Types & Sources of Finance

Introduction to Break-even Analysis

Executive summary

The business world is consistently becoming more harsh and competitive as more and more new entry is evident in this world. In order to survive in this cut throat competition the business communities constantly plan new strategies, which help them to avoid the competition and keep them ahead of their competitors. In the undertaken case study it is observed that Maria has a dance studio in Norwich, Norfolk. This dance studio is situated in the central part of the Norwich city. Besides dancing, this studio provides various physical activities such as aerobatics, gyms and sauna. Norwich is a small city and population of almost 230000. So the scope of finding the target customers is enough. Rather than this, Norwich city is connected with almost all routes of the country. But in case of expanding the studio, other areas surround the Norwich city are preferable and recommendable. The studio consists of two large rooms. Besides this, three medium room for changing, one large storage room and office room including reception area. The studio adopts some marketing strategies to enlarge their dance studio. The main aim of the studio is to provide warm and supportive environment and service that can attract different people on the basis of cultures, communities, ages and interests. Now, there are many dance classes surrounds Norwich city. So the studio has to take some adequate steps to attract the new or upcoming customers. The studio has to promote their dancing studio through different marketing techniques such as promotion, advertisement, digital hoarding media etc.  Maria dance studio provides smoke free area as well as full of greenery environment. Since the last five years, Maria dance studio experienced 20% growth rate each and every year. A proper market plan depends on the flexibilities and qualities of the services. As evident from the location of the studio, it is situated at one of the most significant and important position of the market. As a result it is convenient for all the people to attend the classes easily. Moreover there are many other studios associated with culture and literature. As a result it will be easier for the people to find the location. As a far as competition is concerned because of the location, the type of dance lessons that Maria is giving is itself a unique one. So it is expected that she will be able to grab the attention of people interested with the art.

Table of Contents

Business description. 3

Business environment analysis. 3

Product. 4

Marketing plan. 5

Implementation. 5

Operational considerations. 5

Financial plan. 6

Conclusion. 10

Appendix. 11

References. 14

Business description

Maria enters into a contract for a dance studio in the Norwich. The dancing school is situated near the center of the Norwich and also having onsite parking site. The studio offers a place where young and old people can learn Zumba dance, have fun, feel comfortable and met with new people. Zumba dance is very much beneficial for the people as it burns lot of calories which helps to reduce weight. Maria offers dance lessons at appropriate price and package sessions in order to reach the dance skills (Alexander, 2008). There are two studios having three changing rooms, sprung wooden floors, reception area and storage room. In addition, there are sauna, aerobics and gym facilities.  The studio is located at the most appropriate place as it is connected with all the routes. The marketing plan for the studio will help to analyze competition in the market, techniques through which more people attract towards the studio and future growth of the business. The business is most suitable for the place as people prefer more workouts and dance which means Zumba dance will provide satisfaction to the customers. The country is rich in culture but the country ranked as the second most deprived districts in the East England (Audley, 2011). There adequate steps need to be taken in order to attract more customers towards the studio for dance lessons. The major threat for the studio is that there are many other dance studios and fitness centers opening up in the Norwich. Therefore, approximately nine fitness/health clubs are there in the ring road and more 12 dance studios that surround Norwich. The main objectives of the studio are as follows:

• To provide supportive and warm environment which will satisfy the customers
• Providing an entertainment and social forum for the people with diverse backgrounds, interests and ages (Wong, Radel and Ramsaran-Fowdar, 2011).
• Providing quality Zumba training for the students.
• Providing quality sauna, aerobatics and gym classes.

The studio can attract more customers through public relations, promotion and marketing strategies.  The studio welcomes all types of people coming from different places and maintains a non alcohol and smoking free environment. Dancing attracts people from different backgrounds with diverse interest. Married and single people between the ages of 25 and 60 get an opportunity to lose their weight and learn Zumba dancing (Cafferky and Wentworth, 2010).

Business environment analysis

The studio is located at the center of Norwich at 43 new markets and Norfolk is connected with all the routes. Maria has noticed many other dance studio and fitness existing and opening up in Norwich which means huge competition in the market. The studio is in the city center where there are many studios and fitness center already existing (De Beer and Rossouw, 2005). It is important to analyze the market environment with the help of different marketing techniques such as SWOT analysis, PESTAL and Porter’s five force. Target market for the studio will be married and single people between the ages of 20 and 60 would be the supporters of the dancing studio. The age group generally looks for new and entertaining things to do. The local authority area of Norwich has a lower proportion of small companies and micro businesses than at national and regional levels.  The working age population in Norwich is economically active but the activity rate of the economy is much lower in the Norwich than in the south Norfolk or Broadlands.

The Zumba dance has experienced a substantial development at a rate of 20% each year. The main factors for increasing demand is interest of the people in Dance, entertainment and meeting with new people (Perez, 2009). There are dance studios and fitness center in that place with dance teachers who provide classes for different dance lessons which is a major threat for the studio. Maria should focus on advertisement and promotion techniques such as online advertisement, radio, TV, public relations and billboards. The marketing plan is based on providing quality training for the dance lessons, to enhance the leisure quality time, to gain dancing skills and health benefits. The target audience should also include healthy and fat people because Zumba dancing is very much beneficial for losing weight (Donovan and Henley, 2010). The studio is at the center of the city which is a advantage for Maria because more customers will attract towards the center.

Product

The main product of Maria consists of the dance studio in which “Zumba Dance” is one of the product types of Maria’s dance studio. Zumba dance is type of dance which has literally risen from Latin America which the Maria used to teach (Fifield, 2007). This dance type is a Latin based Aerobic dance form which is one of most favorite dance type for UK people. Zumba dance itself act as a work out for the people who will help them to burn a lot of calories and will also help them to be fit and fine. Zumba dance instructors must be licensed to teach this dance style because it involves a lot of physical workout. This dance style can taught to the people belonging to the ages between 20 to 40 years. Its benefits includes burning of the fats, removes joint problems, helps to get rid of heart problems, helps in increasing the peripheral vascular resistance of the body which will help in the uplifting of the body. It is one of the toughest dance forms in the world which must be taught carefully by the instructor (Ravenhill and Ravenhill, 2013). This dance form also helps to get rid of some other diseases such as heart attack, blood pressures and other orthopedic limitations.

Marketing plan

The marketing plan for Maria depends on the three main equipments regarding her business different marketing strategies. The marketing strategy of Maris includes customer satisfaction which helps her to gain a lot of more customers in return. Also Maria followed the incentive policy by which she could gain a lot of customers (Hooley, Piercy and Nicoulaud, 2012). The main priority of her advertisement were the people whom she used o train or teach them. The secondary advertisement for Maria was the flyers and the local newspapers in which it consists of different coupons and the offers related to discount. This special advertisement helped Maria to gain a lot of customers for its products and also increased the craze for her products. The craze for Maria’s Zumba Dance was increased in locally and nationally rather than internationally. Later on, it is found from the demographics that the international visitors also showed their interest in Maria’s Zumba dance classes. Generally the international immigrant’s age lies between 16-44 years and this also increased the economic growth. The establishment of Maria’s dance classes helped in the employment of the locality (Hughes, 2006). This product of Maria includes the cultural trend which helped the people to gain knowledge and also the advancement with trend helped Maria to attract the people for its product.

Implementation

According to the marketing strategies of Maria, the implementation of her strategy includes the flyers, newspaper advertisement, verbal advertisement and the praise of the people. The creation and the innovative implementations of the Maria’s product regarding her dance studio made her to gain name and fame (Hult, Pride and Ferrell, 2014). Also these implementations helped Maria to develop her financial conditions which also helped her to improve more tactics for advertisement purpose. Planned budget helps to gain sales forecast for Maria and this helps Maria to gain customer for her products. Each and every time the plan for the advertisement should revised in order to gain customer attraction with offering them the attractive offers regarding the product. This process helps Maria to dive the customer’s attraction towards its products (Pérez and Greenwood-Robinson, 2009). The implementation of the innovative ideas helped Maria to increase its resources so that it could help her to gain the customer craze in the forms of the advertisements. The implementation of the 7p’s of the marketing strategy helped Maria to make growth in her business along with the increasing demand, proper systematic management, the physical evidences, place of selling the product and the enriching the people to have the taste of the culture that the Maria consists of (Hutt and Speh, 2010). This all the implementation helped Maria in gaining the name and fame for its business.

Operational considerations

Operational considerations include the changes or improvement of the processes that Maria should make and the spaces or the loopholes of its business that might help her to destroy its business (Kotabe and Helsen, 2015). The changes that must be done by Maria are the usage of smart technologies for advertisement., developing different new ways of marketing its product, application of it security systems so as to keep the proper records of her staffs, quality of the services must be revised so to maintain the provision of best quality services for her customers

and proper agreement should be made during employment of the staff members as well as the records of the customers (Kotler and Keller, 2012). The climatic factors are a type of operational considerations that must be considered as per the climatic criteria and the environmental aspects. The above mentioned operational considerations must be made by Maria in order to develop its business and it will also help Maria to grab a good market position so as to compete with her competitors. Thus in order to stand in a good position in the market, Maria has to bring changes in its marketing channels which will help her to know about its sales of the services provided.

Financial plan

The startup requirements include teaching supplies, business assets and advertising. The initial investment in the business depends on the requirements of the business (Schmidt and Wright, 1996). The budget for the business is as follows:

The cost of the business includes fixed cost of assets and other variable cost (Pinson, 2008). According to the investment of Maria, it has been observed that Maria is going to invest from her personal assets which will help her to make investments in her own business plan. The amounts of investment in the business are as follows:

There are certain assumptions for the business that should be keep mind while preparing the financial plan (Kuada, 2008). The sensitive analyses of the business are as follows:

Income statement for the current month

Breakeven analysis

Maria can invest £9,000 in new gym kit to attract new customers towards the studio (Holton, 2012). The cost of the business will change to:

New fixed cost= £17,000

Revenue = fixed cost + variable cost

75000 = 17000 + variable cost

Variable cost = £58000

Variable cost per unit = £58000/500 = £116

Breakeven point = £75000

Maria can invest £12000 in the spa facilities to attract more customers. The cost of the business will change to:

New fixed cost= £18,500

Revenue = fixed cost + variable cost

75000 = 18,500 + variable cost

Variable cost = £56500

Variable cost per unit = £56500/500 = £113

Breakeven point = £75000

Conclusion

The overall study was made on the Maria’s Dance Studio which was based on the Zumba dance style. The style was described in details which will help to get the easy views regarding the marketing strategy, marketing plan, implementation and the considerations that helped Maria in its product management and development (McDonald, Mouncey and Maklan, 2014). This study is also based on the business descriptions and the business environmental analysis that the Maria to keep consistency in its business. These two methods also describes the Maria’s business dependents and the environmental analysis which effects or helps Maria’s business. The study is based on the types of dance forms and other cultural activities which the Maria’s Dance Studio consists of but the study is continued as mentioned on one dance form which is Zumba Dance form. The brief and detailed information have been provided in order to have the overview of this dance form which is quiet popular in Norwich. About this product, Maria can provide detailed information of this dance form and she sells this product in an efficient manner. Above all, Maria had employed quite good learned instructors whom she could control and guide them properly for selling of her product (Mitręga, 2006). The main aim for choosing this product is that it helps the young and aged peoples fit and fine with proper guidance. The financial plan for Maria includes the costs, breakdown analysis, budget analysis, cost and price models, and break-even with sensitivity analysis and sales projections given in this study. Mario dance studio is renowned for Zumba dance training .The dance studio is situated in Norwich city, England. The main aim of this dancing studio is to provide excellent quality of Zumba dance training as well as high quality aerobatics, sauna and gym training also (Moosa, 2007). The target trainee for this dancing studio is the adults as well as the minor. This dance studio is committed to affordable and quality dance instruction to Norwich city as well as the other part of the England. There is a very dedicated and active dance community situated in Norwich but there has never been a structured dance studio. In Mario dance studio, trainee can expand their dance knowledge and they will also get the fitness knowledge. The main advantage of dancing is to provide fit and flexible body (Rainey, 2005). Except dance classes, Mario dance studio also provides a comfortable and familiar environment to the visitors.

Appendix

  References

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