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Business plan of the low-cost price segment sports hall

1. PROJECT SUMMARY
The goal of the project is the organization of a low-cost price segment in Moscow, Yuzhnoye Chertanovo metro station. The project has both a commercial and a social component, providing affordable youth leisure activities. The gym is located on a rented area, in the basement of a residential building. Target audience – young people (men) aged 15-35 with low and middle income who are interested in sports.

The main prerequisites for the successful implementation of the project are: the growth of the market of sports and recreational services even in times of crisis and the lack of sports facilities in the area under consideration with an extremely high population density.

Investment costs are directed to the purchase of simulators, the arrangement of the premises, as well as the formation of a working capital fund, from which losses are covered before the project becomes payback.

2. DESCRIPTION OF COMPANY AND INDUSTRY
Gym services are part of the market for sports and fitness services, which, in turn, is part of the market for paid services. Paid services are an important part in the structure of expenditures of the population. However, in the share of paid services in the structure of gross expenditures per capita, Russia lags far behind developed countries. First of all, this is due to the relatively low level of income and a large share of the cost of food in them. With increasing revenues, the share of food expenditure will decrease, while the share of expenditure on paid services will increase.

Experts note the constant decline in real disposable incomes of the population since 2014; in Q1 2016 alone, they fell by 3.7%. This fall caused a decrease in household spending by 4.3%, which, in turn, adversely affected the dynamics of GDP – it led to a fall in gross domestic product by 1.2% in annual terms.

At the same time, according to analysts (Rosstat and Analytical Center under the Government of the Russian Federation), the consumption of paid services is highly stable against the background of falling demand for goods (primarily durable) – in 2015, the demand for services fell by only 2%, Retail trade contraction was 10%. The volume of the market for paid services in 2015 (the results of 2016 are still being summarized) amounted to 7.9 trillion rubles, which corresponds to 17.3% of the value added of the entire services market of the country.

In the first half of 2016, the rate of decline in demand for paid services slowed down – a decline in demand was 0.9% in annual terms. During the individual months (February and May), positive growth rates were observed.

Business plan of the gym
The largest volume of consumption of paid services falls on three areas: housing and communal services (27.5%), transportation services (19%), communication services (16.1%). About 11% is accounted for household services (maintenance and repair of vehicles, repair and construction of housing and other). The share of medical services (including sanatorium-resort) was about 8%, educational services – 6.8%. There is a decrease in the share of three key types of paid services from 65.3% in 2013 to 62.6% in 2015, while in the same period the share of medical (from 6.9% to 8%) and educational (from 6, 2% to 6.8%) of services.

The market of sports services in general is experiencing certain difficulties, leading to a decline in its volumes. The fall, which began in 2014, continues to this day. This is caused by the general deterioration of the economic situation in the country. Annual growth until 2014 was more than 25%, and the potential market capacity was estimated at $ 2 billion, despite the fact that the market is very far from saturation.

A significant part of the system of physical culture and sports is traditionally funded by the state. Until 2014, budget allocations grew steadily, although they were significantly below the level of developed countries, where about 2% of GDP is allocated to the industry. In Russia, this figure is almost ten times lower. Private investors show interest in the market, however, it was not too large even in the pre-crisis period. For the most part, the interest of private investors is associated more with personal interests and hobbies than with the formation of a profitable business.

All organizations operating in the field of sports and recreational services can be divided into two categories: commercial and non-commercial. The first are created for profit.

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