THE ACADEMY OF
NORTHERN EXCELLENCE
REDFINE YOUR SELF BY BECOMING YOUR POTENTIAL

ASSIGNMENT II- FEASIBILITY STUDY
FEBRUARY 29, 2016

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*** From here on out, The Academy of Northern Excellence will be abbreviated to “TANE” ***

Table of Contents

Page
Number

Executive Summary

2

Potential Market

3

Local Competitors

6

Product and/or Service Offering

9

Pricing strategy

10

Promotion Strategy and Budget

11

Distribution Plans

12

Cost/Profitability Analysis and Pro Forma Financial Statements

13

Future Plans

14

Appendix

15

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Executive summary
My name is Jan Barbier, I have a degree in Kinesiology and certificate in personal training and I am currently a student in Respiratory Therapy and Exercise Physiology. TANE is a business concept that is targeted to both high-performance athletes and to those individuals that may suffer from more than one risk factor. My expected business outcome is to provide
Yellowknife with my expertise in improving ones physical capabilities and to improve one’s quality of life by working to eliminating ones identified risk factor.
I am hoping to open TANE in Yellowknife, Northwest Territories once I have graduated in this coming summer. I have been saving money for this very project, so I will not require any loans or financing from any third parties. I plan on working as a full-time respiratory therapist, while having TANE as an extra source of income. This will allow me to safely open TANE, without putting myself at financial risk. Once graduate, my parents will be passing our family home on to me as they are moving down to Alberta, when this occurs I will be redecorating the double garage in to a functional testing facility.
The overall objective of TANE is to slowly get my name out there as I one day aspire to open a full fitness facility here in Yellowknife; by starting this part-time business I am able to begin networking and building a better understanding of the market in Yellowknife.

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Potential Market
As already stated, TANE will be located in Yellowknife, Northwest Territories.
Yellowknife is a small town (population: 20,000 Reference) with a big city feel to it. Being the capital of the Northwest Territories, Yellowknife gets a large sum of its income from the government, although this is not its largest source of income. Yellowknife is quite lucrative with its Diamond mines and its recent focus on tourism. After living in Yellowknife for the past twenty years, there is no doubt that the time spent here will contribute to TANE’s success.
Seeing the city grow in the past twenty years will definitely contribute to the success of TANE as
I have been able to analyze how receptive the market has been to new enterprises and have learned what approaches were successful and why others weren’t.
TANE is a business that is tailored specifically to two markets; the high-performance market, individuals that are interested in improving their fitness for a certain sport or event.
Where the second market are those individuals that are looking to improve their health. As a certified personal trainer and a graduated kinesiologist, these credentials attract the highperformance market. Where my full-time job as a respiratory therapist and my certificate in exercise in physiology attract the health related market that require the presence of a certified professional while exercising.
Please resort to the appendices, section _____ for market statistics. Add awg cwg
Firstly, we will address the physical health and wellness market. There is no denying that
Canada is getting unhealthier each year, no matter what statistic you examine you will see that there is a crucial need for a business like TANE. Statistic Canada stated in a 2005 study that
54 % of Canadians are either over-weight or obese. This shocking stat alone demonstrates

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that more than 1 and 2 individuals can benefit from a business like TANE. Living a sedentary lifestyle is the sole result of this stat and why individuals find themselves overweight or obese, but the point to take away from this, is that with obesity comes chronic diseases and other fatal sicknesses that can be reversed with a healthy balanced life. Some diseases and complications that arise from obesity are: diabetes, high-blood pressure, cardiovascular diseases, Pulmonary, depression, anxiety, and the list continues. (Stats) Stats Canada has also demonstrated in a study that 18% of Canadians are smokers, an epidemic that seems to be slowly diminishing, but in this study it shows that Northwest Territories represents the second highest population of smokers in Canada. It is also important to state that although healthy balanced lifestyle cannot reverse Cancer it can reduce some of the symptoms, improve an individual’s quality of life, or postpone the onset of cancer.
Canada has already begun to see the generation of baby boomers beginning to retire, a large generation (how many) of people that will require services like TANE, it is important to state that a regular personal trainers are not recommended to work with an individual with has more than one risk-factor as they may not possess the training that an exercise physiologist may have. After doing some research in Yellowknife, I have located one certified exercise physiologist for a population of 20,000.
Above I have mentioned that there is a direct need for TANE because individuals that may suffer from the mentioned risk factors. In fact, 4 of 5 Canadians suffer from at least one risk factor. A risk factor can include but is not limited to: Drugs, Alcohol, Obesity, lack of physical activity, lack of nutrition, chronic disease, etc.
Secondly, the high-performance market extends far and wide in the Northwest
Territories. Northwest Territories funds youth sports teams to compete in large sporting events

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like Arctic Winter Games, Canada Winter/Summer Games, and Western Winter/Summer Canada
Games. By competing in large events as mentioned above, there are a large number of athletes that have their trips almost entirely funded to represent the north. Such sporting events requires that each sport must possess a high-performance team in order to maintain their skills and physical fitness. As a soccer player that has gone through 10 years of high-performance training, they not once put us through physical fitness regime or provide us with athlete testing that allows us to track and mark our progress. As a certified exercise physiologist I am legally allowed to test athletes to failure, where a personal trainer is only allowed to use predictive methods. A person that wants to train at high-performance does not necessarily need to be training for a sport, the event can simply be a self-set goal.
Yellowknife is the perfect city for TANE, as it clearly possesses a vast market. It also important to state that all the major employers (Government of Northwest Territories, Tourism industry, and the diamond mines) and other local business in the city all provide and promote incentives for their staff to live a healthy and fulfilling life in Canada’s North, so a lot of. (Talk about more in the pricing)
During the summer months, there is an increase in population due to students returning home (student rate), increased tourism, seasonal jobs (short-term pricing), and the warm weather causing people to be more active and some may be high-performance athletes returning for summer break. That being said, in the winter months there is an additional market for those individuals that are trying to keep themselves training during their off-season in the colder seasons. Page |6

Competition (add rates to appendix)
In the appendices you will find competitor rates and a small survey of 100 Yellowknifers stating what facility they use, and a study examining their overall impression of their current facility.
After doing extensive research and reaching out to friends, it was evident that a business service like TANE does not exist in Yellowknife. A service that works more closely with their clients, one that is able to train high-performance individuals, using the most accurate methods of testing to progress my clients. The same business that is certified to work with individuals that may require a health-professional during fitness. Through my research I have located 3 businesses that pose a threat to TANE, below you will find a brief summary of each competitor and their pros and cons that I have identified through research, personal meetings, or brief conversations with I’ve had with their workers.
Just Fitness
Just fitness is a class-based fitness facility that allow their clients to work out in only a group setting. This means that individuals that have a tight and strict schedules, do not feel comfortable working with others, or may need direct assistance do not benefit from this facility.
The class-based sessions benefit those individuals that require group motivation (team work), like to compete against others, and/or require a set time to work-out. That being said, Just
Fitness has a very strict hours of operation, does not allow individuals to work solely on their own, or allow individuals to pick their own workout style.
The perks of this business is that their trainers have full control of their clients, choosing their workout, picking their progressions, and decide when they are able to be promoted more advanced classes. This business has also monopolized material arts in Yellowknife as they also

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host Yellowknife only mixed martial arts fighting club. They also possess Yellowknife’s only exercise physiologist, allowing her to work with individuals that have a health risk that must be monitored by a professional when doing physical activity. Seeing they are only class based sessions only, I do not think she promotes her exercise physiologist credentials.
Overall I believe that with their strict hours and class format accompanied with their high rates, they are not as popular as the other fitness facilities in Yellowknife. I do know that the small market that do choose this business are considered as teammates or family, a trait that some people seek in a fitness facility.
Breakaway Fitness
Breakaway Fitness is no-doubt considered Yellowknife’s best fitness facility, with their prime location, abundance in newer equipment, group training options, and in-house message therapists. Customers have expressed that due to prime location and newer equipment it tends to be extremely uncomfortable to workout at this facility as it is always busy and there are too many members. After conducting a small survey of a 100 random Yellowknifers, create graph here, it was evident that Breakaway is without a doubt Yellowknife’s most popular gym despite their apparent lack of comfort and relatively high price. Location, quality of equipment, and hours of operation seem to be Breakaway Fitness’ strengths.
Racquet Club
Yellowknife’s second popular fitness facility, but best ranked facility when it comes to customer satisfaction. A facility similar to Breakaway Fitness, although has older equipment, less convenient location, and stricter hours of operation. The Racquet Club also hosts all indoor racquet sports in the Northwest Territories, youth summers camps, and is known for hosting their

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customer appreciation parties (they have a liquor license). They are also the only gym that possesses a sauna and a hot tub that is free to use by any member. People seem to choose this facility because of their welcoming atmosphere, ability to play indoor racquet sports, take part in their social events, and their diverse group workouts.
The Racquet club is the only facility that has an open policy for outside trainers. If a client of mine is to sign up at the racquet club, the racquet club will provide a reduced rate and allow me to train my clients in their facility for a price of $20.00 an hour (provided I show proof of my credentials). This is extremely crucial for the survival of TANE. As mentioned initially, this will allow me to continue my day job as a respiratory therapist, while TANE is going through its initial phases. Utilizing their facility will allow me to possess all the required equipment without actually opening my own gym and should TANE grow to a point of expansion, then I will look at adding capital and moving my testing equipment from my garage to an official location.
After examining all fitness facilities in the north, there is only one trainer that exclusively works with two volleyball teams, but other than him and just fitness, no other trainer or fitness facility has attempted to market their location as a high-performance hub.

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Product and/or Service Offering
See appendix (PAGE) for pricing sheet
TANE will be a service that offers two types of services, testing and training. Testing can occur both for individuals that looking to gaining overall information about their progressions, or individuals that are trying to learn more about their overall health. In both cases there is an option to complete a specific test at an individual rate, but a second option that goes through a full consultation. This package is obviously more expensive, but it provides the member an exact indicator of the individuals overall fitness or health. This is a service that is unique to
Yellowknife as there is no other business that is able to do this type of professional testing.
The training pricing of TANE is a bit more complex; as training individuals for their overall fitness is not as serious as someone working on their overall health. For the highperformance training there is package for single training sessions and then there is a larger package that is set to 6 weeks week long, 2 sessions a week. There is also a range of price differences for size of the team. TANE also has experience with doing team-building workshops and working with team psychology; these pricings are included as individual training sessions.
For the health related training; I simply have an hourly rate, but the longer the member signs on with TANE, the cheaper the hourly rate becomes.

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Pricing strategy
Firstly, I reached out to all the local gyms asking their personal training rates, from there
I had a good indicator what the regular market is paying for a personal trainer and what the price ranges I could potentially set. The prices above are purposely set to less than all the other gyms overall rates for three reasons.
1.) I am freshly graduated, although I possess the credentials, some would argue that I lack in experience.
2.) As a new business in Yellowknife, I want to keep my training hourly rate lower than other trainers, so TANE will spark some interest when individuals are looking searching the city for gym rates.
3.) TANE will be a part-time business, so the overall training hourly rate is to also accommodate for this.
For testing, I have chosen $100.00 for single tests and $150.00 for a full consultation, I have gone with this pricing as this type of service is the only one in Yellowknife. I believe the affordable testing rates will draw-in an adequate and manageable amount of demand.
It is important to state that each new member must begin with a mandatory consultation testing, this is not uncommon when starting with a new trainer. The consultations that typical personal trainers use predictive, less reliable methods while, TANE is able to use more reliable current methods. The full consultation is also considerably more expensive at my competitor’s locations.

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Promotion Strategy
My promotion strategy is to initially present to each individual coach in the city, getting a team to accept my services would take up a lot of my available working hours, but it will get
TANE in to the word of mouth, and individual clients will begin to inquire about person sessions and testing. I will also present my services to the government, drop-in clinics, and to local doctors. If a patient is being prescribed by a doctor that exercise could save their life, having a service like TANE can be a doctor’s solution. These recommendations are more likely to be successful, as many health insurances would fund their client to use our service.
I have also allocated $3000.00 as my budget for promotion and advertising. With this allocated money, I would first invest in t-shirts that would be provided to TANE clients for workout attire. I would then allocate the rest of the money creating brochures, business cards, vehicle decals, and signage for the TANE facility.

I feel that because TANE is initially trying to attract a certain market, going through traditional advertisement methods like radio or newspaper ads, won’t be nearly as effective then setting meetings with the source directly.
In the Appendix you will find an allocation of Promotion budget
There will have to be two messages when promoting TANE; firstly our message to those individuals trying to improve their overall fitness is address their ability to reach their potential, is simply the work they put in. Where our second message would want to attract those individuals that are interested in changing their bad habits and that are choosing a healthier lifestyle. I believe the name of this business demonstrates that TANE is a professional business

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that uses science proven to find solutions for our clients. I also believe that the slogan “redefine yourself, become your potential” attracts and inspires both markets aspired markets.

Distribution Plans
As previously stated, TANE will begin as a part-time business; I will be taking on a reduced client load to allow myself to continue to work as a full-time Respiratory Therapist.
Should TANE grow to a point of expansion, that is something I am work considering but to start
I will set a maximum 5 clients at time. Ideally, I would like to work with 2 sports teams and the remaining 3 spots filled by individuals with more than one risk-factor.
$30,000 dollars have been invested in to testing equipment and remodeling my double garage in to functional testing facility. It may sound a bit unprofessional to have a testing facility in a garage, but the remodeling is to change the appearance of the garage to a functional workplace. Working in my garage during TANE’s initial phase allows me to keep the fixed cost down. When working with groups of more than 3, TANE must reach out to The Racquet club for their bigger facility.

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Cost/Profitability Analysis and Pro Forma Financial Statements
On page _ of the appendix you will find a ‘start-up requirements’.
On page _ of the appendix you will find a pro forma income statement.
-

Please note that I have added my phone bill, my rent (since the testing will be held in the garage), utilities, vehicle expense and health insurance as company expenses. Also be aware that this is also a part-time business that does not include my full salary.

On page _ of the appendix you will find a pro forma cash flow statement.
On page _ of the appendix you will find a pro forma balance sheet.
On page _ of the appendix you will find a ‘breakeven analysis’.

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Future Plans
I found that the strong points of this business concept was its ability to open as a parttime business, this allows me to continue to work my full-time job at the same time. Another strong point of this concept was having the racquet club as a partnership and an unused double garage as a testing space. I believe that this concept would only be profitable if an entrepreneur opened their facility in phases as Yellowknife is a tricky market to be successful in and if the company was to not pan out, maintaining full-time employment would act as a safety net.

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Appendix
Citation