Business Plan for Diva Records - Coursework Example

? Business Plan for Diva Records April 20, I. INTRODUCTION Diva Records is a startup independent record label that aims to support and market local homegrown talents and provide them a chance to penetrate the mainstream recording industry. The company will get solo and tandem artists whose repertoire include pop ballads, pop jazz and acoustics. The business will be built through a partnership between two music-loving individuals who each have unique strengths as far as managing the recording label is concerned. One will be focusing on business development and marketing, and the other one on operations. Startup capital shall be from two sources – personal investments from each partner, and a short-term bank loan, which the company sees to close by the end of its 3rd year of operations. Since the business is really more of an independent label, very little capital expenditures shall be made. The bulk of its budget will be focused on marketing and operations. The business will initially be located in one of the partner’s homes, for cost efficiency. This is where the management will meet with clients and vendors, and hold office in the meantime. It will operate on no revenue and implement a low overhead for the first year. The owners will focus on relationship marketing in order to get media partners and good costs for equipment rental during recordings. It will do tie ups with event organizers and media bodies to achieve the desired media mileage for the brand as a whole, and for all its talents. Diva Records desires to achieve equity through below the line efforts with these potential partners. II. BUSINESS DESCRIPTION AND VISION Diva Record’s vision is to promote local music groups while increasing live appearances and sales. This two-fold objective is really focused on giving back to the community by honing local talents and at the same time gaining revenues for the company to be able to sustain and expand the services. Its keys to success are as follows: 1. Careful selection of talents to sign up. There will be very rigid screening to get only the finest local talents per category. 2. Limit the number of talents to sign up to be able to stay focused on the marketing efforts. 3. Have a mix of work and fun. The music business is a fun business, and the owners, being passionate about their work, looks forward to creative improvements as time goes by. Instead of competing with the larger record labels, Diva records will apply a more focused regional approach to concentrate on local and homegrown talents. These artists’ goal is to be visibly known in the local market, and eventually penetrate the mainstream. This group in interested in gaining exposure and be known by the local market, since as more people know them, they are most likely to get projects and gigs, and possibly produce a CD, consequently earning more revenues. Diva Records wishes to be known as a hard-working and promoting record label, with the reputation of having support for local talents. Such brand equity will bring the record label to its own place in the market. III. MARKET ANALYSIS Diva Records targets two primary market segments – record stores and consumers at live shows. The management’s focus is to develop visibility within the community, enough to be able to sign up artists which is they to gaining mileage and revenues. The two target markets that have been identified are as follows: 1. Record retailers – this segment distributes the product to end-users. This is the retail channel that ultimately moves the greatest quantity of CDs. It takes time for record stores to be able to sell these CDs as some artists need to gain following before their songs are patronized. However, Diva Records will endeavor to get the partnerships of these record stores, even going as far as sponsoring their activities to be able to have a good position in their display areas. A long-term relationship is foreseen with these establishments. 2. Patrons at live gigs and concerts – they are the end users themselves. They go to entertainment shows to enjoy, and eventually with a purpose of getting a copy of the artists’ songs at the first onset of recognizing an affiliation with these songs. Music CDs are not essentials; they are not basic needs. But a person passionately interested in music will set aside a budget to get the CD that he likes. Will want to have this market segment purchase the compilation CDs to gain footing and touch base with the clientele. IV. DESCRIPTION OF PRODUCTS AND SERVICES The business will start off by producing compilation CDS, both covers and originals, performed by selected artists in the region. These artists shall be screened and evaluated by the owners themselves to determine their marketability. The owners will establish relations with the talent managers, if any, or with the artists themselves. The relationship will be symbiotic, such that no fees will be required from each other. Diva Record’s objective is to build up their talent pool and market share, while the artists’ aim is to gain exposure. Within the first year, about four compilation CDs will be released. As the music label’s brand gains more recognition, it also gains a following. The company wishes to position Diva as an attractive label in promoting artists. While working on the compilation CDs, Diva Records will also work with possible media partners for networking purposes. It will touch base with local radio stations to gain massive airplay, do sponsorships to be able to penetrate this group. There will also be relationship marketing among record stores for product placements. Tie-ups will be offered in exchange for good display spots in these record stores. Diva Records will also establish relationships among local bars and hotels to be able to market the artists to do live shows, and be part of these partners’ regular group of performers. The management will also enforce marketing and promotional tie-ups to be able to establish long-term business relations with them. The support and patronage of these local bars is the key for the company to establish good relations with the concert/ event crowd. V. ORGANIZATION AND MANAGEMENT Diva Records’ owners, who each have areas of expertise to focus on, will manage the company. They will be handling the two major areas of the record label – sales and support: 1. Sales/ Business Development/ Public Relations and Marketing This group is in charge of rolling out the business, getting the right partners, establishing market position and selling the products and services. Since the scope of work is rather wide, two to three more employees shall be hired to assist the Department manager in achieving the goals. The team is responsible for bringing in the sales into the company by effectively marketing the products and services both to the end user-consumers, retailer partners, and media channels, and to the artists as well. They will be tasked to profile potential artists, screen and evaluate, and establish relationships with them as well. After creating the CDs, they will begin to market the product through the channels mentioned above. 2. Finance/ Admin This team is responsible for giving backend support to the front liners. The Finance and Admin team will monitor and implement contracts, touch base with suppliers and vendors to be able to technically produce the CDs. They are in charge of the technical aspect of recording and producing the CDs. They will also do the paper works, monitor sales, and ensure compliance to local business regulations. The ability for this team to fulfill their tasks is very crucial for the other team for them to get the sales. VI. MARKETING AND SALES PLANS Roughly about 50% of Diva Records monthly operational budget shall be allocated to Advertising and Promotional strategies alone. This includes expenses to be incurred in utilizing mainstream media particularly radio advertising; sponsorships and other alternative media; and design and production of merchandising and promotional materials. A successful launch is always accompanied by a tri-media campaign to ensure that the target market is reached. However, due to the limited advertising and promotions budget, it chooses to advertise mainly via radio plugs in local radio stations in London. Repeat exposure via radio advertisements would spark interest among listeners. Among the three mainstream media, radio is considered to be the most cost efficient as it requires the advertiser a fixed advertising cost, yet it allows the product to be continuously stimulating the consciousness of its listeners. Internet Marketing has become popular because Internet access is becoming more widely available and used. Well over one-third of consumers who have Internet access at home report to using the Internet to make purchases (What is Internet marketing 2004). Moreover, statistics show that Internet users increase at a rapid rate that in five years’ time, it is predicted that 80% of United Kingdom’s population will have a computer with Internet access at home (Advertising 2007). Since Diva Record’s target market are individuals and groups who, most likely have internet access either at the office or at home, it chooses to primarily utilize internet marketing to promote its products. Diva Records shall create a website that contains pertinent details regarding the company’s profile and its products. It would contain the company’s mission-vision and a statement of what the company wishes to achieve market-wise. It would also present the profiles of its artists and their upcoming activities. More importantly, it would contain an updated catalogue of its CDs and releases. Tie ups with shipment companies shall also be made to ensure that Diva Records would reach various places in UK and in other countries. The website shall be launched simultaneously with the release of its first music CD. 3. FINANCIALS 4. Start Up Requirements Start Up Expenses   Phone Line Connection/ Connectivity ? 1,500.00 Storage Cabinets ? 12,000.00 Racks and Display Cabinets ? 12,000.00 Personal Computers ? 6,000.00 Office Furniture ? 6,000.00 Stationeries/ Letterheads ? 1,000.00 Store Signage ? 1,500.00 Business Registration Costs ? 1,000.00 Manpower ? 3,500.00 Print Ad ? 2,000.00 Sponsorship Budget ? 20,000.00 Website Creations and Hosting ? 5,000.00 Brochures/ Flyers/ Business Cards ? 1,000.00 Others ? 1,000.00 Start Up Expenses ? 73,500.00 Start Up Assets   Cash Required ? 5,000.00 Start Up Inventory ? 45,000.00 Other Current Assets   Long Term Assets   Total Assets ? 50,000.00 5. CONCLUSION The owners’ passion for music and business fueled the idea for them to open an independent record label in East London. While the ultimate goal is to of course, to gain revenues and sustain the business for the next few decades, there is also this desire to help the local music industry by getting home grown talents who are can compete with mainstream artists, if only given the proper support and exposure. The owners recognize that the first year of operations might not give them the revenue they desire, but they will treat this period as an opportunity to establish the right relations with media partners, vendors, suppliers, artists and of course, the target market. They do not plan to focus on capital expenditures and acquiring tangible assets at this point. Investments will be in the form of forging relationships, doing marketing and promotional tie-ups, media placement and sponsorship activities that will ensure good rapport with targeted partners. The first year will also focus on getting a good batch of artists to contribute to the compilation CDs. This is the make-or-break project such that this is the record label’s first shot at capturing the attention of the market. This will determine their pacing for the next five years. Reference List Benefits of Internet Marketing 2012. Retrieved April 20, 2012 from http://www.nextsbd.com/imarketing/benefits-of-online-marketing.php Internet World Stats 2012. Retrieved April 20, 2012 form http://www.internetworldstats.com/eu/uk.htm Read More