Start & Run an Event-Planning Business. Mardi Foster-Walker

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СКАЧАТЬ Type of business

      (b) Location of the business

      (c) Legal structure of the business (proprietorship, partnership, incorporated company)

      (d) Names of any other shareholders

      (e) The amount of funds required

      (f) The terms under which those funds will be repaid

      Personal experience and background

      This section includes your up-to-date resume and those of any partners or other key people in your proposed venture. Emphasize why your background and experience or that of your partner or key personnel is valuable to the success of your business. Potential lenders or investors must feel that you have the experience and expertise to make your business work. They are very aware that mismanagement can be a cause of business failure.

      Description of service

      Describe your special events business and service clearly and concisely. Explain why there is a need for your service and why it will do well in your chosen market. Emphasize the strengths your service has over your competition. Make sure you highlight your service’s uniqueness. Emphasize that your business will be home-based or in low-cost office space with low overhead, which will allow you to sell your service at a reasonable price.

      Sales and marketing strategy

      Prove that you have done your market research by providing details on your potential clients and how you intend to reach them. Explain how you will use the information you have gathered as the basis of your sales and marketing strategy. Describe your competition and why your service will sell in your targeted market. Show that you have a good understanding of your chosen market and why a potential lender should feel confident that your sales and marketing planning will be successful. See chapter 8 for more information on sales and marketing.

      Forecasts and projections

      This section of your business plan should be a summary of fixed expenses and overhead, planned sales and marketing expenses, start-up costs, projected revenue forecast, and a projected cash flow analysis. Your cash flow forecast should be a truthful and realistic projection of the financial needs of your new business. It should show the potential lender that the business has the ability to pay back the amount borrowed. This is generally where most lenders will be looking for weaknesses in your plan, so be prepared for scrutiny and to answer any questions regarding your proposed business.

      For more detailed advice on business plans, Self-Counsel Press publishes many business kits and forms.

      Financial Management

      If you begin with a good business plan, you are off to a good start in your business’s financial management. Sound planning encourages you to think practically about the factors critical to your business, such as costs, space requirements, equipment purchases, and so on. The following list outlines some key benefits provided by a detailed business plan:

      (a) Allows you to see your business on paper before you invest any money

      (b) Indicates at what point your venture will break even and begin to show a profit

      (c) Helps a lender or investor see the merits and potential profitability of your business

      (d) Prepares you for the possible risks of starting a business and guides you in your personal financial planning

      (e) Tells you how long your start-up capital will last and at what point you will need to rely on the revenues to operate the business

      In addition, to prepare a financial forecast — an important part of a business plan — you must know and be able to predict the following:

      (a) What is the amount of cash on hand you have to invest in your new business?

      (b) What amount of loans or borrowed money from outside sources is available?

      (c) What is your business capacity? How many events can you realistically expect to produce per year?

      (d) What will you charge for your services?

      (e) Based on your sales and marketing efforts, how many special events and what types of events can you produce?

      (f) What are the costs involved in producing events?

      (g) What are the fixed expenses of running your business?

      Forecasting cash flow

      Understanding cash flow is an absolute necessity for the new business owner. Along with loans and your personal investment, the cash flow into your business is created by the number of events you are paid to produce. The amount of cash your business will earn will depend on the number of events you produce and the income generated by producing those events.

      In chapter 5, we discuss setting a price for your events and services. The cash flow out of your business is linked to the costs of producing your events and the expenses of running your business. Naturally, as a viable business, your objective should be to bring in more cash than goes out. To plan and monitor that process you need to develop a cash flow forecast. This forecast requires that you take into account fixed expenses and overhead, marketing costs, and start-up costs. You also need to forecast revenues. The next sections look at these elements in turn.

      Fixed expenses and overhead

      Fixed expenses and overhead are the costs incurred in running your business and are constant regardless of how many events you produce. Make a list of all the expenses that will be paid by your company and whether they are monthly, quarterly, or annual expenses.

      Marketing costs

      In addition to your fixed costs and the costs of producing an event, there are costs incurred in marketing your services. In order to do a cash flow, you must have a marketing plan and forecast a budget for your first year of operation. Included in your marketing plan should be your expenses. See chapter 8 for more information on what goes into marketing.

      Start-up costs

      Start-up costs include your purchases for all the equipment, furniture, and sales materials necessary to start your new venture.

      Forecasting revenues

      Forecasting the revenue you will bring in during your first year of operation is one of the most difficult steps in preparing your cash flow projections and business plan. Review your market research materials and estimate how many clients you can hope to attract each month. Be realistic and take into consideration how many events you alone can produce in a day, a week, a month.

      Also consider the amount of time necessary to get your marketing materials into circulation to build a customer base. Prepare a chart of the revenues you anticipate each month for a year. Consider planned vacations and other personal commitments. Do several different СКАЧАТЬ