 15(70X800) 56,000
7 15(85-9X800) 60,800
8 11(76+11-12X800) 60,000
9 10(75+10-13X800) 57,600
10 12(72+12-11X800) 58,400
11 16(73+16-10X800) 63,200
12 16(79+16-15X800) 64,000
Total 150 =5,51,200
Semiannually Admission Fee =2,25,000

(1500X150)
Total =7,76,200

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7.3. Five Years Sales Forecasting:

Year Unit Sales Average unit Total sales in


selling price in TK TK
Year-1 400 6464.25 25,85,700
Year-2 466 6464.25 30,14,500
Year-3 530 6464.25 34,25,300
Year-4 589 6464.25 38,09,000
Year-5 651 6464.25 42,10,500

7.4. Financial requirement:


The design of the Fitway has been completely financed by the personal
resources of partners. Each partners give Tk.14, 00,000. Thus we have
collected Tk.70, 00,000 by which we have fulfilled our initial requirement.
Our initial investment is Tk.70, 00,000 from which cash in hand is
Tk. 7, 72,400 & Bank balance is tk34, 05,000
.
The following is a summary of the projected first year total costs:

Description Amount TK (Yearly)


Fixed cost (50000X12) =600000 (including
Gas & water
Prepaid rent 1, 00,000
Instrument 17,24,000
Salaries 11,04,000
Water filtering machine 15,000
Ac 1,68,000
Fan 16,000
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Light 7,500
Installation & decoration 4,00,000
Office equipment 30,000
TV(2) 30,000
Computer with sound system 35,000
Telephone, mobile 6000
Insurance 60,000(12X5000)
License 50,000
Total fixed cost 43,45,500
Variable cost
Advertisement
Leaflet 9000
Newspaper 12, 09,600
Magazine 50,000
Total advertisement =12, 68600
Electricity 96,000(12X8000)
Telephone 3600(300X12)
Mobile 3600(300X12)
Refreshment (staff) 40,000
Refreshment (customer) 6000
Other expense 50,000
Total variable cost 14, 67,800

Total Cost 58, 13,300

50

7.8. Break Even:


FC

Break-even annunity =
S – VC

43, 45,500
= 6464.25-3669.5

43, 45,500
= 2794.75

= 1554.98

= 1555

FC

Break-even sales =
1-VC/S

43, 45, 500


=
1-3669.5/646425

43,45,500
=
1-0.568

= 43,45,500
0.432

=Tk.100, 59,027.78

54

R=6464.25q
q r (q , r)
0 0 (0,0)
400 2585700 (400 , 2585700)
1555 10051908.75 (1555 , 10059027.78)
2000 12928500 (2000 , 12928500)

C=3669.5q+4345500

q c (q , c)
0 0 (0,0)
1555 10051572.5 (1555, 10059027.78)
2000 11684500 (2000, 11684500)
400 5813,300 (400, 5813,300)

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Sales
TC

1.3C

1.2C

1.1Cr

01Cr 1555, 10031908.75

90L

80L

70L

60L

50L

40L FC

30L

20L

10L

Q
500 1000 1500 2000

Figure: Break even analysis

56
7.9. Ratio analysis:

1. Current Ratio:

Total current assets


Formula:
Total current liabilities

As we have no current liabilities, we don’t need to find out current ratio.

2. Acid Test Ratio:

Current assets-Investment-Prepaid expenses


Formula:
Current liabilities

We have no current liabilities, so we don’t need to find out acid test ratio.

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3. Debt Equity Ratio:

Debt
Formula:
Equity

For operating our business we don’t take any debt, so we don’t need to find
out debt equity ratio.

4. Operating Expanse ratio:

Total operating expense – Interest Expense


Formula:
Net sales

Year-1 Year-2 Year-3 Year-4 Year-5

35, 19,880 33, 85,280 22, 90,280 22, 85,280 22, 85,280
29, 90,700 35, 43,680 40, 41,354 45, 20,750 55, 33,159

=1.17 =0.955 =0.567 =0.505 =0.454

Here we see day by day operating expanse ratio is lower. It indicates the
signal of our success.

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5. Inventory Turnover Ratio:

Cost of goods sold


Formula: Average Inventory

Our business is a service business, that’s why we don’t have any cost of
goods sold, so doesn’t need to find out inventory turnover ratio.

6. Average Collection Period:

Accounts receivable
Formula: X 365
Annual sales

We will not give any credit facilities. So we have no accounts receivable.


That’s why average collection period ratio is not required for our business.

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7. Return on Total Assets:

Operating income

Formula: Total assets

Year-1 Year-2 Year-3 Year-4 Year-5

529,180 158,400 17, 51,074 22, 35,470 27, 47,879


64, 70,820 66, 29,226 83, 80,300 106, 15,770 133, 63,649

=0.082 =0.024 =0.209 =0.211 =0.21

From the above calculation we see the return on total asset ratio is
increasing.

8. Return on Equity:
Net income
Formula:
Shareholder Equity

Year-1 Year-2 Year-3 Year-4 Year-5

529,180 158,400 17, 51,074 22, 35,470 27, 47,879


64, 70,820 66, 29,226 83, 80,300 106,15,770 133,63,649

=0.08 =0.02 =0.21 =0.21 =0.21

From the above calculation we see, return on equity ratio is increasing unto
three years & then 3 to 5 years it remains constant.

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Conclusion:

We know that health is wealth. So everyone should conscious about

their health. For this reason, they should look for a good health club

where they will get the required services and we promise to give them

the best service which is desired.

The study confirms that the demand of health club is increasing day

by day. In recent years, several changes are observed that people are

concerned about the importance of good health. That’s why; the

prospect of our business is promising.


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75

BOOKS
 Entrepreneurship
-By Peggy Lambing & Charles Kuehl

 Starting and Managing Small Business


-By-H. Kuriloff & Douglas Cloud

SURVEY

 Customer Survey

 Competitor Survey

WEB SITES

 www.worldhealthclub.com

 www.google.com

 www.bodybuilderbd.com

OFFICIALS AT THE FITNESS WORLD & LADY LINE

HEALTH CLUB
 Fitness World

House # 42, Road # 2/A

Dhanmondi, Dhaka
 Lady Line

House # 95, Road # 9/A

Dhanmondi, Dhaka

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