Rise Up Entertainment

RWS 390W Writing in Business Settings

Department of Rhetoric and Writing Studies

San Diego State University

San Diego, CA 92118

December 12, 2019

Ms. Jennifer Altschul

San Diego Women’s Investment Group

San Diego State University

5500 Campanile Drive

San Diego, CA 92182-4452

Dear Ms. Altschul,

Enclosed is the formal business plan for Rise Up Entertainment. This business plan was written by our team to deliver all the details and future outlooks of the company for Ms. Jennifer Altschul’s investment decisions. In this business plan, we included our company description, service description, market research and analysis, marketing plan, financial plan, and implementation plan for you to review.

Rise Up Entertainment's major service is event coordinating and planning. Rise Up Entertainment gives a variety of startup groups the opportunities to grow their network and brand name through our company’s services. We provide the location, catering, and marketing services to our all customers.  Rise Up Entertainment is planning to open to the public in 2022.

Thank you for taking the time to read our business plan. If there is any confusion or misinformation in our business plan, please feel free to contact us. We are available to discuss the business plan at your convenience at any time. We are looking forward to working with you in the future.

Sincerely,

Bernie Montenegro

Christian Lagrange

Santiago Zuniga

Yinan Huang

Jamese Mosley

Rise Up Entertainment Business Plan

RWS 390W, Group 3, Section 3

December 12, 2019

Presented to:

Jennifer Altschul

Women’s Investment Group (SDWIN)

San Diego Chapter

Prepared by:

Yinan Huang, Christian LaGrange, Bernie Montenegro,

Jamese Mosley, & Santiago Zuniga

Fall 2019

Instructor: Dr. Steve Merriam

Executive Summary

Rise Up Entertainment's purpose is event coordinating and planning. We give a variety of startup groups the opportunities to grow their network and brand name through our company’s services.

As a member of the San Diego Community, Rise Up Entertainment wants to create a fun, energetic, and interactive experience for the San Diego EDM scene. With our services, it is our goal to provide sports fans and concert go-ers with top tier live events.

After doing research on the attendees of some of the biggest EDM festivals, we found that the age range of most of the audience fell within the 21-30-year-old bracket. This is likely because of their willingness and ability to pay to attend these somewhat expensive events, such as the Electric Daisy Carnival. However, when looking at the household incomes for EDC attendees, most had earnings of less than $50,000 a year before taxes.

Rise Up Entertainment will initially be an event planning service for electronic music which has a great deal of competitors. Market share concentration in the concert and event promotion industry is relatively low and is highly fragmented, with more than 70,000 event promoters in the United States alone.

Rise Up Entertainment is a limited liability corporation owned equally by its five founders: Bernie Montenegro, Christian LaGrange, Jamese Mosley, Santiago Zuniga, and Yinan Huang. All play a vital role in the management and operations of the company.

Service-based businesses, such as event planning/promotion services, require little funds as they start-up and when Rise Up Entertainment expands, we will require less funds to maintain. According to IBIS World, Concert and Event Promotion Over the 10 years to 2024, industry value added (IVA), a measure of the industry's contribution to the overall economy, is expected to grow at an annualized rate of 3.7%. Comparatively, US GDP is forecast to grow at an annualized rate of 2.2% during the same period.

Rise Up Entertainment was created by five San Diego State University students who will act as the executive team throughout this business’ growth. This San Diego based business' purpose is to help rising talent get their name out into the world. With a strong five-year plan, Rise Up Entertainment will not only maximize in profit and clientele, it will also act as a one stop shop for local groups to take their talent, networking, and growth to the next step.

Company Description

Rise Up Entertainment is a limited liability company in the concert and event promotion industry whose purpose is to provide entertainment to the San Diego Community and promote local artists and athletes. We give a variety of artists, athletes, and vendors the opportunities to grow their network and brand name through our company’s services. Whether their passion is music, sports, or other ventures, Rise Up Entertainment wants to be by their side. We want to inspire and promote the next generation of talent to the public and provide fun interactive experiences. We provide the location, catering, and marketing services to our customers. We are dedicated to helping local artists in the greater San Diego area get their name out there and together, we will all rise up.

Rise Up Entertainment is a one-stop-shop for many businesses that want to host an event, with an emphasis in creating concerts for new artists. Our goal is to build relationships with local businesses that are looking to increase their awareness and build their clientele alongside us. Rise Up Entertainment provides all the essential items to startup groups and creators for event hosting; we also do the event marketing for our clients to make them well recognized by the public. We have a list of venues and vendors we had worked with previously. So, our clients do not need to find the venues and vendors themselves. Our well-experienced marketing team also helps our clients create and implant the event marketing strategies. Our services help our clients reduce their operating costs, because we give them access to our strong network of artists, vendors, venues, and a strong marketing team. This eliminates the need of them finding these event essentials themselves. The management team consists of Bernie Montenegro (CEO), Jamese Mosley (COO), Yinan Huang (CAO), Santiago Zuniga (CFO), Christian Lagrange (AE).

Rise Up entaintament’s mission statement is “To inspire and promote the next generation of entertainment through the creation of fun, interactive live experiences.”

Since we are a startup company we will host corporate events to raise funding for the next phase of our company. We will then begin working with local artists in San Diego and produce EDM concerts and shows. Within the first 5 years we plan to drive down our operating costs and improve our effectiveness in event production and promotion. We will then scale our operations to include bigger productions and implement our sporting events.

Service Description

Rise Up Entertainment is a service-based business that offers a variety of events which include:

1. Concerts (i.e. EDM, House/Techno)

2. Specialty Sporting Events (i.e. boxing, basketball, dunk contests, etc.)

As a member of the San Diego Community, Rise Up Entertainment wants to create a fun, energetic, and interactive experience for the San Diego EDM scene. With our services, it is our mission to provide sports fans and concert go-ers with top tier live events. Additionally, our concerts will headline some of your favorite artists. Our venues include a handful of warehouses located within a reasonable walking distance from parking as well as local food and product vendors located on the grounds of the warehouses.

How we Differ from Competitors  

Although Rise Up Entertainment is a relatively young organization, we value the longstanding tradition of going above and beyond what is expected. When planning for events/services, Rise Up Entertainment ensures that our planning for these events is formulated, assessed, practiced, worked and re-worked to ensure our customers are in for a safe, lively, and affordable experience. In addition, we also employ local San Diego vendors, and in turn, help generate jobs for people outside of the organization.

Technology

Technology for event planning has become essential in this new age of sporting events and concerts because consumers want their information in an easy and accessible format. Rise Up Entertainment will implement the following:

1. Blogs – Our company values customer experiences, so why not post them! Blog posts will help us understand our mistakes and correct them for future events. These blog posts will also serve as a time capsule so consumers can reflect on their experiences.

2. Official Website – Our official website will include our company’s history, webpage strictly for frequently asked questions (FAQs), and a webpage for scheduled events during each month as well as lineups for concerts and sporting events. Also, local vendor information will be updated regularly.

3. Streaming Service – We wish to partner up with companies such as DAZN, ESPN+, and Hulu live sports to provide event coverage for fans that could not make it to our sporting events. The streaming service will have all fights available and ready to watch. Similar to Pay Per View, we provide single fights for a price of $69.99 or an option of  a whole subscription for $7.99 per month.

4. Rise Up Entertainment App – The task of going through whatever web browser might take to long for some customers. We look forward to releasing our app that’ll help make the process of finding event times, artists, and vendors easier without going through the hassle of a web browser.

Service Fulfillment

Rise Up Entertainment will fulfill customers’ expectations and service needs by implementing roles for each owner.

First, by providing customer service hotlines for questions as well as a page on our website that is strictly for frequently asked questions (FAQs) just in case our hotline is not working.

Second, we will have optional surveys that will help correct any errors in our service and provide valuable feedback to create an exceptional experience for future events.

Future Services

Although Rise Up Entertainment will initially be centered around San Diego, we eventually want to expand our company’s events and locations. We plan to expand our company within 10 years to eventually serve the rest of California, Florida, and New York.

We also want to implement an App tailored to customers in those specific locations, so they are given correct information about vendors in their area, location of the venue, and time-based on where events are located.  

Along with our app, our partnership with DAZN, ESPN+, and Hulu Sports will put us in a position to further expand Rise Up Entertainment to different locations outside of California. Our streaming

Sales Literature

Along with ticket purchases, customers will be provided a brochure that highlights all concert details (artists, designated sections music sections, set times, vendors, merchandise, etc.) and/or sporting event details (main event, vendors, scheduled times, etc.).

Market Research and Analysis

Since fans of electronic dance music range in all ages over a vast number of genres within the category, we plan to target the segments that are most likely to attend concerts and events.

After doing research on the attendees of some of the biggest EDM festivals, we found that the age range of most of the audience fell within the 21-30 year old bracket. This is likely because of their willingness and ability to pay to attend these somewhat expensive events, such as the Electric Daisy Carnival. However, when looking at the household incomes for EDC attendees, most had earnings of less than $50,000 a year before taxes.^[1] In Enigma Research’s audit of the event, they found that the main occupations of festival attendees were in retail, restaurant service, or full/part time students. As far as current living situation, the majority of attendees were single and either lived with their parents or roommates. These trends and similarities in audience seem to be consistent in other non-EDM festivals as well, such as Lollapalooza Chicago and the Austin City Limits Festival in Texas^[2]. With these new insights into the types of people who are most likely to attend the types of events we plan on throwing, we have identified our target market to be older members of generation z and younger millennials from the ages of 18-30 with an interest in electronic dance music. This is because of their experiential consumption habits and their heavy preference for concerts and festivals.

Overview of Target Customers and Consumption Patterns

One great finding was that consumers of EDM tended to broadcast their fandom much more than listeners of other genres, and often openly mention their love toward the genre and lifestyle itself^[3]. This is important for us, as we are focusing on building up local talent whose names our audience most likely won’t know. As long as we are able to put on a fun and memorable event with good music, we should be able to satisfy our audience needs and expectations. Even Disney knows how EDM events are effective at drawing in a crowd of young adults. The past couple years, Disney has been hosting Electroland at Disneyland Paris in order to attract 18-25 year olds back to the park or to introduce them to the park if they've never been there^[4]. Nielson, a data company, reported that EDM fans accounted for 74% of live event attendance in 2017^[5].

EDM fans talk about the events and concerts surrounding the genre 30% more than the average music fan. Their conversations tend to take place on social media, which will help us in our efforts to build awareness around our events by making social media content that is attractive enough to share. When analyzing the social platforms used most in our audiences conversations about events, we saw Twitter to be very significant. EDM fans post up to 6 times more than the average user.  We also found a huge spike in the amount of visual posts during live events through the form of snapchat and instagram story posts, making up a quarter of the total amount of EDM related posts. EDM fans are highly active and engaged on social media. They tend to like to show off anything cool that they may be doing, so we should give them something to show off by producing events with strong visual stimulation, such as colorful decorations or out of the ordinary art installations. Our marketing efforts should contain the same type of visual stimulation, as plain advertisements are not likely to get our audiences attention.

Trends

Members of our target market are seeking much more interactive experiences in terms of live performances^[6]. They want bigger productions, bigger headliners, and are willing to pay a lot more for an admission ticket. With touring and live events making up a larger portion of an artists revenue than ever, it has become essential to put on a good show.^[7] Companies are working with technologies that produce more interactive experiences. One that is expected to gain traction is virtual reality. Recently, bracelets that blink and change color to the beat at concerts and festivals have been appearing and are being well received by attendees.^[8] Another type of wearable technology that is being implemented are RFID bracelets which replace physical tickets as well as track consumer behavior and purchases inside of events. This data can be used to tailor special discounts to attendees in real time to increase marketing and sales efficiency. Stage design is growing more spectacular due to improvements to sound, lighting, recording and special effects equipment that are aiming to create much more immersive environments. There has also been a huge increase in mobile ticketing applications that are lowering entry barriers into the industry since it is making it easier for promoters to market to targeted audiences using the data the apps collect.^[9] To keep up with these trends, we will integrate QR scancode technology into our ticketing systems to eliminate the need for physical tickets as well as lower the risk of counterfeit tickets. We will also provide interactive items such as light up foam glow sticks, LED beach balls, and other inflatables for the audience to toss amongst themselves. Our stage design will grow more advanced as we become more profitable in the years to come, including better visuals, sound systems, and pyrotechnics.  

Risks and Challenges

One of the major challenges is getting over the negative stigma that is associated with electronic dance music. It has often been called “drug music” and the events that promote the music tend to be associated with illegal drug use. This negative association may result in some problems for us. It may hurt us in the way that it draws people away from our events, but it most likely may cause problems for us in terms of liability for the safety of our attendees. There have been many reports of concert and festival attendee overdose, such as the incident at Hard Summer 2016 where 3 people died due to serious MDMA toxicity^[10]. Ways that we can go about reducing risk for these types of unfortunate but common problems are being implemented at many events recently. Insomniac events and Shambhala have provided harm reduction services throughout their concerts and festivals, such as Insomniacs well known ground control to patrol the festival grounds and Shambhala providing a station for checking their drugs and testing them to make sure they consumable^[11]. Rise Up Entertainment does not condone or encourage the use of illicit drugs at our events, therefore we will not provide test kits as that would be a sign of encouragement. Instead, we plan to implement a thorough pat down to prevent as many drugs as possible from getting in. For the ones that do manage to find their way into our events, we will have staff trained at identifying and responding to dangerous practices of drug distribution. We will also provide training to staff members in identify signs of overdose and how best to remedy the situation if it occurs. With the intention of selling alcohol at some of our events, we will also have the risk of belligerence among our customers and other negative effects of alcohol consumption. This my include damage to the property or fights breaking out between people. We will again ensure proper training among our staff and security to keep damage and rowdiness to a minimum, as well as purchase all the proper permits to sell alcohol legally. Since our events will include loud speaker systems, there is also the risk of hearing damage or loss. We will hire competent and reliable sound engineers to make sure the levels of the sound systems are balanced and at a decibel level that is safe for extended exposure for our audience. In the unfortunate event of problems occurring with pyrotechnics, fires may start that will result in smoke inhalation risk. We will always map out clear exit routes in preparation for an event to make sure that all of our attendees are able to make it out safely. When we produce bigger events in larger outdoor venues, there is the risk of gate-crashers jumping fences or rushing the entrances to gain free entrance. This will result in the venues potentially reaching excess capacity which can result in problems with experience quality caused by crowding. To prevent such disasters from occurring, we will employ crowd control and place security around the perimeter, depending on the size of our events.

Marketing Plan

Situational Analysis

Rise Up Entertainment will initially be an event planning service for electronic music which has a great deal of competitors. Market share concentration in the concert and event promotion industry is relatively low and is highly fragmented, with more than 70,000 event promoters in the United States alone. Amongst all the promotional companies, the main two include Live Nation Entertainment Inc. and The Anschutz Corporation which together make up 46.2% of the industry total market share^[12].  

Live Nation has been able to reap the benefits of its presence across 40 countries to achieve economies of scale and become a major provider of logistics and support for other promotional companies. The Anschutz Corporation is one of the largest sports and entertainment presenters in the world. Their strategy is focused around the development of large venues and arenas where they can host sporting events, concerts, and other special events.  

Some outside forces that may affect our business are the economy and popularity of electronic music. Since we offer a service that is not a necessity by any means, our consumers’ disposable income will play a large part in them attending our events. If there is a lull in the economy, we could see a large dip in our sales. A lot of our target audience is students who may not generate any income of their own, instead they rely on their parents to fund their trips to events. In the case of an economic downturn, parents will likely be more hesitant to fund these experiences for their kids. The popularity of electronic music can also greatly affect the sales of our events. Currently, electronic music is experiencing the largest boom in its history gaining more and more popularity each year. There was a 16% increase in interest in electronic music in 2018, up 4% from the previous year^[13].

Our marketing advantage is that we are a small, local company that prides ourselves on our quality of work rather than quantity of events. We place a heavy emphasis on partnering with local vendors and artists because we want to create a foothold in the San Diego area. We will provide everything from the artists to food vendors and facilities.  

Target Audience

For our first 1-3 years of operating as concert promoters, we will be mainly working with up and coming artists to help the artists and our company gain exposure and build a brand. This will allow us to contract artists for cheaper than it would be to get more well-established artists. This will also help us to focus on one part of the event planning business rather than taking on every event at the outset. In years 1-3, our events will mostly consist of electronic dance music which has a very specific target audience. After year 3, we would like to expand our business to incorporate other types of music and events including sports and events for other small businesses.  

^[14]

As the figure above shows, in our first few years of operating we will be targeting both males and females. The average attendance of music festivals is a little different than the listeners but still nearly evenly split between male and female at 44% and 56% respectively^[15]. The age groups we are targeting are mainly late Millennials and early Gen Z. The majority of event attendees are either in high school or college with a large drop-off of fans after they receive a college degree. This is due to the partying nature and amount of dancing that goes with attending these events. We will be targeting all wealth classes as the average household income of attendees varies greatly. Lower class people, including high school and college students make up a great deal of attendance at music events, but middle and upper classes are still well represented. The different classes usually attend events for different reasons. Lower class people tend to go to music events because they genuinely like the music while upper class people attend because of the party atmosphere.  

After a few years of operating, we will begin expanding our business to include events other than electronic dance music. These events include music of other genres, sporting events, and events for small businesses. This will slightly change our target market to include an older audience. Consumers aged 18-54 make up 74.8% of all attendees of events^[16]. We will further segment our target market using digital tools, based off interest in the type of event we are producing. Our consumer interests will range in a variety of different types of musical genres, sporting events, and related activities. We will also include business to business marketing because we will be targeting small businesses that would like to host events for their employees or clients.  

Strategies and Tactics

For the first few years of operation, the majority of our marketing will be done on social media and online. This will allow us to keep our marketing budget down and reach most of our target audience. Electronic music listeners are generally more active on social media than listeners of any other genre. They are considered “hypersocial” and on average tweet 1.85x more than the average Twitter user^[17]. Creating our own social media platforms can serve as a great way to market our events to people. For example, during Electronic Daisy Carnival last year, which had more than 400,000 attendees, had a feature called “Our Story” on Snapchat. This allowed people to post their snapchats from the event to a common story that anyone could view. Tactics like this help gain exposure for the event and allow people who couldn’t attend get a second-hand look at what the event is like.  

Since our target audience is initially going to be Millennials and Generation Z, marketing on social media and online should be sufficient to have successful events. Generation Z has never known a world without the internet and social media and on average spend almost three hours per day on social media platforms. Millennials spend slightly less time online but still come in at about two and a half hours per day. This gives us an abundance of opportunities to advertise to this audience in a way that they are familiar with. The platforms we will mainly be advertising on are Twitter, Instagram, Facebook, and Snapchat. These are four of the top five most popular social media platforms in the US. Other than social media, we will also be advertising on websites such as Eventbrite and TicketMaster that sell tickets for events. People that visit these sites are likely already looking to buy tickets for an event. We can leverage their interest in attending an event through our advertising.  

Budget Breakdown and Goals

Our short-term goal is to hold at least eight events in our first year and grow that by about two events per year. We plan to secure our clients for the events mainly through marketing our services and referrals from previous clients. Our first-year budget for advertising will be $1.8 million which should be more than enough to achieve our goals. Advertising will be a key determinant of our success because we need to create a foothold in the San Diego community. The majority of the advertising budget will go towards advertising on social media. There are a multitude of ways to pay for advertising on social media platforms but we will be using the “Cost-per-thousand-impressions" method. This means that we will only pay for the advertisement once it reaches 1,000 impressions and the cost will increase with every additional 1,000. The average cost for this type of ad usually runs about $1,500 per month and we will be doing this on four different platforms^[18]. That comes out to a total cost of $6,000 per month and $72,000 per year.  

We will also be employing digital billboards throughout San Diego to promote our company and events. These billboards will range from $2,500 - $8,000 per month depending on where we decide to have them displayed. We will be using one billboard in a medium-traffic area so that will cost about $5,000 per month. That comes out to a total of $60,000 per year.  The remaining portion of our advertising budget will be allocated as necessary for each individual event.

Management Plan and Organizational Chart

Ownership Structure

Rise Up Entertainment is a limited liability corporation owned equally by its five founders: Bernie Montenegro, Christian LaGrange, Jamese Mosley, Santiago Zuniga, and Yinan Huang. All play a vital role in the management and operations of the company.  

Management Team

The organizational chart above outlines how Rise Up Entertainment will be managed by its five owners. Bernie Montenegro (CEO) will oversee and assist the four other C-level managers: Santiago Zuniga (CFO), Jamese Mosley (COO), Yinan Huang (CAO), and Christian LaGrange (AE). The Chief Financial Officer will manage the Finance and Accounting departments. The Finance department will be in charge of short and long-term financing, budgets, and forecasting. The Accounting department will be in charge of creating financial statements, including income statements, balance sheets, statements of cash flows, and retained earnings. In addition to financial statements, the Accounting department will prepare end of year taxes.  

The Chief Operating Officer will manage the daily operations and Human Resources departments. Daily operations include monitoring invoices, contracts, and assessing company performance. The COO will also be in charge of contacting potential vendors, sponsors, and artists. The Human Resources department will be in charge of interviewing and hiring any new workers the company may need, employee relations, payroll, and training. The Chief Administrative Officer will manage the Purchases and Inventory departments. The Purchases and Inventory departments go hand-in-hand as the Purchase department will make the necessary purchases to ensure inventory is up to date and sufficient to meet our clients’ needs. All purchasing decisions will need to be cleared by the CFO to make sure we have the funds available to make the purchases.  

The Account Executive will manage client services and relations as well as the Marketing department. Client services and relations include establishing the clients’ wants and needs for the event and making sure the client is satisfied with the finished product. The Marketing department is vital to the company’s success because we need to be able to market our company to gain new clients as well as market our clients’ events to ensure their success. Every decision made by the lower-level managers will need to be approved by the CEO before implementation. While our company is still in its first stage of growth, we will not be contracting employees other than the owners. All aspects of the company will be dealt with by the management team until we build up enough sales to need external help.

Human Resources

The salaries of the five members of the management team will be determined by the company’s net profit during that year. We are not expecting to make a profit at the outset of the company; therefore the managers might not be compensated for the first year of business. Once the company generates a profit, the profit will be partially reinvested in the company while the rest will be split equally between the five managers. For example, if the company generates a profit of $500,000 for a fiscal year, 25% or $125,000 of that profit will be reinvested into the company for things such as increased marketing or possibly purchasing a venue. The other 75% or $375,000 will be split equally among the managers with each receiving a salary of $75,000.

Financial Plan

Service-based businesses, such as event planning/promotion services, require little funds as they start-up and when Rise Up Entertainment expands, we will require less funds to maintain. The following charts will show the time and money we have invested  into our company Rise Up Entertainment. According to IBIS World, Concert and Event Promotion Over the 10 years to 2024, industry value added (IVA), a measure of the industry's contribution to the overall economy, is expected to grow at an annualized rate of 3.7%. Comparatively, U.S. GDP is forecasted to grow at an annualized rate of 2.2% during the same period. IVA growth in line with or slightly faster than growth in the overall economy is typically indicative of a mature industry.^[19] As a first-year company, we plan to be at an IVA rate of 2.5% annually, and although it is around the baseline margin of the annual GDP forecast of the U.S economy, we expect full growth by the end of 2022 to reach 3.1%.

Projected Balance Sheet

The balance sheet is an important tool for investors to gain insight into a company and its operations. The purpose of Rise Up Entertainment’s balance sheet is to give interested parties an idea of the company's financial position, and additionally model what the company owns and owes. Rise Up Entertainment has continually planned for success, and this is outlined in our projected balance sheet below. We plan on operating our business in an almost debt free position with help from contributable investors. In 2022 (year 1), our total current assets will reach roughly $13.8 million and $20.3 million in 2023 (year 2).

The subcategory of assets titled current assets will have a total cash amount up to $10 million in year 1. Accounts receivable in year 1 will equal $500,000, along with inventory reaching $1 million for year 1, totaling current assets to $11.5 million. Assets has a second category, fixed long term assets, which includes land fees at and long-term investments (stocks, bonds, real estate, and cash) reduced by accumulated depreciation of $250,000 makes the total for fixed assets of $2.2 million in year 1. The company’s total assets will add up to $13.8 million in our first year. The total liability and owner’s equity will reach an estimated amount of $2.9 million in year 1. Owner’s equity (personal investment in the company and retained earnings) has a chunk of money from owner’s investments that has a sum of $2 million for year 1. Lastly, based on the common financial ratios, specifically the Debt ratio, our company will be operating as a debt free company with that number being 1 < .05 in year 1.

In our second year of operations, our total assets will be roughly $20.3 million. Of that $20.3 million, cash will amount up to $15.5 million while accounts receivable will gain roughly $1.5 million and inventory will tally $1 million and. Under liabilities and owner’s equity, current liabilities include accounts payable, short-term loans, and accrued salaries and wages are expected to total $793,250 for year 2. Our company’s total liabilities and owner’s equity such as long-term debt, $28,000, owner’s investments sum up to $2.5 million and retained earnings aggregating $2.7 million in total owner’s equity. The total liabilities and equity for year 2 is $3.5 million. In year 2, Rise up Entertainment will still be operating as a debt free company with the debt ratio being 1<.04.

Projected Income Statement

Our income statement is important because it shows the profitability of our company during the time specified in its heading. As a reader of the income statement bear in mind that the income statements main purpose is to illustrate revenues, expenses, gains, and losses; however, it does not show cash receipts (money the company receives) or cash disbursements (money the company has paid out).

The following table illustrates the companies expected income over the next couple years. According to Tanvi Kumar of IBISWorld, over the five years to 2024, industry revenue is expected to climb at an annualized rate of 1.9% to $36.6 billion. Continued growth in consumer willingness to splurge on industry events, supported by rising discretionary spending and corporate profit, is expected to drive modest but steady revenue growth during the period.^[20] Based on the report by Kumar, we can project year 1 total revenue to be roughly $10.9 million. sales revenue (number of tickets sold) in year 1 will amount to $11.2 million minus sales returns and allowances (tickets returned) of $350,000 including $75,000 in service revenue. Also, expenses accrued in year 1 include Advertising, Commissions, Depreciation, Employee Benefits, Insurance, Intertest Expenses, Rent, Salary Wages, Utilities, and Web Domain which accumulate to $5.9 million and net income after taxes total $3.9 million in year 1.

 In year 2 we see the total revenue is estimated to be $12.6 million. Sales revenue will total $13.3 million, then reducing sales returns and allowances by $750,000 and lastly increasing service revenue by $50,500. Furthermore, the same expenses listed above, Advertising, Commissions, Depreciation, etc., for year 2 will exceed year 1 by 1.12% and total approximately $7.1 million, however this is not including total net income from continuing operations after taxes which is estimated to be $4.5 million at the end of year 2.

Projected Statement of Cash Flows

The cash flow report is important because it informs the reader of the business cash position. For a business to be successful, it must have sufficient cash at all times. It needs cash to pay its expenses, to pay bank loans, to pay taxes and to purchase new assets.

The following table shows our companies projected cash flow. Although our cash flow in early year 1 caps off at $10 million, we still must compensate for three activities: Operating Activities, Investing Activities, and Financing activities. Operating activities are day-to-day activities, investing activities are purchases and sale of long-term assets and investments, and lastly, financing activities are transactions with owners and creditors. Let’s start with cash at the beginning and end of the year and work our way down from there. In year 1 our cash at the beginning of the year (January 1, 2022) will total $10 million and cash at the end of the year (December 31, 2022) will total $2.9 million. Operating activities in the year 1 will amount to a net cash flow of $2 million with cash paying for inventory, general operating and administrative expenses, wage expenses and interest. Those listed are subcategories of operating activities that will meet the baseline total of $2 million. The two subcategories of investing activities that are shown on the cash flow statement include purchase of property and equipment and making loans to other entities (vendors, sponsors, and organizers). The purchase of property and equipment is $2.5 million and $665,000 worth of loans to other entities will be approximately $3.2 million of net cash flow from investing activities. Cash paid for in financing activities include subcategories of repurchase of stock which is a total of $2.3 million while reducing repayment of loans to $350,000, and lastly dividends paid to shareholders while depleting the cash flow by another $500,000. The total net increase of cash from all three activities will be $6.6 million by the end of year 1.

For year 2, cash at the beginning of the year (January 1, 2023) is estimated to be $15.5 million and cash at the end of the year (December 31, 2023) will total roughly $2.9 million. Operating activities will total $1.9 million, which is less than the previous year due to the decrease in wage expenses. Similarly to year 1, the cash paid under operating activities for inventory purchases will also be $1 million. Other performances that are being cash paid are the general operating and administrative expenses that makes up $265,000 of operating activities. Despite wage expenses decreasing to $650,000 from its original $750,000, we don’t expect to be in the red for too long as we’re anticipated to increase wages the following year. The interest in year 1 will also increase to $23,500. Net cash flow for investing activities estimating to be $3.2 million with cash paid for purchase of property and equipment, $2.5 million, and making loans to other entities total $773,250. Finally, net cash flows from financing activities is lower than the original cash flow from year 1 with the total being $250,000. The repurchase of stock is the main sum of financing activities approximating $2 million as well as repayment of loans equaling a negative $1 million and dividends being a negative $750,000. Lastly, the total net increase in cash will have a total sum of $5.5 million.

Break-Even Analysis

The break-even analysis is a key metric that helps our business determine the cost structures, and the number of units that need to be sold in order to cover the cost or make a profit. The break-even point from the analysis is the point where total cost and total revenue are equal. Based on the graph below the break-even point is when revenue is a sum of $2 million and 8,000 tickets sold. A profit loss will occur if the at any point tickets are sold less than the break-even point. The graph shows the clear profitability with 24,000 tickets being the most profitable at $6 million and 2,000 tickets being least profitable at approximately $1 million.

Implementation Plan

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Rise Up Entertainment is a limited liability corporation that was founded by five San Diego State University students. This San Diego based business' purpose is to help startup groups get their name out into the world. As well as, assist in the planning of events when held at the Rise Up Entertainment venue. With a strong five year plan, Rise Up Entertainment will not only maximize in profit and clientele, it will also act as a one stop shop for local groups to take their talent, networking, and growth to the next level.

Rental Space

The current rental space will be located in San Diego slightly outside of Downtown San Diego. Relatively close to the popular  bars and clubs, yet far enough to be able to offer a unique experience far greater than the impacted “party” scenery . This location will be indoors with ample street parking available to guests. We also have exclusive parking which has our “Rise Up Entertainment” label visible for visiting guests. This location is wheelchair accessibility inside and outside of the venue. There are two stages available for performance needs, however, only one will be available per night per artist. The main stage is located to the left because it has more floor space. There will be wheelchair availability off the left side of the main stage, which will not interfere with our standing attendees or working staff members. There will be three bathrooms available, woman, men and neutral. All restrooms will have assistance rails. The men’s restroom will come with 2 urinals, and one stall while the women’s will come to 2 stalls. The neutral bathroom will have a urinal and a toilet with no divider meaning it will only be meant for one person at a time. The kitchen area will be located next to the bar but divided off by a wall so that there is privacy for both groups to work at there necessary speed. Coat check is to the right of the entrance for efficiency. Executive offices are not pictured here as they will be located in a separate location for the time being.

Loans and Income

In order to rent this location, the Rise Up Entertainments will apply for a Small Business Administration (SBA) 7(a) loan. Once approved through Well Fargo, we have the opportunity to take out up to $5,000,000 with long term financing repayment. These repayment terms are up to 7 years for working capital, 10 years for equipment, and 25 years for real estate^[21]. Currently we only find it necessary to take out $500,000 for the first year until we have successfully completed the first 15-20 corporate events. This could change depending on the outcome of each event but as of now, that will be our loan amount. It is important to note that the loan can be increased at any point as long as we continue to be in good standing.

In addition to using the SBA Loan for rental space, it will also be used to purchase venue equipment, as in tables and chairs. Decoration and specialized designs expenses will be handled by those who are being presented in the event.

First Year Events

Rise Up Entertainments first 15-20 events will take place during the first year of being in business. We will work strictly with small to medium sized corporations in San Diego in order to create a network among locals. There are a few reasons why Rise Up Entertainment has chosen to work with corporations during the first year compared to San Diego Electronic Dance Music artist. The first reason is liability and affordability. Although planning events is not a one size fits all, one things strong corporations have in place is their liability protection. Working with any corporate group should ensure that they come with liability coverage that can protect damages that occur. Whether it be accidental damage to venues materials because of an employee, most business have financial security in place to cover the cost we will set forward. In addition, small to medium size events can run anywhere from $750 to $75,000 depending on the needs of each group. To make sure that Rise Up Entertainment is always on the rise financially, we plan to create a flat percentage charge of 18%. This means that Rise Up Entertainment will charge 18% of the total cost spent to depending on the needs of the group. For example, let's assume Rise Up Entertainment agreed to put on a corporate event for a guest list of 40 people at $175 per person^[22]. In the end it took 15 hours to meet with the client, plan the event, and complete all necessary follow ups. In the end, rise up entertainment agreed (through contract) that the small event would have an 18% charge for the total cost spent. That means that by the end of the event, assuming no major losses were taken, Rise Up Entertainment would receive $2385 before the event even began.

 $175 x 40 guests = $7,000 x 18% = $1,260

15 hours x $75/hr = $1,125 

These numbers may seem low, however, this is before Rise Up Entertainment has included expenses for catering, entertainment (DJ’s or themed event), alcohol, decorations, and clean up. Assuming we did add those charges, the event could grab anywhere between $5000 to $10,000 in profit^[23]. It is important to understand that these profit values are based on rough calculations and assumptions. This is due to the fact that event planning cost and expenses vary depending on each individual event. Therefore, Rise Up Entertainment is basing its projection of of fixed numbers BEFORE additional services are added.

Rise Up Entertainment has decided to hire a bar service with a liquor license and liability contract already in place. Since drink (with alcohol) services can account for 10-20% of a private event budget, Rise Up Entertainment hopes to bring in roughly $1200 per 100 heads. Of that amount, Rise Up Entertainment will take 5% profit from the bar through contractual agreement. The 5% will not include tips given during the event.

Year Two Through Five

Although Rise Up Entertainment will be beginning its journey with planning events for local corporations, the goal is to be the one stop shop for local San Diego talent. We believe that in order to have a strong financial background and to work out first year bumps, we need to create financial stability. Once stability has been established, we are going to be opening our doors to the public so that they can enjoy all that RIse Up Entertainment has to offer. In the year 2022, we will be opening our doors to local San Diego EDM artist where they can take the stage and create an unforgettable experience for their fans and themselves. During this year, we plan to host as many DJ’s as possible with the promise of pay for their work. The pay will depend on their needs and range of popularity, as well as the outcome of the event. This means that the artist will earn a base pay, and if they outsell the event, they will earn more. However, if the event is not up to standard, they will not lose their base pay. We want fans of all genres to be able to open their hearts and eyes to the experience that is right on their doorstep, as well as promote talent of wide ranges. Down the line, Rise Up Entertainment does hope to extend their popularity to other event types, as in sports and events for other businesses but that will come after we truly established our name.

Nearing year five of Rise Up Entertainment, it is believed that we will not only be able to own the location that is currently being rented but also expand to other “sister” venues across the San Diego area. Currently we are not looking to venture past San Diego.

Marketing

Rise Up Entertainment will be creating their online presence through three current social media platforms and the office Rise Up Entertainment website. The three platforms chosen for our business is Facebook, Twitter (@riseupent), and Instagram (@riseupent).  Each platform will be laid out as a way to promote upcoming events and artist performing, as well as contact San Diego based artist that we believe would be great for specific event nights. Our social media will also allow for Rise Up Entertainment to communicate with its fans and help direct them when they have a question regarding our business.

Our website will be run by Gosite, a software company based in San Diego, California. Gosite is another one stop shop for business owners who need growth through online visibility^[24]. They will offer our business seven tools available through our website and their recently launched mobile app. The seven tools they offer are placement, messenger, reviews, booking, sites, and contact hubs. Each tool will serve its own purpose that can benefit Rise Up Entertainment. We believe that the placement tool is the most valuable software that is offered to us. Its purpose is to place our business across all 75 Google My Business (GMB) platforms, so that when potential customers as search “event planners near me” on their devices, they will see RIse Up Entertainment on the first page as long as they are within 50 to 100 miles of San Diego^[25].  Another amazing tool that will not only benefit Rise Up Entertainment but also the customers, is the booking tool. The booking tool will allow for potential clients to book meetings with us to discuss future events with Rise Up Entertainment^[26]. It also acts as a way for us to manage our growing clientele, so that we never overbook and can keep our business relationship in good condition.

Customer Service

Rise Up Entertainments target audience varies due to the variety of events we are going to be providing to the San Diego community. With regards to clientele, anyone had the opportunity to create an event, of course, it would be preferred that they were legal adults. However, talent has no age restriction. Although we are not a nightclub, we are offering entertainment that could require an age restriction in the future. In order to consume alcohol legally in California, you must be at least 21 years old.

Rise Up Entertainment will enforce rules and regulations among all guests who enter the venue. These rules and regulations can be found on Rise Up Entertainment official website: RiseUpEntertinament.com. They will also be available within the terms and conditions section when buying tickets for any and all Rise Up Entertainment events. It is important that Rise Up Entertainment customers refer to this website prior to entry of the venue as it can avoid confusion regarding what we are responsible for and how we handle conduct our business. By purchasing a ticket and entering the venue, there is a silent agreement made between attendees (customer/client) and agents (Rise Up Entertainment employees), that everyone is going to follow the procedures put into place.These regulations were put made for strictly for liability purposes and safety control, and as such, they will be enforced at all times.

When working with a private groups, contracts will be set in place prior to the event where rules and regulations have been discussed to fit the separate parties needs. However, that does not mean that private parties can dismiss the standard rules and regulations that are established on the Rise Up Entertainments website/contract. Violation of any rules and regulations will be handled in a similar fashion as that of a regular attendee. Therefore, we highly suggest that future clients read Rise Up Entertainment policies, as well as provide a copy of their needs outside of the contract in order to create a specialized agreement. Although we are offering this option to our private event groups, there are more procedures and documentations required before any signed or sealed by the CEO.

As stated previously, all information can be found on the official Rise Up Entertainment website.

Employment

Rise Up Entertainment will be offering full time employee positions and part time employee position. Full time employees will work no more than 40 hours in one work week, and will receive overtime as needed. Scheduling will be determined determined based on events and staffing needs. Rise Up Entertainment will be hiring yearly as positions will constantly need to be filled and new roles become available. Applications can be found under “career” on the Rise Up Entertainment website. Work benefits are currently in the process of being negotiated with our San Diego Human Resource Department. Only full time employees will be offered benefits. For more information regarding employment, it can be found on the official Rise Up Entertainment employee contract which is located on Zenefits.

Although not a local San Diego business, Zenefits is a company based in the United States that offers cloud-based software as a service to companies for managing their human resources. They also offer a particular focus on helping organizations with health insurance coverage. Rise Up Entertainment also plans to use this software to assist in tracking company hours, paystubs, and individual employee documents^[27].

Zenefits was founded in the year of 2013 and their headquarters can be located in San Francisco, California^[28].

All employees and contractors partnered with Rise Up Entertainment, will be paid on the 15 of every month. The only time this will change is if the 15th falls on a holiday recognized by the government. If this does occur, all partners will be paid the following day, unless it is a Friday. In that case they shall be paid that following Monday.

Estimated Growth

Event planning in itself is a stable business with constant opportunity for growth within the San Diego community. More growth means more business. Therefore, we project that Rise Up Entertainment will be at a constant financial incline of 1-2% every year^[29].  We strongly believe that the partnerships, sponsorships, and events are enough to put Rise Up Entertainment on the map for success.

It is important to understand that profitability in the market of event planning is not an exact percentage or dollar amount. This is most likely due to the large variety of event planning sub-sectors which vary in budget amounts, depending on the owner and event being put together. However, IBISWorld uses earnings before interest tax (EBIT) as a way to indicate the potential profitability of event planning companies. The formula that would be used is revenue minus expenses (excluding interest and tax).^[30] Assuming that all companies manage their own revenues and expenses, profitability will vary.

Conclusion

To summarize, Rise Up Entertainment is the one-stop-shop for all your event promotion and production needs. We will host a variety of fun and interactive events, with an emphasis on EDM concerts featuring new and upcoming San Diego artists. Our goal is to build relationships with local talent and vendors that are looking for exposure and to build their clientele alongside us. As members of the local community, we want to give local artists the chance to succeed. Our management team is dedicated to fostering their growth and providing the best experience for the attendees of our events.

Although we are a new company, Rise Up Entertainment is offering something unique to the community. We offer more than just events, we offer our customers the opportunity to be a part of something bigger than just themselves. A place where they can feel a sense of connectedness with their fellow peers and be amongst a group of people who are there to have a great time and escape the stress of everyday life alongside them.

We are confident that our business plan and strategy for growth will lead to success. We are not only in business with the goal of our own growth and profitability in mind, but also hope for the growth of the people we work with. We are focused on the success of our community as a whole, and are proud to serve as a platform for undiscovered talent to get a chance to showcase their skills. Our events will serve as a gateway to a journey of creating unforgettable memories with some amazing people. We invite you to take part in this journey, and join us on our rise up.