Financial Management Report: Timebased Events Limited Event Planning

This report analyzes the financial management practices of Timebased Events Limited, an event management firm in London, UK. The report focuses on an event planned for Amazon's product launch, exploring market research, alternative funding sources such as angel investors, bank loans, advance ticket sales, and sponsorship. It also delves into the main purposes of financial management within the events industry, including capital requirements, capital composition, financing sources, fund investment, surplus disposal, cash management, and financial controls. The report critically evaluates relevant pricing strategies like fixed hourly rates, flat fees, profit percentage, commission, and hourly expenses. Furthermore, it includes a critical evaluation of cost-volume-profit (CVP) analysis to determine the break-even point and recommends appropriate funding sources and pricing strategies for the event's financial success.

Running head: EVENTS FINANCIAL MANAGEMENT
Events Financial Management
Name of the Student:
Name of the University:
Author’s Note:
Course ID:

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Executive Summary:
In this report, the assistant financial manager of a profit-making event management firm
organises various events for different types of occasions in London, UK. Thus, Timebased
Events Limited is chosen as the event management organisation, which collaborates with the
visionary brands of elevating ideas. The organisation needs to follow the flat fee pricing strategy,
as Amazon would be able to seek appropriate knowledge of the patients. Finally, in order to raise
funds for the event, Timebased Events Limited could seek bank loan and sponsorship for making
the stated project a success along with assuring its overall commercial viability.

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Table of Contents
1. Introduction:...............................................................................................................................3
2. Market research results about the commercial viability of similar events:.................................3
3. Alternative sources of finance to fund the event:........................................................................4
4. Main purposes of financial management within the events industry:.........................................6
5. Relevant pricing strategies for pricing the products/services of the event:................................8
6. Critical evaluation of cost-volume-profit (CVP) analysis to calculate the number of customers
to break-even:................................................................................................................................10
7. Recommendation of appropriate sources of finance and pricing strategies of the event:.........14
8. Conclusion:................................................................................................................................14
References:....................................................................................................................................16

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1. Introduction:
In this report, the assistant financial manager of a profit-making event management firm
organises various events for different types of occasions in London, UK. Thus, Timebased
Events Limited is chosen as the event management organisation, which collaborates with the
visionary brands of elevating ideas. It is considered as one of the leaders in event production and
corporate event planning in London and other global places (Timebased.co.uk 2018). The
organisation has numerous clients, out of which Amazon is selected for this report. It is assumed
that Amazon is planning to launch 30 new products for which it would conduct an event to draw
the attention of the potential customers. This event would host few renowned movie and sports
personalities where it would be possible for the common individuals residing in London to attend
the event through payment of entry fee.
Timebased Events Limited has different venues for carrying out various events. The
major venues that the organisation has in London include “Conde Nast College of Fashion and
Design”, “Design Museum” and “Royal Opera House”. The major services of the organisation
constitute of launching events, brand event management, international events and awards
ceremony production. Hence, the current report would concentrate on brand event management
of the new products of Amazon to be launched.
2. Market research results about the commercial viability of similar events:
Timebased Events Limited has arranged some similar events in the past and it has gained
adequate amount of profit from such events, some of which are illustrated as follows:
Vogue Festival 2015:

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Vogue is a global fashion brand, which intended to drive its inspirational fashion festival
for capturing imaginations along with transporting the festival goers into a new world of fashion.
For conducting such public event, Timebased Events Limited had relocated the festival to two
new venues, which were “Royal College of Art” and “The Royal Geographical Society”. These
two venues have been designed in such a manner that they fit to carry out the global fashion elite
(Draper, Young Thomas and Fenich 2018). The editor of Vogue has appreciated the work of the
organisation after completion of the event regarding design and looks concept. This implies the
commercial viability of the project.
H&M swimwear launch:
For arranging the new swimwear launch of H&M, the organisation has arranged
Shoreditch House for hosting the event, since David Beckham was the chief guest of H&M for
the event (Fragkogianni 2018). In the poolside, branded campaign displays were designed with
the help of a striking feature of rain curtain. In addition, Timebased Events Limited had
developed a stylish showroom for displaying products along with the private lounges for global
press and list of celebrity guests. It has received huge appreciation from H&M for conducting the
event in a successful fashion, which signifies that the event is commercially feasible.
3. Alternative sources of finance to fund the event:
The alternative funding sources that Timebased Events Limited could have for financing
the event comprise of the following:
Angel investors:
Timebased Events Limited could access websites such as Angelsden in order to connect
the potential investors with the help of personal introduction or pitching events for a fee. The

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website contains 13,000 angel investors having 90% success rate (Barr and McClellan 2018).
The other ways of finding investors include approaching the existing contacts or specialist
investment groups. For example, as Timebased Events Limited is planning the launch of new
products in Amazon, it could approach the sports firms to place advertisements on the chosen
event venue.
Bank loan:
The bank loans are not provided easily in the current era, since the banks are unlikely to
make profit for financing an event. However, since Timebased Events Limited has global records
of achievement, it is possible for it to seek the bank loan option. Conversely, it could seek bank
loan, if it mortgages a business asset. Before mortgaging, it is necessary for an organisation to be
aware of the event success before taking into account bank loan as an option (Bekaert and
Hodrick 2017).
Advance ticket sales:
Event-ticketing platform such as Eventbrite could be used before selling advance tickets
of the planned date of the event. This would help in evaluating the popularity of the event
proposal, since working capital base could be increased (Brooks 2015). Hence, the processing of
payment in the context of Eventbrite would help Timebased Events Limited in applying for
advance payment before the date of the event. This processing enables the organisation to gather
a part of advance ticket sales, as the same would be supplied with important cash flows to kick-
start the project.
Sponsorship:

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After the event is completed, the sponsors often tend to arrive. Their motive is to obtain
information about the expected audiences to attend the event, venue and event timing, event
agenda along with the marketing plan of Timebased Events Limited. Thus, it would be essential
for the firm to obtain core finance or individuals participating in the event before they tend to
approach the sponsors. Moreover, sponsorship packages need to be finalised by providing a clear
explanation of the benefits about the advantages to be provided to the sponsors.
4. Main purposes of financial management within the events industry:
There are certain main purposes of financial management within the events industry of
UK, which are described briefly as follows:
Estimation of capital requirements:
The assistant financial manager of Timebased Events Limited is required to project the
capital requirements of the firm. This would depend on the projected costs and profits coupled
with the future programs and policies of the firm (Eldenburg, Krishnan and Krishnan 2017).
Hence, the assistant financial manager of the firm needs to carry out projections effectively for
increasing the overall earning ability.
Determination of capital composition:
As soon as the projections are made, the assistant financial manager of the firm is
required to determine its capital structure. In this context, Finkler et al. (2016) remarked that
both short-term and long-term valuations of debt and equity are needed. This would depend on
the portion of equity capital a firm holds and additional funds that would be obtained from the
outside parties.

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Selection of financing sources:
In order to procure funds, a firm has a number of alternatives such as angel investors and
loans to be sought from the banks and other financial institutions coupled with the public
deposits to be accumulated as bonds (Fox and Madura 2017). Each factor needs to be chosen
based on relative advantages and limitations of each funding source and period.
Fund investment:
The assistant financial manager needs to assist the financial manager of Timebased
Events Limited to determine the fund distribution into profitable events. This would enable in
minimising the overall investment risk and timely returns where possible (Gatzert 2015).
Surplus disposal:
The assistant financial manager of Timebased Events Limited could help the finance
manager of the organisation to aid in making net income decision. This procedure could be
conducted in two ways:
One procedure is the declaration of dividends, which comprises of the rate of dividend
and other advantages like bonus.
Another procedure is retained earnings where the volume is required to be ascertained
depending on diversification and innovation plans of the firm (Matthew 2017).
Cash management:
It is the duty of the assistant financial manager of Timebased Events Limited to undertake
cash management decisions. Cash is essential for various purposes like salary and wage
payment, electricity and water bill payment, clearing short-term obligations, creditor payments,

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maintaining sufficient inventory and purchase of stuffs related to the events (Getz and Page
2016).
Financial controls:
It is necessary for the assistant financial manager of Timebased Events Limited for
planning, using and procuring the funds. Moreover, the personnel would require exercising
controlling over funds. This could be fulfilled with the help of various techniques by taking into
consideration ratio analysis, financial forecasting and cost control (Hoye et al. 2015).
5. Relevant pricing strategies for pricing the products/services of the event:
For conducting this particular event, the relevant pricing strategies that Timebased Events
Limited could use comprise of the following:
Fixed hourly rate:
This rate would start from £15 and more. Majority of the attendees paying hourly rate
would want to obtain information regarding the overall number of hours planning is expected to
make. With the help of fixed hourly rate, the firm would receive payment for the overall event
hours; however, the coordination hours above time.
Flat fee:
Timebased Events Limited is needed to review the requirements with Amazon and after
the review is done, the price could be presented. As laid out by Jackson, Morgan and Laws
(2018), majority of the clients prefer this strategy, since they obtain prior information regarding
the payments. However, the organisation is required to be appropriate at estimating time devoted
on the job or it would have negative effect on this type of payment.

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Profit percentage:
This pricing strategy depends on part of the amount collected on the part of Amazon.
Hence, Timebased Events Limited is required to ensure the fill-up of seats or it might make
pennies on a pound. In this regard, Jaimangal-Jones, Fry and Haven-Tang (2018) cited that few
event firms work for a percentage varying between 15% and 20% of the total cost of the event
regardless of the number of individuals brought in.
Commission:
Few event organisations base their fees for obtaining commissions from travel agents,
venues and hotels. Such pricing strategy might be profitable; however, it would be the only
option (Jones 2014). Moreover, few clients are aware of these benefits and they might envision
double dipping, obtaining payment and venue for similar services. This strategy could be highly
beneficial for Timebased Events Limited, as it is working with Amazon, which could
accommodate its rates because of financial stability in the UK market.
Hourly expenses:
Another strategy that Timebased Events Limited could use is to charge hourly expense
with add-ons in order to cover expenditures (Lim 2017). In addition to this, the various project
managers of the organisation would subcontract portions, which are not managed directly. Under
such situation, the client would be provided with a bill of additional 15% -20% over the overall
service cost. This strategy could take into account stuffs such as mailing and printing (Raj,
Walters and Rashid 2017).

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6. Critical evaluation of cost-volume-profit (CVP) analysis to calculate the number of
customers to break-even:
According to Masterman (2014), CVP analysis is reliant on determining the break-even
point of the cost and volume of product. This analysis is extremely useful for the managers of a
firm to make short-term decisions. Since it takes into account different assumptions to enhance
relevance, it considers that fixed costs, selling price and variable cost per unit do not vary. In
order to conduct this evaluation, various equations are required and these could be developed
with the help of cost, price and other variables. In order to plot them, the economic graphs are
utilised. Hence, it is a process of cost accounting related to the impact of varying levels of costs
and sales in terms of operating income of the organisation.
Timebased Events Limited could rely on CVP analysis, if the costs do not vary within a
particular level of production. Assumptions are made that all the printed tickets would be sold
and there would be absence of semi-variable cost, which means that the costs would be either
variable or fixed. With the help of CVP analysis, the use of contribution margin is made in order
to handle the product contribution margin, which is the output sought after deducting variable
costs from overall sales (Pedersen and Thibault 2014).
In order to ensure the success of the event, Timebased Events Limited needs to be aware
about the contribution margin, as it needs to be greater than the overall fixed costs. Moreover,
the contribution margin could be used for ascertaining the break-even point and break-even sales.
This could be obtained by dividing the overall fixed costs by the ratio of contribution margin
(McKinney 2015).

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Certain assumptions are made to compute the total number of customers for reaching the
break-even point and they are illustrated as follows:
Particulars Units
Average revenue per customer £ 35
Average variable cost per
customer £ 10
Contribution margin per
customer £ 25
Incremental fixed cost £ 20,000
Number of customers 900
Table 1: Assumptions to compute the break-even point in terms of customers
(Source: As created by author)
According to the above table, it could be evaluated that the expected number of
customers is 900 to attend the event of Amazon. It is expected that the organisation would earn
£35 from each customer. On the other hand, the average variable cost for each customer is
assumed as £10. However, no cost of sales has been taken into account for conducting this event.
Hence, the contribution margin for each customer is £25 (£35 - £10). The fixed cost in order to
conduct this specific event of Amazon is assumed as £20,000. With the help of primary
assumptions, the break-even in relation to customers and sales is calculated, which is depicted
below in the form of a table as follows:
Particulars Units