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Business plan

LA K-pop Music Festival

Business plan for LA K-pop Music Festival Qinghe (Moment) Li of 24

Executive Summary

The LA K-pop Music Festival is located in Los Anglos, one of the cities that have large Korean population in the United State, which is over 3 hundred thousand. Our festival is K-pop music style festival, last for 3 days and holding in a weekend in August.

Since Korean Pop Music are very successful in the recent years, K-pop idols also made a lot of oversea fans. Our business’s mission is providing the best opportunity for K-pop fans in United State (especially for those fans that could not afford flight tickets) to have the chance to see their idols live performance, and even get to meet them. It will also be a very good chance for South Korean government to propaganda the Korean culture to the world.

Our ideal consumers are people between high school to middle age, including not only American and Korean, but also all the people who love K-pop music and Korean culture.

K-pop music fans will come to our festival for couple of reasons: We invited not only one idol group or only idols from one entertainment company, but all the hit group so that fans can meet all their idols at the same time.

Our business will be a publicly held corporation. In the company, I will find a group of four experienced vice presidents to organize and run the festival together with other managers and staff’s help. We also need the help from sponsors. The style of sponsors will including from related department of Korean government, restaurants, music apps, social medias, music labels to fans pages and beer companies.

Our Music Festival will be one of the biggest venues, LA Convention Center, in Los Anglos. In United State, there are already have many K-pop group concerns holding in all shapes and size in the recent years. However, we will face thrive for couple of aspects: tickets are too expensive, if big Korean companies willing to cooperate or not, and a huge amount of staff member and funding needed.

We believe our knowledge and passion will get over the troubles and thrives, and build our unique Asian brand in the United State, to let more people get to know Korean culture and K-pop Music.


PART 1: THE CONTEMPORARY BUSINESS ENVIONMENT

Description of Business

The LA "K-pop" music festival is a Korean pop style festival, which last for 3 days in August.

Form of Business Ownership

My business will be publicly held corporation because a great music festival needs several area of the work also needs lots of sponsors to hold and advertise before the music festival started or before the pre-sale. The publicly held corporation is the best way to attract the investors, and be available for sale to the public, especially for a new music festival.

Ideal Customer

I would describe my ideal customers 85% will be teenagers and college students, and 25% of people that are older than 25-year-old. Around 70% will be female since boy’s groups are more popular than girl’s groups. Almost 60-70% percent customers get their money for the tickets from their parents, and the other 30-40% percent of people either they are worker that have their own salary, or they saved money from their daily life for their idols.

Our Advantages

Our costumers will come to visit us for several reasons. We are the biggest K-pop Festival in the United State, therefore, fans that like more than one idols group could see more than more idols in one time. Moreover, since it will be a huge festival, it is also easy for fans to get to know new groups and it is also a good chance to buy official merchandises. Also we will have the best quality of the stage and light plus firework design, and different theme for different stage everyday. It will be the worthiest festival that k-pop fans would like to join. Also we will have the best transportation groups to help people get back to the city when the festival ends.

Ethical Issues

1) We are the most diligent, responsible and patience people to hold the festival, and invite most pop Korean idols groups in nowadays to be participate in the festival.


2) We want all the fans get more than what they paid, even the chance to hi five with the idols.

Social Responsibility

As lots of the music festival advertise for blues sky and clean air, however, none of them really make their promise. We will keep the environment and site neat and tidy through the festival, their will be enough cleaners and volunteers to clean up after the festival. Provide enough drinking fountain and public rest room (especially for female), also reasonable sum of trashcans.

Global Issues

I am considering to make my festival in several different countries since K-pop is a big hit right now and plays such a important role in the world music in nowadays. More and more fans from different countries showed how much that they want to meet there idols on the social media, and I think there are no border for music, it is important for a musician and a music lover to share music with the word. Europe countries will be my next goal, especially France since they also have such a huge population of K-pop fans.


PART 2: THE BUSINESS OF MANAGING

Mission Statement

The LA K-pop Festival will located at LA Convention Center, in Los Anglos. Our business’s mission is providing the best opportunity for K-pop fans in United State (especially for those fans that could not afford flight tickets) to have the chance to see their idols live performance, and even get to meet them. It will also be a very good chance for South Korean government to propaganda the Korean culture to the world.

Business Goals

Fist Year Goals:To get enough initial fund, including event sponsorships, donations and

pre-selling tickets. To invite Korean Pop Groups from different big entertainment

companies, to participate the LA K-pop festival. To build a official website for fans to know who is coming and can get

more information from the website. Also advertisements on all the Korean Groups’ (who are going to participate in the festival) official website page. Hopefully be on the top ten hot searching ranking list in the arts part in Google for at least a week.

Intermediate to Long-term GoalsTo open the K-pop festival in other cities of the United State, or even

open in other countries. To achieve profit in 3 years.


SWOT Analysis for The LA K-POP Festival

Org

aniz

atio

nal Strengths Weaknesses

New way of music festival event in United State that have many groups participate at the same time.

Professional and enthusiastic organizers, highly motivated.

Huge market in United State, huge population of K-pop fans.

Lack of money for start-up. Lack of experience in invited

group from big entertainment companies.

Not completely optimistic for the fun foundation.

Env

ironm

enta

l Opportunities Threats Great chance to popularize the K-

pop market in United State. Bring more international

experience and Korean culture to United State.

Attract companies to be the sponsor.

Fans from the East cost might not able to participate the festival.

Some of the Korean Groups had their own concerns in the United State already, fans might loss interesting to go again.

Management

There will be four parts of management in our company, each part has a vice president. There will be several managers under each president, and also because it’s a festival, so we will need many seasonal workers and volunteers. Vice President in MarketingVice President in Event managementVice President in FinanceVice President in Human Resource


Organization Chart


President

Vice president of Marketing

Vice president of Event Management

Vice president of Finance

Vice president of Human Resources

Consumer Service manager

Promotion manager

Event coordinator

Live performance manager

Accounting manager

Revenue and tax manager

Recruit manager

Training manager

Floor Plan

The music festival office will contain four different working area for each parts (also we will have many employees working at home), five offices for president and four vice presidents, one meeting room which can seat at least eight people, one resting and waiting area including the reception desk and a bathroom.


Raw Materials

(4) Office desk for 4 people @ $270 each……………………………….……………$1080(30) Office chair @ $70 each…………………………………………….…………………$2100Reception desk ……………………………………………………………………………………$250Council board …………………………………………………………………………………….. $500(5) Manager desk @ $275 each …………………………………………………………..$1375Sofa …………………………………………………………………………………………………….$400(5)Archives Cabinet @ $100 each …………………………………………………………$500Printer ………………………………………………………………………………………………...$100Water cooler ………………………………………………………………………………………..$120Cash register ………………………………………………………………………………………..$100White board and marker ………………………………………………………………………..$50Total …………………………………………………………………………………………………$6575

Quality Assurance

Our presidents and there managers will be most responsible and ensure everything goes well. The manager in marking will be responsible for getting enough sponsor and promotion, also being patient and helpful for the customers. The manager in event management is responsible for ensure especially the best atmosphere during the music festival, not only for the stage design, and also cleanup after the festival and funs’ support.


PART 3 PEOPLE IN ORGANIZATIONS

Corporate Culture

Our company’s corporate culture is being professional, being innovative, ad being enthusiastic. Every employee must do their job at their position, using their skills they have to solve the unpredictable issues. At the same time, they also need to be patient to costumers, sponsors, and other employee and volunteers come to help us. We always tried to improve ourselves by listening to other suggestions and experiences.

Leadership Philosophy

We believe “as you sow so will you reap.” It won’t necessary means how much we work on will turns to how much we will earn within a period of time, but it will affect for a long time, even a whole life. We are a professional group of people, and we work efficient by dividing and distribute the reasonable work to the most suitable person. At the same time, we will offer the chance for our employee to promote a higher position, even a new department when we growing larger and larger.

Job Descriptions

The job descriptions for LA K-Pop festival will be as follows:

President: The president is also the CEO, who has the right to decide all the decisions in the companies, and response to be collaborate all the information that each department provide in order to have a better plan of what is the next step of the company.

Vice president in Marketing: The vice president in Marketing will be responsible in the marketing area of the business. Must be well knowledge in K-pop music and both Korean and United State cultures. Making or help making decision in market such as what kind of advertisement should be promote in, and also leading it’s two parts: Promotion and consumer service, and giving suggestion and advice to them.

Promotion manager: The promotion manager will be responsible for deciding what to promote, where to promote and how to promote, also be responsible for the Website design. The promotion manager has the right to employ people helping him finish and perfect the work.


Consumer Service manager: The consumer service will be responsible for helping consumer solve problems and represent the corporate image. The manager has the right to employ several suitable man to help and also giving suggestion to the company about the issues given from the consumers.

Vice president in Event Management: The vice president in event management will be responsible for managing events and define the company brand through the festival. The vice president also needs to book venue and negotiate fees.

Event coordinator: The event coordinator will be responsible for coordinating events, including booking musicians, setting up guests in order, organize the site and environment, hiring cleaning crew and ensuring the event runs smoothly.

Live performance manager: The live performance manager will be responsible for ensuring the stage equipment’s’ quality including audible devices and lightening devices. Also giving the support of information technology.

Vice president in Finance: The vice president in finance will be responsible for directing financial strategies for our music festival and overseeing the preparation of financial reports and direct investment activities. Also needs to approve or reject lines of credit and commercial, real estate, and personal loans.

Accounting manager: The accounting manager will be responsible for applying his or her professional knowledge and skills in the preparation and presentation of financial and other decision oriented information to assist management in the formulation of policies and in the planning.

Revenue and tax manager: The revenue and tax manager will be responsible for performing account work for the Internal Revenue Service and equivalent agencies. Also responsible for managing tax reporting and compliance within an organization.

Vice president in Human resources: The vice president in Human resource will be responsible for providing human capital management advisory, and help company to match job seekers to employers and develop employee restructuring and recruitment plans. To find and to supervise the people for our music festival.


Recruit manager: The recruit manager will be responsible for sourcing, interviewing, and screening applicants for present and future job opportunities. Advertises job openings, interviews applicants, selects the most suitable match, and screens applicant by checking background and references.

Training manager: Responsible for offering training in a job-specific area. Especially for volunteers who will help during the festival. Focuses on teaching specific areas of knowledge or on-the-job capabilities needed for certain positions.

Job Specifications

The job specifications for the four vice presidents in LA K-Pop festival will be as follows:

Job Title: PresidentNeeded Skill/Credentials/Qualification for Job: The president is also the CEO of the company, and need to hold meeting with all the vice presidents once of two week to double check if everything is going on the right track or not. The president is response for the overall of the company, and need to make sure all the departments are doing their job correctly. The responsibility of president is huge, they could decide whether the company should be public or private, and has the right to decide to slow down or fast up the projects.

Job Title: Vice president in MarketingNeeded Skill/Credentials/Qualification for Job: The vice president in marketing should have strong human relation skills and create, deliver, edit, and optimize marketing material. Also he or she will be responsible for create and distribute customer survey. Also responsible for designing and supervising the creative process of an advertising or market campaign. Being able to set goal, monitor work and evaluate results to ensure their department. This position will require a degree in Business Management and two years of work experience or at least five years work experience in music industry.

Job Title: Vice president in Event managementNeeded Skill/Credentials/Qualification for Job: The vice president in finance should have strong human relation skills and being able to set goal, monitor work and evaluate results to ensure for his or her employee. He or she manage staff responsible for event coordination activities and ensure staff is


adequately prepared for event. The order for musicians and detailed of transportation issue for fans is responsible too. He or she must be energetic and willing to work long hours, especially during the festival, and be able to solve emergency event well. This position will require a degree in Business Management and two years of work experience or at least five years work experience in music industry.

Job Title: Vice president in FinanceNeeded Skill/Credentials/Qualification for Job: The vice president in finance should have great human relation skills and being able to communicate risks and profits with other vice presidents and other investors. At the same time, he or she should summarize and forecast on the state of company’s financial affairs. The position will require a degree in Accounting or a minimum of two years work experience in Accounts or Financial.

Job Title: Vice president in Human ResourceNeeded Skill/Credentials/Qualification for Job: The vice president in human resource should be able to identify and assess training needs within our company, and train employees for specific jobs. Also being responsible for providing leadership and establishing and implementing human resources strategy to go along with overall business plans and objectives He or she should be able to set goal, monitor work and evaluate results to ensure their department. Patient and helpful are preferred, and needs strong human relation skills to communicate and teaching people. The position will require a degree in Human resource and at least three years work experience in Human resource.

Training Employees

Our employees will including both full-time, part-time and volunteers during festival. Most of the full time worker only needs on-the-job training while they are at work. And for most of part-time or volunteers because they only work for specific days or hours, so they have to being off-the-job training some days before the festival. The training manger will be responsible for training, and other vice president will help and giving specific training and distribution to their managers later. The new hire should get to now our corporate culture, also the basic skills such like computer applications and policies as well.


Compensation

Each vice president will earn from $15,000 per year as salary in the beginning, as they are also the stockholders of the company, they will earn more from profits if we have. For all the managers is the same, but they won’t get extra profit. All the VPs and managers will work all year, but other employees under managers may work less, depend on their job. For other employees, they will get around $800-1000 each month. The salary will be paid monthly.

Incentives

The incentive for employees will not only be money on pay increases, but also giving them opportunity to go abroad and learn things in major labels and other great music companies.


Part 4: PRINCIPLES OF MARKETING

Target Market

The first target market is music fans age between 13-25. Most of the teenagers or young people who are K-pop fans, most of them go to see live shows or festivals more than once. At the same time, there are many students who study abroad, and they even listen to more kinds of music, and they are mostly be affordable for the festival ticket and will enjoy the time with their hometown friends.

The second target market is middle-age people, from age 25-45 for Asian, and European foreigners as well. Those people are Asian people who want to participate in a Asian festival, or a K-pop fans since K-pop just started. Those people are able to pay for that ticket, and drive or by public transportation to the festival place. However, the population of middle-age people who participate in a huge K-pop festivals are usually less than 10%.s

Product Feature and Benefits

Our costumers will come to visit us for several reasons. We are the biggest K-pop Festival in the United State, therefore, fans that like more than one idols group could see more than more idols in one time. Moreover, since it will be a huge festival, it is also easy for fans to get to know new groups and it is also a good chance to buy official merchandises. Also we will have the best quality of the stage and light plus firework design, and different theme for different stage everyday. It will be the worthiest festival that k-pop fans would like to join. Also we will have the best transportation groups to help people get back to the city when the festival ends.

Product Differentiation

Our special is the style unique and how many famous musician will come to our festival. We will hold our festival in LA Convention Center, in Los Anglos, and inviting some famous groups of famous K-pop idol groups to our festival, and do an opening for “LA K-pop” music festival by my great relationship with some of them.


Pricing

I lower the price than most of other music festivals so I will choose market share objectives, which we called penetration pricing. I won’t yearn for benefit in first 3 years, but I need the whole country know of us, and then we can make a profit to survive. The price will be located around $75-$200 for three days.

Place (Distribution) Issues

Our office will not be in the center of the city, but it will be setting up in a well-public transportation area. At the same time, the music festival needs a big place to hold, so we will be hold near the suburb to get a lower space expenses.

Advertising

LA “K-pop” music festival will using Internet, mobile and radio for our advertising ways. Because our Target market is mostly young people, who use their phones and surfing on website everyday, and either mobile or Internet advertising. At the same time, by using website putting advertisement, such like what the Google does for years is really specific. So that it will save lots of money on forcing our target market. By using public transportations, we will put advertisements on bus, taxi, and other public transportation so that people who take the public transportation could notice it and maybe interested in it.

Promotions

We will use publicity and public relation for our promotion. As we said before we will invite some famous musicians to come to our festival, so they could also promote for us during their shows or even when they are on TV variety shows. Our target is attracting professional musician and fans, getting better public praise. Meanwhile, for our ticket sales, we will give group purchase discount.


PART 5 MANAGING INFORMATION

IT Resources

We will need an official Website for our LA “K-pop” festival to help us promote and selling tickets online. We will need our website showing our funs our latest news, announcement, online gift shop including CD selling and about our company, including legal provisions. Also the general festival guideline, such like who will come and perform in our festival. For the employees in my marketing groups, they should new well in Microsoft software including Word, PowerPoint and Excel, and Photoshop is preferred. We need a IT counselor to help us for the security issues, such like building a firewall and identity theft and also solve our daily computer theft such like anti-viruses software and avoiding spam and spyware.

Customer Service

We believe if the people enjoy the festival and think it worth the price, they will come again and bring more friends. The satisfaction of our funs will be our main purpose in our festival. We will provide customers service call, website support and website Q&A. During the festival, we will have both volunteers and staffs come and help our funs, handing guiding sheets, guiding their ways to different stages and lost & found service as well. At the same time, we will provide suggestion box both online submission for winning gift card and lottery during the festival when they gives suggestions.


Cost of Doing Business

Office Cost

Expenses Expected Monthly Cost

Expected Yearly Cost

Rent 20,000 240,000

Salaries and Wages 20,000 240,000

Supplies 500 6000

Advertising and Other Promotions

1000 12,000

Utilities: Heat, Electricity, etc. 200 2400

Telephone and Internet 200 2400

I.T Support 400 4800

Total 42,300 507,600


Festival Cost

Expenses Expected Cost

Rent for the venue 60,000

Salaries for event stewards and security, and food for volunteers

5000

Rent for equipment 20,000

Promotions before the festival 20,000

Electricity 2000

Musicians earnings 60,000

Total 147,000

Expected Revenue

We believe our music festival will attract more than 30,000 funs during our first festival. The ticket price will be around $18(including the student price). And also rent some of the places in our venue for food and gift tents, $200 for each, about 20 tents. Also we will try to get some sponsors. This will lead to yearly revenues of approximately $580,000.


12-Month Income Statement (Profit & Loss Statement)LA K-pop Music FestivalInsert Year: 2018

Janu

ary

Febr

uary

Mar

ch

Apr

il

May

June

July

Aug

ust

Sept

embe

r

Oct

ober

Nov

embe

r

Dec

embe

r

YEA

RLY

Revenue (Sales)Ticket sales 540,000 540,000

Festival renting revenue 40,000 40,000

Total Revenue (Sales) 580,000 580,000

Cost of Goods SoldMusicians hiring fee 60,000 60,000

Festival equipment and other cost 87,000 87,000

Total Cost of Goods Sold 147,000 147,000

Gross Profit 433,000 433,000

Operating ExpensesRent Expense 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 24,000

Salary/Wage Expense 27,500 27,500 27,500 27,500 27,500 27,500 12,500 12,500 12,500 12,500 12,500 12,500 240,000

Supplies Expense 500 500 500 500 500 500 500 500 500 500 500 500 6,000

Advertising Expense 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12,000

Utilities Expense 200 200 200 200 200 200 200 200 200 200 200 200 2,400

Telephone/Internet Expense 200 200 200 200 200 200 200 200 200 200 200 200 2,400


I.T Support 400 400 400 400 400 400 400 400 400 400 400 400 4,800

Interest from Loans (if applicable)

Other Expenses (specify)

Total Expenses 31,800 31,800 31,800 31,800 31,800 31,800 16,800 16,800 16,800 16,800 16,800 16,800 291,600

Net Profit -31,800 -31,800 -31,800 -31,800 401,200 -31,800 -16,800 -16,800 -16,800 -16,800-

16,800-

16,800 141,400


Balance Sheet

Assets

Current AssetsCash in Bank $250,000Inventory $10,000Prepaid Expenses (insurance) $10,000Total Current Assets $270,000

Fixed AssetsMachinery & Equipment $2,000Furniture & Fixtures $4,000Real Estate / BuildingsTotal Fixed Assets $6,000

Total Assets $276,000

Liabilities & Net Worth

Current LiabilitiesAccounts Payable $100,000Taxes PayableNotes Payable (due within 12 months) $50,000Total Current Liabilities $150,000

Long-Term LiabilitiesBank Loans Payable (greater than 12 months) $200,000Less: Short-Term Portion $100,000Total Long-Term Liabilities $100,000

Total Liabilities $250,000

Owners' Equity (Net Worth) $26,000

Total Liabilities & Net Worth $276,000

PART 6: FINANCIAL ISSUES


Startup Costs

Our balance sheet shows total assets of $ 276,000. As the president, I will invest $56,000 in it, and each of my vice presidents will invest $20,000, and we will sale some of our share about $40,000 for corporate companies. Then our require startup costs is about $100,000

Financing

The core five presidents will put $136,000 into startup costs of our festival. Then the remain will be $100,000, we will loan from some banks in the US for about $100,000.


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