NEW BUSINESS PROPOSAL

M.A.D

My Auspicious Day

EVENT MANAGEMENT COMPANY

SUBJECT:- Managerial Skills and

Entrepreneurial Management

By:- Davidson Peetala

Student ID:- L0215KMKM0611

EXECUTIVE SUMMARY :

M.A.D( My Auspicious Day) is a event management company .

The MISSION: To provide a unique experience by giving fast and efficient service, by

maintaining the standards to establish growth in the industry.

The VISSION: To be a market leader with main focus on service and then the profits.

The event management industry in UNITED KINGDOM has been growing fast. People

like Ron Dennis (McLaren) own 50% of shares in a medium scale event management

company which proves the potential of the industry. Even though there are well

established event companies, the researcher after working with some of them like Purple

grape, Absolute taste felt there are still areas which are not being focused . As per the

online survey by the researcher the most commonly known events are those which large

groups attend The researchers event group would like to give an opportunity to the

medium to large socio economic group people to think they can also have an event

organized for their beloved ones. The main focus of the researcher is to organize

surprise events(birthday’s, love proposals, anniversaries, get together , reunion) and also

small scale events which are mostly related to small groups. There are better standards

which can be brought into the large scale events, the researcher wants to use the small

scale and surprise events as entry strategies, after being established in the market

would like become a competitor and later be a leader.

Business Potential : The below figures show the potential forecast of events in U.K.

Sector

estimated value in 2010(£ billions)

estimated value in 2015(£ billions)

estimated value in 2020(£ billions)

conferences and meeting 18.8 21.8 25.2

exhibitions and trade shows 9.3 10.8 12.4

incentive travel 1.2 1.4 1.6

corporate hospitality 1 1.2 1.3

outdoor events 1 1.2 1.3

festival and cultural events 1.1 1.3 1.4

music events 1.4 1.7 2

sports events 2.3 2.8 3.2

TOTAL for dicretionary events 36.1 42.2 48.4

Source: Britain for events (2011,pp.3)

Strategies for Competitive Advantage: The most of the event companies hire their

employees on contract basis, because of which the employees don’t take up

responsibility, the researcher by giving the employees an opportunity to invest in the

company will get them fully focused and committed towards the development of the

company. The researcher would like to maintain a proper database of all the clients. This

will give the researcher an opportunity to remind the clients if they would like to have an

event organized on their auspicious day. The researcher would also get the different

cloth, fashion brands to sponsor M.A.D by setting a deal of wearing the brands for the

events. Using Up Selling, Cross Selling, and Switch Selling techniques to make sure no

client goes without making a deal. The researcher will also take feedbacks seriously and

use the technology to the best possible extent.

Revenue and Profit forecast: The event companies have some of their own assets and

the rest are taken on a day hire basis. There are good numbers of suppliers to provide

necessary equipment for any functions of the event. Keeping these factors in mind the

researcher will need less capital to start the business and make the break even easily

achievable. From the approximate financial repots stated in this proposal the capital

required for the researcher to start the company will be approximately £ 67,000 pounds.

Looking at the potential of the industry, the researcher would like to get maximum money

invested through his own resources.

As per the approximate sales forecast the researcher estimates to breakeven and run

into profits by the end of first year.

The Team: There will be only three levels in the organization:

C.E.O.

MANAGEMENT TEAM.

CONTRACT AND HIRE BASED EMPLOYEES.

M.A.D will offer good work experience to freshers and students by providing them part

time and full time employment on contract or daily hire basis.

For the Investors: By investing 90% in the start up of the company the researcher shows

the confidence in the growth and expansion of the company. Since the risk factors are

very few and the expansion of the industry is unlimited, people will be invited to invest in

the expansion and growth of the company.

Legal structure: Even though the researcher and his family are investing in the company,

an official bond will made which will clearly state the role, rights and ownership duties of

each and every investor .The Legal structure and agreements of the company will be

very clear about what each person’s role in the company is and what their demands can

be with also keeping in mind the safety regulations.

Timing: As the Olympics are approaching most of the event companies are focusing

upon the major deals involved through the Olympics. By doing so many may neglect the

small events during this time. So the researcher would like to take this particular period

to enter into the market and create a brand name for the company.

BUSINESS DESCRIPTION:-

History: Modern western society tends to create events which celebrate individual

milestones, anniversaries and achievements” When looked into the modern society,

each and every reason to celebrate can be turned into an event. The event management

industry is a multi billion industry with so many chances to succeed. When looked into

the modern economy, finding a business which can do well without being much effected

by the economy, a event organizing company is one. The financial reports of the

companies like dalewarenorth and compass group which are some of the major event

companies show the evidence that the event management companies are doing well.

The fact that the boss of McLaren Mr. Ronald Dennis holds fifty percent shares of a

medium sized event company ABOSOLUTE TASTE does prove the potential of the

event management industry. As per the Britainforevents.com (2011) the estimated

business for the events in Britain are worth £ 36 billion and in a recent report submitted

by All Party Parliamentary Group for Events (APPG) suggest how the events can boost

the economy of Britain.

Suppliers: In general, the significant growth of the event industry had resulted in wide

range of specialist suppliers. They may work in direct event related function areas like

lighting, sound production staging, entertainment and catering or associated areas like

transport, legal and security services. This view has been supported by the work of

Bowdin ,et al. (2011). Since the industry is a well known and has enough and easy

resource requirements it will be easy to find good suppliers with less bargain power.

Ownership and Agreement: With the potential and opportunity event industry offers and

with 3 years of experience in the hospitality industry and event management companies

like Purple Grape and Absolute Taste, the researcher has got an internal view of the

industry perhaps would like to invest 40% of the total company’s share and 40% will be

supported by the family members of the researcher . The rest of the 20% will be left open

for the employees to invest.

Legal considerations: The legal aspects do include the health and safety regulations,

rights and limitations of the employees and the company registration through companies

house. The other factors to be considered will the legal agreement specifying the roles of

each family member in the company.

BUSINESS OPPORTUNITY:-

As per raj .et al(2009) ‘Event management is the capability and control of the process of

purpose, people and place’. Some of the commonly know events are :

1. Charity events.

2. Festival events.

3. Music concerts.

4. Cultural events.

5. Religious events.

6. Personal and private events.

As per the online survey from surveymonkey.com (2011), the researcher found that

music concerts and festival events are most visited and 92% would like to surprise their

beloved ones, but none did mention they ever attended any surprise events.

Potential customers: The researcher would like to mainly target the middle socio

economic groups and above. Event management companies like Purple Grape,

Absolute taste and compass group which are established in the market, they target the

audience by highlighting the commonly known events. The researcher’s company would

like to target the customers by highlighting the concept of surprising a person on their

auspicious day. The researchers company will give the opportunity to each and everyone

who loves to organize an event but backs off assuming it would cost really high.

Geographical area: The per recent reports submitted by the parliamentary group for

events the estimated value of the event industry in 2010 is 36.1 billion pounds and is

expected to reach 42.2 billion by 2015 which shows the promise which event industry

carries. The concept of events will not require a good looking office in the most costly

areas of United Kingdom so the researcher will have his office set up in the outskirts of

London which can cover both London and county’s around London.

Competitors: ‘Competitors are people who are intent on driving you out of business’

Finch (2010, pp.35)

Competitors can be categorized into two types

1. Existing competitors: To provide an event to organize surprise party’s will not be a

big issue for the companies who had been in the market for some time. The

companies like JLC, Delawarenorth and absolute taste have their brand well

established in the market

But also at the same time this could also be an advantage for the

researcher, since the companies are well established they may not really have to

worry about the researcher since he is targeting specific events, which will be an

advantage for the researcher to establish his brand in the market.

2. New entrants: There are small companies in the recent past who are offering this

service.

The researcher had been working in the industry from the last 3

years which will give an extra advantage to withstand the competition.

MARKETING STRATEGIES:

The researcher keeping in mind the different product life cycles will plan accordingly to

provide a good marketing strategy .

Using Porter’s model of industry evolution and product life cycle , the marketing

strategies can be planned for the company. Porter’s model distinguishes three broad

stages in the evolution of the market, such as :

1. Emerging industry

The two main issues are the uncertainty of the buyers who will be uncertain about

the success of the product and Second will be the uncertainty among the sellers

about the demand levels, customer needs and technological developments.

2. Transition to maturity

This phase talks about the falling industry profits, slowdown in growth less product

innovation.

3. Decline

The decline will be the stage which will be result of competition from substitutes

and also changing customer needs.

This had been supported by the work of Lancaster and Massingham (2011, pp.457,458).

The other theory which is close to this is the Product life cycle theory ‘All products and

services entering the market have beginning, middle and near but not necessarily final

end’ Gabay(2011, pp.10).

Keeping these methods and theories in consideration a proper planned strategy will

prove to be very important for each and every stage of a service or product.

Pricing and costing : The pricing strategies are used to improve the long run and short

run profits ,expand the market share, discourage new entrants and also to improve the

sales of the weaker products and services. This view had been supported by Lancaster

and Massingham (2011, pp.162). Since it is a new company the researcher would like

to concentrate on getting his brand name establishes in the market and also consider the

startup expenses . So the profit margin will be less initially. Depending on the demand

the researchers company would like to be flexible on charges and price rates. Using

the penetration pricing strategy the pricing and costing will be calculated for the

company.

Sales projection: Considering the facts of from the annual report submitted by the Britain

for events on estimated revenue from the events in UK, it is evident that each sector of

events are doing well and are generating huge revenues. Keeping this in mind and

anticipating the sales for the first three years of the researchers company an report has

been made on approximate assumptions.

The estimated sales forecast for the next three years of the company.

SALES FORCAST FOR THE M.A.D COMPANY

Sales Forecaste (3 years) M.A.D. event management

year 1 year 2

year 3

Estimated events per year

180 280 360

Estimated revenue per event

£ 800 £ 1000 £1300

Estimated people served per event

20 20 20

total revenue

£ 144,000 £ 280,000 £ 468000

Further using Break event point analysis will help us to understand the understand where

the total revenue matches the total cost which will be neither loss nor profit. This view

has been supported by Lancaster and Massingham (2011, pp.171). The break even

point can be calculated from the following information

Selling price per event — variable cost per unit = contribution per unit.

Total fixed costs

Break even quantity = unit contribution

Marketing plan: The overall marketing plan of the researcher is to enter the event

management industry by utilizing the feasible penetration areas. The event industry had

been showing growth in the recent past, and to enter the industry to establish the

researcher opted to chose the brand creation technique by targeting groups which are

middle socio-economical. Keeping in mind the internal marketing the researcher has

involved its top employees to invest in the company which will give them an extra reason

to work towards the success of company. The researcher will also consider the evolving

market concept. The concepts of marketing based on developing and maintaining long

term relations with the customers will be referred to as relationship marketing. This

concept has been supported by Lancaster and Massingham (2011, pp.29). The

researcher believes in the concept of word of mouth marketing. By providing a good

service and creating a good impression the company can grow faster and easily create a

brand name for itself. Understanding the buyers behavior through the Focus group

research will help what is being expected by the customers and also for the strategic

marketing.

BUSINESS OPERATIONS: The researcher would like to provide people a better service

with cost effectiveness and competitive service to survive in the market. Using the supply

chain management effectively the objective of the researcher can be achieved. Turning

the idea of a customer into a reality does need a good skills. Starting the initial planning

of what has to be done till actually executing the plan will need good efforts and thinks.

The main objectives to be covered on planning a event are :

1. Organizing a suitable venue according to the guest likes.

2. Getting the necessary equipment to organize the event.

3. Getting the employees booked to work for the event.

4. Having a step by step approach towards the entire event.

5. Understanding the customers attending the event .

In this process using the supply chain management techniques of a very well planned

approach from the start till the end will help the researcher provide a good service to

the customers.

Operating cycle : The important aspects which the researcher uses in operating plan are

setting the targets to achieve, budgets to be met and also fulfill the mission and vision of

the company .The operating cycle can also be considered as working capital

management. Working capital management for a event management company will be

very important since there will be good amount suppliers and the cash flow will be very

constant having a good working capital procedure will help the M.A.D to understand its

current position which will give the researcher an opportunity to plan the monthly budgets

and also improve his financial status.

Services offered: The services offered by the researcher initially will be the events which

a person can organize on providing a surprise to a person on their auspicious day and

using this penetration strategy to enter into the event management field . Once the

M.A.D creates a name for itself in the market the researcher would like to move further

and expand the company by providing all other events with the concept of providing fast

service at the same time maintaining good standards and also by being very flexible.

Personnel: There will be only three level in the organization.

ORGANISATIONAL CHART

The researcher wants to make sure that each and every employee of the company is

felt important and takes the ownership of the company. By just putting in three levels in

the company it becomes easy for the researcher to know the potential of the employees

and also get them motivated. To specify the third level will the employees who will be

looking for part time employment, since the event management business is un

predictable the researcher chose to have mostly part time employees. The students in

U.K. these are eager to do part time jobs and grab some good experience. By providing

them an opportunity to come up with ideas which will improve the researcher will try to

make them feel they are important to the company. The researcher will also provide

training sessions for these employees which will help them develop themselves also at

the same time understand the standards of the company.

TECHNOLOGY: Usage of the technology is vital in any industry. Choosing the right

equipment which can be used is an important aspect in event management industry. The

most commonly used systems to enter and create the planning and execution of events

in these days are the most advanced computers, but the researcher would like to use

MICROS operating system apart from the computers. Using MICROS will provide you

an easy and simple access to you sales and inventory. It is a quick day end report which

can give all the detailed explanations of each and every object sold , used and the

revenue produced. The latest technology which is been very widely used these days is

“could”. Usage of “cloud” in event industry can benefit a lot by providing :

1. Cost: the capital expenditure can be converted into operational expenditure as a

result reducing the cost.

2. Local independence: The systems can be accessed using web browser

irrespective of the device they use.

3. Peak load capacity: The peaks in demand can be easily managed using cloud.

4. Reliability : The reliability will be improved .

5. Maintenance: The cloud computing cannot be installed in user’s computer which

will allow the provider to support and upgrade the software. This view has been

supported by Parry(eventindustrynews,2008).

FINANCES: The entrepreneur starting from scratch should always try to put money from

his own resources. Since it can bring in the confidence in the investors and also gives

the researcher an opportunity to prove that his idea was good. The entrepreneur can

also move from the phase of idea to reality which will help him further to develop and

enhance his business plan. Making a good financial statements perhaps will be

important. This view has been supported by Siciliana (2003, pp.194,195)

Startup expenses

equipment needed to run the events £ 10,000

consulting services

£ 10,000

promotion and advertising

£ 8,000

personal expenses

£ 10,000

Legal and agreements

£ 3,000

technological support system

£ 6,000

Capital expenditure

£ 20,000

Total

£ 67,000

PROFIT AND LOSS ACCOUNT

YEAR 1 YEAR 2 YEAR3

revenue ( sales)

events

£ 144,000 £ 280,000 £ 468,000

brand sponsors

— £ 25,000 £ 30,000

Total revenue(sales)

£ 144,000 £ 305,000 £ 498,000

Operating Expenses

equipment to run the event

£ 10,000 £ 35,000 —

Personal

£ 10,000 £ 30,000 £ 50,000

Technological support system

£ 6,000 £ 12,000 £ 10,000

Legal and agreements

£ 3,000 — —

capital expenditure

£ 20,000 £ 20,000 £ 20,000

consulting services

£ 10,000 £ 20,000 £ 30,000

promoting and advertising

£ 8,000 £ 15,000 £ 20,000

Total Operating Expenses

£ 67,000 £ 132,000 £ 130,000

Profit Before Tax

£ 77,000 £ 173,000 £ 368,000

taxes(10%)

£ 7,700 £ 17,300 £ 36,800

Net profit

£ 69,300 £155,700 £ 331,200

Cash flow for M.A.D.

year 1 year2 year3

Cash received

Cash from operrations

£ 144,000

£ 280,000

£ 468,000

Cash from sponsors

— £ 25,000 £ 30,000

subtotal cash from operations

£ 144,000

£ 305,000

£ 498,000

Aditional cash received

investment of employees

£ 6,700 — —

New long term liabilitites

— — —

Sales of other current assets

— — —

New investment

— — —

sales of longterm assests

— — —

New other liabilities

— — —

subtotal cash received

£ 150,700

£ 305,000

£ 498,000

Ependitures

Personnel

£ 10,000 £ 30,000 £ 50,000

Consulting services

£ 10,000 £ 20,000 £ 30,000

Advertising

£ 8,000 £ 15,000 £ 20,000

Technology support system

£ 6,000 £ 12,000 £ 10,000

Legal and agreements

£ 3,000 — —

capital expenditure

£ 20,000 £ 20,000 £ 20,000

equipment to run the event

£ 10,000 £ 35,000 —

subtotal spent on expenditures

£ 67,000

£ 132,000

£ 130,000

Additional cash spent

Taxes

£ 7,700 £ 17,300 £ 36,800

dividends

— — —

Long term liabilities principal repayment

— — —

purchase of extra assets

— — —

subtotal

£ 74,700 £ 149,000

£ 166,800

Net cash flow

£ 69,300 £ 156,000

£ 331,200

Cash balance

REFERENCES:

Bowdin, G. et al., Events Management . [e-book] : Elsevier press,

Available at : Google books,

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anagement%20bowdin&f=false [ accessed on 26th December]

Britain for events, 2011.Opportunities for growth in the UK Events Industry Roles &

responsibilities, A report to the all Parliamentary Group for Events. ( updated October

2011).

Available at :

http://www.britainforevents.co.uk/images/Opportunities%20for%20Growth%20in%20the

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page Ltd.

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[ Accessed on 2nd January 12]

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http://books.google.co.uk/ebooks/reader?id=52FtDt8JanEC&printsec=frontcover&output

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London: routledge Publishers.

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