Business Plan
Content
BUSINESS OPPURTUNITY In an ever changing fast paced world, where the trend is drastically shifting towards nuclear families, both the parents of the family being employed and having very little time for their children, the focus is shifted towards how one can make this little time spent with their little children momentous. In a nuclear family the parents get to focus all their efforts and concentration on their children only to ensure that they remain happy all throughout. Hence the growing number of nuclear families have given an impetus and also created a need for an industry that provides services specialized only for children Birthday is one occasion that is most awaited every year both by the child as well as his parents. All parents would like to make their child’s birthday a special occasion that is ever remembered by their child. In addition with the increasing purchasing power, parents care little about the expenditure to host a grand show for their children. However, the constraint lies in the event planning and organizing of the special occasion while parents are consumed with their works. Here lies the opportunity to develop an event management service for kid parties that would relieve the parents of the burden of planning the event and enjoy the celebrations without any stress and strain. The industry catering to such specialized services is very limited in Bangalore which gives a potential for such a segment to grow. Apart from catering to the demand of a working family having heavily burdened office, such a service would also take care of the demands of the social world organizing a special occasion of special recognition with utmost professionalism and dedication. Bangalore’s growth has been exponential, both in terms of its urban sprawl and population. Bangalore’s population is presently estimated to be 80,84,676 which comprises of 7,09,838 children belonging to the age group of 1-7 years i.e. almost 10% of the population. Further, Bangalore’s population growth rate has been 35% and is expected to touch 1 crore by 2012. However, considering the urbanization pace in Bangalore agglomerate that has contributed to the shifting of population to Bangalore, the figure of one crore is
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estimated to be reached much earlier. All these statistics indicate that there is a wide market that could be catered to both at present and in future.
PRODUCT/SERVICE: “GALAKIDZ” is primarily a service business that will offer personalized service to our clients with respect to the event management of their kid’s birthday party. It will specialize in organizing children’s birthday parties entirely, right from sending invitations, setting up the party to clearing away so that our client’s can relax and enjoy their child’s big day. Our range of services includes: 1. 2. Designing and printing invitation cards as per the requirements of our clients and sending them to the guests who are to be invited. Venue finding services to fix a venue for the party to be conducted after taking into consideration factors like accommodation for the number of people invited, the amount our client is willing to pay for the venue etc. 3. Providing decor services to transform or give a new look to the party venue that stimulates children. The decoration services can be availed from the basic party ware with balloons to a more extravagant themed party dressing with props. 4. Conducting games and activities, where in lies the thrust of the party fun. Our task would include, organizing creative games and events for the children creating a fantasy world, providing both visual and audio entertainment such as action, dance floor etc. 5. Catering service would include the provision of tasty healthy and innovative food for children’s parties which could be tailored to the theme, accommodating special dietary requirements including organic menus 6. 7. 8. Arrangement of the right type of return gifts or goody bags depending on the requirements of our clients Photography services: we would also have a photographer present at the party to capture the sweet memories of the child. Clearing up services so that the parents can relax at the end of their child’s big day
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Customers can either book for the whole package or any one or more of the services depending on the requirements or budget. Unique selling proposition (USP) 1. Our service is personalized service catering only to a special segment of the society, hence having a greater caliber to serve the segment in comparison to a generalized service provider. 2. By aggregating a complete range of party related services, “GALAKIDZ” will offer its customers the ease of one stop shopping. 3. The principal USP of our service will lie in the expertise hired, which will be engaged in providing unmatched services with utmost professionalism ensuring maximum efficiency while minimizing the possibility of error. This will place us in a competitive position as a premier provider of party management services.
MARKET ANALYSIS Target market and customer profile: Our target market may be divided as follows: 1. Age group: we would mainly target parents of those children belonging to the age group of 1-7 years. Most parents are highly ecstatic about their child’s first birthday, however many parents would also like to celebrate the on coming birthdays to satisfy their child’s desire. The age group is restricted to 7 years as neither the child nor the parents desire to celebrate the birthdays in a grand manner any further. But this may not be the case in all situations. 2. Income group: our target markets are middle, upper middle and the upper income group families, couples or individuals of Bangalore. We choose these groups because they are most able to afford as well as willing to pay for such a service. 3. Working class: the fast pace of life we live in leaves very little time for extra things we would like to, and one such thing is the planning of our lovely child’s birthday party. Thus this service is targeted to the working class who cannot find time out of their busy
3
schedule to plan such parties. “GALAKIDZ” will fill this need by being available to take on the burden of planning so that people can spend time on more important things, like family and friends. Further the overwhelming detail needed to plan a good show for your child is too large a constraint to place on people not trained in the area of event management. Competitors: “GALAKIDZ” is in a unique position of competition. Though the number of firms offering children specialized, event management services are limited in Bangalore, they posses the advantage of being in the market longer and thus having more experience, established reputation and client base. Another group that could be listed as competitors are the people who wish to organize their own events without the benefit of assistance as it will help them to internalize the cost planning and also will be able to add personalized touches that have meaning with in the family. However our group of talented and creative expertise will help us overcome these competitors and create an unparalled service. Market growth: Bangalore’s population growth has been 35% and is expected to touch 1 crore in near future. Increase in population implies increase in the number of children belonging to the targeted group and hence more birthday parties. Further the demand for this service can also increase considering the rise in income and the corresponding purchase power in the hands of the urban population and also the growing needs for building interpersonal; relations within the family and social groups. Place: The “GALAKIDZ” office will be located inside the city limits of Bangalore on M.G.road as it is easily accessible and well known location which would provide the ease of location and save time of our clients to reach our office. The office space required would not exceed 500 sq ft floor area as it has to accommodate only the administrative staff. The other employees will mainly be engaged in the field work and will not require an official environment to work in. Since initially we plan to open only one branch, 4
for the purpose of convenience to customers we would also encourage meeting with clients in social settings such as restaurants, coffee houses, the clients home and also take orders over phone. When the company accomplishes considerable growth in terms of revenue and profit we will extend branches in other parts of the city. The office environment will display a high degree of professionalism in terms of its working and will be equipped with the latest business technology such as telephone systems, computers, fax machines, printers and software. The office will have a secure storage area of supplies and equipment used in events like decoration items, cameras etc. Promotion: As stated earlier, that our client base is predominantly the middle to upper income group families and individuals. Hence, we must take care that majority of this market’s needs are catered to. Our marketing must, thus convey them the idea of releasing them from task, freeing their time for family and friends and promise of a worry free event. Keeping in mind these aspects, we have developed our marketing strategy as follows: 1. Hoardings: Attractive hoardings appealing both to parents and children will be placed in strategic areas like Malleshwarm, Commercial Street, Kormangala in order to have a wide and mass appeal, spreading awareness regarding the existence of our business. 2. Internet advertisements: Since internet is being used by people almost everyday, advertisements in the form of pop ups on recognized sites like Yahoo and Google would also help in capturing the target market. 3. Print advertisements: We will tie up with newspaper agencies to distribute the attractive pamphlets containing services offered by us on a door to door basis in selected localities 4. Word of mouth referrals: Since this is a service based business, our marketing would be predominantly by word of mouth as this will help generating sales leads the local community through customer referrals. This will require developing affiliate relationships with not only the customers but also other product and service providers like caterers, wholesalers of decorations and other party items etc who also gain from the growth in our business.
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5. Quantity based discounts: Discounts based on the number of services availed of and number of people to be catered to will be given Pricing: ‘GALAKIDZ’ deals with a diverse range of services. Hence, the pricing will vary depending on the number of people to be invited, the choice of venue opted by the clients and the specific services to be availed by the client. The prices of each service rendered will be based on the current prices prevailing in the market and will also depend on the pricing strategy of firms providing us the materials to conduct events. Assuming an order for 150 people our price for full event management service will range from Rs 50000 to Rs 120000 which includes the cost of hiring the venue, cost of purchase of material required to conduct the event, cost of services provided in the form of conducting activities and games, cost of printing and distributing invitation cards and profit margin. Sales forecast: By beginning on a smaller scale, GALAKIDZ has the foresight to grow at a rapid pace to keep up with the demand we wish to maintain a steady rate of sales growth. We expect to have at least one client per week in the first six months giving us an average estimated revenue of Rs 20.40,000 for the first six months. We expect to increase by 20% half yearly based on the increasing awareness of our service. The projected sales (in terms of revenue) are shown below: 1st Year 1st Projected sales 6months Rs. 2040000 2nd 6months Rs. 2448000 1st 6 months Rs. 2937600 2nd Year 2nd 6 months Rs. 3525100 1st 6 months Rs. 4230000 3rd Year 2nd 6 months Rs. 5076000
ORGANISATIONAL PLAN:
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The management team of “Galakidz” will be small in the beginning and as the sales increase the organization structure will also broaden. The primary employee is the founder i.e. AMITA.N.JIVRAJANI who will supervise all event plan and execution. The organization structure will be as follows: OWNER / PROPRIETOR
EVENT MANAGEMENT TEAM
ADMINISTRATION TEAM
DECORATORS
EVENT ANDACTIVITIES ORGANISERS
INTERIOR DESIGNERS
The administration team will comprise of employees to take and confirm orders after giving a Description to the clients about the various services they can choose from, to maintain Stores account of decoration materials in stock, to attend enquiry calls, to deal with caterers and Maintenance of books of accounts etc. The event management team will consist of the people who will actually execute the work at the party venue. This team will function as one with constant communication through weekly staff meetings, email, and message boards. All jobs are interrelated. The performance of one effects that of the other; each team member expects nothing but best from each other Should Galakidz grow beyond its estimated size, more positions in specialized areas will need to be added as well as additional site support and office assistance. To fill these positions it is looking for energetic, teachable, detail-oriented persons who want the potential to grow and improve their skills within the organization. Galakidz to be the best; therefore, they will hire those who want to succeed. OPERATIONAL PLAN: 7
‘GALAKIDZ’ will start its operations from its office located on M.G.road by sending direct emails to parents of young children in Bangalore. The mailer will announce open house invitations to visit the facility. The operations of the firm are associated with the services provided and hence are listed below: 1. Invitation cards: We will have tie ups with local printers providing us their services at reasonable rates. However the designing of these cards will be done by creativity specialists hired by our organization having qualification in animation or any similar field. The distribution will be done either through post or courier services as desired by the client. We would also use personalized communication media like emails and telephones to add a personal touch to the process. This service will be offered at the discretion of the client. 2. Venue finding services: Galakidz will have tie ups with different party halls in different locations covering the entire city as well as different party halls having different rental prices providing an elaborate list for the customers to choose from. 3. Decoration services: We will have fixed local providers of decoration and party items from whom we will purchase decoration items as and when needed. The firm will also keep stock of the frequently used items so that it does not suffer from shortage of such material at any point of time. The organization will hire an interior designer who will work in co-ordination with the team of creativity specialists (hired for the purpose of designing invitation cards) to decorate the party venue giving it an innovative look 4. Games and activities: This would require the assistance of well experienced youth who would energize the party environment with their ability to stimulate the children, excellent communication and event management skills. They will also take care of the visual and audio entertainment at the party venue. Our entertainers will arrive 30-60 mins before the party to set up. 5. Catering: We will have tie ups with “SAGAR CATERERS” for providing the mouth watering food making it a perfect day and the cakes will be ordered from the “SWEET CHARIOT” Centers for they can be trusted for the quality of their products.
Party Booking:
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To ensure that our clients get the party they require we would recommend that the clients book at least 6-8 weeks in advance so that the arrangements regarding party venue and distribution of invitations can be made The booking will be confirmed on receiving 50% of the entire cost of the event management as an advance deposit. All prices will be subject to change at any time with the exception of confirmed bookings. The final payment will be due 7 days before the party date. Written notification expressing the clients wish to cancel the party is required and the following charges will apply More than 42 days- 0% 29-42 days 15-28 days 8-14 days 7 days 20% of deposit 40% of deposit 60% of deposit 80% of deposit
The above charges will be deducted from the deposit received at the time of confirming the order and the balance shall be refunded back to the client. The host/parent is responsible at all times for the general supervision of children within the party venue. Our responsibility is strictly restricted to the supervision of party activities provided by us. Launch of our service: We will have a launch party at our office located at M.G.road. We would also rent the vacant office spaces around our office in the same complex to accommodate our guests. Our guests would include our prospective business dealers i.e. party decoration item providers, caterers etc. we would also send invitation cards to our target customers living in the vicinity so that they can take note of the facility provided by us. The launch party will be on a Sunday there by giving an opportunity for most people to come and know of our services.
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FINANCIAL PLAN: Start up costs and sources of finance: A summary of the total initial funds required and the mechanism of their funding is shown below: PARTICULARS Start up costs: Legal Stationery etc. Consultants (Lawyers, Real estate agents etc.) Advance deposit (for renting office) Advertising (Launch party, Brouchers etc.) Miscellaneous Total Start up expenses Start up Assets needed: Cash and Bank balances Computers and Laptop Furniture and fittings Total Assets needed Total Requirements Funding: PARTICULARS Owner’s Personal Funds: In the form of cash Sale of Investments (in shares and debentures) Mortgage loan from bank Total capital and liabilities AMOUNT(Rs.) 3,33,000 2,15,500 5,48,500 5,00,000 10,48,500 AMOUNT(Rs.) 12,500 21,000 30,000 2,75,000 1,00,000 25,000 4,63,500 1,25,000 85,000 3,75,000 5,85,000 10,48,500 AMOUNT(Rs.) AMOUNT(Rs.)
‘GALAKIDZ’ wishes to be a debt free establishment. However, outside financing is the most viable option to finance the start up costs. The cost of future operations of the concern will be financed from the profits earned.
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The projected financials of the concern are shown below: GALAKIDZ PROJECTED INCOME STATEMENT PARTICULARS 1st Year Amount(Rs.) Amount 20,40,000 9,18,000 11,22,000 3,60,000 4,28,000 23,000 5,400 1,50,000 9,66,400 1,55,600 32,500 1,23,100 (Rs.) 24,48,000 11,01,600 13,46,400 3,60,000 4,28,000 23,000 5,400 1,50,000 9,66,400 3,80,000 32,500 3,47,500 2nd Year Amount(Rs. ) 64,62,700 28,27,000 36,35,700 9,50,000 8,96,000 46,000 12,000 3,15,000 22,19,000 14,16,700 65,000 13,51,700 3rd Year Amount(Rs.) 93,06,000 39,57,800 53,48,200 11,40,000 7,20,000 46,000 12,000 3,30,750 22,48,750 30,99,450 65,000 30,34,450
Sales Less: Cost of Sales Gross Profit Expenses: Payroll Sales and Marketing Expenses Depreciation Maintenance and Utilities Rent Total Expenses Profits before interest Less: Interest Net Profit NOTE: • • •
Depreciation is charged at 10% p.a. on furniture, fitting, and computers. Interest is charged at 13% p.a. on the loan taken from bank. Rent per month is taken at Rs. 25,000 with an annual increment of 5%.
BREAK EVEN ANALYSIS: Number of parties organized at break even point: 27 Revenue at break even point: Rs. 22,95,000 We will break even approximately in 7 months. RISK FACTORS:
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1. Though the current market for such specialized services is limited, there is a high scope for growth which will encourage the entry of more firms thereby increasing competition. 2. Our services are dependent on the operational plans and strategies of our business dealers and hence any changes in their working pattern may have an adverse effect on our business. 3. Our target customers are limited only to the population of Bangalore and thus a large part of the national market is left uncovered giving a scope for growth to competitors. 4. Since ‘Galakidz’ is a service based business, hardships might be faced in convincing customers about the quality of services provided. MITIGATION OF RISK FACTORS: 1. Concentration on advertising and promotional activities to spread awareness of services provided on a larger scale. 2. Taking feedback from customers who have already availed the service in order to develop on the loopholes and hence ensure quality services. 3. Leveraging the expertise of employees in providing better customer satisfaction in order to competitively position ourselves as a premier provider of such specialized services. 4. Planning strategies for quick expansion to tap a larger market.
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1
estimated to be reached much earlier. All these statistics indicate that there is a wide market that could be catered to both at present and in future.
PRODUCT/SERVICE: “GALAKIDZ” is primarily a service business that will offer personalized service to our clients with respect to the event management of their kid’s birthday party. It will specialize in organizing children’s birthday parties entirely, right from sending invitations, setting up the party to clearing away so that our client’s can relax and enjoy their child’s big day. Our range of services includes: 1. 2. Designing and printing invitation cards as per the requirements of our clients and sending them to the guests who are to be invited. Venue finding services to fix a venue for the party to be conducted after taking into consideration factors like accommodation for the number of people invited, the amount our client is willing to pay for the venue etc. 3. Providing decor services to transform or give a new look to the party venue that stimulates children. The decoration services can be availed from the basic party ware with balloons to a more extravagant themed party dressing with props. 4. Conducting games and activities, where in lies the thrust of the party fun. Our task would include, organizing creative games and events for the children creating a fantasy world, providing both visual and audio entertainment such as action, dance floor etc. 5. Catering service would include the provision of tasty healthy and innovative food for children’s parties which could be tailored to the theme, accommodating special dietary requirements including organic menus 6. 7. 8. Arrangement of the right type of return gifts or goody bags depending on the requirements of our clients Photography services: we would also have a photographer present at the party to capture the sweet memories of the child. Clearing up services so that the parents can relax at the end of their child’s big day
2
Customers can either book for the whole package or any one or more of the services depending on the requirements or budget. Unique selling proposition (USP) 1. Our service is personalized service catering only to a special segment of the society, hence having a greater caliber to serve the segment in comparison to a generalized service provider. 2. By aggregating a complete range of party related services, “GALAKIDZ” will offer its customers the ease of one stop shopping. 3. The principal USP of our service will lie in the expertise hired, which will be engaged in providing unmatched services with utmost professionalism ensuring maximum efficiency while minimizing the possibility of error. This will place us in a competitive position as a premier provider of party management services.
MARKET ANALYSIS Target market and customer profile: Our target market may be divided as follows: 1. Age group: we would mainly target parents of those children belonging to the age group of 1-7 years. Most parents are highly ecstatic about their child’s first birthday, however many parents would also like to celebrate the on coming birthdays to satisfy their child’s desire. The age group is restricted to 7 years as neither the child nor the parents desire to celebrate the birthdays in a grand manner any further. But this may not be the case in all situations. 2. Income group: our target markets are middle, upper middle and the upper income group families, couples or individuals of Bangalore. We choose these groups because they are most able to afford as well as willing to pay for such a service. 3. Working class: the fast pace of life we live in leaves very little time for extra things we would like to, and one such thing is the planning of our lovely child’s birthday party. Thus this service is targeted to the working class who cannot find time out of their busy
3
schedule to plan such parties. “GALAKIDZ” will fill this need by being available to take on the burden of planning so that people can spend time on more important things, like family and friends. Further the overwhelming detail needed to plan a good show for your child is too large a constraint to place on people not trained in the area of event management. Competitors: “GALAKIDZ” is in a unique position of competition. Though the number of firms offering children specialized, event management services are limited in Bangalore, they posses the advantage of being in the market longer and thus having more experience, established reputation and client base. Another group that could be listed as competitors are the people who wish to organize their own events without the benefit of assistance as it will help them to internalize the cost planning and also will be able to add personalized touches that have meaning with in the family. However our group of talented and creative expertise will help us overcome these competitors and create an unparalled service. Market growth: Bangalore’s population growth has been 35% and is expected to touch 1 crore in near future. Increase in population implies increase in the number of children belonging to the targeted group and hence more birthday parties. Further the demand for this service can also increase considering the rise in income and the corresponding purchase power in the hands of the urban population and also the growing needs for building interpersonal; relations within the family and social groups. Place: The “GALAKIDZ” office will be located inside the city limits of Bangalore on M.G.road as it is easily accessible and well known location which would provide the ease of location and save time of our clients to reach our office. The office space required would not exceed 500 sq ft floor area as it has to accommodate only the administrative staff. The other employees will mainly be engaged in the field work and will not require an official environment to work in. Since initially we plan to open only one branch, 4
for the purpose of convenience to customers we would also encourage meeting with clients in social settings such as restaurants, coffee houses, the clients home and also take orders over phone. When the company accomplishes considerable growth in terms of revenue and profit we will extend branches in other parts of the city. The office environment will display a high degree of professionalism in terms of its working and will be equipped with the latest business technology such as telephone systems, computers, fax machines, printers and software. The office will have a secure storage area of supplies and equipment used in events like decoration items, cameras etc. Promotion: As stated earlier, that our client base is predominantly the middle to upper income group families and individuals. Hence, we must take care that majority of this market’s needs are catered to. Our marketing must, thus convey them the idea of releasing them from task, freeing their time for family and friends and promise of a worry free event. Keeping in mind these aspects, we have developed our marketing strategy as follows: 1. Hoardings: Attractive hoardings appealing both to parents and children will be placed in strategic areas like Malleshwarm, Commercial Street, Kormangala in order to have a wide and mass appeal, spreading awareness regarding the existence of our business. 2. Internet advertisements: Since internet is being used by people almost everyday, advertisements in the form of pop ups on recognized sites like Yahoo and Google would also help in capturing the target market. 3. Print advertisements: We will tie up with newspaper agencies to distribute the attractive pamphlets containing services offered by us on a door to door basis in selected localities 4. Word of mouth referrals: Since this is a service based business, our marketing would be predominantly by word of mouth as this will help generating sales leads the local community through customer referrals. This will require developing affiliate relationships with not only the customers but also other product and service providers like caterers, wholesalers of decorations and other party items etc who also gain from the growth in our business.
5
5. Quantity based discounts: Discounts based on the number of services availed of and number of people to be catered to will be given Pricing: ‘GALAKIDZ’ deals with a diverse range of services. Hence, the pricing will vary depending on the number of people to be invited, the choice of venue opted by the clients and the specific services to be availed by the client. The prices of each service rendered will be based on the current prices prevailing in the market and will also depend on the pricing strategy of firms providing us the materials to conduct events. Assuming an order for 150 people our price for full event management service will range from Rs 50000 to Rs 120000 which includes the cost of hiring the venue, cost of purchase of material required to conduct the event, cost of services provided in the form of conducting activities and games, cost of printing and distributing invitation cards and profit margin. Sales forecast: By beginning on a smaller scale, GALAKIDZ has the foresight to grow at a rapid pace to keep up with the demand we wish to maintain a steady rate of sales growth. We expect to have at least one client per week in the first six months giving us an average estimated revenue of Rs 20.40,000 for the first six months. We expect to increase by 20% half yearly based on the increasing awareness of our service. The projected sales (in terms of revenue) are shown below: 1st Year 1st Projected sales 6months Rs. 2040000 2nd 6months Rs. 2448000 1st 6 months Rs. 2937600 2nd Year 2nd 6 months Rs. 3525100 1st 6 months Rs. 4230000 3rd Year 2nd 6 months Rs. 5076000
ORGANISATIONAL PLAN:
6
The management team of “Galakidz” will be small in the beginning and as the sales increase the organization structure will also broaden. The primary employee is the founder i.e. AMITA.N.JIVRAJANI who will supervise all event plan and execution. The organization structure will be as follows: OWNER / PROPRIETOR
EVENT MANAGEMENT TEAM
ADMINISTRATION TEAM
DECORATORS
EVENT ANDACTIVITIES ORGANISERS
INTERIOR DESIGNERS
The administration team will comprise of employees to take and confirm orders after giving a Description to the clients about the various services they can choose from, to maintain Stores account of decoration materials in stock, to attend enquiry calls, to deal with caterers and Maintenance of books of accounts etc. The event management team will consist of the people who will actually execute the work at the party venue. This team will function as one with constant communication through weekly staff meetings, email, and message boards. All jobs are interrelated. The performance of one effects that of the other; each team member expects nothing but best from each other Should Galakidz grow beyond its estimated size, more positions in specialized areas will need to be added as well as additional site support and office assistance. To fill these positions it is looking for energetic, teachable, detail-oriented persons who want the potential to grow and improve their skills within the organization. Galakidz to be the best; therefore, they will hire those who want to succeed. OPERATIONAL PLAN: 7
‘GALAKIDZ’ will start its operations from its office located on M.G.road by sending direct emails to parents of young children in Bangalore. The mailer will announce open house invitations to visit the facility. The operations of the firm are associated with the services provided and hence are listed below: 1. Invitation cards: We will have tie ups with local printers providing us their services at reasonable rates. However the designing of these cards will be done by creativity specialists hired by our organization having qualification in animation or any similar field. The distribution will be done either through post or courier services as desired by the client. We would also use personalized communication media like emails and telephones to add a personal touch to the process. This service will be offered at the discretion of the client. 2. Venue finding services: Galakidz will have tie ups with different party halls in different locations covering the entire city as well as different party halls having different rental prices providing an elaborate list for the customers to choose from. 3. Decoration services: We will have fixed local providers of decoration and party items from whom we will purchase decoration items as and when needed. The firm will also keep stock of the frequently used items so that it does not suffer from shortage of such material at any point of time. The organization will hire an interior designer who will work in co-ordination with the team of creativity specialists (hired for the purpose of designing invitation cards) to decorate the party venue giving it an innovative look 4. Games and activities: This would require the assistance of well experienced youth who would energize the party environment with their ability to stimulate the children, excellent communication and event management skills. They will also take care of the visual and audio entertainment at the party venue. Our entertainers will arrive 30-60 mins before the party to set up. 5. Catering: We will have tie ups with “SAGAR CATERERS” for providing the mouth watering food making it a perfect day and the cakes will be ordered from the “SWEET CHARIOT” Centers for they can be trusted for the quality of their products.
Party Booking:
8
To ensure that our clients get the party they require we would recommend that the clients book at least 6-8 weeks in advance so that the arrangements regarding party venue and distribution of invitations can be made The booking will be confirmed on receiving 50% of the entire cost of the event management as an advance deposit. All prices will be subject to change at any time with the exception of confirmed bookings. The final payment will be due 7 days before the party date. Written notification expressing the clients wish to cancel the party is required and the following charges will apply More than 42 days- 0% 29-42 days 15-28 days 8-14 days 7 days 20% of deposit 40% of deposit 60% of deposit 80% of deposit
The above charges will be deducted from the deposit received at the time of confirming the order and the balance shall be refunded back to the client. The host/parent is responsible at all times for the general supervision of children within the party venue. Our responsibility is strictly restricted to the supervision of party activities provided by us. Launch of our service: We will have a launch party at our office located at M.G.road. We would also rent the vacant office spaces around our office in the same complex to accommodate our guests. Our guests would include our prospective business dealers i.e. party decoration item providers, caterers etc. we would also send invitation cards to our target customers living in the vicinity so that they can take note of the facility provided by us. The launch party will be on a Sunday there by giving an opportunity for most people to come and know of our services.
9
FINANCIAL PLAN: Start up costs and sources of finance: A summary of the total initial funds required and the mechanism of their funding is shown below: PARTICULARS Start up costs: Legal Stationery etc. Consultants (Lawyers, Real estate agents etc.) Advance deposit (for renting office) Advertising (Launch party, Brouchers etc.) Miscellaneous Total Start up expenses Start up Assets needed: Cash and Bank balances Computers and Laptop Furniture and fittings Total Assets needed Total Requirements Funding: PARTICULARS Owner’s Personal Funds: In the form of cash Sale of Investments (in shares and debentures) Mortgage loan from bank Total capital and liabilities AMOUNT(Rs.) 3,33,000 2,15,500 5,48,500 5,00,000 10,48,500 AMOUNT(Rs.) 12,500 21,000 30,000 2,75,000 1,00,000 25,000 4,63,500 1,25,000 85,000 3,75,000 5,85,000 10,48,500 AMOUNT(Rs.) AMOUNT(Rs.)
‘GALAKIDZ’ wishes to be a debt free establishment. However, outside financing is the most viable option to finance the start up costs. The cost of future operations of the concern will be financed from the profits earned.
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The projected financials of the concern are shown below: GALAKIDZ PROJECTED INCOME STATEMENT PARTICULARS 1st Year Amount(Rs.) Amount 20,40,000 9,18,000 11,22,000 3,60,000 4,28,000 23,000 5,400 1,50,000 9,66,400 1,55,600 32,500 1,23,100 (Rs.) 24,48,000 11,01,600 13,46,400 3,60,000 4,28,000 23,000 5,400 1,50,000 9,66,400 3,80,000 32,500 3,47,500 2nd Year Amount(Rs. ) 64,62,700 28,27,000 36,35,700 9,50,000 8,96,000 46,000 12,000 3,15,000 22,19,000 14,16,700 65,000 13,51,700 3rd Year Amount(Rs.) 93,06,000 39,57,800 53,48,200 11,40,000 7,20,000 46,000 12,000 3,30,750 22,48,750 30,99,450 65,000 30,34,450
Sales Less: Cost of Sales Gross Profit Expenses: Payroll Sales and Marketing Expenses Depreciation Maintenance and Utilities Rent Total Expenses Profits before interest Less: Interest Net Profit NOTE: • • •
Depreciation is charged at 10% p.a. on furniture, fitting, and computers. Interest is charged at 13% p.a. on the loan taken from bank. Rent per month is taken at Rs. 25,000 with an annual increment of 5%.
BREAK EVEN ANALYSIS: Number of parties organized at break even point: 27 Revenue at break even point: Rs. 22,95,000 We will break even approximately in 7 months. RISK FACTORS:
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1. Though the current market for such specialized services is limited, there is a high scope for growth which will encourage the entry of more firms thereby increasing competition. 2. Our services are dependent on the operational plans and strategies of our business dealers and hence any changes in their working pattern may have an adverse effect on our business. 3. Our target customers are limited only to the population of Bangalore and thus a large part of the national market is left uncovered giving a scope for growth to competitors. 4. Since ‘Galakidz’ is a service based business, hardships might be faced in convincing customers about the quality of services provided. MITIGATION OF RISK FACTORS: 1. Concentration on advertising and promotional activities to spread awareness of services provided on a larger scale. 2. Taking feedback from customers who have already availed the service in order to develop on the loopholes and hence ensure quality services. 3. Leveraging the expertise of employees in providing better customer satisfaction in order to competitively position ourselves as a premier provider of such specialized services. 4. Planning strategies for quick expansion to tap a larger market.
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