A Project Report ON

Business Plan for an Event Management Company ENTREPRENEURSHIP DEVELOPMENT AND PROJECT MANAGEMENT

AS PARTIAL FULFILLMENT OF PGPBM PROGRAM, Second year, Trimester V

SUBMITTED BY ADITYA KUMAR. Finance + Marketing Roll No-2243/09 Specialization No.-049

Pune Institute of Business Management

PUNE 2009 -2011

DECLARATION

I, Aditya Kumar hereby declare that this project report is the record of authentic work carried out by me during the period from 15th February to 30th April, 2011 and has not been submitted earlier to any university or institute for the award of any degree/diploma etc.

Name of the Student with Sign: Aditya Kumar

Date:

ACKNOWLEDGEMENT
This project has been an honest and dedicated attempt to make the analysis on marketing material as authentic as it could. And I earnestly hope that it provides useful and workable information and knowledge to any person reading it. During this period, I had the pleasure of working closely with accomplished organization people who shared with me their experience and helped me in completion of my research. I express my sincere thanks to my project guides and my institute faculty for guiding me. Lastly I am grateful to my parents who been my mentors and motivators. I am also thankful to all my batch mates who have been directly or indirectly involved in successful completion of this project.

TABLE OF CONTENTS:
Sr.No. Contents Page no.s

1. 2. 3. 4. 5.

ABOUT BUSINESS PLAN WHY BUSINESS PLAN CONSTITUENTS OF A BUSINESS PLAN ABOUT THE NEWLY FORMED COMPANY MISSION THE COMPANY

5 6 8 12 13

6.

KEYS TO SUCCESS SAMPLE FINANCIAL PLAN

14 15 19

7. 8.

HOW TO FORM AN EVENT MANAGEMENT COMPANY

9.

21 GOOD IDEAS/STEPS FOR STARTING AN EVENT MANAGEMENT COMPANY

1. ABOUT BUSINESS PLAN

A business plan is a comprehensive, written description of the business of an enterprise. It is a detailed report on a company's products or services, production techniques, markets and clients, marketing strategy, human resources, organization, requirements in respect of infrastructure and supplies, financing requirements, and sources and uses of funds.

The business plan describes the past and present status of a business, but its main purpose is to present the future of an enterprise. It is normally updated annually and looks ahead for a period of usually three to five years, depending on the type of business and the kind of entity. It is a crucial element in any application for funding, whether to a venture capital organization or any other investment or lending source. Therefore, it should be complete, sincere, factual, well structured and reader-friendly.

2. WHY BUSINESS PLAN?

There are many important reasons for drawing up a business plan. Some of the most significant are the following:

Getting an integrated view of your business.

By preparing your business plan, you get an integrated view of all issues regarding your business. For example, it helps you to identify better your target clients, outline your market segment, shape your pricing strategy and define the competitive conditions under which you must operate in order to succeed. Business planning ensures that all these considerations are consistent and properly harmonized. Also, the business plan process often leads to the discovery of a competitive advantage or new opportunities as well as deficiencies in the plan. Committing your plans to paper, ensures that your overall ability to manage the business will improve. You will be able to concentrate your efforts on any deviations from the plan before conditions become critical. You will also have time to look ahead and avoid problems before they arise.

Mutual understanding within the management team. Reaching mutual understanding among the members of the management of the firm is particularly important in cases in which the recommended policy of engaging as many managers as practically possible is applied in the preparation of the business plan.

 Determining financial needs and applying for funds. Determining the amount, type and sources of financing and when it is required. Using the business plan in the process of application for funds. In preparing this manual, it has been assumed that the primary objective of preparing a business plan is to determine the financing requirements of your business and to apply for external funding.

3. CONSTITUENTS OF A BUSINESS PLAN

A business plan should not be something you prepare once, then put on a shelf and forget. Dynamic planning should be an integral part of managing your business. Most successful ventures prepare a three-to-five year business plan every year. This involves updating last years business plan by comparing the planned figures and goals with results achieved and taking into account changes, new information, experiences and new ideas. The steps involved in the business planning process are the following:

1. Assessing the situation 2. Developing a mission 3. Getting ready 4. Setting goals 5. Working out the business plan

1. Assessing the situation

This should be an assessment of how your customers, partners, competitors and suppliers view your business. It should answer the question where are we now? It should also be a honest and self-critical exercise trying to answer the important questions any businesspersons should be asking themselves regularly: What are our important strengths and main weaknesses? What can we do well and what should we not be doing at all? What are the major mistakes we have made in the past and what can we learn from them? Do we make a reasonable number of mistakes?

2. Developing a mission

Before proceeding further you should formulate a clear mission statement for your enterprise. Developing your mission is often the most valuable part of the dynamic planning process since it can change or reconfirm the direction of your business. Missions are intended to provide a sense of purpose and act as a tool for communicating where the business is heading. Shareholders, employees and business partners can be better motivated and support the mission if they know what it is.

Your vision says how you see yourself in the far future. It expresses what you want your company to become. A vision shared by all the people concerned with the business is an important factor for its successful development.

Your mission defines what you want to achieve. It states the benefits your business will bring to clients, employees, shareholders and the community as a whole.

Your philosophy expresses the values and beliefs of your organization's culture. Your strategy indicates how to get there.

A business is often founded on the vision of an individual. As the entity grows, the organization may lose its original raison dtre and its mission may change. The mission should be reviewed regularly and if necessary adapted. This should be providing an updated picture of what you are trying to achieve and answering

What business are you in? What do you do best? Whose needs do you meet? What needs do you meet? What benefits do you generate?

Philosophies or values should be included in the written business plan. They are an important foundation that should be communicated to all levels within your organization and to your outside business partners. A consistent corporate culture and a good understanding of the entity's direction and values can improve decision-making and staff productivity. Staff may feel better about what they do. People are motivated by more than just getting a salary. The vision, mission, philosophy and strategy of a firm are usually developed by the top management, sometimes at an offsite location has many benefits (getting away from the day-to-day distractions for the purpose of this process).

3. Getting Ready
After the mission and the philosophical basis have been defined, you need to start the actual work of preparing the business plan. Some important matters you need to address when getting ready are:

Appointing a coordinator. Appoint the staff member who will be responsible for coordinating the business planning process and for delivering the final document (business planning project manager) in time.

Hiring a facilitator. Consider the value of an experienced facilitator. Hire one if you do not have a staff member who is available and has the relevant experience and talent in guiding complex business planning processes. Very often an external person - neutral and independent - can be of value in moderating complex consensus-seeking sessions. This person should be knowledgeable about the requirements of the readers of the business plan.

Defining tasks. Define the different tasks and steps involved in the process, the timing of these and the overall schedule for the work.

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 Identifying team members. Identify the people who will be involved in the process and define their roles, competencies, responsibilities and expected contributions/deliverables.

Gathering information. Gather and organize all the basic information that will be required from internal and external sources (market surveys, reports on competition, new technological developments, etc.). In addition to information available in-house, there are valuable sources and tools such as industry associations, databases and specialized consultants to be considered.

4. Setting Goals.
Setting goals for the future development of the business is a prerequisite for the preparation of the business plan. Although these goals will have to be adjusted in the iterative planning process, they can still be of great value in setting the tune and spirit for further work. The goals should be time-bound, realistic and measurable. Examples of such goals can be:

Over the next three years increase sales volume by an average of 20 per cent per year by intensifying marketing and sales effort in the neighbouring countries (export);

In the coming year reduce production costs by 10 per cent through greater automation of production lines;

By the end of the second planning year launch three new products on the local market.

5. Working out the business plan

Working out the business plan basically involves synthesizing and harmonizing your marketing, sales, development, manufacturing, operations and financing targets in such a way as to enable the enterprise to meet its overall objectives. This matching work is usually conducted in an iterative process until full consistency of all elements of the business is achieved.
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4. ABOUT THE NEWLY FORMED COMPANY

Welcome to the future of event planning! Occasions, The Event Planning Specialists, brings to the community of Portland a new breath of air in the event planning market. By combining old fashioned values, going the extra mile, and using cutting edge eventplanning software, Occasions will lead the market, providing the same quality results, every time. Occasions is an equal opportunity business making its expertise and its products available to help its customers plan their own events. Party Packs (complete kits for their event), make hosting a party a snap, right down to the refreshments. The event planning software brings interactive event planning as close as their personal computer. Through these and other affordable products and services, Occasions aims to be the number one resource for any event.

Objectives
Occasions is a small business aimed at the big time. In order to reach its lofty goals, Occasions must focus on the mission behind the vision. It will take all the employees, owners, founders, and vendors daily living the vision that Occasions represents. The vision manifests itself in three ways: y Be one of the top three event planning specialists in the Northwestern United States. y Justly compensate the employees, owners, and founders of Occasions. y Produce the same quality results, every time.

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5. MISSION THE COMPANY

In an ever changing, fast-paced world, success is determined by good choices for lasting effects. Communication is essential. Occasions strives to be the best choice of clients by helping to ease their event planning burden. Through consistent, predictable professionalism, Occasions will ensure a worry and hassle-free event at a reasonable price. But, not all our clients will be external. Occasions has internal clients to serve. Occasions will strive to provide the same predictable and professional working environment to its employees and contracted vendors, justly compensating them for their services. It is also a priority to make a comfortable living wage for its owners, founders, full-time staff, and their families. Keeping in tune with the needs of the market, utilizing the latest technology and trends, all while ensuring the client receives the individual attention they deserve, is the vision and daily mission of Occasions; The Event Planning Specialists.

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6. KEYS TO SUCCESS

Our keys to success include the commitment to quality by every person who is part of the team. Each of us will be responsible to push ourselves to a higher level of professionalism in three areas:

y Consistent, accurate fulfillment of the client's wishes. y Competitive pricing for the quality of services offered. y Significant profit made on each event planned.

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7. SAMPLE FINANCIAL PLAN

Start up costs and sources of finance: A summary of the total initial funds required and the mechanism of their funding is shown below: PARTICULARS Start up costs: Legal Stationery etc. Consultants (Lawyers, Real estate agents etc.) Advance deposit (for renting outlet space) Advertising (Launch party, Vouchers etc.) Miscellaneous STORE leasing Total Start up expenses Start up Assets needed: Cash and Bank balances Computers and Laptop Furniture and fittings Machinery Total Assets needed WORKING CAPITAL Total Requirements 225000 1700000 1500000 100000 4425000 1500000 9000000 100000 25000 200000 500000 2000000 150000 100000 3075000 AMOUNT(Rs.) AMOUNT(Rs.)

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Funding:

PARTICULARS Owners Personal Funds: In the form of cash Sale of Investments (in shares and debentures)

AMOUNT(Rs.)

AMOUNT(Rs.)

45,00,000 20,00,000 65,00,000

Mortgage loan from bank Total capital and liabilities

25,00,000 8000000

Occasions wishes to be a debt free establishment. However, outside financing is the most viable option to finance the start up costs. The cost of future operations of the concern will be financed from the profits earned.

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The projected financials of the concern are shown below:

Occasions
PROJECTED INCOME STATEMENT PARTICULARS 1st Year Amount(Rs.) Amount (Rs.) Sales Less: Cost of Sales Gross Profit Expenses: Payroll Expenses Depreciation Maintenance and Utilities 100000 125000 160000 50000 100000 170000 160000 90000 200000 330000 320000 110000 1800000 800000 1000000 2400000 1100000 1300000 5000000 2300000 2700000 2nd Year Amount(Rs.)

Total Expenses Profits before interest Less: Interest

435000 465000 97500

520000 780000 97500

960000 1740000 195000

Net Profit

367500

682500

1545000

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NOTE: y y y Depreciation @ 10% p.a. on furniture, fitting, and computers. Interest @ 13% p.a. on the loan taken from bank. RENT IS 15000 PER MONTH. With 10% annual increase

BREAK-EVEN: The break even will be achieved within three years if the budget and expected sales go as per the plan and the firm will be debt free within five years if it wants to pay of its debt.

MITIGATION OF RISK FACTORS:

1. Concentration on advertising and promotional activities to spread awareness of services provided on a larger scale. 2. Taking feedback from customers who have already availed the service in order to develop on the loopholes and hence ensure quality services. 3. Leveraging the expertise of employees in providing better customer satisfaction in order to competitively position ourselves as a premier provider of such specialized services. 4. Planning strategies for quick expansion to tap a larger market.

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8. HOW

TO

FORM

AN

EVENT

MANAGEMENT

COMPANY

Are You Ready?

Want to start an event management company? Wish to earn those great bucks? First make sure you know where you are You are heading into event planning business where you will need solid social networking and business development skills to survive. Your success in this business will depend upon, not only on your experience and knowledge level but also on your contacts (public relations), negotiating, marketing and entrepreneur skills. Here I should assume that you have been working in the event industry (or sales or marketing industry) for the last couple of years (at least 2 years) and that now you are confident you can find clients for yourself. Just like in any other business, there are certain skills which you must have in you, if you wish to succeed in the event planning business: y -You manage people effectively and get the job done. y - You know how to manage time and prioritize your tasks. y - You can find new and innovative ways to solve problems. y - You are good in decision making. You first evaluate your options and then decide.

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y - You know how to talk to clients and close sales. y - You have the ability to sell your ideas. y - You have the ability to market your services. y - You know how to manage cash flows and keep track of financial transactions. y - You understand team formation. y - You have leadership qualities. y - You know how to motivate yourself and others. y - You have strong analytical ability and eye for detail.

If you wish to excel in the event management field at as faster pace, then get certified. There are many event planning certification which can prove helpful in becoming a certified event planner. Such event management certificates demonstrate competitive distinction and that you have the skills, knowledge, experience and ability to plan and manage a successful event.

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9. GOOD IDEAS/STEPS FOR STARTING AN EVENT MANAGEMENT COMPANY

Step 1: Decide the services you wish to sell

A service is something which is intangible like: wedding planning, party planning, organizing music concerts, fashion shows, conducting MICE (meetings, incentives, conferences and exhibitions) etc. Choose those services in which you have a strong hold, in which you have majority of your experience and expertise and which can generate maximum revenue for you. Don't try to be jack of all trades and sell all event planning services one can think of. If majority of your experience is in wedding planning, then wedding planning is best for you. Don't try to get into corporate meetings, just because the market is better. Corporate meetings are different from the weddings in terms of planning, implementation and evaluation. In fact every event is planned, executed and evaluated differently and therefore you can't organize all type of events.

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Step 2: Do market research, competitor's analysis and SWOT analysis.

Market Research for Event Management Company Market means your target audience i.e. people who may be interested in your events. It also includes those clients who may be interested in hiring your event management services.

If your target audience are least interested in the type of event you organize, then you won't get any audience. Say you want to organize a rock concert in the country of Oman. But people there are least interested in such type of events. It means there is no market for your event in that country. If you organize the event there, it will fail for sure. Similarly if you wish to organize a Christmas Carnival in an area where majority of people are Muslims, then you can't expect many footsteps.

Therefore it is very important that you find out in advance who are your target audience (i.e. their age group, sex, qualification, profession, lifestyle, income, liking, disliking, customs, religions, traditions etc), where there live and what are their desires and expectations from your event. To do market research you will have to do survey in the area (town/city/state/country) where you wish to organize the event. If you wish to open a wedding planning company and there are hardly two or three weddings in a year in your area, then selling such type of services is not commercially viable.

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Competitors' Analysis Find out: y - who are your competitors y - Where they live? y - What are their employee base (i.e. number of employees) y - Client base (i.e. number of clients) y - Market value (i.e. what is their reputation in the market) y - Market share (i.e. how much business they have occupied) y - Turnover (i.e. annual sales)? y - How many events they organize in a year? y - Why people attend their events? y - What is so special about their events? y - How do they get clients and sponsors for their events?

All this will help you in developing a better business plan for your event

management company.

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SWOT Analysis for Event Management Company SWOT analysis is used to evaluate the strengths, weaknesses, opportunities and threats involved in your event planning venture. In SWOT: 's' stands for strengths, 'w' stands for weaknesses, 'o' stands for opportunities and 'T' stands for threats. Strengths Determine your resources and capabilities and how they can be used against your competition and in favour of your target audience. What advantages do you have? What you can do better than the others?

Weaknesses Determine the resources you lack. Determine the advantages your competitors have. What could you improve? What you should avoid? Opportunities Look at your strengths and determine which opportunities are opened for you. Determine how you can open up even more opportunities by eliminating some of your weaknesses. Threats Changes in external environment (like changes in economy or market trends) or any unfavourable situation can pose threat to your company or business. Determine all present and possible threats to your business venture. It can be the presence of a very powerful competitor or new or innovative ways of organizing events or a heavy tax on entertainment.

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Step 3: Prepare business plan for your event management company

You will develop your business plan on the basis of market research, competitors' analysis and SWOT analysis of your event management company. Before developing your business plan, you should keep some points in mind: 1. Be realistic and avoid optimism while estimating capital requirements, sales and profits. 2. Don't ignore developing strategies which may come handy in case of adversities in your business.

Following steps can be adopted for developing a business plan for your event management company: 1. Outline your business objectives What do you want to achieve in short term and in long term i.e. what is the mission and vision of your event planning company? However don't stick too much with long term objectives as they may become meaningless after a long time or changes in market situation.

2. Determine your staffing needs and what should be their skill sets. Develop the organizational structure of your event management company. Outline your own skills, knowledge and experience and determine how they can be used to achieve business success. Prepare resume of yourself and all of the people who will be involved in your business. These resumes will come handy when you will look for partners/investors later on.

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3.

Determine

how

exactly

you

will

find

clients?

How you will approach them and how you will sell your services. How you will expand your business? What will be your rules, regulations, policies and procedures regarding payments, reimbursement, penalties, cancellation and behaviour? 4. Estimate your capital requirements for one whole year.

How you will manage the cash flow?

5. Prepare a contingency plan i.e. what strategies you will adopt in case of capital loss, economic crisis or market downturn.

Step 4: On the basis of your business plan determine your operating cost i.e. the cost to run the business.

Step 5: On the basis of the operating cost, decide your own fees and the staff salary.
1. Cost 2. Charges/Fees 3. Salary , etc.
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Step 6: Get investors/ business partners for your event management company
on the basis of market research, competitors' analysis, SWOT analysis and your business plan.

Step 7: Decide name and logo of your company and its status
i.e. whether organization will be a company, firm or establishment.

Step 8: Premises, recruitment and marketing your business

Hire office. Buy office stationary and recruit staff. Launch a new flashy website which effectively describes your business and services in great detail. Hire an internet marketing professional to promote it.

If you won't promote your website, then nobody will visit your website. So in that case your website will be as good as nothing. Through your website, your business will get global presence, 24 hours a day and 365 days a year. You can also expect to get lot of clients once, your website becomes popular.

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Step 9: Register your Company

If you have opened a company then get it registered under the Company's Act'. If you have opened a firm then get it registered under the 'Indian Partnership Act'. If you have opened an establishment, then get it registered under the 'Shops and Establishment Act'.An event management company is just like any other company. So whatever rules and procedures are required to start a company, also applies to an event management company.

Step 10: Register to pay tax

Following taxes are to be paid by an event management company. Income Tax, TDS (Tax deducted at source), service tax, entertainment tax and taxes related to moving goods and merchandise from one destination to others. Get PAN card to file Income Tax return. TAN card to file TDS return. Get registration for service tax. The service tax on event management companies in India is 12.36%

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