SM550 Creative Business Planning - Free Samples to Students

Note-

1. It is assumed that the financial data and events in April were same as the month from May to September. Hence the payment for the credit sales done in the month of April will be made in the month of May.
2. There is no specific instruction regarding promotional expenses. Therefore it is assumed that payment regarding promotional expenses is made in the same year at the end of financial year.
3. The method of depreciation used in this case would be written down value method.

4. Details regarding promotional expenses as follow-

(2) Forecasted balanced sheet    

Forecaster financial statement help in the evaluation of the financial performance of a company whereas forecasted balance sheet shows the financial position of the company on coming future years.

(3) Monthly cash budget 

Main cash inflows of Ibiza Rocks are related to the sale tickets made by the club in relation to the rock concert conducted. In addition to that that food and drinks also contributed to the credit as well as cash sales of the company. The main cash outflows of the club are related to the cost of food and drinks paid to the supplier. Hire, licence and wages relates to the hire charges paid to the bands that have performed in the club. Details regarding promotional costs are related to the social media expenses, sales promotion, advertisement and personal selling done by the company. Overhead expense are the occasional indirect expenses done by manager and staff of the club.     

(4) How a system of flexible budgeting could facilitate financial control

A budget can be categorized into two categories that are flexible budget and static budget. The use and advantages of both these type of budget are different. Static budgets are the budgets that are prepared at the starting of the financial year and no alternations are made in such budgets until the start of the new financial year. The financial figures input in this type of budget remains the same throughout the financial year. This decreases the uses and advantages of using budgeting process.

On the other hand, flexible budgets can be defined as a set of various budgets that are prepared for different activities undertaken by an organization; hence there is a separate budget for each of the activity in business. These types of budgets are initially prepared on the basis of assumption and modifications are made on the basis sale changes that occur during the financial year (Hope and Fraser, 2013).

Some of the advantages of the flexible budget that will help in better financial controls are as follows-

1. Better cost control- Flexible budgets help in automatic control on expenses that are expected by the company. For example, a manufacturing unit has set its indirect expenses as 20000 (at the rate of 20% of its sales) and expected a sale of 100000. If the actual sales of the company are 75000 then it would automatically control the cost to 20% of 750000 i.e. 15000 instead of 20000.     
2. Updating with recent data- Best feature and advantage of a flexible budget is that it keeps itself updated with the current financial information of the company which was not the case in static data (Wyatt, 2012). There might be the occurrence of certain events that resulted in increased cost of raw material. This factor would be considered by flexible budget and changes will be made accordingly.
3. Costs and profit margins of the company can also be changes in case of a flexible budget.
4. The flexible budget also enables comparative analysis of actual financial figures with expected financial figures (Aalto, 2012).   

Flexible budgets that will be prepared by Ibiza Rocks will be as follows

• Direct expense budget
• Total revenue budget
• Expected sales budget
• Advertisement expense budget
• Number of customer budget
• Overall profitability budget

Performa that can be used for making a flexible budget is

(5) Contribution and ticket selling price 

1. Contribution

Contribution can be defined as the profit earned after deducting the variable price from selling price of a company. Generally, the contribution is used by business organization and manufacturing units to set prices for their product and services (Hilton, R.W. and Platt, 2013).

Here, contribution per unit would be [18-(18*42%)] = 10.44.

Therefore contribution for-

2. Expected selling price

• 2000 monthly customer

Lest assume that list price is x.

Therefore (x*.58) *2000= 20000 i.e. target profit

X=   17.24

• 3200 monthly customer

Lest assume that list price is x.

Therefore (x*.58) *3200= 20000 i.e. target profit

X=   10.78

A promotional plan is to execute marketing strategies for ensuring to meet the objectives targeted. It covers all sort of communication between the company and the clients. There are four basic components in a promotional plan (Armstrong et al. 2015). They are personal selling, advertisement, sales promotion and public relation.

Personal selling: It is about discussing with a buyer, showing portfolio and selling the companies vision.

Advertisement:  It includes media, magazine, radio, newspaper, television etc. It is a paid promotion.

Sales promotion:  Blog, catalogue, email marketing, website are the examples of sales promotion.

Public relation:  Any intention to create a good or well-known image of the organization is a public relation (Chong et al. 2017). Press released article is an example of public relation.

These four components help an organization to reach the SMART objective.

The smart object in a business increases the chance of achieving the goal without rushing, drifting from the aim. It clarifies the ideas, keeps the focus on the efforts.

Specific:  A goal should be clear and specific, otherwise someone won’t be able to focus and feel motivated. Drifting from goal it is always necessary to try to answer these five W questions

• What do I want to achieve?
• Why is the aim so important?
• Who is involved?
• Where is it?
• Which resources are involved?

Measurable:  Measuring goals are important to stay motivated. Accessing program helps to meet deadlines, stay focus and feel the excitement of getting closer to the goal.

Achievable:  A goal needs to be attainable and realistic, stretching the abilities of one still keeping it possible (Huet et al. 2015). Ibiza Rocks can identify resources or overlooked opportunities that can bring them closer to goal.

Relevant:  The goal should matter and is relevant to all other goals. The plan should be controllable and keep moving everyone forward.

Time limited:  There always should be a target time and date for every goal to keep the focus on the goal.

So, it is an effective tool that gives clarity, motivation and focuses needed to achieve the goals for Ibiza Rocks in Brighton.

There are several technologies for planning promotion. Some are traditional and some are digital. Now a day’s online marketing also known as digital marketing is a great way to promote the business of Ibiza Rocks in Brighton.

Traditional marketing is about any kind of advertising, promotion in a company that has been used by Ibiza for a proven rate of success for years. It includes printed advertisements such as bill bounds, newsletter, newspaper ads and others. Other types of traditional marketing are television commercial or sports product, service or radio advertising. Traditional methods have an advantage ahead of digital marketing (Armstrong et al. 2014). A client not having internet cannot access the website or email. But he can hear radio ads, can see television ads or read the newspaper ads.

Digital marketing is any type of marketing sample or services which includes electronic gadgets. There are two main subjects of digital marketing, online marketing and offline marketing. The seven categories of online marketing are

• Search Engine Marketing (SEN)
• Search engine Optimization (SEO)
• Social Media Marketing (SMM)
• Contain Marketing
• Affiliate marketing
• Pay per click advertising (PPC)
• Email Marketing

The four categories of digital offline markets in Radio Marketing, Television marketing, Phone marketing and the marketing we use to do delivery orders. Offline digital marketing is popularly used but it doesn’t come in the field of digital marketing now. Specifically, digital marketing to the marketing used with the help of internet. The digital marketing is a great process of marketing to promote Ibiza in Brighton in the world of technology and speed.

Using social media as a promotional platform is known as media messaging. It is also a useful way to promote Ibiza Rocks services (Giles et al. 2013). A launch before the program in Brighton via social media is a great way to kick start. Connecting with brands will be useful too.  The ways to make this program successful are

• behind the scenes look for an audience
• highlighting people
• creating touching an inspiring or humorous posts that reflects the subject of Ibiza
• tape introduction videos of Ibiza representatives
• making an emotional connection with visual contacts
• questioning and soliciting opinions
• focusing on consistency and accuracy

By focusing on messaging instead of promotion Ibiza can build trust, establish the brand and employees and leaders create believability. An emotional link with the youth will create a heavy impact on them. People feel like they are always in with the music concert. Media messaging actually helps in growing relationship with the youths more than any kind of promotion. The 500$ project will be worthy of the messages are distributed properly.

At last, it is always discussable that the advertisement Ibiza is going to be post or show should set a moral which would govern a person’s behaviour or how the activity is conducted. This will create a strong bonding with the clients of Ibiza. An ethical advertise is the one which doesn’t make a false claim or doesn’t lie and is within the limits of decency. Now main interest for advertisers is to increase the craze of the product by puffing, some well decorated and colourful ads. They claim their services are better and unique qualities which is totally false. Ethics depend on our belief. If the advertisers think that the customer will understand their ads persuade that and act as like their ads that would lead to a good result. This should be the main motto of Ibiza. Fooling customers are not the way to promote. Generally, everyone doesn’t lie as they have to prove them to the advertisement regulating bodies. But what they say is always fully true.

Here a good response from youth on an advertisement will be the key factor for the Ibiza Rocks to launch their business in Brighton (Garoufallou et al. 2013). So keeping the ethics and relating to them with emotion, heartiness and humour because they will be the main part of it.

Conclusion 

It can be said that promotion and financial analysis both are a very important aspect of business management and Ibiza Rocks should give special consideration to different aspects of these management strategies. The promotional plan prepared in this report would be very effective and it is expected to boost the sales of the company that will increase its profitability. Overall cost management strategy of the company is effective but they should include economic concepts like economies of scale and break-even analysis for better management. Ibiza Rocks needed to create a solid marketing strategy which will surely satisfy the customers of Brighton. It concludes that an effective promotional plan for keeping ethics in the advertisement can make Ibiza Rocks doing great business in a tough and challenging market like Brighton.

References 

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