The document is a business plan for an entertainment management company called T.L Management Corporation. It includes sections on the organizational structure, marketing research, financial projections, and competition. The plan aims to provide quality entertainment services while focusing more attention on each client compared to other agencies. Market research surveys found clients want managers to prioritize them and negotiate the best prices. Financial projections estimate the company can earn over $1.3 million in its first year with 3 musicians and 2 models as clients.
1. Entrepreneurship: Business Plan
1
BUSINESS PLAN
25
Business Plan
Salexia Timmerman
Entertainment Management Company
TABLE OF CONTENTS
1. EXECUTIVE SUMMARY
1.2 Business Description
1. 3Business Summary
1. 4 Goals and Objectives for the Business
2. INTRODUCTION
3. ORGANIZATIONAL STRUCTURE
3.1 Personal Background
3.2 Organizational chart
2. 4. MARKETING
4.1 Marketing Research Survey and Analysis
4.2 Sales forecasting
4.3 Advertising
4.4 Competition
4.5 Pricing
5. ACCOUNTING
5.1 Income statement
5.2 Income statement Clarifications
5.3 Balance Sheet
5.4 Balance sheet clarifications
6. FINANCIAL OVERVIEW
6.1 History of financial statements
6.2 Financial Projections
6.3 Sources of Funding
7. CONCLUSION
8. REFERENCES
EXECUTIVE SUMMARY
3. Managing entertainers and talent has an attractive outcome and
ongoing luxuries but the work is a task in itself. It takes time to
develop, build and a following gain and maintains bookings for
all talents while keeping clients happy financially after your
commission. T.L Management Corporation is a reasonably
commission based talent management company that takes on
entertainers in music, television, sports, movies and models
with the primary focus on their worth per offer. The
establishment of T.L Management Corporation will provide
people with quality entertainment services and products. The
business plan will include; the organizational structure,
marketing, accounting, financial analysis and the operational
management steps.
The management of T.L Management Corporation has come up
with various strategies aimed at minimizing the risk of business
performance. These entail; minimizing the costs of
entertainment hence increasing profitability and revenues
through economies of scale. Many people will be employed in
the corporation to ensure that superior service has been offered
hence increasing the level of satisfaction. Building an enhanced
customer base will ensure efficient cash flow in the business.
The funding from investors in the business will help to build
cover expenses required in the initial operations of the business.
Since T.L Management Corporation deals with enhancement and
improvement of talent, the business shall ensure that the
audience has been involved in all aspects of the business.
The main purpose of T.L Management Corporation is to manage
talent while delivering quality entertainment for the people.
INTRODUCTION
When starting an entertainment management company I can
help clients earn more for their work in comparison to other
firms and booking agencies. After observing and being around
4. being around people working behind scenes and learning about
the disadvantages of management from the clients themselves, I
have gained an interest in starting my own company. I plan on
gaining insights based on clients from random companies and
coming up with a solution to the plan.
ORGANIZATIONAL STRUCTURE
Personal Background
Salexia Timmerman
I am currently a senior at Long Island University: Post Campus
and will be graduating in December 2013 with a Bachelors
Degree in Business, concentration Management. I have
experience in the business and management field, having to
manage a restaurant currently owned by myself with the help of
my father. I also had jobs in the past working at Target and a
movie store. I haven’t had much experience in entertainment
myself but I have been around and observing people that
manage entertainers and work for, if not owning labels and
management companies. Negotiating booking prices and making
sure someone is well accommodated is the most interesting, and
main focus of the job and along with networking and
communicating. I have efficient team working skills that can
make it easy to cope with the others in the job hence making it
possible to cope with the other members. Those are
characteristics and requirements of the job, along with the
persistence needed to push your client, who also wants to prove
themselves to the masses, and I enjoy doing them all.
Levar Lewis
Levar recently took a break after graduating high school and
plans on enrolling in college for the upcoming 2014 year. Aside
from school, he has a great ear for music and new artists
(usually artists that end up being largely famous) that are on the
5. rise from all over the country. These connections will make it
easy for T.L Management to adopt new strategies aimed at
increasing the number of people in the company. This will
attract more people hence creating a sustainable business
environment. He’s worked as Sales Associate for some watch
companies in Macys and is well skilled in communication and
attentive to what people are interested in and gaining this
information, which puts him at an advantage to go out and listen
for music artists that need management to start up.
Organizational Chart:
Salexia TimmermanLevar Lewis
60% Owner (250 Shares)
40% Owner (250 Shares)
Bookings
Bookings
Accounting
Accommodations
Contracts
6. Maintain the Website
Daily Operations
Daily Operations
MARKETING
Marketing Research Survey and Analysis
The target market for T. L Management Corporation is diverse.
We came up with a survey to a few potential clients to any
talent management/agency company to find out what kind of
manager-client relationship they would like. We handed out 25
and got back 10 within a week. The takers were a variety of
occupations from 2 rising actors, 6 music artists, 1 aspiring
model and a senior high school football player. This is because
these are the main people who want to have development and
also achieve positive growth. T.L management would also like
to increase its market share so as to promote its talents
especially when they join us with a current buzz. We made the
survey based on observations of what a lot of entertainers are
complaining about existing management teams not doing for
them and what they usually voice concern on.
Marketing Research Survey
Marketing Research Questionnaire
1- Strongly Disagree
7. 2- Disagree
3- Undecided
4- Agree
5- Strongly Agree
a) I am a....
Musician? Actor? Model? Athlete?
6 musicians, 2 actors, 1 model, 1 athlete
These are the main clients we are targeting to represent.
b) I feel a lot of managers don’t primarily focus on one client
long enough?
1
2
3
4
5
Six people chose 4, Three people chose 5 and one person was
undecided.
They primarily feel that managers have too many people to
work with and give them limited focus. And that is what TLM is
aiming to focus on more to compete with other management
companies. If the client doesn’t feel they are being focused on
then they wont feel they are getting their full worth in job offers
after a certain time.
c) Managers only care about their quick commission
1
8. 2
3
4
5
Nine chose 5 and the one remaining was undecided.
Most managers know they are automatically getting 15 percent
from every deal so if they have numerous clients that’s a
guaranteed check from at least one of them so they might not
take as much time to negotiate pricing as well after they feel
they would get a good enough cut for themselves.
d) I don’t feel I got the best price for my recent jobs?
1
2
3
4
5
Three chose 5 and the seven remaining were actually undecided.
This goes into what was stated before with price negotiation.
Some managers have too many clients to get good rates for so
they may lack in one area that they don’t in another and hat area
could result in a disgruntled client that feels they aren’t
improving as far as getting paid what they aim for.
e) I haven't quite focused on my goals from the beginning
Yes
A Little
No
3 chose Yes, 4 chose A Little, 3 chose No and noted there
wasn’t much time.
9. I asked one why they didn’t have much time and he said that
when he stated he told them what he wanted to achieve
independently as a personal goal but they just kept giving him
gifts and sending him on jobs that he never thought about
forgetting his main objective from the start.
f) Communication is a big key in management-client
relationships
1
2
3
4
5
All ten candidates chose 5
This is why TLM focuses on the client more and giving then the
opportunity to tell us what they want and how they feel certain
things are going so we can all be on the same page.
Sales forecasting
Information from the surveys helped us to conclude the kind of
services that clients look forward to getting from managers and
there was also small consideration of our company in the near
future. With adding on at least one mildly popular model and
one musician, within the first year there would be bookings
coming in for each client. On average entertainers get between
5-6 jobs per week and that’s in one focus (Magazine, Club
Appearances, Interviews, Features, Endorsements). If there were
multiple jobs a day per client that would be over 10,000 a day
after commission for the manager. With upcoming talent like
what we will start out with, the average appearance count is 1-2
per day. Clients, based on demand will have a base-booking
price set in comparison to their prior fees. New music artists
within our target market usually have a minimum booking fee of
10. $10,000, of which 15 percent is commission for management.
This fee is for either performance or appearances Models
usually get between $3,000-9,000 for starter magazines and
between $1500-10,000 for event appearances. Calculating the
days the clients would be taking a break would leave out 100
days in the year on average. With the expectation of 2 events a
day for each client at minimum and the growth throughout the
year to have 5 clients (3 musicians and 2 models) consistently
working the forecast would be:
Musicians: 3*10000*.15= $4500/day
Models: 2*1500*.15= $450/day
Yearly revenue: 4950*265= $1,311,750
If the predictions are worked out thoroughly this would all be
forecasted from at minimum: a 265 day work year for each
client with the minimum for each job and client specifically
calculated per day with the commission included. Each job will
be worked on from the managers’ representation of the client
and making sure both parties are satisfied and get what they
anticipated on.
Advertising
Since we’re starting from the beginning to build the company
up, we have to start getting noticed and show our knowledge of
the industries we want to manage in. The talent we manage will
already help to get notice on TLM along with social media and
local venues. The company will be listed on yellow pages and
white pages; flyers will go out promoting the artists along with
TLM backing their name. We will network with people who are
and/or know people who are looking for new management and
want to start with a fresh team with their goals being the first
11. priority. Business cards will be made and given out at
networking events that way aside from the talent themselves,
possibly an agent who has certain restrictions that wants to
expand who they are representing will pass the client on. We
will also look to advertise in event papers in the NYC area and
in the future sponsor events involving the industries we aim to
manage in after we are established enough to afford it.
Competition
Stiff competition is expected to be faced in the business.
However, T.L Management Corporation will develop several
strategies to stay at an advantage. Firstly, the management will
have a niche for itself through its commitment to develop the
talent it has. Unlike talent agencies that just make sure to secure
a gig for the client, management companies, like TLM focuses
on outlining a career path and building the network for the
company and the client as well. The management will ensure
that the talent has created value appealing to the audiences.
TLM has other competitors that have been around prior to the
start of our company and currently upcoming companies that are
based off of celebrities so they already have an advantage by
association. Other competitors are popular independent
managers that have been known for simply managing people
that are famous now. Some plans to compete with the other
companies are starting with price. The asking commission is 15-
25 percent determined by the client and the manager and how
well known they are. TLM plans on staying at 15 percent no
matter (unless suggested by the client or future circumstances)
what because we see it as the client is always working for both
of us and the manager is the channel to get that work displayed
to the masses. We don’t see the need to raise rates because of
sudden raises in booking prices, because if a dollar raises for
the client, it automatically raises for the manager so we don’t
need surprises in contracts.
12. Another area of competition is incentive, some managers are so
quick to negotiate a price and a place they don’t do the in
betweens like transportation to and back and hospitality at the
venue. We always work to get the client a way and back to and
from the job and we make sure they are treated well at the place
(food, drinks). Another competitor is the entertainer that
manages him or herself. They don’t have to worry about a
commission being charged and can negotiate their deals on their
own. But our plan is to show that sometimes you may need help
and can’t do it all alone especially once you make it bigger.
To keep our name standing we will (like I said before) sponsor
entertainment events to get people to notice our company
because down the line we plan on expanding.
Pricing
Several pricing strategies shall be applied depending on the
product that has been released to the market. We will use
various ways to make pricing and production decisions. Since
there are few firms in the market, T. L Management Corporation
has a competitive advantage. One of the ways in which the
company would decide its pricing is through the analysis of the
company’s demand. When the demand of the company’s
products/services is high, the company increases it prices.
However, it increases the price of its products up to a point
where the price matches with the price of the leading, so we
don’t lose potential business that may see it more fit going with
a more familiar company. Increase in prices increases
production (Longenecker, 2006). Factors for pricing include:
1) Demand of the client
2) Comparable fees of other options
3) Demand of other companies clients in comparison to ours
13. 4) Other benefits of the job
5) Future bookings between the manager/client and the inquirer
Every offer has to be solidified with a half down deposit to
compensate for any circumstances. For example if we book an
artist a show for 30,000 instead of a closer venue for 18,000 the
same night and the client gets there and the promoter couldn’t
come up with the other half before the show started, the night
wasn’t fully wasted and the client still made close to what they
would have made for a full show and a longer night. Either way,
a deposit is a safe way to secure the contract other than writing.
We don’t have a set salary as of yet because we want to wait
and analyze our official first year’s calculations so we can
establish how well the company is doing and how we can
exactly make use of the cash and profits.
After the first year or depending on the progress of the company
within the first year we can consider adding merchandise into
our product line. Starting with clothing and innovative
accessories like phone cases and hats with the company’s logo
and entertainers to show the faces we have of our company.
Aside from basic pricing and merchandise, there’s the pricing
for endorsements and other lucrative deals for out clients that
out them into other contracts. Commercials, clothing, shoes,
liquor deals, etc are all along endorsements that can be offered.
These areas are all based off of the client’s fame and the
amount of influence they’ll have on others.
ACCOUNTING
14. Since we aren’t operating from a physical location, there are no
property expenses we have to add into the mix. Everything will
be handled from our home and we will be meeting like any other
business meetings in restaurants and other outside but private
settings to discuss business. There are no tangible goods that
need to be purchased because we mostly work as providing a
service for now. Other items we will continue to use are our
phones and laptops using email and phone calls. Occasional
studio time for the musicians are included with contracts with
other clients that want to do music with ours and we are able to
cover extra costs for recording and other tasks that have to be
paid for the actors and models..
Income statement
REVENUES
Sales
$1,311,750
Expenses
16. $2,165
Net Income Before Taxes
$1309585
Taxes 40%
$523,834
Net Income
$785, $751
Income statement Clarifications
Sales were calculated from the minimum booking fees in a
space of 265 working days for each client, assuming there are 5
clients in the start up of the business. The revenue after
commission is deducted from each client per day would be up to
$4950 multiplied by the number of days working for the year.
Expenses include the yearly amounts for the phone bill, getting
the business cards made that are passed out aside from flyers for
events. There was also the advertising expense which we plan
on paying 60 dollars for one entertainment magazine spot to
advertise our company ad the talent with us. In total we have 3
17. magazines with reasonable prices. Other expenses include
entrance fees for us to be able to get into venues to promote or
look for new talent along with business meeting expenses since
we have no physical location, we’ll need to meet with clients
and potential businesses. We will also pay for the website to be
made that will also be secured with a separate payment to a
hosting website. And then of course we included our
incorporating fee of $195.
Balance Sheet
The following represents the projected balance sheet for T.L
Management Corporation:
ASSETS
Current Assets
CASH
Cash in bank
$3,000
Accounts Receivable
$655,875
19. NET WORTH
$133,361
Balance Sheet Clarifications
The cash balance of $3000 comes from the investment of each
owner by the percentages of the ownership of the expenses
before it was 3000 then we split the difference to add extra cash
for miscellaneous expenses ultimately being the three thousand
dollars.
Accounts receivable is the amount owed from promoters and
other contractual obligations after they paid the half deposit so
we can move forward with working with them.
655,875*2= 1,331,750 (the beginning sales)
Accounts payable is calculated with the phone expenses and
advertising during the year
500 + 180 = 680. The other costs are paid from the start to
being operating. And the taxes that are included in the income
statement of 40 percent.
FINANCIAL OVERVIEW
20. We used the income statement figures to analyze our break-even
point to see if we will be profitable and in what space of time
we can get to the break-even point. To find the Break-Even
point we divided the fixed costs by selling price minus variable
costs.
Fixed Costs
Selling Price-Variable Costs
2165/4950-500= 0.48651
To break even with expenses we see that we would have to book
half of an event, which would be one to make a bigger profit.
The break-even point is low since we already have low expense
costs of just the phones, website maintenance, advertising and
business cards.
Financial Ratios
Current Ratio = Current Assets
$657,875
=
1.25
21. Current Liabilities
$524,514
Profitability ratio
Profit Margin on Sales = Net Income = 785,751 = .599
Sales
1,311,750
TLM has a net income of $0.59 cents for each dollar of sales.
Operational Management
Tax Compliance:
We have filed for incorporating TLM through an incorporation
form in New York State, which is in the appendix. After we get
the confirmation, we plan on obtaining the Corporate Tax
Information Kit with the tax identification number. After that
we will get the seal because we do need to have a business
account to put the funds into.
Personnel:
T.L Management will be owned and controlled by the two
owners, Salexia Timmerman and Levar Lewis. There are no
current employees other than us. Many tasks will be already
planned out and split up between us to be done efficiently while
others will be worked on together if we can help each other on a
specific task at hand
22. Operation Procedures:
· While we will have clients in contract with us, to expand and
get more people to notice us we will network and attend events
to introduce the company and hand out business cards into
various industries that we look into managing. Flyers are
implanted when we have dates booked for our clients and we
want to promote those events so we make them to hand out so
people are aware of us and the talent.
· Our clients are pretty much like business partners because
they help us bring in the promoters and offers so they have the
chance to contact us at anytime in phone, email and in person.
· When booking anybody from TLM, they have to specify if
they are providing transportation and food/drinks at the
destination and any other requests before hand so our client
knows what they have in store for them.
· The client is our main priority so they have just as much a say
in bookings as we do and what they feel should happen. Half is
paid to book the client and then after the job, the other half is to
be paid.
· Promotions are going to be done through social media like
Twitter, Instagram and Facebook.
Sources of Funding
The company has the choice to look for the funding or fund it
on our own. The startup cost as a whole is $2165. This includes
advertisement, event entrance fees, business cards,
incorporation fees, having the website made and the
maintenance hosting for the website which is separate payment
itself every month and the first month’s phone bill which will
be a joint plan business line from ATT.
23. Entrance Fees: $500
Website: $250
Website Security: $15
Business Cards: $25
Advertising: $180
Incorporating Fee: $195
Phone Bill: $500
Business Meetings: $500
Ways that we can receive funding is to look into crowd funding
using websites like Kick Starter which helps pool together
people interested in a business plan that want to put money into
it after reviewing and concluding that the idea might be
profitable. There are also a lot of other websites similar that
help to generate buzz on an idea and bringing investors into it.
We can also apply for small loans with a reasonable interest rate
or pitch the idea to an investor that may want to be apart of the
business plan as well.
Personal savings will be used to finance 100% of the capital
needed to enhance business performance. The main advantage of
using this form of financing is to ensure complete ownership of
the business and to avoid liability on out part in case something
causes a conflict between all parties in just the beginning of the
venture. When a person finances the business, it is easy to gain
24. revenues and achieve revenue growth. Although this is a main
form of risk, the business tends to achieve success due to its
ability to raise revenues. Peer to peer lending through
partnerships to the business shall also be used, as sufficient
sources to raise capital required ensuring sustainability of the
business. In this formula, the business can borrow money from
friends at a fee in return after some time. T.L Management Corp
also considered financing from this source.
The other option for the management to consider is asset backed
lending. Since T.L Management Corp. has to have a number of
assets that are worth the consideration; the business will
capitalize on using them to raise capital for the business. Most
of the asset-backed loans are usually based on collateral value.
Many entertainment businesses are financed by consumer loans.
These types of financing range from mortgages, equity loans,
refinancing and personal loans. Banks nowadays don’t mind if a
person takes a loan and uses it for the purposes of a business.
This is because as long as the security is guaranteed, it is
difficult for such a loan to use the funds in activities that do not
generate income. For this reason, T.L management will chose
from a variety of options weighed in order to raise the capital
needed to start its business operations
The chosen source financing of the business will depend on the
risks involved, the taxes and the assets available in the
business. We looked over every option to go about financing
and came to the agreement that we can split the expense 60/40
like our ownership percentage that way we can start off on our
own and eventually after seeing how well we do and we gain a
market, we can then again consider other people’s money
(OPM).
Salexia: 2165*.60= 1299 + 417.50 (1760.50)
Levar: 2165*.40= 866 + 417.50 (1239.50)
25. The capital funding equals $2165 but we planned on splitting
the difference that makes it $3000 so we can have a small
amount of “petty cash” in case of an extra expense.
.CONCLUSION
Despite the increasing competition from the company’s
competitors, T.L Management Corporation will continue to
offer the best entertainment management strategies and value
our clients like we are the client ourselves when negotiating
offers. The idea is to manage clients just like other agencies and
firms but with more of the person in mind than the reputation
and only the company as a thought. We want to emphasize
paying more attention and keeping the clients goals as a priority
and respecting their talent.
With paying more attention to the steps n bringing the company
forth there are a few things to focus on more and work on like
the marketing since there’s no one specific client, we want to
diversify with different forms. But overall even with competing,
it will be a profitable company at least with the basic jobs being
booked and at most with the other deals that are possible.
References
Cones, J. W. (2010). Business plans for filmmakers.
Carbondale: Southern Illinois University Press.
Longenecker, J. G. (2006). Small business management: An
entrepreneurial emphasis. Mason (OH: Thomson.
Chorafas, D. N. (2007). Strategic Business Planning for
Accountants: Methods, Tools and Case Studies. Oxford: CIMA.
Print.
Elliott, R., & Percy, L. (2007). Strategic Brand Management.
Oxford: Oxford Press.
Martin, A. (2004). The entertainment industry is cracked, here
26. is the patch. Paris: Publibook.
http://smallbusiness.chron.com/start-entertainment-promotions-
company-2299.html
http://www.ehow.com/how_6357922_start-entertainment-
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