SampleBusinessPlan

OnlineEventPlanningCompany
CoastalBusinessStrategies

This business plan has been submitted on a confidential basis solely for the benefit of selected, highly qualified
investors in connection with the private placement of the above securities and is not for use by any other persons.
Neither may it be reproduced, stored, or copied in any form. Do not copy, fax, reproduce, or distribute without
permission.

Contents
I. Executive Summary ... Page 4
I.A
I.B

Objectives
Mission Statement

II. The Industry and the Company and its Products or Services... Page 4
II.A
II.B
II.C
II.D

The Industry
The Company and the Concept
Products and Services
Entry and Growth Strategy

III. Market Research and Analysis.. Page 10

III.A
III.B
III.C
III.D
III.E

Customers
Market Size and Trends
Competition and Competitive Edges
Estimated Market Share and Sales
Ongoing Market Evaluation

IV. Economics of the Business. Page 16

IV.A
IV.B
IV.C
IV.D
IV.E

Demand
Profitability
Revenue Growth
Fixed, Variable, and Semi-Variable Costs
Months to Breakeven

V. Marketing Plan.. Page 18

V.A
V.B
V.C
V.D
V.E

Overall Marketing Strategy

Pricing
Sales Tactics
Service Guarantee
Advertising Strategies

VI. Design and Development Plans Page 25

VI.A
VI.B
VI.C
VI.D
VI.E

Development Status and Tasks

Difficulties and Risks
Product Improvement and New Products
Costs
Proprietary Issues

VII. Manufacturing and Operations... Page 28

VII.A Operation Cycle
VII.B Geographical Location


VII.C Facilities and Improvements
VII.D Strategy and Plans
VII.E Regulatory and Legal Issues

VIII. Management Team Page 32

VIII.A
VIII.B
VIII.C
VIII.D
VIII.E
VIII.F
VIII.G
VIII.H

Organization
Key Management Personnel
Management Compensation and Ownership
Other Investors
Employment and Other Agreements, Stock Options and Bonus Plans
Advisory Board
Other Shareholders, Rights, and Restrictions
Supporting Professional Advisors and Services

X. Overall Schedule... Page 36

XI. Critical Risks, Problems, and Assumptions... Page 39
XII. The Financial Plan. Page 41
XII.A
XII.B
XII.C
XII.D
XII.E
XII.F

Pro Forma Income Statements

Pro Forma Balance Sheets
Pro Forma Cash Flow Analysis
Break-Even Chart
Cost Control
Highlights

XIII. Proposed Company Offering Page 51

XIII.A
XIII.B
XIII.C
XIII.D
XIII.E

Desired Financing
Offering
Capitalization
Use of Funds
Investors Return


I. ExecutiveSummary

EVentsisaneventplanningcompanythatallowsindividualsandbusinessesto
virtuallycreateaneventonline.Thehubofthebusinesswillbealargedatabaseof
vendors,suppliers,venues,etc.thatwillregisterwithustojointhenetworkinordertobe
searchablebyourcustomers.Inexchangeforthefreeadvertisementandbrand
positioningsuppliersandvendorsgainbyappearinginourdatabase,theywillprovide
theirproductorserviceatadiscount.Thisdiscountwillincreaseourprofitmarginsas
wellasprovidecustomersanincentivetoplanthroughus.

Thereiscurrentlyanunmetneedintheeventplanningindustry,whichwillbe
detailedfurtherinthisreport.TheSoutheastregionoftheUScurrentlycontainsmany
areaswithlittleaccesstoprofessionaleventplanners.Thereisalsocurrentlynowebsite
thatfullyallowscustomerstoviewadatabaseofsuppliersandvendors,comparethem,
andvirtuallycreatetheirownevent.

A. Objectives

Theultimateobjectiveofthecompanyistobecomeamajorcompetitorinthe
nationaleventplanningmarket.TheimplementationofthisbusinessplanwillenableE
Ventstopositionitselfinthecurrentmarket,rapidlygrowduetotheinnovativeconcept,
andeventuallyobtainlargesharesofthenationalmarket.Specificgoalsthatwillleadto
theachievementoftheseobjectivesare:

Developalargedatabaseofvarioussuppliers,vendors,andvenues
EstablishthebusinessintheNorthCarolinaeventplanningmarketthusgaininga
shareoftheSoutheastregion.
Providecustomerswithaninnovativewaytoplaneventsthathasnotpreviously
beenallottedtothem.
Provideexcellentcustomerserviceandbuildandmaintainstrongpartnershipsto
ensureloyaltyandsupportexpansion.

B. MissionStatement

Asacustomerfocusedbusiness,itisourgoaltoprovidehighqualityoptions
convenientlyandeasilyobtainedataffordableprices.Wewillstrivetocreateacompany,
database,andinteractivewebsitethatwillbeuserfriendlyandgiveindividualsand
businesseschoicesthatwereperhapspreviouslyunavailableduetofinancial,geographical,
ortimerestraints.

II.TheIndustryandtheCompanyanditsProductsorServices

A. TheIndustry

Theeventplanningindustryissensitivetoeconomicfactorsandhasrecently
experiencedadeclineindemandduetotherecession,droppinganaverageannualizedrate


of0.1%to$11.9billionbetween2005and2010.Thelackofdisposableincomeformany
resultingfromthisdowntownhasledtomanybudgetcutsacrosstheentireindustry.
Overallattendanceandeventdurationhavealsoseenadeclinesince2008.

Operatorsintheindustryarereducingtheirprofitmarginsinattemptstomaintain
currentclientbaseswhilesimultaneouslytryingtoattractnewbusiness.Industry
competitionhasincreasedwithreducedrevenue,andmanyfirmshavebeenforcedto
reducethesizeoftheiroperationstosimplysurvive.Theseeffectscanalsobeseenbythe
decreaseinnumberofemployeesateachcompanyaswellasthenumbertotaloperations
intheindustry.Between2005and2010,thenumberoffirmsoperatinginthetradeshow
andeventplanningindustrydeclinedatanaverageannualizedrateof1.5%.Employment
droppedbythesamerate.

Thefollowingarekeystatisticsandhistoricaldataofthetradeshowandevent
planningindustrysoverallperformancethroughoutthelastseveralyears.

RevenueGrowth

Year
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010

Revenue$Mill
8,887.6
9,406.9
11,113.0
10,851.3
11,018.9
11,430.8
11,640.9
11,925.7
12,548.6
12,964.9
12,624.6
11,820.0
11,853.o

Growth%

5.8
18.1
2.4
1.5
3.7
1.8
2.4
5.2
3.3
2.6
6.4
0.3
5


IndustryOverviewKeyStatistics

o Revenue:$11.9Billion
o AnnualGrowth0510:.1%
o AnnualGrowth10154.6%
o Profit:$474.1Million
o Wages:$3Billion
o Businesses:18,500

AnalysisofGeographicConcentration:

IndustryStructure

o LifecyclestageMature
o RevenuevolatilityLow
o InvestmentRequirementsLow
o IndustryAssistanceNone
o ConcentrationLevelLow
o RegulationLevelNone
o TechnologyChangeMedium
o BarrierstoentryLow
o IndustryGlobalizationLow
o CompetitionLevelHigh

B. TheCompanyandTheConcept

EVentswillbeanonlinecenteredeventplanningcompany.Thebasicconceptofthe
businessisthatacustomerwantingtoplananeventwouldlogontoourwebsite.From
there,theyhaveaccesstoanentiredatabaseofvendorsandsubcontractorsofevent
relatedproductsandservices.Theclient,fromtheprivacyoftheirownhome,canbegin


planningtheireventthroughourvirtualeventsite.Theywillsearchthroughdifferent
vendors,addthemtotheirlistandwatchtheireventunfoldbeforethem.Theycanalsosee
howchoosingvendors,locations,etc.willaffecttotalcostsaswellasgetvisualexamplesof
theappearanceoftheevent.

Thiscompanyresolvesanunmetneedintheeventplanningindustry.Manypeople
simplydonotknowwheretostartwhenplanninganevent.Theymaynotknowthenames
offloristsorcaterersandmanydontevenknowthedirectiontheywanttotaketheevent.
Aclientcansearchthroughtheentiredatabase,plan,andscheduletheentireevent
themselves,ortheycanopttomeetpersonallywithoneofoureventplannersfor
additionalguidanceandvision.Thatstaffmemberwillcatertotheclientandmakesure
thatvisionisfulfilled.

Vendorswillregisterwithourcompanyinordertoappearinourdatabase.Asthe
databasewillincreasetheirnotorietyandsales,wewillhavenegotiatedcontractswith
eachvendortoreceivetheirservicesatadiscount.Thisdiscountwillallowustooffer
savingstoourclientsaswellaskeepportionsofeachcontractforprofit.

Thetypesofvendorsinthedatabasewillbeafullarrayofthedifferentservicesand
entertainmentoptionsonewouldexpectforhostinganevent.Anexampleofsomeofthe
vendorsincludedare:Bars,bandsfromvariousgenres,cateringcompanies,party
suppliers,restaurants,miscellaneousentertainers,partycoordinators,partyorganizers,
etc.Theclientwillpayonebilltoourcompany(eliminatingtheproblemmanycustomers
haveoftryingtokeeptrackofallthepaymentstheyvemadeduringtheeventplanning
process).Therefore,wetakethebill,subtractournegotiateddiscount,paythevendors,
andkeepthedifferenceasprofit.Vendorscanalsocompeteinsomeformofreverse
auctiontobidforourclientsbusiness.Byofferingaonestopshop,weeliminatethe
hassleandproblemsassociatedwitheventplanningproblems.

C. ProductsandServices

EVentswillhaveseveralservicestoofferourcustomersforanytypeofevent.From
largecorporateeventstosmallbirthdayparties,thewebsitewillbepositionedtocaterto
everyneed.Someoftheeventsthatourcompanycanplaninclude,butarenotlimitedto:

Holidayfunctions
CorporateEvents
Weddings
BirthdayParties
PrivateParties
ProductorServiceLaunchParties
BarmitzvahsandBatmitzvahs
TradeShowsandConventions
Fundraisers
NonProfit
FashionShows

CocktailParties
CorporateOutings
Anniversaries
DiningParties
AndMore!

Venues
ThelistofvenuesinwhichEVentswillcontractwithwillconstantlybeupdatedasnew
vendorandsupplierrelationshipsarebuilt.AtEVents,wegivetheclienttheabilityto
choosefromseveralvenuesincludingeventspaces,restaurants,nightclubs,lounges,bars,
centers,andhotelstonameafew.Pricingwillbevenuespecificandwilldependonthe
timeofyear,thetypeofvenue,etc.However,byplanningthroughEVents,customersare
abletoenjoydiscountsshouldtheychooseavenuefromournetwork.Pricesvary,butwe
willrequire15%oftotalvenuecostsfromthesupplier.Thiscanbejustifiedbythefree
advertisingreceivedbybeingonourpreferrednetworklistaswellasincreasedbusiness
forthevenuefromourclients.Thus,wecanofferclientswhouseEVentsforplanning5%
discountsonallvenuesandstillmake10%profitoneachdeal.

Individualsvisitingoursitewillbeabletoviewallthevenuesperlocationalong
witharatingsystemfrompastcustomers.Thepricethatwillbeprovidedtoourclients
willalreadyincludethediscountspreviouslymentioned.Forexample,ifavenuewould
normallycost$1000,itwillbelistedat$950forourclients.Thisistoshowthemthe5%
discounttheywillenjoy.However,thevenuewillonlyreceive$850,or85%ofthetotal
cost,andEVentswillkeep$100,or10%ofthetotalcost,asprofit.Webelievethissystem
willcontinuetodrivepricedowninitiallywhenvenderstrytogainbusinessaswellas
whensubstitutesandcompetitionemergeastheytrytoretainthatbusinessgained.

Services

Asaonestopshop,EVentswillofferallservicestypicallyexpectedofanevent
planningcompany.Justaswithvenuereservation,wewillrequire15%oftotalcostsfrom
allvendorsandsupplierswhowanttogainaccesstoourclientsbyjoiningournetwork.
Thus,again,ourclientelewillreceive5%offallservicesandweretain10%ofthetotalcost
asprofit.

AtthetimeoftheinitiallaunchofEVents,wewouldliketohaveatleastthree
optionsfromwhichclientscanchooseforeachserviceoffered.However,asthebusiness
growsandmorevendorsandsupplierjointhenetwork,weexpectthenumberofoptions
togreatlyandrapidlyincrease.

Thisinitialthreeoptionchoicewillincludeastandardorbasicservice,avalue
addedservice(thiscouldbeminorupgrades,betterreputation,higherquality,etc.),and
finallytheluxuryserviceofferedatapricepremium.Thiswillallowclientstoquickly
determinewhattheycanexpecttoreceivewiththeirprojectedbudget.Afterchoosingone
ofthepackages,customerscaneasilyadddifferentoptionsandchoosefrommanyvendors
totailorthecampaigntomeettheirexactneeds.Ofcourse,asalways,Eventsplanning


staffisalwaysavailableforconsultationsandplanningassistanceshouldthecustomer
requestadditionaladvice.

Throughextensiveresearchandanalysisofthecurrentindustry,wehavebeenable
todeterminewhatvendorsandsuppliersineachoftheinitialthreepackages,Standard,
ValueAdded,andLuxury,mightcharge.Thepricesdonotreflectthat10%oftotal
costsEVentswillreceiveasprofitforthe5%savingswewillofferourclientsasincentives
toplanthroughourcompany.Thefollowingtableshowspriceestimatesfordifferent
services.

D. EntryandGrowthStrategy

Wewillfocusonsmaller,socialeventsinitially.Asalloftheteammembersarein
NorthCarolina,wewillconcentrateonthelocalstatemarketinthebeginning.Compared
toothercurrenteventplannersinthemarket,EVentswillprovideaninnovativewebsite,
EVents.com,thatallowsclientstoplantheireventsvirtually.Inaddition,ourwebsitewill
allowreverseauctionswherevendorswillcompeteforcustomerbusiness.Insuch
auctions,nomatterwhichvendorsreceivebids,theultimatewinnersareourcustomers.

Anothercompetitiveadvantageisthatvendorswillberequiredtoprovide5%
discounttoourcustomers.Tostart,wewillengageinsocialnetworkingsites,suchas


Facebook.Socialnetworkingsitesshouldbeveryeffectiveinfindingtargetcustomers.A
beginningpromotioncontestwithatopprizeof$15,000towardsaneventwillhelpusgain
enoughpublicitytocaptureinitialcustomers.Toobtainlargebusinessaccounts,wewill
usetheValueinUseAssessmenttoolstopersuadepotentialcorporateclients.Thiswill
occuroncewehavesustainedacrediblepositioninthelocalandsocialmarkets.

SinceourtargetcustomersaregenerallyfamiliarwithInternetandcomfortablewith
onlinetransactions,wewillkeepputtingadvertisingdollarstowardsonlinewebsitesand
socialmediaforums.Inaddition,contestpromotionswillbeofferedonlinefromtimeto
timetohelpmaintainaloyalcustomerbase.Consideringthefactthatmoreandmore
peoplewillhaveaccesstoInternet,wethinkthepoolofourtargetcustomerwillcontinue
togrowovertime.Allofthesefactorscancontributetoourgrowthinfuture.

III.MarketResearchandAnalysis

A. Customers

Thecustomersweprimarilytargetarethosewhomaynothavethetimeor
organizationalskillsneededtoplanaspecialevent,orthosewhoplaceahighvalueon
convenienceandtransactionease.Customerbenefitswillberealizedthroughthe
convenienceofonestopshopping,costsavingsthroughthecompanysnetworkof
vendors,andabilitytovirtuallyseetheentireprojectinadvance.

Changesindisposableincomeandbudgetsofcustomerswillaffectpricesensitivity
aswellasthenumberofaddonservicestheyarewillingtopurchase.Therefore,itcanbe
projectedthatcompaniesandindividualswithhigherdisposableincomesandlarger
budgetswilluseourservicesmorefrequentlyandwithmorevalueaddedservicesand
vendors.Theageofthepopulationandpopulationgrowtharealsorelevanttothe
industry.Datashowsthatindividualsbetween20to34yearsoldtendtobehighusersof
eventplanningcompanies.Thiscanbeexplainedbyincreasingincomes,budget
constraintsasindividualsofthisagetendtobebuyingassets,suchashouses,andstarting
families.Thisagegroupalsotendstohistoricallyhavethemosttimeconstraintsaswell.
Thiscanbeexplainedbylongerhoursspentinattemptstoadvanceacareer,timespent
withfamily,etc.

Between2006and2008,themedianannualincomeforfamiliesinNorthCarolina
wasabout$46,000.HouseholdsinRaleigh,thestatescapitalboastedmedianannual
incomesof$53,926,wellabovethestateaverage.Theaverageageofthepopulationwas
36.8years,andonly12percentofthetotalpopulationwere65yearsorolder.
Thefollowingchartshowstheagedistributionofhouseholdsbetween2006and
2008.Fromthechart,itcanbeestimatedthatbetween30to40%ofthestatespopulation
willfallintoourtargetagegroupof20to34yearsold.

10


TheAgeDistributionofPeopleinNorthCarolinain20062008

B. MarketSizeandTrends

In2010,theindustrysawabout$11.9billioninnationalrevenues.AccordingtoIBIS
World,theSoutheastregionoftheUSaccountedforapproximately20.3%ofthese
revenuesand22.5%oftheindustrysemployees.TheSoutheastistheindustryssecond
largestmarket,yetonly25.2%ofthenationstotalpopulationinhabitsthearea.The
followingisadetailedmapshowingthedistributionofindustrybusinessesacrosstheUS.
Fromthismap,itcanbeseenthatthereisnotamajorcompetitorinthenationalmarket
locatedinNorthCarolina.Thus,apotentialneednotbeingmetbythecurrentmarketis
identified.

11


Therecentrecessionhasgreatlyaffectedtheannualgrowthratesoftheindustry,
droppingthetypicallyseenaverageannualincreasesof4to5%toanaverageannual
declineof0.1%.However,recentstudiessuggestthatmostindustryprofessionalsfeelthe
recessioniscomingtoandendandpastgrowthratescanbeexpectedtoreturninthe
comingyears.

Theindustryisunevenlydistributedacrossthenationwithlowconcentration.
Whileconcentratedmarketscanbefavorable,wefeelthisleavesampleroomforgrowthin
theNorthCarolinaregion.

OneunimpressivetrendintheSoutheastregionsmarketisthatofhistoricallylow
employeewages.Forinstance,22.5%ofthenationalindustrysemployeesarelocatedin
theSoutheast,yettheseindividualsaccountforonly19%oftheindustryswages.

Currently,oneofthemajortrendssweepingnotonlytheeventplanningmarket,but
everyothermarketaswellisthatofsocialmediaintegration.Asmoreandmore
businessesandindividualsrelyonsocialmedianetworks,advertisingandpromotionvia
thesesiteswillalsogreatlyincrease.

AlongthesesamelinesisthedevelopmentoftheHybridEvent.Theseevents
combinebothphysicalandvirtualelementstoplanningevents.Throughhybridevents,
attendancecanbeincreasedbyallowingparticipationbothonthegroundandaroundthe
world.

Althoughitislargelybelievedthattheworstoftheeconomicdownturnhascome
andgone,themarketispredictedtocontinuetoseebudgetcutsthroughouttheremainder
of2010.Asubsequenttrendwillthenbeafocusoncostsavingstrategies.Thiscould
provetopotentiallybeagreatcompetitiveadvantageforourcompany.Industry
professionalsbelievethatfocuswillshiftfromattainingtheperksofcreativityandlarge
budgetstogettingmorebangforthebuck.

Withreducedbudgetsandgreaterattentiononcostsaving,itwillbeincreasingly
importantforprofessionalstoproveROI(ReturnonInvestment)fortheirclients.Thiswill
resultinmoreopenlinesofcommunicationbetweentheplannerandclientaswellasa
greaterneedofreassurancethattargetedbusinessobjectivesarebeingmetwhilegreater
returnsareseen.

Asthecostoftravelingcontinuestoincreasethroughoutthenation,itcanbe
predictedthatmorecompanieswillbeplanninglocalizedevents.Thus,itwillbeimportant
tobuildstrongerrelationshipswithlocalsuppliersandvendors.

C. CompetitionandCompetitiveEdges

Competitionforthisbusinesscanbefoundinanyofthenonvirtualeventplanning
companiesalreadyinthemarket.Forafee,aneventplannerishiredwho,inreturn,
contractswithvariousvendorsandhandlesalllogisticsandparticularsregardingthe
event.ThestrengthoftheseexistingcompetitorsisthattheycanprovidefullAZservices,

12


handlingvirtuallyallneedsoftheclientpersonally.Theeventplannertakesmuchofthe
burdenfromoftheclientandcreatesaneventtomeettheclientsrequests.Thisreduced
burdenonthecustomerisamajorstrengthisamajorfactorinthedecisiontohirean
eventplanningcompany.

Oneweaknessoftheexistingeventplanneristhatthecustomerincurshighcostsin
returnforspecializedandpersonalattention.Inaddition,theplanningprofessional
typicallyhasasetofpreferredvendorstouseforthevarietyofservices.Thesevendorsare
notnecessarilychosenthroughalowcoststrategy.Overall,hiringaneventplanning
businessshiftsthecontroloftheevent,aswellascontroloftheprice,outofthehandsof
theclient.Aclientinterestedinbeingmorehandsonwithgreatercontrolwillseeour
businessasthebestalternative.Withthelowerincomesandbudgetscurrentlyassociated
withthenationalmarket,hiringoutsideprofessionalstoplaneventsisnotalwaysan
option.

Intermsofcompetitionconcentration,IBISWorldestimatedthat,in2009,thetop
fourplayersintheindustryaccountedforlessthan1%oftheavailablemarketshare,
leavingtheindustrywithaverylowlevelofconcentration.
Accordingtothereport,theindustryisalsohighlyfragmentedwithalargenumber
ofsmalloperators.USCensusBureaudataindicatesthatthereareasubstantialnumberof
nonemployeroperatorsinthisindustry,whichcompriseover98%oftotalestablishments.
Duetothesmallbusinessnatureoftheindustry,thesefiguresarenotexpectedtogreatly
changeoverthelongterm.
BasisofCompetitionoutlinesthefactorsinfluencingthelevelofrivalrybetween
operatorsintheindustry(internalcompetition)andoperatorsfromotherindustries
(externalcompetition).IBISWorldanalysissuggeststhatcompetitioniscurrentlyhighand
canbeexpectedtocontinueincreasing.Thereportshowsthatcompetitionis
overwhelminglypricebasedduetothelargenumberofsmallbusinessoperatorsaswell
astherelativeeaseandlowcostofentry.Thecapitalrequirementsforstartinga
businessarehistoricallylow,asistheinitialcostofentry.
AccordingtoIBISWorld,majorplayersintheindustryoftenrepresentlarge
corporateclientsandregionaltourismdestinations.Nearlytwothirdsofexistingfirms
havelessthanfiveemployeesand,althoughsoleproprietorsaccountforapproximately
80%ofindustryenterprises,theycurrentlygenerateonly6.5%oftotalrevenue.
Itisexpectedthatthenumberofindependenteventplannerswillcontinuetoriseas
aproportionoftotalindustryactivity.
Muchofthisindustryisbasedonprofessionalnetworking,andsocialnetworking
sites,suchasLinkedInandFacebook,havemadethismucheasier.Whiletheimpactof
thesesitesisexpectedtoberelativelyminimal,itcouldimpactlongtermdemand.

13


D.EstimatedMarketShareandSales
Althoughtheeventplanningindustryasawholeislargeintermsofdollars,itis
heavilyfragmentedbecauseserviceproviders,i.e.caterers,stylists,photographers,music
bands,etc.,tendtobesmallandindependentlyoperated.Typically,mosteventplanners
providesetpackages,givingcustomersfewopportunitiestochoosetheirfavorite
providers.
Ourproductwillbedifferentinthatcustomerscanbuildtheireventpackagesprior
toworkingpersonallywithaplannerandmaintaintotalcontrolofwhichservicesand
vendorstouse.Byempoweringcustomersandprovidingtoolstohelpthem,ourbusiness
willincreasecustomersatisfactions,buildstrongrelationshipwithusers,andimprove
customerretention.Inaddition,therearealwayscostconsciouscustomerswhowantto
lowprices,butarelimitedbytheirtimeandnecessaryknowledgetonegotiatewith
differentserviceprovidersdirectly.Forsuchcustomers,ourwebsitecanprovideareverse
auctiontoletserviceproviderscompetesothatcustomerscanreceivethebestpossible
ratesavailableinthemarket.

WiththedevelopmentofInternetandmobilecomputingdevices,peopleingeneral
arebecomingmorecomputersavvy.Thetrendisthatmoreandmorepeoplewillbe
comfortableonlineshoppingandtransactions.OurwebsitewillbringtheInternettothe
eventplanningmarkettomeetthesedemands.

SinceweplantofocusontherelativelysmallSoutheastregionbeforeexpanding
nationwide,ourinitialmarketsharewillbesmall.However,thisnumberisexpectedto
increaseatarapidpacegivenouruniquecompetitiveadvantages.ThefollowingTable
showstheprojectedmarketsharesforthenextthreeyears.

Marketsharein
percentage
Marketsharein
dollars

2011
0.1%

2012
0.4%

2013
1%

X1

X2

X3

Forthenextthreeyears,ourexpectedannualgrowthrateisaround115.44%.It
mayappeartobeanunusuallyhighfigure,butmanystartupsintheindustryhaverealized
similarrates.Duetoourhighdifferentiation,weexpecttoseerapidgrowth.

14

E. OngoingMarketEvaluation

Between2010and2011,thetradeshowandeventplanningindustryisexpectedto
reboundascorporateprofitsbegintoriseagainandtheeconomystabilizes.During
periodsofeconomicgrowth,thenumberandlengthofeventsincreaseascompanieshave
moremoneytospendonmarketingactivitiesandevents.Thisgrowthwillstimulate
profitsforplayersintheindustryaswellasincreasethemarketingbudgetsfor
conventionsandexhibitions.Economicimprovementwillhelpwithbusinessandconsumer
sentimentandwillresultinanincreaseinthenumberofshowswithfewercancellations.
Between2010and2015,itisforecastedthatindustryrevenueswillincreaseatanaverage
annualizedrateof4.6%.Thiscanbeseeninthetablebelow.

Year
Revenue$Mill
Growth%
2010
11,853.0

2011
12,484.0
5.3
2012
13,109.0
5.0
2013
13,627.0
4.0
2014
14,203.0
4.2
2015
14,812.0
4.3
2016
15,182.3
2.5

Thefollowingchartsummarizespastandprojectedprofitscomparedtowagesas
wellastheratioofemployeesperestablishment.

15

IV.EconomicsoftheBusiness

IndeterminingifEVentwasaviablebusinessventure;ourmanagementteamhad
tolookattheeconomicsoftheentireindustry.Researchingmarketconditionsofthe
overallindustryhasledustovaluableinformation.WhileinitiallydevelopingEVent,the
foundingteamresearchedUSindustrydatatoviewstatisticsandanalyzethecurrentand
projectedconditions.

A. Demand
Theeventplanningindustryissensitivetoeconomicfactorsandhasrecently
experiencedadeclineindemandduetotherecession.Overall,theindustrysufferedadrop
atanaverageannualizedrateof0.1%between2005and2010leavingtotalindustry
revenuesatabout$11.9billion.Eventhoughthisstatisticisnotfavorableforourbusiness,
industryexpertsexpectdemandtoincreaseastherecessioncontinuestoshowsignsof
stabilizing.Therefore,wepredictthatweareenteringthemarketataperfecttimeto
realizeprofitsinatimeofeconomicrecovery.Asbusinessesbegintoincreaseprofit
marginsandattractnewcustomers,thedemandforeventsandpartyplanningservices
shouldjumpwiththebudgetincreasestypicallyassociatedwithincreasedprofitmargins.

B. Profitability

Operatorsintheindustryarereducingtheirprofitmarginstomaintaintheircurrent
clientbasewhilesimultaneouslytryingtoattractnewbusiness.Overthelastcoupleof
years,profitabilityhasbeenlowduetotherecession,buttheservicesofferedarestill
desiredbybusinessesandclientswhenhostinganevent.In2009,totalrevenueswere
about$11.9billionwithtotalprofitsof$474.1million.Weexpectbothrevenuesand
profitabilitytoincreasewithinthenextseveralyearsastheeconomyimprovesand
disposableincomeincreasesallowforindividualstomakemoreuseofourservices.

16

C. RevenueGrowth

Theeventplanningindustryexperiencedhighgrowthinearly2000withan18.1%
increase.Theindustryhadasmalldecreasein2001of2.4%,stabilizingwithconsistent
revenuegrowthuntiltherecessionin2008.Thisyear,theindustryhasexperienced0.3%
revenuegrowth,andweexpectrevenuetocontinuetoriseasmarketconditionsimprove.
ThewebpresencecreatedwithEVentswillbeauniqueoffering,andweprojectthe
companywillsurpasscurrentonlineeventplanningcompaniesrevenuesduetoour
productselection,innovativeidea,andpricingformulaforpotentialcustomers.

D. Fixed,Variable,andSemiVariableCosts

Themajorityofourcostswillcomefromrunningandsupportingourwebsite,
which,formanycustomers,willserveasourstorefront.Themostsignificantcostswillbe
forcustomersupporttoensuresatisfactionandbuildcustomerrelationships,vendor
supporttokeepproductsandservicesavailable,webhosting,andmaintenance.Ourcosts
arereducedduetothefactthatweareathirdpartynegotiatingbetweenvariousvenders
andclients.EVentswillinitiallyneedtospendasubstantialamountonadvertisingto
pushourpresenceinthemarket.

Advertisingwillcontinuetobeanecessaryexpenseincurredasourmarketshare
increases.Wewillimmediatelyforward90%ofcashreceivedfromcustomerstovendors
throughanautomaticpaymentsystem.Becausewedonotactuallyholdthefundsinour
system,theremaining10%isusedasourrevenuebaseforcashflowandotherfinancial
projections.Mostofourexpensescanbeclassifiedasfixedcosts;andtheaveragemonthly
fixedcostisexpectedtobeabout$132,600duringthefirstyear.Wefindthatthecapital
neededtostartourbusinessandexecutedailyactivitiesisrelativelylow,especiallyifwe
haveseveralstorefrontsspreadthroughoutthecountry.Thismeansthatdominatingthe
onlinemarketwillbevitaltothecompanyssuccess.

E. MonthstoBreakeven

ChartA

ChartB

17

Theaveragemonthlybreakevensalesamountis$132,600,whichisequaltothe
totalamountoffixedcosts.Thisamountseemstobehighforournewventureforthefirst
monthbutourinitialequityinjectionwillhelpsatisfyourcashflowneeds.Wedonot
projectthatwecanachievethatamountofsalespermonthduringmostofthefirstyear.
Asaresult,wemaylosemoneyinthefirstyear.

ChartsAandBshowourbreakevenfigures.ChartAshowsbreakevenforthefirst
year,whileChartBprojectstheaveragebreakevenforeachmonthin2012.Assalesgrow,
weplantoincreasespendingonlyintheareasthatsupplementsalestoinsurethatthe
companycansupportrapidgrowth.Theaveragemonthlyfixedcostinthesecondyearis
estimatedat$244,690.Wecalculatethatthebreakevenpointshouldbereachedinthe
secondquarterin2012.

V.MarketingPlan

A. OverallMarketingStrategy

TheTargetMarket

Thetargetmarketsfortheeventplanningindustrycantypicallybedividedintotwo
categories:Thesocialmarketandthecorporatemarket.
Corporateeventscanincludesucheventsascharityfundraisers,galas,athletic
competitions,tradeshows,conventions,andparties.Themarketforcorporateeventsis
verylargeascompaniesplacehighvalueonplanningeventsthatwillbelongremembered
anddiscussed.Therefore,itistypicallyrecommendedthatthosestartingnewevent
planningcompaniesbeginbyplanningsocialeventstogainclienteleandexperience.
Consideringthenatureofourbusiness,itcanbeprojectedthatthemajorityofourinitial
businesswouldcomefromindividualsratherthancorporations.

Thesocialmarketcanincludeweddings,birthdays,parties,reunions,etc.According
tostatistics,mostpeoplewhoutilizeeventplannersforsocialeventstendtoresideinthe
middletoupperincomelevelsandhavesomedisposableincome,butperhapsnotmuch
sparetimetospendplanning.Theseclientstypicallyhavehouseholdincomesofatleast
$60,000.

Whileourbusinesswillstillfocusonthesetwolargecategoriesoftargetmarkets,
ouraudiencecouldprovetovaryslightlyfromthesenorms.Forinstance,ourclientswill
bethosewhowantdesiretheadvantagesofaneventplanner,butperhapsdonothavethe
disposableincomethatisnormallyassociatedwiththeabilitytohireone.Itshouldbe
importanttonotethatourbusinessisnotforthosewhocannotaffordeventplanningatall.
Thoughthereareinitialcostsavingsandadvantagesbybeingabletovirtuallyviewan
eventasitunfolds,ourclientswillstillmostlikelybemeetingwithpersonalevent
planners,whoserveasthemiddlemanbetweenthecustomerandprospectivevendors.

18

Wedoexpecttoservemoresocialcustomersthancorporate,atleastintheinitial
phasesofthebusiness.However,astechnologyandtheInternetcontinuetoadvance,we
hopethatmorecorporationswillturntoservicessuchasourstoplantheirbusiness
events.
SWOTAnalysis

StrengthsandWeaknesses(InternalAnalysis)andOpportunitiesandThreats(External
Analysis)

ThebasisofanySWOTanalysisistheenvironmentalscan.Byconductingextensive
researchoftheindustryandmarkets,wecanbetterunderstandourpositioninthe
industry,aswellasdiscoverstepsthatneedtobetakeninordertobecomemajor
competitors.Therearemanywaystoconductthisresearch.Oneofthekeystepswewill
takeistoanalyzethemarketinordertodeterminethelimitsortradingareaofour
business.Sinceweassumewewillbestartingwithsocialeventstogainclientele,wecan
estimatethatourtradingareawillbelocalatfirst.

However,oncewegaincorporateclients,weprojectthattradingareatogrowtoa
nationallevelovertime.Whenthishappens,ourmarketwillexpandfromthestateof
NorthCarolinatotheentireUS.ByaccessingtheBureauofLaborsConsumeExpenditure
Survey,wecangaininformationabouthowindividualsintheUStendtospendtheir
money.Thiswillallowustoseewhereouradvertisingandpromotiondollarswillbemore
efficientlyspent.

Afterscanningtheenvironment,moreinsightcanbegainedbyinterviewing
potentialclients,conductingsurveysandleadingfocusgroupstogainaccesstothe
opinionsofconsumers.

StrengthsandWeaknesses(InternalAnalysis)

Oneofourbiggeststrengthsintheinitialphaseofourstartupwillbetheflexibility
thatmanyentrepreneursrealizewiththeirsmallsize.Theabilitytomakequickdecisions
forourclientsandforourbusinessasawholecouldprovetobeakeyfactorinoursuccess.
WealsohavetheadvantageofutilizingnewtechnologyandtheInternetinwaysthatmany

19


eventplanningcompanieshavenotdone.Therefore,wehavethepotentialtoreachafar
greatermarket.ByofferingtheconvenienceoftheInternet,thesocialmarketwillhave
accesstoeventplanninginareaswheretheyhavepreviouslynot.Forinstance,studies
haveshownthatapopulationbaseofatleast50,000isneededtosupportanevent
planningbusiness.Therefore,thosewithsomedisposableincomewhohappentolivein
smallertownsmaynothavehadtheoptiontohireaneventplannerbecausetherewill
typicallynotbeonelocatedinthatregion.

Oneofourbiggestweaknessescouldprovetobegainingclientele.Wearestartinga
businesswithoutextensiveeventplanningexperienceoraclientbase.Wewillhaveto
workhardertobuildcustomerrelationshipsthanwewouldifwewerestartingabusiness
afterworkingintheindustryforawhilewithrelationshipsalreadyestablished.Wewill
alsoneedtoworktobuildourimage.Thoughwedoofferaservicethatfocuseson
convenienceandaffordability,wedonotwanttobeperceivedascheap.Weneedtobe
viewedasaluxury.Ourmarketingplanwillneedtotakethisintogreatconsideration.
Clientswillneedtobeensuredthattheyaregettinghighqualityservices.Itwillbe
importantforthemtorealizethatweareabletorealizecostsavingsduetothenatureof
businessandnotbecausequalityissacrificed.

OpportunitiesandThreats(ExternalAnalysis)

DataaccessedthroughIBISWorldgivesgreatinsightintothecurrentmarket.One
ofthegreatestopportunitiesanewbusinesscanembarkuponisanunfulfilledconsumer
need.LookingatthelowconcentrationofeventplanningservicesinNorthCarolina,itcan
beseenthereisaneedthatisnotbeingmet.Weareoptimisticaboutthisneedbecause
SoutheastregionoftheUSbringsinthesecondlargestrevenuesintheindustry.However,
asmostoftheselargeplayersarelocatedinGeorgiaandFlorida,itcanbedeterminedthat
NorthCarolina,withitsevergrowingurbanization,cangreatlybenefitfromamajorplayer.
Also,byaccessingnewtechnologiesandtrends,wehavetheopportunitytoreachalarger
marketthantypicallywouldhavebeenpossibleinpreviousyears.

Itwillbeimportanttorealizethatathreatexistsintheemergenceofsubstitute
services.Wecanexpectanumberofcompaniestooffersimilarservicesafteroursgains
notoriety.Companieswithlargeclientbasesandloyalfollowingscouldposeathreat
shouldtheybegintooffersimilarproductsandservices.Shouldwehavetocompetewith
othermajoreventplanningbusinessesforaccesstovendorsandsuppliers,itcouldposea
hugethreattoourcompany.Eventplanningcompaniesarenotouronlycompetition.
Florists,caterers,etc.oftenwilltakeoneventplanningresponsibilitiesonthesideinorder
tobringinadditionalrevenues.
GoalsandObjectives

Currently,theSoutheastregionaccountsfor20.3%oftotalrevenuesintheindustry.
Withlowconcentration,thereareonlyafewmajorcompetitorsinthemarket.Even
thoughsoleproprietorsaccountfor80.2%ofthebusinessesintheindustry,theyonly
accountfor6.5%oftotalrevenues.NorthCarolinacurrentlyonlycontainsabout1.7%of
theenterprisesinthecountry.Fromthisdata,wecanestimatethattheNorthCarolina
marketcurrentlyaccountsforapproximately$40millionofannualrevenues.

20

Afterestablishingourbusiness,ourfirstmajorgoalwillbetobecomethe
competitorforNorthCarolina,gainingasignificantshareofthelocalmarket.Thiswillnot
onlyincreaseourpositioning,butwillmostlikelyincreasethestatesshareasoverall
revenuesincreasefromourbusinessincreases.

ThesecondgoalwillbetoexpandoperationsthroughouttheSoutheastregionand
becomeamajorcompetitorinthelargermarket.Wehopetogainarespectableportionof
the20.3%sharetheSoutheastregioncurrentlyholdsoftheentireindustry,possibly
increasingthatnumberaswellwithourindividualgrowthinsizeandrevenues.

Finally,wehopetoexpandnationallywithoperationsthroughouttheUS,joiningthe
smallgroupofmajorcompetitorsinthenationalindustry.

Specificforecastsforaproduct(s)orservice(s)

AccordingtoIBISWorld,industryrevenueisexpectedtoincrease5.3%in2011to
about$12.5billionastheeconomycontinuestoimprove.Industrypricescanbeexpected
toincreaseasdemandforeventplanningrises.However,ourclientswillalwaysbeableto
enjoythediscountswecanofferthroughthenatureofournetworkofvendorsand
suppliers.

B. Pricing

Inordertomaintainacompetitivepositioninthemarket,weareinitiallytakinga
lowcostprovidermarketingstrategy.Aspreviouslydescribed,allcustomerswillreceive
a5%discountonallproductsandserviceswhenpurchasedthroughoursite.Thisfigure
doesnotaccountforinstancesinwhichareverseauctionbidmightoccurforcertain
clientelebusiness.

Asclientbasegrowsandlarge,businessaccountsaregained,weexpectournetwork
ofvendorstocompeteforcustomerbusiness.Ourwebsitewillallowreverseauctionsto
occurbetweenbuyerandselleratthesetimes.Thiswillcontinuetodrivedownpriceand
giveusacompetitiveadvantageoverothereventplanningcompanies.Inordertoensure
thatwestillmakeprofitsinthesesituations,wewillstillrequire10%oftotalcostsfrom
eachsupplierorvendor.

C. Salestactics

EVentswillnotonlyhavetosellitselftopotentialclients,buttosuppliersand
vendorsaswell.Whileadvertising,promotions,andpublicrelationswillgainthemajority
ofourclients,especiallyindividualsplanningsocialandpersonalevents,different
strategieswillbeneededtopromoteourbusinesstoothercompanies,i.e.thevendorsand
suppliers.Itwillbeextremelyimportanttobuildlongtermrelationshipswiththese
partnersinordertoretaintheirservicesonourdatabaseascompetitionbeginstoincrease.
StrategicB2BMarketingtacticswillbenecessaryinlocating,forming,andmaintaining
thesebusinessrelationships.

Weplantousepersonalsellingandrelationshipbuildingtechniquesinorderto

21


obtainandretainthebusinessoftheselargeaccounts.Aneffectivemarketingtoolthatwe
willimplementwillbethatoftheValueinUseAssessment.Theseassessmentsare
extremelytimeconsumingandcostlytoperform,butthebenefitsgreatlyoutweighthecost
iftheaccountiswonand,moreimportantly,potentiallylonglastingandprofitable.For
theseelitefew,research,analysis,fieldassessments,surveys,andinterviewswillbe
conductedinordertogainunderstandingoftheirmarketpositioning,needs,wants,etc.
Throughthis,wewillbeabletodeterminewhatspecificbusinesselementsandfactors
theseclientsbelievetobeofhighvalue.

Forsomeclients,pricewillbethemostimportantfactor.Othersmightplacehigh
importanceoncollaborativerelationshipswithopenexchangeofindustryknowledge.No
matterwhatthecustomervalues,theassessmentitselfisanincentivetochooseour
businessasthecustomergainsaccesstoallinformationwefindduringtheresearchand
analysisprocess.Manytimestheylearninformationabouttheirowncompanypreviously
notevenknowntothem.

Aftertheassessment,avaluewordequationiscreatedforeachelementinwhich
thatcustomerplaceshighvalue.Thisexpressesbenefitswecanofferinmonetaryterms.
Forinstance,byidentifyingnextbestalternativestoourcompany,wecancreateequations
toshowcustomersexactlywhatthesavingswouldbebychoosingourcompanyora
specificvendoronourlistoverthenextbestalternative.Anotherusefulequationmight
showthepotentialpartner,inmonetaryterms,thesavingsthatwillberealizedthroughthe
partnershipbyeliminatingsomeofthetime,money,andeffortusedtoattempttotapinto
newmarkets,findnewcustomers,advertise,etc.

Onceacontractiswon,itwillbenecessarytomaintainacloserelationshipwith
continuous,openlinesofcommunication.Itisestimatedthatnewanalysisandresearch
shouldbeconductedatleastonceperyearforeachofthesetoptierclients,and
informationandvalueequationsshouldbeupdatedascompetitionandsubstitutes
continuetoemerge.

Ontopofthe5%discountallclientsreceivesimplybychoosingvendorsinour
network,promotionswillbeheldthroughouttheyearshowcasingdifferenttypesofevents
orfeaturedvendors.Thesepromotionswillbedirectedtowardsobtainingnewclienteleas
wellasgivingcurrentcustomerswhoperhapshavenotutilizedourservicesinsometime
anincentivetoreturntothesiteandviewnewoptions.

D. ServiceGuarantee

Inordertoensurecustomersatisfactionand,inturn,retainclientsandbuild
relationships,weplantooffercertainguarantees.Ifaclientisunsatisfiedwithacertain
vendororsuppliertheyhavechosen,itwillbestandardpolicythattheywillbereimbursed
forupto40%ofthecostsofthatparticularsupplier.Inaddition,dependingontheseverity
oftheissuethatledtothenegativeperception,differentactionswillautomaticallybe
taken.Theseactionscouldbethatthevendorsratingonoursiteislowered,complete
refundstotheclientinquestionmaybeordered,or,inthemostseveresituations,they

22


couldberemovedfromourpreferrednetworkcompletely.

Whilethisstrategywillhelpprotectthecompanyagainstcustomerswhochooseto
defectbasedondissatisfactionwithvendors,itwillbeimportanttobuildandmaintain
supplier/vendorrelationshipstogiveeachvendorincentivetoperformwell.Thisis
important,asitcanbecostlytoretainacustomerwhoisnotsatisfiedwithsomevendors
onourlist.Also,selectingwhichbusinessesareaddedtothedatabasewillneedtobean
extensiveprocesstoensurethateventhoseclientschoosinglowercost,standardservices
willreceivehighqualityresults.Wewantourclientstoalwaysfeeltheyaregettingtheir
moneysworth.

E. AdvertisingStrategies

Theadvertisingpromotionstrategywillbefocusedmostlytowardsonlinewebsites
andsocialmediaforums.Advertisingdollarswillinitiallybespentonpushmediums
andpromotionalwebsitestogenerategeneralawareness.Publicrelationswillalsobe
anintegralpartofourinitialstrategy.PressReleasedistributionsiteswillbeutilizedin
ordertoincreasenotorietyandhopefullyencouragelocalmediatowritearticlesand
opinionpiecesaboutourbusiness.Longtermadvertisingdollarswillbeusedon
nationalwebsitesandadsinprintpublications,potentiallyexpandingtotelevisionads.

ContestPromotion

Thecompanywillkickoffbyholdingacontestinwhichthewinnergetstheirevent
plannedatnochargeupto$15,000.Theseservicescanbeputtowardtheeventorpartyof
thewinnerschoice.Thecontestwillbelaunchedthroughthecompanywebsite,and
promotionswillbeplacedonvariousvendorwebsites,Facebook,andTwitter.Thecontest
willrunforsixweeks,atwhichtimeawinnerwillberandomlypickedfromallregistered
participants.Aheavyfocusonpressandpublicrelationswilloccuratthistimeinorderto
ensureoptimalparticipationintheeventandtogainnotorietyfortheoverallbusiness.
Pressreleasedistribution,networking,andadvertisingcanbeestimatedat$2,000.

Thepromotionwillnotonlygaingreatinitialnotoriety,butwillbeintegralin
buildingourinitialclientdatabase,aseverycontestparticipanthastoregistertheir
information.Totalexpectedcost:$17,000

SocialMedia

Thecompanywillcontinuetonetworkandpromoteitsservicesthroughtheuseof
socialmediaplatforms,suchasFacebookandTwitter.Ablogonourwebsitewillbe
writtenandupdatedweeklytopublishusefultipsandgeneraladviceonplanning.Updates
totheblogwillbepostedregularlytothecompanysFacebookandTwitteraccounts.The
blogstorieswillbetaggedandcontainvariouslinkstohelpbuildsearchengine
optimizationforthecompanyswebsite.Userswillalsobeabletochatthroughforums
witheachother.Theseforumswillallowcustomerstopostpicturesoftheirevent,rate
vendors,giveadviceandtips,etc.

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Totalcostforsocialmediaadvertisingisminimal.AdvertisementsonFacebookare
purchasedusingCostperClickanddailybudgetscanbesetandchangedatanytime.
Currently,itisnormaltospendupto$40perweekadvertisingonFacebook,dependingon
thenumberofclicksanadreceives.Therefore,annualcostscouldbeestimatedforthefirst
yearataround$2,000.

GoogleWordAds

ThecompanywillinvestadvertisingdollarsintopurchasingGoogleAdWordsso
thatthecompany'swebsitewillappearinsearchengineswhenpeoplearesearchingfor
keytermsrelatedtoeventplanningservices.Thispullleveladvertisingwilldrivequalified
traffictothecompanywebsiteandensurethattheyareindividualsactivelysearchingfor
eventplanningservices.

DirectMarketing

BycreatingaListserv,potentialandcurrentcustomerscansignuptoreceive
emailsandnewsletters.Specials,updates,news,andeventswillbesentdirectlytothese
clients.Dependingonthecontactlistsizeandhowfrequentlyemailsandnewsletterswere
issued,costcouldvary.Forinstance,untilthenumberofpeopleonourlistreaches500,
emailblastsandonlinenewsletterscanbesentatanytimefornocost.However,oncea
largerlistisachieved,itwillbenecessarytopurchaseadatabasesystemthatwillallowus
tomonitorthelargenumberaswellasensureautomaticresponses,massemailingsending,
creativedesigntechniques,etc.

TargetedAdvertising

Nichewebsitesandmagazineswillbeagreatwaytoreachourtargetaudience.For
instance,TheKnotisabridalmagazineandwebsite.Localandnationaladvertisingcan
bedoneontheirsiteinordertoreachthoseinneedofsocialeventplanning.

Distribution

Asamajorityofourbusinesswillbeconductedviaourinteractivewebsite,the
majorityofourproductsandserviceswillbedistributedonline.Personalattentionand
eventplanningconsultationwillbeginwithinitialinofficeconsultations.However,
personalattentiondetailcanalsobedistributedthroughthewebsite.Personalmeetings
willbeforthoseclientswhorequireadditionalhelpandthosewhoarewillingtopaythe
costassociated.Wepredictthatourhighend,large,strategiccustomerswillbethemost
likelytotakeadvantageofthesephysicalservices.

DistributionforallmarketingandpromotionalmaterialswillinitiallyfocusonNorth
Carolina.Onceweareestablishedasthemajorcompetitorinthestate,wewillexpandthat
focustotheentireSoutheastregion.Pressreleaseswillbewrittenaboutthecompany,its
launchpromotioncontest,etc.anddistributedtothemajorpressreleasedistributionsites

24


(i.e.PRWeb,BusinessWire,andPR.com).Theadvantageofthesesitesisthatgeographic
areasofdistributioncanbechosen.

Fromthis,pressandmediainNorthCarolinawillhaveaccesstotheinformationand
wewillnothavetoworryaboutwastingcostonpressinotherareaswhowouldnotbe
interestedinthesubject.Wefeelthiswillbeoneofourmosteffectivedistributiontoolsas
pressinalltowns,evensmallerones,canpickupthestoryandwritearticlesandopinion
piecesonEVents.Thiscouldproveespeciallyhelpfulinreachingthosetownswithfewer
than50,000peoplethatmaynothaveaccesstoeventplanningservices.

Aspreviouslymentioned,extensivefocuswillbeplacedonadvertisingthrough
nichewebsitesandmagazines.Themajoradvantageofthistypeofadvertisingisthatthe
readerorvisitorisactivelylookingfortheservicesweprovide.Forinstance,event
planningmagazines,bridalwebsitesandmagazines,corporatebusinesssitesandtrade
magazines,andlocalNorthCarolinasitesandpublicationswillbeourmosteffectivetargets
intheinitialgrowthphaseofthecompany.

VI.DesignandDevelopmentPlans

Thedesignanddevelopmentstageoftheeventplanningbusinessconsistsofthe
creationofspecializedsoftware/databases,customerinterfaces,andotherInternet
capabilitiestobeabletosearchapredeterminedlistofvendors,themes,andpricepoints.

A. DevelopmentStatusandTasks

Thereareseveralkeystepsthatwillneedtobetakeninthedesignanddevelopment
phase.Forinstance,oneofthefirstthingsthatwillneedtobeaccomplishedistheinitial
searchforvendorsandsuppliersaswellasthenegotiationandrelationshipestablishment
withthosebusinesses.Legalconsultationwillbeutilizedinthedraftingofcontractsto
ensureallaspectsofthepartnershipareclearlystatedandunderstood.

Next,softwareforcustomerinteractionandinterfacingwillneedtoberesearched
andcomparedusingcostbenefitanalysis.Researchhasshownthatuserinterface
database,software,andwebsitedesigncancostaround$20,000.Thisisthefigurewewill
useindraftingprojecteddevelopmentcostsforthefirstyear.

Atthesametime,possiblelocationsforthemainofficewillneedtobedetermined.
Theleasingofofficespacecanbeatimelyprocess,soitwillbeimportanttoprogressas
quicklyaspossibleonceadecisionhasbeenmadeonwherethebusinessshouldbelocated.
Anassumptioncanbemadethatanexecutivesuitewillneedtoberentedtoallow
managementandtheentrepreneurialteamtohaveindividualoffices,accesstoconference
andpresentationrooms,andreceptionandwaitingareas.Wealsowanttocontinuetotry
tokeepcostsaslowaspossibleinitially,soabasicexecutivesuitepackagewillbe
purchasedforthefirstyear.Largeroffices,upgrades,andnewlocationswillbechosen
oncethecompanyisbetterestablished.Byresearchingofficerentalsinthetwolargest
citiesinNorthCarolina,Raleigh/DurhamandCharlotte,weestimatemonthlyrentforthis

25


spacetobeapproximately$2,000.Thoughactualnumbersmayvary,thisisthebest
estimatebasedonourcomparisonandwillbeusedinourfirstyearprojecteddevelopment
costs.

Beforeanyotherkeystepscanbetaken,itwillbenecessarytodevelopatimeline
leadinguptotheofficiallaunchofthebusiness.Thistimelinewillneedtoincludeeachand
everyintegralstepthatmustbecompletedinordertoforthelaunchtobesuccessful.

Onceadetailedtimelinehasbeenestablished,thenextstepwillbetopurchaseor
leaseofficeequipment,includingthecomputersthatwillbenecessaryinordertorunthe
business.Then,thedatabaseandcustomerinteractionsoftwarewehavechosenwillbe
implemented.Intensivetrainingsessionsandtutorialswillbemandatoryfortheentire
foundingentrepreneurialteam.Assumingthatallfoundingmemberswilleachrequirea
computerandacomputerwillbeneededforreception,weestimateabout$5,000willbe
neededtopurchasethisequipment.

Next,salariesandwageswillneedtobedeterminedforallstaffandplanners.
Typically,eventplannersarepaidonanhourlybasis.Therefore,eachplanneronourteam
willreceive$50perhourforhisorherservices,whenneeded.Thehiredreceptionistwill
receivebetween$10and$15perhourbasedonhisorherexperienceandthepositionwill
befulltime.Theentrepreneurialteam,actingasplanners,consultants,andmanagerswill
bedistributedwhatprofitsareleftaftercostsandotherwagesaresubtracted.Therefore,
salarieswillcontinuetoincreaseasprofitsincrease.Oncetheseguidelineshavebeen
determined,wecanbeginhiringancillarystaffandadditionalplannersifneeded.All
employeesmustattendmandatoryeducationandtrainingsessionstoensurethateach
staffmemberknowseverydetailofthebusiness.Thiswillensurebetterserviceforour
customers.

Finally,thebusinesswillofficiallylaunch,beginningwiththecontestpromotionto
winafreeevent.

B. DifficultiesandRisks

Aswithmostbusinesses,amajordifficultywillbethesimplefactthatnotevery
customercanbepleased.Thereiselevatedriskinthisbusiness,aswearepromoting
ourselvesastheonestopshopforeveryoneseventplanningneeds.Somecustomerswill
notbesatisfiedwiththeoptionsofferedinourdatabase.Somestrategicplanningcanhelp
reducethisrisk.Bynetworkingandcontractingwithmultiplevendorsineachcategory
(i.e.floral,caterer,etc.),wehopetoprovidethemostnumberofpeoplewiththegreatest
numberofoptions.Anotherdifficultycouldariseifsomecustomershavecomplaints
regardingpricingstrategies.Buildingrelationshipswillallowustodocumentcustomer
behavior,likes,dislikes,elementsofimportance,etc.Byknowingwhattoemphasizefor
eachcustomer,riskassociatedwithpricingdissatisfactioncanbereduced.

Weestimatethataninitialdifficultywillbeconvincingpotentialclientstouseweb
interfacetopurchaseaccesstoavirtualdatabaseanditseventplanningtools.This,

26


however,shouldbeovercomeafterthebusinessgainsnotorietyandapositiveimageis
perceivedthroughwordofmouthtactics.

Naturally,weassumethat,astechnologycontinuestorapidlyadvance,itwillbe
imperativetoupgradesoftware,databases,equipment,etc.Thereisalwaysarisk
associatedwiththesechanges.Downtime,training,andcustomerdissatisfactionwith
havingtolearnanewsystemcouldallprovetobetroublesfacedduringtimesofnew
technologyimplementation.

Finally,oneofthebiggestriskswewillfaceinthisbusinessisthepossibilityof
losingcontractswithvendorsandsuppliers.Reasonscouldvaryfromapoorrelationships
tovendorsswitchingtonewandemergingsubstitutesites.Placinganemphasison
buildingandmaintaininggoodcustomerandsupplierrelationshipscangreatlyhelpreduce
thisrisk.

C. ProductimprovementandNewProducts

Oncewefacethethreatofsubstitutesandsimilarbusinesses,itwillbeessentialto
continuouslydevelopnewimprovements,services,andproducts.Forinstance,
enhancementsmightincludeofferinggiftandguestregistriesthroughoursite,theability
tosendemailinvitations,textblasts,socialmediapostsviaoursite,videoconferencingor
hybrideventservicesforthosewithguestsnotabletophysicallyattendanevent,and
honeymoonandtravelallinclusivepackages.

D. Costs

Thefollowingtableshowsexpecteddesignanddevelopmentcostsforthefirstyear.

27


E. Proprietaryissues
Ouronlinetechnologycouldprovetobeaproprietaryissuesincewebelieveitwill
beuniquetothisindustry.Othercompaniesmaytrytoduplicateourservicesbyviewing
andstudyingourwebsite.Itwouldbewisetorequirethesoftwaredevelopmentcompany
tosignanagreementprohibitingthemfrombuildingidenticalsoftwareanddatabasesfor
similarcompanies.Otherprovisionswillbedeterminedwhenthespecifictechnologyis
decideduponandacompanyischosen.Legalconsultationwillbeusedtodraftcontracts
withtermstowhichbothpartiesmutuallyagree.
VII.ManufacturingandOperations

Asanonlineservicecompany,wewillnothaveamanufacturingfunctionbecause
wedonotactuallysellorstorephysicalinventory.However,asathirdpartycontractor,it
willbeimportantforustoensurethatourpartnersinventoriesandservicesaredefect
freeanddeliveredontime.Wealsohavemanyotherfunctions,includingourphysical
headquartersandtheinteractivewebsiteanddatabasethatrequirecomplexsupply
chainsandlogisticalsystems.
A. Operationcycle

Theinteractivewebsitewillbethehubofallactivities.Therefore,wewillneedto
havethesoftwareandsitedevelopedandreadyfortestingandtrainingassoonaspossible.
Oncetheofficialwebsiteisready,weexpecttobeginreceivingonlineorderswithinafew
weeksofthelaunchdate.Thisextratimeshouldproveessentialasweworkwithour
vendorstoentertheirinformationintooursystem,continuesystemstestingandtraining,
andensurethatallfunctionsofthesiteanddatabaseareworkingproperly.

Oncethesystemisfullyfunctioning,maintenanceandcontinuousimprovement,
customerandvendorsupport,advertising,andadministrationwillbeourmajoroperating
cashoutflows.Cashinflowswilloccuratseveralpointsineverycustomersplanning
process.Thefirstwillbereceivedasthecustomerinitiallyregistersandpaysonlinefor
accesstoourdatabaseandplanningtools.Asecondcashinflowfromthatsamecustomers
transactionwilloccureachandeverytimethatcustomerreservesavenue,supplier,or
vendor.Aspartofouragreementwithvendors,wewilltakeout10%fromallcash
receivedandforwardtheresttovendors.Theamountthevendorpocketswillhavealready
factoredthe5%discounteverycustomerreceives.Intheotherwords,wedonothavea
traditionaloperatingcycleasonewouldfindinamanufacturingcompany.

Peopleonlyneedeventplanningservicesforspecialoccasions.Somespecial
occasionsareseasonal.Duringsummerorotherbusymonths,wemayneedtohire
temporaryworkerstomeetthedemandforcustomerservicesupport.

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B. GeographicalLocation

Ourwebsite,EVents.com,willbetheprimarymethodofservingourcustomers.
SinceourservicewillbemostlyInternetbased,anypersonwhogetsInternetaccesscould
potentiallybeacustomer.However,wewillfocusonNorthCarolinamarketinitially
becauseitwilltaketimetobuildourvendordatabaseandwewillneedtobuildacompany
thatcansupportlargesalesgrowth.AsallcofoundersresideinNorthCarolina,wewill
positionourheadquartersinGreenville,NC.Therearemanystrategicreasonsforthis
locationdecision:

Theareaisarapidlygrowing,welldiversifiedservicecenterforeasternNC.
Populationincreased23.3%duringthe1990s.(PCDC,n.d.)
Thelaborforceexpanded21.8%andemploymentgrewby21.2%between1990
and2000.(PCDC,n.d.)
PittCountyisleadingretailcenterincentral,northern,andeasternNorthCarolina.
PittCountyprovidestaxincentivestoencouragebusinessestojointhecommunity.
EastCarolinaUniversityandPittCommunityCollegecanprovidewelltrained
candidatesforemployees,aswellasprovideimmediateaccesstoalargepoolof
potentialclientsinourtargetagegroup.
Theaveragehourlyratefortheregionis$17.57,whichislowerthanthenational
average,$20.18(BureauofLaborStatistics,n.d.).Utilizingaworkforceofcollege
studentsandyoungadultscanhelpmaintainlowpayrollcosts,thusincreasing
profitmargins.

C. FacilitiesandImprovements

Themainfacilitiesinthefirstyearwillbethedatacenterwherethesiteand
databasearehostedandthephysicalofficespaceinGreenville.Areliabledatacenterwill
becriticalforsuccessasthewebsitewillneedtobeaccessibleandfunctioningatalltimes.

Rentingserversfromwellestablishedhostingcompanycouldbemorecosteffective
thanbuildingadatacenter.Therefore,wewillhireRackspace
(http://www.rackspace.com/)asourhost,andrentallseversfromtheirdatacenters.
Rackspacesreputationintheenterpriselevelhostingmarketand100%networkuptime
guaranteeledustochoosethemforourhostingandserverneeds.Thecompanyoffersa
widerangeofservicesoptions.Weplantousetheirmanageddedicatedserversand
cloudservers.Dedicatedserverwillbeobtainedthroughyearlycontracts.Cloudservers
willbeacquiredasneededwithoutspecificterms.Basedoncurrentpricinginformation,
thetotalcostfor12monthsofservicewillbearound$44,180.Thetablebelowillustrates
majorprojectedexpensesforwebhosting.

29

MonthlyUnitPrice
Quantity
12Months
DedicatedServer
$959
20
$19,180
CloudServer
$500
50
$25,000
Total

$44,180
Table7.C.1Hostingexpenseforthenext12months

Growingcompaniesrequiremoreandmoreresourcestosupplementthat
growth.Tosupportourprojectedgrowth,spendingonhostingwillincreaseabout50%
peryearforthenextthreeyearstosupporttherapidgrowthinsales.Highinvestmentin
qualitywebserviceshouldensurestrongercustomersatisfactionandhelpachieveourhigh
salesgoals.Thefollowingdiagramdepictstheforecastofhostingexpensesforthenext
threeyears.

Figure7.C.1Hostingexpenseforthenextthreeyears

CommercialleasingpricesinGreenvillearereasonable.Themainpurposesofthe
physicalofficespacewillbeforgeneralandadministrativefunctions,facetofaceclient
meetings,presentations,designingandplanningbyhiredeventplanners,processing
orders,updatingsiteinformation,etc.Since,whencomparedtotheamountofbusiness
conductedsolelythroughtheinteractivewebsite,theamountoffacetoface,customer
businessconductedatthephysicallocationisexpectedtobeverysmall.Asaresult,
proximitytocentralorhighertrafficareasofthecityisnotatoppriorityinchoosinga
location.

Currently,themostidealspaceappearstobeonelocatedat2405CharlesBlvd.The
2,016squarefeetavailablewillbesufficientfortheinitialphaseofthecompany.Thiswill

30


allowofficespaceforthefoundingteam,asmallconferenceroom,receptionarea,and
designandplanningspace.Currently,thespacerentsfor$1,800eachmonthor$21,600a
year.Sincewewillmostlikelybeexpandingwithinafewyears,longtermcommitments
willbeavoidedandweexpecttosignaoneyearagreementinitially.

Tomaintainaslowaspossiblecosts,furnitureandmajorofficeequipmentwillbe
leasedatfirst.Leasingwillallowustosavemoneyandremainflexibleshouldweneedto
makequickchangesinthenearfuture.Theactualleasefeeswilldependonthenumberof
employeesthatwillberegularlyutilizingthephysicalspace.However,wecanestimate
thatthemonthlyleasepaymentislikelytobeabout$1,500.Thecomputer,telephone,fax,
andothernetworkingdevicesintheofficewillalsobeobtainedthroughleasing.We
estimatethemonthlypaymentforthisequipmenttobeabout$2,500permonth.

Asoperationsexpandandsalesgrow,moreworkerswillbeneeded.Furnitureand
equipmentpurchasingdecisionswillberevisitedatthosetimesandotherroutes,suchas
purchasingforlongterminvestment,maybetaken.However,duringaperiodofrapid
growth,theabilitytobeflexiblewillprovetobeagreatcompetitivestrength,andleasing
wherefeasibleisagreatwaytopromoteflexibility.
D. StrategyandPlans

Thewebsitewillbethecenterofoperationsatalltimes.Toshortendevelopment
timesandreduceoverallcosts,wewillcollaboratewithasoftwaredevelopmentcompany
thatspecializesinecommercesites.Majorinitialdevelopmentwillbedonewithinthe
softwarecompany.However,wewillrequirethatourITstaffbepresentduringthis
developmentsothatthenecessarytrainingandexperienceisgainedandtheywillbeable
toeffectivelymanagethesiteonceitisfullyoperational.

Qualityassuranceofthewebsitewillberesponsibilityofourinhousetestingteam.
Mandatorycontinuoustestswillbeperformeddailytoensurethewebsiteisfreeofdefects
thatcouldleadtodowntimeandothercausesofcustomerdissatisfaction.Occasionally,a
thirdpartymightbeconsultedforlargerprojectsandmajortechnologicalupdates.
E. RegulatoryandLegalIssues

Theeventplanningindustryisnotheavilyregulated.Infact,therearevirtuallyno
regulationsatthefederalorstatelevels.However,asanonlinecenteredcompany,
problemsandrisksassociatedwithInternetwillabsolutelyapplytoourbusiness.Weneed
totakemeasurestoensurethatsoftwareisprotectedatalltimesandcontingencyplansare
alwaysinplace.Customersandvendorswillneedtobeassuredthattheirinformationis
privatelystoredandwillneverbeshared.Notonlycouldaleakofpersonalinformation
leadtodetrimentalregulatoryandlegalrepercussions,thenegativeperceptionscustomers
haveforcompanieswhodonotprotecttheirinformationcanrapidlyspreadtoothersand
destroyareputation.

31

Passwordprotectedpages,stronglegalassistance,partnershipandcustomer
contracts,privacyagreements,andvirusprotectionsoftwareareallwaysinwhichthe
issuesassociatedwithonlinebusinesscanbemitigated.

VIII.ManagementTeam

AllownersofEVentsPlanningarecommittedtothesuccessofthisendeavor.
Cumulatively,theteamhasmorethan20yearsofbusinessexperience.Ourknowledge
baseincludes,butisnotlimitedtoeventplanning,marketing,informationtechnology,
publicrelations,advertising,nonprofitfoundationmanagement,andbusinessownership
andmanagement.Allfoundersalsohavedocumentedcompetencesincustomerservice
andprofessionalrelationshipskills.

Thereareseveralpositionsthatneedtobefilledinordertooperateonadaytoday
basis.AnyindividualschosentojointheEventsteamwillneedtobehighlyrecommended
andcompetentintheirexperiencefield.Payingaslightpremiumforqualityemployees
willbemorecosteffectivethanattemptingtorepairthedamageofapoorjobdoneora
customerdissatisfiedbyanunqualified,lowerpaidemployee.

Regardlessoftheirofficialpositionandtitleinthecompany,eachindividualhired
willbeapartoftheEventsteam.Everyteammemberneedstohaveextensive
knowledgeofallfunctionsandoperationsofthebusinesssothatmiscommunicationand
logisticalerrorscanbeminimized.Everyteammemberwillreceivemandatoryinfield
trainingandwewillalsoprovideregularperformanceincentivesgearedtowards
motivatingindividualstoprovideexcellentcustomerservice,maintainrelationships,etc.

A. Organization
Startingasasmallestablishment,wewillbeginwithacorestaff(seeKey
managementpersonnel).Asthecompanyexpands,aChiefExecutiveOfficer,whowill
reporttotheAdvisoryBoard,willbedesignated.Thispersonwillberesponsiblefor
carryingoutthestrategiesdevisedwithintheboard.

Asrevenuesincrease,itwillbeessentialthatsomeoneisonboardtorunthe
financialaspectsofthebusiness.TheChiefFinancialOfficerwillreportdirectlytotheCEO,
andultimatelytheAdvisoryBoard.OtherpositionsthatwillneedtobefilledareHuman
ResourcesandMarketingmanagers.

32


Chief
ExecutiveOfficer

AdvisoryBoard

Chief
FinancialOfficer

Accounting

ITDept

HumanResource
Manager

MarketingManager

OfficeManager

EventPlanner

ExampleofOrganizationChardforEVentOnlinePlanningCompany

B. KeyManagementPersonnel
OfficemanagerThispositionwillberesponsibleforhandlingtheschedulingof
meetingsbetweenplannersandtheirclients.Theywillalsohandlethedailydecision
makingandofficerelatedactivities.AsOfficeManager,otherancillaryresponsibilitieswill
includemaintainingofficesupplyinventory,purchasing,andassistingwithotheroffice
functions.Thispersonwillalsomeetwithpotentialvendorsandsupplierstonegotiate
specifictermsanddetails.Thispersonwillbeginasaparttime(hours)positionevolving
intoafulltimepositionasthebusinessexpands.

EventPlanner(s)Theprimaryresponsibilitiesforthispositionincludetalking
withcustomersbyphone,email,orfacetofacemeetings.Sincemosttransactionswill
occuronline,theeventplannerwillserveasanavenueofexpertiseforthepotentialclient
whohasneverplannedaneventorwhorequiresmoreinput.Theeventplannerwillalso
actasaliaisonbetweenthecustomerandvendors.

NetworkAdministrator(s)Thenetworkadministratorwillmakesureall
equipmentandthewebsiteproperlyfunctioning.Thispersonwillworkwiththeleasing
companiestomakesurerequiredequipmentisleasedcorrectlyandmaintenanceisupto
dateforallsoftwareandthewebsite.

C. ManagementCompensationandOwnership
Keymanagementpersonnelwillreceivesalariescomparabletoothersintheregion.
Modestcompensationwillbepaidtotheadvisoryboardinthefirstyearofoperationto
helpcompensateforthehighinitialcostsalreadyprojectedforthefirstyear.These
salariesareexpectedtoincreaseasrevenuesincrease.Theadvisoryboardwillbepaidfor

33


participationinbusinessmeetingswithpersonnel.Stockownershipwillnotbeofferedat
thistime.

Foundersareexpectedtoinitiallycontribute$20,000eachtothebusiness.Thiswill
notcoverthetotalstartupcosts,sowewillneedtoseekexternalfunding.Expectedcosts
forthefirstquarterwillrequirethatweobtainanadditional$900,000inequityfinancing
(seeOtherinvestors).

Thetablebelowoutlinesthepayrollforkeymanagementpersonneloverthenext
threeyears.Inyearone,weareplanningonamodestsalaryof$20,000perowner
(AdvisoryBoard).Thissalarywillincreaseby3.5%infiscalyear2011andagainby1.75%
infiscalyear2012.

Table:KeyManagementPersonnel
PersonnelPlan

OfficeManager
EventPlanner
NetworkAdministrator
AdvisoryBoard
TotalPayroll

Year1

Year2

Year3

$48,000
$40,000
$52,000
$100,000

$49,680
$41,400
$53,800
$103,500

$50,550
$42,125
$54,742
$105,311

$240,000

$248,380

$252,728

D. OtherInvestors
Wehavealoftygoalofacquiring$900,000duringthefirstquarterofthestartup
period.Equityfinancinginthefirstthreemonthswillconsistofcontributionsfromthe
founders,FFF(family,friends,andfools),privateinvestors,andventurecapitalists.
Althoughwedonotanticipatehavingaboardofdirectorsatthistime,equityfinancingmay
dictatethatamoreformalboardbeformedinthefuture.

E. EmploymentandOtherAgreements,StockOptionsandBonusPlans
Employees,vendors,andsuppliersofEVentsOnlinePlanningCompanymaybe
askedtosignanondisclosurestatementthattheywillnotreproduceorusetheknowledge
gainedatEVentsPlanningtostartacompetingcompany.

F. AdvisoryBoard

EventsOnlineCompanywillnothaveaboardofdirectors.However,thefounders
willserveasmembersofanAdvisoryBoard.Thisboardwillberesponsibleformajor
businessdecisionsregardingthecompanysmissionandvision,financing,growth,
marketingandothermajorfunctions.

SupportingProfessionalAdvisorsandServices

Wewillrequiretheservicesofseveralotherprofessionalsinordertomakesurewe
arecompliancewithstateandfederalregulations,andinanattempttomaximizeour

34


positionsinthemarketandindustry.Theknowledgeandexperiencetheypossesswillbe
beneficialtous.Thislistmayvaryaccordingtoourbusinessneedsatthetime.

Accountant
Banker
Insuranceagent
Attorney
Consultants

IX.SustainabilityandImpact

EVentsPlanningrecognizestheimportanceofmakingapositiveimpactonsocial,
economic,andenvironmentalareasclosesttoourbusinessandbeyond.Oneofthegreatest
waysforustoachievethisisthroughoursuppliersandthosewithwhomwedobusiness.

Thefocusofourbusinessisonlinecommerce.Oneofthemostimportanttopicstoday
involvespredatorycompaniestakingadvantageofpeopleonline.Ourgoalistosecureand
safeguardinformationobtainedfromourcustomers.Itisimperativethatcustomer
sensitiveinformationissafe.Wewouldliketoseelawsimplementedthatwouldpenalize
thosewhoknowinglytakepartinthiskindofcriminalactivity.

GreenInitiatives

Ourofficewilluserecycledproductswhenpossible,aspartofourEVentGreen
initiatives.Advertising,brochures,flyers,andanyprintedbusinessmaterialswillbe
printedonrecycledpaperproducts.Sinceourbusinessisonline,wewillminimizeuseof
printedmaterialsasmuchaspossible,andoptimizeouruseofonlinecommunication
mediums.Inaddition,wewilluseofficeequipmentthatisEnergyStarcompliantinan
efforttoconserveenergy.Ourcompanywillpracticeenergyefficiencythoughmodified
poweruseandturningoffcomputersandequipmentwhentheofficeisnotinoperation.

Itwouldbeverydifficultforustomakeabigimpactwithourgreeninitiativeswithout
requiringthatourvendorsandsuppliersadoptthesameenergysavingandenvironmental
friendlyobjectives.Wewillspotlightourattentiononthosewhoarealreadygreen.These
suppliers/vendorswillreceivepriorityplacementinourdirectory.Inaddition,wewillflag
onourwebsitethosevendorsthatareenvironmentallyfriendlyandhavesustainability
businessespracticeswithagreenleaficonsinceweknowthisinformationisimportantto
ourcustomers.Wewouldliketoworkwiththosewhoarenotyetgreencomplianton
goinggreen,tohelpthemachievethesegoalswithinapredeterminedtimeframe.

HealthyChoices

Customerstodayaremorehealthconsciousandenvironmentallysavvythanadecade
ago.Thiswilldrivesomeofthechoicesmadeforfoodsuppliersatcertainevents.
Dependingonthesevendors,customerswhochooseorganicmenuoptionsmaybe
assessedanupchargeduetoincreasedcost.

35


Wewillprovidevisibilityandpromotiononourwebsitetovendorssupplyinghealth
alternatives,organicandlocalfarmfoodoptions.

CommunitySupport

Inaddition,wevaluethesurroundingcommunitywhereourbusinessislocatedandthe
communitiesthatweservice.Wewillconsistentlyseekwaystosupporttheareaswhere
ourcustomersarelocated.Werecognizethevalueofsupportingthecommunityandits
impactoncustomerloyalty.Ourcommunitysupportprogramswillinclude:

Annualdonationofupto.80%ofpretaxprofitstolocalfoodbanksinthe
marketsweserve
Offerinternshipatourcompanytocollegestudentstudyingormajoringin
hospitality
Annuallyofferuptofive$1,000scholarshipstofreshmanstudentsstudyinge
commerce,websecurity,entrepreneurship,hospitality
Hostnetworkingeventsannuallytoletpeopleknowofourservices;pay
temporaryworkershourlywagestogreetguests,givedirections,etc.

Aswebegintoplanmoreevents,morevendorsandsupplierswillbedoingmorebusiness.
Thishelpssupportthelocaleconomiesinwhichthesevendorsresideastheyhaveaneed
tohireemployeesandgrowtheirbusinesses.

X.OverallSchedule
Overall Schedule

36


Schedule to Website and Official Company Launch

XI.CriticalRisks,Problems,andAssumptions

Aswedevelopourbusiness,wearefullyawareofpotentialriskstothebusinessand
theconsequencesofadverseoutcomesrelatedtoourindustry,company,employees,
marketappeal,andfinancing.Weareconsideringcontingencyplansintheeventthese
adverseoutcomesshouldoccurinordertobepreparedtonavigateourbusiness
successfullyoutofanychallengingsituations.

Forthecompanytobesuccessfulwehavecertainassumptionsconcerningsales
projections,profitsandfinancingthatwillimpactthebusinessessuccess.Ourincome
forecastisshownbelowoverthenextthreeyears.

Sales
2011
2012
2013
(In$1,000s)
$11,900
$47,600
$119,000

Thefollowingisadetailedexplanationofeachofthesepotentialrisks,including
howtheymightimpactourbusiness,andoureffortstoeitheravoidorrespondifthese
eventsweretooccur.Potentialissuesandrisksthatfacethebusinesscouldinclude:

1) Lackofeconomicrecoveryoranotherrecession:

Wecurrentlyaredevelopingthisbusinessassumingthattheeconomicconditionsare
currentlyinrecovery.Theeventplanningindustrysuffereda.1%declineindemand
between2005to2010.Ourbusinessneedstoseegrowthintheindustrytohelpleverage
theestablishmentofourbusinessandfuelitsgrowth.Currently,weareprojectingthatour
averagemonthlybreakevensalesamountis$132,600inthefirstyear,andweare

37


expectingthatafterthefirstyearwewillbeabletoreachthebreakevenpointthrough
salesrevenue.Adoublediprecessioncouldjeopardizeourabilitytoreachthisgoalinthe
timeframethatisprojected.

2) Notenoughcashtoadequatelysupportthebusiness:

Asdetailedintheplan,weneedanestimated$900,000tofullyoperateEVent.We
expectthatSBALoans,PrivateInvestors,andInstitutionalLoanswillsupplythisfora
determinedtimeframe,afterwhichtimewebelievethebusinessprofitswillsupportthis
cashflowneed.Intheeventsalesandrevenuesdonotescalateasexpected,wewillseek
alternativemethodsoftemporaryfunding,suchasadditionalloansorinvestmentsupport
untilsalesneedsareachieved.Afterestimatingsales,wefoundthatthebusinesswill
breakeveninthesecondquarterin2012asdepictedbytheFigure12.D.2below.

Figure12.D.2Monthlybreakevenfor2012

3) Increasedcoststhatareinexcessofestimates:

Sinceourbusinessismainlyamiddlemanbetweentheconsumerandtheevent
vendors,wedontincreasecoststoimpactourestimatesotherthanitspotentialimpacton
increasedsales.Ifcostsgoup,consumersandcompanieswillbelesslikelytospendmoney
oneventsandcelebrations.Wearehopefulthatgiventhereductioninpriceconsumers
receivebyworkingthroughourwebsite,theywouldbemorelikelytouseourservices,
whichwillsupportoverallsales.Ourserviceoffersacostbenefittocompaniesand
consumersthattheycurrentlydonothaveandwebelievethatthiswillpositiveimpactour
marketshareintheindustry.

4) Technicalproblemswithourwebsite:

Akeyaspectofourconsumerofferisourwebsitethatenablestoconsumerstoself
designtheirdreamevent.Itisvitalthatourwebsiteisfunctioningappropriatelyatall
timesforconsumeraccessandeaseofuse.Toensurethatwedonotencountertechnical

38


problems,wewillseekbackupnetworksupportforthewebsiteandareutilizingawebsite
designservicecanhelpusplanforconsistentandreliableoperationsofthesite.

5) Securityissueswithwebsiteandcustomerinformation:

Forcustomerstofeelcomfortablemakingpurchasesonoursite,theyneedtotrust
thattheirpersonalinformationissecure.Wewillbeutilizingthelatestsecuritytechnology
availableonthewebsitetoensurethatalltransactionalandpersonalconfidential
informationfromcustomersismanagedappropriately.Wewillensurethatallnecessary
securitymeasuresaretakentoprotectthewebsitefromoutsiderisks.

6) Customerdissatisfaction:

Customersatisfactionandpositivewordofmouthisessentialforthesuccessofour
business.Wewillbeworkingtoensureourcustomersaresatisfiedwiththeirexperience
usingourservices,andbelieveinrecommendingourservicetofriendsandfamily.Wewill
ensuresatisfactionbyfirstexpectingtopqualitycustomerservicebyallvendorsand
employeesofourbusiness.Inaddition,wewillconductregularaftereventcustomer
satisfactionsurveystotrackourprogressandensureimmediateresolutionofanytrending
customerconcerns.

7) Competitionfromanothercompany:

Currently,noothercompaniesinthemarketplaceareofferingaservicethatmirrors
ourconsumeroffer.Wewillconstantlybeevaluatingthecompetitivelandscapeand
marketplacetodeterminewhatotheralternativeservicesareavailabletoconsumers.We
arecommittedtoinnovatingandcontinuouslyevolvingourconsumerofferasnecessaryto
meetconsumerdemandandstretchbeyondanycapabilitiesofexistingcompetition.Our
positioninginthemarketplaceisouruniqueofferingwithintheeventindustrysimilarto
someoftheexistingonlinetravelplanningsites,andwewillberuthlessinour
commitmenttoensurethatourwebsiteremainscuttingedgeandsuperiorinitsofferingto
ourcustomerbase.

8) Difficultiesinsecuringthenecessaryvendorsforservices:

Inourbusinessmodel,itisvitalthatvendorsactivelyseektobecomeoneofthe
vendorsthatEVentwilloffertoitsclients.Withthisbeingsaid,attheforefrontofour
businessistherelationshipbetweenEVentandthemultiplevendorsthatwillbeoffered
fromthesite.Insecuringthesevendors,EVentwillusemarketingmaterialsand
promotionalpackagestoattractthesevendorstoourbusinessandtoshowcasetheir
servicestopotentialclients.Itisbeneficialforvendorstojoinournetworktoincrease
salesontheirend,attractnewclients,createasteadyflowofclients,andtocreatemoreof
anonlinepresenceviaEVentsosecuringthesevendorsposesnorealrisktothese
businesses.Wefeelthatwewontmeetthatmuchresistanceinsecuringnewvendorsand
thesatisfactionofourvendorsisequallyasimportantasourcustomers.

39


9) Difficultiesinsuccessfullymarketingthebusiness:

Inmarketingourbusinesswecouldrunintodifficultiesinmarketingourbusiness.
EVentplansontakingthetraditionalmarketingstrategiesandmixingitwithnewsocial
mediaadvertisingandoutoftheboxadvertisingcampaignstogiveEVentamarketing
advantageovercompetitors.Theseeffortswillincludehittingallsocialmediaoutlets,
gorillamarketingcampaigns,promotionaladvertising,newslettersandgiveaways,mailers,
andotherformsofmarketingthatwillhelpusreachourtargetmarket.Wefeelthatwe
haveplacedenoughmoneyinadvertisingtocovertheexpensesofthesemarketing
campaignsandEVentwillcontinuetopushtobeaheadofthemarketingcurvein
successfullyreachingourtargetmarketwithaneffectiveandefficientapproach.

MinimizingRisks

EVenthasindicatedthecriticalrisksthatcanaffectthebusinesssobeingableto
minimizetheseriskwillbeimperativeforitssuccess.Inbeingabletominimizetheserisks,
wewillactivelyseektheadviceofprofessionalsinvariousfields(accounting,insurance,
banking,law,etc.)tobetteranalyzesituationsanddecisions.EVentwilllooktocreatea
networkinwhichwecanreachouttovariousfieldsforadvicetobetterthechancesofE
Ventssuccess.Asweareanonlinebusinessthatoffersproducttoclientsfromalistof
vendors,wewillberesponsibleinprovidingservicestoclientsbutourliabilitywillbe
limited.Itwillbeuptoourvendorstoprovidetheutmostcustomersatisfactionand
qualitytoourclientsandwillbejustasresponsiblefortheirservicesasiftheywere
performingtheirsservicesontheirownaccount.

InsuranceProtection

EVentwillhaveebusinessinsurancethatwillprovidespecializedprotectionfor
ouronlinebusiness.Thisinsurancewillincludelossofrevenueprotection.Lossof
revenueprotectionwillprotectEVentifourwebsitehostgoesoutofbusinessorour
internetconnectionislostforanextendedperiodoftime,wewillbecovered.Thiswillalso
includeLibel/Slanderprotectionfromanyoneonlinethatmighttrytopublishuntrue
thingsaboutEVentthatcanmisconstrueourbusiness.Theftwillbecoveredbyoure
businessinsuranceprotectingidentityanddatatheftastheycanposehugerisksforthe
company.Wewillalsocarrythebasicinsurancepackagesthatareexpectedforacompany
(liabilityinsurance,workerscompensation,businessinsurance,etc.)tooperatewhile
protectingthebusinessanditsemployees.

Vendor/CustomerRelationship

Oneofthebiggestrisksthatourbusinessholdsisourvendorsabilitytomeetour
clientsexpectations.Wefeelthatwecanminimizethisriskbyfindingreputableand
trustworthyvendorsinwhichwecanconfidentlyrecommendtoourclientsandknowthat
theywilldeliverontheirend.EVentwillcloselyandcarefullymonitorhowvendors
performedforourclientsthroughsurveysandfollowupstomakesurethattheywere
satisfiedwiththeireventandhowthingscouldhavebeenbetter.InthesituationthatE

40


Venthasvendorsthatroutinelyhavedismalratingsfromourclients,wewillhandlethe
situationbydiscussingwiththevendorhowtheycanbettertheirserviceorfinda
replacementthatwillbetterserveourclients.Bydoingthis,itwillhelpensurethatEVent
hasthebestandmostdependablevendorsavailableforourclientstochoosefrom.

XII.TheFinancialPlan
A. ProFormaIncomeStatements

Asaprimarilyonlineservice,certainassumptionscanbemade.First,creditwill
generallynotbeextendedtocustomers.Second,paymentswillbemadeviaechecks,
creditcards,ordebitcards.Therefore,accountsreceivablesentriescommonlyfoundin
otherservicecompanieswouldmostlikelynotnormallyexistinours.Shouldthisoccur,it
wouldbeforestablishedandtopprioritycustomers.Wedonotexpectthissituation
duringthestartupphasesofthecompany,asrelationshipswillhavenotbeenestablished.
Inaddition,weassumeourtaxrateforthenextyearswillbe35%.

Intheincomestatements,salesmeanthetotalcasheswereceivedfromcustomers.
Becausewehavecontractualobligationstoforward90%ofthemdirectlytovendors,our
systemwillautomaticallytodosoimmediatelyafterreceivingcashes.Table12.A.1shows
majorcostsaspercentageoftotalsalesestimatedforthefirstthreeyears.Wehaveto
spendalotinitiallytobuildwebsiteandsaleinfrastructures.However,assalesincreases,
weexpectthecontrollablecostsaspercentagesofsaleswillbedecreasingovertime.Table
12.A.2showstheprojectedincomestatementsfornextthreeyears.

Percentagesofmajorcosts
2011
2012
2013
Costofgoodsold(vendors
90%
90%
90%
pricing)
Hosting
0.37%
0.14%
0.08%
CustomerSupportCost
4%
2%
1%
VendorSupportCost
2%
1%
1%
Websitemaintenance
0.084%
0.042%
0.017%
Advertising
4.20%
2.10%
1.26%
Generaladministration
2.521%
0.945%
0.454%

Table12.A.1Estimatedmajorcostsaspercentagesoftotalsales

41


IncomeStatement(in$1,000)

2011
2012
2013
Sales*

$11,900.00 $47,600.00 $119,000.00

Costofgoodssold(Vendorpricing)

$10,710.00 $42,840.00 $107,100.00

Grossrevenue
$1,190.00 $4,760.00 $11,900.00

Costsandexpense

Costofservice

Hosting
$44.18
$66.27
$99.41
Customersupport+Relationship
$500.00 $1,000.00
$1,500.00
Management
Vendorsupport
$200.00
$400.00
$600.00
Totalcostofservice
$744.18 $1,466.27
$2,199.41
Researchanddevelopment

Websitedevelopment
$20.00
$
$
Websitemaintenanceandimprovement
$10.00
$20.00
$20.00
TotalR&D
$30.00
$20.00
$20.00
Selling,generalandadministrative

Contestpromotion+advertising
$17.00
$
$
Googleadwords
$300.00
$600.00
$900.00
Selling,other
$200.00
$400.00
$600.00
Generalandadministrative
$300.00
$450.00
$540.00
Totalselling,generalandadministrative
$817.00 $1,450.00
$2,040.00
Totalcostsandexpenses
$1,591.18 $2,936.27
$4,259.41
Incomefromoperations
$(401.18) $1,823.73
$7,640.59
Interestandother,net
$77.64
$77.64
$77.64
Incomebeforetaxes
$(478.82) $1,746.09
$7,562.95
Taxes
$(167.59)
$443.54
$2,647.03
Netincome
$(311.23) $1,302.54
$4,915.92
Note:*totalcashreceivedfromcustomer
Table12.A.2Proformaincomestatementsforthenextthreeyears

42

Figure12.A.1Incomeforecastsforthenextthreeyears

Becausemostcostsincurred,suchashostingandcustomersupportcosts,arenot
directlyrelatedtotheamountofsales,theywillbecalculatedasfixedcosts.Thus,our
futureincomeisverysensitivetosales.Withourcurrentprojections,itcanbeexpected
thatthecompanywillnotmakeaprofitthefirstyear.Shouldactualsalesbe20%ormore
belowwhatisanticipated,anevenlargerfirstyearlosswilloccurandaprofitwillnotbe
realizedinthesecondyeareither.However,ascurrentprojectionsshow,itisexpectedthat
aprofitwillbereachedbyyear2.

B. ProFormaBalanceSheets

Weassumethatthemajorityofourexternalfinancingactivitieswilloccurinthe
firstthreemonthsof2011.Founderswillsupplyinitialfundingtostartthecompany.
ExternalfinancingactivitieswillbediscussedinmoredetailsinSectionXIIIProposed
CompanyOffering.Table12.B.1liststhebalancesheetforthenextthreeyears.

43

ASSETS
Currentassets:

Balancesheet(in$1,000)
1sthalf
2ndhalf
2011
2011

Cashandcashequivalents
Shortterminvestments

$500.59
$

$421.18
$

Totalcurrentassets
Property,plant,andequipment

$500.59
$

$421.18
$

Totalassets

LIABILITIESANDOWNERS'
EQUITY
Currentliabilities
Accountspayable
Employeecompensationsand
benefits
Shorttermliabilities

$500.59

$421.18

2012

$2,167.27
$

$2,167.27
$

$2,167.27

$
$20.88

$
$42.73

$
$46.82

2013

$9,286.67
$

$9,286.67
$

$9,286.67

$
$42.73

Tax
$
$
$443.54 $2,647.03

Totalcurrentliabilities
$20.88
$42.73
$490.36 $2,689.76
Longtermdebt
$379.12
$357.27 $353.18 $357.27
Otherliabilities
$
$
$
$

TotalLiabilities
$400.00
$400.00 $843.54 $3,047.03

Owners'equity
$500.00
$500.00 $21.18
$1,323.72

Retainedearnings
$(399.41) $(478.82) $1,302.54 $4,915.92

TotalOwner'sequity
$100.59
$21.18
$1,323.72 $6,239.64
Totalliabilitiesandowners'

equity
$500.59
$421.18 $2,167.27 $9,286.67
Table12.B.1Balancesheetsforthenextthreeyears

C. ProFormaCashFlowAnalysis

Table12.C.1liststhemonthlycashflowprojectionsfor2011.InJanuary2011,we,
thefoundingteamofEVents,willcommit$100,000tothecompanyfrompersonal
fundraisingefforts.Onaverage,eachfounderwillcontribute$20,000intothecompany.
However,internalfundingalonewillnotbesufficientforthetotalamountneededfor

44


executions.Anestimated$900,000fromexternalequityfinancingactivitieswillbe
necessaryforallmajorcompanygoalstobereachedandprovidesomecushionwhensales
arebelowexpectations.ForFebruaryandMarch,theamountsare$300,000and$400,000,
respectively.Accordingtotheforecast,wewilllosemoneyforallmonthsin2011.Figure
12.C.1illustratesthemonthlynetcashflowin2011.

Inaddition,cashflowstatementsfor20122013arealsoprojectedandlistedin
Table12.C.2.Figure12.C.2illustratesthequarterlynetcashflowfor20112012.

Figure12.C.1Monthlynetcashflowin2011

45

Figure12.C.2Quarterlynetcashflowfor20112012

46