Music Buisness Plan - Assignment Example

?Music Business Plan 19th April Introduction In order to be successful in the current competitive business environment, it is essential for new businesses to come up with a business plan that encompasses the goals of the firm, and the mechanisms of attaining the goals. One the basic importance of a business plan is that it provides the background information regarding the company that is vital especially when seeking for more funds from investors and governments. Business plans can have an external or internal focus. Externally focused business plans have wide information that depends on whether they cover profit entities or non-profit organizations. For profit entities major stakeholders include customers and investors while in non-profit entities key stakeholders are donors. On the other hand, business plans that are internally focused embark on attaining intermediate goals so as to reach external objectives1. This business plan seeks to discuss major strategies that On the Beat Company will adopt to be competitive in the music industry. Company description Due to the increased need by individuals to engage in health maintenance programs offered by various SPA centers, my Idea is to establish a music company that will ensure adequate relaxation and enjoyment with the SPA centers. On the Beat Company (OBC) will embark on producing Rhythm and Blues (R&B) music. In this way, the company aims at providing various genre of music that make up the contemporary (R&B) music that includes funks among others. In this way, the company targets both the old and young clients who visit the centers. To expand its capital base, OBC will operate as a limited company. In this way, it will attract more investors who will be focused at contributing a significant capital to receive high dividends. OBC mission statement is to provide high quality entertainment that will ensure it capitalize on the expanding music industry across the world. Product and services As mentioned earlier, OBC embark on producing (R&B) music. Do to the high demand of this type of music especially among the young people, the company is focused at expanding its sources of revenue by engaging in various income generating activities that are related to the music industry as outlined in this section. Ringtones OBC will provide an opportunity to ensure that our customers can subscribe for ringtones in monthly bases. Each ringtone will cost US$1. With the partnership of a local mobile company, OBC will provide a framework that will streamline the sharing of profits generated by the monthly subscriptions from our customers. Based on the high number of our customers who owns mobile phones, OBC will generate a significant amount of funds that will enhance our expansion. Selling of albums In order to ensure that our customers can regularly enjoy our services in the health centers and back in their homes, OBC will also embark on selling its albums in the local and international market. Selling and loading of flash disks In the contemporary world, individuals who possess computers like to listen to a wide range of music while undertaking their duties. In this regard, OBC will embark on selling flash disks to our clients and then loading them with music at a fee. In order to attain a competitive advantage, OBC will utilize mobile phones, Ipods and social sites such as twitter and face book to communicate with our customers. As the number of clients who visit the SPA centers increase day by day, we expect our customer base to expand thus increasing our total sales. Marketing plan The new technology in the music industry has resulted into a stiff competition that has forced many companies to depart from the traditional lines that created divisions among the artists and recording companies among other stakeholders. In the same way, the growth of music companies has been enhanced as a result of extensive marketing and promotional strategies through free services such as you tube, face book and twitter. One of the major challenges that are faced in the music industry is piracy. Based on the increased avenues through which consumers can access free music, through piracy, it is essential for government authorities to enact strict rules that will reduce the level of piracy in the music sector. Major customers in the music industry are young people especially in colleges and universities. As a result, competitors have established products that are valued by young people. Major competitors in the US music industry are Universal Music Group, Warner Music Group, Independent labels and the UK based EMI Group. To attain a competitive edge, OBC will not only target the young people in the higher institutions of learning but also it will provide quality music to female clients who are regular visitors of SPA centers, health centers and social events. In the same way, the company is focused at adopting the 4Ps (product, price, promotion and place) in its marketing strategies. Product OBC is aimed at providing quality music that will meet the demands of its customers. To create demand for our products we will provide customized services. For example, customers will have an opportunity to select the type of music that they want to be stored in their flash disks and memory cards. Price Based on the stiff competition in the music industry, OBC is focused at using penetrative prices to enter the market. This will entail lowering the initial prices for instance ringtone subscription fee, the prices of flash disks and memory cards. Since our aim is first to acquire a considerable market share, penetrative prices will result to attraction of new customers. The prices of ringtones, 1GB flash disks and memory cards will initially stand at US$1, US$10, US$4 respectively. As the company expands its operations, the prices will be adjusted upwards to increase profits in the long term. Place To ensure that high number of customers will access our products and services, we will sell our products through offline as well as online methods. This will ensure that any customers regardless of his or her location will easily access our products and give a feedback regarding our products as compared to those of our competitors. Promotion To create a strong awareness among our potential customers, we will initiate a number of promotional strategies. First, OBC will embark on sponsoring social events such dancing competition and cultural events held in the institutions of higher learning. Secondly, the company will open a face book group where it will invite high number of customers to participate in discussion related to their social lives. In the same way, the OBC will sponsor TV and radio programs especially those that are focused at eliminating use of drugs by young people. To be successful in our marketing strategies, OBC will open 2 yahoo mail accounts that will improve the communication between the company and our customers. Additionally, the company will establish a website that will display various products and their prices. During the first 5 months of our operations, we are focusing at holding 2 live performances every week especially during the weekends. Management description To ensure the success of our operations, the company will be made by a management team that will encompass the managing director, human resources manager and technical manager. Other stakeholders will include lawyers, agents, graphic designers, band members and shareholders. The table below indicates the specified roles of the management team and other stakeholders. Position Responsibilities Managing director To oversee the entire operations of all the departments of the company. To formulate vital policies that affects the company as a whole. Human resources manager To undertake recruitment of all the employees including the technical managers, band members and lawyers. Technical manager To manage the music system and streamline any technical association with mobile phone companies and our suppliers. Lawyers Representing the company during court cases. To ensure that the company is compliant with copyright regulations and property rights. To advice the company management team on legal matters that affect OBC. Agents To help the company in its offline distribution of its products. Band members Undertaking live performances during promotional activities. Graphic designers To create the company websites. Ensuring that the websites are regularly updated and any security threats that may affect our online transaction are addressed. Shareholders To provide additional capital for the purpose of expanding the company To provide vital ideas during annual or urgent meetings. Table 1 Financial plan To undertake its operations, OBC will need to allocate adequate financial resources to initiate strong marketing and management strategies. The table below indicates the revenue and expenses that the company will incur in the first year of operations. Items Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Income Album sales 1000 150 200 260 300 350 400 500 570 600 700 900 Subscription 150 160 180 200 250 270 300 350 380 400 450 500 Downloading 90 100 120 150 200 230 280 300 350 400 500 550 Total 340 410 500 610 750 850 980 1150 1300 1400 1650 1950 Expenses OBC Registration 1000 - - - - - - - - - - - Promotion 200 200 250 300 200 150 150 200 150 150 150 150 Live performance 300 300 300 300 300 150 100 100 100 200 200 200 salaries 600 600 650 700 700 700 700 700 700 700 700 700 Office expenses 300 300 350 200 50 50 50 50 40 30 50 50 Total 2400 1400 1550 1500 1250 1050 1000 1050 990 1080 1100 1100 Profit/Loss (2060) (990) (1050) (890) (500) (200) (20) 100 310 320 550 850 Table 2 From the table below it is clear that due to the high amount of expenses during its establishment, OBC will experience losses in first seven months. In its first year of operations, the company will generate revenue amounting to US$11,890,000, while the total cost will amount to US$15,470,000. This means that for the company to break even, it needs to generate additional income of US$3,580,000 in the next financial year. Conclusion Based on the above discussion, it is clear that an effective business plan should incorporate all the vital aspects that are useful particularly when looking for more funds from financial institutions and governments. In the same way, a business plan indicates the responsibilities of the various stakeholders, the marketing strategies that the company will adopt as well as the ways of attaining the organizational goals. Bibliography Pinson, L. Anatomy of a Business Plan: A Step-by-Step Guide to Building a Business and Securing Your Company’s Future,6th Edition, Dearborn Trade, Chicago, 2004. Appendix Table 1 Position Responsibilities Managing director To oversee the entire operations of all the departments of the company. To formulate vital policies that affects the company as a whole. Human resources manager To undertake recruitment of all the employees including the technical managers, band members and lawyers. Technical manager To manage the music system and streamline any technical association with mobile phone companies and our suppliers. Lawyers Representing the company during court cases. To ensure that the company is compliant with copyright regulations and property rights. To advice the company management team on legal matters that affect OBC. Agents To help the company in its offline distribution of its products. Band members Undertaking live performances during promotional activities. Graphic designers To create the company websites. Ensuring that the websites are regularly updated and any security threats that may affect our online transaction are addressed. Shareholders To provide additional capital for the purpose of expanding the company To provide vital ideas during annual or urgent meetings. Table 2 Items Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Income Album sales 1000 150 200 260 300 350 400 500 570 600 700 900 Subscription 150 160 180 200 250 270 300 350 380 400 450 500 Downloading 90 100 120 150 200 230 280 300 350 400 500 550 Total 340 410 500 610 750 850 980 1150 1300 1400 1650 1950 Expenses OBC Registration 1000 - - - - - - - - - - - Promotion 200 200 250 300 200 150 150 200 150 150 150 150 Live performance 300 300 300 300 300 150 100 100 100 200 200 200 salaries 600 600 650 700 700 700 700 700 700 700 700 700 Office expenses 300 300 350 200 50 50 50 50 40 30 50 50 Total 2400 1400 1550 1500 1250 1050 1000 1050 990 1080 1100 1100 Profit/Loss (2060) (990) (1050) (890) (500) (200) (20) 100 310 320 550 850 Read More