Fantastic Five Consultants

Mike Doyle

Hanan Maswadeh

Marissa Fallenbaum

Jessica Lupo

Dimitre Simpson

University of Central Florida

Revolutionary Fitness

March 4th, 2019

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Executive Summary

This report examines the development of Revolutionary Fitness handled by the Fantastic Five

Consultants. The purpose of this report is to provide the Integrated Business Competition Case

Challenge Board of Directors with the information necessary for accessing the effectiveness of

current operations and provide a suggested business plan that will move Revolutionary Fitness

into an entirely new direction.

Effective March 4th, 2019, Revolutionary Fitness acquired an SBA Loan of $150,000 and a total

startup cost of $375,500. These costs currently draw attention to the financial state of

Revolutionary Fitness. The company is working towards establishing itself within its community

and developing a unique atmosphere to inspire holistic development through fitness and to

promote lifelong wellness. Further investigation into health and wellness has revealed there are

several fitness trends that have been consistent over recent years. Functional training, HIIT, and

a shift towards holistic wellness all look set to stay for the foreseeable future. There’s a new

wave of digital trends being driven by technology and demographic changes, and Revolutionary

Fitness wants to be at the forefront.

Revolutionary Fitness and the Fantastic Five Consultants mutually beneficial relationship has

proved to be successful. The report evaluates this range and concludes that Revolutionary Fitness

would be an ideal candidate to meet the challenge presented by the market and could satisfy

consumer demand since it provides a unique atmosphere to inspire holistic development in an

area where there is high demand.

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Based on these conclusions, it is recommended that Revolutionary Fitness take immediate

measures to launch and promote its premier services alongside its existing product line through

marketing, hiring initiatives, and new offerings.

Company Description

Mission Statement

To provide a unique atmosphere while inspiring holistic development through fitness and

promoting lifelong wellness.

Service and/or Product Line

Revolutionary Fitness is tasked with providing a unique atmosphere to inspire holistic

development through fitness, ultimately promoting lifelong wellness. Current products and

services include Adaptive and Inclusive Recreation, Aquatics, Fitness, and Risk Management.

Adaptive and Inclusive Recreation: Revolutionary Fitness values an inclusive environment to all

those who want to constantly challenge themselves and lead change. This service is in the

introduction stage, it is a small market with limited competition. This includes Adaptive

Intramural Sports: Sitting Volleyball, Goal Ball, Wheelchair Basketball, Special Olympics

Unified Sports, Adaptive Swim Lessons, Surfing Trips, and Climbing Programs and Adaptive

workout equipment such as Cybex Total Access Chest Press, Cybex Total Access Overhead

Press, Cybex Total Access Lat Pulldown and Cybex Total Access Row.

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Aquatics: Revolutionary Fitness offers a leisure pool and outdoor lap pool while also offering

swim lessons, lifeguard tryouts, and SCUBA Certifications. The lap pool consists of 12 heated

lanes, ranging from a shallow area to 10 ft in depth, features diving blocks and has the ability to

host swim meets. The leisure pool offers activities such as water volleyball, water basketball, and

an extensive outdoor leisure area featuring shaded cover, tanning chairs, and water fountains.

This service is in the maturity stage and has a continued reduction in costs and is differentiated.

Fitness: Revolutionary Fitness offers a variety of different facilities for intensive workouts,

relaxation or even studying. This service is in the growth stage, it features greater consumer

awareness and costs are reduced compared to the Introduction stage. Facilities include: The

Cardio Floor which features over 150 pieces of equipment across a 9,500 sq. ft. facility. There

are a variety of machines including recumbent and upright bikes, treadmills, rowing machines,

total body ellipticals, lower body ellipticals, steppers, and arc trainers. There is also a 1/8 mile

track to enhance your cardiovascular endurance. Indoor Climbing Tower: Housed within

Revolutionary Fitness, the Climbing Tower stands at 50 feet, is comprised of over 25 top-rope

routes in a wide range of difficulty levels, making it a great for beginners as well as avid

climbers. Group Exercise Studio: There are two group exercise studios that have the ability to

host the more than 200 classes offered weekly at Revolutionary Fitness. Classes include Yoga,

Kickboxing, Cycling, Boxing, Strength Training, Zumba, and more. Multipurpose Activity

Courts: Two courts enclosed with rounded walls to allow for different activities such as floor

hockey and indoor soccer, but can also be turned into a venue for formal events. The MAC gym

is over 15,000 sq. ft. with an observation area. Weight Floor: Revolutionary Fitness has two

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weight floors split between primarily machine based fitness and free weight fitness across 15,000

square feet.

Intramural Sports have four divisions offered. Participating in Intramural Sports is a great chance

to get involved and meet like-minded athletes. Activities accommodate various skill levels for

both recreational and competitive participation. In addition, our Outdoor Adventure team helps

plan outdoor adventures with a knowledgeable staff that can help suggest trip ideas and our

comprehensive library offers an assortment of guidebooks and maps. At Revolutionary Fitness,

we realize athletic training is the prevention, evaluation, treatment, management, rehabilitation

of athletic related injuries, and offer these services to our members through risk management.

Business Climate Analysis

Key political factors that are likely to affect our client’s industry include the new tax laws that

have been implemented for businesses and the health and safety regulations for this industry.

Congress passed the $1.5 trillion tax bill with temporary tax cuts for individuals and permanent

tax breaks for corporations in November 2018. Businesses will be impacted differently according

to size, income, industry and several other conditions. The pass-through income deduction rate is

one of the provisions with the greatest potential for small businesses. With the right strategic

planning, small business owners can get 20 percent deductions on income received from

pass-through entities. Sole proprietorships, partnerships, LLCs and S corporations are classified

as pass-through entities when it comes to federal income tax. This is because they are not subject

to income tax. Owners are taxed directly and individually on income with profits and losses

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taken into consideration. The level of regulation in the fitness industry is relatively light. The

need to comply is only with health and safety rules, fair trading regulation, and fitness centers

must have public liability insurance and personal indemnity insurance. Also, all trainers need to

be qualified to meet the industry requirements, completing the level I and level II personal

training certifications.

A few notable economics factors that play a role into the fitness industry include the increasing

growth rate of the industry, the total industry revenue, the number of health clubs/fitness centers,

and industry trends. In revenue terms, the fitness industry growth rate is 2.6% globally.

According to the​ IHRSA report​, total industry revenue was an estimated $83.1 billion in 2016,

up from $81 billion in 2015. The trend has continued in a positive direction and according to the

latest IHRSA report the industry revenue was $87.5 billion in 2018, that is a $6.5 billion increase

in just 3 years. Over the course of a few decades, the industry grew to approximately 200,000

clubs globally, serving 162 million members. The high increase of the industries revenue and

rapidly growing members can be due to the generations that are heavily into living a healthier

lifestyle have a more disposable income to spend on luxury services such as a gym membership.

This part of the report will analyze social factors in order to present facts about the social

component of the future clients of gyms. The age/sex group who most likely to participate in

aerobics/fitness was females aged 15-34 years (21%) followed by females aged 35-54 years

(17%) and males aged 15-34 years (13%). Influences in social media have created more of a

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health-conscious society, leading to more people wanting to go to the gym. 81% of millennials

actively exercise and the cultural factor of a more health-conscious society from outside

influences such as social media have affected this statistic. Another socio-cultural factor to take

into consideration is the rapidly increasing obesity rate in the North American region. According

to the Centers for Disease Control and Prevention in the United States, 36.5 percent of adults are

obese. Globally, obesity is one of the top five leading causes of death, causing more than 2.8

million deaths each year.

There are several fitness trends that have been consistent over recent years. Functional training,

HIIT, and a shift towards holistic wellness all look set to stay for the foreseeable future. There’s

a new wave of digital trends being driven by technology and demographic changes. On-demand

fitness services are taking advantage of improved internet connectivity and streaming

capabilities. But they’re also tapping into Millennials’ desires for personalization, freedom, and

experiences over material things. Millennials use fitness apps more than other age groups, with

women using them twice as much as men​. About 46% want as much quantifiable data about their

health as possible, and ​54% are likely to buy a body-analyzing device​.

Two of the bigger issues that may impact the industry on the national level, according to IHRSA,

are the Improved Nutrition and Physical Activity Act and the Healthy Workforce Incentive

Provision. These are two different examples of activism. The first measure, the Improved

Nutrition and Physical Activity Act, would authorize roughly $250 million for a series of

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programs aimed at educating the public about better nutrition habits and encouraging more

physical activity, particularly among the nation's youth. Meanwhile, the Healthy Workforce

Incentive Provision is seeking to change the existing law.

One very important environmental factor to take into consideration is the high energy

consumption (electricity price) of fitness centers. In order to operate most machines it requires

electricity, but this can be minimized by introducing energy efficient machines where possible.

Integrated Marketing and Sales

Marketing Objections

To promote a unique atmosphere to inspire holistic development through fitness to promote

lifelong wellness within a year in order to double customer acquisition.

Targeting

Revolutionary Fitness has three tiers when it comes to their target market depending on the

offers put in place. Our value proposition is the ability to cater to multiple target markets and

fulfill multiple group’s needs. Within the first tier, we lean towards targeting students, moving

on to our next tier, we will be targeting anyone of interest in a gym with a wide variety of

amenities and our last tier targets an older age group in who will receive full access as well as an

assigned personal trainer.

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Marketing Recommendation

Revolutionary Fitness offers monthly memberships, four-week courses, day passes, and

nutritional supplements. ​When it comes to membership subscriptions the pricing is based on

three tiers.

Starting off with the first tier being the student program. Within this program students will be

paying $35 a month, when they do so they will have access to all of the gym equipment as well

as a mindfulness component the gym offers in which has multiple holistic segments to help

students with not only to stay physically fit but mentally fit as well. Moving on to the next tear

being the basics, members will pay $60 a month and have access to all of the exercising

equipment, the mindfulness component as well as access to four classes a month. Lastly, the

third tier being at $100 a month gives members access to every and anything the gym has to

offer. unlimited classes, all access to all equipment as well as being paired with a personal trainer

whenever the member would like.

On top of the monthly subscriptions, we also have four-week intense classes in which members

or any member of the community can sign up and provide one of our trainers with their personal

goals, here at Revolutionary Fitness we build what's best for your body, mind, and soul.

Members of the community are also allowed to pay $10 for a one day pass to access all of our

amenities. This makes it convenient to not only non-residents who are in Winter Park are but to

our members who would like to bring guests. Revolutionary Fitness also offers a wide variety of

organic nutritional supplements in order for members to enhance their performance, improve

their health and prevent nutritional deficiencies.

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When it comes to placing our organic nutritional supplements we will be placing them in the

front of the gym near the signup desk in order for customers to notice them as soon as they walk

in. Our gym tiers and offers will also be posted in the front as well.

From an advertising point of view, we plan to showcase all of what we have to offer on all social

media platform being Instagram, Facebook, and Twitter. On all of these platforms, we plan to

pay for advertising to better get our name out there. In addition, we plan to use SEO and SEM to

ensure the online visibility on Google and Bing when any users search for gyms nearby. Lastly,

we plan to promote our company by mail we plan to do so by sending out free day passes to

everyone within the community in order for them to try out our extraordinary amenities. We also

plan to promote Revolutionary Fitness by spreading awareness through the community by

hosting multiple health and wellness workshops and events.

As said before, we will be seeking more customers by promoting Revolutionary Fitness by

sending out free day passes to everyone within the community in order for them to try out our

extraordinary amenities. When it comes to customer retention, we will have loyalty programs

where we will track the amount of times members sign in. Not only are we able to track when

members sign in but all of our equipment needs to be scanned by each members’ card in order to

be used. When members scan their card, data accumulated is the number of miles they ran,

calories they burned, heart rate, etc;. Members will have access to all data as soon as they go on

the Revolutionary Fitness app or website. We promote our loyalty program in a way where we

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reward our members for their physical efforts. The more they work out, the more points they

earn and thresholds they surpass. Whenever a threshold is surpassed, an award such a smoothie,

protein shake or even spa day is awarded. This gives us the opportunity to encourage our

members to partake in their own well being while being awarded.

In addition to the recommendation, we used Simply Analytics to see how our location in Winter

Park, FL will do. We used three different metrics to analyze this location. First, we looked at

people who are more inclined to spend a high amount of their money on their health and dieting.

Second, we look at the age group of 18-24 which is who we decided to target. Third, we looked

at BMI Obesity levels in the area we are located.

Below are the three screenshots from Simply Analytics. The map looks at the area surrounding

the Winter Park/Rollins College area which is where our location will be.

This is the diet/health demographic

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 This is the 18-24 age group

This is the BMI Obesity levels

Marketing Budget

Our marketing plan will consist of creating real content marketing though exploiting sources

such as website optimization, realistic social media advertising, SEO/SEM strategies, and public

relations marketing. Our marketing budget for Revolutionary Fitness was created based on a few

insights we were able to gather on the industry of the business. Most companies spend about 5%

to 15% of annual revenue on marketing. Of the total marketing budget, approximately 35% to

45% should be spent on digital marketing activities. The first year Revolutionary Fitness was in

business they generated sales of $66,982. We collectively decided that revenue was ultimately

too low so instead, we will be using the working cash available at the end of year one, which

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equates to $174,000. It is determined that 15% of that would be allocated towards the marketing

budget allow the business to have $26,100 available for our marketing strategies. Based on our

marketing efforts the strategies will generate a sales increase of 125% for the second year in

business, for a total of $150,652 in sales. For the third year in business, the marketing strategies

will generate a sales increase of 62%, for a total of $ 244,056 in sales. The return on investment

after all of the marketing efforts equates to an ROI of 239%.

Marketing Calendar

When it comes to the marketing calendar we plan to implement promotions in which will grab

our consumers from an emotional/relatable appeal this will be occurring from the end of

December to the middle of March. We plan to do so because we took the time to understand the

psychology of our overall target. Towards the end of December when the year is beginning to

end, people tend to implement new goals in their lives which heavily rely on new changes

specifically to their health, fitness or body in general. The reasoning we have the promotion

going up until the mid of March is to have spring break promotion. In which promotes your

having active bodies prepared during the spring and summer.

Data Driven Decision Making

Problem Statement: Symptoms we identified are that we are losing money, there are not enough

people coming into our location, our margins are not high enough and we do not have high

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enough brand awareness. Constraints that are hampering the business are not having a high

enough assortment of amenities, less than premier customer service, low brand awareness and

not enough marketing focus. Our team has made a few assumptions about Revolutionary Fitness.

These assumptions include: our location is in Winter Park, FL, right next to Rollins College; we

currently do not have a lot of amenities offered; and we assume that we already have an existing

facility, workforce and customer base that has capacity for growth.

There are many stakeholders that we have identified such as employees, consumers, Rollins

College, competitors, residents nearby, the bank we loaned the money from, suppliers and

owners. Success criteria as it applies to each stakeholder are as follows- Employees: their job is

fun, pays well, and their work feels impactful. Consumers: that costs are low, and that they get

value out of their membership. Rollins: helps keep students and faculty engaged and healthy.

Competitors: have the ability to gain competitive advantage against us. Residents nearby: not a

lot of traffic in the area, and it creates a nice environment. The bank: that we pay back the loan in

full and on time. Suppliers: that we maintain a strong relationship and we continue business with

each other. Owners: that profits are high and brand awareness increases consistently. The

timeline for each stakeholder is infinite except for employees, who have interest until they no

longer work for us. Consumers have interest until they are not members any longer. The bank

has interest until the loan is paid off. Finally, suppliers have interest until we no longer do

business with each other. Everything else is infinite until the business changes location or goes

out of business.

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Below is the balanced scorecard which we have created. It includes the four sections (People,

Internal Processes, Customer, and Financial). It also contains the objectives, KPI’s, our targets

and the according initiatives.

Human Resource Management

Job Description:

A General Manager (GM) at Revolutionary Fitness will effectively manage all facets of the gym.

This includes sales, customer satisfaction, recruitment and selection, training and development,

and facility cleanliness while ensuring all company goals are being met and exceeded. This

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position is responsible for communicating and upholding company policies, standards, and an

overall friendly environment.

Essential Duties and Responsibilities:

Staffing and Development

Recruit, interview and hire all necessary staff

Train, coach and continuously give feedback to all employees

Instill a sense of accountability, teamwork and responsibility

Provide and maintain the highest level of customer service

Delegate, monitor and oversee the performance of all staff members

Plan and promote monthly events to drive member engagement

Qualifications:

2-3 years of related management experience supervising a team of at least 4-10

employees;

Strong customer service and sales skills with proven results;

3-4 years of broad retail/operations/athletics industry experience managing P&L and

trend reports;

And a Bachelor’s degree in a related field (preferably in business).

Recruitment:

Begin by trying to recruit within from the current store manager because they already know what

has been happening within the business and what needs to be improved. If this proved to be

ineffective, seek out an external General Manager. We plan on doing this by posting jobs on

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Indeed for free. We will utilize Indeed to appear in general search results, accept mobile

applications and manage candidates directly from our Indeed account.

Selection:

For the selection process, we will begin with an informal phone interview to narrow down the

pool of applicants. During the phone interview, we will ask them to tell us about themselves and

find out why they are interested in our General Manager position. After the phone interview, we

will send out a DISC personality assessment in order to understand their communication and

management style. Next, the candidates who are approved to go on to the second round will be

required come to an in-person interview. Here, we will ask more specific questions based on

their resume and situational questions.

Compensation Plan:

The General Manager of Revolutionary Fitness will be given a $50,000 dollar salary along with

quarterly bonuses based on membership sales, insurance and a benefits package. The

compensation program focuses on maintaining a high level of internal equity. Pay ranges will be

reviewed to determine if jobs with similar skill sets and duties have similar pay opportunities.

Decisions will be made that support the overall rewards philosophy, consistently administer pay

policies, and support organizational priorities, changes and needs. There will also be a strong

focus on maintaining external competitiveness. This will be established by developing a pay

structure based on benchmark market data and pay from our market competitors. A

$50,000-dollar salary is slightly above average compared to our competitors in the area.

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We will also strive to ensure that the General Manager and other employees receive individual

recognition. We are going to hold quarterly award ceremonies in order to recognize employees

for continuously delivering impressive work and helping the company achieve all goals and

objectives. We will give out prizes including vacations, technology, as well as the quarterly

bonuses employees get for surpassing goals.

Feedback and constructive criticism are essential in order for Revolutionary Fitness to

experience growth and success, as development is a vital part of our mission statement. We will

continuously give feedback to the General Manager to ensure that they are also continuously

growing and developing. We will ask the employees for feedback of the GM and then meet with

them quarterly to deliver this feedback using radical candor.

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Financial Projections

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Implementation Project Plan

Project Priority Matrix:

Based on the Assumptions made earlier in the report, our recommendation below is to prioritize
time first to ensure everything is complete in a timely manner. Secondly, we plan to prioritize
cost to maintain a conscious. Finally, to focus on the scope in order to accept and adapt to
required change.

Cost Time Scope

1st Priority X
(Constrain)

2nd Priority X
(Enhance)

3rd Priority X
(Accept)

1. Time: This is our first priority because we have a set date that we want to open
Revolutionary Fitness. We have to ensure that everything is done by then, therefore
making time a constraining force.
2. Cost: Since this is a large scale project, it is essential that we seek sponsor support, as
well as maintain a conscious budget. Cost is enhanced due to its ability to change on a
small scale.
3. Scope: This is our third priority due to our need to accept any required changes to the
scope and original plan.

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Work Breakdown Structure

Below is our Work Breakdown Structure we have determined that in order to Improve the
Revolutionary Fitness location we must increase profits. To do so, we plan to raise revenue,
create a marketing plan and optimize customer interactions.

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WBS Dictionary

INTRO

Below is our Work Breakdown Structure Dictionary which showcases the work packages and
their corresponding estimated time durations.

WBS Dictionary, Work Packages, & Estimated Time Durations

Work Activity Title Time Predecessors Short Description

Package Duration

1 Start Improving N/A N/A We are going to increase profits

Revolutionary Fitness through numerous work
by Increasing Profit packages within 3 years.

1.1 Raise Revenue 1 1 We need to raise revenue in

order to increase profits.

1.1.1 Implement 1 1.1 Work with Marketing, Finance

Subscription Plan and key decision makers to
implement new subscription
based model for customers.

1.1.1.1 Track Customer 1 1.1.1 Track customer spending

Spending through analytical software and
gym data to determine the best
products to offer.

1.1.1.1.1 Use Data for 1 1.1.1.1 Using data from analytical

Customized Offers software, provide customized
offers to customers of
Revolutionary Fitness

1.2 Create Marketing Plan 1 1 Create overall marketing plan

for the promotion of
Revolutionary Fitness and all of
it’s good and services.

1.2.1 Create new marketing 1 1.2 Using Photoshop and Canva,

for Subscription Plans design attractive print and digital
and Supplements media to promote new
subscription based model.

1.2.1.1 Promote holistic well 1 1.2.1 Plan marketing material

being and fitness promoting a holistic, healthy

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 through social media. wellbeing online

1.2.1.1.1 Utilize Facebook, 1 1.2.1.1 Utilize Facebook, Instagram and

Instagram and Twitter Twitter to promote a holistic
wellbeing by scheduling posts,
tracking analytics and posting
consistently.

1.3 Optimize Customer 1 1 Create an environment where

Interactions providing premier customer
service is at the forefront of
Revolutionary Fitness.

1.3.1 Hire new General 1 1.3 Screen, interview, and ultimately

Manager hire new General Manager to
facilitate excellence amongst the
staff and run Revolutionary
Fitness.

1.3.1.1 Provide premier 1 1.3.1 Customer interactions and

amenities for ratings will drastically improve
customers with useful/unique amenities.

1.3.1.1.1 Renovate leisure and 1 1.3.1.1 Create a nice space for

lap pool for customers customers to swim laps as well
as lay on lounge chairs and
enjoy some leisure time.

1.3.1.1.2 Install washer and 1 1.3.1.1 Depending on the customer’s

dryer units for subscription package, they may
customers be able to use our laundry units,
so that they could do laundry
while working out.

Gantt Chart

In the Gantt chart below, you can see all our 13 work packages have been scheduled neatly to
meet our final goal in improve Revolutionary Fitness location in order to increase profits .
According to the schedule, if we were to begin the project today, we could see the end of the
project by March 11, 2019.

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