ENTREPRENEURSHIP AND INNOVATION FINAL ASSIGNMENT THE ROCK GYM

VIETNAM NATIONAL UNIVERSITY
HCMC UNIVERSITY OF TECHNOLOGY
INTERNATIONAL MASTER PROGRAM

ENTREPRENEURSHIP AND INNOVATION
FINAL ASSIGNMENT
THE ROCK GYM

Group members:
Truong Bao Thach – 2170312 – Leader
Pham Thanh Trung – 2170297

Lecturer: Dr. Truong Minh Chuong

HCM City, 12/2021


TABLE OF CONTENTS
Heading

Page

Question a)

1

Question b)

4

Question c)

5

Question d)

7

REFERENCES

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a) Assessing the contributions of your products and/or startup to the development
of the economy in view of employment, labor income, tax, customers
health/satisfactions, working conditions for labor in general, living conditions,
contribution to other industries…
Entrepreneurship is essential to the economy for numerous reasons, from promoting
social change to driving innovation. Being no exception, our startup “THE ROCK
GYM” which aims to provide an element of uniqueness through combination of
Fitness- and Powerlifting Center is expected to contribute to the development of the
economy in several aspects.
First, in view of employment, we create jobs for Vietnamese people, thereby helping to
reduce the unemployment rate which is currently quite high because of the Covid-19
epidemic, especially people whose specialty is in fitness industry, such as coaches or
personal trainers/instructors, since several fitness and strength training centers have
been closed or have had to have major staff cuts after the recent wave of Covid-19 in
the summer of 2021. Although we only expect to hire 11 employees initially and this
number seems too small and inconsiderable, but small businesses like ours account for
a large or even overwhelming proportion of the total number of enterprises (in
Vietnam, considering only registered enterprises, this rate is over 95%). Thus, the

contribution of these businesses to total output and job creation is significant.
Second, our startup is expected to contribute to labor income as well. The business’
expected base pays of around 6,500,000 VND/staff/month (excluding other benefits,
bonuses, etc.), is relatively higher than the average income of Vietnam in 2020 which
was about 4.2 million VND/person/month. The average income in 2021 decreased by
about 1% compared to that in 2019 (General Statistics Office, 2021). Among the
working forces, service employees saw the most significant reduction in average
income due to the long-lasting pandemic. Therefore, with a considerably higher pay
than the average income in the country, our business can help improve the living
conditions of Vietnamese workforce generally and fitness workforce specifically.
The unemployment rate increased during and after the recent Covid-19 wave in Ho
Chi Minh City. This was not only because of businesses being shut down, but also
because of the bad working condition for workers. Several businesses required
employees to work and live inside the companies or factories. In some companies,
employees were forced to work more hours. In THE ROCK GYM, employees are the
main focus and the core strength of the business, and in any circumstance, employees
will work for the hours according to the signed contracts, unless they are willing to
work more hours for more benefits. Therefore, the third contribution of THE ROCK
GYM will be working condition of employees. Working condition will be better than
most gyms, since we will acquire quality equipment, and the spacious room will give
not only customers but also our employees comfortability.
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Fourth, the business will contribute to the tax system of Vietnam. When opening the
gym business, there are some taxes that we must contribute such as excise tax, income
tax, corporate tax, value-added tax, etc. Taxes are contributed to help fund public
works and services—and to build and maintain the infrastructure used in a country.
Taxes are used for the betterment of the economy and all who are living in it.
Understanding the importance of taxes to the economy, THE ROCK GYM will pay

taxes in full and on time according to the law.
Fifth, THE ROCK GYM is anticipated to help satisfy the demand of customers for
both fitness centers and powerlifting gyms. For fitness centers, although the market is
already saturated, some gaps still exist. Several commercial fitness centers leave their
customers unsatisfied, especially in the marketing and sales aspect. In many centers,
not only sales staff but also personal trainers also try to sell training packages. For
each different customer, staffs can sell at a different price because they have to achieve
the target KPI, so they often sell at a lower price. This sales method is unprofessional
and many customers are dissatisfied ( Ruby Fitness, 2021). THE ROCK GYM provides
the professional services, and the similar problems are not tolerated. We give freedom
to customers to choose from various packages with fair prices. For powerlifting gyms,
in the context that there is only one powerlifting gym in Ho Chi Minh City, one more
gym will raise competition, thus reducing the price, creating more options, and
improving service quality for customers.
Sixth, THE ROCK GYM’s important contribution is to improving the health of the
community. Better community health can provide a range of economic
benefits. Importantly, it can provide Vietnamese with the opportunities and freedom to
lead more active, healthy and productive lives. Improvements in community health
radiate out to the rest of the economy by reducing health care costs, enhancing
workforce productivity and increasing the amount of labor available (for example,
through lifting the number of people participating in the workforce). The impact of
gym and fitness industry has been researched in some countries such as Australia
(Access Economics, 2009). However, statistics have not been studied or analyzed in
Vietnam, so this is basically an idea and this idea needs further research to confirm.
Seventh, THE ROCK GYM will help the sport powerlifting be more popular in
Vietnam, especially in the Southern of Vietnam. Usually, when people lift weight, their
main focus is the look of their bodies, therefore fitness and bodybuilding are widely
known. Powerlifting, on the other hand, focuses on ultimate strength. Techniques are
performed differently and more strictly than fitness and bodybuilding (but not as
complicated as Olympic weightlifting). While Northern of Vietnam already knows

powerlifting (amateur national powerlifting competitions are hosted annually in
Hanoi), it is not as popular in Southern of Vietnam. When popularity of the sport in
this region increases, amateur competitions can be held more often, more new

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businesses or organizations will be formed, thus help the sport industry as a whole
grow. Powerlifting has been considered for SEA GAMES, but due to its not high
popularity (compared to another strength sport Olympic weightlifting) and drug issues,
it will not be competed officially in Vietnam in the near future. However, global
official federation for the sport exists, namely IPF (International Powerlifting
Federation), and drug-tested world competition is held each year. If an official
powerlifting federation is created in Vietnam, THE ROCK GYM’s contribution to the
sport industry will be even more significant.

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b) What are the most critical points contributing to your startup success? And
why are they critical?
Time: It is reasonable to open a gym service at this time, when several small
competitors have been wiped out after the quarantine due to the Covid 19 pandemic.
At the same time, after the pandemic, customers' health concerns have also been
increased. When customers have a greater interest in health values of products,
customers will have a better attitude towards health care products/services, so that
customers will increase purchase intention and then will have actual purchase
behaviors (Tudoran et al., 2009). In addition, a survey in UK figured out that boom can
be expected in post pandemic fitness. Two-thirds (64%) of people surveyed say that
exercising is a priority for improving their physical and mental health in the wake of

coronavirus – up 6 per cent compared to before the pandemic (Hickey-Mason, 2021).
Market: In gym industry, especially in Powerlifting field, there is only one competitor
that dedicates a powerlifting gym, and no competitor combines a powerlifting gym and
a fitness gym as one brand, so that the niche market of powerlifting gym in Vietnam is
at emergence phase. In this niche industry, there is only one market leader in HCMC,
Oldschool Barbell System, which has its prices relatively higher than the fitness
industry, and is probably unable to meet increased competition on the market with
price reductions because of its high cost. If we choose to focus on powerlifting aspect
and decide that the main revenue stream is from powerlifting gym, because this niche
industry is still new, bargaining power is lower than the fitness industry as a whole,
and we can get a higher profitability.
Core strengths: We have the competitive advantage of having no renting cost (which
is one of the major expenses in fitness industry business), so that we have more capital
to run the business. The less expense can give us the ability to have more profit or we
can cut down the cost to gain more customers.

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c) As the startup founding team, what do you have to prepare in view of personal
psychology and professional knowledge for startup success (pls refer to your
product/service)?
Personal psychology:
As a startup founding team, we are psychology-prepared to have the support of family
and friends. The co-founders are friends who have worked together on many projects
for a long time since we understand each other well, we have the same problem
solving and clear division of work. In addition, our capital is mainly from ourselves,
from family and friends with low risk and we have prepared for spending in 1 year, so
we will face less financial pressure leading to internal conflicts as well as family
pressure.

However, we are both risk adverse, we consider the risks of starting a new business are
much higher than the benefits of it. Therefore, we always think that starting a business
is not a right choice, leading to us being afraid of failure and having the mentality of
giving up if we encounter difficulties in the process of building a business. This is a
huge challenge and this could put huge pressure on us.
Professional knowledge:
The cofounders are both Business Administration graduates, therefore we can apply
the knowledge from books in reality. Finance, human resources and marketing are our
main strengths in terms of university knowledge. However, real experiences and
working knowledge in the field matter in a great extent. We started out in the gym
industry from the inherent passion. We have been in contact with the gym industry for
a long time so that we are confident that we have the necessary professional
knowledge about the gym industry. We are both amateur lifters who have competed in
some local competitions, so we have the knowledge about choosing gym equipment.
We have also spoken to several managers and supervisors in the gyms we have gone to
about machine management and maintenance. We know a few things about customer
services since we have worked in customer service industry in as interns. Although the
field we worked was not the fitness field (we worked in hospitality – worked as
supervisor and receptionist in a medium-sized hotel), there are similarities between the
two fields, as hospitality includes recreation sector (meaning hotels having fitness
rooms in it). We did not supervise the recreation sector during the internship, but we
observed the way customer services were given to the hotel customers. We believe
through this observation we know basic things about customer services of gym
industry.
In addition, familiarity with the gym industry as customers can help us establish
relationships with industry experts from whom the experts have provided and trained
us in the knowledge and experience of the gym industry, they give us knowledge of

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gym and environment design, providing knowledge on selection and training of staff
and personal trainers. In terms of management, both co-founders have degrees in
business administration, one has strengths in financial management to help manage
costs and financial resources effectively and one has strengths in human resources and
marketing combined with a passion for the gym to identify potential customers from
which to build advertising and communication plans for the gym as well as to train the
staff professionally. These can help our startup have a smooth and complementary
management.

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d) After learning the entrepreneurial process and performing the business plan
do you have the intention to startup? If yes, why do you have that intention? If
no, why do you not have that intention?
Although after learning the entrepreneurial process and performing the business plan,
we do not have real intention to startup. The business plan we write is still lacking
some ideas and information, such as the detailed financial projection, or the detailed
overall schedule to execute the plan. We do not have enough experience or relationship
with those who are in the gym business to get some help or learn from. Nevertheless,
the main reason we do not want to try is not because of our business plan, it is because
we consider the risks of establishing a new business are much higher than the benefits
of it, as we are both risk adverse. We believe startup is not for everyone, and not for us
as well; we like to invest rather than running a new whole business. Below are some of
the reasons why we think starting up is risky and not worth a try.
First, when forming a new business, job security is uncertain. In fact, starting a
business is very risky and the failure rate is very high. In 2020, the Nextrans fund
made a very in-depth market study showing that the start-ups that are considered as
successful in the Vietnamese market are only about 3%. Vietnam has less than 5% of

start-ups that celebrate their 2nd birthday, which is a very low rate. These numbers
show that the market for start-up is extremely fierce (Anh, 2021). For these reasons,
startup often does not guarantee job stability or security. If the startup fails in a short
period of time, we have to look for another job, and it is unlikely that we will get hired
by reputable employers since we have only failure experience of startups. That is also
an opportunity cost when we do a startup, because we will not have experience of
working in other businesses appropriate with our technical fields, thus missing the
chance to accumulate working experience as employees. Moreover, we, as founders,
are not guaranteed to have permanent roles on the executive team. 80% of
entrepreneurs, as the research from Harvard Business School professor Wasserman
shows, are forced to step down from the CEO position (Wasserman, 2008). This is
usually because investors insist that founders relinquish control and hold firms’
progress down. Thus, our jobs can be unstable and there is no guarantee that we will
have full control during the operation.
Second, startup requires heavy workload. We obviously are willing to work really hard
at any job, but startups require too much pressure. Usually, entrepreneurs have to have
to work for an excessive number of hours each day because the startup is in a race to
beat the clock, trying to create a product or service and establish a market before the
money runs out. For us, it is just not our preference, as we both want work-life
balance.
Third, constant changes can happen when starting a new venture. In an early-stage
start-up, there are various options and decisions to be made. Unforeseen situations
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occur, market trends change and aggressive competitors can suddenly enter the market.
Therefore, when the business is still in the process of forming a solid foundation,
entrepreneurs may need to change quickly at one point or another. As for us, we are the
people who prefers stability.
In conclusion, we do not think we want to open this business, even though we still

think it is feasible and has a chance to succeed. From our points of view, the risks
outweigh the potential benefits of it. Instead, we would like to keep doing our current
jobs (working as employees) and invest in other businesses that already have a solid
base and have the ability to give back an acceptable amount of return, rather than the
high risk-high return approach of other risky investments or startups. We are risk
adverse and want to be stable, so startup may not be our choice. Nonetheless, our
business plan can be used if other entrepreneurs have the similar critical strengths like
we have discussed in part b).

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REFERENCES
[1] Access Economics. (2009). Let's get physical: The economic contribution of

fitness centres in Australia [PDF]. Retrieved 22 December 2021, from />[2] Anh, P. (2021). Vì sao chỉ dưới 5% start-up Việt "được" tổ chức sinh nhật lần 2?.

VnEconomy. Retrieved 22 December 2021, from />[3] General Statistics Office (2021). Thu nhập bình quân của Việt Nam khoảng 4,2

triệu đồng/người/tháng. Báo Tài nguyên & Môi trường. Retrieved 22 December
2021, from />[4] Hickey-Mason, E. (2021). Boom expected in post pandemic fitness according to

our new
survey. BHF. Retrieved 28
December
/>
2021,

from

[5] Phân tích thị trường Fitness Việt Nam thời điểm hiện tại. Ruby Fitness. (2021).

Retrieved 22 December 2021, from />[6] Tudoran, A., Olsen, S., & Dopico, D. (2009). The effect of health benefit
information on consumers health value, attitudes and intentions. Appetite, 52(3),
568-579.
[7] Wasserman, N. (2008). The founder’s dilemma. Harvard Business Review.

Retrieved 22 December 2021, from />
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