Wonderland Agency Project Proposal

This assignment tasks you with evaluating a project proposal submitted to the Wonderland Agency. Your analysis should delve into the project's feasibility, potential impact, and adherence to best practices in agency management. You will need to demonstrate critical thinking skills by identifying strengths and weaknesses within the proposal, and ultimately provide recommendations for its success.

Event Financial
Management

TABLE OF CONTENTS
1.0 INTRODUCTION.....................................................................................................................1
1.1 Company Profile...............................................................................................................1
1.2 Description of the events..................................................................................................2
1.3 Market research on the events..........................................................................................2
2.0 Analysing the main purpose of financial management within event industry...........................2
2.1 Investment Decisions........................................................................................................3
2.2 Financing Decisions.........................................................................................................3
2.3 Dividend Decisions..........................................................................................................3
3.0 Critically analyse and recommend relevant sources of finance to funds the event...................5
Internal source of finance.......................................................................................................5
External source of finance......................................................................................................6
4.0 Critically analyse and recommend relevant pricing strategies available for pricing the
products or services of event............................................................................................................7
5.0 Critically analyse of Cost Volume Profits analysis to calculate number of customer to break
even..................................................................................................................................................8
6.0 Conclusion and Recommendations............................................................................................9
6.1 Conclusion........................................................................................................................9
6.2 Recommendations............................................................................................................9
REFERENCES..............................................................................................................................11

1.0 INTRODUCTION
Financial management is the process of effective and efficient management of funds
and the source of funds from where the organisation manages to get the funds. This is the
work which is totally depended upon the top management of the companies who are
specialized in this work. This management of financial work is important in every type of
business in all the sectors. While without this management of the funds and source of fund no
business would be able to work and operate in the market. Just as other business do the
financial management event management business also need to manage their funds and
source of fund. In event management it is required top prepare budgets, control the funds and
identify the source of funds. The present report will cover Wonderland Agency of London
which is a renounced event management company. Wonderland Agency is popular to
management all types of corporate and social events and they pool out their funds from
various sources.
1.1 Company Profile
Wonderland is one of the group which has presence in events and musical both
markets. Further, it helps to several businesses for arranging as well as handling events at the
workplace. In addition to this, this company operates in events from last many years and hold
wide range of events in several companies.
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1.2 Description of the events
Illustration 1: Project proposal for Wonderland Agency
1.3 Market research on the events
In order to carry out this particular event by Wonderland then market research is to be
done at here. During this, it can be analysed that total amount worth of 4000 GBP will be
required for completing this specific event. Apart from this, total return worth of 25000 GBP
will be generated as per the market research.
2.0 Analysing the main purpose of financial management within event
industry
Funds are the main and basic requirement of any business or any sector it is necessary
to have the availability of funds in the business so that it can run smoothly. For these funds
and available sources of funds in the event industry it is essential to manage them with proper
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planning (Brigham and Ehrhardt, 2013). This financial management is the vital part of event
industry and also helpful in Wonderland Agency as they carefully do the planning,
monitoring, recording and control in the handling of income and expenses of event. It is very
important to do the budgeting in Wonderland Agency so that they can make out the necessary
business objectives. Event management industry are in the way to progress and development
as there are no need of premises, products are not there or no requirement of any equipments.
The start up cost of this business is very low and this allow the manager to create, develop in
the professional field. The main purpose of financial management in Wonderland Agency is
to seek the funds from available resources, put them into business, control the wastage of
funds and then monitor them for future requirements.
The financial manger is responsible of planning, directing, organising and controlling
capital resources of Wonderland Agency (Petty and Burrow, 2015). Wonderland agency is
having financial manager who is the responsible person in handling the money of event
company. They have to take several decisions regarding finance, investment and risk
management. The purpose of financial management in Wonderland agency are as follows:
2.1 Investment Decisions
When the company generates more profit and has additional cash at the workplace
then go for making investments. Finance manager plays a major role in this particular aspect
where it firstly reviews the cash position and financial statements (Diksha, 2017). At here, the
manager uses capital budgeting methods for making decisions for long term and short term
both kinds investments in several alternatives.
2.2 Financing Decisions
Another decision taken by a financial manager at the workplace is financing decisions
which include several aspects. In this, budgets are financial plans are prepared, evaluated and
then profitable judgements are to be taken into account. Herein, manager selects that which
kind of source of finance will be the most suitable for the organisation for raising fund. Basic
two kinds of sources are considered which include debt and equity financing.
2.3 Dividend Decisions
The third major decision taken by finance manager is divided where company decides
that whether dividend should be distributed among shareholders or not (Finance Functions,
2017). If yes, then on which basis like yearly, half yearly or quarterly has to be given is
decided by the manager.
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Supporting Accounting- the accounting department of Wonderland agency is regulated by
financial management of the company (Bekaert and Hodrick, 2017). The purpose of the
financial management is to review the function and working of accounting department for the
accuracy and validity of capital resource. Wonderland agency require funds for organising an
event whether corporate or social, for catering, decoration, planning and make or beauty artist
expenses. As it is among the top most event management company in London and is
organising weddings, birthday parties, concerts, corporate events like meeting and
conferences, festivals etc., For all these events they need budgets and need to do proper
planning of events.
Help in decision making- financial management also help in making the financial decisions
regarding the event that in which kind of event they will be getting the highest profits. The
main purpose of Wonderland financial management is to do the financial decision making of
from where and how to arrange the funds (Gomber, Schweickert and Theissen, 2015). All the
available information must be helpful, accurate and relevant to the type of event Wonderland
agency is planning to do. Management of financial are the intermediary between the
management and the operational manger at Wonderland thus saving the time of top
management to make the decisions regarding other things.
Risk management- to identify the best suitable alternative available with the management in
capital source are the part of financial manager work. They are also involved in the
management and minimisation of the risk which in prevailing in the market respect to the
source of fund or application of the available funds (Ahern, Duchin and Shumway, 2015).
Risk can be like lack of funds, adverse loan terms, or unstable financial investments.
Improve operational control- controlling of the operational cost or workflow of
Wonderland is also the purpose of financial management. All the operations and planning are
need to get reviewed by them so that it can help the company to survive in the sector or
market.
Stability of revenue- if there is a good financial planning of the available resources and all of
them are fully utilized then it will help the company to generate a good amount of revenue
and profits. This is another kind of purpose of financial management to provide stability in
generation of revenue for the company (Linnerooth-Bayer and Hochrainer-Stigler, 2015).
Wonderland agency always want that their revenue are sustainable and stable so that getting
the profits as and when they are needed.
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3.0 Critically analyse and recommend relevant sources of finance to funds
the event
There are various sources of funds from where Wonderland agency make out the
capital for their working and operations as well. Funds are the main part and important
element of any kind of business as it enables the company to work efficiently and in proper
manner as they need. Funds are the capital resources of the business which they invest in
working so that they can work and operate. Business require money to operate, plan, execute,
buy raw materials and other equipments of the business. Without having the cash in hand
with the event management company they will not be able to do proper planning and then
execution of the plan (Ndungo, Tobias and Florence, 2017). They need to identify the correct
source of fund and then choose among all the alternative of source of funds so that they can
work in a better way and then do the planning work. Wonderland agency is about to organise
a concert very soon for which it would be requiring budget and they will various sources of
funds which are easily available to them. The different source of funds are:
Internal source of finance
Crowdfunding- there are various types of crowdfunding platforms in UK which are been
offered to new event or any new idea to allowing them to organise events before they risk
their available cash like Kick starter. They give the opportunity to provide the details about
the new idea, identify the target from where to get the funds from and how to use that capital
(Fanourgiakis, 2015). This crowdfunding is easy and simple for those new starters who are
new to the industry or who are having unique idea and do not want any risk factor at the very
starting.
Angel investors- they are affluent individuals and groups who are looking for investment
opportunities. They are basically like the relevant investors through online personal
introduction and the websites like Angels den. In London there are 13000 angel investors and
they are claiming 90% success rate under the lead investor.
Savings- own funds which are available with the Wonderland agency to organise a concert in
the form of personal savings are the most common and the first form of funds (Finkler,
Calabrese and Purtell, 2016). They are most easy form but Wonderland will avoid use of
saving in organising a concert as this involve a bigger amount of risk.
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Sales of assets: At the workplace particular machinery or asset which not generates any kind
of return that will be sold by the company in market. Whatever amount remains, that will be
used for business project or event.
Retained profits: Amount remained at the workplace from profit after paying dividend to
shareholders is referred as retained profits. This particular sum of money is considered for
undertaking business project or event where any kind of cost not has to bear by Wonderland
agency.
External source of finance
Bank loan- for taking a bank loan Wonderland need to have a good and sound level of past
track record only by seeing and analysing the track record of Wonderland only bank will be
able and ready to provide Wonderland loan. Bank loan as is the most common and
convenient form of source of fund which is available with Wonderland as the track record of
Wonderland is very good. They need to take the bank loan against existing asset like the
office or any immovable property as they need to satisfy all the terms and conditions of bank
loan. Wonderland also need to provide the idea and tell their planning to bank according to
which bank will be ready to give loan. Bank overdraft is also one of the alternative among the
choices which Wonderland is having with It (Szabo, Rozenberg and Vajdová, 2017).
Overdraft is that type of facility which help the owner of the business to take out the specified
amount from the advance which is provided by the bank.
Leasing: It is external source of finance in which some part of property or asset is to be given
on leas to another party. In exchange to this, second party gives sum of money to the
Wonderland company which is used for the project. Herein, any kind of cost of finance not
required to pay from whom the capital is raised.
Sponsorship- this is the most common form of source of fund which are available for the
event management company as they take this as the most effective option. For this form
Wonderland need to show up their plan, budget, number of person attending the event, when
and where the event will be taking place. Sponsorship is something in which the whole
company need to support the event financially.
Advance ticket booking- by this also Wonderland can manage to get some amount of money
by taking the help of the advance ticket booking platform like Evenbrite. They will help
Wonderland to sell their certain amount of tickets on the advance basis. This will surely help
the company to know the popularity of the concert among the public this advance ticket
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booking will be just before one or two months of the concert organised by Wonderland in
London.
4.0 Critically analyse and recommend relevant pricing strategies available
for pricing the products or services of event
As Wonderland is about to organise a concert in London and they need to set the
venue of concert, date and time, amount of people who will be attending the event, the price
of tickets and the banqueting which they will be providing to the public. Among all these
activities in organising event setting or fixing the price is the most important part as with the
help of price only Wonderland will be able to determine the profits and revenue of concert.
Fixing of price is very tough task as after this only Wonderland will be able to see how much
they will earn and what will be the income or the revenue of the company (Howorth,
Westhead and Allcock, 2016). Fixation of price of products and services of event of
Wonderland need to have a pricing strategy which will be helpful for them. The use good
pricing strategy will determine profits maximisation on sale of products and services. There
are wide range of factors which are required to consider before fixing price like production or
distribution cost, competitors in the market, positioning strategies and business target that is
customer base. Various pricing strategies which Wonderland will apply while setting up the
prices are:
Pricing at premium- in this type of fixation of price Wonderland will fix the price of its
concert at higher price than that of all the competitors in market like Seven Events, First
Protocol event management or Guest list etc., This premium pricing is only effective in the
initial stages of any event or products and for those businesses who are having the unique
goods or ideas (Emadi, Vossoughi and Jetton, 2017). As the customers at London are in a
habit of perceiving higher price tag or the products which are made available to them and
Wonderland is already working very hard to maintain its position in market.
Pricing for market penetration- this type of pricing strategy which is adopted by
Wonderland will enable the company to set the price of concert tickets at lower price than its
competitors in the market. This is the technique of market penetration and generally applied
by new entry or new emerging company in market. Wonderland as is not the new market
player so this pricing strategy will not be helping them to get profits.
Economy pricing- this is the economic process of setting the prices of tickets of concert
organised by Wonderland in which they tend to minimise the cost of marketing and
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production of the products. Economic pricing is best for the large firms in the market as they
are having set and very loyal base of customers and this technique is not good for small
businesses firm. Since the small businesses are lacking behind volume of sales of larger firms
in the market. If the small or new firms are applying economic pricing then will not be able to
generate sufficient profits and prices would also be very low.
Price skimming- this is just as premium pricing of products but the difference is that at the
starting if big firm is launching any new product they will keep the price of that product high
and then afterwards will decrease the price (Liu, Zhang and Keh, 2017). The main benefit of
price skimming is the firm in the initial stage only gets the most and higher number of profits
from the launch of new product. Wonderland is a well settled firm in event management
industry so price skimming strategy for fixing up the price of concert tickets will be most
suitable. As at the starting stage only they will be getting the highest number of profits which
they are expecting. And as the demand for the event would go on increasing or the
competitors would start selling the same kind of product then it will lower down its prices.
By this price skimming Wonderland will be in the staring only generate a larger number of
share in market and this will also help in making the event more and more popular among the
public.
5.0 Critically analyse of Cost Volume Profits analysis to calculate number
of customer to break even
Cost to volume profits analysis is used to take out the break even point of cost and
volume of goods sold and then help the management to make the short term decision
regarding the cost and making out profits. In cost to volume profits analysis it is assumed that
fixed cost, variable cost and sales price are to be constant. And this fixed and variable cost
are fixed within the specified production level. This also would allow Wonderland to take out
the changes in its cost and volume of sale and how will these affect the income and net
income of business (Finkler, Calabrese and Purtell, 2016). If the cost of concert tickets are
increased after the certain point of time then this will affect the income of business. And the
break even is that point which is determined the point where expense and revenue of
Wonderland will be equal. If the company with the sale of tickets of concert is at a position
where they are having no profit and no loss situation then that point is required to as break
even point.
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Both the cost volume profits and customer break even point analysis will be helpful in
taking out the amount of profits and sale volume form Wonderland. As Wonderland is about
to launch the concert in London and need to take out cost of volume profits and to calculate
number of customers to break even.
Sale per unit (S) £30
Variable cost per unit (V) £17
Contribution (S-V) (C) £13
Total fixed cost of whole event (FC) £4000
Break even point (FC/C) £4000/13
£307.6
So from the above example of the break even point of Wonderland which it will be
getting would be £307.6
6.0 Conclusion and Recommendations
6.1 Conclusion
From the above report it is very clear that financial planning is very important for any
industry and also for event management company. The report is all about Wonderland
Agency which is a UK based event management company and is planning to conduct a
concert in London very soon. For this event Wonderland will be requiring funds and need to
determine the source of funds which are available in the market. There are various sources of
funds from where company will make the capital for organising the concert like sponsorship,
bank loan, saving and advance ticket booking. The most suitable form of source of fund
which will be available for Wonderland will be taking loan from bank and rest from
sponsorship. As Wonderland is a very well-known event management company so bank will
be easily ready to give the loan to them. And for fixation of the price, price skimming and
premium price are the best strategies. As it is a well settled company and these price strategy
will help Wonderland in taking out best results from the concert.
6.2 Recommendations
It can be advised to the Wonderland company or agency from the above analysis that,
it should hire a project manager who has many years of experience and handled too much
events in his professional life. The reason is that it will help to prepare effective kind of
project plan along with the activities. In addition to this, company will become able to
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manage the whole event properly and meet to objectives within time. Apart from this, it
needs to do proper monitoring and provide the best guidelines to team members so that
individuals can meet the goals. Further, Wonderland Agency needs to apply several effectual
cost management strategies at the workplace which will support to reduce total expenses of
the event.
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