Event Management Assignment

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By student name
Professor
University
Date: 07November 2017.
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Contents
Executive Summary.....……………………….………....……..……………………………………….3
Introduction.………………….…………..………………....……..………………………………………..4
Results of the market research…..………………....……..………………………………………..4
Estimated proft and loss statement, funding details and balance sheet at the beginning.....
………………….…………..………………....……..……………………………………….6
Funding of the event.…….…………..………………....……..………………………………………..7
Relevant income streams.…………..………………....……..………………………………………..7
Discussion of the proposed event..………………....……..………………………………………..8
Pricing of the event...........…………..………………....……..………………………………………..8
Recommendation and conclusion.........................................................................9
References.………………….…………..………………....……..………………………………………...10
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Executive Summary
In the given assignment, an even t needs to be organised in one of the cities of United Kingdom by one
of event management company in UK. A cost benefit analysis and a proposal is being prepared for the
approval for event and its successful occurrence. Using the market research and analysis of income
expense streams, the same has been analysed whether its viable or not. Appropriate source of finance
has been selected and apply the pricing strategies, an estimated income statement and balance sheet
has been prepared to support the findings.
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Introduction
The event has been planned in such a way that not only the revenues are ascertained but it guarantees
the success to the entrepreneurs and hence, this will also enable the future revenues such that they will
be coming to future events as well. Furthermore, The event will be towards the end of December so
that the audience can be invited in bulk and there is maximum possible sale of tickets at it is a holiday
period. The venue will be London and eminent people from business, industry and big companies will
be invited to deliver the sessions of business start ups and setting up the micro, small and medium
enterprises. The invitees in the audience will be the budding entrepreneurs whose contact can be taken
from Business board and college students who will be graduates and will start working. The other
facilities offered will include a welcome drink and snacks packet which will be sponsored free of cost by
the advertisers and sponsors., such that they are also benefitted. Other facilities will include frinking
water outlets, free WiFi, multiple charging points all across the hall to enable the attendees feel like
home.
Results of the market research, commercial viability and conclusions
Similar events focusing on growth of business or like other ways to increase the profitability or entering
into the new venture of the existing company keep on happening every now and then in London. But
since the frequency is quite often and the per person ticket cost is high, the turnout of the audience
crowd is generally low. Furthermore, it all depends on the planning of the show, the speaking attendees
who has to deliver the session, the sequence of the event, the other facilties being provided to the
people which plays a crucial role in the success of the event. Further, these events are on generalized
concepts and topics and therefore it caters to the general crowd, where the commercial viability rate is
low.
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However, the event which is being planned to organize through this proposal will be one of its kind
where certain exciting stuff will be there for the new entrepreneurs and those who can take the risks.
This will be delivered by one of the most renowned person across the Globe, Mr. Scott Bales, who is a
global leader on innovation, mobility, designs and trends. Furthermore, there will also be a session
towards the end of the program from one of the renowned motivational speakers. These speakers will
give ideas on how to start the small business with new ideas and less of investment, more of effort and
less of constraints, more of revenues and profits and less of costs. Alongside, few renowned bankers wil
also be attending the event and peoplewill get the opportunity to touch base with them to arrange for
funds at lower rates of interest and without much of paper work inefficiencies. Hence, considering all
the above perspectives, the event is expected to be huge success not only for the company but for the
target audience.
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Estimated proft and loss statement, funding details and balance sheet at the beginning
In the given scenario, all the costs have been considered and profit has been derived asuuming that the
minimum attendance will be of 500 persons. There can be an upside but not the downside on it. Further
more, the opening balance sheet has also been prepared and sources of funds have been mentioned
alongwith the interest rates.
Opening Balance Sheet
Particulars Amount (£)
Non Current Assets -
Current Assets
Cash 20,000
Total Assets 20,000
Non Current Liabilities
Long from Bank 13,000
Loan from family members 5,000
Investment - Self 2,000
Current Assets -
Total Liabilities 20,000
Cost Benefit Analysis Statement (Estimated)
Particulars Amount (£)
Expenses:
Venue + Refreshments 5,000
Stationary 3,000
Guest Speaker Remuneration (3) 6,000
Staff and Volunteer 350
Prizes 170
Interest cost on loan (assuming for 5 months) 460
Other Misc. expenses 5,000
Total Expenses 19,980
Revenues
Sales of raffles @ £ 1 300
Sale of tickets @ £ 50 (500 tickets) 25,000
Total incomes 25,300
Estimated Profit 5,320
Return on investment 26.6%
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Source of funding
Particulars Amount (£)
Self investment 2,000
Loan from family @ 0% interest 5,000
Loan from Banks @ 8.5% interest 13,000
Total funding requirement 20,000
Funding of the event
Based on the estimated income streams and covering all the possible expenses, the funding required to
organise the event in London would come to around £ 20000 which can be arranged from sources like
self investment, money lenders, from banks and financial institutions, other friends and relatives and
from the sponsors. In the given case, since the sponsors are already managing the show by availing free
food packets for audience, therefore most of the funding is being arranged from bank through personal
finace which is at the rate of 8.5-9 %, the rest of the funding being met by personal investment and
borrowings from the family at 0% interest rate. It has been assumed that the event will be over in about
5 months and therefore the funding cost i.e., the interest has been considered only for the period of 5
months in the profit and loss statement.
Relevant income streams
In such type of business events, the most prominent source of income is the delegate ticketing fees
which they pay to attend the event. Considering the crowd, the period of the event and reasonable rates
of the tickets, the minimum audience expected is 500 persons. This can increase too and + 20% can be
managed as arrangements have been done on that basis. The other source of revenue being selling of
raffles and rewarding the audience at the end. Since, this will be just for fun and the crowd expected is
generally professional, so the revenue from the same has been considered to be very low. Further, there
can be other revenue streams like through advertisers and sponsors, but they are already covering up
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for the food expenses. Few others include commission from the bankers in case they get a customer
from the event. However, the same is not covered in teh analysis as it is not fixed and certain.
Discussion of the proposed event
The detailed profit and loss statement and balance sheet has been attached for reference. Howevre,
the event cost is expected to be near £ 19000-21000 covering up for all the expenses like venue and
refreshments, stationary costs, guest speaker remuneration and incentives, other staff and voluntees
expenses, cost of the rewards and prizes, interest cost on the loan taken from the bank (assuming for
only 5 months) and other miscellaneous expenses here and there totaling to £ 19,980. The total revenue
will be around £ 25,300 which will be covering up all the expenses is giving a profit of £ 5320 yeilding a
return on investment of about 26.6%, which is good considering the market average.
Break even point
Particulars Amount (£)
Contribution per ticket 50
Total fixed cost 19,980
Break even point 400
The break even in the given case will be around 400 tickets which can cover up for the expenses
incurred. Therfore, even if 20% of the crowd doesn’t turns up in the worst possible scenario, it won’t be
a loss for the company and the company would still be able to make up for the expenses incurred.
Pricing of the event
The pricing of the event has been considered based on the average rates for the venue and on the basis
of the competive rates. The expenses have been estimated based on these averages whreas the revenue
has been considered using the ticket rate for such event and what is the expected average turnout at
the event. The pricing strategies used has been fixed and variable costs, break even analysis, cost benefit
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analysis, return on investment, trading on equity, capital budgeting and leveraging. As per capital
budgeting techniques, if the proposal earns equal or more than the cost, the same should be accepted
and the same holds true in the given case. Also, break even analysis and cost benefit analysis along with
ROI is indicative of the fact that the proposal will return in profits and therefore the same can be taken
forward.
Recommendation and conclusion
Based on the above in depth analysis of the pricing, the cost to be incurred, the financing to be arranged
and the profit that can be earned, it can be concluded that the event is a financially viable one that can
be accepted and taken forward for successful closure. The most viable source of finance will be loan
from bank at fixed rate as the rates have fallen down from 9.5% to 8% in the recent past and others can
be arranged from family, friends and relatives at zero rates of interest. The relevant income streams
primarily includes tickets sold and the future commission from the banks. All the pricing strategies used
here indicate that the project will be profitable from all the views it will be a win win situation for both
the organisers and the expectators.
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