Imade Toni-Osagie

BUSINESS PLAN Lyrics to My Beat CONFIDENTIAL Lyrics to My Beat …Creating Future Stars Today. Business Plan. 2018. 2 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat Table of Contents Executive Summary Introduction……………………………………………………………………………………...8 Mission Statement………………………………………………………………………………9 Objectives……………………………………………………………………………………….9 Keys to Success…………………………………………………………………………………9 Highlights of Lyrics to My Beat………………………………………………………………10 Business Summary and Financing Business Overview…………………………………………………………………………….12 Management Team……………………………………………………………………………12 Products and Services…………………………………………………………………………13 Company Strategy…………………………………………………………………………….14 Required Funds……………………………………………………………………………….14 3 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat The Business Model Introduction…………………………………………………………………………………….17 Business Model Canvas……………………………………………………………………….18 The Customers…………………………………………………………………………………19 Products and Problems………………………………………………………………............19 The Value Proposition…………………………………………………………………………20 Key Partners……………………………………………………………………………………21 Key Activities……………………………………………………….......................................21 Key Resources………………………………………………………………………………….22 Cost Structure………………………………………………………………………………….22 Market Analysis Summary Industry Overview……………………………………………………………………….........24 The Nigerian Music Industry in Numbers………………………………………………….24 Talent Shows in Nigeria………………………………………………………………….......25 Market size…………………………………………………………………………………….25 Market Needs………………………………………………………………………………….26 Market Growth………………………………………………………………………………...27 4 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat Marketing and Publicity Plan Overview……………………………………………………………………………………….29 Positioning……………………………………………………………………………………...29 Pricing……………………………………………………………………………………….….29 Promotion and Publicity……………………………………………………………………...30 Competitive Advantage………………………………………………………………………32 Milestones………………………………………………………………………………………33 Strategy and Implementation………………………………………………………….…….33 SWOT Analysis…………………………………………………………………………………34 Strategic Alliances- Analysing the top 10 musicians in Nigeria………………………….35 Operational Plan Overview……………………………………………………………………………………….37 Business Structure…………………………………………………………………………….38 Criteria for Entry and Selection……………………………………………………………...40 Requirement for Judges’ Selection…………………………………………………………40 IT Unit…………………………………………………………………………………………...41 5 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat Financial Plan Financing……………………………………………………………………………………...43 Underlying Assumptions……………………………………………………………………...43 Sensitivity Analysis…………………………………………………………………………….43 Sales Forecast………………………………………………………………………………….44 Revenue Streams………………………………………………………………………………45 Assumption…………………………………………………………………………………….45 Projected Financial Statements……………………………………………………………...48 Statement Analysis…………………………………………………………………………….54 6 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat “Go out and buy yourself a 5 cent pencil and a 10 cent notebook and begin to write down some million-dollar ideas for yourself” BOB GRINDE 7 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat EXECUTIVE SUMMARY INTRODUCTION Lyrics to My Beat (hereafter referred to as “LTMB”, “The Initiative”, “The Brand” or “It”) is an online talent show competition. It will be developed, marketed and managed by Qube 247- a budding online music platform. Established in 2018, LTMB is set to recreate music competition standards. LTMB is changing the status quo by offering a standard music platform where individuals (or groups) in all types of genres can showcase what they got in the most convenient manner- from the comfort of their homes. This strategy is driven by a simple conviction- Everybody is a star. Research shows that a lot of Nigerian music talent shows have restrictions- a limited number of people housed and groomed, subliminal promotion of certain participants by the organisers or a competition set up for specific genres only. LTMB intends to change all that. Regardless of genre, looks or status, LTMB will shine the light on all participants with no bias. LTMB will work with established Nigerian producers to create catchy original beats for undiscovered talents to sing/ rap/ hum/talk to. The winner of the competition gets a music distribution deal with Qube 247 and other mouth- watering prizes. The goal is to bridge the existing gap in the Nigerian music industry. It will be strictly for the Nigerian music market to put the spotlight on the untapped potential in the Nigerian music industry. The purpose of this business plan is to raise N- for the development of an online music competition while showcasing the expected financials and operations over the next three years. 8 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat MISSION STATEMENT “The goal is to spotlight undiscovered music typically overshadowed by their mainstream counterparts” - LTMB Mission Statement. The mission speaks to underground artistes, unsigned talents and the entire Generation Y. Everybody gets a shot- all entries will be considered and the participants with exceptional lyrics will be rewarded. OBJECTIVES The initiative’s main objective is to showcase musical talents in the most convenient way, without distinction of gender, appearance, genre or other opinions by: • Developing an online platform where all sounds are encouraged to participate. • Fostering relationships between the industry veterans (producers) and the protégés (participants) • Establishing and growing LTMB into a formidable talent competition, merchandising and multimedia brand. • Creating a steady stream of revenue from voting portals, merchandising and eventually digital sales and live performances. KEYS TO SUCCESS • • • • Focus on creating a formidable internet presence and building the foundation for a recognisable web brand. Solve problems with independent marketing, promotional and advertising budgets. Consistent engagement of the public to ensure active participation in the competition. Ensure financials are managed effectively, marketing and promotional budgets are monitored and develop successful growth strategies. 9 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat HIGHLIGHTS OF LTMB § § § § § § Innovation/ Convenience- LTMB will operate strictly as an online platform. All entries and announcements will be via the web and social media. Multiple streams of income- Asides from revenue generated from the voting portals, LTMB will manufacture and produce a large variety of merchandise at the lowest possible costs. Collaboration and Co-creation- LTMB will work with established producers and other industry professionals to create the best music platform. Trademark- the initiative is in the process of registering the name “Lyrics to My Beat” as a trademark. Advertising- LTMB intends to work with leading agencies for digital marketing and branding services. Management- The brand’s management is highly driven and passionate about seeing the company goals to fruition. 10 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat “All achievements, all earned riches, have their beginning in an idea” NAPOLEON HILL 11 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat BUSINESS SUMMARY AND FINANCING BUSINESS OVERVIEW LTMB is the brainchild of Qube 247 Ltd. Qube 247 was registered and incorporated on the 30th of November, 2015 as a limited liability company in Lagos State, Nigeria. The idea was an original conception of the founder, David O. Adeyemi. The plan was to create a talent show built on convenience and general acceptance. Preliminary research showed that most talent shows had rigorous application and auditioning processes. This alone served as a deterrent and talent dampener to the prospective participants. After all of that, participants were still not fairly selected. With LTMB, Adeyemi seeks to change all the politicking and focus on the music. According to him, “the public cares only for artistic content within the music. Lyrics to My Beat is looking for artistes (without bias) with exceptional lyrics that can blend with our original beats to create infectious sounds that will break cultural boundaries and possess major crossover appeal” MANAGEMENT TEAM David O. Adeyemi Founder and CEO (Chief Executive Officer) David has always been an avid music lover. His love for music and an enterprising mind led to the creation of Qube 247 in 2015. He has since created other projects in entertainment and the service industry. Currently an LIRS employee, he uses his experience in people management and business administration to improve the operations and profits of Qube 247. David holds a BSc in Accounting from Benson Idahosa University, Benin City, Edo State. 12 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat Aisosa Okundaye COO (Chief Operations Officer) Over the last five years, Aisosa has been an entrepreneur, advisor, writer and business development executive; working in various roles within and outside the entertainment industry. He started his career as a content developer for an entertainment outfit before leaving for Madison Park Ltd to build his business development skills and all the while still being an integral part of Qube 247. He is focused on actualising the vision of Qube 247, which is ensuring the availability of African music for music lovers everywhere and giving proper monetary value to this music. Aisosa holds a B.A in International Studies and Diplomacy from Benson Idahosa University, Benin City, Edo State. Sesan Adeniji Strategist Sesan’s influence in the music industry is very significant. For over sixteen years, he has been influencing the opinion of the music industry in the news by granting every talented artiste the same opportunity to be heard, whilst ensuring these talented acts are noticed by the right brands and event managers. He serves Qube 247 by offering his vast acumen from working with the greats in the entertainment industry. PRODUCT AND SERVICES The primary revenue source for LTMB will come from the online sales of forms for the competition as well as from corporate sponsorships. These corporate sponsors will cobrand the initiative. The secondary revenue will come from merchandise. The initiative will manufacture and produce a large variety of merchandise at the lowest possible costs. Every piece of merchandise, once sold, becomes a living piece of advertising for our project, creating a dual benefit for LTMB and its customer base. These items will include but are not limited to the following: T-shirts, Baseball Caps, Sweatshirts, Wristbands and other collectibles. 13 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat COMPANY STRATEGY LTMB intends to carve its niche with the following strategies: Innovation The foremost strategy for LTMB is its online based platform. The competition will be strictly online to increase accessibility and convenience. Differentiation The initiative will not adopt a “winner takes all” model but instead a first to third place prize model. This will encourage participation and healthy competition amongst the contestants. Strategic Alliances LTMB will use certain strategic alliances to gain a sizeable market share. This strategy will be largely based on Sesan’s extensive inside knowledge of the entertainment industry and an established network of contacts within the industry. The plan is to work alongside some music industry favourites (musicians, DJs, producers and on-air personalities) to gain grounds and get maximum participation. REQUIRED FUNDS The initiative seeks a capital infusion of 50 million naira from prospective investors. The interest rate and other obligations are to be further discussed during negotiation. This business plan assumes that the investor will receive a 15% equity share in LTMB. The investor will not have any active role in the day-to-day operations of the company, or have the power to bind the company with any contract, promise, agreement or undertaking. This money will be used to cover costs associated with: 1) Development of website. 2) Promotional items. 3) Brand ambassadorship. 4) Legal fees. 5) Competition prizes. 6) Logistics etc. 14 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat The investment is required to meet the competition’s first milestone which is reaching positive cash flow by third quarter of operations. The initiative is projected to generate 45 million naira in revenue by the end of the first year, with a profit margin of 30%. 15 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat “Setting goals is the first step in turning the invisible into the visible” TONY TOBBINS 16 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat THE BUSINESS MODEL INTRODUCTION The LTMB business model, like any business model will describe how the brand functions; its value proposition, revenue streams, and how it will create and adapt to new markets and technologies. LTMB business model will create value for the following group of people • • • • Participants are given a platform to showcase their talents and win amazing gifts. The Nigerian entertainment industry acquires new talents. Corporate sponsors get the opportunity to promote their brands. Investors enjoy timely return on investments. 17 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat BUSINESS MODEL CANVAS FOR LYRICS TO MY BEAT KEY PARTNERS KEY ACTIVITIES VALUE PROPOSITION CUSTOMER RELATIONSHIP CUSTOMER SEGMENTS Participants in the entertainment industry (artistes, producer and DJ) Promoters. Influencers. Sponsors. Judges. Customer acquisition. Seamless transactions. Website management. Merchandise design. Beats production. Convenience. Innovation. Multi-genre. Affordable. Fairness. Co-creation. Personal assistance. Nigerian youths (18- 35 years) Nigeria based. CHANNELS KEY RESOURCES Website. SMS voting portal. Staff. Website. Word of mouth. Social media. COST STRUCTURE REVENUE STREAMS Set up costs. Operations costs. Legal costs. Promotion costs. Online sales of forms. Sponsorship fees. SMS votes. Google ad clicks. Merchandise. FIGURE: THE BUSINESS MODEL CANVAS 18 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat THE CUSTOMERS The target customers are youths with regular access to the internet and active social media users. All of our target customers must be Nigerian based; their ages ranging from 18- 35 years old. The winners of the competition will be brand ambassadors of Qube 247 so it is important they are within Nigeria and young enough to be dedicated to the cause. Active social media presence will be a plus because it is an online competition; gender is not relevant, just raw talent and dedication. The issue of language will also not be a hindrance. Participants are allowed to flow in English, Pidgin or any local dialects as long as they are on the beat. Another customer segment is the fashionable millennial that will love the LTMB merchandise. The objective is to ensure these items are trendy enough to be worn for all occasions. PRODUCTS AND PROBLEMS PRODUCTS LTMB is offering the following products and services: 1) One of a kind talent show. 2) Top-notch beats from a reputable music producer. 3) Quality merchandise. PROBLEMS Convenience: Most talent shows lack creativity and adaptability. Products should be tailored for the public and not the other way round. In the present technological climate, a competition that creates a platform that requires minimal stress to participate in will be generally accepted. A show that does not require a designated venue for example will be good for everyone; participants should be allowed to partake from the comfort of their homes. 19 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat Predictability: There is a tendency for competitions to be clichéd and predictable in their winner selection. In the bid to appeal to a certain crowd, they tip the scales to favour certain contestants based on looks, sounds and other pre-determined indices. This means that certain contestants never stood a chance. Collaboration: Being a newbie in any industry can be daunting, even more so, the entertainment industry. Many talents get discouraged trying to break into the mainstream and give up on their dreams. If an opportunity to collaborate with industry veterans was presented, these protégés will do better. Income Generation: There are a lot of investors looking for viable businesses to invest in. Promises are made, financial projections are drafted to look favourable but the real question remains- How many feasible streams of revenue does the business have? This will determine the certainty of the returns on investment. THE VALUE PROPOSITION LTMB has analysed these problems and come up with the following value propositions: Convenience- LTMB will make the competition as hassle-free as possible. Participants will be allowed to contest from the comfort of their homes, offices, favourite hangout spots- anywhere they like. It is important to the brand that the participants are stressfree to enhance their creativity. Innovation- the application and participation processes will be strictly online- making LTMB a one-of-a-kind show. The goal is to make the experience as seamless as possible. Multi-genre- all genres will be accepted and considered without bias. The competition was created to explore untapped talents and new sounds as against creating more of the existing sounds. No artiste will be profiled or partially privileged. Collaboration- one of the most unique propositions of LTMB is the collaboration between established producers and the participants. This will boost the participants’ confidence and ensure they bring their A-game. 20 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat Quality merchandise- LTMB already has a number of revenue streams but the production of quality merchandise is worth mentioning because even after the competition, this will still be a source of revenue. LTMB is dedicated to creating quality, affordable and quirky merchandise. KEY PARTNERS LTMB has a number of key partners; • Participants in the entertainment industry (artiste, producer and DJ), • Promoters and influencers. • Sponsors and judges. • Technological partners. The entertainment industry participants are part of the supply side. They help deliver the value proposition to the end users (the contestants). Promoters and influencers do the same: they create a unique value proposition by ensuring the service is transferred seamlessly from the brand to the contestants. The sponsors provide funds and promotional items while the judges ensure the best talents get the prize. The technological partners are important because they oversee: • Website • SMS portal • Google Ads • Payment etc. KEY ACTIVITIES The key activities will revolve around enhancing positive relationships between LTMB and the public. These activities are specific business processes such as beats production, merchandise design and customer retention. 1. To acquire and retain customers, LTMB will continually improve the value proposition e.g. convenience and innovation whilst looking out for complementary value propositions. 2. A dedicated and top notch production team will be available to ensure the brand delivers on the customer value proposition (collaboration). 21 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat 3. LTMB will work with skilled technological partners to ensure proper website management. 4. These technological partners will work round the clock to deliver seamless transactions. 5. The design of merchandise will also be a key activity. Great designs will translate into quality merchandise which is a key value proposition. KEY RESOURCES In order to perform these key activities, LTMB will require some key resources. These key resources need to be built and nurtured to make certain the initiative’s goals are achieved. These resources include; 1. Human resources- skilled staff. 2. Intangible resources- brand name. 3. Supporting resources- communication systems (website and SMS voting portal) COST STRUCTURE The biggest cost element for LTMB will be the cost to acquire participants in the entertainment industry. LTMB will have to work alongside a prominent music artiste, a top notch DJ and music producer to guarantee the brand gets maximum public attention. Other elements in the cost structure will include: 1. Set up costs. 2. Technological costs. 3. Operations costs. 4. Marketing costs. 5. Legal costs. 6. Customer support. 22 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat “The expert in anything was once a beginner” HELEN HAYES 23 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat MARKET ANALYSIS SUMMARY INDUSTRY OVERVIEW Nigeria’s music industry has made significant strides over the last two decades, and is now arguably the most vibrant music sector in Africa. It has the highest number of internationally successful and decorated contemporary music acts, such as Wizkid, 2face Idibia, Davido, D’banj, and Tiwa Savage, to mention a few. Recently, Nigerian musicians have been smiling to the bank, having experienced a boom in digital sales, downloads and online streaming. The typical challenges, such as piracy and proper distribution channels notwithstanding, the Nigerian music industry remains a money-spinner. The internet has brought new and legal ways of distributing, promoting and marketing music without geographical constraint. Nigerian entrepreneurs (some of whom were in business before the 2013 arrival of iTunes in the country) have leveraged their knowledge of Nigeria’s music sector to outsell the bigger, global platforms locally. Music streaming platform, Spotify is not legally available in Nigeria, so there is an opportunity for local entrepreneurs to tap into this market too. Spinlet is one of the early birds to the digital distribution space in Nigeria and claims to have the world’s largest catalogue of Africa-centric music. Qube 247 is gearing to get a share of the market with its innovative ideas and dedicated team. THE NIGERIAN MUSIC INDUSTRY IN NUMBERS The Nigerian music industry produces 550 albums of different types of music annually. Record sales have more than tripled in the past 5 years, averaging 10 million in 2005 and rising to an estimated 50 million in 2010. An estimated 1200 concerts and musical shows take place every year and account for a combined annual turnover of US$105.5 million. 24 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat The vibrancy of Nigeria’s music industry has also had a sizeable economic impact. PwC’s Global Entertainment and Media Outlook provides historical performance figures in the entertainment industry from the first half of the decade (2011 to 2015) and forecasts performance in the same areas for the next four years. According to the report, the Nigerian music industry was worth $40 million in 2011 and $47 million in 2015. By 2020, this figure is expected to double to $86 million. The report notes that digital platforms will account for over 90% of Nigeria’s recorded music sales in 2020. TALENT SHOWS IN NIGERIA Talent shows emerged in Nigeria in the early 2000s. Shows like MTN’s Who Wants to be a Millionaire, Gulder Ultimate Search and MTN’s Project Fame set the pace for others to follow. These shows have produced celebrities, millionaires and most importantly, put the corporate sponsors behind the shows in the spotlight. These talent shows are set up for various reasons; several big establishments organise talent shows to showcase their numerous products and services. They also serve as a means for young talented Nigerians to showcase their craft and make money. Whatever the reason for their establishment, these shows have become fan favourites and occupy a huge part of the Nigerian entertainment industry. LTMB is gunning to be the number one online talent show in Nigeria. It will channel the strengths of the existing frontrunners and add its unique value propositions to achieve this feat. MARKET SIZE The total market for LTMB includes all Nigerian-based youths that have access to the internet and most likely own mobile/desktop devices. The addressable market that the brand will target are; 1) 2) 3) 4) Nigerian-based youths that like music and are fashion forward. Nigerians that own a mobile/desktop device. Nigerians with access to the internet. Nigerians that are active on social media. 25 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat 5) Nigerians that love talent shows. 6) Nigerians that vote during talent shows. Talent shows amass as much as 170 million votes as seen in the last Big Brother Nigeria. This includes online voting (98.3%) and SMS voting (1.7%). These votes, however came from viewers in 49 African countries, with Nigerian viewers the only ones allowed to vote by SMS. Conservatively, the total number of voters in Nigeria is estimated to be 6.3 million (online and SMS voters). This market size was calculated by multiplying the total percentage of SMS voters by the total number of votes and adding it to the ratio of online Nigerian voters. (i.e. 2.89 million SMS voters and 3.41 million online voters) MARKET NEEDS Online talent hunts are driven by the mobile devices market. According to the Jumia Mobile Report 2018, Nigeria is Africa’s largest mobile market with about 162 million subscribers; 21 million Nigerians are smartphone users and 98 million Nigerians are users of the internet; 17 million Nigerians are active mobile social media users. This is a win for LTMB because more smartphones and active social media users means more potential customers for the brand. 26 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat MARKET GROWTH Number of smartphone users in Nigeria from- (in millions) Figure culled from statista.com Number of internet users in Nigeria from- (in millions) Figure culled from statista.com All this research on smartphone and social media users shows growth opportunities for LTMB as an online talent show for the millennial. 27 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat “Always deliver more than expected” LARRY PAGE 28 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat MARKETING AND PUBLICITY PLAN OVERVIEW LTMB has formulated a simple but effective approach to market its products. The major focus of the LTMB publicity plan is to keep the marketing very web heavy (i.e. most of the advertising will be done via the internet). LTMB will be marketed mostly through social media, Google Ads and word of mouth. Industry people will also be targeted through different websites, magazines, shows and strategically placed posters. POSITIONING LTMB is offering itself as a first-of-its-kind online talent show in Nigeria. By delivering the same perks from the top talent shows with rigorous selection processes and working with a lot of industry veterans, the initiative is gunning for the top spot. The target market is the creative and trendy millenials. This set of people promote trends and love out-of-the-box events: positioning LTMB as the new cool thing will endear these millenials to our corner and create a larger market size for our products and services. PRICING The competitors’ prices have been examined and the range was taken into consideration in determining the prices of the brand’s products and services. LTMB’s pricing strategy is to offer premium products/services at the prevalent market price. LTMB will generate revenue from the following streams: i) ii) iii) iv) SMS votes. Online forms. Merchandise. Google Ads. 29 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat The strategy is to use a market penetrating price for a certain period of time to gain a market share. After LTMB has achieved this feat, the prices can be gradually hauled to its desired margin level. PROMOTION AND PUBLICITY LTMB’s marketing will revolve mostly around online mediums. Some basic offline mediums will also be used but emphasis will be placed on the online platforms. To get the most of these mediums, the brand will prepare a polished and professional press kit. The Professional Press Kit will include: • Biography- a professional one page “about us” will be written to provide press, radio and social media with a complete concise story behind the brand. • Photo shoot- a full service digital photo shoot will be performed to provide high resolution images for the brand’s social media pages, blog and electronic press kits. The Electronic Press Kit (EPK) which will be in a pdf format and power point deck will contain the following: - Company backgrounder. Management/ Staff bio. A selection of important press releases. Product/ services fact sheet. Case studies. Digital artwork. Noteworthy press coverage. Contact information. ONLINE PRESENCE Social media is a useful tool in today’s business environment. The brand believes that it will be critical to its success. Customer acquisition, customer retention, brand development and a host of other things are some of the benefits of attention30 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat grabbing social media pages. LTMB intends to optimise all these benefits and even more. § § § § Customised Instagram, Twitter and Facebook layout- the brand will design and create unique content for the listed social media pages. These pages will be used to maximise fan experience and boost brand exposure. Development of a website- the brand’s website will complement its online promotion plan and aid in the creation of an expansive online platform that will allow individuals to see relevant information as they unfold and contact support. Promotion on online blogs- the brand will be featured in the most prominent social media blogs; Instablog, Linda Ikeji Blog, Tunde Ednut, to name a few. These blogs get heavy traffic and will enhance brand publicity. Internet marketing- LTMB will also utilise paid internet marketing channels like Google Adwords, Facebook and Instagram to promote the initiative. Once the professional press kit and updated online presence is complete, the brand will move forward in presenting its products and services to the mediums that are illustrated and outlined in detail below. REVIEWS The brand will do as much as it can to effectively promote ourselves in the press with the assistance of a full-time publicist and Sesan Adeniji- a press veteran and founder of My Streetz magazine. This publicist will secure interviews and reviews for LTMB in both online and offline publications. The publicist will compile a list of appropriate press outlets in our target market. The list will not be solely focused on music blogs but on all things millennial and pop culture- fashion, sports, movies and trends. Evaluation of our publicity efforts will include the monitoring of trends on social media (twitter most especially) and feature regarding the brand and its offerings. 31 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat RADIO The panel of judges for LTMB will include a prominent on-air personality. This person will work with the brand to ensure maximum radio publicity and will act as a radio promoter for LTMB. The radio promoter will update the appropriate radio personnel with information on our products and recent developments (the contestants, special promotion in the area, t-shirts, caps, flyers, etc.) COMPETITIVE EDGE Talent competition in Nigeria has been a social sensation for more than a decade. A lot of these shows apply the same strategies and offer similar services. LTMB is not coming into the market with a new product but offering the same products in a more appealing manner and taking into consideration, the prevalent trends. Social Media The foremost strategy for LTMB is its online based platform. The strategy is to launch a talent show on the strengths of social media influence. % of Nigerian youths have active social media pages. Creating a show that is strictly online will boost youth participation and increase accessibility. Differentiation The initiative will not adopt a “winner takes all” model but instead a first to third place prize model. This will encourage participation and healthy competition amongst the contestants. Merchandise Creating chic and classic merchs is an understated edge. It will be a multi-purpose product for the initiative. The merchs will be branded with our name and logo (free publicity), will guarantee LTMB a following amongst the fashionable crowd and will be a recurring revenue stream. 32 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat STRATEGIC ALLIANCES LTMB will use certain strategic alliances to gain a sizeable market share. This strategy will be largely based on Sesan’s extensive inside knowledge of the entertainment industry and an established network of contacts within the industry. The plan is to work alongside some music industry favourites (musicians, DJs, producers and on-air personalities) to gain grounds and get maximum participation. STRATEGY AND IMPLEMENTATION Lyrics to My Beat will have several milestones. A couple of them are listed below: Ø Ø Ø Ø Launch of website and social media platforms. Signing a prominent artiste as the face of LTMB. Total sales of 5000 forms to contestants. Achieving the break-even point. MILESTONES Milestone Start Date End Date Management Website and social media. 03/01 04/01 IT team and COO Signing of artiste. 03/01 06/01 Publicist and COO Sales of 5000 forms. 06/01 07/01 Marketing team, publicist and COO Break-even point. 03/01 10/01 COO and CFO 33 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat SWOT ANALYSIS STRENGTHS WEAKNESSES § Experienced management team. § Online platform guarantees more § § § § § § § § participation. Strategic alliances with the most prominent industry people. Relatively low capital intensity. Improved customer interaction. Multiple revenue streams. Relatively low operations costs. § § THREATS OPPORTUNITIES § § § § § Imitation of ideas by the competition. Limited advertising opportunities. Limited exposure in areas where the internet is not accessible. Fraud vulnerability. Differentiation of brand not distinct enough. Growth of niche markets. New customer segments. Retirement of competitors. Changing trends and new technology. Advertising. § § § The competition. Changes in trends, laws and regulations. Increase in frauds. 34 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat STRATEGIC ALLIANCES- ANALYSING THE TOP 10 MOST FOLLOWED MUSICIANS ON SOCIAL MEDIA IN NIGERIA Nigerian celebrities, Davido and Wizkid are among the list of the most followed Africans on the social media channels- Instagram, Facebook and Twitter. This is according to the Power 50 list compiled by the African Social Media Power Report (January 2018). This list has a combined following of almost 400 million, a number that is more than half the population of Europe and twice the population of Nigeria, Africa’s most populated country. In Nigeria, the top ten most followed musicians on social media are listed below: 1) Davido 2) Wizkid 3) Tiwa Savage 4) Yemi Alade 5) D’Banj 6) Peter Okoye 7) Olamide 8) Tuface Idibia 9) Phyno 10) Tekno 18.1 million 13.6 million 11.2 million 8.63 million 7.60 million 7.49 million 7.23 million 6.76 million 6.01 million 5.58 million These musicians have considerable influence over their followers and can be a beneficial ally for brands. The possibilities inherent in their influence are innumerable and limitless. LTMB intends to use this leverage to create buzz for its products and services. The initiative will collaborate with one of the top ten mega influencers listed above to increase its brand awareness. 35 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat “Innovation is when you put an idea into action” MARC BENIOFF 36 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat OPERATIONAL PLAN OVERVIEW The purpose of the operational plan is to provide personnel with a clear picture of their tasks and responsibilities in line with the goals and objectives contained within the strategic plan. This operational plan will establish the services, actions, projects and measures that LTMB has planned for the next` year. It will present highly detailed information specifically to direct people to perform the day-to-day tasks required in the running of the initiative. The operational plan will provide the what, who, when and how much. What- the strategies and tasks that must be undertaken. Who- the persons who have responsibility of each of the strategies/tasks. When- the timelines in which strategies/tasks must be completed. How much- the amount of financial resources provided to complete each strategy/ task. 37 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat STRATEGY Brand Building GOAL NAME - Identify the target customers. - Research the target customers. - Develop the brand positioning. - Develop LTMB name, logo and tagline. - Develop the brand’s website. - Develop the content marketing strategy. - Build the marketing toolkit. - Build and expose the brand Collaboration and Co-creation. - Generation of ideas. - Creation of products/services. - Refinement of products/services. - Unveiling of star artiste. - Collaborating with customers. - Collaborating with stakeholders. BUDGET PERFORMANCE INDICATORS INITIATIVES -Customers identified. Employ seasoned professionals (digital marketer, web designer and brand specialist) to carry out these functions. Content developer Brand manager COO IT team Explore and engage as many people as possible to share and gather ideas. CEO COO Brand manager Stakeholders The public -Customers’ needs explored. -Brand easily identified by the public. -LTMB logo and tagline made. -LTMB website ready. WHEN WHO -Marketing strategy complete. - Monthly generation of ideas by the staff. - Merchandise and online competition creation. - Testing and development of these products. - Signing Olamide as face of LTMB. - Fan feedback for service improvement. - reactions and criticisms from stakeholders taken into consideration. Contact Olamide’s management and share the vision with them. 38 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat GOAL NAME PERFORMANCE INDICATORS Revenue Recognition. - Identify the streams of revenue. - Determine the transaction price of the products. - Allocate the transaction price to each product/service. - Sale of forms. - Sale of merchandise. - Sponsorship packages. - Streams of revenue recognised. - Each transaction price outlined. Hire experienced financial analysts to ensure profit maximisation -Transaction price and cost allotted. minimisation; simultaneously - Minimum of 5000 guaranteeing forms sold. proposed value - At least 3 sponsorship is delivered deals sealed. efficiently. - Accountant CFO COO CEO Promotion and Publicity. - Social media promotion. - Increase engagement on all social media platforms by 50% - Growth in the social media followings by 50%. - Minimum of 2 product giveaways every month. - All promotional gifts given away. - Loyal fans rewarded with promotional gifts - Feedback from customers about the brand’s services. Content developer. Social media influencers. Brand manager. Radio partners. TV partners. - Internet marketing promotion. - Product giveaways. - Branded promotional gifts. - Customer referral incentive program. - After-sale customer surveys. INITIATIVE BUDGET STRATEGY WHEN Advertise on as many online platforms as possible. Engage influencers and gossip blogs to expedite the promotion process. Visit local radio and TV stations with promotional items. 39 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. WHO Lyrics to My Beat CRITERIA FOR ENTRY AND SELECTION OF THE CONTESTANTS LTMB is going to be a contest. The final contestants will be chosen based on their skills and effort by a team of impartial judges; the public will then be given the opportunity to save their favourite contestant every week and the last three contestants standing will win mouth-watering prizes. Criteria for Entry The entrant must fit into all these categories 1) Nigerian-based Nigerians. 2) 18 – 35 years. 3) Possess outstanding lyrical skills in any language. A form will be purchased at 5000 naira only by all interested contestants. Criteria for Selection Based on a set of established selection factors (delivery, flow, style, unique star quality and voice dexterity), the judges will assign scores to the listed indices and make the final selection of 20 contestants for the competition. It is vital that entrants stick to the entry rules to prevent disqualification. JUDGES/PANEL AND REQUIREMENT FOR SELECTION LTMB is a music competition so all 4 judges will have musical backgrounds and experience. These judges will consist of; 1) 2) 3) 4) A disc jockey. An on-air personality. A print media maestro. A social media influencer. 40 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat These judges will be selected based on their musical prowess, popularity and objectivity. These judges will undergo basic training to ensure they adhere to the judging criteria and guidelines of the competition. IT UNIT LTMB will outsource its core IT functions to a reputable IT firm. The in-house IT unit will manage a range of activities that include but are not limited to: 1) 2) 3) 4) 5) Social media You Tube. Website. Fan mail and enquiries. Videos of the contestants. The IT team will work closely with the music producer, content developer and digital marketer to guarantee a unified standard is transmitted through all the communication techniques. 41 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat “Do what you can, where you are, with what you have” TEDDY ROOSEVELT 42 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat FINANCIAL PLAN FINANCING LTMB is seeking to raise 50 million naira in debt funds. The interest rate and loan agreement will be further discussed during negotiations. This business plan assumes that LTMB will receive a one-year loan with a 20% fixed interest rate. The financing will be used for the following: - Financing for the first six months of operation. - Development of the LTMB brand. - Brand ambassadorship. - Competition prizes UNDERLYING ASSUMPTIONS 1) 2) 3) 4) 5) 6) The Nigerian youths will be interested in online competitions. The Nigerian people love reality shows and will give LTMB a try. The Nigerian population will continually increase in size. LTMB will have an annual revenue growth rate of 30%. The owner will acquire 50 million naira of debt funds to develop the business. The loan will have a one-year term with a 20% interest rate. SENSITIVITY ANALYSIS The Initiative’s revenues are moderately sensitive to changes in the general economy. As the country is currently in a state of financial uncertainty, the demand for entertainment has waned given that consumers have less discretionary income. However, this demand is slight as many people see participating in entertainment as a source of income and even taking part in the voting process as a lower cost alternative to more expensive forms of entertainment. 43 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat SALES FORECAST To ensure the accurate depiction of sales for the first year, this business plan used the social media fan base of our proposed star ambassador to estimate the number of forms that will be sold. This was performed in the following manner: 1. Researched and collated the top 10 most followed Nigerian musicians across all social media platforms (Instagram, Twitter, Facebook). 2. Selected a star from this list based on popularity, loyalty from fan base, availability and cost. 3. Calculated projected revenue as a function of a percentage of the proposed star’s followers. LTMB has decided to work with Olamide. His followership is around 7.23 million. This will be the basis for our initial sales projection. Sales Forecast for Forms- Worst Case Scenario Olamide’s followers - Percentage likely to be interested in LTMB Percentage likely to buy forms 1% 15% Sales Forecast for Forms- Best Case Scenario Olamide’s followers Percentage likely to be interested in LTMB Percentage likely to buy forms -% 25% 44 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat REVENUE STREAMS Lyrics to My Beat intends to generate revenue through these streams: 1. 67% of total revenue generated from sales of forms. 2. 15% of total revenue generated from SMS portals. 3. 100% of total revenue generated from Google AdSense. KEY ASSUMPTIONS Key Assumptions Exchange rate (1) Company income tax Education Tax 1 30% 2% Inflation rate 16.54% No table of figures entries found. Interest rate 20.00% Financial structure External LTMB Year 1 20,000,000 Year 2 40,000,000 Year 3 50,000,000 1,050,000 1,050,000 1,050,000 21,050,000 41,050,000 51,050,000 45 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat Costs Monthly($) Annual Naira TRADEMARKING 12,500.00 12 150,000.00 150,000.00 BUSINESS INSURANCE 58,333.33 12 700,000.00 700,000.00 MARKETING AND ADVERTISING JUDGES RENUMERATION 166,666.67 12 2,000,000.00 2,000,000.00 166,666.67 12 2,000,000.00 2,000,000.00 OWNERS SALARIES 100,000.00 12 1,200,000.00 1,200,000.00 80,000.00 12 960,000.00 960,000.00 EMPLOYEES' SALARIES EMPLOYEES' TRAINING AND CONSULTING BRANDING COST 28,333.33 12 340,000.00 340,000.00 416,666.67 12 5,000,000.00 5,000,000.00 PROMOTIONAL COST 125,000.00 12 1,500,000.00 1,500,000.00 LOGISTICS 41,666.67 12 500,000.00 500,000.00 GIFT ITEMS 416,666.67 12 5,000,000.00 5,000,000.00 PROFESIONNAL FEES AND LICENSE MISCELLANEOUS COST 29,166.67 12 350,000.00 350,000.00 41,666.67 12 500,000.00 500,000.00 BEAT PRODUCTION 83,333.33 12 1,000,000.00 1,000,000.00 66,666.67 12 800,000.00 800,000.00 SMS PORTAL Annual Growth rate 30% 46 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat Revenue Assumptions Sale of forms 67% SMS votes 15% Vendor Price range Amount Average service price 5,000 Average SMS Vote price 100 Sale of Forms Total Media Reach Projected Marketing coverage Marketing efficiency Customer conversation rate % Number 100% 10% 7,230,-,000.00 10% 72,300.00 15% 10,845.00 Market Size (SMS) Possible Show viewership Conversion rate Probable Show viewership 170,000,000 10% 17,000,000 Voting percentage of users Number of Votes 2% 340,000 Share of Votes 85% 15% Telco LTMB 289,000 51,000 47 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat PROJECTED FINANCIAL STATEMENTS Sales Quantity 2019 2020 2021 2022 Sale of form 3% 10,845.00 14,098.50 18,328.05 23,826.47 SMS VOTES 97% 340,000.00 442,000.00 574,600.00 746,980.00 350,845.00 456,098.50 592,928.05 770,806.47 Sales Quantity 800,-,-,-,-,-,-,-,- 2020 2021 Sale of form 3% 2022 SMS VOTES 97% 48 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat INCOME STATEMENT PROJECTION TURNOVER SALE OF FORM SMS VOTES REVENUE -FORM SALE REVENUE - SMS GOOGLE AD SENSE 2019 54,225,-,000,-,225,000.00 2020 70,492,-,200,-,692,500.00 2021 91,640,-,460,-,100,250.00 -,132,-,698,-,830,325.00 36,168,075.00 5,100,000.00 4,320,-,588,075.00 47,018,497.50 6,630,000.00 5,616,-,264,498.00 61,124,046.75 8,619,000.00 7,300,-,043,847.00 79,461,-,204,700.00 9,491,-,157,001.00 (150,000.00) (700,000.00) (2,000,000.00) (500,000.00) (2,000,000.00) (1,200,000.00) (960,000.00) (174,810.00) (815,780.00) (2,330,800.00) (582,700.00) (2,330,800.00) (1,398,480.00) (1,118,784.00) (203,723.57) (950,710.01) (2,716,314.32) (679,078.58) (2,716,314.32) (1,629,788.59) (1,303,830.87) (237,419.45) (1,107,957.45) (3,165,592.71) (791,398.18) (3,165,592.71) (1,899,355.63) (1,519,484.50) (340,000.00) (5,000,000.00) (1,500,000.00) (500,000.00) (1,000,000.00) (396,236.00) (5,827,000.00) (1,748,100.00) (582,700.00) (1,165,400.00) (461,773.43) (6,790,785.80) (2,037,235.74) (679,078.58) (1,358,157.16) (538,150.76) (7,913,981.77) (2,374,194.53) (791,398.18) (1,582,796.35) (4,000,000.00) (5,000,000.00) (350,000.00) (3,000,-,388,075.00 (8,000,000.00) (5,827,000.00) (407,890.00) (3,000,-,558,018.00 (10,000,000.00) (6,790,785.80) (475,355.01) (3,000,-,250,915.00 (7,913,981.77) (553,978.72) (3,000,-,601,718.00 (5,216,-,171,652.50 (7,067,-,490,612.25 (10,575,-,675,640.47 ( 19,080,-,521,202.65 12,171,652.50 16,490,612.25 24,675,640.47 44,521,202.65 COST TRADEMARKING BUSINESS INSURANCE MARKETING AND ADVERTISING JUDGES RENUMERATION OWNERS SALARIES EMPLOYEES' SALARIES EMPLOYEES' TRAINING AND CONSULTING BRANDING COST PROMOTIONAL COST LOGISTICS GIFT ITEMS PROFESIONNAL FEES AND LICENSE INTEREST ON LOAN MISCELLANEOUS COST BEAT PRODUCTION SMS PORTAL PROFIT/ (LOSS) BEFORE TAX CIT (30%) PROFIT/(LOSS) AFTER TAX RETAINED EARNINGS 49 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat Revenue Revenue Form Sale Revenue Form SMS Sales Google Ad Sense 120,000,-,000,-,000,-,000,-,000,-,000,- 2020 2021 2022 PROFIT/ (LOSS) BEFORE TAX 63,601,718 35,250,915 23,558,018 17,388,075 2019 2020 2021 2022 50 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat CASH FLOW PROJECTION CASH INFLOW 2019 2020 2021 2022 - 33,879,267.50 70,853,220.25 107,258,795.03 EQUITY 21,050,000.00 20,000,000.00 10,000,000.00 - CASH REVENUE 41,029,267.50 53,338,047.75 69,339,462.08 90,141,300.70 - 4,558,807.50 5,926,449.75 7,704,384.68 62,079,268.00 111,776,123.00 156,119,132.00 205,104,480.00 TRADEMARKING (150,000.00) (174,810.00) (203,723.57) (237,419.45) BUSINESS INSURANCE (700,000.00) (815,780.00) (950,710.01) (1,107,957.45) (2,000,000.00) (2,330,800.00) (2,716,314.32) (3,165,592.71) (500,000.00) (582,700.00) (679,078.58) (791,398.18) OWNERS SALARIES (2,000,000.00) (2,330,800.00) (2,716,314.32) (3,165,592.71) EMPLOYEES' SALARIES (1,200,000.00) (1,398,480.00) (1,629,788.59) (1,899,355.63) EMPLOYEES' TRAINING (960,000.00) (1,118,784.00) (1,303,830.87) (1,519,484.50) BRANDING COST (340,000.00) (396,236.00) (461,773.43) (538,150.76) PROMOTIONAL COST (5,000,000.00) (5,827,000.00) (6,790,785.80) (7,913,981.77) LOGISTICS (1,500,000.00) (1,748,100.00) (2,037,235.74) (2,374,194.53) (500,000.00) (582,700.00) (679,078.58) (791,398.18) OPENING BALANCE RECEIVABLES TOTAL CASH INFLOW CASH OUTFLOW COST MARKETING AND ADVERTISING JUDGES RENUMERATION GIFT ITEMS PROFESIONNAL FEES AND LICENSE INTEREST ON LOAN (1,000,000.00) (1,165,400.00) (1,358,157.16) (1,582,796.35) (4,000,000.00) (8,000,000.00) (10,000,000.00) - MISCELLANEOUS COST (5,000,000.00) (5,827,000.00) (6,790,785.80) (7,913,981.77) (350,000.00) (407,890.00) (475,355.01) (553,978.72) (3,000,000.00) (3,000,000.00) (3,000,000.00) (3,000,000.00) (5,216,422.50) (7,067,405.25) (10,575,274.49) (28,200,000.00) (40,922,902.50) (48,860,337.04) (47,130,557.20) 33,879,267.50 70,853,220.25 107,258,795.03 157,973,923.21 BEAT PRODUCTION SMS PORTAL CIT TOTAL CASH OUTFLOW NET CASH FLOW 51 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat TOTAL CASH INFLOW 205,104,480 156,119,132 111,776,123 62,079,268 2019 2020 2021 2022 Net Cashflow 180,000,-,000,000.00 157,973,923.21 140,000,-,000,-,258,795.03 100,000,-,000,000.00 70,853,220.25 60,000,-,000,000.00 33,879,267.50 20,000,- 2020 2021 2022 52 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat Non current Asset 2019 2020 2021 2022 Current Assets Cash and Cash Equivalent Receivables 33,879,267.50 70,853,220.25 107,258,795.03 157,973,923.21 4,558,807.50 5,926,449.75 7,704,384.68 10,015,700.08 Total Current Assets 38,438,075.00 76,779,670.00 114,963,179.71 167,989,623.29 Total Assets 38,438,075.00 76,779,670.00 114,963,179.71 167,989,623.29 1,050,-,171,-,000,000.00 1,050,-,662,-,000,000.00 1,050,-,337,-,000,000.00 1,050,-,859,-,000,000.00 Non-current liabilities 33,221,652.50 69,712,264.75 104,387,905.22 148,909,107.87 Current Liabilities Tax liability 5,216,423.00 7,067,405.00 10,575,274.00 19,080,515.00 Total Liability 38,438,075.00 76,779,670.00 114,963,180.00 167,989,623.00 Total Liabilities 38,438,075.00 76,779,670.00 114,963,180.00 167,989,623.00 Financed by: Equity Retained Earnings Debt Equity 53 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat 180,000,-,000,000.00 167,989,623.29 140,000,-,000,-,963,179.71 100,000,-,000,-,779,670.00 60,000,-,000,-,000,000.00 38,438,075.00 Total Assets STATEMENT ANALYSIS Payback period Inflow Debt Balance Balance (50,000,000.00) Net cash flow year 1 33,879,267.50 (16,120,732.50) Net cash flow year 2 70,853,220.25 54,732,487.75 Period - 54 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner. Lyrics to My Beat NPV (50,000,-,879,267.50 - 29,080,916.31 70,853,220.25 - 52,204,476.23 107,258,795.03 - 67,835,204.35 157,973,923.21 - 85,759,393.77 Project NPV 184,879,990.65 RATIOS Gross profit ratio Net profit ratio Key Ratios (Minimum pricing) Interest cover (Times) 10% 20% 20% 38% 2019 40% 2020 46% 2021 19% 25% 22% BREAK EVEN ANALYSIS Amount Total Fixed cost Total Revenue a b (13,510,-,588,075.00 Total Quantity Revenue per quantity Total Variable cost Variable cost per quantity Contribution Margin ratio Break even point in Unit c d = b/c e f = e/c g = d-f h = a/g 350,- (14,690,-,634.16 *At a sales level of 153,404.89 units, Revenue is just enough to cover fixed cost. 55 CONFIDENTIAL- This document is strictly confidential and the information and ideas shared within the business plan are not to be re-distributed, shared, or copied without written consent of the owner.