Concert Promotions Company Business Plan Executive Summary Company Summar

Concert Promotions Company Business Plan - Executive summary, Company summary, P
romotional services, Market analysis summary, Strategy

Concert Promotions Company
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BUSINESS PLAN
GOOD VIBRATIONS, INC.
145 Mueller Avenue, Suite 13 Lansing, Michigan 48901 Good Vibrations, Inc. (GVI)
, is a home-based concert promoting corporation. GVI's keys to success include:
implementing an effective cash flow plan, communicating with our customers and c
lients regularly, and targeting our most ready-tobuy customers or clients first.
EXECUTIVE SUMMARY COMPANY SUMMARY PROMOTIONAL SERVICES MARKET ANALYSIS SUMMARY
http://www.referenceforbusiness.com/business-plans/Business-Plans-Volume-09/Conc
ert-Promotions-Company.html[10/20/2009 8:12:30 PM]
STRATEGY MANAGEMENT SUMMARY FINANCIAL PLAN APPENDIX
EXECUTIVE SUMMARY
Good Vibrations, Inc. (GVI), is a home-based concert promoting corporation, loca
ted at 145 Mueller Avenue, Suite 13, Lansing, Michigan. This business plan was d
eveloped for the purpose of applying for a business loan in the amount of $19,55
0. The start-up costs for this business are $29,550. The owner's equity is $10,0
00. Projected sales for 2002 alone are $377,250 and our projected profits are ov
er $147,000. GVI's keys to success include: implementing an effective cash flow
plan, communicating with our customers and clients regularly, and targeting our
most ready-to-buy customers or clients first. The business of concert promotions
, as shown in our plan, has an excellent profitability level and growth rate. Ou
r competitive edge along with new promotion techniques puts GVI in the forefront
of promotional services. We are living in an age where more and more new talent
is being introduced into the concert mainstream. Our concert promotion services
will differ from the traditional concert promoters because of our added persona
l touch. The highlights of our business plan are shown below.
Objectives
Our objectives for the business are to: Sell 80 percent to 90 percent of an aren
a's capacity per concert Host at least 10-20 concerts a year Create an ongoing r
elationship between GVI, the artist, and the concert attendees that will continu
e throughout each year
Mission
Our mission is to provide the best and most unique quality of entertainment that
the music industry has to offer to our concert attendees. Also, to meet the art
ists' performance needs with professionalism and expertise. We will establish an
excellent business relationship with each arena facility owner so that the even
t is profitable to all parties involved.
Effective Facets of Promotions
RESEARCH: Always ask questions, gather information, meet people, and learn more
about our market. QUANTITY: We must do everything we can to let all potential at
tendees know of an event. Many avenues must be pursued to make sure no stone is
left unturned in terms of promotion. FREQUENCY & DISTRIBUTION: If we wait until
the last six days before an event to bombard the market, it is too late. People
plan their "free time" weeks and months ahead. We must give our audience plenty
of advance notice.
12 Keys to Outstanding Success
Below are 12 key marketing ingredients that we will apply to make significant gr
owth almost straight away. They are as follows: 1. Understand that marketing our
business provides the ultimate return on our money. Work "on" our business, not
"in" it. 2. Only use direct-response marketing, not "institutional." 3. Communi
cate with our customers and clients regularly. 4. Run simple low-cost, or no-cos
t tests on every aspect of marketing to find our biggest sales appeal. 5. Target
our most ready-to-buy customers or clients first. 6. Create a systematic, high
profit back end. 7. Always reverse the risk our customers feel before they buy.
8. Give our reasons why our sponsoring of events will benefit, add value, and so
lve problems for the client. 9. Always include testimonials or endorsements in a
ll our marketing. 10. Always think in terms of the customer or client's "What's
in it for me?" question. 11. Implementing an effective cash flow plan. 12. Achie
ving efficiency.
COMPANY SUMMARY
Good Vibrations, Inc., is a home-based corporation located at 145 Mueller Avenue
, Suite 13, Lansing, Michigan. Our present office is small but is in a room of i
ts own to keep our home and work lives separate. Our office will contain bookshe
lves, file cabinet, desk with computer, sitting chairs, a fax, a copier, and spa
ce for a small waiting area.
Company Ownership
Good Vibrations, Inc., is a corporation, owned by its principal investor and ope
rator, Roland Wilson.
Operations
Roland's plan is to be home-based for the period of three years after which he w
ill seek the use of an office/hall building for his offices. GVI's regular busin
ess hours will run from 12:00 noon until 9:00 P.M., Monday through Friday. On Sa
turdays or concert days the hours will vary. Most of the business will be handle
d at our home office. As other business warrants, we will use hotel facilities a
nd clients' offices for the larger more in-depth meetings. The process of promot
ing a concert will begin with: 1. Choosing a date, artists, and location 2. Proj
ect expenses 3. Project sponsorships needed 4. Project ticket sales 5. If concer
t selection is feasible, begin concert promotion schedule
Start-up Summary
Total start-up expenses (including legal costs, advertising and promotions, stat
ionery, and related expenses) come to $29,550. Start-up assets required include
$2,000 in short-term assets (office furniture, etc.) and $10,000 in initial cash
to handle the first few months of operations as sales play through the cash flo
w. The details are included in the following chart. Start-up Plan Start-up Expen
ses
Legal and Accounting Expenses
$500
Stationery, etc. Consultants Insurance Office Furniture Research and Development
$300 $1,000 $500 $2,000 $1,000
Brochures and Promotional Items $3,150
Computer and Printer Travel Meals Security Accommodations Other Total Start-up E
xpense Start-up Assets Needed Cash Requirements Start-up inventory
$1,200 $3,000 $400 $6,000 $500 $0 $19,550 $10,000 $0
Other Short-term Assets Total Short-term Assets Long-term Assets Total Assets Le
ft to finance: Start-up Funding Plan Investment Owner Investor 2 Other Total Inv
estment Short-term Liabilities Unpaid Expenses Short-term Loans Interest-free Sh
ort-term Loans Subtotal Short-term Liabilities Long-term Liabilities Total Liabi
lities Loss at Start-up Total Capital Total Capital and Liabilities Checkline
$0 $10,000 $0 $10,000 $0
Total Start-up Requirements: $29,550
$10,000 $0 $0 $10,000 $0 $19,550 $0 $19,550 $0 $19,550 ($19,550) ($9,550) $10,00
0 $0
PROMOTIONAL SERVICES
GVI will offer the following promotional services to our clients: Distribute Pub
lic Service Announcements Purchase Radio Ads Purchase Newspaper Ads Offer Bullet
in Announcements, Newsletters, and Personal Letters Print Bulletin Inserts/Flyer
s Submit Concert Information to the Press Display Posters
Provide Press Kits Setup Telephone Interviews with Local Radio Stations Handle M
erchandising of T-shirts, Posters, CDs, etc. Provide Lodging and Transportation
Setup Facility and Site Selection Provide Food and Beverages for Artist Handle T
echnical Specifications, including Sound, System Needs, Lighting Needs, etc.
Promotional Strategies
We will use several types of promotional strategies for our events, but the majo
rity of our market will be reached by radio. Media Profile/Demographics 1. WWCK
105.5 FM â 265,000 listeners per day and, through the use of repeater facilities, are
a major presence in the radio market throughout south central Michigan. Market:
Lansing is the 16th ranked radio metro in the U.S. 42.9 percent of the adult 25
+ population has at least some college education. Lansing metro retail sales tot
al $5.4 billion per year. 95 percent of metro residents drive to work. 2. WDZZ 9
2.7 FM â 100,000+ listeners per day. Target audience 92.7 3,000 watts 18- 54 age grou
p. #1 Urban Adult Contemporary alternative work station reaching adults of all a
ges. Is #1 in reaching our core audience of 18-34 urban listeners. We will also
use Print Media, Television, Online Information Services, Posters, Banners, and
Event Programs. Print Media (advertisements placed): Major Newspapers: Oakland P
ress, Saginaw News, Detroit News, Detroit Free Press, Grand Rapids Press, Lansin
g State Journal, Ann Arbor News, Bay City Times, Kalamazoo Gazette, Chicago Trib
une, Saturday Star (Ontario Edition). Music Magazines: Current Magazine, Jam Rag
, Metro Times, Orbit, Between the Lines, Music Review Magazine, The Buzz! News,
Real Detroit, Repeat the Beat, Mirror, BPM Culture, DJ, Revolution, DJ Times. In
addition to advertisements placed, five waves of press releases with follow-up
issued to 250 local newspapers and other periodicals in Michigan, Ohio, Illinois
, Indiana, Wisconsin, and Windsor, Canada, listing supporting company as a major
sponsor of the event.
Television Five waves of press releases with follow-up issued to 60 television s
tations in Michigan, Ohio, Illinois, Indiana, Wisconsin, and Windsor, Canada, li
sting supporting company as a major sponsor of the event. Online Information Ser
vices Five waves of press releases with follow-up issued to over 2000 internatio
nal magazines, newspapers, and major music/information sites. Third-party sponso
ring will be made available to supporting company where suitable in posting comp
any's banners on major websites. Posters Logo inclusion on 2000 11â ² Ã 17â ² three-color
rs regionally distributed. Banners Sponsor's banners prominently displayed at ma
jor traffic flow points. Banners will be prominently displayed at the entrance t
o the event, Major sponsors will have their banners on stage either across the f
ront or as a backdrop behind the entertainers. Event Program Prominent logo incl
usion in 10,000 copies of the official program for the Good Vibes Explosion 2002
and listing of supporting company as a categorized sponsor.
Dealing with Local Media
We will use the following methods in dealing with the media. Create our own cove
r letter on our organization. Thank them for their time and commitment to workin
g for the community to keep them informed of special programs. Make it personal
and warm. Build an ongoing relationship. Deliver the Press Kit in person if poss
ible. Both the fact sheet and release should be in the hands of media representa
tives two to three weeks before the concert date, to accommodate deadlines and s
chedules, and facilitate coverage. But even if we don't make the deadlines for t
he concert, we will submit the information and make contact with editors and ass
ignment desks to keep them aware that our ongoing events for the community throu
gh concerts and programs will enrich the community.
The Press Kit includes the following: 1. A Black and White Publicity Photo of th
e Artists (make sure we know how many to send). 2. Artist Fact Sheet. This has g
eneric information about the artist. 3. News Release for Concert Night. The rele
ase is only intended to supply generic information for local communicators to bu
ild on. All details that the public needs to know in order to be aware of the ev
ent and consider attending should be in the local release. Always doublecheck to
be sure that the information on how media people can reach us for questions or
interview requests is clearly displayed. An important thing: Our office has clea
rly identified on the news release who media representatives should contact for
information about our concert. If this information is not accurate please correc
t the contact persons name and daytime phone number before sending it to the med
ia. 4. Sample Community Bulletin Board Announcement and/or PSA. Since formats of
these vary widely, adapt the sample to suit requirements.
Media Contact Tips
Media Contacts: If we have not contacted local editors and news directors for pr
evious events in our community, now is the time! Call for an appointment. If an
in-person meeting is not possible, ask to speak on the phone or ask if they want
to suggest a more convenient time to call back. Personal contact is extremely h
elpful in getting coverage. Accompany your release by a call before or after it
is received, or arrange an appointment so we can present it in person. In our co
ntacts with local media, make it clear that concerts such as this one held at ou
r local arenas are planned as an enrichment event to the community at large and
that the community is invited, without a charge. Some news people assume events
are for paying attendees only, so your casual mentions about the fact that the w
hole county is invited may be helpful in getting coverage. Invite the editor or
news director to attend the concert, underscoring its community-wide aspect, and
the fact that you believe it will be a very special event.
MARKET ANALYSIS SUMMARY
Good Vibrations is focusing on four target audience groups that are of all racia
l backgrounds. The men's and women's age groups are: 1. 18-24
2. 25-34 3. 35-44 4. 45-54 Our marketing survey has revealed that, on average, a
pproximately two thirds of concert attendees are female and one third are male.
According to the U.S. Census Bureau, Census 2000, these people are between the a
ges of 18-54 who possess disposable incomes of $10,000$40,000. According to Arbi
tron, most are employed with high school diplomas and 57.8 percent have some col
lege education. According to the Lansing Area Chamber of Commerce the year round
population for Ingham County is 436,000 and 125,000 for the city of Lansing. Ac
cording to Arbitron the median annual household income is $42,784 and median hom
e value is $50,500. Lansing Area Access/Restaurant/Tours/Traffic Flows Immediate
ly adjacent to the Lansing IMA Arena is I-69 which sees over 25,000 cars pass by
each day according to the Lansing Area Chamber of Commerce. The IMA has the con
venience of being within 100 minutes of at least four major state universities,
theree major concert arenas, and the State Capitol. With the intersection of I-4
96 and I-69 in Lansing, it is favorably positioned near the corridor, which is o
ne of the county's major north-south interstate highway systems. A major shoppin
g complex, The Westinghouse Center, is within walking distance as well as a numb
er of dining and fast food establishments. Currently Good Vibrations, Inc., is c
onducting a feasibility study in hopes of bringing at least four concerts to the
lower Michigan area in 2002. These concerts will also feature food and noveltie
s booths.
Market Segmentation
We expect a modest 5 percent growth in our target market over the next four year
s. The growth will increase our Ingham County target market from 236,683 to 287,
691 by 2005. Market Analysis
Potential Customers Growth 2001 Age Group 18-24 Age Group 25-34 Age Group 35-44
Age Group 45-54 Other Total 5% 5% 5% 5% 0% 41,869 61,054 70,052 63,708 0
2002 43,962 64,107 73,555 66,893 0
2003 46,160 67,312 77,233 70,238 0
2004 48,468 70,678 81,095 73,750 0
2005 50,891 74,212 85,150 77,438 0
CAGR 5.00% 5.00% 5.00% 5.00% 0.00%
5.00% 236,683 248,517 260,943 273,991 287,691 5.00%
Target Market Segment Strategy
Our strategy is to target individuals aged 18-54 because they are the largest po
pulation of music buyers and concert attendees. We will reach the 18-34 group by
marketing some of the newest and heart-throbbing talents. For our 35-54 group w
e will market our older and more overlooked artists that this age group will rec
ognized from the 1960s to the 1980s, from their school/college days along with t
he other R&B artists and music that appeals to them. We cannot survive just wait
ing for the customer to come to us. Instead, we must get better at focusing on t
he specific market segments whose needs match our offerings. Focusing on targete
d segments is the key to our future. Therefore, we need to focus our marketing m
essage and our product offerings. We need to develop our message, communicate it
, and make good on it. Our target market covers 15 lower Michigan counties, and
people aged 18-54 which totals over2.9 million individuals. This market is the l
argest segment of people that generally purchase tickets to music concerts. We e
xpect 18 percent of this market to be urban males, 30 percent to be urban female
s, 15 percent to be suburban males and 37 percent to be suburban females.
Market Growth/Industry
Attendance for top tours fell in 1999 while concert grosses jumped.
Analysis: The good news for the concert industry is that music fans in North Ame
rica forked over a record $1.5 billion to buy concert tickets in 1999, according
to industry trade magazine StarRate. The bad news for fans is that this feat wa
s accomplished by increasing ticket prices rather than by increasing attendance.
StarRate's annual analysis of the concert business found that the average consu
mer paid $43.63 to see one of the top 50 tours in 1999, up more than $10 per tic
ket from 1998. But only 27.4 million tickets to the top 50 tours were sold in 19
99, a decrease of 1.1 million from the previous year. Aging rockers the Rolling
Stonesâ who haven't been shy about asking a premium for tickets in recent yearsâ were 199
's top grossing act, ringing up $66.7 million in ticket sales in North America,
according to StarRate. The Stones' "No Security" tour, for which fans paid an av
erage of nearly $110 per ticket, topped 1999's gross charts despite drawing near
ly a half million fewer fans in North America than did the No. 2 Bruce Springste
en tour, for which tickets cost an average of about $60. Trade magazine Entertai
nment Business , whose statistics include shows outside North America (and which
has a slightly different reporting period), pegged the Stones' 1999 take at $89
.2 million and named the band as the top touring act of the 1990s, with more tha
n $750 million in ticket sales for the decade. Their closest competitors were th
e Grateful Dead ($285 million) and U2 ($282.5 million). The Rolling Stones sold
out 42 of 45 shows reported Entertainment Business for 1999, but there are signs
that high ticket prices kept fans away from some events. Sting's "Brand New Day
" tour, for example, attracted a disappointing average of 4,600 fans per city, p
erhaps because the typical ticket sold for nearly $80. Neil Young, with an avera
ge ticket price near $70, averaged attendance of less than 5,000 per city. Meanw
hile, Tom Petty and the Heartbreakers and John Mellencamp, acts with fan bases s
imilar to Young's, both charged about half as much for tickets as Young did and
both drew an average of well over 10,000 fans per city. Premium prices weren't c
harged by every act in the top 10. The average NSync ticket went for $28.62; the
Dave Matthews Band, $34.44; Shania Twain, $37.65; Backstreet Boys, $37.24; the
George Strait Country Music Festival, $40.80; and Neil Diamond, $36.86. All had
prices comfortably below the average. Among StarRate's top 50 tours, the lowest
ticket prices were charged by the Goo Goo Dolls, $19.37. The spike in 1999's ave
rage ticket prices can be attributed in large part to the Rolling Stones,
who charged a much higher ticket price for their "No Security" arena tour than f
or their "Bridges to Babylon" stadium tour of 1998, which commanded prices in th
e $65 range. But also feeding the trend is the increasingly common practice of c
harging significantly higher prices for venues' best seats. Also contributing to
rising ticket prices is the rapid consolidation of the concert promotions busin
ess, which had traditionally been controlled by independent promoters who genera
lly booked concerts in one region. That changed in 1997, when a new company call
ed BEST Entertainment snapped up many of the top independents. BEST's big catch
of 1999 was The Next Adventure, which, rather than controlling a region, special
izes in promoting major stadium tours like "Bridges to Babylon." BEST is particu
larly powerful in the amphitheater market because, during its buying spree, the
company purchased promoters who also owned venues. BEST now owns venues in about
30 of top 50 markets, and it self-produced about 20 amphitheater tours in the s
ummer of 1999. These efforts have made BEST the dominant player in the industry.
According to StarRate, BEST had a hand in more than 60 percent of the 200 top-g
rossing concert dates of 1999. BEST- promoted shows grossed $310 million in 1999
, according to Entertainment Business, well ahead of the $118 million take of th
e number two player, House of Blues Concerts. BEST's strategy for recouping its
approximately $1.5 billion investment in the concert business has been to increa
se sales of sponsorshipsâ which includes the placement of a business' name on a venueâ an
to sell more advertising. BEST also has increased the marketing muscle behind t
he subscription series at its amphitheaters. Demographics are also working to in
crease ticket prices. As the spending power of baby boomers grows, so does the a
mount of money they will spend to see their favorite acts. That fact isn't lost
on the acts and their management, who demand more money from promoters. Thus tou
rs like those of the Rolling Stones, Bette Midler (with an average ticket price
of $81.23, according to StarRate), and Andrea Bocelli ($101.34) can command high
er ticket prices than ever. One of the more encouraging signs to those in the co
ncert industry was the emergence of acts that appeal to young audiences. While s
urveys of the top-grossing tours are often dominated by long-established acts, 1
999's top tours included teen favorites NSync and Backstreet Boys. Also of note
is Shania Twain, who began her first headlining tour in 1997 and quickly emerged
as the hottest country act since Garth Brooks.
Indicators weren't as positive for country music as a whole, however, as the gen
re didn't have the benefit of a Garth Brooks tour in 1999. The George Strait Fes
tival continued to roll, and Brooks & Dunn grossed an estimated $10 million, acc
ording to Entertainment Business. But overall, gross country concert dollars wer
e down 16 percent from 1998. Despite the festival's calamitous end, Woodstock '9
9 was the single highest-grossing concert event of the year, according to Entert
ainment Business. Nearly 187,000 people attended the July 22-25 event, and its t
otal ticket gross was nearly $29 million. The year-end charts issued by both Sta
rRate and Entertainment Business are compiled from unaudited box office reports
voluntarily filed by concert promoters, and promoters are told that the numbers
they report should reflect the face price of tickets. The numbers don't include
taxes, ticketing company convenience fees, parking, and other charges. Top 10 To
urs (StarRate) Act/Gross (in millions) 1. Rolling Stones/$66.7 2. Bruce Springst
een and the E Street Band/$61.4 3. NSync/$51.5 4. Dave Matthews Band/$48.5 5. Sh
ania Twain/$40.8 6. Cher/$37.7 7. Backstreet Boys/$37.1 8. Elton John/$32.5 9. G
eorge Strait Country Music Festival/$32.4 10. Bette Midler/$31.7 Top 10 Tours (E
ntertainment Business) Act/Gross (in millions) 1. Rolling Stones/$89.2 2. Bruce
Springsteen and the E Street Band/$53 3. Dave Matthews Band/$44.6 4. NSync/$44.3
5. Shania Twain/$36.6 6. George Strait Country Music Festival/$32.4 7. Cher/$31
.5 8. Neil Diamond/$31.3 9. Celine Dion/$26.8
10. Backstreet Boys/$24.5 As you can see Good Vibrations, Inc., has chosen a pri
me time to start a concert promotions business.
STRATEGY
As stated above our strategy is a combination of promotions and target marketing
. We will focus on concert attendees ages 18-54 and utilize our detailed promoti
onal strategies to reach these individuals. The target customer will also consis
t of baby boomers and R&B music lovers.
Implementation Steps
Before we begin our marketing and promotions, we will confirm all of the followi
ng items: Check with other area concert arenas, churches, radio stations, and pr
omoters for conflicting events Confirm our concert location in writing Confirm t
he date and artist in writing with the agent Confirm that the radio station will
support us Thoroughly read artist's rider and contract to be sure we can fulfil
l it 14 Weeks Prior to Concert Our tour posters, mailers, tickets, and flyers ar
e ordered from the printer. The cost of our promotional pieces and tickets are t
o be absorbed by getting a local business to use the backs of tickets as a coupo
n, or by placing logos on our promotional pieces. Also, we are seeking to partne
r with our local radio station. We can do this by placing their logo on our prom
otional items in exchange for substantial discounts for on-air advertising and u
nderwriting. The most important thing we will do is to start a "word of mouth" c
ampaign immediately. We will make calls to local clubs, etc., and get the word o
ut about our event. This is very effective and helps get the "buzz" going. This
will begin immediately! Determining what type of concert we are promoting we the
n acquire our mailing labels for a regional mailing for that particular industry
. At least two to three times the venue capacity are mailed out. If the venue ho
lds 500, between 1000-1500 mailers are sent out. All local barber shops and beau
ty salons are then contacted. Next ticket sales at ticket outlets and music stor
es are set up. They are then listed on our
promotional materials. All outlets are informed that the receipts and excess tic
kets are to be picked up no later than the day before the concert. Our music sto
res are then informed that even if they sell all of their allotted tickets UNDER
NO CIRCUMSTANCES should they tell their customers the concert is sold out unles
s we personally tell them so. 13 Weeks Prior to Concert Our mailing is sent out.
We will use volunteers to help with our bulk mailing and as a back up we will c
ontact our printer; they offer mailing services to promoters for a very reasonab
le fee. 12 Weeks Prior to Concert Our flyers advertising the concert will be dis
tributed throughout our city. Distribute flyers advertising the concert to all m
ajor clubs in the area. Also, flyers will be posted in local businesses and rest
aurants. Flyers are also distributed to our ticket outlets, and posters are bein
g displayed in a prominent location in the selling outlets. Our tour publicist i
s provided the following information: 1. Venue name 2. Venue street address, inc
luding city and state 3. Show time 4. Ticket prices (specify ticket breakdownâ ¦ $9 gr
oups/$12 advanced, etc.) 5. Local phone number for ticket information 6. The nam
e of the radio station(s) we are doing our primary promotions with, including th
e call letters, phone numbers, and the name of our contact at the station If any
stations or newspapers contact us directly, they will be supplied with all the
details of our concert. 11 Weeks Prior to Concert Tickets will be distributed to
our outlets. They are adequately supplied with tickets, flyers, and a poster. T
he poster is hung in a prominent location. 8 Weeks Prior to Concert Our partneri
ng with a local radio station is arranged and they have started running spots/un
derwriting announcementsâ approximately 20 per week . We have inquired with the radio
station about contests and giveaways, such as tickets, CDs, cassettes, and "pri
ze
packages." Most stations jump at the chance to center a huge promotion surroundi
ng a concert. We are working mainly with our local station. The amount of "free"
promotion they give us each time they giveaway tickets on the air will offset o
ur expense of supplying them with a reasonable amount of free tickets. We will t
arget our ticket giveaway at 20 pair of tickets. The product giveaway is availab
le through management or the station can contact the radio promotions department
at the artist's record company. We will always begin our radio campaign at leas
t eight weeks before our concert. We are airing between 3-6 spots or more each d
ay. Our radio promotion is always started early on. We can always reduce spots w
hen we sell out our concert. Also, the stations in our area are provided with al
l the information regarding our concert. We understand that waiting too late to
begin our radio promotion will adversely affect our ticket sales. Although radio
advertising does cost, it is an incredible means to effectively communicate wit
h the concertgoers that will attend our concert. 6 Weeks Prior to Concert We are
following up to see that our local radio station received promotional giveaway
products, including ticket giveaways. We are also contacting the artist's manage
ment about a radio interview. This is scheduled by week four. 4 Weeks Prior to C
oncert We are now running the second "flight" of spots/underwriting announcement
s with our local radio station. Approximately 20 per week up to our show date or
until the tickets have sold out. Radio spots will remain airing until the day o
f the show unless we sell out our tickets. We also are sending out a second mail
ing to "concertgoers" in our area at this time. Lists are available from Dunhams
Direct. Concert posters are placed in prominent locations throughout our commun
ity such as: local grocery stores, arcades, malls, restaurants, and any industry
-owned businesses. We are also making sure all posters are still up at our area
barber shops and beauty salons. 3 Weeks Prior to Concert Arrange for a volunteer
to call all major clubs to remind them about the concert. This is a very import
ant part of the last-minute promotion of our concert. Even though we may have al
ready contacted our local clubs, we are going ahead and giving them another "rem
inder" call. It is also being mentioned that we have group rate tickets availabl
e to groups of ten or
more. Connecting with our local clubs is a vital link to the success of our conc
ert. Week of Concert All ticket monies and/or tickets are picked up from the out
lets no later than the day prior to the concert. This will give us time to make
an accounting of all tickets sold at advance and group rates. Group rates will n
ot be applicable at the door nor should any tickets not already paid for be held
at the door. It is common for people to call, ask us to hold 30 tickets, and th
en not show up or appear with just a few people. If we have not already discusse
d arrival times and last-minute details with the artist's road manager, he/she w
ill be called to confirm appropriate arrangements. Hotels are reserved and prepa
id in the artist's name. There is often confusion at the desk so we will be sure
that the artist's name is correctly spelled and, if possible, a confirmation nu
mber is assigned and given to the road manager. Day of Concert We are making sur
e that our crew will be present at the pre-determined time. The hall manager sho
uld have the building open and ready for set-up. We will brief ushers and staff
on their duties at least two hours before concert time. We are making sure they
are aware of the fact that due to recording contracts, no tape recorders or vide
o cameras are permitted in the hall without written approval of the record compa
ny or management. Photographs are not permitted. We are meeting with our road ma
nager to cover details on set-up and load-out as well as sound check, etc. We ha
ve tables set up at the rear of the concert arena and have several people availa
ble to help with sales of records and T-shirts, etc. We have an expense record s
heet completed (door sales can be added following the concert) and receipts on h
and so we can settle up quickly if percentages are involved. Meal(s) for artists
and crew are provided. Preparation time with artists and crew usually takes pla
ce an hour or so prior to the concert. Doors usually open to the public 30-45 mi
nutes before concert time.
Mailing list cards are passed out (if appropriate) to get the name and address o
f all who attended so we can send flyers to them in the future. More concertgoer
s will fill out cards if a drawing is attached. Drop boxes are placed by entranc
es for cards. After the Concert We are making sure that enough crew members are
present to help artists with load-out. We will then send thank-you notes to all
volunteers. We pay all our bills.
Logistical Specifications
Sound Check Sound check should be scheduled at least two hours before the concer
t start time. A set time should be agreed upon before the event date. Plan to ke
ep people out of the arena during sound check. The sound system and stage should
be set when artists arrive. They usually like to take their time during sound c
heck to make sure things go as smooth as possible during the concert. We will ha
ve our most qualified sound engineer on hand to run the sound. If additional equ
ipment is rented or brought in, we will be certain that the sound engineer is ex
perienced in operating it or has someone with him who is. Also, we must be sure
that the sound engineer is at the site the whole time (sound check, concert time
, and tear down). Concert order, track queues, and equipment instructions should
be completed prior to sound checks. Product Sales GVI will have at least two tr
ustworthy, responsible individuals available to handle the sale of merchandise.
We may need more sales personnel depending on the size of the building. The vend
or should provide a starting bank for the sales personnel for transactions. Sale
s personnel will be expected at the product table one hour prior to the concert,
during the concert, and one hour after the concert. It is necessary for the pro
moter to provide at least one to two eight-foot tables (depending on the size of
the building) to display the products. We will place the tables in areas most h
eavily traveled by the concert attendeesâ near entrances and exits closest to parking
areas. The artist may have the right, but not the obligation, to sell products
at the concert. The artist pays no charges or fees on merchandise sold at the ev
ent if stated in their contracts.
Lodging /Transportation When necessary, we will provide one double room at a nat
ional chain hotel (Holiday Inn or like quality). The hotel should be as close as
possible to the concert site. Confirmation of reservation should be returned wi
th the Concert Confirmation Form. When the artist is flying to the event, we wil
l provide transportation to and from the airport, concert site and hotel. We wil
l be notified of the cost of the air fare. We plan to pay this at the time the a
irplane ticket is booked. The artist arrival time, flight number, airline, etc.,
will be communicated with us as soon as possible prior to the event.
Possible Competition
The following are possible competitors: 1. XYZ Music Presents 2. WHYZ Presents 3
. Mega Explosion Concert 4. River Run Casino 5. MTV ABX 6. Chandler Park Music F
estival 7. Industry & Stoned Productions 8. Molehill Productions These companies
are listed as "possible" competition because we know with our unique marketing
strategies and professionalism we can gain an edge over them.
Competitive Edge
Good Vibrations, Inc., currently has artists waiting to be promoted year round,
instead of just during the summer. Our competitive edge will be that we will con
tinuously market the artist and be more than a seasonal promoter. We operate wit
h the utmost professionalism and offer quality service to all of our clients, no
t just the most famous ones.
Pricing
Our ticket pricing will average about $35 for floor tickets and $27.50 for gener
al admissions. Our average arena capacity will be about 2,500 to 4,500 seating c
apacity. Each concert will be budgeted out in regards to individual charges such
as but not limited to:
Arena rental Ticketmaster fees Stage use Forklift Spotlights Novelty Sales Parki
ng Insurance Bond Switchboard House sound Risk Management Technical Director Sec
urity Stage hands Follow spots Set-up/Clean-up tilities Marquee set-up First Aid
Lighting Design Fee
Sales Strategy/AIDCA
AIDCA, or attention, interest, desire, conviction and action are the five stages
of the sales call are how we'll approach our prospective clients. If this appro
ach fails, we will politely thank them for their time and discontinue the call.
Possible Leads Possible leads will derive from advertising firms, martial arts,
travel agencies, automotive dealers, airlines, apparel, electronic stores, art s
upplies, youth organizations and centers, athletic organizations, ball clubs and
organization, bartending schools, band instruments, beauty salons and schools,
banks, cellular services and pagers, bible schools, colleges, pool parlors, book
stores, beverage manufacturers, sporting goods, apartments, pet supplies, car al
arms, churches, basketball clubs, hockey clubs, soccer clubs, credit card compan
ies, fastfood restaurants, employment agencies, fitness clubs, vitamin and healt
h stores, travel agencies, furniture stores, manufacturers, grocers, hotels and
motels, ice cream manufacturers, music stores, mobile home manufacturers, and br
okers, and many more.
Key points of interest for sales calls: Strive to set-up an appointment as oppos
ed to a sale. Target your sales drives. Keep features in reserve as aids to tip
the balance in your favor. Elaborate on product or service features, benefits, a
nd company knowledge. Never criticize the competition, but always aim to outperf
orm it. Above all, SMILE! Sales of sponsorships will be based on the collective
expenses of each individual concert. Our goal is to know the total expenses of e
ach concert before we promote it. Once we know the expense total, we will know h
ow many sponsorships we need to sell.
Sponsorships
Sponsorship/Advertising will play a vital role in the success and growth of Good
Vibrations. Before the first ticket is sold, sponsorship and program advertisin
g is our primary resource to ensure a successful event for Lansing and Ingham Co
unty. Without such support, Good Vibrations would simply cease to get off the la
unching pad. This year is our inaugural year and we anticipate it to be a waters
hed for the four-concert event called the "Good Vibes Explosion 2002." Good Vibr
ations's use of Internet, television, radio, and print advertising, as well as c
ommissioned art posters, official programs, brochures, flyers, T-shirts, banners
, direct email, and extensive signage will blanket south central Michigan and de
liver sponsor/advertiser's and the Good Vibrations's messages. We estimate that
the event marketing campaign will generate 2.9 million impressions within 90 min
utes of Lansing, effectively tapping into a market with an Effective Buying Inco
me (EBI) of $38 billion. The different sponsorship/advertising packages and thei
r corresponding benefits and features are described within the following pages.
Each package delivers incredible value, allowing your company to fulfill its mar
keting missions in a cost effective, culturally beneficial manner. All sponsors
receive an entertainment package consisting of tickets and backstage and hospita
lity passes to all indoor and outdoor events. If our sponsors do not see an "exa
ct fit," we are open and willing to create a special program for their company.
Sponsorship Title Endowment
Marquee Sponsor $25,000.00 Corporate Sponsor $15,000.00 Principal Sponsor $10,00
0.00 Patron Sponsor Affiliate Sponsor Booster $5,000.00 $1,000.00 $500.00 Associ
ate Sponsor $2,500.00
Marquee Sponsor
The Marquee Sponsor will achieve unparalleled exposure at an unsurpassed value f
or their company through title sponsorship of the Good Vibes Explosion 2002. Gra
b the attention of a desirable target with millions of favorable impressions. De
monstrate their company's commitment to community service and preservation of Am
erica's unique musical heritage. Receive top billing across all the board in all
media in all mentions. The benefits afforded to the sole Marquee Sponsor of the
Good Vibes Explosion 2002 will include: Their company's name will become the le
ad part of the Festival's name, i.e.: "The (corporate identity or product brand)
" Good Vibes Explosion 2002. Full inclusion in primary position of all paid and
trade television, radio and print advertising and promotional pieces, press rele
ases, indoor event signage, and public service announcements. Continuous listing
s and press coverage in print, radio, and television during said event. Top bill
ing mentions during emcee breaks and intros at indoor and outdoor events. Licens
e to use event name and trademarks in your company's promotional activities, sub
ject to GVI review. First choice vendor booth placement (booth at GVI's expense)
with product exclusivity at event with right to sell, use, or display products
(within GVI's guidelines). Paramount banner placement at all indoor and outdoor
events (subject to venue rules). Marquee sponsor title appearing on Good Vibes E
xplosion 2002 T-shirts. Largest size sponsor advertisement in the official Good
Vibes Explosion 2002 program
guide, published by Small Business Designs and Graphics and distributed at the e
vent and in south central Michigan. Lead appearances in all event program, broch
ures, posters and flyers, and event website for one year, with linking. First op
tion to be involved in video and audio recording and broadcast projects. Additio
nal banner placements (up to four total) at indoor and outdoor events. Additiona
l signage at concession and souvenir areas. Custom entertainment package to rewa
rd employees, customers, and others. Consists of eight VIP passes which feature
a "Meet and Greet" session with headlining artists (subject to artist contractua
l riders) in addition to total access to all events and 20 sponsorship passes wh
ich allow for seats in both indoor events.
Corporate Sponsor
For the Corporate Sponsor we will tailor their contribution to a slightly more m
odest level than the Marquee Sponsorship, but they will receive incredible expos
ure nonetheless. Each opportunity to announce and credit the event will be follo
wed immediately by a phrase such as "Presented by (their company or product bran
d)". Show the target audience their company's strong commitment to new American
music and community service. The Benefits afforded to Corporate Sponsors of the
Good Vibes Explosion 2002 will include: Full inclusion in secondary position of
all paid and trade television, radio and print advertising and promotional piece
s, press releases, indoor event signage, and public service announcements. Conti
nuous listings and press coverage in print, radio, and television during said ev
ent. Prominent mentions during emcee breaks and intros at indoor and outdoor eve
nts. License to use event name and trademarks in your company's promotional acti
vities, subject to GVI review. Preferred vendor booth placement (booth at GVI's
expense) with product exclusivity at event with right to sell, use, or display p
roducts (within GVI's guidelines). Preferred stage wings banner placement at all
indoor and outdoor events (subject to venue rules). Second largest size sponsor
advertisement in the official Good Vibes Explosion's program guide, published b
y Small Business Designs and Graphics and distributed at the event and south cen
tral Michigan. Corporate sponsor title appearing on Good Vibes Explosion 2002 T-
shirts. Second largest appearances in all event program, brochures, posters and
flyers and event website for one year, with linking.
Additional signage at concession and souvenir areas. Custom entertainment packag
e to reward employees, customers, and others. Consists of six VIP passes which f
eature a "Meet and Greet" session with headlining artists (subject to artist con
tractual riders) in addition to total access to all events and 12 sponsorship pa
sses which allow for seats in all events.
Principal Sponsor
We're adding this sponsorship level for sponsors who are trying to reach a new,
expanded market (from local to regional or national). The benefits afforded to P
rincipal Sponsors of the Good Vibes Explosion 2002 will include: Full inclusion
in third position of all paid and trade television, radio and print advertising
and promotional pieces, press releases, indoor event signage, and public service
announcements. Continuous listings and press coverage in print, radio, and tele
vision during said event. Mentions during emcee breaks and intros at indoor and
outdoor events. Vendor booth placement (booth at GVI's expense) with product exc
lusivity at event with right to sell, use, or display products (within GVI's gui
delines). Stage wings banner placement at all indoor and outdoor events (subject
to venue rules). Third largest size sponsor advertisement in the official Good
Vibes Explosion 2002 program guide, published by Small Business Designs and Grap
hics and distributed at the event and south central Michigan. Principal sponsor
title appearing on Good Vibes Explosion 2002 T-shirts. Third largest appearances
in all event program, brochures, posters and flyers, and event website for one
year, with linking. Custom entertainment package to reward employees, customers,
and others. Consists of four VIP passes which feature a "Meet and Greet" sessio
n with headlining artists (subject to artist contractual riders) in addition to
total access to all events and eight sponsorship passes which allow for seats in
all events.
Patron Sponsor
No sponsorship can do so much for so little money. Gain millions of favorable im
pressions at an incredible value. This is the minimum level of sponsorship neces
sary to receive televisionadvertising benefits. Help one of the first and best A
merican music festivals to grow and touch people with the uplifting power of Rap
and Dance music.
The benefits afforded to Patron Sponsors of the Good Vibes Explosion 2002 will i
nclude: Inclusions in all paid and trade radio and print advertising and promoti
onal pieces, press releases, and indoor event signage and public service announc
ements. Mentions during emceed breaks and intros at indoor and outdoor events. V
endor booth placement (booth at GVI's expense) with product exclusivity at event
with right to sell, use, or display products (within GVI's guidelines). Stage w
ings banner placement at all indoor and outdoor events (subject to venue rules).
One-fourth size sponsor advertisement in the official Good Vibes Explosion 2002
program guide published by Small Business Designs and Graphics and distributed
at the event and south central Michigan. Patron sponsor title appearing on Good
Vibes Explosion T-shirts. Appearances in all event program, brochures, posters a
nd flyers, and event website for one year, with linking. Custom entertainment pa
ckage to reward employees, customers, and others. Consists of two VIP passes whi
ch feature a "Meet and Greet" session with headlining artists (subject to artist
contractual riders) in addition to total access to all events and six sponsorsh
ip passes which allow for seats in all events.
Associate Sponsor
The Associate Sponsor will be able to promote their company to thousands of pote
ntial local customers who are proven spenders! This is the minimum level of spon
sorship necessary to qualify for booth space at the event. The benefits afforded
to Associate Sponsors of the Good Vibes Explosion 2002 will include: Inclusions
in all paid and trade radio and print advertising and promotional pieces, press
releases, and indoor event signage and public service announcements. Mentions d
uring emceed breaks and intros at indoor and outdoor events. Stage wings banner
placement at all indoor and outdoor events (subject to venue rules). One-fourth
size black and white sponsor advertisement in the official Good Vibes Explosion
2002 program guide, published by Small Business Designs and Graphics and distrib
uted at the event and south central Michigan. Associate sponsor title appearing
on Good Vibes Explosion 2002 T-shirts. Appearances in all event posters and flye
rs, and event website for one year. Custom entertainment package to reward emplo
yees, customers, and others. Consists of two VIP passes which feature a "Meet an
d Greet" session with headlining artists (subject to artist contractual riders)
in addition to total access to all events and four sponsorship
passes which allow for seats in all events.
Affiliate Sponsor
The Affiliate Sponsor will be able to promote their company to thousands of pote
ntial local customers who are proven spenders! The benefits afforded to Affiliat
e Sponsors of the Good Vibes Explosion 2002 will include: Inclusions in print ad
vertising, press releases, and indoor event signage and public service announcem
ents. Mentions during emceed breaks and intros at indoor and outdoor events. Bus
iness card-size black and white sponsor advertisement in the official Good Vibes
Explosion 2002 program guide, published by Small Business Designs and Graphics
and distributed at the event and south central Michigan. Affiliate sponsor title
appearing on Good Vibes Explosion 2002 T-shirts. Appearances in all event poste
rs and flyers, and event website. Custom entertainment package consisting of two
VIP passes which feature a "Meet and Greet" session with headlining artists (su
bject to artist contractual riders) in addition to total access to all events an
d two sponsorship passes which allow for seats in all events.
Booster Sponsor
The Booster Sponsor will be able to promote their company to thousands of potent
ial local customers who are proven spenders! The benefits afforded to Booster Sp
onsors of the Good Vibes Explosion 2002 will include: Mentions during emceed bre
aks. Mention in the official Good Vibes Explosion 2002 program guide, published
by Small Business Designs and Graphics and distributed at the event and south ce
ntral Michigan. Booster sponsor title appearing on Good Vibes Explosion 2002 T-s
hirts. Appearances in all event posters and event website. Custom entertainment
package consisting of two VIP passes which feature a "Meet and Greet" session wi
th headlining artists (subject to artist contractual riders).
Sales Forecast
We plan to host four concerts a year over the next three years. In 2002 we will
host concerts on the following dates:
Valentine's Day, February 14 Easter, March 30 Mother's Day, May 19 Michigan Stat
e University Smash Month Concert, September 21 The following table gives a rundo
wn on forecasted sales. We anticipate selling at least half of the available sea
ts or 2,500 tickets for each of the first three concerts at our lowest price of
$27.50. This would average approximate sales of $68,750 each for the first three
concerts. For the Michigan State University concert we anticipate a sellout cro
wd of 4,500 seats at our maximum price of $37 or at least $166,500 in projected
sales as recent similar concerts have shown. Then in 2003 we plan to increase ou
r $27.50 tickets to $37, and our $37 tickets to $47. In 2004 we plan to increase
our $37 tickets to $42 and our $47 tickets to $52. Those increases will help to
promote growth in our cash flow. We also plan to have teen parties every month
starting in January 2002. The ticket costs to the parties will be $10 a ticket f
or the first year and $15 a ticket for the second year. The parties will be for
50 to 100 teens. Our conservative sales forecast reflects the lower number of te
ens attending or purchasing tickets. We expect our expenses to decrease about 10
percent as our events become annual events and not much advertising and marketi
ng is required.
Sales Forecast
Sales Valentine's Day Concert Easter Concert Mother's Day Concert Teen Parties T
otal Sales Direct Cost of Sales Valentine's Day Concert Easter Concert
FY2002 FY2003 $68,750 $68,750 $68,750 $4,500 $92,500 $92,500 $92,500 $6,000
FY2004 $105,000 $105,000 $105,000 $234,000 $9,000
Michigan State University Smash Month Concert $165,600 $211,500
$377,250 $495,000 $558,000 $28,050 $28,050 $25,245 $25,245 $22,721 $22,721
Mother's Day Concert Teen Parties Subtotal Cost of Sales
$28,050 $1,800
$25,245 $35,595 $2,400
$22,721 $32,036 $2,400
Michigan State University Smash Month Concert $39,550
$125,500 $113,730 $102,599
Milestones
The accompanying table lists important program milestones, with dates and manage
rs in charge, and budgets for each. The budgets are set for the cost of everythi
ng except the cost of the artist and will be adjusted depending on which artist
we choose to use. The milestone schedule indicates our emphasis on planning for
implementation. Our pre-paid sponsorships will help to offset any additional cos
ts needed outside our budget. What the table doesn't show is the commitment behi
nd it. We will hold monthly follow-up meetings every month to discuss the varian
ce and course corrections.
Milestone Valentines Day Concert Easter Day Concert Mother's Day Concert Michiga
n State University Smash Month Concert Totals
Start Date End Date Budget 9/6/2001 2/14/2002 $30,000
Manager Department Roland Wilson Roland Wilson Roland Wilson Roland Wilson Promo
tions Promotions Promotions Promotions
12/22/2001 3/30/2002 $30,000 2/10/2002 5/19/2002 $30,000 6/15/2002 9/21/2002 $45
,000 $135,000
MANAGEMENT SUMMARY
The initial management team depends on the founder himself, and additional back-
up if needed. As we grow, we will take on additional office help and sales peopl
e.
Personnel Plan
Roland Wilson will arrange the concerts, make sure everything goes according to
schedule, that and the bills are paid in full and on time. For the first year he
will not receive any pay. All the profits will be put back into the business. W
ithin the second year Roland will seek to hire a staff that includes a Secretary
and Sponsorship Sales Rep, each being paid $25,000 a year without benefits. Rol
and will begin receiving an Owner's Draw in the amount of $1000 per week the thi
rd year. He will initially cut costs in the start-up phase by offering college s
tudent's working internships with his company.
Personnel Plan Secretary/Receptionist Sponsorship Sales Rep Owner's Draw Total P
ayroll Total Headcount Payroll Burden
FY2002 FY2003 FY2004 $0 $0 $0 $0 1 $0 $25,000 $27,000 $25,000 $27,000 $0 3 $7,50
0 $52,000 3 $15,900 $50,000 $106,000
Total Payroll Expenditures $0
$57,500 $121,900
FINANCIAL PLAN
We want to finance growth mainly through cash flow. We recognize that this means
we will have to grow more slowly than we might like. The most important factor
in our case is sponsorship sales. The sales will offset any expenses we incur wi
th promoting our concerts. We are also assuming start-up capital of $10,000.
Important Assumptions
The financial plan depends on important assumptions, most of which are shown in
the following table as annual assumptions. At least we are planning on the probl
em and dealing with it. Interest rates, tax rates, and personnel burden are base
d on conservative assumptions. Some of the more important underlying assumptions
are:
We assume a strong economy, without major recession.â ¢We assume, of course, that ther
e are no unforeseen changes in concert promotions to make our musical artists im
mediately obsolete.
General Assumptions Short-term Interest Rate % Long-term Interest Rate % Payment
Days Estimator Collection Days Estimator Tax Rate % Expenses in Cash % Sales on
Credit % Personnel Burden %
FY2002 FY2003 FY2004 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 30 45 30 45 6.00
30 45 6.00
Inventory Turnover Estimator 6.00
25.00% 25.00% 25.00% 10.00% 10.00% 10.00% 0.00% 15.00% 0.00% 15.00% 0.00% 15.00%
Break-even Analysis
Our break-even analysis will be based on each concert and the following facts: C
ost of promoting the event Cost of talent and talents expenses Cost of location
and amenities How much in sponsorships do we need to sell and by what timeframe
All of the costs for these items are yet to be determined.
Projected Profit and Loss
Our projected profit and loss is shown on the following table, with sales modest
ly increasing over the next three years.
Projected Profit and Loss (Income Statement) FY2002 FY2003 Sales Direct Cost of
Sales Production Payroll Other Total Cost of Sales Gross Margin Gross Margin % O
perating Expenses Sales and Marketing Expenses Sales and Marketing Payroll Adver
tising/Promotion Travel Sound Accommodations Security Miscellaneous $0 $8,600 $1
2,000 $4,000 $2,000 $24,000 $0 $0 $7,740 $12,000 $4,000 $2,000 $24,000 $0 $125,5
00 $113,730 $0 $0 $0 $0
FY2004 $102,599 $0 $0
$377,250 $495,000 $558,000
$125,500 $113,730 $102,599 $251,750 $381,270 $455,401 66.73% 77.02% 81.61%
$0 $6,966 $12,000 $4,000 $2,000 $24,000 $0
Total Sales and Marketing Expenses Sales and Marketing % General and Administrat
ive Expenses General and Administrative Payroll Payroll Expense Payroll Burden D
epreciation Telephone Business Insurance Concert Facility Insurance Total Genera
l & Administrative Expenses General and Administrative % Other Expenses Other Pa
yroll Accountant Total Other Expenses Other % Total Operating Expenses Profit Be
fore Interest and Taxes Interest Expense Short-term Interest Expense Long-term T
axes Incurred Extraordinary Items Net Profit Net Profit/Sales
$0 0.00% $0 $0 $0 $0 $600 $500 $500 $0 0.00% $0 $935 $0 0.00% $53,135 $1,955 $0
$49,165 $0 39.10%
$0 0.00% $0 $50,000 $7,500 $0 $600 $500 $500 $0 0.00% $0 $1,020 $0 0.00%
$0 0.00% $0 $106,000 $15,900 $0 $600 $500 $500 $0 0.00% $0 $1,020 $0 0.00% $281,
915 $1,955 $0 $69,990 $0 37.63%
$109,860 $173,486 $1,955 $0 $67,364 $0 40.83%
$198,615 $271,410
$147,495 $202,091 $209,970
Projected Cash Flow
The following cash flow projections show the annual amounts only. Cash flow proj
ections are critical to our success. The monthly cash flow is shown in the illus
tration, with one bar representing the cash flow per month, and the other the mo
nthly balance. The annual cash flow figures are included here and the more impor
tant detailed monthly numbers are included in the appendices.
Projected Cash Flow Net Profit Plus: Depreciation Change in Accounts Payable Cur
rent Borrowing (repayment)
FY2002 $147,495 $0 $69,305 $0
FY2003 FY2004 $202,091 $209,970 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
($55,813) $3,825
Increase (decrease) Other Liabilities $0 Long-term Borrowing (repayment) $0 Capi
tal Input Subtotal Less: Change in Accounts Receivable Change in Inventory Capit
al Expenditure Dividends Subtotal Net Cash Flow Cash Balance $0 $0 $0 $0 $0 $0
$216,800 $146,278 $213,795 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Change in Other Short-term Assets $0
$216,800 $146,278 $213,795 $266,800 $272,078 $586,873
Projected Balance Sheet
The balance sheet in the following table shows managed but sufficient growth of
net worth, and a sufficiently healthy financial position. The monthly estimates
are included in the
appendices.
Projected Balance Sheet Assets Short-term Assets Cash Accounts Receivable Invent
ory Other Short-term Assets Total Short-term Assets Long-term Assets Capital Ass
ets Accumulated Depreciation Total Long-term Assets Total Assets Liabilities and
Capital Accounts Payable Short-term Notes Other Short-term Liabilities Long-ter
m Liabilities Total Liabilities
FY2002
FY2003 FY2004
$226,800 $373,078 $586,873 $0 $0 $0 $0 $0 $0 $0 $0 $0
$226,800 $373,078 $586,873 $0 $0 $0 $0 $0 $0 $0 $0 $0
$226,800 $373,078 $586,873 $69,305 $19,550 $0 $0 $88,855 $13,492 $19,550 $0 $0 $
17,316 $19,550 $0 $0
Subtotal Short-term Liabilities $88,855
$33,042 $36,866 $33,042 $36,866
Paid in Capital Retained Earnings Earnings Total Capital Net Worth
$10,000 $147,495
$10,000
$10,000 $330,036
($19,550) $127,945
$202,091 $209,970
$137,945 $340,036 $550,006 $137,945 $340,036 $550,006
Total Liabilities and Capital $226,800 $373,078 $586,873
Risks
Our risks for concert promotions are minimal. Our sponsorships will cover the ou
t-of-pocket expenses up front. Any ticket sales will be mostly profit. In case o
f a concert cancellation, it will be stated in our contracts with the artists th
at they will be responsible for any fees or expenses we incur because of their c
ancellation.
Exit Strategy
We will consider using one of the forms of exit listed below, should our busines
s come short of meeting our objectives over the next five years. Selling all or
a portion of the business Passing the business on to a family member Selling to
an Employee Stock Ownership Plan (ESOP) Taking the company public Liquidation Ea
ch of the above forms of exit involves a variety of considerations. These consid
erations will be worked out between the owner, legal counsel, an accountant, and
GVI's staff.
APPENDIX
Sales Forecast
Sales Valentine's Day Concert Easter Concert Mother's Day Concert Michigan State
University Smash Month Concert Teen Parties Total Sales Direct Cost of Sales Va
lentine's Day Concert Easter Concert Mother's Day Concert Michigan State Univers
ity Smash Month Concert Teen Parties Subtotal Cost of Sales
Oct Nov Dec Jan $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Feb $0 $0 $0
Mar
Apr $0 $0 $0 $500
$68,750 $0 $0 $0 $500
$68,750 $0
$0 $500 $500
$0 $0 $0 $500 $69,250 $69,250 $500 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
$0 $0 $0 $28,050 $0 $0 $0 $0 $0 $0 $200 $0 $0 $0 $200
$28,050 $0
$0 $200 $200
$0 $0 $0 $200 $28,250 $28,250 $200
Personnel Plan
Personnel
Oct Nov Dec Jan Feb Mar Apr
Secretary/Receptionist Sponsorship Sales Rep Owner's Draw Total Payroll Total He
adcount Payroll Burden
$0 $0 $0 $0 $0 $0 1 1
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 1 1 1 1
$0 $0 $0 $0 1 $0 $0
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Payroll Expenditures $0 $0 $0 $0 $0 $0
General Assumptions
Oct Short-term Interest Rate % Long-term Interest Rate % Payment Days Estimator
Collection Days Estimator Tax Rate % Expenses in Cash % Sales on Credit % Person
nel Burden %
Nov
Dec
Jan
Feb
Mar
Apr
10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.
00% 10.00% 10.00% 30 45 30 45 6.00 30 45 6.00 30 45 6.00 30 45 6.00 30 45 6.00 3
0 45 6.00
Inventory Turnover Estimator 6.00
25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 10.00% 10.00% 10.00% 10.00% 10.
00% 10.00% 10.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 15.00% 15.00% 15.00%
15.00% 15.00% 15.00% 15.00%
May $0 $0 $0 $500 $0 $0 $0 $200 May $0 $0 $0
Jun $0 $0 $0 $500 $0 $0 $0 $200 Jun $0 $0 $0
Jul $0 $0 $0 $0 $500 $500 $0 $0 $0 $0 $200 $200 Jul $0 $0 $0
Aug $0 $0 $0 $0 $500 $500 $0 $0 $0 $0 $200 $200 Aug $0 $0 $0
Sep $0 $0 $0 $500 $0 $0 $0 $39,550 $200 Sep $0 $0 $0
FY2002 FY2003 $68,750 $68,750 $68,750 $4,500 $28,050 $28,050 $28,050 $39,550 $1,
800 $92,500 $92,500 $92,500 $6,000 $25,245 $25,245 $25,245 $35,595 $2,400
FY2004 $105,000 $105,000 $105,000 $234,000 $9,000 $22,721 $22,721 $22,721 $32,03
6 $2,400 FY2004 $27,000 $27,000 $52,000
$68,750 $0
$166,500 $166,500 $211,500
$69,250 $500
$167,000 $377,250 $495,000 $558,000
$28,050 $0
$28,250 $200
$39,750 $125,500 $113,730 $102,599 FY2002 FY2003 $0 $0 $0 $25,000 $25,000 $0
$0 1 $0 $0 May 10.00% 10.00% 30 45 6.00 25.00% 10.00% 0.00% 15.00%
$0 11 $0 $0 Jun
$0 $0 $0 Jul
$0 1 $0 $0 Aug
$0 1 $0 $0 Sep
$0 1 $0 $0 10.00% 10.00% 30 45 6.00 25.00% 10.00% 0.00% 15.00%
$50,000 $108,000 3 $7,500 $57,500 10.00% 10.00% 30 45 6.00 25.00% 10.00% 0.00% 1
5.00% 3 $15,900 $121,900 FY2004 10.00% 10.00% 30 45 6.00 25.00% 10.00% 0.00% 15.
00%
FY2002 FY2003
10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 30 45 6.00 30 45 6.00 30
45 6.00 30 45 6.00
25.00% 25.00% 25.00% 25.00% 10.00% 10.00% 10.00% 10.00% 0.00% 0.00% 0.00% 0.00%
15.00% 15.00% 15.00% 15.00%
Profit and Loss (Income Statement)
Oct
Nov
Dec
Jan
Feb
Mar
Apr
Sales Direct Cost of Sales Production Payroll Other Total Cost of Sales Gross Ma
rgin Gross Margin % Operating Expenses Sales and Marketing Expenses Sales and Ma
rketing Payroll Advertising/Promotion Travel Sound Accommodations Security Misce
llaneous Total Sales and Marketing Expenses Sales and Marketing % General and Ad
ministrative Expenses General and Administrative Payroll Payroll Expense Payroll
Burden Depreciation Telephone Business Insurance Concert Facility Insurance Tot
al General and Administrative Expenses General and Administrative %
$0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0
$500 $200 $0 $0 $200 $300
$69,250 $69,250 $500 $28,250 $28,250 $200 $0 $0 $0 $0 $0 $0
$28,250 $28,250 $200 $41,000 $41,000 $300 59.21% 60.00%
0.00% 0.00% 0.00% 60.00% 59.21%
$0 $0 $0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0 $0 $0
$0 $2,150 $0 $0 $0 $0 $0 $0
$0 $2,150 $3,000 $1,000 $500 $6,000 $0 $0 0.00%
$0 $0 $3,000 $1,000 $500 $6,000 $0 $0 0.00%
$0 $2,150 $0 $0 $0 $0 $0 $0 0.00%
0.00% 0.00% 0.00% 0.00%
$0 $0 $0 $0 $50 $0 $0
$0 $0 $0 $0 $50 $0 $0
$0 $0 $0 $0 $50 $0 $0 $0
$0 $0 $0 $0 $50 $0 $500 $0
$0 $0 $0 $0 $50 $0 $0 $0 0.00%
$0 $0 $0 $0 $50 $0 $0 $0 0.00%
$0 $0 $0 $0 $50 $0 $0 $0 0.00%
$500 $0
0.00% 0.00% 0.00% 0.00%
Other Expenses Other Payroll Accountant Total Other Expenses Other % Total Opera
ting Expenses Interest Expense Short-term Interest Expense Long-term Taxes Incur
red Extraordinary Items Net Profit Net Profit/Sales $0 $0 $0 $0 $85 $0 $0 $85 $0
$0 $85 $0 $0 $85 $0 0.00% $0 $85 $0 0.00% $0 $85 $0 0.00%
0.00% 0.00% 0.00% 0.00%
$550 $135 $135 $2,785 $12,785 $10,635 $2,285 $163 $0 $0 $163 $0 $0 $163 $0 $0 $1
63 $0 $0 397.19% $163 $0 $7,013 $0 $163 $0 $7,551 $0 $163 $0 ($537) $0 322.19%
Profit Before Interest and Taxes ($550) ($135) ($135) ($2,485) $28,215 $30,365 (
$1,985)
($178) ($74) ($74) ($662)
($535) ($223) ($223) ($1,986) $21,039 $22,652 ($1,611) 0.00% 0.00% 0.00% 30.38%
32.71%
May
Jun
Jul $500
Aug $500
Sep
FY2002 FY2003
FY2004
$69,250 $500
$167,000 $377,250 $495,000 $558,000
$28,250 $200 $0 $0 $0 $0
$200 $0 $0 $200 $300 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $50 $0 $0 $0 $0 $85 $0
$135 $165 $163 $0
$200 $0 $0 $200 $300 $0 $2,150 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $50 $0 $0 $0 $0 $85
$0
$39,750 $125,500 $113,730 $0 $0 $0 $0 $0 $0
$102,599 $0 $0
$28,250 $200 $41,000 $300 59.21% $0 $0 $3,000 $1,000 $500 $6,000 $0 $0 0.00% $0
$0 $0 $0 $50 $0 $0 $0 0.00% $0 $85 $0 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
$50 $0 $0 $0 $0 $85 $0
$39,750 $125,500 $113,730 $102,599 $127,250 $251,750 $381,270 $455,401 66.73% $0
$8,600 $12,000 $4,000 $2,000 $24,000 $0 $0 0.00% $0 $0 $0 $0 $600 $500 $500 $0
0.00% $0 $935 $0 0.00% 77.02% $0 $7,740 $12,000 $4,000 $2,000 $24,000 $0 $0 0.00
% $0 $50,000 $7,500 $0 $600 $500 $500 $0 0.00% $0 $1,020 $0 0.00% 81.61% $0 $6,9
66 $12,000 $4,000 $2,000 $24,000 $0 $0 0.00% $0 $106,000 $15,900 $0 $600 $500 $5
00 $0 0.00% $0 $1,020 $0 0.00% $281,915 $1,955 $0 $0 $0 $3,000 $1,000 $500 $6,00
0 $0 $0 0.00% $0 $0 $0 $0 $50 $0 $0 $0 0.00% $0 $85 $0 0.00%
60.00% 60.00% 60.00% 76.20%
0.00% 0.00% 0.00%
0.00% 0.00% 0.00%
0.00% 0.00% 0.00%
$10,635 $135 $30,365 $165 $163 $0 $163 $0
$2,285 $10,635 $53,135 $163 $0 $163 $0 $1,955 $0
$109,860 $173,486 $1,955 $0
($1,985) $116,615 $198,615 $271,410
$7,551 $0 32.71%
$1 $0 0.31%
$1 $0 $2 0.31%
($537) $0
$29,113 $0
$49,165 $0 39.10%
$67,364 $0 40.83%
$69,990 $0 37.63%
$22,652 $2
($1,611) $87,339 $147,495 $202,091 $209,970 -322.19% 52.30%
Projected Cash Flow
Oct Net Profit Plus: Depreciation Change in Accounts Payable Current Borrowing (
repayment) Increase (decrease) Other Liabilities Long-term Borrowing (repayment)
Capital Input Subtotal Less: Change in Accounts Receivable $0 $0 $465 $0 $0 $0
$0 ($70)
Nov
Dec
Jan
Feb
Mar
Apr
($535) ($223) ($223) ($1,986) $21,039 $0 $0 $0 $1,968 $0 $0 $0 $0 $0 $39,781 $0
$0 $0 $0
$22,652 ($1,611) $0 $0
($271) $0 $0 $0 $0 $0 $0 $0 $0 $0
($1,403) ($38,704) $0 $0 $0 $0 $0 $0 $0 $0
($494) ($223) ($18)
$60,820 $21,249 ($40,315)
$0
$0
$0
$0
$0
$0
Change in Inventory Change in Other Shortterm Assets Capital Expenditure Dividen
ds Subtotal Net Cash Flow Cash Balance
$0 $0 $0 $0 $0 ($70)
$0 $0 $0 $0 $0
$0 $0 $0 $0 $0
$0 $0 $0 $0 $0
$0 $0 $0 $0 $0
$0 $0 $0 $0 $0
$0 $0 $0 $0 $0
($494) ($223) ($18)
$60,820 $21,249 ($40,315)
$9,930 $9,436 $9,213 $9,195 $70,015 $91,264 $50,949
May $22,652 $0 $38,704 $0 $0 $0 $0 $0 $0 $0
Jun $2 $0 $0 $0 $0 $0 $0 $0 $0
Jul $2 $0 $0 $0 $0 $0 $0 $0 $0
Aug $0 $1,403 $0 $0 $0 $0 $0 $0 $0
Sep $0 $67,469 $0 $0 $0 $0 $0 $0 $0
FY2002 $147,495 $0 $69,305 $0 $0 $0 $0 $0 $0 $0
FY2003 FY2004 $202,091 $209,970 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
($55,813) $3,825
($1,611) $87,339
($40,107) $0
$61,356 ($40,105) $2
($208) $154,808 $216,800 $146,278 $213,795
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$61,356 ($40,105) $2 $112,304 $72,199
($208) $154,808 $216,800 $146,278 $213,795
$72,201 $71,992 $226,800 $226,800 $373,078 $586,873
Projected Balance Sheet
Assets Short-term Assets Cash Accounts Receivable Inventory Other Shortterm Asse
ts Total Shortterm Assets
Oct $9,930 $0 $0 $0 $9,930
Nov $9,436 $0 $0 $0 $9,436
Dec $9,213 $0 $0 $0 $9,213
Jan $9,195 $0 $0 $0 $9,195
Feb
Mar
Apr
$70,015 $91,264 $50,949 $0 $0 $0 $0 $0 $0 $0 $0 $0
$70,015 $91,264 $50,949
Long-term Assets Capital Assets Accumulated Depreciation Total Longterm Assets T
otal Assets Liabilities and Capital Accounts Payable Short-term Notes Other Shor
tterm Liabilities Subtotal Short-term Liabilities Long-term Liabilities Total Li
abilities Retained Earnings Earnings Total Liabilities and Capital Net Worth ($1
0,085) ($10,308) ($10,532) ($12,518) $8,522 $31,173 $29,562 $9,930 $9,436 $9,213
$9,195 $70,015 $91,264 $50,949 $0 $20,015 $0 $19,744 $10,000 ($19,550) ($758) $
0 $19,744 $10,000 $0 $21,713 $10,000 $0 $0 $0 $20,015 $19,744 $19,744 $21,713 $6
1,494 $60,091 $21,387 $465 $19,550 $0 $194 $19,550 $0 $194 $19,550 $0 $2,163 $19
,550 $0 $41,944 $40,541 $1,837 $19,550 $0 $19,550 $0 $19,550 $0 $0 $0 $0 $9,930
$0 $0 $0 $9,436 $0 $0 $0 $9,213 $0 $0 $0 $9,195 $0 $0 $0 $0 $0 $0 $0 $0 $0
$70,015 $91,264 $50,949
$61,494 $60,091 $21,387 $10,000 $10,000 $10,000
Paid in Capital $10,000 ($19,550) ($535)
($19,550) ($19,550) ($19,550) ($19,550) ($19,550) ($982) ($2,968) $18,072 $40,72
3 $39,112 $31,173 $29,562
Total Capital ($10,085) ($10,308) ($10,532) ($12,518) $8,522
May $0 $0 $0 $0 $0 $0 $40,541 $19,550 $0 $0 $10,000
Jun $0 $0 $0 $0 $0 $0 $434 $19,550 $0 $0
Jul $72,201 $0 $0 $0 $0 $0 $0 $434 $19,550 $0 $0
Aug $71,992 $0 $0 $0 $0 $0 $0 $1,837 $19,550 $0 $0
Sep $0 $0 $0 $0 $0 $0 $69,305 $19,550 $0 $0
FY2002 $0 $0 $0 $0 $0 $0 $69,305 $19,550 $0 $88,855 $0 $88,855 $10,000
FY2003 $0 $0 $0 $0 $0 $0 $13,492 $19,550 $0 $0 $10,000
FY2004 $0 $0 $0 $0 $0 $0 $17,316 $19,550 $0 $0 $10,000 $330,036
$112,304 $72,199
$226,800 $226,800 $373,078 $586,873
$112,304 $72,199 $72,201 $71,992 $226,800 $226,800 $373,078 $586,873
$112,304 $72,199 $72,201 $71,992 $226,800 $226,800 $373,078 $586,873
$60,091 $19,984 $19,984 $21,387 $88,855 $60,091 $19,984 $19,984 $21,387 $88,855
$10,000 $10,000 $10,000 $10,000
$33,042 $36,866 $33,042 $36,866
($19,550) ($19,550) ($19,550) ($19,550) ($19,550) ($19,550) $127,945
$61,764
$61,765
$61,767
$60,156 $147,495
$147,495
$202,091 $209.970
$52,214 $52,215 $52,217 $50,606 $137,945 $137,945 $340,036 $550,006 $112,304 $72
,199 $72,201 $71,992 $226,800 $226,800 $373,078 $586,873 $52,214 $52,215 $52,217
$50,606 $137,945 $137,945 $340,036 $550,006
Entertainment Business Plan | MoreBusiness.com
Entertainment Business Plan
1.0 Executive Summary
1.1 COMPANY & INDUSTRY DJA Records Corp. (DJA) will capitalize on the growing en
tertainment market across the world through the production and promotion of high
quality entertainment. Located in Miami, Florida, the company will become highl
y profitable through the sale of pre-recorded music product, and ancillary profi
t centers. DJA will own and control the masters (master copies), copyrights and
licenses of its product, which will enable DJA to create immediate revenue strea
ms while growing its music catalog into a multi-million dollar asset. 1.2 PRODUC
TS & SERVICES The company has established four record labels to handle a variety
of music genres including Pop, Rhythm & Blues, Alternative Rock, Jazz, Gospel,
Urban and New Adult Contemporary. DJA has compiled an exciting and diverse roste
r of recording artists. Selected over the past year, these highly talented veter
an and debuting artists will enable DJA to quickly penetrate the music marketpla
ce. 1.3 MARKET ANALYSIS Business Plan Software Write a Comprehensive Business Pl
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DJA will distinguish itself from other independent record companies through its
marketing and promotional plan. Intense, calculated and relentless promotional c
ampaigns will enable DJA to earn massive revenues through the growing popularity
of "singles", as well as traditional full-length albums. DJA will utilize the s
uccess of its pre-recorded music to develop profit centers in independent distri
bution, merchandise and concert promotion. 1.4 STRATEGY & IMPLEMENTATION DJA mai
ntains strong affiliations in the music industry. DJA has been offered internati
onal distribution with Cook Distributing (a distribution arm of Cook) and the Sm
ith Group. This provides DJA the opportunity to generate revenue from the world'
s largest music markets including Japan, Germany, the United Kingdom and South A
merica. 1.5 MANAGEMENT DJA has formed an experienced, award-winning management t
eam. As artists, producers and executives, projects produced by these individual
s have topped Billboard's Charts, earned nominations for Grammy and Stellar Awar
ds, while selling over two million copies. The years of experience maintained in
both the business and creative sides of record company operations will enable D
JA to generate profitable revenue immediately. 1.6 FINANCIAL PLAN DJA will gener
ate over $5.7 million in sales revenue in 2009, and $26.3 million in 2010. DJA w
ill reach positive cash flow by the end of our second year, while netting profit
s of $4.5 million in 2010 and $6.6 million in 2011. 1.7 FUNDS REQUIRED & USE DJA
's founders are seeking $4.5 million in equity investment capital for this excit
ing company. These funds will be used to: a) establish corporate offices, b) mai
ntain overhead expenses, c) acquire and secure artists, d) fund project producti
on budgets, e) fund multi-faceted marketing and promotion budgets. A staged infu
sion of capital over the course of the first 10 months of operations will provid
e DJA with the necessary financial resources. A linked offering composed of comm
on stock, preferred stock and debentures is being offered by DJA.
2.0 Company Summary
2.1 COMPANY & INDUSTRY DJA Records Corp. is a multimedia entertainment company,
which will supply profitable, positive, audio and visual entertainment to a dive
rse, international consumer group. DJA is committed to wholesome entertainment a
cross the board and firmly believes that quality palatable entertainment can be
realized without compromising commercial appeal. DJA is composed of three intern
al divisions: DJA Music, DJA Video, and DJA Ancillary. The company will compete
and earn revenue immediately through the creation of several lucrative profit ce
nters, beginning with pre-recorded music. Additional income will be produced fro
m distribution, video,
merchandising and concert promotion. Each of the albums that DJA produces and ow
ns will create valuable short-term streams of revenue. Owning and controlling th
e rights to each of its albums will enable DJA to grow its music catalog into a
valuable asset, one of several-hundred revenue producing titles. 2.2 LEGAL ENTIT
Y & OWNERSHIP DJA is incorporated in the State of Florida with 10,000,000 shares
of stock. The Board of Directors has authorized the issue of 4,000,000 shares o
f common stock, in addition to debentures for the first and second phases of the
offering. DJA founders, Brian Chapple, Jake Mercado and Jason Dove will collect
ively own 500,000 shares of common stock, and will be issued warrants for: a) op
tions for two million shares of common stock at $2.00/share within five years, b
) an additional option for one million common shares will also be available at $
5.00/share within eight years. 2.3 FACILITIES & LOCATION The majority of the DJA
projects will be produced at Sharp Recorders, in Miami. A multi-million dollar
facility, the quality of Sharp's equipment, the architecture of the studio and i
ts atmosphere are conducive to creating the highest quality projects in a cost a
nd time effective manner. By prepurchasing large blocks of studio time, DJA will
have access to the two studios in this facility at a heavy discount. 2.4 KEY AS
SETS DJA's Chairman, Brian Chapple, has created, produced and marketed over thir
ty albums throughout his career. These albums have generated over $100 million i
n revenue for such companies as Cook, Simpson, Star, Edwards and Taxi Records. D
JA has also identified and signed several successful recording artists, which ha
ve already had combined sales of over 2 million units over the last 3 years.
3.0 Products and Services
3.1 PRODUCT DESCRIPTION DJA Music is DJA's primary thrust for the first several
years of operations. Responsible for the cultivation of talent, the production o
f pre-recorded music product and its marketing, the success of DJA Music will la
y the groundwork for additional DJA profit centers. Four Record labels comprise
the company's music division. Each division has been created with a distinct and
specialized reputation of its own, and will be responsible for a separate genre
of music. New River Records produces and promotes mainstream Pop, Dance, Altern
ative Rock and R&B. Swell Records is responsible for Jazz and new Adult Contempo
rary products. Urban Records will create and produce Urban, Rap and Hip Hop genr
es. Sun Records is designed and created to produce and promote inspirational and
gospel Recordings. 3.2 COMPETITION DJA distinguishes itself through the commitm
ent it undertakes with each of its artists. Contrasting the typical scenario in
which a record company spends more money producing the music than they do in its
marketing and promotion, DJA will utilize a stable of experienced and resourcef
ul producers to ensure the highest quality product within established production
budgets. This, in conjunction with the financing and expertise necessary to sta
ge intense, relentless marketing campaigns will guarantee the impetus necessary
to create "winning" products in the marketplace. 3.3 COMPETITIVE EDGE/BARRIERS T
O ENTRY DJA has a distinct advantage over new labels as it has already signed se
veral well-known, successful
artists, which will ensure early on success. Additionally, its strategic allianc
es with distribution partners and its experienced management team lead to an adv
antage for the company. 3.4 DEVELOPMENT DJA Music and its associated labels will
produce and release four projects from each label in each of the first two year
s of operations. A second phase consisting of sixteen productions for artist fol
low-up albums and newly acquired artists will begin in late 2009. During the cou
rse of 2009, DJA Music's Artist and Repertoire Department will locate, assess an
d consider additional Recording artists. DJA Music has begun discussions with a
variety of known Recording artists who are interested in signing with DJA Music.
4.0 Market Analysis Summary
4.1 TARGET MARKET The target market for DJA Records is very diverse, as the comp
any has four distinct labels, which clearly target the intended market, based on
listening preferences and music genres. DJA has distribution lines in the Unite
d States, Japan, United Kingdom, Germany, and South America, and therefore targe
t the citizens of those countries. 4.2 MARKET SIZE Independent labels have been
described by knowledgeable music industry professionals as "the lifeblood of the
business." In fact, in 2005, independents accounted for over 19.2% of the music
industry's market share, equating to sales of approximately $2 billion and 180
million units. 4.3 MARKET TRENDS The U.S. record business, which grossed four bi
llion dollars in 1990, exploded to eight billion dollars in sales by the end of
1995, with a unit volume of 726 million records sold. Sales fell sharply over th
e course of the next six years, mainly due to the popularity of file sharing on
the internet. File sharing has been curbed, but the internet has taken a key rol
e in the music landscape. Recent figures show industry sales of more than 10 bil
lion dollars, most of which has been generated online. The industry has evolved
considerably, and now digital distribution has become the primary method for sel
ling music to consumers. This has opened the door for smaller record labels to c
ompete with major labels on an equal footing.
5.0 Strategy & Implementation
5.1 PRODUCT DEVELOPMENT A plethora of options are available to satisfy DJA's req
uirement for quality manufacturing and reproduction of compact discs. DJA will o
utsource this function to one of many manufacturing outfits in the industry. The
se vendors will be selected based upon quality of product, ability to meet deliv
ery deadlines, payment terms, inventory and storage options, as well as price. S
everal manufacturers that DJA is currently considering are: Brume Manufacturers,
Inc., Pearl Manufacturing, and Jam Manufacturing. DJA has been offered internat
ional distribution of its product through Cook Distributing and the Smith Group.
A working relationship with either of these companies will allow DJA to readily
expose its music products to the world's largest music markets, while generatin
g $8.50 -$9.50 per unit sold. 5.2 INTERNET STRATEGY In response to the growing p
opularity and necessity for a presence on the Internet, DJA will create and desi
gn a web presence for itself. Utilizing the latest web site technology, DJA's we
b site will be intended to advertise the company, announce and advertise new rel
eases, sell company products and merchandise and offer e-mail communication. Fur
thermore, utilizing the latest technology, visitors to
the web site will be able to sample music clips from DJA's artists. DJA will cre
ate space on its web site for each artist signed to the company. Allowing for in
creased public exposure, the public will be able to learn more about the artist
or group. 5.3 MARKETING STRATEGY DJA has formulated a simple but successful appr
oach to market its products. The chief marketing objective for DJA's pre-recorde
d music, video and programming products centers on the design and implementation
of a strategy that will cost-effectively deliver that product to the intended t
arget market. This will be achieved through a marketing plan consisting of the f
ollowing tools: publicity, community outreach, advertising, art direction, radio
promotion, independent promoters, broadcast music videos, touring, retailer co-
op advertising, motion picture tie-ins, alternate distribution outlets, Internet
, dance club promotions, mailings & telephone follow-ups. 5.4 SALES STRATEGY Con
sidering the onslaught of product released to the music/video market each month
(1,200 new releases) worldwide, it is crucial to ensure the visibility of each p
roject. The financial success of an album can be guaranteed through the establis
hment of proper marketing and promotion budgets. With properly established budge
ts, DJA Music will generate large streams of profits from each of its projects.
The marketing and promotion budget will be divided into twelve to fifteen-month
campaigns, each consisting of three phases: â singleâ promotion through music video and
irplay; media exposure through radio, television, and online; and full length al
bum release and promotion. 5.5 STRATEGIC ALLIANCES Major Recording companies fre
quently invest in independent labels when confidence in the company's roster and
management exists. In these strategic alliances and joint ventures, the larger
company may invest money to: a) assist in completing album projects, b) manufact
ure compact discs and tapes and c) assist with marketing and promotion plans. DJ
A Music will utilize its distribution network to allow for the distribution of p
rojects for smaller, independent record labels. A key factor affording DJA the o
pportunity to capitalize on this is the company's close, personal relationships
with both Cook Distributing and the Smith Group. DJA's ability to claim top doll
ar from these international distribution companies will enable it to earn a midd
leman fee on the distribution and manufacturing of other companies' products. DJ
A will earn between $2.50 and $3.00 for each unit manufactured and distributed.
Company founders have had discussions with numerous record labels across the cou
ntry that are interested in working with DJA. Partnerships with these companies
will be dictated by the strength of company management, the quality of both thei
r artist and product and the size of their marketing and promotion budget. 5.6 O
PERATIONS Each of the label Vice Presidents will be directly responsible for all
of the functions within their particular label, including Marketing/Sales, Arti
st Development, Publicity, Promotion, Artist Relations, Artist &Repertoire, and
Creative Services. Label Vice Presidents will solely handle the majority of thes
e functions for their particular label with the assistance of shared administrat
ive staff. As each label grows in terms of sales revenue and the number of recor
ding artists, additional staff will be added to provide necessary support. Where
ver possible and feasible, staff will be shared between labels in an effort to m
inimize unnecessary overhead. 5.7 GOALS Build a profitable, reputable and stable
entertainment company. Achieve profitability and month-to-month positive cash f
low by the end of 2010.
Fulfill required fiduciary responsibilities to investment partners Position the
company to allow investment partners, founders and employees the opportunity to
financially capitalize on DJA's profitability. 5.8 EXIT STRATEGY As DJA reaches
profitability and becomes a stable operation, several lucrative exit scenarios b
ecome viable. DJA may be acquired by a major record company, or the shareholders
may liquidate their ownership positions through sale of shares to management or
outside investors.
6.0 Management Summary
6.1 ORGANIZATIONAL STRUCTURE DJA follows a typical hierarchical structure with e
ach labelâ s Vice President reporting to the President, who in turn reports to the Bo
ard of Directors. 6.2 LEADERSHIP Brian Chapple, President and Chairman of the Bo
ard, provides the vision for DJA's future. A renowned producer, and recording ar
tist, and employee with such major companies and labels as Cook Distributing, Si
mpson, Star and Edwards, Mr. Chapple has directly produced and contributed to ov
er $100 million of revenue for major record companies throughout his career. Jas
on Dove will operate as DJA's COO/CFO. Mr. Dove, a graduate of the Smith Center,
in the Business School at the University of Florida, provides DJA with a wealth
of tangible business experience. Sean Hertel, Senior Vice President (New River)
, provides an impressive blend of entertainment and general business which will
be instrumental in leading New River. Most recently, Mr. Hertel served as the Ex
ecutive Vice President for Star, in Nashville. In this capacity, Mr. Hertel was
responsible for artist development, artist negotiation and music production. Cur
rently, Sean Hertel is the Director of Gospel Music, for Share Music, also locat
ed in Nashville. Erik Tylor, Senior Vice President (Sun), has developed a multi-
faceted background with experience in finance and banking, in addition to compre
hensive experience in the entertainment industry. Mr. Tylor honed and developed
his management and production skills with New Sounds Productions. Working in the
realm of Christian music, Erik has developed a cadre of affiliations. Relations
hips with artists, concert promoters, program directors (radio stations) and min
istries across the United States will be beneficial to his role as the Senior Vi
ce President of Sun Records. Max Roland, Senior Vice President (Swell), has deve
loped a varied background of experience in the industry. Most recently, he has c
oncentrated on his solo career which has produced four Jazz albums for Star. Due
to his experience in the Jazz niche of the music market, Max has developed a so
lid network of personal contacts with radio promoters, musicians, producers, and
executives. These affiliations are invaluable to DJA and will allow the company
to make an instant impact in the marketplace. 6.3 STAFF MEMBERS A qualified, ex
perienced and talented staff has been selected to operate DJA Music and its asso
ciated labels. Staff members have honed their skills in the areas of project pro
duction, artist & repertoire, marketing and artist promotion. In fact, these ind
ividuals have produced and marketed projects which have earned nominations for G
rammy and Stellar Awards. This assemblage is poised to utilize its combined skil
ls to ensure the growth and profitability of DJA.
7.0 Financial Plan
7.1 REQUIREMENTS DJA is offering several simultaneous investment opportunities t
o cater to short and long-term investor
needs and requirements. DJA seeks to keep the structure of the financing simple
and flexible. Phase 1 of the Offering Phase 1 is composed of 500,000 shares of c
ommon stock and 500,000 debentures (12.5%). Phase 1 is a linked offering meaning
that for each share of $1.00 common stock purchased, a $1.00 debenture must als
o be purchased. DJA possesses the right to re-purchase the debentures at $1.00 w
ithin a fiveyear period from allotment. Phase 2 of the Offering Once Phase 1 has
been fully subscribed, DJA will issue 1,500,000 shares of common stock at $1.50
. Additionally, 1,000,000 shares of $1.50 preferred stock will be available. The
preferred shares will carry 13% dividend to be paid annually. The shares in the
second phase will also be linked offering: two common shares linked together wi
th one preferred share. DJA will hold the right to redeem the preferred shares f
rom holders at $2.50. This action can take place within eight years from issuanc
e. 7.2 USE OF FUNDS Funds will be used to establish corporate offices, maintain
overhead expenses, acquire and secure artists, fund project production budgets,
and fund multi-faceted marketing and promotion budgets. 7.3 INCOME STATEMENT PRO
JECTIONS DJA projects revenues of over $5.7 million in its initial year, growing
to $26.3 million by 2010. Profits in 2010 are expected to be $4.5 million. DJA
will generate the majority of its revenue from the sale of pre-recorded music pr
oduct. This includes compact discs (CDS), CD singles, enhanced CDs and digital m
usic formats. For purposes of revenue forecasts, management has projected varyin
g unit volumes for each of its projects. Sales will occur within a fifteen-month
time frame from the release date. Based upon the intensity of DJA's marketing p
lan/budget for its projects, the following unit projections will be quickly atta
ined and surpassed. NEW RIVER - 250,000 units/release URBAN - 250,000 units/rele
ase SWELL - 125,000 units/release SUN - 125,000 units/release DJA will gross app
roximately $8.75 for each full-length compact disc sold. The current retail pric
e averages approximately $14.72. Revenue will also be earned from the sales of d
igital music through iTunes and other online retailers. DJA will release and pro
mote three to four singles from each fulllength album project. Revenue projectio
ns in the financial model are based upon the following estimates of "single" sal
es. NEW RIVER - 3 Singles - 51,000 units/single release URBAN - 2 Singles - 51,0
00 units/single release SWELL - 2 Singles - 25,000 units/single release SUN - 3
Singles - 25,000 units/single release Additional DJA profit centers will include
distribution services, video sales revenue, merchandise sales revenue and conce
rt promotion revenue. Initially representing less than 5% of the company's reven
ues, the magnitude and scope of these areas will increase as DJA and its artists
' reputations grow. 7.4 CASH FLOW PROJECTIONS
After 23 months, DJA will become cash flow positive and self-sustaining. The com
pany will maintain a cash balance of at least nine months of operating expenses
to ensure an adequate buffer for collecting receivables and unforeseen costs ass
ociated with this industry. 7.5 BALANCE SHEET After four years it is projected t
hat DJA will hold approximately $20 million in cash and liquid assets, with a to
tal assets equating to over $28 million. With only $1.7 million in liabilities,
retained earnings are projected to grow quickly, leading to higher net worth for
stockholders. 7.6 ASSUMPTIONS Accounts Receivable - A/R are conservatively proj
ected with 45% of A/R collections occurring in a 129 day period and the remainin
g 55% in a 90-120 day period. The majority of accounts receivable will be outsta
nding from the distribution company, which receives payment directly from retail
ers and will subsequently remunerate DJA. Because of the extended nature of A/R
in the industry (typically 60 days), DJA will utilize A/R Financing to assist it
s cash position in the first two years of operations, or longer. A 3.5% A/R fina
ncing fee is incorporated in the financial model. The size, strength and reliabi
lity of DJA distribution partners will provide a traditional financial instituti
on or an A/R Factor with the proper security to create a working relationship fo
r DJA's paper. Inventory - Inventory for album releases and upcoming product has
been conservatively projected. Despite the fact that lead times for manufacture
d products are approximately two weeks, DJA's financial model calculates invento
ry purchases in the following manner: 30%-60 days prior to sale and 70% - 30 day
s prior to sale. The majority of the pre-Recorded music product will be stored w
ith the manufacturer and shipped directly to the distributor's fulfillment/distr
ibution centers. A small amount of sample (1,000-2,000 units) and promotional pr
oducts will be kept on hand at DJA corporate offices. Accounts Payable - For pur
poses of this financial model, A/P is separated into two categories: Manufacturi
ng A/P, and Artist Royalty/Mechanical A/P. Adhering to the conservative approach
, the model is constructed with Manufacturing A/P being paid in the same month t
hat the expense is incurred. Artist Royalties will be accumulated and paid bi-an
nually, in August and February. Project Production Budgets - These vary dependin
g on the genre of the project. Established relationships and affiliations in the
industry enable DJA to produce its projects over a ninety-day period, for appro
ximately half the typical cost paid by a major label record company. Projects pr
oduced through New River and Swell require $121,000, Sun Recording's projects (I
nspirational/Gospel) require $80,000 and Urban projects (Rap/Hip Hop) require $4
5,000. Marketing & Promotion Budgets - These vary depending on the particular ge
nre of music. Projects produced and released from New River will be allocated ap
proximately $781,000 while $390,000 will be slotted for Urban projects. Projects
from both Swell and Sun will utilize approximately $240,000. Marketing budgets
will be expired through the course of twelve-month marketing campaigns.

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