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Module Code: ECNM023 1. Introduction The fitness industry has been growing in the UK market at a 22% rate since 2022; however, there was a gap during the global pandemic situation during 2020-2021. Thus, the current study has focused on a fitness business named Power Lift Gym . In this support, necessary discussions are presented like demand and supply analysis, profit and loss calculation, target customer analysis etcetera. The overall discussion will help develop new businesses and help make necessary decisions. 2. Background analysis Considering the European fitness industrial scenario, the UK stands at the second stage in terms of revenue. Therefore, the choice of fitness business is feasible for this study. A bar graph is added in Appendix 1 , where the fitness business scenario can be seen. The fitness industry has been growing rapidly; unless the global epidemic situation during 2020-2021. Previously, the fitness business in the UK earned more than 1.5 billion GBP during fiscal year 2022 (Futurefit.co.uk, 2023). The private and public fitness industries are reporting record numbers of members, fitness facilities, and overall market value despite an additional year of economic decline. The UK penetration rate has reached an all-time high of 12.6% (Bbc.com, 2023). Therefore, it can be expected that the chosen fitness business Power Lift Gym will be successful. 3. What exists now, what are the possible problems now, and how can be solved The chosen business will cover market competitive advantage, where the existing competitors do not provide proper training and body supplements. Along with this, the charges for such fitness services and supplement products are too high to purchase for middle-class customers ( Chankuna and Sriboon, 2022). Due to the global economic downfall, the existing fitness businesses are recovering their loss margin from the market. Thus, it would be a great chance for new business Power Lift Gym to earn more profit with a market penetration strategy, where minimum profit will be targeted ( Amankwah-Amoah and Lu, 2022). Page 3 of 10

Module Code: ECNM023 in future; so based on that company can make necessary financial decisions ( Dilanchiev et al. 2022). Here, the chosen company Power Lift Gym assumes revenue of £ 70000 during fiscal year 2024 and 30% growth is predicted for next following years. The cost of sales is expected as 30% of revenue and the expenses will have 15% of inflation annually. Such prediction and assumption process in profit and loss statement is necessary for controlling the expenses and increasing the profit margin at the perceived level ( Amankwah-Amoah, J. and Lu, Y., 2022). Particulars Year 2024 The year 2025 Year 2026 Year 2027 Year 2028 Total Sales / Revenue £ 70,000 91,000 1,18,300 1,53,790 1,99,927 Cost of sales £ 21,000 24,150 27,773 31,938 36,729 Gross Profit/ loss £ 49,000 66,850 90,528 1,21,852 1,63,198 Business operating expenses Furniture & fittings costs £ 6,000 6,900 7,935 9,125 10,494 Gym Equipment purchase & supply £ 50,000 0 0 0 0 Maintenance costs £ 5,000 5,000 5,000 5,000 5,000 Advertising & marketing costs £ 5,000 5,000 5,000 5,000 5,000 Salaries & wages £ 15,000 17,250 19,838 22,813 26,235 Total operating expenses £ 81,000 34,150 37,773 41,938 46,729 Earnings before taxes (EBT) £ -32,000 32,700 52,755 79,913 1,16,469 Tax 25% -8,000 8,175 13,189 19,978 29,117 Net profit/loss £ -24,000 24,525 39,566 59,935 87,352 Table 1: Profit and loss analysis for new fitness business (Source: Self-developed) According to Table 1 calculation, the 1 st year might have a net loss of -24000 GBP; but the following years will be able to recover the gap and earn continuous profitability. According to the above calculation, it is found that the initial year will have maximum expenses for purchasing gym equipment. However, the following years will only have maintenance charges. Thus, the initial year will have a net loss and the following years will recover the amount with a continuous profit margin. The profitability trend for the next five years is attached in Appendix 2 . Page 6 of 10

Module Code: ECNM023 Appendix 1: UK Fitness Industry Market Scenario Page 9 of 10