Target Market and Initial Business Requirements of Mal Entertainment - Essay Example

Table of Contents Table of Contents Executive Summary 2 Business idea 2 Objective: 2 Mission: 3 Vision: 3 Marketing Plan 3 Products and Services 3Place 3 Price 4 Promotion 5 Market 5 Research 6 Legal Structure 6 Location 6 Human resource 7 Finance 8 Costs 8 Budget 11 Financial forecast 12 Balance Sheet 12 Income Statement 12 SWOT 12 Executive Summary Mal Entertainment is a proposed business, which will be located in Manchester, Uk It will cater services to all types of customers. The services include planning and management of events and parties. The proposal prepared below highlights its target market and intial business requirements including paid capital. It also provides forecasted summarized financial statements and SWOT analysis of the proposal business. Business idea The proposed business name is Mal Entertainment. The reason for selecting this name is based on the nature of the business, and ‘MAL’ is derived from the first name initials of three owners of the business. Objective: The proposed business aims to provide event and party planning services. The objective of Mal Entertainment is to offer its event planning services to all types of customers. The key success factors that the proposed business will aim to achieve include competitive pricing, customized event and party packages, and high profits. Mission: “To create new standards and innovations in the event planning industry by delivering highest standards of customer orientation and service quality”. Vision: To become a global event planning company that has it network throughout the UK and in major cities across in other countries. Marketing Plan Products and Services The business will provide all services right from planning, arranging, and carrying out events and parties. These will also include food services as per the requirements of clients. Although, the company will not start with kitchen, but it will provide such services by contracting with the third party that specializes in delivery high quality food. The key events that the company will focus on include birthday events, business conferences and meetings, youth parties, and weddings. Place At the inception, the proposed business will offer its services in Manchester, UK. Upon successful achievement of established benchmarks in this market the company will expand its services to other major cities including London, Birmingham, New Castle, Nottingham, and Glagow etc. The markets have common characteristics in terms of their social and cultural setup. Price The business has decided different event packages according to the types of event that it can host for its clients. These types of events are identified as Type 1, Type 2, and Type 3 on the basis of the number of guests i.e. less than 20, between 20 and 50, and more than 50 people attending the event. In addition to these pricing packages, clients will have the choice of altering their selection of services. Description Type I Type II Type III Additional Services Charged on Rental Basis Birthdays £125 per head £105 per head £90 per head Jumping Castle, Face Paint, Magic Show etc. Business Events £125 per head £105 per head £90 per head Projectors, Computers etc. Parties £125 per head £105 per head £90 per head Party Backgrounds, Themes etc. Three different food menus are provided below on the basis of the pricing offered by their vendor. For this, three types of menus are set as Type 1: refreshments, Type 2: hi-tea, and Type 3: full course meals. The pricing includes handling charges and also, the proposed business mark up. Description Type I Type II Type III Additional Services Charged Separately Birthdays £35 per head £55 per head £75 per head Cake, cookies etc. Business Events £45 per head £65 per head £95 per head Alcoholic Beverages etc. Parties £40 per head £60 per head £85 per head Alcoholic Beverages etc. Promotion The business will undertake different marketing and promotional activities. The marketing activities will include listing of business on various business print and online directories. In addition, the company will use banners for marketing on different websites, social media platforms, and even cable TV. In addition, various promotional activities will be carried to offer discounts according to the clients’ requirements and events taking place during yearly holidays. Market The primary targeted market of Mal Entertainment is Manchester. This market has a great potential as it is the third largest city of the UK and is home to a large population which host many businesses and thousands of students. The competition in the event and party planning industry is strong as there are number of companies operating and offering various services to customers. Some of the prominent names in the industry are PPL Events, Definitive Events, Make Events, and Cube Events. These companies are providing event planning and management services for all kinds of events including the above listed events. The competition between companies is on the basis of variances in services offered and price charged for them. Research Manchester hosts several mega events every year. These include trade fairs, university and college orientations, and private parties. The company can target clients from all segments of the market including businesses, students, and families. Legal Structure The proposed business entity will be a partnership registered with HM Revenue & Customs (HMRC) between three individuals Mr. Michael Luton, Mr. Alexander Phillips, and Ms. Sarah Johns. The capital and profit and loss will be shared and distributed at a rate of 33.3% between owners. No salaries will be drawn from the business until the company’s revenue reaches £300,000. Location The proposed business will be registered in Manchester, UK as an event planning and management company. The address of the company’s office is R22, Grosvenor House, Grosvenor Street, Manchester, UK. Human resource The management of the proposed business is responsible for developing business relationships and public relations. In addition, Ms. Sarah Jones is a qualified accountant, who will look after the company’s finances and accounts. Moreover, the proposed business will start with a team of three individuals; their job titles, descriptions, and salaries are provided in the following table: Job Title Description Salary (£) Event Supervisor Responsible for supervising parties’ and events’ activities and ensure fulfillment of clients’ requirements. 17,000 p.a. Event Manager Responsible for organizing parties and events according to clients’ requirements. 20,000 p.a. + Commission Driver Responsible for driving the company’s vehicles. 14,000 p.a. In addition, the company will hire staff on contractual basis or event / party basis at a rate of £9 per hour. Finance The capital initial required for the proposed business will be raised by 75% equity investment by the owners of the company and 25% of funding will be acquired from external borrowing from a local bank. The start up capital schedule is provided in the following: Start-up Requirements £ Start-up Expenses Legal 750 Annual Rent 9,500 Fixtures and Fittings (Useful Life = 15 years) 2,500 Service Appliances (Useful Life = 5 years) 45,000 Website Designing 2,000 Office Furnishing (Useful Life = 10 years) 2,000 Computers 1,800 Marketing 5,000 One Year Salaries 51,000 Used Vehicle (Useful Life = 10 years) 6,500 Stationery etc. 200 Insurance 500 Start-up Cash 10,000 Total Start-up Requirements 136,750 Source of Data: (UK Government, 2014) Costs The costs of three service packages as set out in the previous section are provided in the following. It can be noted that the costs will reduce as the number of guests attending events or parties increase. Description Type I Type II Type III Additional Services Charged on Rental Basis Birthdays £75per head £60 per head £55 per head Jumping Castle, Face Paint, Magic Show etc. Business Events £60 per head £55 per head £50 per head Projectors, Computers etc. Parties £65 per head £60 per head £55 per head Party Backgrounds, Themes etc. In the same way, the cost agreed upon with the third party vendor is provided in the table below. Description Type I Type II Type III Additional Services Charged Separately Birthdays £18 per head £27 per head £40 per head Cake, cookies etc. Business Events £15 per head £30 per head £45 per head Alcoholic Beverages etc. Parties £19 per head £28 per head £40 per head Alcoholic Beverages etc. Budget The sales budget on a monthly basis is provided in the following table: Sales Projections (First Year)                             Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Total Alcoholic Beverages 500 550 605 666 732 805 886 974 1,072 1,179 1,297 1,427 10,692 Service Packages 5,000 5,500 6,050 6,655 7,321 8,053 8,858 9,744 10,718 11,790 12,969 14,266 106,921 Food Sales 6,500 7,150 7,865 8,652 9,517 10,468 11,515 12,667 13,933 15,327 16,859 18,545 138,998 Other Sales 3,000 3,300 3,630 3,993 4,392 4,832 5,315 5,846 6,431 7,074 7,781 8,559 64,153   15,000 16,500 18,150 19,965 21,962 24,158 26,573 29,231 32,154 35,369 38,906 42,797 320,764 Financial forecast The summary of financial statements as projected are provided in the following: Balance Sheet   2014 2015 2016 Assets 63,200 88,480 123,872 Liabilities 39,362 34,594 23,817 Equity 102,562 123,074 147,689 Income Statement   2014 2015 2016 Sales 320,764 352,841 388,125 Cost of Sales 144,344 158,778 174,656 Gross Profit 176,420 194,062 213,469 Salaries 51,000 56,100 67,320 Selling and Administrative Expenses 52,926 58,219 64,041 Income before Interest and tax 72,494 79,744 82,108 Interest 3,757 3,382 3,043 Income before tax 68,737 76,362 79,065 SWOT Strengths Weaknesses Experience of company owners Strong business and public relationships. Cost savings. No existing contracts or orders. High initial investment. Threats Opportunities Intense competition. Key selling point of the company is replicated. Economic downfall. Increasing demand for customized event and party planning services. Growing population. Read More