The term Small and Medium Enterprises ( SMEs ) is used to jointly group micro, little and moderate-sized concern ( Schaper & A ; Volery 2007 ) . In order to be classed as an SME, the Australian Bureau of Statistics ( ABS ) requires that the concern be independently owned and managed by an person or little figure of individuals every bit Wellss as employ less than 199 staff ( ABS 2001 ) . In add-on to this, typical SMEs portion other similar features such as start-up finance is by and large provided by the proprietor, they hold a limited market portion and hold a limited life span, they earn low degrees of net net income and they a most frequently a household concern ( Schaper & A ; Volery 2007 ) .
SMEs play a critical function in the Australian economic system as they account for more than 95 % of concern and supply a important proportion of national employment ( OECD 2000 ) . SMEs besides play an of import function as market shapers. They increase the degree of competition within the market, promote invention and development of goods and services every bit good as provide specialised merchandises and services for niche markets ( Schaper & A ; Volery 2007 ) .Without SMEs there would be limited competition and high monetary values for consumers.
As at June 2007 there were 2,011,770 actively trading concerns in Australia ( ABS 2007 ) , of which 98 % were SMEs. A cardinal tendency in the Australian concern environment has been the increasing figure of non-employing-single operators, with now 58 % of concerns non using any staff ( ABS 2004, 2007 ) . Home based concerns make up a really big proportion of these concerns. The remained of the SMEs is made up of 26 % micro concerns, those with less than 4 employees, 12 % little concerns and medium concerns hold a portion of 4 % .
2 Factors act uponing SMEs ‘ success and failure
The nature of SME operations in Australia is that every twelvemonth there are many start-ups and about as many failures. During the 2006-07 fiscal twelvemonth the rate of entry for new concerns into the market was 17 % while the issue rate was at 14.6 % ( ABS 2007 ) . Of the concerns that remain in the market, ABS ( 2007 ) information shows that merely four in 10 concerns were remain in operation after 4 old ages.
Recent surveies on SMEs have identified five chief factors act uponing SME success and failure are funding, selling, production, forces and personal ( Schaper & A ; Volery 2007 ) . Yusaf ( 1995 ) topographic points high importance on the personal factor, and provinces that the success and failure of an SME can frequently be attributed to the proprietor, depending on the degree of their direction accomplishments. Owners with strong accomplishments are able to develop and impact concern programs, employ appropriate staff for the concern, every bit good as accurately maintain records and control fundss ( Yusaf 1995 ) . Personal qualities and traits such as assurance, doggedness and the ability to get by with emphasis and keep a work-life balance are besides considered really of import ( Schaper & A ; Volery 200 ) . Finance is a important issue for SMEs because deficient capital combined with hapless hard currency flows makes it hard to set up, keep and spread out a concern. Effective selling is besides an indispensable component of concern success or failure because it strongly impacts on the house ‘s ability to pull patronages ( Cromie 1991 ; Yusaf 1995.Production refers the physical premises, quality of the merchandises and services produced the ability to obtain supplies. It is indispensable when set uping a concern that extended market research is undertaken when choosing location and clip and attempt are given in order to develop concern relationships. Quality forces are indispensable for successful concerns nevertheless, as antecedently mentioned, this requires the proprietor to hold sufficient direction accomplishments is order to enroll and retain qualified staff.
A recent survey conducted by the New Zealand Ministry of Economic Development ( 2005 ) besides found that the usage of concern programs increased the rate of concern success. This is because the development of a concern program provides lucidity of way, encourages end scene, provides a holistic position on the house and encourages enterprisers to to the full research their thoughts before doing important investings into the concern ( Schaper & A ; Volery 2007 ) . However, despite this, research shows that the bulk of Australian concerns do non set about this type of planning ( Schaper & A ; Volery 2007 )
3.1 Features of Successful Entrepreneurs
Entrepreneurship is “ the procedure brought approximately by persons, of placing new chances and change overing them into marketable merchandises or services ” ( Schaper & A ; Volery 2007, p. 4 ) . While there are many enterprisers in the market topographic point, merely a smattering of them are successful in their chases.
Harmonizing to Schaper and Volery ( 2007 ) there is an eternal list of features and traits that are frequently attributed to successful enterprisers, nevertheless research has shown that of these, merely three have shown a high degree of cogency. These three features include the demand for accomplishment ; an internal venue of control ; and a risk-taking leaning ( Gartner 1985 ) . The demand for accomplishment is of import because it means that the enterpriser has an overarching desire to stand out or win in their projects ( Schaper & A ; Volery 2007 ) . Entrepreneurs besides need a strong internal venue of control in order to stay positive and continue working, even in inauspicious state of affairss. A risk-taking leaning is indispensable characteristic because without it, they may non be willing to prosecute and set about chances when they arise.
3.2 Janine Allis
Janine Allis is the laminitis and pull offing manager of the Australian company, Boost Juice. From what started as individual shop in Adelaide, Boost Juice has grown to 180 mercantile establishments within Australia and a farther 50 in Singapore, South Africa and Britain ( Boost Juice 2010 ) . This twelvemonth, the company is expected to post gross in surplus of $ 130 million and a net net income of around $ 10 million ( Thomson 2010 ) .
Janine Allis, through her desire to set up her ain concern has become one of Australia ‘s prima enterprisers. The procedure Janine took in developing the Boost Juice concept mirrors the aforesaid definition of entrepreneurship. Prior to developing her merchandise she reviewed the retail market to place an unrealized consumer demand, which she found to be a deficiency of healthy fast nutrients ( Boost Juice 2010 ) . It was n’t until after look intoing several other merchandises and a trip to America, where she was exposed to the fresh juice and smoothy construct, she developed a merchandise the Boost juice construct for the Australian market ( Ovations 2008 ) .
From the beginning Janine demonstrated a strong demand for accomplishment. Harmonizing to an interview in the Australian Business Review ( 2010 ) , Janine Allis is quoted as stating, “ I ne’er had purpose of opening merely 1 shop, therefore why we opened the first 1 in Adelaide. We ever had bigger programs to hold universe domination ” . Her dogged committedness and doggedness every bit good as her strong internal venue of control have contributed to the success of the concern. Prior to set uping Boost Juice, Janine had non antecedently run her ain company but was confident in herself and her construct that she was willing to put her household ‘s fiscal hereafter in her concern ( Elder 2004 ) . However Janine besides understood the demand to reassign the hazard of runing a concern to other parties, and in 2010 sold a 70 % interest in the company for to a US private equity house ( Thomson 2010 ) . Based on these demonstrated features and traits, Janine Allis should be considered a successful Australian enterpriser.
4. Analyzing chances and developing a model for concern
4.1 Nature of the fittingness industry
Demand for wellness and fittingness services has, for the past five old ages, increased yearly with about 1.6 million Australians ( 8 % ) now utilizing or keeping a rank to a gym ( ABS 2008 ) . Research into wellness and fittingness tendencies attributes the increased rank rates to improved consciousness of the wellness hazards associated with modern lifestyle picks every bit good as decreases in leisure clip and the handiness of private diversion countries ( Diabetes NSW 2010 ; Sydney Morning Herald 2003 ) .
The Australian fittingness industry is presently undergoing important alteration is response to altering consumer demands. Kirby-Brown and Hall ( 2010 ) identified three major tendencies that are now redefining gym criterions and patterns. The first tendency, referred to as nowism, is a mention to values and attitudes displayed by Generation Y. The chief impact of this social attitude has on wellness and fittingness Centres is on rank construction. Patrons do non desire to be locked into but alternatively prefer pay-as-you-go or no minimal term contracts.
The 2nd cardinal tendency is personalisation, which proposes a major measure off from traditional big gym theoretical accounts towards more dress shop constructions. This is the market that the Breeze Fitness Studio is trying to gaining control. The dress shop gym caters to clip hapless professionals who require flexibleness and non preset agendas ; frequenters who would prefer alternate exercising signifiers ; and those who do non experience comfy in the traditional gym environment ( The Age, 2003 ) . The dress shop gym theoretical account besides provides a more flexible construction because when exercises become unstylish they are no keeping big measures of expensive equipment, purpose-made suites or an inflexible category agenda ( Kirby-Brown & A ; Hall 2010 ; The Age 2003 ) .
These factors all positively indicate towards the viability of set uping a dress shop fittingness Centre.
4.2 Viability of Breeze
There are four chief types of legal constructions used in SMEs, Sole bargainer, Partnerships, Companies and Trusts.
The most normally used signifier is Exclusive bargainer. In this type of construction the concern is non considered a separate legal entity, which means concern net incomes are taxed at the fringy revenue enhancement rate of the proprietor and that proprietor is personally responsible for all of the liabilities of the concern ( Schaper & A ; Volery 2007 ) . However this construction is simple and cheap to set up. A partnership is an agreement between two or more people to get down a concern and lawfully portion the net incomes, hazards and losingss harmonizing to the footings set out in the partnership contracts ( DEEDI 2009 ) . The chief disadvantages of this signifier are the loss of control and that, like exclusive bargainers, there is limitless liability. The company construction is a legal entity separate from the proprietor, which provides for limited liability and separate revenue enhancement of concern net incomes ( Schaper & A ; Volery 2009 ) . Compared to the other two constructions, it is more dearly-won to set up a company. A trust is a construction where the concern is transferred to a 3rd party who has legal control and has a responsibility to run that concern to profit person else ( DEEDI 2009 ) . This construction, while supplying revenue enhancement minimization, is complex and dearly-won by nature ( DEEDI 2009.
Of these four constructions, a Proprietary Limited Company is most suited for Breeze Health and Fitness. While this construction requires higher costs to keep due periodic coverage to ASIC, the benefits received outweigh this. With a high degree of expected net income prognosis for the concern, it is non economically executable to hold this taxed at the fringy revenue enhancement rate of 45 % , when the company revenue enhancement rate is well lower at 30 % . The other cardinal ground for the usage of the company construction is the entree to limited liability. The proprietor does non wish to hold their personal fiscal assets placed unnecessarily at hazard, as would be in the instance in a exclusive bargainer and partnership agreement.
4.2.2 Market Size
It is proposed that Breeze Fitness Studio be established in Toowoomba, Queensland. Recent economic studies put together by the Toowoomba Regional Council ( TRC ) show that there is strong market for wellness and fittingness to back up the constitution of the Breeze Fitness Studio.
The 2010 Economic Report compiled by the TRC shows that demand for humanistic disciplines and diversion services has grown 14.8 % in the past fiscal twelvemonth, compared to the negative mean growing of 3 % for the province. In 2007 diversion services had a combined one-year turnover $ 60.7 million, with the mean one-year concern turnover being $ 243,800p.a ( TRC 2010 ) .
The current female population in Toowoomba and environing local countries, aged between 20 and 55 is 33,267 ( ABS 2006 ) . With about 8 % of the population keeping or utilizing gym ranks, the market size is expect to be around 2660.
The features of the market back up the constitution of Breeze Fitness Studio.
4.2.3 Target Market
Harmonizing to Cooper ( 1993 ) the mark market needs to be an attractive market where the competition is weak, there is possible growing, there are merely few participants and the client base has an unsated demand for a peculiar merchandise. After an rating of the current market in Toowoomba revealed two distinct and complimentary markets which will both be targeted by Breeze Fitness Studio.
Presently there are no female-only fittingness Centres located in the Toowoomba Central Business District. This is a really profitable market because, if the merchandise is tailored right, there is a big population of professional adult females who work in the locality. With the current wellness focal point for professionals, there is an constituted demand for Breeze Fitness Studio. The profile for this market is shown in the tabular array below.
Table 1: Features of Target Market 1
Region or country
A Toowoomba CBD
Busy life styles, want to keep wellness is a convenient mode
The other possible market that was identified was that there are merely a little figure of gyms offering alternate fittingness plans aimed at immature females who are non content with standard gym offerings. Their profile is outlined below.
Table 2: Features of Target Market 2
High Disposable Income
Interested in keeping a healthy life style but are non contempt with standard exercisings offered at gyms.
4.2.4 Nature of Merchandise
Kotler ‘s three degrees of merchandise are used to understand how a client views a merchandise and service.
The most basic degree of a merchandise is its nucleus, which is what is the client purchasing? Breeze Fitness Studio offers it member ‘s women’s-only wellness and fittingness. This can be seen as a transformational merchandise because adult females who join are non merely buying a gym rank they are buying a new rental on life, self-esteem and a release from the emphasiss of mundane life.
The 2nd degree of merchandise is referred to as the existent merchandise, and these are the things that need to be provided in order to accomplish the nucleus benefit. For Breeze Fitness Studio the existent merchandise is characterised by high degrees of client service, a broad and variable array of plans, qualified staff, visual aspect of the staff and quality equipment.
The concluding degree of merchandise, the augmented merchandise, is the extra benefits the client receives from buying this merchandise. Augmented merchandise for Breeze includes flexible rank options and the packaging every bit good as personalised service.
For a ocular representation of the three degrees of the Breeze Fitness Studio Product, delight see Appendix 1.
4.2.5 Competitive Edge/Unique Selling Proposition
Due to the usage of multi-segmented targeting, Breeze Fitness Studio will utilize two different Unique Selling Propositions.
For the first mark market Breeze will concentrate on distinguishing themselves from rivals by convenience of location and high degrees of personal attending non offered at big fittingness Centres. As the gym is aimed at professional adult females, who are frequently under considerable clip restraints, exercises will be structured on accomplishing maximal benefits in minimal clip.
To pull the younger market, Breeze will market the singularity of its alternate fittingness plans. Breeze will be the lone fittingness Centre offering Juakri and Silks, in add-on to Bikram Yoga and Pole Fitness.
Breeze Fitness Studio will be financed through personal nest eggs of the proprietor, a loan from household every bit good as a loan from concern angel, Lee Gend.
It is estimated that the initial costs involved in set uping the concern will amount to $ 102,500. These costs are funding are broken down in item in Appendix 2.
The expected start up costs take into history the cost of tantrum out of the premises, the costs associated with set uping and registering a company with ASIC, the cost of equipment for the studio, the initial selling of the Centre and a border for incidental costs. Working capital of $ 15,000 is required to pay measures and rewards that occur before the Centre is opened.
The loans from Lee Gend and the proprietor ‘s parents will be repaid over a period of 2 old ages at a fixed involvement rate of 7 % . The dislocation of loan refunds is shown below.
Table 3: Loan Repayment Schedule
Footings – 2 old ages, 7 %
Loan from Parents
Loan from Lee Gend
Entire Monthly Refund
Entire Annual Refund
Membership degrees for Breeze Fitness Studio has been based on an initial rank base of 100, which is to be achieved in the rank presale, with a growing rate of 7 % per month for the first twelvemonth, which is in line with industry criterions. It is expected by the terminal of the first twelvemonth the rank base will level out.
Wagess for the twelvemonth have been calculated on the footing of one full-time staff member, 2 parttime staff and 2 casuals, utilizing the industry award. It is estimated that rewards in the first twelvemonth will be $ 82,500.
Breeze Fitness Studio will be located in the Toowoomba CBD and the rental costs for this belongings are $ 66,000 per twelvemonth ( Ray White 2010 ) . This rate is consistent with other comparable CBD locations.
Insurance costs for the studio have been estimated at $ 5500 p.a. An allowance of $ 10,000 has been set aside to cover phone and cyberspace bells, equipment replacing costs, accountant and canvasser fees and other minor expenses.
Using this information, it is projected that Breeze Fitness Studio will gain a net net income of $ 16,403 in its first twelvemonth of operation. A dislocation of this is shown in the net income and loss statement below.
Breeze Fitness Studio
Net income and Loss Statement
For Year Ended 31 December 2011
Net Net income
6. List of Mentions
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& lt ; hypertext transfer protocol: //www.abs.gov.au/ausstats/abs @ .nsf/0/97452F3932F44031CA256C5B00027F19? OpenDocument & gt ;
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& lt ; hypertext transfer protocol: //www.abs.gov.au/websitedbs/d3310114.nsf/home/census+data & gt ;
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& lt ; hypertext transfer protocol: //www.abs.gov.au/AUSSTATS/abs @ .nsf/DetailsPage/8165.0Jun % 202003 % 20to % 20Jun % 202007? OpenDocument & gt ;
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& lt ; hypertext transfer protocol: //www.ovations.com.au/presenter_detail/janine_allis/31359/1 & gt ;
Ray White 2010, Commercial Real Estate, viewed on 23 August 2010,
& lt ; hypertext transfer protocol: //www.realcommercial.com.au/cgibin/rsearch? a=o & A ; id=5604873 & A ; f=0 & A ; p=10 & A ; t=com & A ; ty= & A ; fmt= & A ; header= & A ; cc= & A ; c=35942614 & A ; s=qld & A ; tm=1282392852 & gt ;
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& lt ; hypertext transfer protocol: //www.smh.com.au/articles/2003/11/28/1069825992361.html & gt ;
The Age 2003, Tight Fit, viewed on 3 August 2010,
& lt ; hypertext transfer protocol: //www.theage.com.au/articles/2003/11/14/1068674379888.html? from=storyrhs & gt ;
Thomson, J 2010, Boost Juice laminitis Janine Allis sells 70 % interest, viewed on 8 August 2010, & lt ; hypertext transfer protocol: //www.smartcompany.com.au/buy-or-sell-a-business/20100503-boost-juice-founder-janine-allis-sells-70-stake.html & gt ;
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