financial analysis and planning

Yes, Triple-Health F's Club's new membership structure and pricing will significantly enhance its capacity to forecast its cash receipts. Individuals, students, and families initially paid a single annual membership fee to join the club. Then, in addition to the annual membership fees that the members paid for court use, there was an additional hourly court price. It is quite laborious to maintain track of each member's hourly court usage in order to bill and provide receipts for the 1,700 to 2,500 health club members. It becomes overwhelmingly tedious during the racquetball season which runs from September through April. Since it is the peak season, they are likely to have more members than usual. The season runs for eight months which is more than half of the year hence it is a crucial season for the health club. If during this season the court usage is at 90 to 100 percent during the prime time which is 5.00 to 9.00pm and up to 60 percent all other hours, then there would be a lot of receipting going on. It would be a waste of both customer and human resource time, frustrating and tedious to all, time consuming and a lot of receipting paperwork.
By Triple-F Health Club introducing a flat rate for all the health club members all year round eliminating the hourly court usage irrespective of the hours spent on the court, the health club would save a lot of time and money as well as maintain happier customers. Since most of their memberships expire around the month of September, they would easily be renewed in bulk due to the racquetball season. It is a smart move that does make receipting easy to track and maintain per member because the membership fee is paid only once per annum. IT may be a larger amount, but in the long run, it is also cost effective for the members who frequently use the court.
Question 2
Triple-F Health Club should evaluate the new membership plan and fee structure completely before it decides to adopt or reject it. This is in order to ensure that it is accepted by the health club members, members of staff and other stakeholders so as to avoid losing clientele to competition or facing sub standard services from the members of staff. Cost is a sensitive factor to every business entity. Evaluating and making changes upwards in fees could lead to customer rejection of decisions and would therefore create a loophole for competition to entice the clients to change health clubs. The health club should consider the cost to the club for making the change (Clapham, 2005). Since most memberships expire around the same time, it would mean they would be receiving a large sum of money only once in a year and would have to manage it well all year round without compromising quality of services to the clients and without losing focus on the bottom line which is the profit. They would also have to communicate to individual members either verbally or written to inform them of the changes, the effects it would have on the health club and to the members and the advantage the members shall have when the changes are implemented (Osterwalde, 2005). This would sensitise the members before hand and the health club management would make well informed decisions based on the feedback they receive. The Health Club should also consider the competition and the standards of services they deliver so as to surpass or maintain high standards when making the changes. They may also have to review their business strategy as they would be receipting a lot around the month of September and very little thereafter when they get new membership applications. They would have to understand the client preferences on the services offered and ensure their changes and decisions are at par. A few members may not agree with the changes and terminate membership hence the Health Club should be ready to spend more on a campaign to retain as many existing members as possible and recruit new ones. They would also need to plan how to handle the $50 reduction per member for the first year of rolling out the campaign on the new plan. They should therefore have a financial analysis of the current membership fee collection, current expenses on receipting and personnel and the financial analysis expected when the changes are implemented. If it is still as profitable or even more profitable then it would be worth the change (Osterwalder, 2010).
Question 3
If the new membership plan and fee structure were adopted, Triple F Health Clubs cash management would differ greatly. With the current setup, they receive and manage small amounts of money ranging from $8 to $12 per client per hour for court time used. It is difficult for them to track and receipt each client's hourly court time and charges considering they have approximately 1700-2500 members and the peak season lasts eight months from September to April. The receipting, reporting, balancing, banking and sending statements to clients amongst other accounting processes are done daily and are time consuming. The annual fees also range between $30 and $ 100 per individual or family per annum which is not much. On the upper hand, they have a lot of petty cash flow available for financial emergencies at any time of the year.
If the new plan is adopted, they would be having one or two months of membership renewals mostly during the month of September and October. During this time they would be handling a lump sum of money and it would have to last them all year round. The amount they would be receiving at one would also be ten times more the amount they used to receive annually before as the new plan ranges between $300 and $500 per individual or family per annum. The best cash flow payment plan for themselves, their investors and their suppliers would therefore be best on an annual basis as well as opposed to a monthly basis like they could afford on the previous plan. Their biggest business decisions would therefore be made annually and on an annual assessment of memberships without expecting much income during the year after most memberships have been paid (Cochran, 2009). They may have to upgrade technology on communication, receipting, marketing and advertising to clients as it would be likely they would be getting less face to face encounters and interactions with them.

References
Clapham, E., Englund, P., Quigley, J. M., & Redfearn, C. L. (2006). Revisiting the past and settling the score: index revision for house price derivatives. Real Estate Economics, 34(2), 275-302.
Cochran, W. G. (2009). Planning and analysis of observational studies (Vol. 232). John Wiley & Sons.
Osterwalder, A., Pigneur, Y., & Tucci, C. L. (2005). Clarifying business models: Origins, present, and future of the concept. Communications of the association for Information Systems, 16(1), 1.
Osterwalder, A., & Pigneur, Y. (2010). Business model generation: a handbook for visionaries, game changers, and challengers. John Wiley & Sons.

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