Market Perspectives of the Business Created for Planning Events for Children - Example

Business Plan Summary Executive Summary The aim of this business plan is to provide services related to entertainment and holidays to the children ofall ages. The company will organise birthday parties, New Year parties and adventure camping for the children. In this regard, it is considered that £70,000 will be required for the business as an initial investment to get started. The business will mainly target the middle class families, as they tend to spend their time with children and can be a suitable customer segment with rising demand for such services. The report consists of the mission statement for the business idea, a summary of the same along with the staffing planning for the company to be formed. It also presents a brief of the problems faced by children, which will be resolved through the implementation of the business idea proposed herewith. Additionally, the methodology to be undertaken, marketing aspects, sales strategy, competition and the financial projections have also been presented through this business plan report. Table of Contents Executive Summary 2 1. A Mission Statement 4 2. Summary 4 3. Team 5 4. Problem 5 5. Solution 6 6. Technology 6 7. Marketing 7 8. Sales Strategy 8 9. Competition 8 10. Financials 9 12. References 13 13. Appendix 15 1. A Mission Statement The mission statement of the business idea will be “to make a difference for the community by planning events for children and look after their conveniences as well as preferences concerning their entertainment needs”. 2. Summary The main functions of the business will be to plan events for children that would include holiday packages for occasions such as birthday party, New Year party, adventure camping and other events. The focus of the company will be concentrated on managing events particularly targeting children within the local community. Correspondingly, the business will operate in Manchester, England where a high demand for event management is currently observable. Various adventure camping sites for children will be selected when implementing this business plan, which would further ensure that the children enjoy themselves throughout the adventure activities within a safe environment (Social Care Institute for Excellence, 2011). Adventure camping would mainly include activities such as construction of dens by children, making rope swings, building sandcastles, catching fish and long cycle ride with the family within the selected site. This in turn would help the parents and children to spend their time with each other, strengthening their relationship and likewise, promoting an active lifestyle amid children. The company will be a sole proprietorship firm, which is expected to help in making crucial decisions regarding the business activity and the event management process. As the company is intended to start as a small company with 10 staff members and one proprietor, the start-up costs for the company will be low. Furthermore, at the initial stage, the company will be a home-based business with a capital requirement of £70,000. Funds to make start up investments will be gathered from personal savings, external debts and bank loans as well. Concerning the fact that there is a huge growth prospect for this business idea, if the business turns out to be successful in Manchester, the company will open up its branch offices in various parts of the UK wherein professional event management services can be availed by the clients, i.e. the children and their parents. 3. Team The total number of employees in the company will consist of at least 10 members. The sole proprietor will be regarded as the ultimate decision maker for the firm and will be entitled for a certain amount of remuneration as a proportion of the profit made. Among the 10 members, 2 members will be entitled as the director of the company who will be entitled to ensure that the business functions are aligned with its mission statement when supervising the other members. Accordingly, 7 employees will carry out the function of organising the events for children in England under the direct supervision of the director. 1 member will be recruited as a housekeeping staff responsible for maintaining the hygiene of workplace, to ensure that the working environment is comfortable for the employees. 4. Problem Currently, due to rapid industrialisation in the UK, there has been a huge reduction in the number of playgrounds available for children to enjoy outdoor games and undertake various kinds of sport activities. Internet usage has also posed a huge problem, as nowadays, most of the children get inclined towards using internet and games as the most preferred mode of entertainment, which in turn reduces the scope of physical activities to be carried out by the children, triggering the problem of obesity (Allender & et. al., 2006). Furthermore, in the UK communities, it has been observed that parents, who are mostly working, have minimum time and scope to give company to their children causing problems in their family well-being (WalesOnline, 2012). Thus, this business plan will aim to address the stated problems in the welfare of the community at large. 5. Solution The company’s plan for providing entertainment packages and holiday services to the children of all ages can be considered as one of the best approaches to tackle the problem being faced by the children in the UK. It is expected that these services will enable the disabled children to interact with the people in the society. In addition, the services provided by the company will benefit the children suffering with obesity in their childhood by motivating them to get indulged in physical activities that would be completely different from indoor activities such as internet usage and games (Executive Office of the President, 2010). Enthusiasm within the children regarding sport activities and adventures will also be instigated through the event management services provided by the company. 6. Technology The preliminary steps to be followed by the company in implementing its business functions concentrating on event management for children, will include setting event objectives, deciding a particular date and building a theme for the event. Once the event is decided, the next step will aim at preparing an appropriate schedule for the event. Likewise, budget for the event will be decided along with a suitable place for its commencement. The next step will be selecting the mode of transportation and foodservices to be provided to the children in the event to make the business plan an all-inclusive one. Backup plans will also be created to avoid uncertain disasters that might occur during the event. Correspondingly, obtaining registration and patent rights for the business idea will also be crucial in order to operate the business without legal hazards. In order to obtain the patent for this business idea the company will need to consider the legal requirements for patenting the business. The company, in order to get patented as a sole proprietor company, will therefore need to abide by the guidelines of Companies Act of the UK under Part 2 of the Company Formation (Crown, 2006). 7. Marketing As per estimations, the market size for event management businesses in the UK is booming, especially within the players concentrating on children as their target group clients, which has created better growth prospects for the company. As the company has not yet started its business, it has been decided that the company will use social media and televisions advertisements to promote its services. Moreover, advertisement related to the customised services of the company will also be an effective approach to attract the customers. Newspapers will also be used as a medium by the company to market its services to the customers i.e. the families in the UK, apart from building ties with schools as well as non-profit organisational working for children. 8. Sales Strategy The company will mainly target the middle and upper-middle group of families in the UK. This group has been targeted as most of the middle class families opt for holiday packages with their children along with showing a positive attitude towards participating in short adventure trips at an affordable rate. The middle class families in the UK also have a huge demand for organising birthday parties along with New Year parties for their children (Evidence for Policy and Practice Information and Co-ordinating Centre, 2003). As mentioned above, to ensure that the idea reaches the ultimate targeted client segment, the company will tie up with various educational institutions, which will provide an opportunity for the company to organise excursions and short adventure trips gaining better response from the market. 9. Competition The company is primarily focused towards providing holiday and entertainment services to the children of all ages offering it a competitive advantage, as most of its competitors target the elder group of customers from various countries (HBAA, 2011). Hence, it is expected that most of the parents or customers will avail the services provided by the company as most of its services are customised based upon the customer requirements. 10. Financials According to the projected capital requirements for the business, the company would require around £70,000 as its employed capital to instigate its business operations successfully. Accordingly, £40,000 out of the total amount will be borrowed from the bank and the remaining amount, that is £30,000, will be used in the business through the personal savings. The total amount of personal savings will be procured by accumulating monthly reserves and selling of few personal assets. Accordingly, to gather the total required amount, the company will take a bank loan of £40,000 to meet the requirements of initial start-up capital. This loan would be repaid to the bank on a year-to-year basis. It has been decided that the company would pay back the loaned amount in a yearly instalment of £8,000 along with its interest charged at 4.5% annually (amounting to £1,800). Subsequently, if the loan is continuously paid for five years along with its interest amount, the company will complete its process of loan repayment within the fifth year. The company is further expected to reach a break-even point in its sixth year. In relation to the cash flow projection for the 1st year, it has been proposed that the company will start selling its services from its first month of operations. Accordingly, in its first month, the company will have a sales of £18,000 and accordingly it sales will increase as per the demand wherein it has been considered that the month of October, November and December will be the business season for the company owing to the increasing frequency of festivals within the UK society. Likewise, considering the bank loan and monthly sales it has been projected that the total cash inflow for the company in the 1st year will amount to £498,400. On the other hand, the company will incur an amount of £24,000 for its capital expenditure, which would remain the same for the entire year. Direct cost of materials for its business will amount to £89,640 in the 1st year, which is comparatively greater as compared to other years as it has been assumed that during the 1st year the company will have to incur more cost for its materials. Likewise, it has been assumed that 10 members of the company, which will include the directors, employees and the housekeeping personnel will account to a monthly remuneration of £10,000 in the 1st year of the business and annually it would amount to £120,000. A monthly rent of £200 will be paid for its office space that would amount to £2,400 on an annual basis for the first year. An insurance charge of £100 will be incurred by the company on a monthly basis, amounting to £1,200 in the first year. £300 will be annually paid by the company as bank charges to maintain its company account. Accordingly, it has been presumed that £669 will be paid annually by the company as electricity charges. Telephone bill will amount to £3,898 and advertising expenses will amount to £46,238 on an annual basis, which is comparatively more than subsequent years. This is because the company will have to focus on advertising through effective communication process and promotion strategies in the 1st year to ensure that the targeted customers are well aware regarding the determined services. Other variable costs will include Print, Post and Stationery expenses, which will amount to £13,673, subjected to frequent changes based upon the business requirements. Additionally, as the business will provide holiday and entertainment services to the children of all ages through organising New Year parties and adventure camping trips, it has been assumed that the company will incur an annual cost of £44,570 for its transportation expenses, acquiring a major proportion of its total variable costs. Similarly, the company will incur an annual cost of £43,320 on professional fees and £8,220 on miscellaneous expenses for the first year that would be subjected to frequent changes as per the business requirement. It is worth mentioning that risks to incur a loss in the first year is high, where the company will have to focus on maintaining its capital reserves and pay utmost attention towards increasing its sustainability in sales. In relation to the cash flow projection for the 2nd year, it has been assumed that the company’s business will gradually grow, which would increase its annual sales to £559,200 and this amount will be regarded as the total cash inflow of the company. The company in the second year will not incur any capital expenditure and its cost of materials will decrease to £55,920. Likewise, it has been projected that the company will increase its business in the 2nd year due to which, the salary paid to the staff of the company will also increase, i.e. the monthly salary will rise to £12,000 and annually the company will incur £144,000 for paying remuneration to its employees. Likewise, rent for the company will increase to £350 that is £4,200 annually but the insurance charges will remain the same. Telephone, advertising, printing and stationery expenses in the second year will also reduce for the company, as it would not require much of capital for promoting its services to the customers. Moreover, the company will not incur much of its expenses on transportation and miscellaneous costs but the professional fees of the company will increase as it has been projected that there will be a growth in the business. Therefore, the total cash outflow of the company for the 2nd year will be £416,421 due to which, there has been an increase of £142,779 in the cash flow of the company. This provides a clear idea that the business will be able to increase its aggregate revenue to a significant extent in the 2nd year. Likewise, in the 3rd year, it is projected that the annual sales of the company will be £548,400 and the total cash outflow will be £472,662, which shall hence results to a closing balance of £260,119 for the company in the 3rd year. As it has been planned that the company will be a sole proprietor, there would be no equity share capital in the company. However, the company will take debt in the form of bank loan that will amount to £40,000, which shall give rise to both advantages and disadvantages for the company. The advantage for the company would be that as per the business requirement, it will have an adequate start-up capital and once the loan is sanctioned, it can be stated that the company would be legalised. In relation to the disadvantage it is considered that if the company does not become successful, it might be quite problematic for the sole proprietor to pay back the loan being taken from the bank. 12. References Allender, S. & et. al., 2006. Understanding Participation in Sport and Physical Activity among Children and Adults: A Review of Qualitative Studies. Health Education Research, Vol. 21, No. 6, pp. 826-835. Crown, 2006. Companies Act 2006. General Introductory Provisions, pp. 1-701. Evidence for Policy and Practice Information and Co-ordinating Centre, 2003. Children and Physical Activity: A Systematic Review of Barriers and Facilitators. University of London, pp. 1-135. Executive Office of the President, 2010. Solving the Problem Of Childhood Obesity Within A Generation. White House Task Force on Childhood Obesity Report to the President, pp. 3-87. Hbaa, 2011. Opportunities for Growth in the UK Events Industry Roles & Responsibilities. A Report to the All Party Parliamentary Group for Events, pp. 1-11. Social Care Institute for Excellence, 2011. Think Child, Think Parent, Think Family: A Guide To Parental Mental Health and Child Welfare. Families’ and Childrens Services Guide 30, pp. 3-96. WalesOnline, 2012. Disabled Children Still Facing Access Problems at Welsh Schools. News. [Online] Available at: http://www.walesonline.co.uk/news/wales-news/disabled-children-still-facing-access-2047328 [Accessed April 20, 2014]. 13. Appendix Financial Projections for Year 1 Financial Projections for Year 2 Financial Projections for Year 3 Read More