Entrepreneurial Marketing Development Plan - Essay Example

? Entrepreneurial Marketing Business Plan Oz Tube is an Australian social website company that deals with advertisements and publicity of local events and business venues. This network takes advantage of the robust and viable aspect of social networking to conduct its business practices. This company is one of the growing advertisement agencies which have adopted the use of video productions and internet promotional services. OZ Tube promotional materials target the young population who falls under the age bracket of 18-35. This company provides services to the tourism and hospitality industry through the two communication media. OZ Tube operates exclusively in the south-east Queensland and Brisbane. In this regard, most of the contents are meant for the local population. OZ Tube directs all its hospitality content to the youth population in these two areas. OZ Tube productions works articulately with hospitality premises and other recreational destinations in producing tailor-made video content that responds to the preferences held by the youth (Tunji, 2011). In addition, OZ Tube website provides updates on a 24/7 basis on what is happening within the local hospitality venues and any other related recreational event. All the promotional programs and videos produced by this company changes swiftly with times due to changes in the required content of the advertisement episodes in videos and in the internet. At this juncture, we can appraise the context of a dynamic process whereby OZ Tube is planning to create a new TV program named The Pulse (Tunji, 2011). Just like any other video programs hosted by OZ Tube, The Pulse carries the contents of hospitality and tourism events and venues. This is one of the contemporary TV programs aimed at facilitating delivery of promotional contents to the target generation. The Pulse will revolve around the aspect of entertainment, travel ways and recreational places. Video contents covered in the episodes aims at highlighting the main messages regarding these places at any given time. This TV program still targets the youth population of Brisbane and south-east Queensland. In this regard, the program communicates the major events happening in entertainment places and recreational facilities to the local population and in a timely manner (Frederick, 2009). In the context of entertainment, this TV program covers contents relating to any local entertainment events happening within a certain timeframe or even which theatres show whichever blockbuster movie in the market at that time. In this regard, the company’s management behind the creation and implementation of The Pulse requires a business plan. This business plan will serve as an indicator of the present and future state of affairs with respect to the company’s business expectations on the plan. The plan also serves to indicate fundamental aspects like financial forecasts and risks involved in the process (Frederick, 2009). Just like any other business activity, The Pulse will undergo a financial evaluation meant to test the project’s feasibility. A project is feasible if the expected results conform to the subject company’s objectives. In order to ascertain the feasibility of the project with respect to financial terms, it is necessary to carry out a comprehensive financial analysis. In addition, the feasibility decision will be backed up by information concerning risk evaluation of the underlying project. One of the financial statement the will serve as a appropriate tool in the project’s financial analysis is the balance sheet. The company’s balance sheet reflects the current assets and liabilities that pertains the business and financial statements of the underlying project. This balance sheet guides the interested stakeholders, especially external financers like the sponsors in availing funds to the Pulse. The pulse aims at producing 13 weekly episodes. Therefore, successful production of these episodes need substantial amount of finances. Financial ratios calculated from the balance sheet depict the ability of the company to carry out the project in a financially stable manner (Frederick, 2009). In addition, values like profitability ration calculated from income statement will back up the statistical values obtained from the balance sheet values. All these values helps the project managers in planning for every step required to implement the project effectively. The company’s marketing department uses the values calculated from the financial status of the inventory in stipulating its marketing practices. Turnover ratio enables The Pulse marketers in determining the rate at which the project’s products and services will be received in Brisbane and south-east Queensland (Frederick, 2009). Cash Flow Statement April May June July August Sources of Funds Beginning Cash 0 126,750 126,317 76,107 24,264 Sponsorship 51,750 TV Advertising 39,500 TV Program Placement 39,500 TV Hospitality Venues 26,910 Web Advertising 24,500 Available Cash 130,750 178,160 126,317 76,107 24,264 Uses of Funds Salaries 0 40,092 38,648 40,092 9,050 Payroll Tax 6,014 5,824 6,014 1,358 Equipment 0 5,538 5,363 5,538 1,250 Insurance 0 200 200 200 200 Accounting and Audit 1,000 Start up Cost 4,000 Total Used Cash 4,000 51,814 50,211 51,843 12,858 Net Cash 126,750 126,317 76,107 24,264 11,406 Income Statement Sales TV Advertisers 55,300 Product Placement 592,800 Hospitality Venues 2,070 Advertisers 4,900 Total Sales 655,070 Cost of Services Provided 170,754 Gross Profit 484,316 Operating Expenses 0 Net Profit 484,316 OZ Tube balance sheet as at 31’st August 2012 Current Assets Current Liabilities Cash $47,600 Debts Payable 30,500 Petty Cash 5,400 Interest Payable 7,000 Inventory 40,000 Accrued wages 8,000 Pre-paid Expenses 6,000 Income tax 15,000 Fixed Assets Long-Term Liabilities Equipment 30,000 Loans 94,600 Computers 20,500 Total Liabilities 155,100 Leasehold 5,600 Total Assets 155,100 Break Even Analysis A break even analysis is a financial figure obtained from the values relating to cost of production and the sales of products or services made. A break even point is calculated from cost and sales of products or services contained in the income statement. A break even point is a point where no profit or loss has been made in the production or service provision processes. At this point, the total cost of production is equals to the total sales made oven a given period of time. A break even point is a point which indicates the lower profit limit when determining the appropriate profit margins. In the calculation of a break even point, the fixed cost is divided by the unit selling price and the variable cost is subtracted from the result. After the calculation of a break even point, any other additional unit above the point results in a profit while any other unit below the break even point results in a loss (Frederick, 2009). In this context of The Pulse, we will determine the fixed cost, unit selling price and the variable cost. Upon determination of these elements, we can apply the appropriate formula to determine the break even point that can be used to guide OZ Tube’s Pulse project. From the profit and loss accounts, fixed cost = 166,754. Price per unit=7,900. Variable cost =4000. Break even point= Fixed cost/ (Price per Unit-Variable cost). 166,754/ (7900-4000), =42 Units. In this regard, the break even point for the company’s service is 42 units. Section 7: Critical Risk Potential Risks Business projects are not risk-free. In this regard, The Pulse may experience some risks and obstacles in its execution. One risk is the aspect of competition. Advertising industry, especially in a capitalistic environment is competitive. Therefore, other video and internet promotion companies may come up in Brisbane. This will present some competition challenges to OZ Tube. The Pulse may loose the expected market share to these competitors. Subsequently, company’s sales will drop significantly; hence affecting realization of its business objectives (Tunji, 2011). Obstacles and Risks Intense competition may not allow OZ Tube to get the 13 Pulse episodes to a commercial TV. In addition, financial frustrations due to competition may not allow the company to move on with the project; hence The Pulse may stop after production of the 1’st series. In order to implement the two strategies in a smooth manner, the company should develop suitable alternatives for the problem. Alternative Course of Action The Pulse project managers should consider gaining substantial financial strength that will facilitate provision of funds needed to pay wages for the project’s technical teams. In addition, the company can overcome the forces of competition by adjusting to market trends, especially technological advances in a timely manner. The company should take advantage of any new video production technology in the market. The Pulse can also address competition by establishing good customer relations during production of the first episodes (Tunji, 2011). Section 8: Harvest Strategy Liquidity Event Effective implementation of the project by following all the required steps will result in a successful business opportunity. Sales will start to peak following the ideal product development circle. After successfully completing the first 13 episodes, OZ Tube may embark on developing the second series. Market reception and the influence of external forces determine the procedures to be adopted in implementing the second stage. On the other hand, OZ Tube may revert to taking the company public. In addition, a company can be liquefied through acquisition process. These sale processes will be guided by the financial statements formulated in the later sections (Frederick, 2009). Continuity of Business Strategy In case the company wants to continue with its business practices, it can formulate comprehensive business strategies which specify the plans for developing the second series. In addition, the company should specify the procedures of transforming the episodes from the internet videos to appropriate commercial TV channels. For effective implementation of the project, OZ Tube can choose another party who will implement the second part of producing videos for commercial TV channels (Frederick, 2009). References Tunji, S. G. (2011). Entrepreneurship Marketing: Principles and Practice of Sme Marketing. New York: Taylor & Francis. Frederick, G. C. (2009). Marketing for Entrepreneurs: Concepts and Applications for New Ventures. New York: SAGE. Read More