Financial Analysis and Cash Flow Forecasting of Music Vibes Ltd.

The assignment provides a comprehensive financial analysis and cash flow forecasting for Music Vibes Ltd. over three years (2019-2021). It includes income statements, expense breakdowns, and net cash flow projections, indicating an improvement in the company's cash balance each year. The document also references relevant studies and journals on event management and music festivals.

BUSINESS PLAN MUSIC
FESTIVAL UK

Table of Contents
MAIN BODY...................................................................................................................................1
PART 1- BUSINESS PLAN............................................................................................................1
Describing business venture........................................................................................................1
Choosing type of business formation..........................................................................................1
Market Research of UK..............................................................................................................1
PART 2- BUSINESS PLAN............................................................................................................1
Discussing McCarthy’s 4Ps model.............................................................................................1
Job roles assigned to workers......................................................................................................3
Discussing advantages and disadvantages of Zero-hour contract workers and Agency staff.....4
Enumerating customer target market and customer cohorts.......................................................5
PART 3- BUSINESS PLAN............................................................................................................5
Business strategies for expansion in the future...........................................................................5
Financial Projections...................................................................................................................6
REFERENCES................................................................................................................................8

MAIN BODY
PART 1- BUSINESS PLAN
Describing business venture
The business is started in order to offer goods and services to people in exchange of
money. Music Vibes Ltd is a business start-up which will be starting its music events business by
focusing on all types of music such as rock, electronic, dance and country musics. Firm will offer
quality music events in effective manner which will enhance customer's satisfaction in effectual
way. USP (Unique Selling Point) is organising events at affordable cost and as a result, firm will
have advantage over competitors (Getz and Page, 2016). The company will offer services of
superior quality at affordable prices which will outreach rival businesses.
Choosing type of business formation
The business formation is required to be opted so that desired sales may be accomplished
within the shortest possible time. Out of various options available, company formation will be
chosen by Music Vibes Ltd. The company type is quite advantageous as it requires that company
is an artificial person which cannot die. Moreover, it cannot sue and nobody can sued on it. It has
perpetual existence making it quite feasible for firm. Thus, in accordance to various benefits of
company, this type of formation has been chosen.
Market Research of UK
The UK events industry has been taken good pace in recent time. It remains quite
competitive and it is required that Music Vibes Ltd should implement well-mannered strategies
in the best manner possible. This will provide company with an edge over competitors up to a
major extent. There are various rivals in music festival events such as Live Music Quotes, AOK
Events, The Fair, The Famous Company, MAMA Festivals, Bassline Productions etc. These all
firms are well-established ones and requires gaining market share by Music Vibes Ltd. UK
events industry is worth £39.1 billion as it is presented in new report (New report values UK
events industry at £39.1bn. 2018). It can be enumerated that there music events has £1.30 billion
in the market which represents that organisation will have to be competitive to gain large share.
PART 2- BUSINESS PLAN
Discussing McCarthy’s 4Ps model
The model is presented with reference to Music Vibes Ltd below-
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Product-
The product that will be offered by Music Vibes Ltd is to organise music festival event in
order to provide higher level of satisfaction to people in the best way possible. This will be
beneficial for firm as there are variety of events took place in UK and planning music events will
be great entertainment for youngsters and all music lovers. It means that firm will be able to
provide satisfaction in effective manner and as a result, people will get attracted to organisation
and become loyal towards it (Jones, 2017). Apart from customers, professional musicians and
artists coming for music festival will also be provided with better amenities. This will boost
company to build stronger contacts in effectual manner. Thus, shows will be organised quite
effectually.
Place-
The place specially in the context of music festival event is utmost crucial. It is required
that firm should locate and organise event in that place where large quantum of people could
easily visit and enjoy the shows. In relation to this, business will organise music festival events at
London as it is the largest city in UK and mostly people could visit for witnessing events. This
means that Music Vibes Ltd will be able to attain more number of people at the place and as a
result, desired profits would be garnered in a better way. Moreover, it is required that should take
into account that people are attracted by making appropriate strategies so that event could be
success.
Price-
The price plays crucial role in the company and people come to know at what price, they
will be provided service. In relation to this, Music Vibes Ltd will have to set ticket prices in
accordance to purchasing power of people and also according to competencies in the market. It
can be said that firm is a start-up and market share is required by it. For accomplishing this,
suitable pricing strategy needs to be implemented. The age group between 18-45 of people so
that they may be attracted in a better manner (Meretse, Mykletun and Einarsen, 2016).
Penetrating pricing strategy is best available option for company which will set lower prices on
tickets of music festival and attain desired customer's base. After establishment of good
customer's base, prices will be increased for recovering losses occurred in initial stage by quoting
lower prices.
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Promotion-
It is required to make individual aware about the products or services offered by
company. Through promotions, services are availed by customers in the best manner possible.
This shows that company will be able to attain good amount of profits as tickets will be sold by
applying promotional techniques in effective manner. In present scenario, social media channels
are widely used by people and it could be useful for firm as well. Thus, it will post promotional
advertisements on social media channels for garnering customer's attention quite effectually.
Apart from it, business will offer promotional discount on first-come-first-serve basis to 100
people at 50 % off on music festival ticket.
Thus, it can be analysed from above McCarthy’s 4P's model that Music Vibes Ltd will be
able to attain higher amount of profits as product, price, place and promotion provides clarity
that people will be attracted (Brocken, 2016). This is because it will gain music lovers' attention
up to a major extent which would be beneficial for organisation in maximising revenue in a
better manner. Moreover, it would succeed in the market.
Job roles assigned to workers
There are various job roles which will have highly qualified workforce in firm. The roles
assigned to employees are as follows-
Event Manager
He is the personnel which should be high on interpersonal skills in effective manner.
Music Vibes Ltd will recruit Event Manager possessing skills and would be given necessary job
role of planning, organise and promotional events for the clients. For building stronger
relationship with customers, consumer engagement is required and is assigned to Event Manager.
Moreover, he will liaise with customers for identifying exact requirements of them, research for
venues, for suppliers to make event a success (Smith, 2017). Preparation of post-event evaluation
will be done for assessing firm with higher quality services in the future.
Event Coordinator
Coordinator requires and posses strong communication skills for attracting clients in a
better manner. The role assigned to Event Coordinator in Music Vibes Ltd is to listen to needs of
clients and in return presenting suggestions to them. Moreover, computer operating skills
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requires as he will be engaged in preparation of operational budgets. Furthermore, he will be
entitled to communicate plan to Event Manager. Problem-solving skills are also required as he is
required to resolve issue in case plan goes wrong.
Event Designer
The Event Designer is to identify client's goal by interviewing with them so that needs
may be arrived at and as a result, company will be able to attain exact requirements of people. To
create design plans with the help of virtual event design software is assigned to job role of Event
Designer. Meetings with clients and vendors for better preparation of music event could be
made. He is also entitled to collaborate with Event Coordinator so that firm services can be
accomplished in a better manner and customers may be satisfied.
Discussing advantages and disadvantages of Zero-hour contract workers and Agency staff
Advantages of Zero-hour contract workers
 Main advantage of zero-hour contract is that employers can fulfil obligations by hiring
temporary employees only (Lund and Turris, 2017).
 The zero-hour contract workers is useful for firm particularly when business has
unpredictable outcomes. Next benefit of having such workers is that employers can easily test the skills of
employees on temporary basis and if they like their work, employees could be hired
permanently
Disadvantages of Zero-hour contract workers
 It is disadvantageous to workers as no guarantee of work is provided and financial
stability is also not offered.
 Employees hired on non-permanent basis will not work with greater productivity and
work will be not of great quality (Williams, 2016). The zero-hour contract cannot commit too much on job as he/she may be university
student, thus, productivity gets hinder.
Advantages of Agency Staff
 It is advantageous to organisation as quick help can be availed in a better manner so that
employers can avail work from employees.
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 The agency staff is quite useful as it has various qualified candidates which can be
helpful for company in attaining work. The agency staff pre-screen candidates along with
test seeking their skills. It is quite useful for attainment of long-term benefits as temporary workers could be
transformed into permanent employees.
Disadvantages of Agency Staff
 The agency staff is not useful for employees as they cannot predict how longer will be
assignments, thus, guarantee of work does not prevail (Pasanen and Konu, 2016).
 It is unsuitable as salaries offered are much lower than that of permanent workers offered
on similar position.
 The technicality in work is way low as employees does different work from one job to
another which does not seeks better image in the market.
Enumerating customer target market and customer cohorts
The customers of Music Vibes Ltd is all people which fall within age group between 18-
45. The music lovers will be attracted by company as events will be purely organised of musical
in nature. Customers of London in this age will be attracted in a better manner. Thus, the target
customers of firm will be garnered by listing out promotional strategies and as a result, firm will
be able to attain good amount of profits and succeed in the UK market. It can be analysed that
customer cohorts means that group in which people having similar characteristics are placed
together may or may not posses exact similar traits are targeted. Hence, Music Vibes Ltd will be
able to reach out to customer cohorts.
PART 3- BUSINESS PLAN
Business strategies for expansion in the future
The strategies can be implemented by organisation if in the future, need for expansion
arises. Various strategies are presented which can be used by Music Vibes Ltd for future-
Market Development-
It is a growth strategy by which business may be expanded in a better manner (Simon and
et.al., 2017). It identifies and develops new market segments for existing product placed in the
market. This strategy can be used if Music Vibes Ltd analyses that target customers are not
availing services. Moreover, new segment of customers are also targeted.
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Product Development-
The product development strategy can be implemented when firm observes that existing
products needs to improved or new products have to be created as market share goes down. It
can also be used if Music Vibes Ltd founds that new product have to be developed for new
offering to customers.
Acquisition-
Acquisition is another growth strategy which can be implemented for cutting down
competition in the market so that market share may be enhanced. It is useful for firm in attaining
stake or acquire another event management company for maximising its share (Koukopoulos and
Koukopoulos, 2017).
Diversification-
The diversification is another strategy in which completely new products are offered to
new markets or existing markets. This strategy must be implemented only by conducting proper
market research by company.
Financial Projections
Forecasted Cash flow statement of Music Vibes Ltd
Particulars 2019 2020 2021
Revenue from tickets 15000 17000 19000
Total inflow of funds 15000 17000 19000
Furniture expenditures 4200 4300 5000
Marketing and Promotion
expenses 1250 1400 1560
Sound and maintenance
charges 900 1100 1200
Staff salaries 3400 3600 4000
Telephone charges 750 1000 1200
Insurance expenses 400 400 400
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Total outflow of funds 10900 11800 13360
Net Cash flow 4100 5200 5640
Opening cash balance 0 4100 9300
Ending cash balance 4100 9300 14940
The above forecast shows that cash balance or position will be improved year after year
of Music Vibes Ltd. This is evident from table that ending cash balance will be 4100 in 2019,
increased to 9300 in next year and will reach to 14940 in 2021.
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REFERENCES
Books and Journals
Brocken, M., 2016. The Twenty-First-Century Legacy of the Beatles: Liverpool and Popular
Music Heritage Tourism. Routledge.
Getz, D. and Page, S., 2016. Event studies: Theory, research and policy for planned events.
Routledge.
Jones, M. L., 2017. Sustainable event management: A practical guide. Routledge.
Koukopoulos, Z. and Koukopoulos, D., 2017. Smart dissemination and exploitation mobile
services for carnival events. Procedia Computer Science. 110. pp.24-31.
Lund, A. and Turris, S., 2017. The event chain of survival in the context of music festivals: a
framework for improving outcomes at major planned events. Prehospital and disaster
medicine. 32(4). pp.437-443.
Meretse, A. R., Mykletun, R. J. and Einarsen, K., 2016. Participants' benefits from visiting a
food festival–the case of the Stavanger food festival (Gladmatfestivalen). Scandinavian
Journal of Hospitality and Tourism. 16(2). pp.208-224.
Pasanen, K. and Konu, H., 2016. Use of social media for new service development by Finnish
event and festival organizers.Event Management. 20(3). pp.313-325.
Simon, A. and et.al., 2017. Towards an adapted MHP strategic capabilities model for moderating
challenges to quality music festival management. International Journal of Event and
Festival Management. 8(2). pp.151-171.
Smith, A., 2017. Animation or denigration? Using urban public spaces as event venues. Event
Management. 21(5). pp.609-619.
Williams, N. L., 2016. 4 Managing Event Projects. Events Management: An International
Approach.p.94.
ONLINE
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New report values UK events industry at £39.1bn. 2018 [Online] Available
Through:<https://www.hbaa.org.uk/content/new-report-values-uk-events-industry-
%C2%A3391bn>
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