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Oprah’s Events is an event planning company located in the State of Texas and is tasked with providing quality, originally, artistically designed and organized events. In its formulation and establishment, it focuses in designing and conducting weddings, corporate events, as well as cultural or family celebrations to the residents of the City of Austin, Texas. The event planning industry in Austin is booming particularly because there are frequent music and food festivals and as such, it is an attractive venture for any investor. The essay will describe the financial plan for Oprah’s Events Company with emphasis on the implementation of guerrilla marketing strategies that will guarantee continuity of the business.
A financial plan in this case will involve a complete determination of the past and current financial status of a firm with the aim of forecasting its assets, liabilities, and income. Specifically, Oprah’s Events needs to focus on budgeting since it will help to analyze how rationally the company has spent their capital in the previous year, how much they have saved in their accounts as well as invested in the future advancement so as to determine the business’s financial position. These key management considerations will help the firm to establish itself in the city. The organization’s planning of total asset stands at $1 million and it is expected to increase to $1.5 million by the end of the fiscal year. The firm is also targeted at having a net income of $0.5 million in the first year and increase by 30% annually. Therefore, by undertaking such budgeting activities, the firm will be capable of evaluating if they are on the right course of performance with regard to attaining its goals as well as mission and vision (Dowson & Bassett, 2015). Therefore, in determining the financial position for the Oprah’s Events Company, the focus will be mainly placed on the balance sheet and the income statement, or profit and loss account.
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Guerrilla Marketing Strategy
Guerrilla marketing is defined as an activity in which a business executes an unusual, extraordinary and an unexpected marketing strategy while being situated in the same location so as to increase the market share for its products and services (Lum, 2016). The main idea behind this approach is to develop a competitive advantage over the companies in the same industry who are competing for the same market and offering the identical services. In today’s business world, the competition is thriving hence making it hard for a business to succeed and gain profits. Therefore, to keep the consumers connected to the company’s services and products, a notably unique strategy to entice them needs to be used, which should be better than what the competitors are using so as to create differentiation (Lum, 2016).
Oprah’s Events Company intends to use this guerrilla marketing strategy because this way they are going to be more safeguarded against challenging and unpredictable market conditions. Besides, it is more customer-attractive as compared to the other traditional marketing strategies used; therefore this makes it more memorable and creates a bigger impact. In establishing the strategy, the company has remained assertive and bold when taking chances hence making the company much stronger in terms of decision making. For Oprah’s Events Company to enact this strategy, it aims to give away or in other terms provide for free some of its services to particular categories of clients. This strategy is very influential since when one is offered free services in his or her event, the next thing they will do is to give referrals to the company when their acquaintances or friends need something organized for them. Referrals are an easy way to be introduced to new customers and will presumably increase the market share translating into higher profits for the company.
For the company to be efficient in its market advancement, it should put into consideration the use of coupons, vouchers in which their holders are provided with a discount for a particular service in the company. This strategy will be used mainly to attract new but can also be used to retain or guarantee the return of the existing customers. Although this is a risk service, it helps to grab customers, and after grabbing them, it will be very easy to maintain them with high quality services and therefore to have the upper hand in relation to the company’s competitors.
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The company intends to use the social networks to advertise its services, and this will help in creating awareness as for what is offered by the firm. These social media may include having a company website where the corporation will frequently update its customers on all the products they are currently offering, discounts, and also certain convenient ways of payment. This will help the customers develop trust to the company as well get acquainted with a thorough information of what the company is involved in.
The other social advertising means that the firm can use are Facebook, Myspace, and YouTube among others, which are free websites where it is easy to find potential customers. There it will be easy for the company to create its business profile and also post any commercial that can attract the attention of the users and therefore entice them to view the company profile (Sun, 2018). To make use of these sites more and to get more people visit the company’s website, Oprah’s Events will also post a link to it in each posted material in the aforementioned social networks.
Issues Facing the Business Management
Different issues that affect small business management in general are forecasted to affect the firm as well. One of the key issues which are expected to face the company is the riskiness in expanding since the firm aims to open a second store in a new market. In most cases, small businesses are faced with the uncertainties of managing the business among other challenges. Expanding small businesses such as the Oprah’s events will mean that it will need new clients, which is hectic since new organizations feel the lack of the necessary number of clients. On the other hand, the benefits obtained from the case of opening a store will outweigh the risks which the entrepreneurs fear. Initially, the new business will bring curiosity to the resident customers through a wide advertising campaign. Firstly, they will be attracted to the company as something new, and in the process, they will be eager to inquire if the services rendered by the business are better than those offered by the already established companies. Finally, the quality of the services provided will stimulate them to use it repeatedly and recommend it.
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Moreover, small businesses face issues relating to media and advertising since it will require proper marketing strategies. As aforementioned, Oprah’s Events Company aims to utilize the media and advertising extensively since it is evident that it helps to win customer attention which rests there nowadays. Little by little, the media attention will help the company in increasing the sales of services through popularizing the store which attracts more customers through online platforms (Sun, 2018). The benefits of the media will be felt more considerably, particularly when the firm opens of a new store, mainly for the reason that it will help the firm to boost its market share through increased customer buzz which will be translating into more income flows to the company shortly.
Opening a Second Store
In choosing a better location for opening another representative store for the Oprah’s Events Company, some considerations were taken into account. One of such considerations made was the strength of the current store – it was predicted that in the next two years the company would be making more profits from its work, meaning it is more robust, known by the customers of the area and therefore the second store will not affect the performance of the first one (Sun, 2018). Another issue considered was a thorough market research of the new market area so to ascertain if it is the best choice to invest in.
The selected location was New York City located at 745 5th Ave Suite 500, New York, NY 10151, USA. This is one of the most populous cities in the United States of America. The main reason behind choosing this city as the best location to open one more venue is that it is the most populated state and city in the entire United States of America, and due to this, it exerts a significant impact upon commerce, finance, media, fashion, art, and also entertainment (Sun, 2018). With all these characteristics, it means that many events are often held within this city and therefore provide a better opportunity for the Oprah’s Events Company’s store to find its niche and attract new customers due to the high quality of the services and only positive feedback from the current clients.
Financing the Second Store
Pricing is an essential component when defining business strategies and thus Oprah’s Events Company will need to evaluate the best price possible to attract and retain their customers in a new place. In essence, the firm can price its services according to the cost of production whereby the marginal cost is equal to the marginal revenue. They can still offer discounts and apply other promotional pricing strategies when starting the operations there. However, the price should have some positive profit and take into consideration the differences in the cost of rent as well as other expenses which are reasonably higher in New York than in Austin. If not, the store will be forced to shut down and return to a one-store operation.
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Crediting may become an important factor in ensuring the success of the Oprah’s Events Company since it will help to fund the advertising, current operations, and any expansion activities connected with the desires of the new demanding market. In this case, opening a new store will require more funds and for Oprah’s Events Company’s store to be sustainable in New York City, additional finances will be needed. Therefore, the company will choose the debt financing as the best option for acquiring funds to support the opening of the new location. The plan is to obtain a loan from the bank so as to advance the designed project. However, the bank will most probably want the company’s land asset in Austin as the collateral for the amount given. Moreover, Oprah’s Events Company will have to provide its financial statements for the last year and also other projections for the following two years to receive the credit. The company can also use its credit rating by any known credit company with which they have already worked to support its loan application. One more variant is for the firm to sell a part of its equity, but in such case it will not be able to retain a complete control.
From the discussion above, it is evident that the firm is forecasted to reach a higher level than before if another store is a success in a new place. In New York, there are many companies which offer the same services as Oprah’s Events Company, but since Oprah’s marketing strategy is strong, there is a high chance that the firm will take its market niche. The company’s brand power, service quality, and marketing strategies will help it earn the attention of the new clients in New York City. Therefore, no serious rate of competition is expected to be experienced.