Detailed Business Plan Report: Ibiza Rocks (Financial & Promotion)

This report provides a comprehensive business plan for Ibiza Rocks, encompassing financial analysis, forecasting, and promotional strategies. It begins with an introduction to financial analysis and its importance for the company, followed by a detailed financial plan including forecasted costs, profit statements, balance sheets, and a monthly cash budget. The report also explores the benefits of flexible budgeting for financial control and analyzes contribution margins and ticket selling prices. Furthermore, it includes a promotional plan with an emphasis on achieving SMART objectives through various marketing channels, both traditional and digital. The analysis covers personal selling, advertising, sales promotion, and public relations, and provides a discussion on digital marketing techniques like Search Engine Marketing (SEM), Search Engine Optimization (SEO), and Social Media Marketing (SMM) to promote Ibiza Rocks.

CREATING A BUSINESS PLANNING
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Contents
Introduction......................................................................................................................................3
Financial plan...................................................................................................................................4
(1) Forecasted cost and profit......................................................................................................4
(2) Forecasted balanced sheet......................................................................................................6
(3) Monthly cash budget..............................................................................................................6
(4) How a system of flexible budgeting could facilitate financial control..................................7
(5) Contribution and ticket selling price......................................................................................9
Conclusion.....................................................................................................................................15
References......................................................................................................................................16
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Introduction
Financial analysis and financial forecasting are very important to determine actual financial
position of the company. In addition to that this report has also focused on sales and promotional
activities that can be used to accelerate sale of the company. Promotional activities are very
important for a company as it is important for an organization to maintaining their presence in
the market. Today’s business environment is very competitive and a company should take
advantage of any opportunity to gain competitive advantage over its competitors. Sales and
promotion is an effective tool that can helps in providing such competitive advantage (Crosson
and Needles, 2013). (Needles, Powers and Crosson, 2013). A promotional plan is prepared
considering the market environment and current business operations of the company. Financial
analysis helps in better understanding of current financial position of the company. Evaluation of
current financial position of the company helps in making important strategic and operational
decisions. Analysis of financial analysis also helps in forecasting of financial information. There
are various advantages of financial forecasting that can help Ibiza Rocks in important decision in
future (Needles, Powers and Crosson, 2013). One of the most important functions that can be
done with the help of financial forecasting such as cash management. This report will help Ibiza
Rocks to grow and development in future.
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Financial plan
(1) Forecasted cost and profit
Statement of profit is prepared on the basis of projections made on the basis of financial analysis.
Particular Amount
May June July August September
Sales 25000 25000 25000 25000 25000
Cost of goods
sold
5000 5000 5000 5000 5000
Gross profit 20000 20000 20000 20000 20000
Expenses
Hire & licence 5000 5000 5000 5000 5000
Wages 9000 9000 9000 9000 9000
Overheads 1200 1200 1200 1200 1200
Promotional
costs
500 500 500 500 500
Depreciation 3285.00 2792.25 2373.41 2017.40 1714.79
Total indirect
expenses
18985.00 18492.25 18073.41 17717.40 17414.79
Net profit 1015.00 1507.75 1926.587
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2282.5994 2585.20947
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Note-
1. It is assumed that the financial data and events in April were same as the month from May to
September. Hence the payment for the credit sales done in the month of April will be made in the
month of May.
2. There is no specific instruction regarding promotional expenses. Therefore it is assumed that
payment regarding promotional expenses is made in the same year at the end of financial year.
3. The method of depreciation used in this case would be written down value method.
Particular Amount
WDV
Opening 21900.00
Y1 3285.00
Closing 18615.00
Y2 2792.25
Closing 15822.75
Y3 2373.41
Closing 13449.34
Y4 2017.40
Closing 11431.94
Y5 1714.79
Closing 9717.15
4. Details regarding promotional expenses as follow-
Promotional expenses Amount
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Social media advertisement 150
Personal selling 75
Sales promotion through Blog, catalogue,
email marketing, website etc.
125
Advertisement through media, magazine,
radio, newspaper, television etc.
100
Public relation expenses 50
Total 500
(2) Forecasted balanced sheet
Forecaster financial statement help in the evaluation of the financial performance of a company
whereas forecasted balance sheet shows the financial position of the company on coming future
years.
Particular £ £ £
Fixed Assets 9717.146
Current Assets
Inventory 3500
Debtors 0
Bank 31500
Total Current Assets 35000
Current Liabilities
Trade Creditors 3000
Accrued Overheads 300
Total Current
Liabilities
3300
Working Capital 31700
41417.15
Financed by
Capital 41417.15
(3) Monthly cash budget
Particular Amount
May June July August September
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Cash inflow
Cash sales 2500 2500 2500 2500 2500
Credit sales 22500 22500 22500 22500 22500
Total 25000 25000 25000 25000 25000
Cash outflows
Credit purchases 2500 2500 2500 2500 2500
Cash purchases 2500 2500 2500 2500 2500
Hire & licence 5000 5000 5000 5000 5000
Wages 9000 9000 9000 9000 9000
Overheads 1200 1200 1200 1200 1200
Promotional costs 500 500 500 500 500
Total 20700 20700 20700 20700 20700
Net cash inflow 4300 4300 4300 4300 4300
Opening cash 10000 14300 18600 22900 27200
Closing balance 14300 18600 22900 27200 31500
Main cash inflows of Ibiza Rocks are related to the sale tickets made by the club in relation to
the rock concert conducted. In addition to that that food and drinks also contributed to the credit
as well as cash sales of the company. The main cash outflows of the club are related to the cost
of food and drinks paid to the supplier. Hire, licence and wages relates to the hire charges paid to
the bands that have performed in the club. Details regarding promotional costs are related to the
social media expenses, sales promotion, advertisement and personal selling done by the
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company. Overhead expense are the occasional indirect expenses done by manager and staff of
the club.
(4) How a system of flexible budgeting could facilitate financial control
A budget can be categorized into two categories that are flexible budget and static budget. The
use and advantages of both these type of budget are different. Static budgets are the budgets that
are prepared at the starting of the financial year and no alternations are made in such budgets
until the start of the new financial year. The financial figures input in this type of budget remains
the same throughout the financial year. This decreases the uses and advantages of using
budgeting process.
On the other hand, flexible budgets can be defined as a set of various budgets that are prepared
for different activities undertaken by an organization; hence there is a separate budget for each of
the activity in business. These types of budgets are initially prepared on the basis of assumption
and modifications are made on the basis sale changes that occur during the financial year (Hope
and Fraser, 2013).
Some of the advantages of the flexible budget that will help in better financial controls are as
follows-
1. Better cost control- Flexible budgets help in automatic control on expenses that are expected
by the company. For example, a manufacturing unit has set its indirect expenses as 20000 (at the
rate of 20% of its sales) and expected a sale of 100000. If the actual sales of the company are
75000 then it would automatically control the cost to 20% of 750000 i.e. 15000 instead of 20000.
2. Updating with recent data- Best feature and advantage of a flexible budget is that it keeps
itself updated with the current financial information of the company which was not the case in
static data (Wyatt, 2012). There might be the occurrence of certain events that resulted in
increased cost of raw material. This factor would be considered by flexible budget and changes
will be made accordingly.
3. Costs and profit margins of the company can also be changes in case of a flexible budget.
4. The flexible budget also enables comparative analysis of actual financial figures with expected
financial figures (Aalto, 2012).
Flexible budgets that will be prepared by Ibiza Rocks will be as follows
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- Direct expense budget
- Total revenue budget
- Expected sales budget
- Advertisement expense budget
- Number of customer budget
- Overall profitability budget
Performa that can be used for making a flexible budget is-
(5) Contribution and ticket selling price
1. Contribution
Contribution can be defined as the profit earned after deducting the variable price from selling
price of a company. Generally, the contribution is used by business organization and
manufacturing units to set prices for their product and services (Hilton, R.W. and Platt, 2013).
Here, contribution per unit would be [18-(18*42%)] = 10.44.
Therefore contribution for-
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Monthly customers Contribution per customer Total contribution
2000 10.44 20880
3200 10.44 33408
2. Expected selling price
(i) 2000 monthly customer
Lest assume that list price is x.
Therefore (x*.58) *2000= 20000 i.e. target profit
X= 17.24
(ii) 3200 monthly customer
Lest assume that list price is x.
Therefore (x*.58) *3200= 20000 i.e. target profit
X= 10.78
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PROMOTIONAL PLAN
A promotional plan is to execute marketing strategies for ensuring to meet the objectives
targeted. It covers all sort of communication between the company and the clients. There are four
basic components in a promotional plan (Armstrong et al. 2015). They are personal selling,
advertisement, sales promotion and public relation.
Personal selling: It is about discussing with a buyer, showing portfolio and selling the companies
vision.
Advertisement: It includes media, magazine, radio, newspaper, television etc. It is a paid
promotion.
Sales promotion: Blog, catalogue, email marketing, website are the examples of sales
promotion.
Public relation: Any intention to create a good or well-known image of the organization is a
public relation (Chong et al. 2017). Press released article is an example of public relation.
These four components help an organization to reach the SMART objective.
S Specific
A well-known endpoint of the web information.
M Measurable
Attach timelines and number to the aim
A Achievable
Based on results and existing figure.
R Relevant
Link between web goal and business goal
T Time limited
Time period measured for a goal
The smart object in a business increases the chance of achieving the goal without rushing,
drifting from the aim. It clarifies the ideas, keeps the focus on the efforts.
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Specific: A goal should be clear and specific, otherwise someone won’t be able to focus and feel
motivated. Drifting from goal it is always necessary to try to answer these five W questions
 What do I want to achieve?
 Why is the aim so important?
 Who is involved?
 Where is it?
 Which resources are involved?
Measurable: Measuring goals are important to stay motivated. Accessing program helps to
meet deadlines, stay focus and feel the excitement of getting closer to the goal.
Achievable: A goal needs to be attainable and realistic, stretching the abilities of one still
keeping it possible (Huet et al. 2015). Ibiza Rocks can identify resources or overlooked
opportunities that can bring them closer to goal.
Relevant: The goal should matter and is relevant to all other goals. The plan should be
controllable and keep moving everyone forward.
Time limited: There always should be a target time and date for every goal to keep the focus on
the goal.
So, it is an effective tool that gives clarity, motivation and focuses needed to achieve the goals
for Ibiza Rocks in Brighton.
There are several technologies for planning promotion. Some are traditional and some are digital.
Now a day’s online marketing also known as digital marketing is a great way to promote the
business of Ibiza Rocks in Brighton.
Traditional marketing is about any kind of advertising, promotion in a company that has been
used by Ibiza for a proven rate of success for years. It includes printed advertisements such as
bill bounds, newsletter, newspaper ads and others. Other types of traditional marketing are
television commercial or sports product, service or radio advertising. Traditional methods have
an advantage ahead of digital marketing (Armstrong et al. 2014). A client not having internet
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