Smart Fitness Gym
Smart Fitness Gym is a future business venture that is going to be structured and organized in such a way that makes it sustainable in the long run. There will be a need for financial viability to achieve such a goal. As indicated by Marsh (2016), financial viability refers to the ability of a given business venture to generate sufficient income that is essential in meeting the operational payments, facilitate debt commitments and in some cases allow growth while ensuring that the service levels are maintained. In this regard, the emphasis is going to be laid on the prospect of ensuring that the business makes financially viable decisions that will ensure its success.
Funding the Venture
The business will be jointly funded by the partners who are the individuals that have joined hands to ensure that the whole idea is implemented in the most formidable ways as well as the venture capital firm. It has to be noted that the venture capital firm will be called upon to fund the new business where it will benefit by exchanging its funding prospects with the equity in the startup. The fact that the gym will have a high growth potential within Sydney, Australia implies that most venture capital firms will be interested in availing the required financial resources.
The Financial Requirements
The gym will be operating as a health club and fitness centre that will be housing the exercise rooms as well as the equipment that is used for exercising. In that regard, the financial requirements for starting and operating the business will be in the region of A$500,000. This is the amount of money that will be required to ensure the building of the gym website, pay for the attorney fees, buy business insurance, leasing of the fitness centre location, buy weight lifting equipment, pay employee wages and benefits, purchase gym management software, tack the business finances as well as facilitating the advertising and marketing budget.
Cost Structure
Smart Fitness Gym will have a cost structure that is characterized by variable and fixed costs. Variable costs will be those that change in direct proportion to the service activities. The fixed costs will include the facility costs, the base salary/benefit costs and the cost of keeping the entity going. These are the costs that will be incurred regardless of the activity levels at the gym. In the variable costs category, these will be the costs that change based on the volume. They include some salaries, some utilities like electricity and water as well as laundry where the number of towels depends on the number of customers and operating hours.
Revenue Streams
The analysis of the revenue streams will be undertaken under the aspect of the cash flows. The emphasis will be laid on the exploration of the projected total amounts of money that will be transferred into and out of this gym business where the main focus will be on the liquidity. The amount of time for the projection will be three years in which the management will be determined to have a clear understanding of the extent to which the operations are moving with regard to the set goals and objectives.