business plan

Sales

2- Disagree

3- Undecided

4- Agree

5- Strongly Agree

a) I am a….

Musician? Actor? Model? Athlete?

6 musicians, 2 actors, 1 model, 1 athlete

These are the main clients we are targeting to represent.

b) I feel a lot of managers don’t primarily focus on one client long enough?

1
2
3
4
5 

Six people chose 4, Three people chose 5 and one person was undecided.

They primarily feel that managers have too many people to work with and give them limited focus. And that is what TLM is aiming to focus on more to compete with other management companies. If the client doesn’t feel they are being focused on then they wont feel they are getting their full worth in job offers after a certain time.

c) Managers only care about their quick commission

1
2
3
4
5 

Nine chose 5 and the one remaining was undecided.

Most managers know they are automatically getting 15 percent from every deal so if they have numerous clients that’s a guaranteed check from at least one of them so they might not take as much time to negotiate pricing as well after they feel they would get a good enough cut for themselves.

d) I don’t feel I got the best price for my recent jobs?

1
2
3
4
5 

Three chose 5 and the seven remaining were actually undecided.

This goes into what was stated before with price negotiation. Some managers have too many clients to get good rates for so they may lack in one area that they don’t in another and hat area could result in a disgruntled client that feels they aren’t improving as far as getting paid what they aim for.

e) I haven’t quite focused on my goals from the beginning

Yes    
 A Little      
     No

3 chose Yes, 4 chose A Little, 3 chose No and noted there wasn’t much time.

I asked one why they didn’t have much time and he said that when he stated he told them what he wanted to achieve independently as a personal goal but they just kept giving him gifts and sending him on jobs that he never thought about forgetting his main objective from the start.

f) Communication is a big key in management-client relationships

1
2
3
4
5 

All ten candidates chose 5

This is why TLM focuses on the client more and giving then the opportunity to tell us what they want and how they feel certain things are going so we can all be on the same page.

Sales forecasting

Information from the surveys helped us to conclude the kind of services that clients look forward to getting from managers and there was also small consideration of our company in the near future. With adding on at least one mildly popular model and one musician, within the first year there would be bookings coming in for each client. On average entertainers get between 5-6 jobs per week and that’s in one focus (Magazine, Club Appearances, Interviews, Features, Endorsements). If there were multiple jobs a day per client that would be over 10,000 a day after commission for the manager. With upcoming talent like what we will start out with, the average appearance count is 1-2 per day. Clients, based on demand will have a base-booking price set in comparison to their prior fees. New music artists within our target market usually have a minimum booking fee of $10,000, of which 15 percent is commission for management. This fee is for either performance or appearances Models usually get between $3,000-9,000 for starter magazines and between $1500-10,000 for event appearances. Calculating the days the clients would be taking a break would leave out 100 days in the year on average. With the expectation of 2 events a day for each client at minimum and the growth throughout the year to have 5 clients (3 musicians and 2 models) consistently working the forecast would be:

Musicians: 3*10000*.15= $4500/day

Models: 2*1500*.15= $450/day

Yearly revenue: 4950*265=

$1,311,750

If the predictions are worked out thoroughly this would all be forecasted from at minimum: a 265 day work year for each client with the minimum for each job and client specifically calculated per day with the commission included. Each job will be worked on from the managers’ representation of the client and making sure both parties are satisfied and get what they anticipated on.

Advertising

Since we’re starting from the beginning to build the company up, we have to start getting noticed and show our knowledge of the industries we want to manage in. The talent we manage will already help to get notice on TLM along with social media and local venues. The company will be listed on yellow pages and white pages; flyers will go out promoting the artists along with TLM backing their name. We will network with people who are and/or know people who are looking for new management and want to start with a fresh team with their goals being the first priority. Business cards will be made and given out at networking events that way aside from the talent themselves, possibly an agent who has certain restrictions that wants to expand who they are representing will pass the client on. We will also look to advertise in event papers in the NYC area and in the future sponsor events involving the industries we aim to manage in after we are established enough to afford it.

Competition

Stiff competition is expected to be faced in the business. However, T.L Management Corporation will develop several strategies to stay at an advantage. Firstly, the management will have a niche for itself through its commitment to develop the talent it has. Unlike talent agencies that just make sure to secure a gig for the client, management companies, like TLM focuses on outlining a career path and building the network for the company and the client as well. The management will ensure that the talent has created value appealing to the audiences. TLM has other competitors that have been around prior to the start of our company and currently upcoming companies that are based off of celebrities so they already have an advantage by association. Other competitors are popular independent managers that have been known for simply managing people that are famous now. Some plans to compete with the other companies are starting with price. The asking commission is 15-25 percent determined by the client and the manager and how well known they are. TLM plans on staying at 15 percent no matter (unless suggested by the client or future circumstances) what because we see it as the client is always working for both of us and the manager is the channel to get that work displayed to the masses. We don’t see the need to raise rates because of sudden raises in booking prices, because if a dollar raises for the client, it automatically raises for the manager so we don’t need surprises in contracts.

Another area of competition is incentive, some managers are so quick to negotiate a price and a place they don’t do the in betweens like transportation to and back and hospitality at the venue. We always work to get the client a way and back to and from the job and we make sure they are treated well at the place (food, drinks). Another competitor is the entertainer that manages him or herself. They don’t have to worry about a commission being charged and can negotiate their deals on their own. But our plan is to show that sometimes you may need help and can’t do it all alone especially once you make it bigger.

To keep our name standing we will (like I said before) sponsor entertainment events to get people to notice our company because down the line we plan on expanding.

Pricing

Several pricing strategies shall be applied depending on the product that has been released to the market. We will use various ways to make pricing and production decisions. Since there are few firms in the market, T. L Management Corporation has a competitive advantage. One of the ways in which the company would decide its pricing is through the analysis of the company’s demand. When the demand of the company’s products/services is high, the company increases it prices. However, it increases the price of its products up to a point where the price matches with the price of the leading, so we don’t lose potential business that may see it more fit going with a more familiar company. Increase in prices increases production (Longenecker, 2006). Factors for pricing include:

1) Demand of the client

2) Comparable fees of other options

3) Demand of other companies clients in comparison to ours

4) Other benefits of the job

5) Future bookings between the manager/client and the inquirer

Every offer has to be solidified with a half down deposit to compensate for any circumstances. For example if we book an artist a show for 30,000 instead of a closer venue for 18,000 the same night and the client gets there and the promoter couldn’t come up with the other half before the show started, the night wasn’t fully wasted and the client still made close to what they would have made for a full show and a longer night. Either way, a deposit is a safe way to secure the contract other than writing.

We don’t have a set salary as of yet because we want to wait and analyze our official first year’s calculations so we can establish how well the company is doing and how we can exactly make use of the cash and profits.

After the first year or depending on the progress of the company within the first year we can consider adding merchandise into our product line. Starting with clothing and innovative accessories like phone cases and hats with the company’s logo and entertainers to show the faces we have of our company.

Aside from basic pricing and merchandise, there’s the pricing for endorsements and other lucrative deals for out clients that out them into other contracts. Commercials, clothing, shoes, liquor deals, etc are all along endorsements that can be offered. These areas are all based off of the client’s fame and the amount of influence they’ll have on others.

ACCOUNTING

Since we aren’t operating from a physical location, there are no property expenses we have to add into the mix. Everything will be handled from our home and we will be meeting like any other business meetings in restaurants and other outside but private settings to discuss business. There are no tangible goods that need to be purchased because we mostly work as providing a service for now. Other items we will continue to use are our phones and laptops using email and phone calls. Occasional studio time for the musicians are included with contracts with other clients that want to do music with ours and we are able to cover extra costs for recording and other tasks that have to be paid for the actors and models..

Income statement

$500

$500

Income statement Clarifications

Sales were calculated from the minimum booking fees in a space of 265 working days for each client, assuming there are 5 clients in the start up of the business. The revenue after commission is deducted from each client per day would be up to $4950 multiplied by the number of days working for the year.

Expenses include the yearly amounts for the phone bill, getting the business cards made that are passed out aside from flyers for events. There was also the advertising expense which we plan on paying 60 dollars for one entertainment magazine spot to advertise our company ad the talent with us. In total we have 3 magazines with reasonable prices. Other expenses include entrance fees for us to be able to get into venues to promote or look for new talent along with business meeting expenses since we have no physical location, we’ll need to meet with clients and potential businesses. We will also pay for the website to be made that will also be secured with a separate payment to a hosting website. And then of course we included our incorporating fee of $195.

Balance Sheet

The following represents the projected balance sheet for T.L Management Corporation:

Balance Sheet Clarifications

The cash balance of $3000 comes from the investment of each owner by the percentages of the ownership of the expenses before it was 3000 then we split the difference to add extra cash for miscellaneous expenses ultimately being the three thousand dollars.

Accounts receivable is the amount owed from promoters and other contractual obligations after they paid the half deposit so we can move forward with working with them.

655,875*2= 1,331,750 (the beginning sales)

Accounts payable is calculated with the phone expenses and advertising during the year

500 + 180 = 680. The other costs are paid from the start to being operating. And the taxes that are included in the income statement of 40 percent.

FINANCIAL OVERVIEW

We used the income statement figures to analyze our break-even point to see if we will be profitable and in what space of time we can get to the break-even point. To find the Break-Even point we divided the fixed costs by selling price minus variable costs.

Fixed Costs

Selling Price-Variable Costs

2165/4950-500= 0.48651

To break even with expenses we see that we would have to book half of an event, which would be one to make a bigger profit. The break-even point is low since we already have low expense costs of just the phones, website maintenance, advertising and business cards.

Financial Ratios

Current Ratio = Current Assets
$657,875
=
1.25

Current Liabilities
$524,514

Profitability ratio

Profit Margin on Sales = Net Income = 785,751 = .599

Sales
1,311,750

TLM has a net income of $0.59 cents for each dollar of sales.

Operational Management

Tax Compliance:

We have filed for incorporating TLM through an incorporation form in New York State, which is in the appendix. After we get the confirmation, we plan on obtaining the Corporate Tax Information Kit with the tax identification number. After that we will get the seal because we do need to have a business account to put the funds into.

Personnel:

T.L Management will be owned and controlled by the two owners, Salexia Timmerman and Levar Lewis. There are no current employees other than us. Many tasks will be already planned out and split up between us to be done efficiently while others will be worked on together if we can help each other on a specific task at hand

Operation Procedures:

· While we will have clients in contract with us, to expand and get more people to notice us we will network and attend events to introduce the company and hand out business cards into various industries that we look into managing. Flyers are implanted when we have dates booked for our clients and we want to promote those events so we make them to hand out so people are aware of us and the talent.

· Our clients are pretty much like business partners because they help us bring in the promoters and offers so they have the chance to contact us at anytime in phone, email and in person.

· When booking anybody from TLM, they have to specify if they are providing transportation and food/drinks at the destination and any other requests before hand so our client knows what they have in store for them.

· The client is our main priority so they have just as much a say in bookings as we do and what they feel should happen. Half is paid to book the client and then after the job, the other half is to be paid.

· Promotions are going to be done through social media like Twitter, Instagram and Facebook.

Sources of Funding

The company has the choice to look for the funding or fund it on our own. The startup cost as a whole is $2165. This includes advertisement, event entrance fees, business cards, incorporation fees, having the website made and the maintenance hosting for the website which is separate payment itself every month and the first month’s phone bill which will be a joint plan business line from ATT.

Entrance Fees: $500

Website: $250

Website Security: $15

Business Cards: $25

Advertising: $180

Incorporating Fee: $195

Phone Bill: $500

Business Meetings: $500

Ways that we can receive funding is to look into crowd funding using websites like Kick Starter which helps pool together people interested in a business plan that want to put money into it after reviewing and concluding that the idea might be profitable. There are also a lot of other websites similar that help to generate buzz on an idea and bringing investors into it.

We can also apply for small loans with a reasonable interest rate or pitch the idea to an investor that may want to be apart of the business plan as well.

Personal savings will be used to finance 100% of the capital needed to enhance business performance. The main advantage of using this form of financing is to ensure complete ownership of the business and to avoid liability on out part in case something causes a conflict between all parties in just the beginning of the venture. When a person finances the business, it is easy to gain revenues and achieve revenue growth. Although this is a main form of risk, the business tends to achieve success due to its ability to raise revenues. Peer to peer lending through partnerships to the business shall also be used, as sufficient sources to raise capital required ensuring sustainability of the business. In this formula, the business can borrow money from friends at a fee in return after some time. T.L Management Corp also considered financing from this source.

The other option for the management to consider is asset backed lending. Since T.L Management Corp. has to have a number of assets that are worth the consideration; the business will capitalize on using them to raise capital for the business. Most of the asset-backed loans are usually based on collateral value. Many entertainment businesses are financed by consumer loans. These types of financing range from mortgages, equity loans, refinancing and personal loans. Banks nowadays don’t mind if a person takes a loan and uses it for the purposes of a business. This is because as long as the security is guaranteed, it is difficult for such a loan to use the funds in activities that do not generate income. For this reason, T.L management will chose from a variety of options weighed in order to raise the capital needed to start its business operations

The chosen source financing of the business will depend on the risks involved, the taxes and the assets available in the business. We looked over every option to go about financing and came to the agreement that we can split the expense 60/40 like our ownership percentage that way we can start off on our own and eventually after seeing how well we do and we gain a market, we can then again consider other people’s money (OPM).

Salexia: 2165*.60= 1299 + 417.50 (1760.50)

Levar: 2165*.40= 866 + 417.50 (1239.50)

The capital funding equals $2165 but we planned on splitting the difference that makes it $3000 so we can have a small amount of “petty cash” in case of an extra expense.

.CONCLUSION

Despite the increasing competition from the company’s competitors, T.L Management Corporation will continue to offer the best entertainment management strategies and value our clients like we are the client ourselves when negotiating offers. The idea is to manage clients just like other agencies and firms but with more of the person in mind than the reputation and only the company as a thought. We want to emphasize paying more attention and keeping the clients goals as a priority and respecting their talent.

With paying more attention to the steps n bringing the company forth there are a few things to focus on more and work on like the marketing since there’s no one specific client, we want to diversify with different forms. But overall even with competing, it will be a profitable company at least with the basic jobs being booked and at most with the other deals that are possible.

References

Cones, J. W. (2010). Business plans for filmmakers. Carbondale: Southern Illinois University Press.

Longenecker, J. G. (2006). Small business management: An entrepreneurial emphasis. Mason (OH: Thomson.

Chorafas, D. N. (2007). Strategic Business Planning for Accountants: Methods, Tools and Case Studies. Oxford: CIMA. Print.

Elliott, R., & Percy, L. (2007). Strategic Brand Management. Oxford: Oxford Press.

Martin, A. (2004). The entertainment industry is cracked, here is the patch. Paris: Publibook.

http://smallbusiness.chron.com/start-entertainment-promotions-company-2299.html

http://www.ehow.com/how_6357922_start-entertainment-management-company.html