Event Management Business Plan

Event Management –Theme Parties at Home Business Plan

[Document Title] [Author Name]

Table of Contents EXECUTIVE SUMMARY....................................................................................5 1.

2.

INTRODUCTION.......................................................................................6 1.1.

Purpose of the plan -...........................................................................6

1.2.

Introduction about market opportunity –...............................................6

1.3.

Introduction about the company –.......................................................10

MARKET OVERVIEW................................................................................12 2.1.

Overview of the industry –.................................................................12

2.2.

History of the industry –....................................................................13

2.3.

Size of the industry –........................................................................13

2.4.

Evolution of the industry –.................................................................13

2.5.

Trend of the industry –......................................................................14

2.6.

Key players in the industry –..............................................................14

2.7.

Barriers to enter the market –............................................................15 2

3.

4.

5.

6.

2.8.

Competition strengths and weaknesses –.............................................16

2.9.

Product and industry life cycles –........................................................16

2.10.

Position in product life cycle affecting business plan –.........................18

2.11.

Position in industry life cycle affecting business plan –.........................18

TARGET MARKETS..................................................................................18 3.1.

Major characteristics of target market –...............................................18

3.2.

Demands of target markets –.............................................................19

3.3.

Unsatisfied needs of customers giving rise to business opportunity –.......20

PRODUCT RESEARCH AND DEVELOPMENT.................................................21 4.1.

Environmental Scan –........................................................................21

4.2.

Significant factors of macro environment –...........................................22

4.3.

Types of competition –.......................................................................23

4.4.

Opportunities and threats –................................................................23

COMPANY DESCRIPTION.........................................................................24 5.1.

Type of business and legal structure –.................................................24

5.2.

Mission and objectives –....................................................................24

5.3.

Distinctive core competencies –..........................................................25

5.4.

Management and ownership –............................................................26

5.5.

Board of directors and rationale for members –.....................................27

5.6.

Management staff structure –.............................................................27

5.7.

Key Managers –................................................................................28

MARKETING ACTIVITIES.........................................................................29 3

6.1.

Overall marketing strategy –..............................................................29

6.2.

Specific marketing mix –....................................................................30

6.3.

Strengths and weaknesses –..............................................................31

7.

PRODUCTS AND SERVICES......................................................................31 7.1.

Product description –.........................................................................31

7.2.

Product life cycle –............................................................................32

7.3.

Copyright and Intellectual property right –...........................................33

7.4.

Research and development activities –.................................................34

8.

OPERATIONS.........................................................................................34 8.1.

Product and service delivery procedures –............................................34

8.2.

Supply chain –.................................................................................35

9.

FINANCIAL ANALYSIS.............................................................................35 9.1.

Funds needed –................................................................................35

9.2.

Balance sheets –..............................................................................36

9.3.

Cash flow statements –.....................................................................37

9.4.

Capital requirements –......................................................................38

10.

CONCLUSION AND RECOMMENDATIONS.................................................38

10.1.

Recommendations –.......................................................................40

REFERENCES...............................................................................................42

4

EXECUTIVE SUMMARY

Dubai is one of the most popular emirates of all emirates in UAE, and people living in the city, or people that visit the city, are highly interested and 5

indulged in partying and enjoying themselves in different occasions. Hence the demands for events management companies are high in the city. However the current scenario is such that for family parties or office parties the amount that the customers are required to pay are significantly high, making it difficult for the customers to afford. Hence the new business is here to offer the Dubai market with a concept of theme-based parties at home that will not only make the parties convenient for them but also reduce their expenses on the same. This report presents the business plan for the new business.

6

Chapter: 1Introduction

1.1.

Purpose of the plan

The purpose of the business plan is to initiate theme parties at home initially targeting the Dubai city in UAE, and gradually expanding across all the emirates in UAE. With more and more number of individuals, families, office 7

people and other groups being interested in parties for different occasions, with their main concern being the costs that they need to afford as event management companies arrange for different menus and venues, the scope of the business is significantly high, which will reduce the costs of customers and hence attract them towards the offer, particularly since parties are a great attraction for people living in Dubai.

1.2.

Introduction about market opportunity –

The market targeted for this business is initially Dubai, and once the business gets established in Dubai, the focus will be on expansion of the business across the UAE. Considering both Dubai and the whole of UAE, one beneficial factor is that the market is highly welcoming towards new businesses in the country. Private businesses are significantly encouraged by 8

the UAE with their support and facilities that they provide and policies that are highly business-friendly. The government essentially tries to encourage the entrepreneurial skills among the Emiratis, which can develop into new businesses for the nation. Hence advices and financial aids are also suitably offered to the interested individuals or groups (Business Activities 2014). The Dubai Emirate is similarly welcoming towards new businesses in the city. Owing to the facilities and benefits offered by the emirate, new businesses are highly interested to target the market. Considering the geography and culture of the emirate, Dubai proves to be an ideal place for attracting consumers towards a new business. With increasing population in the region, the city can also be said to be rapidly growing in terms of the changing and growing demands and expectations of customers, which new businesses can cater to. The process for setting up a business in the city is not a difficult endeavor. Also, other market benefits that the emirate offers include the minimal

foreign

ownership

restrictions,

first-class

communication

and

transport infrastructure, and relaxed immigration formalities for expatriate workforces, operating a business in Dubai can be richly rewarding. However, it is also to be noted that the city is uniquely identified for its own systems and structures (Doing business in Dubai n.d.).

9

Figure 1: Rank of Dubai among other countries listed as top destinations (Basit 2012). This figure reflects on the position of Dubai among international countries where it ranks at 8 and hence can be said to be one of the most popular destinations for people to visit as well as reside. This is a major advantage as the market tends to have different kinds of people from across the world along with the emiratis, and hence the market would be large enough to target. Since theme partying at home is the business that is being planned for implementation, it is essential that the markets include customers – individuals, families, or offices that are interested in parties and celebrations. Enterprises based in Dubai have been known to experience and enjoy benign tax environment. In most of the businesses, there is no direct corporate tax involved. Also there are no capital gains taxes or withholding tax on 10

dividends, interest or royalty flows in most of the cases. Considering the case of UAE, there are 50 international treaties of tax, and Dubai being one of the emirates of the UAE, it is expected that businesses in Dubai would enjoy the benefits of these tax treaties as well, if not all but some of them for sure. Restrictions on inward or outward remittance of finance in any major currency are not involved in Dubai, however considering the regulations related to anti-money laundering (Doing business in Dubai n.d.). Also, in Dubai markets, there are no restrictions on private equity measures for businesses that have been established in the Free Zones of the emirate. The common ways by which foreign parties can successfully launch and conduct their businesses in Dubai include (Doing business in Dubai n.d.):  Establishment of a branch office in Dubai;  Establishment of a Dubai limited Liability Company;  Establishment of a free zone vehicle; and  Appointment of an agent that is already licensed in the region. The choice of arrangement needs to be chosen carefully by the interested parties, which would largely depend on the purpose, size and activities of the operations intended by the business. There are a number of Free Zones available in the Dubai market, which has been facilitated by the Dubai government to encourage businesses in different sectors. In case businesses are established in any of these free zones, there would be no need for local sponsors as well. For the rest of Dubai, local sponsorship is necessary in order to conduct any business. This means that 51 percent of the business needs to be owned by a local national of the UAE (Doing business in Dubai n.d.).

11

One of the major concerns related to establishment of a new business is the setting up costs of the business. The tax-free nature of the Dubai market is essentially attractive for this reason and enables businesses with significant financial benefits. However fees are required for obtaining the trade license (Cost of Setting Up in Dubai 2014).

Figure 2: Dubai Financial Markets (Dubai Financial Market PJSC 2014).

The figure above presents the stock market conditions in Dubai, and it clearly reflects on the high level of business activities that take place in the emirate, which is a positive benefit for the new business being targeted in Dubai (Dubai Financial Market PJSC 2014). Considering this situation of the Dubai market, and also the welcoming attitude of the UAE market, the establishment of the new business can be expected to have significant opportunities, especially considering the fact that theme parties at home is a 12

new concept which the company is trying to introduce in Dubai and in UAE. It can be said that the markets in Dubai have the facilities and opportunities for a new business such as the one being planned based on event management. Also, considering the interests of people in events and celebrations

of

occasions,

the

opportunities

can

be

considered

as

significantly high for the new business. 1.3.

Introduction about the company –

The business plan is for a new company the objective of which is to introduce the concept of theme parties at home. As far as event management and organization of parties in Dubai is concerned, there are several companies in the city that are involved in the business. In most cases, arranging for the parties in different venues fulfills the orders of the customers, which costs the customers high amounts. This is one major problem that customers in Dubai are faced with. While on one hand they prefer to enjoy parties in different occasions; on the other hand the costs are significantly high. Hence the target of the new company is to introduce theme parties at home. The target market of the business will be mainly those individuals, families, or offices that prefer to party at low costs and the company will arrange for the parties at their preferred locations instead of hiring different costly venues and menus for the occasions. The key objectives of the business plan include: 

To understand the need of people in the present times for theme parties



To understand the factors that cause problem for people to afford theme parties in different venues 13



To understand

whether

interested

customers

would

be

further

interested to have theme parties planned and arranged in their homes 

To understand the demands and expectations of the customers if they are interested in theme parties at homes.

The scope of this business can be considered to be significantly high as more and more number of people is being interested in theme parties, and the new business would target these customers with offering them theme parties at a lower price, hence increasing the scope of the business. Initially the target market will be Dubai, thereafter focusing the entire UAE thereby making a position in the event management industry in the region. With being able to target and meet the specific theme parties’ needs of individuals, the organization can expect to have significant profits from its performance, gaining significant market growth over time. The focus will be on offering customers with arrangement of theme parties in homes where the decorations of the parties would depend on particular 14

occasions (birthdays, marriage anniversaries, retirement, and engagement celebrations). For example, for celebration of birthday of a girl the themes could include Barbie theme, Dolls theme, or Pink theme. For birthday of a boy, the themes can include Cartoon themes, Blue theme, Cars theme, and others. For celebration of engagement parties, themes can be based on flowers, posters of couples, with colors of red and white theme. Party brochures will be prepared that can give the customers better ideas about how the theme parties would look like offered by the new business.

15

2. MARKET OVERVIEW

2.1.

Overview of the industry –

As far as the event management industry in Dubai market is concerned, the industry is performing significantly well considering its value which crossed US$45 million in first half of 2013. The annual growth in the industry has been obtained to be more than 25 percent. There are some of the top event 16

management companies, namely Plan Ahead Events (PAE), and others that are performing in the market, offering several services that cover business, sports, and activities of entertainment to serve the customers achieving high level of satisfaction (BI-ME Staff 2013).

EVENT S

REACH

LIVE INTERACTION

Right Communication

from the client

WITH

Live Audience

CREATES

Desired Impact

In the words of Shonkwiler, the President of PAE, “The strong growth of the event management industry in the region can be attributed to the UAE’s position as an events and exhibitions hub not only for the Middle East but for the Africa region. The recovery of the real estate industry and the steady growth of the ICT, tourism and hospitality industries have played a key role in fueling the events management industry in the UAE, in addition to the growing trend among private and public enterprises to host occasion-based events for their internal and external stakeholders” (BI-ME Staff 2013). Hence the performance of the industry can be said to be significantly high.

17

2.2.

History of the industry –

The history of events and events management can be dated back to as early as the 41 BCE, when the meetings of monarchs required great planning, and which used to be considered as events (Event Planning 2014). Since then and till the present times, significant development has taken place in the industry and across the globe, with various occasions and various events being in need for effective planning and management. Over the years several popular event management companies have been performing in the Dubai city. To name some of them include Sky High Events, Show Entertainment & Art Production, Evolution Events, and others. In the recent times, home and office parties and occasions are in greater demand for event management companies and companies such as Matrix Party Services, and others are focused on meeting the expectations of the customers in this regard. 2.3.

Size of the industry –

The value of the industry crossing US$45 million reflects a significantly high size and performance of the events management industry in Dubai. Companies such as PAE are expecting to achieve 300 percent growth in a time period of three years (BI-ME Staff 2013). The events industry across UAE has remained the busiest of all businesses in the recent times with companies achieving significant demands and growth in the market. Exhibitions, events, and occasions are increasing the interests of individuals and groups towards event management companies, much more than before (UAE Events Industry Moves Into Top Gear n.d.). 2.4.

Evolution of the industry –

While the events industry in the Middle East has faced significant challenges owing to economic slowdowns and hence decreases in demands among the customers, the situation has however turned out to be positive over the 18

recent years with rise in the demands for events and events planning and management. With companies reducing their budgets and more cautiously deciding on their spending due to the economic slowdowns, there has been significant reduction in demands. As far as the present situation is concerned, the economic condition has been recovered and the competition in the market is moderate to high now, with customers being attracted to different events management companies focusing on the added value that they obtain from these companies. Now companies are planning their budgets and spending more efficiently trying to meet the demands and expectations of the customers, which in turn is attracting the customers more than before (An events evolution 2010). 2.5.

Trend of the industry –

With the high level of growth being achieved by the Dubai events industry in the 2013 and with the increasing number of companies focusing on their efforts to create a position in the events industry in the city, and across the UAE, the trend reflects on a high growth and scope of events management companies in the market (Dubai events industry powers on 2013). For the next five to ten years it can be said that the competition in the market will be significantly high with higher number of events management companies coming up with their offers and services. 2.6.

Key players in the industry –

There are several events management companies playing effectively in the Dubai

market.

Some

of

the

major

players

include

International

Communication Services, Arenev Creations LLC, AV Concepts LLC, Sky High Events, Byblos Translation, Pains Fireworks LLC, Show Entertainment & Art Production, Evolution Events, and others (Events Management in Dubai 2014). Some key international players such as PAE have also entered the market

in the recent times. Companies such as Mosaic Live, Max 19

Entertainment and Events Management are also highly famous among customers for their performances and services. TGP is a leading events management company in the region, which is into the field of production and design and specializes in designing, building, activating, and branding of temporary and permanent commercial environments (Welcome to TGP 2011). 2.7.

Barriers to enter the market –

The most significant barrier to enter the Dubai market with events management services is the huge competition that exists in the market. Although the current business plan is different from the existing companies, with focus on arranging for theme parties at homes, which is something new for the customers, yet the industry being the events industry, the entry will be tough due to competition. It can be said that it will take some time for the new business to reach the customers with their offers. Also, another factor is the investment. It can be realized that the competition will be high. Hence only starting up the business in the Dubai city will not be enough. Significant amount of funds needs to be invested for the purpose of advertising and promotion such that the customers may be aware of the new business and the concept of theme parties as well, which will be something new to them when the new business will offer to arrange the same in their homes. Also, finding a suitable location for the start up and initiation for the business might encounter significant challenges and hence prove to be a major barrier for entry as well. 2.8.

Competition strengths and weaknesses –

Considering the prevailing competition in the market, the major strength of the new business is in the idea of theme parties at homes, which is something new that the business is offering at lower costs for the customers, and is also unlike the currently arranged events in the city related to events, 20

occasions or parties. As individuals and families are interested in parties and events,

it

is likely that

the

business

would

make

position in

the minds of

the

customers

with their

offers

of

lower

costs

and

a

higher

conveniences, since the parties will be organized at their preferred locations based on themes. The weakness is however in the fact that the business is new and hence lacks experience. Hence with no experience, and entering into a new market with a new market, the competition will prove to be highly tough. The company will be facing significant barriers while entering the marketing as existing event management companies would not like a new company to establish itself with ease. Moreover, due to lack of experience, it will take significant amount of time for the company to understand the market, after entering it, and accordingly modify its marketing and business strategies. 2.9.

Product and industry life cycles –

The product life cycle will have the following four stages:

21

Figure 3: Stages of the Product Life Cycle (Product Life Cycle Stages 2014). The industry life cycle will have the following stages (Industry Life Cycle 2014): 

Early stage phase – having alternative design of the product and positioning;



Innovation phase – involving innovation of process;



Cost or shakeout phase – with company achieving economies of scale being settled on a dominant design of innovation, creating high barriers to market entry;



Maturity – where the primary goals would become achieving market share and cash flow; and



Decline – where the industry may be required to be shut down.

2.10.

Position in product life cycle affecting business plan –

For the new business the position in product life cycle will be in the introduction stage. Thus the business plan has to consider all aspects of business taking into concern the business environment that the business is 22

planning to enter and the high level of competition that it will have to encounter. Hence market research needs to be done with significant focus on determining the most effective ways to enter the market and also market the services of the company to the target market, which is being planned. Also, initial stage in the product life cycle means the business lacks experience, which can prove to be highly challenging for the new business. 2.11.

Position in industry life cycle affecting business plan –

The industry can be said to be in the cost phase where the industry is achieving economies of scale creating high competition and barriers for entry of new companies. Hence this will affect the business plan in the sense that the business will now be required to focus more on overcoming the competition and creating its position in the new market, reflecting significant innovation, which would create the attractions for the market. 3. TARGET MARKETS 3.1.

Major characteristics of target market –

The target market for the new business is mainly those individuals and families in Dubai that are interested in parties for celebration of different occasions but are faced with difficulties owing to the high costs of venues that event organizers arrange for. Dubai represents a cosmopolitan city with a mix of different cultures and people here belong to different lifestyles, having different tastes and preferences. Being one of the most famous tourist destinations as well, the lists of visitors over the year are varied, and parties and celebrations are parts of their lives as well. There are both traditional festivals such as Ramadan and National Day, as well as contemporary styles of celebration which include parties on different occasions,

where

most

of

them

are

private

in

nature

(Dubai

Culture/Traditions 2013). Hence it can be understood that the target market 23

of the new business is the interested people in parties and events, which can be expected to create an attraction towards the new concept of theme parties at home. 3.2.

Demands of target markets –

Events and parties are on high demands in Dubai, and in UAE. This is the reason that several events management companies are continuously focused on meeting the demands of the customers. Events include various occasions such as management of corporate events, business functions, corporate parties, festivals, parties, conferences and business celebrations. In order to arrange for these events or parties, individuals, families, offices, and groups are in need for professionals whom they prefer to pay for the services they would provide by arranging for the events or parties (Event Management Company, Dubai, UAE 2014).

Figure 4: Events/Parties

in Dubai

(Event

Management

Company,

Dubai, UAE

2014). The new business will however mainly target the private parties that are demanded by families and individuals for occasions such as birthdays, 24

anniversaries, retirement functions, and so on, which in most cases people want to enjoy at a lower price. Hence such parties that are demanded are private, based on themes and are required to involve reduce costs than the bigger events. 3.3.

Unsatisfied needs of customers giving rise to business

opportunity – The two most important factors that initiated the idea for the new business include:  The high costs of the events or parties in Dubai if professionals are hired for arrangement of the parties.  The lack of convenience of the venues since professionals or event management companies would arrange for the events or parties at different venues with menus, which also increased the costs for the customers. These are two main reasons for which individuals and families in Dubai are faced with difficulties when it comes to plan and enjoy for particular private occasions. This is where theme parties at home are being suggested by the new business, which would include arranging for the parties at the residences or preferred locations of the customers, hence reducing the costs significantly. With parties arranged based on themes, the occasions for the families and

individuals

can be well organized

expectations and demands of the customers.

25

trying to meet

the

4. PRODUCT RESEARCH AND DEVELOPMENT 4.1.

Environmental Scan –

As part of the environmental scan, the political, economic, social, and technological factors in Dubai that can affect the business have been identified (PEST Analysis of Dubai Market 2009). POLITICAL

ECONOMIC

Political

SOCIAL

TECHNOLOGICAL

Main revenues of Population

environment

in Dubai

UAE is stable but obtained

There is a network

are involves

80 of seven industrial

from percent

of areas in Dubai, one

structure

of tourism,

real expatriates.

business park, and

government

is estate,

and

three

dynastic both at financial national

70

and services.

Emirati levels.

Crime rate is Nil.

Records

till

The operations of February

2009

comprises

debt of Dubai at There

represents

approx. USD 100 provision

constitutional

billion.

more are

direct taxes

no

free having

of international distinction,

government

There

and

of successful

males.

reflect

framework.

specialized

Dubai population zones

Dubai’s

monarchy

foreign

percent

highly

is than

marriage.

for one

two

world

class

seaports,

major

international airport, network

on Traditional dress highways,

modern of high

Trade policies are corporate profits codes are there class open

with

no or

private but there are no telecommunications

protective duties incomes. or

lesser

restrictions.

Customs

duties

dress codes for services

and

tourists.

and

reliable power and

are as low as 4 percent

networks, utilities.

having 26

Well defined and several sound framework exemptions. for

business

followed clear rules.

is

with

ownership

There

are

controls

no on

foreign exchange,

any

trade barriers or quotas. Import are

duties

competitive

in nature.

4.2.

Significant factors of macro environment –

From the political, economic, social, and technological factors identified and mentioned in the previous section, it can be said that the Dubai market is highly welcoming for new businesses and the macro environment of the Dubai market has been strengthening over time as well. One of the major factors related to the government of Dubai is that their debt restructuring would no longer be an issue for businesses with no entities expected to default any further. Performance of the market has also been supported and boosted by the combinations of events and festivals such as Dubai Shopping Festival, Russian and Chinese New Year’s celebrations, and Saudi school holidays. The leisure market is also doing well for Dubai (John 2012). All these factors have a positive outlook for the new event management business that is being proposed and planned as the market seems to be highly welcoming of events and also individuals and families that would look for parties based on themes at their preferred locations. 27

4.3.

Types of competition –

Over the years Dubai has emerged as a high class environment for business. Dubai now provides a logical platform for businesses and investors proving it to be huge market for the global economy. Levels of crime being low and the country being politically stable, more and more number of businesses are feeling attracted to the Dubai market for doing business, thereby increasing the level of competition as well. Foreign direct investment (FDI) has been more attracted to the city owing to its open economic policy, minimum control of the government, and regulation of the private sector. The provision of world class infrastructure by the city attracts more of international businesses. Moreover competitions are raised from the availability of cost advantages which are obtained due to absence of foreign exchange controls, trade barriers or quotas. The network of foreign trade is also extensive in nature, resulting in higher attraction of businesses, and hence increasing the competition in the market (Dubai for Business 2013). 4.4.

Opportunities and threats –

As far as opportunities are concerned, the macro environment of Dubai market,

and

the

significant

facilities

related

to

business

policies,

infrastructure, technology are concerned, the new business can be said to have a welcoming position in the new market, especially considering the new concept that the business is targeting to the market. The only threat is the existing competition in the market, which also includes several event management companies performing in Dubai, and the rising business prospects in the city, which will make the entry and performance of the new business significantly difficult.

28

5. COMPANY DESCRIPTION 5.1.

Type of business and legal structure –

The new business being planned is based on sole proprietorship. The owner will alone own the company and will be solely responsible for the assets and liabilities of the business. It will be the responsibility of the owner to arrange for the necessary license and permits in order to enter and perform in the Dubai market. Regulations for the particular industry will have to be followed. Since the business will be sole proprietorship, the control of the business will be completely in the hands of the owner and the business will be easy and inexpensive to form (Sole Proprietorship n.d.). For the growth of the financial sector, Dubai has introduced certain laws for its businesses which will be necessary to consider. These include Companies Law, Contract Law, Arbitration Law, Insolvency Law, Data Protection Law, Collective Investment Law, Investment Trust Law, Single Family Office, Special Purpose Company Preferential

Regulations, Creditor

Payment

Regulations,

Systems and

Settlement

Strata

Title

Law

Finality

Law,

(Independent

Legislative Framework Based on International Standards 2013). 5.2.

Mission and objectives –

The mission of the business is to – 

To offer customers with theme parties at home and solve their problems related to expensive venues and menus.



To target customers that prefer to celebrate different occasions primarily in their homes or offices and arrange such parties based on particular themes, meeting the expectations of the customers.

In order to achieve this, the following objectives are being targeted –

29



To prepare an effective team of management that will look after all the managerial processes of the business and operations.



To enter the Dubai market and establish the company.



To effectively market the offering of the ‘theme parties of home’ to the target market explaining them to the benefits and uniqueness of the new concept.



Hence to effectively position the new business in the minds of the customers, and with success in the Dubai market, to expand across the UAE.

5.3.

Distinctive core competencies –

The distinctive core competencies of the company will include the following:  Core Competency 1 – The ability to target a new market with a new concept, which has been based on the need of customers in the market.  Core Competency 2 – Highly qualified professionals will be part of the company who can effectively determine the market needs and accordingly plan for the services being offered.  Core Competency 3 – The advanced technologies will be made used for arrangement of the parties hence making them interesting and attractive for the customers.  Core Competency 4 – Unique marketing strategies that will target existing competition in the market and gain competitive advantages.

30

5.4.

Management and ownership –

Ownership structure – The ownership of the business will be based on sole proprietorship.

Figure 5:

Sole proprietorship for the business (Collins 2014).

Internal management team – The main business management categories that will be part of the new business will include Sales and Marketing, Administration, Services, and Human Resources. There will be some key management personnel who will be in charge of the management roles in these departments. External management resources – The external management resources will be considered as backup for the internal management. Thus there will be a team of external professional advisors for the company such as accountants, bankers, lawyers, business consultants, to advise for the business measures as well. Human resources needs – The Company will have its own employees. For this purpose effective recruitment and selection processes will be conducted, and thereafter suitable training and development will also be provided to them. 31

5.5.

Board of directors and rationale for members –

The board of directors for the company will be formed including the owner and other highly qualified professionals that essentially possess the skills and knowledge which is required for the particular business. Thus the team will include those that have experience in the field of event management, and for the best arrangement of parties, especially considering theme parties. A total of 6-7 professionals will be part of the board that will meet every time and decide on all major activities and processes of the business. Two factors that will be focused while deciding on the board include their experience and their diversity. Diverse individuals tend to contribute effectively through varied ideas, which can prove to be beneficial for the business. Most importantly, the members should realize the purpose and objectives of the business and perform accordingly. 5.6.

Management staff structure –

For the initial start of the business, around 20 staff or employees will be needed who will be working in different departments under specific managers. The structure that is being planned can be represented as follows:

Chief Executive Officer

Sales and Marketing Manager

Administration

Services Manager

Human Resources Manager

Financial Manager

Sales and Marketing Staff

Admin and Technical Staff

Services 32 Staff

Human Resources Staff

Staff for Managing Finances

Figure 6: Management Staff Structure for the New Business 5.7.

Key Managers –

The key managers for the business will be the following: Sales and marketing manager – He will be in charge of the marketing strategies and activities of the business and will target practices that can most effectively position the business in the minds of the customers in the new market. Administration manager – He will in charge of looking after the administration related tasks of the company and will also look after the technical needs of the company based on which he will allocate the right staff to take care of the tasks. Services manager – He will mainly look after the needs and expectations of the customers and hence for the delivery of the right services to the right customers at the right time, involving the staff working under him. Human resources manager – He will look after selection and recruitment of the right candidates for the business, and also for arranging for their training and development. Financial manager – He will look into the matters related to financing and financial management of the business.

33

6. MARKETING ACTIVITIES 6.1.

Overall marketing strategy –

Figure 7:

Overall

Marketing

Strategy for

the New

Business

The

overall

strategy

marketing

of

the

business

involves understanding the exact needs and expectations of the customers – in terms of their party needs, theme based parties, and lower costs. Based on such understanding and market analysis, including the existing competition, the marketing mix has been developed defining the price, product, promotion, and place for the new business.

34

6.2.

Specific marketing mix –

The marketing mix for the new business has been planned and is being proposed as follows:  Product – The product that the new business is offering is a new

concept of partying. Theme based parties will be offered to the target market that is facing problems owing to the current method of arranging parties through event management companies, involving high costs. The new business offers to arrange for occasional and theme based parties at the individual’s or family’s residences or preferred places by the customers.  Price – The customers are already disappointed with the huge costs

involved in arranging for the parties. Hence reasonable prices will be offered by the new business, which will attract the customers more towards the new concept.  Place – The target market currently chosen is Dubai. However once

the business establishes successfully in Dubai, it will expand across the UAE. The target market includes those individuals and families that are party loving in nature, and require professionals to arrange for the same.  Promotion

– Promotion of the business will be done through

advertising measures, based on the use of the media such as television, radio, or printed media. The internet technology will also be made used through development of social networking pages and website for the business. Campaigns can also be targeted to target different areas of the market to let customers know about the new company.

35

6.3.

Strengths and weaknesses –

The strengths and weaknesses of the marketing strategy and mix being planned for the new business can be tabulated as follows: Strengths 



Weaknesses

The strengths of the marketing



The major weakness of the

strategy lie in understanding

strategy can be faced with the

the

the

existing competition and event

customers and targeting them

management companies in the

with what they are expecting.

market, which might prove to

Lower

exact

needs

pricing

of

strategy

will

prove to be beneficial for the business in attracting greater

be

barriers

pursuing

for the

effectively marketing

activities of the new business.

number of customers.

7. PRODUCTS AND SERVICES 7.1.

Product description –

The offering of the new business is basically a service that will arrange for theme based parties for its customers. The focus will be on offering customers with arrangement of theme parties in homes where the decorations of the parties would depend on particular occasions (birthdays, marriage anniversaries, retirement, and engagement celebrations). For example, for celebration of birthday of a girl the themes could include Barbie theme, Dolls theme, or Pink theme. For birthday of a boy, the themes can include Cartoon themes, Blue theme, Cars theme, and others. For celebration of engagement parties, themes can be based on flowers, posters of couples, with colors of red and white theme. Party brochures will be prepared that can give the customers better ideas about how the theme 36

parties would look like offered by the new business. The idea is to make it cheaper and convenient for the customers to enjoy their occasional parties. 7.2.

Product life cycle –

The product life cycle for the new business can be represented through the following figure:

Figure 8:

Product Life

Cycle of the

New Business (PLC – The Product Life Cycle n.d.).

These will be the four stages of the product life cycle for the new business: Stage 1: Introduction and launch of the business/service – This is the stage where the new business will be launched in the new market, which is Dubai. This will include researching the market based on which business and marketing decisions would be finalized. During this phase, the costs for the company will be high and the profits will be low till the time the company is positioned in the minds of the customers. 37

Stage 2: Growth and development – This is the phase when the service/business can be expected to create its position in the market and accordingly the sales and profits should gradually be rising. Thus return for investment should be able to be achieved during this stage. Stage 3: Maturity and competition – During this stage it can be expected that the competition will increase and hence lead to increasing costs for the company which will require indulging more into advertising and promotion. Offers and discounts will be offered to retain existing customers and attract new ones, during this stage. Stage 4: Saturation and decline – This stage would reflect sales and profits declining for the business, which may occur due to new entrants in the industry, higher costs, or change in preferences of customers, and other reasons. Depending upon the situation, the business may be shut down or diversified. 7.3.

Copyright and Intellectual property right –

Intellectual property (IP) rights arise when there is a new invention or ideas being presented and implemented. Hence protecting the new ideas is a necessity for a new business, such as the one being discussed in this business plan. As for the new business is concerned, the idea of theme parties at home is a new idea/concept being suggested and hence needs to be protected. Copyright protection can rightly be applied which is free and automatic as well. With copyright protection the business will receive a legal protection for the original ideas being expressed through the business and its owner. For copyrights there is no need for registering for the ownership for assertion or receiving protection. The original ideas and works can both 38

be protected with copyrights for the business (Protect your business name or idea 2014). 7.4.

Research and development activities –

This will include activities of investigation by a special team to research and understand the exact needs of the customers and hence develop for the services and the right processes that can meet the expectations of the customers. For this business, the focus will be particularly on the type of parties the customers or the target market in Dubai and UAE is looking for, the themes that can best suit the different occasions, the best processes and technologies that can be used to arrange for the parties at the preferred locations of the customers at costs that can be easily affordable by the customers. 8. OPERATIONS 8.1.

Product and service delivery procedures –

The business offers a service of arranging for theme parties at home. For effective delivery of the services, the SAS service delivery process can be considered as effective. It involves a comprehensive set of tried and tested procedures that focuses on maintaining the quality, integrity, availability, and agility of the application, network infrastructure, and services. Designing of the network is the initial stage focused by SAS service delivery process. The processes will be considered based on the particular needs of the business. The components of the network would be arranged and configured by the team of SAS. Also, the monitoring and management of the network will be obtained by the service desk of SAS (Service Delivery Process 2014). 8.2.

Supply chain –

The supply chain for the business can be represented through the following figure: 39

Figure 9:

Supply Chain for the Business

For this business, the raw materials would include all those materials that will be necessary for arranging for the theme parties at homes. Hence suppliers will be required for providing those materials. Manufacturing might be required for particular decoration materials that will be used for the parties. Distribution would include carrying all necessary materials to the customer’s site for arrangement of the parties. Hence these are the main factors that will be involved in the supply chain of the business. 9. FINANCIAL ANALYSIS 9.1.

Funds needed –

Since the business is targeted at a small scale for the initial establishment, funds of around AED 30,000 are expected to be invested. Of this amount, around 30 percent will be invested by the owner, while the rest of the amount will be borrowed from the bank. The funds are being planned considering the fact that the parties will be arranged mostly at the residences of the customers, or their offices, and hence there will not be 40

requirements for separate venues which would otherwise prove to be costly both for the business as well as the customers. 9.2.

Balance sheets –

The projected balance sheet for the business has been planned as follows: Balance sheet for the first year of the business – Assets

Amount (in

Liabilities

AED) Cash Accounts

Amount (in AED)

2,000 Accounts payable

0

0

receivable Inventory

0 Total liabilities

Land

0

Building

0 Owner’s equity

Equipment Other assets

8,000 Paid in capital 0 Owner draws Retained earnings Total equity

Total assets

10,000 Total

liabilities

and equity

Balance sheet for the second year of business – 41

0

10,000 0 0 10,000 10,000

Assets

Amount (in

Liabilities

Amount (in

AED)

AED)

Cash

1,500 Accounts payable

Accounts

2,500

500

receivable Inventory

0 Total liabilities

Land

0

Building

0 Owner’s equity

Equipment

500

8,000 Paid in capital

Other assets

10,000

0 Owner draws

0

Retained earnings

1,500

Total equity Total assets

12,000 Total

11,500

liabilities

12,000

and equity

9.3.

Cash flow statements –

Cash flow statements for the first two years of business – Particulars

Year 1 (Amount in

Year 2 (Amount in

AED)

AED)

Beginning Cash

2000

13,800

Cash sales

0

2,000

Accounts receivable

0

2,500

20,000

0

Balance Cash In:

collections New loans 42

New investment

0

0

8000

3000

100

200

Inventory on hand

0

200

Principal payments

100

200

13,800

14,700

Cash Out: Equipment Purchased Expenses paid

Ending Cash Balance

9.4.

Capital requirements –

The initial capital requirements for the business would include the capital that will be necessary for expenses for launching the company in the new market. In order to obtain the exact needs, the marketing plan for the business will be strategically developed. The products and services of the business have been described and strategies would include the possible means to establish the business in the new market, and hence requirements of capital will be essential for purchase of land, building of the office, for advertising and promotion, and for delivering the services being offered. Costs will also be incurred for the development of the processes and services that will rightly be able to meet the demands and expectations of the customers. Funds around AED 5,000 will be spent on advertising and promotion of the business as well. 10.

CONCLUSION AND RECOMMENDATIONS

The business plan has been focused on developing and presenting a new concept of theme based parties at home, focused to be initially targeted in the Dubai market, and gradually spreading across the UAE. Now, considering the current situation and macro environment of the Dubai market, over 43

viewing its political, economic, social, and technological environment, it can be said that Dubai would prove to be highly welcoming for the new business. Particularly focusing on two factors, such a conclusion can be drawn. 

Firstly, the Dubai government welcomes new businesses providing them with facilities and infrastructure, which are essential for the success of a business.



Secondly, individuals and families in Dubai are highly interested in occasional

parties

which

currently

are

organized

by

events

management companies, and the costs for such arrangements are huge for the people to afford. Considering these two factors, it can be said that the concept of theme based parties at home will be interesting and attractive for the market, particularly because it will reduce the costs for the customers and also make it more convenient for them to enjoy each occasion that they want. The market is another issue, which can be considered to be highly competitive particularly owing to the presence of a number of events management companies already in the region. It can be said that the initial entry for the business in the new market will be tough and there could be significant barriers from the existing players in the market. However, with an effective marketing mix, the new business should be able to target the market well. It has been obtained that the business is focused on understanding the exact needs of the customers and meeting them. Hence this would essentially create a position in the minds of the customers. Although the start up might require significant amount of effort and time, but it can be well expected that the business will run successfully with passage of time.

44

The most essential factor that makes me business suitable and feasible for the Dubai market is the existing trend in the sector. The rising population of the city and the changing preferences of customers are creating further demands for event’s organizers. The new business can be said to be rightly targeting the target market with an absolutely new idea that is not only attractive and cheaper for people to afford, but also highly convenient and effective for families and friends who want to party together. And, Dubai is a market where newness is welcome by all. More importantly, the current offerings of the events management companies are unable to satisfy the needs of the customers, and hence the offering of the new business can be concluded to be feasible and should be implemented with due effort. 10.1.

Recommendations –

The following recommendations would be suggested for the implementation of the new business – 

Market research needs to be conducted on a frequent basis. While it is essential for the initial start up of the business, such research needs to continue in order to note any changes in the preferences of the customers, which then the company would be required to address essentially, to retain its existing customers, and also attract new ones.



The marketing of the new business is one of the most essential factors for the establishment of the business and spreading about it among the

customers.

Unless

the

marketing

strategies

are

effectively

implemented, chances are that the new market would not be well aware of the company or its services. Also, people need to know the uniqueness of the new business in order to get attracted to it. Hence it is recommended that particular focus is given on the marketing management and team selection, which would be responsible for the marketing decisions and activities for the business. 45



It is already established that the concept of the new business is new for the Dubai market. However, since there are existing events management companies in the region, and the competition is high, it can be expected that the same concept will be tried to be indulged by other

competitors

as

well.

Hence

continuous

innovations

and

uniqueness is essential for the new business to keep it distinct from other competitors in the market. Depending on the needs of the customers, new designs and ideas will have to be developed on a regular basis. Moreover, it is recommended to offer customers with discounts and offers as well to keep them attracted with the company. 

Finally the selection of the board of directors, the management teams, and the staff need to be done with extreme care since human resources are the most essential part of an organization that will be responsible for all decision making and accomplishment of tasks. Hence due time and care should be allotted while creating the teams and also while allotting them with individual tasks and responsibilities. Employees should also be well trained to communicate effectively with customers to create a positive relationship between the company and the customers, highly essential for keeping them attracted to the company and its services.



It

is

also

recommended

to

encourage

the

human

resources

management team to indulge into training and development sessions for the staff, to keep them updated with the current market scenarios, changes needed for the business, and other factors which might otherwise affect their business. Employee motivation is recommended to keep them encouraged and motivated towards their work, which will result in their high performance and effort for the business and hence success. 46

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49