Management Accounting and Control

Live Project

Submitted to: Dr. Akshita Arora

Submitted by: Anisha Babbar (17BSP0355)

Gargi Sondhi (17BSP0892)

Mohit Rana (17BSP1579)

Priyanka Bhatnagar (17BSP2036)

Riya Bhadouriya (17BSP2244)

Suraj Kumar (17BSP2910)

Venkatesh Boggavarapu (17BSP3133)

Name of the Startup: FITNESS MANTRA (Unisex Gym and Health Club)
 INDEX

ACKNOWLEDGEMENT

EXECUTIVE SUMMARY

INTRODUCTION

GENERAL COMPANY DESCRIPTION

Company Overview

Mission and Vision

Strengths and Core Competencies

Challenges

INDUSTRY ANALYSIS

SERVICES OVERVIEW

Services

Benefits and Features

Why People need this Service?

FINANCIAL PLAN

Start-up expenses

Revenue Forecast (3 - Year):

Projected Profit & Loss

Projected Balance Sheet

Breakeven Analysis

Statement Of Cost Sheet

 Acknowledgement

We are grateful to Dr. Akshita Arora for giving us an opportunity to

perform the cost analysis of a company. This project has helped us in
understanding concepts like Cost Sheet, Break-even Analysis and their
practical applications in business. This project would not have been
successful without her continuous guidance and theoretical inputs.
 Executive Summary

Fitness Mantra is a gym that will provide health care and body workout
services at low cost to all segments of customers. Owners are
experienced and dedicated towards health care services. As the Health
care market is booming in India and more and more people are getting
health-conscious, we are optimistic about the startup. Market volume of
the health care sector has reached 10,12,400 cr by the year 2018 hence,
the present demand for gyms is increasing day by day as s large segment
of the market is still untapped. Increasing awareness, obesity and heart
disease are recorded high, becoming a driving force for market growth.
We also notice that a low income market segment is ignored by key
competitors, especially in the area where we wish to set up our gym.
Apart from this, Fitness Mantra will have its own training facility with
state of the art health care equipment from quality manufacturers.
 Introduction
With our well experienced trainers, best in class equipment we aim to provide you
a complete fitness experience.

Fitness Mantra is located in Janakpuri, Pashim Vihar and Punjabi Bagh in New
Delhi. The Gym has cardio machines, Fitness Studio, Free weights. The gym
provides both group and personal training. It is a health club who’s target is to
make you all fit and healthy. So join in and avail all the top facilities it is offering
like Gym, Aerobics, Yoga, Weight Management and much more under one roof
with National Level more under roof with National Level Trainers, Skilled
Assistants, Latest Equipments including a huge Cardio Section, Strength Section &
Free- weights Section, Food supplements, etc.
 Highlights

Startup Expenses (all figures in Rs.)

Revenue Forecast (all figures in Rs.)

 Revenue Forecast (3 - Year):

Net Profit Expected (all figures in Rs.)

 General Company Description

Company overview:

Fitness Mantra Gym and Health Club will be situated in Janakpuri, Pashim Vihar
and Punjabi Bagh in New Delhi. Its owners are Gargi Sondhi, Priyanka Bhatnagar,
Mohit Rana, Riya Bhadouriya, Suraj Kumar, Venkatesh and Anisha Babbar. It is
expected to set up in 2017. Fitness Mantra aims to provide good quality health and
fitness facilities at low costs.

Mission and Vision:

Our Vision - To create awareness about healthy lifestyle and its benefits.

Our Mission - To provide strategies and training programs related to health care

Strengths and Core Competencies:

 Lowest cost of services in comparison to competitors

 Certified trainers from top ranked health care institutions
 Owner’s commitment and dedication towards health care services

Challenges:

Fitness Mantra will face a challenging situation in creating its brand image and
attracting customers towards its services due to presence of already established
players in the local market such as Gold's Gym and The Gym.
 Industry Analysis

A health club can be described as a service facility that is intended to provide

physical health care exercises with the help of specialized equipments. It normally
serves both male and female customers but in some cases females are provided
special attention by providing them female-only health clubs in which all staff
including trainers are also females. Normally, the environment is made casual to
provide customers comfortable experience that helps them performing
bodybuilding and other exercises with ease. According to a survey conducted in
2016, the total number of gyms in Delhi NCR were 1,100.
 Services Overview

Services

Fitness Mantra will provide following health related services:

 Aerobics
 Cycling
 Boxing
 Yoga
 Pilates
 Muscle Training
 Diabetes & Obesity Control

Benefits and Features:

 State of the art facility with latest equipment from quality manufacturers
 Low cost with monthly, quarterly and annual subscription plans.
 Personal qualified trainers to help our members achieving results without
wasting much time

Why people need this service?

Health care and fitness club market in Delhi has been serving to a high income
segment off lately. However, a trend is been observed that a large segment of low-
income customers are left with unmet needs. Fitness Mantra will primarily exist to
provide health care facility to the lower income class without compromising on
quality of service.
 SWOT Analysis
Strengths:

 Management committed towards to a result orientated approach to attract

and maintain customers in a highly competitive market.
 Health care program is well-thought according to the need of layman.
 Lowest cost of service in the entire market of Gold’s Gym
 Company will hire qualified and trained staff.
 Lowest price
 Management of health care experts
 Qualified and trained staff
 Low cost offer from well established competitors. Although it’s a small level
threat
due to a fact that market is rapidly growing.
 Low cost health care equipments availability for home exercise

Weaknesses:

 Personal training services can be high in costs.

 It is low in staff that can be problem in providing service to a large
pool of members.

Opportunities:

 Health care club market is rapidly growing.

 Increasing heart and obesity disease are causing people to pay importance to
exercise and health care activities.
 People are getting use to have gym and health clubs in their daily routine of
life.
 A large segment of market is still untapped, low income area will be of
special focus for Fitness Mantra which is totally ignored by the rivals.

Threats:

 Recession and economic downturn can slow down the growth of health
clubs.
 Financial Plan
Start-up expenses

The start-up expenditures for Fitness Mantra, Inc are summarized below:

Sources of Capital:

Investment requirement Rs. 6,32,75,000

_______________

Total Investment Rs.6,32,75,000

Startup Expenses:

Gym/Health club development Rs. 21,919,100

Personnel Rs. 18,371,500

Capital Expenditures Rs. 9,502,500

Consulting Services Rs. 5,701,500

Promotion Rs. 316,761

Total Start-up Expenses Rs. 63275000

 Revenue Forecast (3-Year)

Year 1 Year 2 Year 3

Gym Club Membership

Year 1: 25000 members Rs. 63275000

Year 2: 100,000 members Rs. 310047500

Year 3: 300,000 members Rs. 930142500

Others:

Sales of training
equipment (10% growth
each year) - Rs. 2214625 Rs. 2657550

Total Revenue Rs. 63275000 Rs. 312262125 Rs. 932800050

 PROFIT & LOSS PROJECTION (3-YEAR)

YEAR 1 YEAR 2 YEAR 3

Revenue (Sales)
Health club memberships 83511312.42 334045249.66 1002135748.98
Sales of sports training equipment - 2386037.50 2863245
Total Revenue (Sales) 83852174.91 336772149.66 1005612546.48
Operating Expenses
Health Club Development 23587684.98 - -
Personnel 19770024.98 57264899.94 64082149.93
Capital Expenditures 10225874.99 10103164.49 10225874.99
Consulting Services 6135524.99 32722799.97 32722799.97
Promotion 340862.50 409035.00 409035.00
Total Operating Expenses 60059972.44 100499899.40 107439859.89
Profit Before Taxes 22012900.23 230818450.27 887946811.60
Taxes (10%) 2201290.02 23081845.03 88794681.16
Net Profit 19811610.20 207736605.24 799152130.44
 BALANCE SHEET PROJECTION (3-YEAR)
BEGINNING PROJECTED YR 1
Assets
Current Assets
Cash in bank 681725.00 69038972.40
Account Receivables - 957141.90
Prepaid Expenses 102258.75 102258.75
Total Current Assets 783983.75 70098373.05
Fixed Assets
Training Machines 23587684.98 44993849.95
Furniture 10225874.99 10225874.99
Total Fixed Assets 33813559.97 55219724.94

Total Assets 34597543.71 125318098.00

Liabilities and Equities
Current Liabilities
Accounts Payable 0 2736444.15
Long Term Debt
Bank Loans Payable 0 68172499.93
Total Liabilities 0 70908944.08

Owner’s Equity
Retained Earning- beginning 34597543.71 34597543.71
Retained Earning- Current - 19811610.20
Total Owner’s Equity - 54409153.92

Total Liabilities 34597543.71 125318098.00

 BREAK EVEN ANALYSIS

COST DESCRIPTION FIXED COST VARIABLE COST

Variable Costs
Personnel 10%
Consulting Services 3%

Fixed Costs
Health Club Development 23587684.98
Personnel 19770024.98
Capital Expenditure 10225874.99
Consulting Services 6135524.99
Promotion 340862.50
Taxes 2201290.02

Total Fixed Costs 62261262.46

Total Variable Costs 13%

BREAK EVEN SALES= 71564695.35

 Statement Of Cost Sheet
Living Expenses
Salary for owner / manager 1-3 months
Land & Buildings Land Once
Building (buy or lease) 1-3 months
Furniture & Fixtures Once
Decorating & Remodelling Once
Outside Signage Once
Vehicles Once
Equipment
Computer Once
Machines Once
Cash Register Once
Tools Once
Other (Specify) Once
Office Supplies 1-3 months
Telephone 1-3 months
Internet 1-3 months
Utilities 1-3 months
Advertising
Business Cards 3 months
Newspaper / Radio Ads 3 months
Brochure Once
Website Once
Packaging & Labeling 1-3 months
Inventory
Merchandise 1-3 months
Raw Materials 1-3 months

Licenses and Permits As Required

Professional Fees
Legal 1-3 months
Accounting 1-3 months
Other (Specify) 1-3 months
Insurance As Required
Deposits (utility etc) Once
Salaries and Wages 1-3 months
Cash Reserve (Petty Cash, Credit Accounts) 1 -3 months
Other (Specify) As Required
Total Cash Required To Start A Business