Business plan sample (стр. 1 )

BUSINESS PLAN SAMPLE

Executive summary

“XXX is a combination of a good friend, a top-class entertainment magazine and a concierge at a luxury hotel. XXX is a digital shopping mall for entertainment, that strives to be more personal than your local bakery or tobacconist’s.”

Business concept

·  XXX will offer a simple, convenient, safe and attractive way to find information about and book events or other experiences via digital channels.

·  Together with business partners, XXX will create a marketplace offering a superior selection of everything connected with the event (tickets, travel, restaurant visits, music, merchandise etc.), including comprehensive information and content. The XXX customers will get personalized information and service, delivered via continuously improving, interactive digital channels.

·  XXX will create revenue in the form of service charges (for tickets), sales commission (for the sale of related products and services) and fees for different types of advertising and marketing activities.

Vision

·  XXX will be the market leader in Europe for event tickets via digital media and the obvious meeting place for users of Internet who are interested in entertainment.

·  XXX will have created the standard for ticket sales on the Internet and be a leader in introducing new concepts, such as new digital channels and electronic ticketing.

·  XXX shall, moreover, be a coveted business partner

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

Goals

The goal for the year XXX is to launch the site in Sweden, Germany, UK and in Italy. In four year’s time, XXX will have a turnover of MSEK XXX and an operating income of MSEK XXX.

Competition

Today’s market is underdeveloped and dominated by companies with a pronounced technical focus or an artistic ambition, which leaves the door wide open for a consumer-oriented, innovative player. At present, there is no pan-European player within event tickets market.

Ownership and company management

Prior to financing and strategic collaborations, XXX is owned by the founders of the company, one external investor and an advisory board. The company management also comprises the founders of XXX.

The group has been composed to create a unique combination of experienced, market-oriented executives and entrepreneurs with many years’ experience from leading international companies in diverse businesses such as ticketing, media, consumer products, finance and IT/Internet.

Principal strategies

In brief, XXX ’s principal strategies are as follows:

·  Offer a superior consumer solution through customization and co-operations

·  Drive traffic and build the brand with the customer by using guerilla marketing as well as traditional marketing methods and also co-operate with major portals and media players

·  Convert browsers to shoppers by presenting a user friendly site were exiting content is linked to personalized offers

·  Rapid geographical and conceptual expansion with an active roll-out team and a product and business development in the technical frontier

·  Financial and technical independence

·  Expansive business model with low operational risk, low need for working capital and large organic growth potential

·  Establish strategic connections with important partners in order to attract maximum attention, reduce costs and have access to skills essential to the operations

·  Focus on profitable customer groups and products

·  Create future opportunities for directed marketing, and advertising revenue through the development of a pan-European customer database

Key investment considerations

XXX addresses a large and growing market

·  The total event ticket market is according to our estimations XXX MSEK in Scandinavia and XXX MSEK in Germany.

·  According to Forrester Research, Inc. online event ticketing sales are expected to grow from an estimated $XXX million in XXX to an estimated $XXX billion in XXX.

·  The above tells us that event tickets is a large market, however XXX ‘s ambitions extend far beyond ticket sales, including the strongly growing market for entertainment and related products/ services (incl. travel).

The event ticket market has a number of features that lends it to being converted to digital channels

·  The industry offers a wide array of products with many customer choices and combinations, that can be conveniently administered via digital channels such as the Internet, WAP or digital-TV.

·  There clearly exists an opportunity to provide high consumer value, mainly through selection, content and convenience services.

·  The products sold are easy to order/ distribute and return.

·  The industry has fragmented distribution today.

XXX has an attractive business model

·  Great synergies can be created if the operations are linked to companies within for example the music, entertainment and travel industries.

·  XXX uses a flexible and expansive business model, with low operational risk and low need for working capital.

·  Certain content providers and alliance partners are believed to require little payments for services or support rendered in order to gain market exposure.

·  There are a number of obvious revenue flows, which can be realized quickly.

·  It is possible to add a wide range of related products / services to the offering.

XXX has a strong customer value proposition

·  XXX will offer a simple, convenient, safe and attractive way to find information about and book events or other experiences via digital channels.

·  Together with business partners, XXX will create a marketplace offering a superior selection of everything connected with the event (event tickets, travel, restaurant visits, music, merchandise etc.), including comprehensive information and content.

·  The XXX customers will get personalized information and service, delivered via continuously improving, interactive digital channels.

XXX has a good supplier value proposition

·  XXX will increase ticket sales, which supports the goals of both Organizers, who want to maximize the number of tickets sold, and Booking systems, that want to mediate as many tickets as possible.

·  The partners’ information is spread to more customers.

·  The complete solutions offered, along with customization and valuable content, will create an attractive context, where the suppliers want to sell their tickets and other products and services.

·  XXX will create a strong brand name which the suppliers would want to be associated with

·  The digital channels provided by XXX will enable special features and offers e. g. auctions, that cannot be offered through traditional channels

XXX will be the first ambitious, customer oriented, pan-European online ticket-seller, and will maintain superior speed to market

·  There is no existing pan-European player selling event tickets and being first often results in a lot of free publicity and attention. This has been the experience of many other ventures.

·  The existing local competitors do not offer consumer oriented, high quality service.

Market overview

The event ticket market

Definition

In the term event tickets XXX includes tickets to events within, e. g.

·  music, such as concerts and festivals

·  performing arts, such as theater and dance

·  sports

Tickets for the cinema, which may be classified as an event, are currently not included in the scope of XXX.

Industry value chain

·  The Organizer is the party who arranges an event, examples of such being theaters, production companies and sports clubs. The Organizer can come to an agreement with the sports arena or an independent ticket sales company to transfer the rights for the handling of the ticket administration and sales.

·  The Arena is the place where the event takes place. The “Arena” and the “Organizer” can, in certain cases, be one and the same whilst, in other cases, the “Arena” is separate from the “Organizer”.

·  The ticket-booking system is an administrative system which, through such functions as booking and printing out of tickets, as well as numerous statistical reports, facilitates the rational administration of tickets for an organizer.

·  Ticket sales companies are a marketing channel for the Organizer, who handle booking, payment and distribution.

The ticket buyer can, thus, choose between:

a)  calling on the Organizer’s own ticket office to buy tickets directly or collect booked tickets,

b)  calling the Organizer, booking the tickets and having them sent to the home address,

c)  via telephone or the Internet contacting a tickets sales company, booking the tickets and collecting them at a nearby agent

d)  visiting an agent and buying the tickets on the spot[1]

e)  or buying the ticket directly from the arena.

Finances

The owner of the ticket-booking system often charges the Organizer or the Arena a fee for every ticket the system has produced. This fee is usually between SEK XXX per ticket. The ticket sales company also charges for its distribution services via, for example, agents in the form of a service fee which is added to the price of the ticket, thus being paid by the ticket buyer. This service fee varies between SEK XXX per ticket depending on the price of the ticket.

Apart from this, the Organizer/Arena may also need to invest in certain hard - and software to be able to use the system.

The size of the market

There are no official statistics available concerning the size of the market for event tickets in the European countries. However, there are size estimations of the US market the number of tickets sold in certain European countries and of the principal players’ turnover figures. Based on these assessments, an estimate of the market size can be made.

The total size of the Swedish market is approx. 8-15 million tickets per year and Europe’s biggest markets by far are UK and Germany with between 180-200 million tickets sold per year each.

Ticket commissions would constitute a further 7% of the total ticket market turnover if all tickets were to be sold by agents. Many tickets are sold directly over the counter at theaters, festivals, etc. which is why this figure should be regarded as a theoretical measure of the maximum turnover potential for ticket agents per market.

In the USA, where online ticket booking is well-established, there are several players who jointly have approx. 2% of the total market, a share which is expected to increase to 19% by the year XXX [2]. The most successful online player in the USA is Ticketmaster-CitySearch. They have obtained the rights to distribute Ticketmaster’s (USA’s biggest ticket sales company) tickets online. Ticketmaster-CitySearch has experienced dramatically increased sales over the last two years, which is shown in the graph below.

Source: Morgan Stanley Dean Witter

XXX in the value chain

From a XXX perspective, the value chain for event tickets can, very schematically, be described as the picture below.

The customers are private consumers as well as companies that are in the market for event tickets or related petition is both companies currently offering a sales channel for event tickets, i. e. other web based services, call centers and agents, and potential new competitors. The suppliers to XXX are mainly booking systems, arenas and organizers. Aside from the players in the event tickets market, XXX will also interact with a number of players providing other products and services to be sold through XXX to the customers.

In the following sections, the different players in the value chain will be described in more detail.

Customers

There are two primary groups of customers, private consumers and companies, with varying characteristics and needs.

Customer group	Description	Key Customer Needs
Consumers	·  Large number of potential consumers ·  Highly fragmented in terms of socio-demographic background, interests and behavior. ·  High interest in the product	·  Convenience of purchase ·  Broad selection of events ·  Availability of information ·  Safety, (payment/delivery) ·  Inspiring user experience
Companies	·  Limited number of customers ·  Homogenous target-group ·  Limited/little interest in the product	·  Convenience, (ordering, payment, distribution) ·  Attractiveness of product, (i. e. suitability as Corporate gifts)

Suppliers/Partners

XXX has, or intend to, finalize collaboration agreements with leading partners in several industries, in order to provide its customers with a superior service, and maximize revenue. The partners include:

·  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.

·  Other strategic business partners

To equip the web site with content, complete product and service offerings, using the latest technology advancements, XXX will engage knowledgeable partners, including, but not limited to:

·  Media Companies

·  Web Portals

·  Content Providers

·  Providers of related products/ services, such as music, travel tickets and hotel accommodation

·  Technology partners

Competitors

An increasing number of ticket suppliers are investing in online booking via the Internet. There are currently several national players who offer event tickets. Most of these companies are originally traditional ticket-booking companies. Many have already got fully functioning systems in operation and even more are in the process of building up systems. Since the ticket suppliers are interested in selling their tickets through as many channels as possible, it is likely that this trend will continue.

At present, however, there are no pan-European players within event tickets and the local players are of greatly differing types. Nevertheless, most of them do not succeed in offering their services in a simple and attractive way. The majority of the sites have poor functionality, lack of focus on content and design, and a low level of recognition due to inadequate marketing. In the table below is a presentation of some of Europe’s leading ticket companies and their web presence.

Country	Player	Type	Sales channel	URL
Sweden		Booking system Ticket provider Ticket provider Internet site	Phone, Internet Phone, Internet (not OL) Phone, Internet (not OL) Pure Internet player
Germany
Italy
France
UK
Spain
Norway
Denmark
Finland

The competition in the online European ticket market varies by country. Not only is there a varying number of competitors, but they also differ in ambition and aggressiveness. Below, the competition in the major European markets is described in summary.

Sweden

·  eCommerce maturity and internet penetration makes Sweden an excellent “test” market for eVentures

·  Online activity in the event ticketing market is still limited, opening up first mover advantages for XXX

·  Market structure with only one booking network, that covers a large portion of the market, create possibilities for XXX to easily enter the market and reach the scale needed.

·  A partnership with Ticnet, expected to be the only remaining booking network, is vital for success. Ticnet’s own ambition has so far been low

Germany

·  No other player seems to have fully realised the potential of an event focused site. Instead, they are pure ticket sales players with no international ambition. This creates a window of opportunity for XXX.

Italy

·  XXX should not delay a market entry for too long, since the situation will not remain this favourable forever

·  Italy is still an relatively immature Internet market, though general Internet development is accelerating

·  Online activity in the event ticketing market is still very limited

·  The early stage of the market, makes it wide open for new entrants

·  The market structure needs further investigation, but market opportunities for XXX are considered to be large

France

·  The development of the French market for online ticketing has accelerated dramatically in XXX. Site quality and offerings are petition is still moderate

·  No player has aimed to become a full scale entertainment site/portal yet

·  XXX probably has opportunity to partner with at least one of the major booking networks

·  The ticketing market size, the French acceptance of ecommerce and the recent market development, indicate a fast growth of the online ticketing market

UK

·  The UK online ticketing market is already fairly large, and growing fast

·  So far, only US players have pan-European ambitions

·  The major actors are backed by strong owners and/or a strong partner network

·  XXX could probably enter the market and be able to connect to the important booking systems, but at a high price

Spain has some web based ticket sales companies, but they are not very advanced.

Norway is a smaller market, with only one identified online ticket sales companies. The existing service is very basic, with no additional information or content. The site is linked to the portal SOL (Scandinavia On-line), and thereby gets a good customer flow.

Denmark is also a small market, similar to Norway. There are, however, a few booking services online and they offer somewhat more functionality and information than the Norwegian. The strongest web based booking service is owned by the portal SOL. Their service would not be a tough competitor today, but since they have a strong customer base and the capability to build brand, they must not be overlooked.

In Finland only one ticket sales company can be found on the web, though it is not possible to book online.

Ireland is a very small market and Ticketmaster is already present. No other competitors have been identified.

Generally speaking, the currently available European web sites for ticket sales are focused on managing the booking transaction, and do not provide much information, content or ticket related services for that matter. The exception is the UK sites, offering more than the clear-cut sites we see in the rest of Europe.

Despite the competition, given the strong XXX value proposition, XXX will be able to capture a substantial part of the online ticket market, provided a quick launch and roll-out is achieved.

However, XXX is not only competing against other ticket sales companies on the Internet. Practically all other channels, where the customers can buy event tickets, can limit XXX ’s market share. However, the superior value that XXX will offer demonstrates a strong case for winning market share from traditional channels. Event tickets are also well suited for sale on the Internet, which further strengthens XXX ’s position compared to the traditional players.

There is also a threat from other players entering the event tickets market. Players with an established customer base and regular customer contact, e. g. web portals or travel agencies, might be interested in diversifying there business to include tickets as well. The best way for XXX to fight competition from such players is to form partnerships, in order to gain access to their exposure, customer stock and relation.

Digital channels

Rapid growth of Internet users

The number of Internet users worldwide is currently estimated at over 150 million and is expected to increase to 550 million[3] users within two years. In Europe, the Internet has had most impact in Sweden with a penetration as high as 58 percent[4]). Internet users are also spending a constantly increasing amount of time on the web.

Whilst Scandinavia is still in the lead as far as Internet penetration per capita is concerned, the larger populations in other European countries make them very interesting in a longer perspective. 25% of the world’s Internet users are to be found in Western Europe. The table below details the number of Internet users in the top 15 countries of the world, the majority of them are European.

Increased shopping on the web

The market for consumer trade via the Internet is still in a very early phase of development, but growth has been dramatic over the last few years. IDC[5] as well as Forrester is expecting an explosive development in Europe during the next few years.

Consumer trade on the Internet in Western Europe

By XXX, Forrester expects Europe's eCommerce market will be 50% of the US's, although with great disparities between particular countries. This growth is underpinned by several very strong drivers:

·  Free access, either directly or through price pressure on other ISPs.

·  Increased capitalization of internet companies.

·  Competition -- established net companies will gain local footholds; advanced Nordic e-firms will move into other European countries; and finally, local firms will get up to speed.

·  Increased sales -- Euro-consumers will start to fully take advantage of e-commerce.

IDC also estimate that the number of Internet users who buy and sell goods and services over the Internet will increase to 40 percent in December XXX. This may be considered to be a relatively modest growth, but as the total number of users is estimated to increase dramatically over the same period, it will lead to a rapid increase in eCommerce

Event tickets are suitable for online sales

Event tickets is one of the products considered to be most suitable for selling via the Internet. Surveys have shown that as many as 28%[6] of the consumers say that they already book tickets via the web and 90% of these consumers maintain that they will continue to do so in the future[7]. Event tickets also top the surveys that show which products/services are in demand from consumers via the Internet. 50% of the Swedes state that they would like to buy event tickets on the Internet[8].

Other surveys confirm that event tickets are a very Internet-friendly product. Forrester Research Inc. estimate that event tickets will be one of the products with the greatest share of sales via the Internet within the next four years, only surpassed by computer software and music.

Source: Forrester Research Inc.

Many of the aspects favoring the Internet channel are also valid for other electronic channels, such as the evolving WAP and digital TV. In parallel with the Internet growth, described above, we will also see a strong development in alternative digital channels.

Company overview

Vision

XXX is…

a combination of a good friend, a top-class entertainment magazine and a concierge at a luxury hotel. XXX provides a digital shopping mall for events, that strives to be more personal than your local bakery or tobacconist’s.

XXX ’s vision for the year XXX

·  XXX will be the market leader in Europe for event tickets via digital media and the obvious meeting place for users of Internet and other digital media who are interested in entertainment.