Business Plan: SAC PRO SPORTS CLUB
About the Business
This business plan aims to open a new sports club, which provides the customer number of games, sports and activities such as billboards, swimming pool and various other athletics. The name of this new venture will be – ‘SAC PRO SPORTS CLUB’. Moreover, this sports club needs to be open in Saudi Arabia, which is a nation in the Middle East. The value proposition and mission of the business is to deliver the superior and value added services to the users with the help of many fitness and sports related activities in respect with the target market (Woratschek, Horbel and Popp, 2014). The business will also provide them an unmatched pleasing experience that will help the sports club in retaining their customers for longer period of time. This will also endure word of mouth publicity.
There are many reasons that can be in the direction of the future success of the business. The climate in Saudi Arabia is extremely hot throughout the year (Almazroui et al, 2012) and this will attract a large number of individuals, as the club will provide various indoor sports activities in the air-conditioned ambience. In addition, there are many health problems facing by the children and adults due to the physical inactivity from a long period of time (Ortega, Ruiz, Castillo and Sjostrom, 2008). Therefore, this will provide another motive to the sports club to make people actively conscious towards the health with the offering of various activities in respect with entertainment. Moreover, this business will also get support from the government as it is benefitting the society as a whole.
SAC PRO sports club will focus on people and individuals belong to the young generation. However, there are no barriers for others to be a part of this unique sports club. Therefore, on the basis of age, the respective segmentation will be made. Those individuals whose are of age between 15 to 25 years will be the major target people of this sports club. The market potential also plays an important role in the segmentation of the market (Menzly and Ozbas, 2010). In Saudi Arabia, majority of the population belongs to youth category, which implies that the chosen segment will yield good returns to the business.
One can easily the existing demand for a sports club in Saudi Arabia and the country have the highest birth rates in the world with the majority of a young population (Assad, 2008). This shows that the proposal of the sports club will be profitable and favourable.
In addition, people living in Saudi Arabia are also aware of the health issues of children and adults due to the prolonged physical inactivity in the nation. Therefore, there will be a huge market potential for a new and high-quality sports club that will focus on the youth of the country.
Various existing sports clubs in Saudi Arabia will possess challenge with their membership plans and offers. Various prospective consumers will like to compare the services provided by the sports club and then will choose the best plan and club satisfying their needs and requirements. This shows that for attracting the potential or prospective customers, value proposition plays an important role in respect with this new sports centre (Sandstrom, Edvardsson, Kristensson, and Magnusson, 2008). Saudi Arabian Sports Club and Jeddah United Club will be the major competitor of this sports club. Jeddah United Club is doing business from a long period of time and they also offer several kinds of sports activities to the women. These sports clubs are settled from a long period of time and thus pose a challenge to the new sports club. The management of the new sports club needs to undertake lot of practices in order to gain the trust of the segmented market and thus attracts a huge customer base for their club business.
Market Opportunities
In addition, large portion of population also inclined towards the traditional sports and this can impact the business and customer preference for this new sports club. Moreover, the population of Saudi Arabia are also getting interested towards the IT and telecommunication technology and this can pull the customers from computers to sports club.
The business strategy of this new sports club will be unique and competitive. This club will be more advanced in side of technology than any other rather than focusing only on air-conditioned ambience. For getting potential customers, this business will also focus on appropriate location, size and facility of the club (Chiu, Wang, Fang, and Huang, 2014). The business will gain high competitive position with the help of strategic planning, program development and marketing (Madhavaram and Hunt, 2008). As with time and dynamic business environment, strategy will be diluted but this sports club will always go and operate with the latest trends and programs in this sector. This will not only give the long-terms success to the business but also help them to compete with the other sports clubs.
It will also acknowledge that customers connected with the club remain content with services delivered to them. They would be provided best value services in respect with their money. The various services and amenities offered by the club need to make understand to the customers so as to gain a long-term relationship with the customers. This will be included during the planning of the business and thus later on help the sports club in retaining customers for a longer period of time. This strategy will be made towards satisfying the customer’s needs in the best possible manner.
Thus, the business strategy of the club seems to be favourable in respect with both club and customers.
This sports club will be focusing on providing various range of services and that will make the club called as multi-sport complex. Many activities such as aerobics, dance, indoor badminton, gymnastics, hockey and many others will accompany this sports club floor. It will also include two swimming pool where one will be for the beginners and others for the good swimmers in respect with different sizes. The club will also be filled with skilled manager and competent staff so that the customers’ needs will be met effectively. In the sports club, one fitness room will also be designed that will includes several necessary types of equipment such as aerobic machine, free and machine weights. The logistics management of this sports club will be based on taking the services of online seller suppliers. These all practices will help this sports club to provide unique and innovative services to potential customers.
This sports club will also consider the needs for replenishment of members and there will be a separate food and beverage area. The structure of this area will be modelled in such a way that the members can enjoy food and non-alcoholic drinks by seeing the various happenings of the court. In addition, this area will also equipped with two big smart led TV, which displays various sports related programs and channels as per the member needs. This arrangement will give a good environment and ambience to the members and thus fulfil their desires.
Target Market
Moreover, for yielding more profit, this sports club will also target impulsive buyers and thus offers various apparels and items such as sports shoes, badminton racquet, costumers use in swimming pool and aerobics and so on. This shop will be made as a private labelling that offers wide range of sports related products.
For the success and expansion of any business, promotion plays a significant role (Basco and Perez Rodriguez, 2009). For the purpose of promotional activity, this business will advertise with the help of banners in various universities and colleges, as the target market is the youth. In addition, any staff of the sports club can also distribute pamphlets outside the universities and colleges.
The next big aspects are the pricing strategy which needs to be managed critically so that sufficient amount of revenues can be generated from the target market (Du, Bhattacharya and Sen, 2010). Moreover, the target markets of this business are those students who studied in colleges and universities and also depend on their family for the various expenses. This need to be considered while framing pricing strategy to keep fair prices so that the business will flourish in the future.
In every business whether a company or service firm, management role-plays an important role in the future success and sustainability (Burnes and Jackson, 2011). All the people who are involved in the operations of the management are responsible for the sustainability of the business. In the initial phase, the management team or group will be based on the core partners of the sports club. The important role like planning, directing, staffing, organizing, marketing and promotions will be acknowledged by them only (Srivastava, 2007). The operation activities of the business will be handled by a team of 15 members during the first year. In respect with food and beverage area of the club, there will be a small staff for the operations. As the requirement of the club increases every year, there will be continuous addition of 3-4 new staff members. Moreover, the increment in their base salary will be according to the operations of the business as well as their future success.
It needs to be ascertained that this sports club will be opened in one city and then later on subsequently expand in the other cities. It can also hope that this business project will get promising response from the market. According to the membership and member responses, various new sports club will be opened in other areas and cities also after the successful two years of the business. Moreover, if the customer and members demands for more sports activities and facilities, it will also be incorporated.
This includes the creation of various necessary budgets and statements in respect with the economic policies of Saudi Arabia. This financial plan is also be made on certain assumptions such as –
- The economy will be strong without any major recession.
- There will be continuous growth of the membership subscription.
- Collection days will also be very critical in the beginning.
- Tax rate, interest rate and personnel burden will be based upon the conservative approach.
- Current interest rate – 10%
- Long-term interest rate – 10%
- Tax rate – 15%
SAR 5,000,000 will be the total start up requirement cost. This is a collective cost of all development costs, equipment costs, land and building costs,
- Year 1 – (131,313.10/2,500,000)*100 = 5.25%
- Year 2 – (293,773.60/2,500,000)*100 = 11.75%
Time Period of return on investment = 100/ (5.25+11.75) = 5.88 yrs.
In 5 to 6 years, the investors will get the return on investment, however, depends on the certain conditions.
References
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Assad, S.W. (2008) The rise of consumerism in Saudi Arabian society. International Journal of Commerce and Management, 17(1/2), pp.73-104.
Basco, R. and Perez Rodriguez, M.J. (2009) Studying the family enterprise holistically: Evidence for integrated family and business systems. Family Business Review, 22(1), pp.82-95.
Burnes, B. and Jackson, P. (2011) Success and failure in organizational change: An exploration of the role of values. Journal of Change Management, 11(2), pp.133-162.
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Du, S., Bhattacharya, C.B. and Sen, S. (2010) Maximizing business returns to corporate social responsibility (CSR): The role of CSR communication. International journal of management reviews, 12(1), pp.8-19.
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Menzly, L. and Ozbas, O. (2010) Market segmentation and cross?predictability of returns. The Journal of Finance, 65(4), pp.1555-1580.
Ortega, F.B., Ruiz, J.R., Castillo, M.J. and Sjostrom, M. (2008) Physical fitness in childhood and adolescence: a powerful marker of health. International journal of obesity, 32(1), p.1.
Sandstrom, S., Edvardsson, B., Kristensson, P. and Magnusson, P. (2008) Value in use through service experience. Managing Service Quality: An International Journal, 18(2), pp.112-126.
Srivastava, S.K. (2007) Green supply?chain management: a state?of?the?art literature review. International journal of management reviews, 9(1), pp.53-80.
Woratschek, H., Horbel, C. and Popp, B. (2014) The sport value framework–a new fundamental logic for analyses in sport management. European Sport Management Quarterly, 14(1), pp.6-24.