Financial Management for Event Industry: A Case Study of Ashfield Meetings & Events

This report provides a closer look into the execution of a product launch event of Apple, conducted by Ashfield Meetings & Events, which is a reputed event management company, based in the UK. The report covers different aspects of the execution of the event including pricing strategies, cost benefit analysis, need for effective financial management and recommendations for the project.

Running Head: FINANCIAL MANAGMENT
Financial management
Name of the Student
Name of the University
Author note

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Executive Summary:
In this report, a closer look has been given into the execution of a product launch
event of Apple, conducted by Ashfield Meetings & Events, which is a reputed event
management company, based in the UK. Thus, Ashfield Meetings & Events has been
chosen as the event management organisation, which is a subsidiary of the famous
pharmaceutical company, UDG Healthcare PLC. In the report provided below, the different
aspects of the execution of the event have been provided. Right from the pricing strategies,
the cost benefit analysis, need for an effective financial management and the recommendation
of the project, all have been provided for a lucid understanding of the execution of the event.

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Table of Contents
1. Introduction.........................................................................................................................3
2. Discussion:..........................................................................................................................3
2.1 Results of Market research about the commercial viability of similar events.................3
2.2 Alternative sources of finance for funding of events:.................................................5
2.3 Major purposes of financial management within the events industry:........................6
2.4 Pricing strategies:.............................................................................................................7
2.4 Critical evaluation of cost-volume-profit (CVP) analysis:.............................................8
2.5 Recommendations:........................................................................................................11
Conclusion:..............................................................................................................................11
References:...............................................................................................................................13

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1. Introduction:
Ashfield Meetings & Events is a reputed international event management company,
which is based in the United Kingdom. It is located in the city of Leicestershire
(ashfieldhealthcare.com 2018). It is one of the most sought after event management
companies in the world. They cater to the requirements of small to large companies ranging
from pharmaceutical, medical devices, biotech and medical diagnostics companies, around
the world. The company majorly provides a series of services including the production of
various product launch events of various companies, tours and award ceremonies, both in a
national as well as on international scale. Here the event of Apple’s new product launch,
which is set to take place in Liverpool has been discussed about.
The major event venues of the company include Rome, Zurich, and Paris
(Pharmafile.com. 2018). The company has won numerous prestigious awards and accolades
in the form of “UK event 2013: Agency Of The Year”, “Conference & incentive Travel
excellence Awards 2014: Pharma event Of The Year” and many others (Bloomberg.com.
2018). The company, which has the division named after it, the Ashfield Division, has a wide
range of expertise in the form of various healthcare professional and other personalised
services, for effortlessly providing services in the form of expertise in providing management
of events, at both in a national as well as international scale.
2. Discussion:
2.1 Results of Market research about the commercial viability of similar events:
Ashfield Meetings & Events has been conducting events on a national as well as
international scale since its inception. It has garnered adequate amount of profits along with

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an indelible reputation for conducting events with meticulous planning. Details of some of
these events have been provided below:
 Drumming workshops to brewery tours in Japan: Ashfield was tasked with
creation of an annual incentive program for a pharmaceutical company’s top working
executives. After much research, Japan was chosen as the area of experience because
of its rich culture and ethos. Tokyo and Kyoto were chosen as the favoured places. It
was a five day event, consisting of luxury trips, rickshaw rides, and temple tours. A
special Taiko drumming workshop was also arranged for the executives. Touring of
brewery, traditional Japanese dinner of Sushi and Sashimi on a beautiful Yakatabune
boat along with a huge dinner in a traditional; sprawling garden of Japan was also
arranged (Citmagazine.com 2018). The client was impressed and had also requested
Ashfield’s assistance in future for arranging similar events.
 The Bayer UK conference: Ashfield had arranged a conference meeting for Bayer
UK, which is a pharmaceutical company. It was attended by a total of 450 attendees
from different genres of the industry ranging from consumer, animal healthcare
products, crop sciences, pharmaceutical divisions (Bayer.co.uk 2018). It was a highly
engaging event, which had emphasised on the understanding of the life sciences
business. It was even recognised and awarded by EVCOM Live awards, in the form
of the ‘Life Sciences event award’, in the year 2017. It was noted that Ashfield had
utilised its knowledge of their innovative and dynamic business, along with their
technical know-how of the life sciences market, for arranging innovative and exciting
concepts for the event. It was recognised as one of the most successful conferences in
the United Kingdom.

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2.2 Alternative sources of finance for funding of events:
Funding of events is one of the most important aspects of any successful event, be it
any award ceremonies, meetings and conferences. It is also true for Ashfield too. Some of the
sources of finance are as follows:
 UDG Healthcare PLC: UDG Healthcare is the parent company of Ashfield
meetings and events. Being the parent company, it also looks after the
financial well-being of Ashfield Meetings & Events. It is one of the most
reputed and largest health care companies in the industry. UDG's sales,
marketing and medical service offerings are well included into Ashfield
Commercial & Medical Services, which caters to the financial requirements of
the event management company.
 Angel investors: Ashfield also has a large network of angel investors, which
also caters to the sourcing of funds for the company, which helps in their
production and arrangements of the different events for the company. It is
because of its strong network of investors, the company is able to gather funds
from a large pool of investors, from the contacts generated by its existing
network of investors and financers, including the angel investors.
 Loans provided by the banks: In the era of financial independence and
digitalisation, banking has been the heart and soul of every growing and
developed economy. The banks make huge profit in arranging such big events
as conducted by Ashfield (Kavanagh, Rochford and Bussa 2015). Since, the
company has earned international repute by serving its clients in the best
possible way, receiving bank loans from companies is not at all a difficult
affair.

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 Sponsorship and sale of tickets: Sponsorship has become an integral part of
the financing any major event. In case of Ashfield, it is no exception. After
gathering the information about the events, forecasted ticket sales and other
information, it agrees to sponsor the event. Ashfield has been working in this
field for quite some time now, which helps in receiving sponsorship in
comparatively easier ways. Ticket selling websites like Eventzilla, Ticket
Tailor, Etouches and EventMobi can play a major role in assisting the sale of
advance tickets, which again form s a credible source of finance
(Eventmobi.com 2018).
2.3 Major purposes of financial management within the events industry:
The major purposes of the need for managing the finance for the event
industry are as follows:
 Budget preparation: One of the most important tasks of financial
management is the creation of the budget. The budget helps in
forecasting the income and expenditure of organising any particular
event of any other expense or income for the company (Sba.gov 2018).
It helps the event directors for accurately knowing the financial map
for the future events.
 Capital needs and requirements: Preparation of an effective financial
plan and a proper strategy for its implementation is very necessary;
otherwise the company might become bankrupt in the future (Bhatt,
Manadhata and Zomlot 2014). Determining the required amount of
capital and its sources helps in seamless execution of events and other
plans.

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 Investment issues: It is very important for the finance manager of the
company, to determine the areas, where the funds could be invested for
the betterment of the events business, how to use it, where to invest it
for expansion and other important purposes. In this way the surplus
could be disposed in an effective manner.
 Management of the financial resources: Management of the financial
resources like cash in hand and other liquid funds, loans, borrowings,
must be identified, failing to do so, might invite greater financial perils
for the company (Entrepreneur.com 2018). Most importantly, if cash
management is not performed properly, it could lead to disruption of
the day to day activities of the company.
2.4 Pricing strategies:
For executing such kind of events, effective pricing strategies could be use by
Ashfield:
 An hourly rate: Such rates are very useful, as most of the attendees favour to
pay on an hourly basis. It helps the attendees in getting the vital information
about the duration of the event, and it makes the payment a hassle-free affair.
It would also help in receiving the money of the aggregate amount of hours of
the event and it could start from £16.
 Venue rent: The cost of performing in the specific venue is required to be
taken into consideration. The rent of the hall, the usage of the facilities and the
cost of the other items being separately installed for the guests by Ashfield,
needs to be taken care off.
 Percentage of profit: the profit percentage is another item which needs to be
taken care of, it is probably the most important item, in organising such

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events. Ashfield must ensure that the seats are full and the money is being
received on time. Generally profits vary from 15 to 20 % o the total cost of
conducting the event.
 Receiving commission: Commission is another important source of income
for the event companies, which is derived from the various travel agents, food
companies, hotels and venues. It’s a highly profitable strategy, which also
helps in building strong professional networks for future events and activities
(Atkins and Moyer 2013). This strategy will do wonders for Apple, and would
be very effective for an event based company like Ashfield.
2.4 Critical evaluation of cost-volume-profit (CVP) analysis:
The cost volume profit analysis or the CVP is mainly used by companies for assessing
the impact of changes in cost and volume on its operational expenses and income. It is also
widely used in case of event management companies; its usage is all pervading (Ziakas and
Boukas 2014). There are three pivotal elements of a CVP analysis, which are the profits,
volume and the cost of the products. Here the contribution margin is calculated by deducting
the variable cost from the total sales (Torriti and Ikpe 2014). It is mostly used for decision
making purposes for determining the level of sales, which is necessary for making a profit in
the process of selling of goods by the company.
In the case of Ashfield, CVP would be very useful in the condition that the costs
remain fixed till a particular level of output or production. Another condition which would
help in CVP’s hassle free implementation is the assumption that the tickets would be sold and
only variable cost and fixed cost remains. Some important points need to be kept in mind, for
ensuring the success of the implementation of the CVP, such as the contribution margin must
be greater than the total fixed costs (Noreen, Brewer and Garrison 2014). It could also be

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utilised for calculating the breakeven point, by dividing the aggregate fixed costs with the
contribution margin.
Some of the hypothetical figures, which would help in using the CVP analysis, are
mentioned below, in a tabular format:
Particulars of costs Prices
Average revenue for each consumer
£
45
Average variable cost for each
consumer
£
15
Contribution margin for each consumer
£
30
Incremental fixed cost
£
15,000
Number of consumers 700
Table 1: Basic hypothetical figures, to be used for Ashfield’s event.
(Source: Author’s creation)
In accordance with the table provided above, the average revenue from each consumer would
be £45, the average variable cost for each of the consumers is fixed at £15, with the
contribution margin being £ (45-15). Here the increasing fixed costs have been taken to be at
£15,000 and the number of consumers expected to be 700. With the help of these
hypothetical figures, the break even of the customer and sales amount can be calculated, as
has been provided below:
Particulars Units
Revenue
£
31,500
Total variable cost
£
10,500
Contribution margin
£
21,000
Incremental fixed cost
£
15,000
Total profit
£
6,000
Break-even (in customers) 500
Contribution margin ratio 66.67%
Break-even (in sales)
£
22,500

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Table 2: Break-even in terms of consumers and break-even sales for the event
(Source:Author’s creation)
If we decipher the table, it could be seen that the contribution margin for the event of
Ashfield is at £21,000. Generally a healthy and positive amount of contribution margin is
always favoured for retaining greater amount of profits for expanding purposes in future. It
can also be derived from the table that after deduction of the fixed cost, the net profit would
stand at £ 6,000. Thus, it can be said that Ashfield needs a total of at least 700 consumers to
be on the no profit and no loss margin, which is the breakeven point.
In the table given below, various levels of revenue have been shows, which would
eventually help in preparation of the traditional break even chart.
Revenue
Contributio
n
Fixed
cost Profit
£
15,000 £ 10,000.00
£
15,000
-£
5,000.00
£
30,000 £ 20,000.00
£
15,000
£
5,000.00
£
37,500 £ 25,000.00
£
15,000
£
10,000.00
£
45,000 £ 30,000.00
£
15,000
£
15,000.00
Table 3: Different revenue levels for breakeven point

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O
B
P
Loss (-
£5000) Profit (£6000)
Q
Income
(£31,500)
Costs
(£25,500)
A
C Variable Costs
(£10,500)
Fixed Costs (£15,000)
Break-even point
(700 customers)
Output
(Source: Author’s creation)
Figure 1: Break-even chart for the planned event of Apple conducted by Ashfield
meetings & events.
(Source: Author’s creation)
2.5 Recommendations:
Based on the close evaluation of all the factors, strategies, pricing strategies, need for
financial management and the cost benefit analysis, a series of recommendations have been
provided for smooth growth of Ashfield in the successful completion of the event of Apple’s
new product launch. For the income streams, banks are one of the most viable sources of easy
finance. Since Ashfield has been operating under the flagship banner of UGDD, for many
years, getting loans from the banks won’t be a very difficult issue. Similarly, sponsors would
also be available, because of the joint brand name of one of the most reputed event
management company of the UK and for associating with Apple, which is in itself, one of the

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pioneers of the Silicon Valley. For the pricing strategies, the hourly rate and the commission
mechanisms are very viable options, which must be utilised. Considering the brand name of
Apple being involved, Ashfield must also increase its own profit percentage; keeping in mind
the venue rent strategies.
Conclusion:
Thus it can be said and concluded that for the successful execution of the event of
Apple’ s new product launch in Liverpool, UK, Ashfield must assess all the intricacies of the
project in hand. Right from the costs, the pricing strategies, the cost benefit analysis of the
relevant incomes, expenses, and the sales must be taken into careful consideration. For this, a
thorough preparation of a proper capital structure is very important, where all these issues
would be addressed. A final projection and forecast must be done for all the components of
the event, before final execution. Along with all this, finally the sources of income in the
form of bank loans and sponsorships from reputed sponsors must be used.

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References:
Ashfield Healthcare. (2018). Ashfield Meetings & Events scoop life sciences event award |
Ashfield Healthcare. [online] Available at:
https://www.ashfieldhealthcare.com/gb/news/ashfield-meetings-events-scoop-life-sciences-
event-award/ [Accessed 15 Aug. 2018].
Ashfieldhealthcare.com (2018). Ashfield Healthcare. Ashfield Meetings & Events named in
CMI 25 list | Ashfield Healthcare. [online] Available at:
https://www.ashfieldhealthcare.com/gb/news/ashfield-meetings-events-named-in-cmi-25-list/
[Accessed 15 Aug. 2018].
Atkins, M.G. and Moyer, D.S., International Business Machines Corp, 2013. Facilitating
event management and analysis within a communications environment. U.S. Patent
8,347,143.
Bayer.co.uk (2018). plc, B. UK - Bayer plc. [online] Bayer.co.uk. Available at:
https://www.bayer.co.uk/ [Accessed 15 Aug. 2018].
Bhatt, S., Manadhata, P.K. and Zomlot, L., 2014. The operational role of security information
and event management systems. IEEE security & Privacy, (5), pp.35-41.
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[Accessed 15 Aug. 2018].
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at: https://www.citmagazine.com/article/1310193/masterplan-ashfield-meetings-events
[Accessed 15 Aug. 2018].

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Citmagazine.com. (2018). Universal World Events rebrands as Ashfield Meetings & Events.
[online] Available at: https://www.citmagazine.com/article/1229573/universal-world-events-
rebrands-ashfield-meetings---events [Accessed 15 Aug. 2018].
Entrepreneur. (2018). Financial Management. [online] Available at:
https://www.entrepreneur.com/article/21926 [Accessed 15 Aug. 2018].
EventMobi. (2018). EventMobi. [online] Available at: https://www.eventmobi.com/
[Accessed 15 Aug. 2018].
Kavanagh, K.M., Rochford, O. and Bussa, T., 2015. Magic quadrant for security information
and event management. Gartner Group Research Note.
Noreen, E.W., Brewer, P.C. and Garrison, R.H., 2014. Managerial accounting for managers.
New York: McGraw-Hill/Irwin.
Pharmafile.com. (2018). Ashfield Meetings & Events | Pharmafile. [online] Available at:
http://www.pharmafile.com/directory/ashfield-meetings-events [Accessed 15 Aug. 2018].
Sba.gov. (2018). The Importance of "Financial Management" | The U.S. Small Business
Administration | SBA.gov. [online] Available at:
https://www.sba.gov/offices/district/nd/fargo/resources/importance-financial-management
[Accessed 15 Aug. 2018].
Torriti, J. and Ikpe, E., 2014. Cost–Benefit Analysis. In Encyclopedia of Law and
Economics (pp. 1-8). Springer, New York, NY.
Ziakas, V. and Boukas, N., 2014. Contextualizing phenomenology in event management
research: Deciphering the meaning of event experiences. International Journal of Event and
Festival Management, 5(1), pp.56-73.