SPECIAL EVENTS COMPANY BUSINESS PLAN
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“Special Events Company” will be offering event planning services to individuals, groups and corporations in located in West Palm Beach, Florida. In order to launch the operations of this business successfully, the founders estimates that they will require a total of $119,250. The pioneers will invest $19,250 in the project and seek additional funding amounting to $100,000 from Grand Bank & Trust of Florida.
The marketing plan for Special Events Company confirms that the marketing strategy of the proposed business will be successful. The elements of the organization’s marketing strategy include advertisement of our products and services through various types of media, offering sales discounts and giving promotions to our clients.
1.4 Financial Projections
The business projects $500,000 and $144,000 revenue and gross margin during the first year respectively, which are expected to achieve a positive growth during the next three years of operation. These figures are expected to give an annual gross profit of $57,485 and a positive cash flow of $57,485.
TABLE OF CONTENTS
1. MARKETING PLAN
1.1 target market
The target market for Special Events Company can be divided into two: Corporate market and social market. Corporate events include events such as tradeshows, corporate parties, charity fundraisers, athletic competitions, galas and conventions. The market for corporate events is quite large since corporations place high value of planning events that will be remembered and discussed for a long time. Allen (2007), recommended that those starting new event planning companies should start by planning social events in order to gain experience and clientele. Considering the nature of Special Events Company, it can be projected that majority of clients will initially come from individuals rather than corporations. Examples of social events include individual parties, birthdays, reunions and weddings. Statistics collected by Allen (2009), showed that most individuals who seek the services of event planners for social events tend to reside in the middle- to upper-income levels and they have some disposable income but have limited time to plan for events. The statistics collected by United State department of Commerce (2010) showed that this group of individuals in West Palm Beach has income of at least $50,000.
While Special Events Company will focus on these two categories of target markets, the audience for this company may prove to vary slightly from these norms. For example, the target customers will be those who desire the advantages of an event planner but perhaps they lack disposable income that will enable them to hire one. In short, the company expects to serve more social than corporate customers in the initial phase of the business. However, is the company grows, it is expected that more corporations will turn to its services to plan their business events.
In order for Special Events Company to gain and maintain competitive edge in the target market, the company will initially take a “low cost provider” marketing strategy. In other words, the pricing objective for Special Events Company will be to maximize the quantity of units of sales and reduce costs as much as possible in order to enjoy long-term profits. The company will offer various types of discounts including seasonal discount, cash discount, trade discounts and promotional discounts. The rates of the discounts to be offered will be determined by the member team after the company launches its operations. However, discounts will not count for instances in which reverse auction bid might occur. As the client base for Special Events Company grows, the network of vendors for this company is expected to compete for customer businesses. The system of operations for this company will allow reverse auctions to occur between vendors and clients at these times. This will help to drive down the price and give the company a competitive edge over other event planners. In order to ensure that the company will benefit from these transactions, the vendors will be required to pay 10% of total costs to the company.
In order to ensure client satisfaction and build and retain relationships, Special Events Company will be offering certain types of guarantees. In a client is inconvenienced by any vendor chosen, it will be a standard policy that they will be reimbursed up to 40% of the costs of that particular vendor. This percentage may be adjusting upwards or downwards depending on specific circumstances. Other actions might be taken depending on severity of the issue that led to customer dissatisfaction. For instance, the vendor may be required to make complete refunds, their rating could be lowered on the company’s list or they may even be removed from list of vendors completely. This strategy will help the company to protect dissatisfied clients, though it will be important to create good relationship with vendors in order to give them incentive to perform well.
Special Events Company will not only market itself to target customers only, but to suppliers and vendors as well. While promotion, advertising and public relations will help the company to gain majority of customers, especially individual holding social events, different strategies will be needed to promote the company to the suppliers and vendors. It will be quite important to build long-term relationships with these partners in order to retain their services on the company’s list as competition increases. The member team for this company plans to use personal selling and relationship building techniques so as to obtain and retain the businesses of these large accounts. To achieve this, the company will adopt “Value-in-Use Assessment”, one of the most effective marketing tools. This market tool involves conducting research, analysis, surveys, field assessments and interviews in order to gain understanding of the needs, wants and positioning (Roncevich & Primm, 2009). This makes it possible to determine the specific business elements and factors that the clients believe to be of high value. As Kimball (2011) explained, these assessments are costly and time consuming but their benefits outweigh cost if the account succeeds. More importantly, this marketing tool is long-lasting and highly profitable in the long-term.
In the market for event planning services, it is expected that most clients will consider price to be the most important factor. Some might place high importance on collaborative relationships with open exchange of industry knowledge. After the value assessment is completed a “value word equation” will be created for each element that the clients place high value on. This will present numerous benefits for Special Events Company. For examp0le, by identifying the best alternatives among different services offered by different vendors, this company will be able to create equations to show clients exactly what their savings would be by choosing this company or a specific supplier or vendor on the company’s list. The company will also be able to create an equation that will enable a potential supplier or vendor to realize about the savings that they will make through partnership by eliminating some of the costs, effort and time used to attempt to tap into new markets, advertise or find new clients.
After winning a contract with any client, the staff of Special Events Company will always focus on maintaining close and continuous relationship and open lines of communication. The aforementioned assessment will be conducted at least once per year and value equations and other information will be updated as substitutes and competition continue to emerge.
Special Events Company will adopt various advertising strategies as discussed below:
During the first year of operations, Special Events Company will hold a grand opening where it will organize and sponsor athletic events such as mountain bike race, 5 kilometres and 10 kilometres run and off-road triathlon. Various kinds of prizes will be provided and all team members will be interacting with people to promote the company’s products and service. In addition, promotions will be held throughout the year showcasing the different kinds of events and suppliers featuring on the company’s list. These promotions will be meant for attracting new clientele as well as giving the existing customers time and incentive to evaluate the different service and vendor options in order to make more informed decisions in the future.
After successfully launching its operations, Special Events Company expects to network and promote its services through the use of social media platforms such as Facebook and Twitter. The company will also develop a website and create a blog that will be updated weekly to publish useful tips on planning and offer general advice on this issue. These updates will be posted regularly on the company’s Facebook and Twitter accounts. The users will be able to make comments through forums. They will also be able to post pictures of various events, give advice and tips and rate vendors. The main advantage of this strategy is that it is has minimal total cost.
Other advertisement tools
Special Events Company will also be promoted in various types of media including televisions, newspapers, radios, magazines and calendars. This company will be registering and keeping a list of potential clients. Research has determined that individuals who purchase event planning services in West Palm Beach read magazines and use calendars in their home. Thus, this company will mainly use magazines and calendars to communicate with our clients.
Distribution for all marketing and promotional materials will focus the whole of Australia. Personal attention and consultation details will begin with initial in-office consultations. Personal meetings will also be conducted in other places chosen by clients. With time, personal attention details will also be distributed through the company’s website. The pioneers predict that the company’s high-end, large, strategic customers are most likely going to take advantage of the physical services that this company will be offering
The following is the summary of Special Events Company’s strengths, weaknesses, opportunities, and threats. From our analysis our strengths and opportunities outweigh our weaknesses.
StrengthsEducated and Knowledgeable founder of the business
Majority of the team members have prior experience in event planning business.
The business will be located in one of the wealthiest and the most populous cities in Florida and thus, will be able to cater event planning services to a huge number of corporate and private clients
Excellent working team who are devoted to their responsibilities
Ability to make quick decisions for the customers
The company is planning to utilize new technology and internet to market its services in ways that other event planners in West Palm Beach have not done. This will enable the company to reach a greater market.
WeaknessesSpecial Events Company will be a new business venture and thus, it lacks client base. This will be solved by working hard to build and maintain customer relationships.
There is an unfulfilled customer need for event planning services in West Palm Beach.
availability of effective marketing media, especially the internet
projected improvement in national economic conditions that will event support planning industry
The population of the target market has been increasing rapidly.
Lenient government rules and regulations on event planning industry.
Special Events Company’s expects to face high completion from the existing, well established event planners. This will be solved through research and development as well as applying innovative and effective marketing strategies for our services.
Special Events Company expects other planners to offer similar services after it gains notoriety.
There is likelihood that Special Events Company is going compete with major event planning businesses for vendors and suppliers.
This section provides details about Special Events Company’s financial plan. Preliminary estimates indicate that Special Events Company will achieve positive growth from the first year of operation, irrespective of the fact that it is a start-up business. This prediction is based on anticipated high levels of revenues which will be generated though provision of quality and reliable event planning services. The forecast is also based on the market analysis which has established that there is a high demand for event planning services. Innovative and effective marketing strategies which will be adopted will play a vital role in facilitating the demand and increase average sales. The business also anticipates a positive growth in gross margin over time. Special Events Company has sufficient cash to enable it to endure situations of negative cash flow that it may encounter during start-up and even in the future. Therefore, this section presents realistic depiction of Special Events Company financial position, though a bit conservative.
The market growth projections for the event planning industry Florida, United States, are accurate
The national economic conditions in US, which are currently favourable to the event planning industry, will not decline significantly in the next three years.
Detailed financial information is depicted below.
5.2 Break-even Analysis
Beak-even analysis is based on constant monthly revenues of $41,667 and variable costs of $29,667 during the first year of operation. Monthly fixed costs amount to $6,850. The break-even calculations assume a 28.8% gross margin. The calculations are as follows:
Monthly projected sales: $41,667
Monthly variable costs:$29,667
% Gross margin28.8%
Break even point sales= Monthly fixed costs/%Gross margin
Therefore, assuming constant monthly revenues and variable costs our sales will break even during the first month of operation and after making sales of $23,785.
5.3 Pro Forma profit and loss account
Year 1 Year 2 Year 3
Sales $500,000 $600,000 $700,000
Direct costs of sales (vendor pricing) $356,000 $400,200 $441,450
Others $0 $0 $0
Total cost of sales $356,000 $400,200 $441,450
Gross margin $144,000 $199,800 $258550
Gross margin % 28.8% 33.3% 36.93%
Expenses Cost of hosting clients 8,000 10,000 12,000
Cost of customer support 7,000 9,000 11,000
Payroll $42,000 $55,000 $61,000
Sales and marketing expenses $20,700 $32,900 $63,100
Depreciation $0 $0 $0
Utilities $955 $1125 $1580
Insurance $800 $1200 $1200
Rent $2600 $3500 3500
15% Interest expense on long-term loan $150 $75 $0
Total operating expenses $82,205 $112,800 $153,380
Profit before taxes $61,795 $87,000 $105,170
Taxes incurred $3089.75 $4,350 $5,258.5
Net Profit $58,705.25 $82,650 $99,911.5
5.5 Pro forma Cash Flow Statement
The following data represents the projected cash flow for Special Events Company
Year 1 Year 2 Year 3
Cash received Cash received from operations Cash sales $500,000 $600,000 $700,000
Total of cash from operations $500,000 $600,000 $700,000
Other cash receipts Sales Tax received $0 $0 $0
Short-term loan $0 $0 $0
Long-term loan $0 $0 $0
Sales of current assets $0 $0 $0
Sales of non-current assets $0 $0 $0
Receipts from investments $0 $0 $0
Total cash received $500,000 $600,000 $700,000
Cash payments Expenditure from operations Cash spending $22,300 $55,000 $125,000
Bill payments $370,215 $415,218 $499,850
Total cash payments from operations $392,515 $470,218 $624,850
Other cash payments Sales Tax, Vat $0 $0 $0
payment of short-term loan $0 $0 $0
Repayment of long-term loan $50,000 $50,000 $0
Other liabilities $0 $0 $0
Purchase of current assets $0 $0 $0
Purchase of non-current assets $0 $0 $0
Dividends paid $0 $0 $0
Total cash payments $442515 $520,218 $624850
Net cash flow $57,485 $79,782 $75,150
Cash balance $97,485 $177,267 $252,417
5.6 Pro Forma balance sheet
Year 1 Year 2 Year 3
Assets Current Assets Cash $97,485 $177,267 $252,417
Accounts receivable 34,540 36,750 38,260
Other current assets $18,500 $18,500 $18,500
Total current assets $150,525 $232,517 $309,177
Fixed assets Fixed assets $36,200 $36,200 $36,200
Accumulated depreciation $0 $0 $0
Total fixed assets $36,200 $36,200 $36,200
Total assets $186,725 $268,717 $345,377
Liabilities and Capital Current liabilities Accounts payable $53,319.75 $36.461.75 $69,410.25
Other current liabilities $0 $0 $0
Total current liabilities Long-term liabilities $80,000 $60,000 $40,000
Total liabilities $53,319.75 $36.461.75 $69,410.25
paid-in Capital $19,250 $19,250 $19,250
Retained Earnings ($24,550) $34,155.25 116,805.25
Earnings $58,705.25 $82,650 $99,911.5
Total capital $53,405.25 $136,055.25 $235,966.75
Total liabilities and capital $186,725 $232,517 $345,377
Net worth $53,405.25 $136,055.25 $235,966.75
Special Events Company will initially focus on becoming a major competitor in West Palm Beach city. After realizing this objective, the growth plan for this company is to expand and to provide its services to individuals, groups and organizations in the whole state of Florida. During that time, press releases will be written about this company and distributed to the major press distribution sites such as BusinessWire, PRWeb and PR.com. These sites are advantageous in that is possible to choose specific geographical areas of distribution. From these, press and media in Florida will have access to the company’s information and there will be no worry of wasting costs of distributing information in unintended areas. This will be one of the most effective distribution tools as press in all towns in Florida, even small one, will be able to pick up the information and write opinions and articles on Special Events Company. This will be helpful in reaching geographical areas with low population where people may not be accessing event planning services.
On top of this, extensive focus will be placed on advertising through magazines, newsletters and websites. This type of advertising is quite effective since the reader or visitor is actively looking for the services that are provided by this company. For instance, bridal websites, event planning magazines, and local Florida sites and publications will be the most effective targets in the initial growth phase of this company. The company will also open small offices in various towns in Florida in order to tap potential clients. Special Events Company hopes to gain a respectable portion of market share for event planning services in Florida, marked by increased size and revenue.
As with any other kind of business, one major difficulty that Special Events Company might face is that not every client can be pleased with the services offered in this company. This kind of business has an elevated risk since the company is promoting itself as “one-stop-shop” for everyone’s event planning needs. It is possible that some clients will not be satisfied by the options offered in the list and database of this company. However, some strategic planning can help to minimize this risk. The company plans to network and contract with multiple suppliers in each category of services offered. This will help to provide potential clients with the greatest number of options to choose from.
Secondly, Special Events Company may experience difficulty if clients start complaining about pricing strategies. The company will focus on building relationships with customers who will help in documenting their behaviors, likes, dislikes and other important elements. Understanding what to emphasize for each client can help to reduce the risk associated with pricing dissatisfactions. It is also expected that this company will encounter difficulty in trying to convince potential clients to use web interface to buy access to a virtual database and its event planning tools. The business can overcome this after gaining notoriety and positive image. As technology advances, Special Events Company will need to upgrade its equipments, software and equipment. These changes are associated with some risks. This calls for training and in many instances leads to customer dissatisfaction with having to learn a new system. Finally, this business is exposed to the risk of loosing suppliers and vendors on various grounds. The company can reduce this risk by placing emphasis on creating and maintaining good customer and supplier relationships.
The founders of Special Events Company will exit this endeavor after creating a successful business that could be sold for a substantial profit or as a franchise that could provide its event planning services throughout the state of Florida. The owners intend to run this business until they are ready to retire or after selling it and starting another one. In case the proposed plan will not be successful, the founders will implement necessary measures to exit the venture with minimal damage to the founders and investors. All facilities owned by the company will be sold to cover any outstanding debts. Additional debts will be paid by the founders in form of monthly payments until all debts are cleared. The partnership agreement designed by the member team of this company defines “when the business will be termed as successful” and timelines for achieving milestones.
The success of this business will be monitored monthly during the first year and quarterly in the following years. The founders clearly understand that it usually takes three years for a business organization to turning profit and there is possibility that a business can operate at a loss during that period. The owners will always be mindful of this when evaluating the performance or state of the company and when need be, they will make adjustments to keep this business running with a positive cash flow. This plan has determined that this business is likely going to earn profits during the first year of operation. However, if things turn contrary to this projection and the runs at substantial losses, the founders will begin the process of closing this business and paying back the debt.
This is the timeline schedule of this business plan for Special Events Company up to start-up
9-12 Months Prior to Start-upComplete Business PlanRegister Business Entity Determine time required to obtain state and local business permits.Visiting of consultants
6-9 Months Prior to Start-up Determine office Apply for Business Loan4-6 Months Prior to Start-up
Completing all business filings and license applications are complete Acquiring Retail and Selling Licenses Arranging for telephone service installation in officeOpen checking accountsArranging for business announcement ads in local papers3 Months Prior to Start-up Ordering Cash Register / Merchant Account
2 Months Prior To Start-up1 Month Prior to Opening
Allen, J. (2002), The Business of Event Planning: Behind-the-Scenes Secrets of Successful
Special Events, London: John Wiley & Sons
Allen, J. (2007), The Executive’s Guide to Corporate Events and Business Entertaining: How to
Chooseand Use Corporate Functions to Increase Brand Awareness, Develop New Business, Nurture Customer Loyalty and Drive Growth, London: John Wiley & Sons
Allen, J., (2009), Event Planning: The Ultimate Guide To Successful Meetings, Corporate
Events, Fundraising Galas, Conferences, Conventions, Incentives and Other Special Events, London: John Wiley and Sons
Kimball, K., (2011), Start Your Own Event Planning Business 3/E: Your Step-by-Step Guide to
Success, California: Entrepreneur Press
United State department of Commerce (2010), State & County QuickFacts, Retrieved
September 24, 2012 from http://quickfacts.census.gov/qfd/states/12/1276600.html