Business plan sample (стр. 3 )

·  Stage 1 - Launch phase

At stage 1, the operations and the ticket-booking service are established with the customer. The goal is to become well-known, generate traffic on the site and create an economic basis consisting of income flows from ticket commissions. In addition to the pure ticket-booking service, the site will also offer content; XXX will be the obvious meeting place for consumers interested in entertainment, with information about events, chats and, for example, the possibility of watching video cuts from different concerts and putting questions to the artists.

·  Stage 2 - Expansion phase

At stage 2, operations are expanded to offer related goods and services as well. The aim is to broaden the revenue basis and to further increase the site’s attractiveness, thus increasing the number of visitors. In practice, this means that the site will offer related products and services complementary to ticket purchases.

·  Stage 3 - Exploitation phase

At stage 3 the increased traffic on the site and the customer database that has been built up is utilized to generate further income in the form of advertising and marketing fees. A pan-European database, containing information on consumers’ preferences and interests concerning events and related products, opens up unique opportunities for directed marketing for the players who are XXX ’s suppliers in stages 1 and 2, i. e. theaters, the music industry, the travel industry, sports clubs, etc.

Releases

Pre-launch

Prior to the first release, XXX will launch the concept in the media to achieve early customer attention and claim its space in the web universe. In connection with that, there will be a first version of the site up and running. This will be a registration site, that makes it possible to start building an initial customer data base. In the time that elapses from the pre-launch to the launch of release 1, XXX will make sure that new things appear on the site, to keep the customers’ interest. This may for example be special contests.

Release 1

Release 1 is planned for March XXX, in Sweden and May XXX in Germany. This release will be quite advanced, to give the customer a good picture of what XXX stands for and its ambitions, at the same time it will clearly describe what can be expected in the future, in terms of enhanced selection, services, and functionality. The goal for XXX is to create a site that is clearly better than the existing competition in the first release, and then keep moving at high speed to outpace competition.

The first release will contain the following front-end features:

·  Sales of event ticket

·  Link to sales of travel and merchandise

·  Search engine (arenas, city, date, type of event) & browse

·  FAQ

·  Customer profiles and membership

·  Newsletters

·  Content: event descriptions, reviews, arena information

·  Different methods of payment

·  Different methods of distribution

·  Customer buying history

To achieve this, the following back-end functions needs to be developed:

·  Online connection to booking systems

·  Basic XXX booking system

·  Online connection to credit card and debt collection company

·  Call-center system

·  Statistics functions

·  Event database

·  Encryption

For the German launch the following functionality will be added:

·  Handle different currencies and languages

·  Cross boarder delivery

·  WAP enabled services

Business goals

Quantitative goals

The XXX management team has set up the following goals. The financial effects of this plan is described in the section below (Projected financials).

	Year XXX	Year XXX	Year XXX	Year XXX
Launch (country) No. customers (thou.) No. tickets sold (thou.) Turnover (MSEK)

Qualitative goals

·  Brand

XXX shall have high awareness levels and be associated with the values mentioned under the heading Brand positioning. The company shall always be innovative and customer-focused in its marketing.

·  Technology

XXX shall constantly explore and promote the industry’s technological development. The company shall constantly renew and develop its technology and work on solutions creating new standards for ticket sales, e. g. e-ticket solutions, through partnerships with market leading suppliers of technology.

·  Business partners

XXX shall be the most attractive business partner in the ticket industry. XXX shall strive to build up long-term, mutually profitable relationships with business partners.

·  Investors

XXX shall be a highly profitable, serious and expansive company within the eEconomy.

·  Employees

XXX ’s workplaces shall be a stimulating environment where the employees have fun, earn money and play a hands-on role in making history.

Projected financials

The tables below show the projected earnings and net cash flows for XXX during the period from XXX to XXX.

Projected Income (tSEK)

	Projected Income TSEK	XXX	XXX	XXX	XXX	XXX
	Tickets sold
	Ticketing Revenue
	Other Revenue
	Total Revenue
	Cost of ticketing
	Cost of Goods, other
	Gross Profit
	Marketing
	Support & Maintenance
	Personnel & Administration
	Other Operating Expenses
	Depreciation
	Operating Income
	Interest
	Pretax Income
	Taxes
	Net Income
	Key Business Indicators
	Operating Income / Total Revenue (%)
	Accumulated Operating Income
	Net Cash Flows

NB: For details on key assumptions in budget model, please see Appendix 2.

Sensitivity Analysis vs. base case XXX

The sensitivity analysis performed shows that XXX has a good safety margin, for reduced revenue. It also shows that there can be a considerable upside, if revenue growth is quicker than accounted for in the projections above.

·  Market growth: The Business Plan assumes an annual market growth of +X%. One %-pts difference to the assumed +X% improves/worsens the Operating Income in year 4 by X TSEK. If the market would remain flat for the coming four years that would result in a reduction of tickets sold by X% in XXX. At the same time the Operating income would decrease from X TSEK to X TSEK.

·  Market size and Market share: A change of +/- X% in the assumption of the market size or the market share would have a corresponding impact on number of tickets sold and Net Turnover. For example, assuming the market size would be 10% larger than estimated in the Base, that would imply an Operating Income of X TSEK (+X%) in XXX.

·  Service fee: X SEK/ticket in Base Case. Assuming everything else unchanged, the Service fee could be reduced to X SEK/ticket (40% decrease versus Base) before reaching a negative Operating Income in XXX.

·  Other Revenue Streams. Base case assumes that in XXX "Other Revenue Streams" will represent X% of the turnover generated by service fees. Assuming the X SEK/ticket in service fee remains unchanged the "Other Revenue Streams" could go down to less than X% in XXX before reaching a negative Net Earnings.

Capital requirement

The total capital requirement for the following three years is estimated to XXX MSEK. That is based on a pan-European launch into eight countries. The primary objective during the fall of XXX will be to raise MSEK XX. This will finance the launch into Sweden and Germany and will cover the period November XXX to June XXX. A second round of investment capital will be raised starting March XXX, after the launch, to enable further European expansion.

For perspective, if we were to launch only into Sweden and Germany the total capital requirement is estimated to MSEK XXX. The capital need the first six months remains basically unchanged versus the pan European scenario. For more details on the Sweden and Germany only scenario please see Appendix 3.

The estimate for capital requirement assumes no leasing or other financial arrangement. Instead it is based on an immediate cashflow need at the time of the investment, i. e. there should be a potential upside to the upfront capital requirement.

Ownership structure

XXX has to date issued XXX shares, to raise the amount of XXX MSEK. The state of ownership for the company is currently as follows:

Owner	% ownership	No of shares
Total	100,00%	XXX

Management team agreement

There is an agreement between the founders and the other two members of the management team to work without salary for ten and four months respectively. The partners have also committed to stay with XXX for at least four years, in order to be entitled to all of their share of stock.

Collaboration agreements

XXX has, or intend to, conclude collaboration agreements with leading partners in several industries, in order to provide its customers with a superior service.

·  Suppliers, booking companies and ticket agents

In order to ensure access to major events and secure a good selection of tickets, distribution agreements will be concluded with leading organizers, booking companies and agents in the local markets.

XXX has already secured important agreements in the markets planned for the first release, for details see the table below.

Company name	Country	Current status
	Sweden	Ongoing negotiations
	Sweden	Ongoing negotiations
	Germany	Ongoing negotiations
	Germany	LOI exists, contract negotiations

Next XXX will also approach the third large booking system company in Germany, XXX and later on the equivalent players in the countries next in line for roll-out.

·  Strategic business partners

To equip the web site with comprehensive and interesting content, complete product and service offerings using the latest technology advancements XXX will engage knowledgeable partners.

-  Media Companies - An important cornerstone in XXX ’s strategy is to establish strategic collaborations with companies in the media industry. The goal is to obtain marketing opportunities at reduced prices in exchange for part-ownership or against a commission on the increase in turnover.

-  Web Portals – Co-operation with companies with large customer base and many regular visitors, such as web portals, will provide XXX with a steady stream of visitors and reduce marketing costs.

-  Content Providers – Using externally produced content gives XXX the opportunity to provide its customers with comprehensive, interesting and continuously updated content, at a low cost.

-  Experiences and related business - XXX will become an important sales channel for all products and services related to events and experiences, such as music, travel tickets and hotel accommodation.

Disputes

The company is not currently involved in any disputes.

Risk factors

All equity investment involve risks. More specifically, investment in XXX involves the following risks:

Early stage of operations

The company was only started in XXX and will become operational in a limited scale in Sweden during Q1 XXX. As a result, there is limited operating history on which to base an evaluation of future prospects.

Low barriers to entry

The market for goods and services over the Internet is intensely competitive and rapidly changing. In a traditional sense, barriers to entry are low as business concepts can be replicated quickly and at low cost. It is thus important to establish a concept and have it supported by a loyal customer base, to increase the barriers for other entrants.

The development of the Internet:

Consumer’s access to the Internet and their willingness to adopt new technology and new habits are key factors for success.

On-line competitors

There exists a number of local online competitors in Europe as well as in the US, which are larger and have more resources than XXX has, as of today, and will have in the initial phase of the expansion. These competitors pose a risk against the success of XXX, in the sense that they can, if they chose to, drive competitors out of business by means of price competition, competition through advertising spending, competition for management resources, etc.

As tickets are one of the most interesting areas within B2C, there is a strong possibility that other companies are also working on the same business concept as petition can also come from the USA, where there are already several large ticket sites.

Consumer acceptance

In order for XXX to be successful, the company must become well-known and attract traffic to the site, thus generating sales. If XXX does not succeed in building a brand and developing an application that appeals to the customers, the project will not succeed.

Risks associated with international expansion

The opportunities described in this business plan are based on an expansion into other geographical markets and a further expansion of the Swedish and German organization. This will result in revenues being inferior to the expense of establishing these operations in the first period of operation. The international expansion may be delayed or its cost may increase due to factors outside management’s control.

Uncertainty of financing

There are no assurances that XXX is able to raise financing needed to secure further existence and expansion of the company. There is no guarantee that the favorable climate that exists today on the risk capital market will continue. Furthermore, no guarantee can be given that the dilution effects of future new share issues in XXX will not be greater than those initially planned.

Lack of public market and uncertainty of future listing

The shares in XXX are not publicly traded. As a result, there are restrictions on the transfer of shares. It is the intention of the founders and management team to seek a public listing of the shares of the company. There are, however, no assurances that such a listing can be executed. Investors should recognize the risk involved in investments in unlisted companies.

Availability of proficient management

XXX will start to recruit management for their global as well as local organization shortly. The availability of the right management resources will be critical for the continued success of the company.

Technical risks

In order to develop well-functioning technical solutions for XXX, it is absolutely essential to have a working system that is reliable, simple to use and easy to expand when the flow of clients increases.

Legal and regulatory risks

The Internet area has, up until now, been characterized by a considerable absence of legislation, etc. At present, there is nothing to indicate that the company’s operations are threatened by projected interference from authorities or other bodies. This cannot, however, be ruled out in the future.

Year XXX

The risks entailed by the Y2K changeover, both in the form of actual risks and a reduced disposition to taking risks on the part of investors, etc. must be taken into consideration. As the first launch is planned to take place in the year XXX, however, we consider the risk as far as XXX is concerned to be limited.

General economic and market conditions

The company’s performance may be affected by factors beyond its control, including, but not limited to, general economic conditions and actions by competitors or suppliers.

 

[2] Forrester Research Inc.

[3] NUA Internet Survey

[4] IDC, Q4 XXX (Internet users as share of population>15 years)

[5] International Data Corporation

[6] IDCXXX

[7] Price Waterhouse Coopers, 1998

[8] Teldok 115, 1997

 

[10] Based on size of subsidiary