Event Management | My Assignment Tutor

1Corporate EventManagementWeek 8.Presented by: Carlos Gomez2Learning Outcome 3: Assess theimportance of a feasibility study fora proposed corporate event“Related to P4, P5, M3 and D3: Review a range of different typesof corporate events and assess how they meet different strategicfocus and goalsTable of Content 3CARRYING OUT A FEASIBILITY ASSESSMENT: SCANNINGTHE MARKETING ENVIRONMENT, SPECIFIC MARKETRESEARCH, ANALYSIS AND ASSESSMENT.BUDGETING AND FORECASTING, COSTING BOTHFIXED AND VARIABLE COSTS, INCOME AND CASHFLOW ANALYSIS. OVERALL RISK ASSESSMENT.4CARRYING OUT A FEASIBILITY ASSESSMENT:SCANNING THE MARKETING ENVIRONMENT,ANALYSIS AND ASSESSMENT.Carrying out a feasibility assessment 5Feasibility studies can be carried out for any event but usually “aformal feasibility study is carried out for larger, more complex, moreelaborate events, which in turn usually means that the hosting of theevent is more costly” (Dowson and Bassett, 2015, p. 40).Even though a feasibility study may appear costly it is an effectiveway to evaluate the potential for success … this is especially relevantwhen the event is a new or unique and where there are noestablished guidelines for the planning process.Conducting a Feasibility Study 6The primary purpose of the preliminary analysis is to screen project ideasbefore extensive time, effort, and money are invested.Two sets of activities are involved.Step One: Conduct a Preliminary Analysis1.  Describe or outline as specifically as possible the planned services, targetmarkets, and unique characteristics of the services by answering thesequestions:•  Does the practice serve a currently unserved need? (e.g., multiculturalpopulations or age groups who are not currently being served)•  Does the practice serve an existing market in which demand exceeds supply?•  Can the practice successfully compete with existing practices because of an“advantageous situation,” such as better design, price, location, or availability(e.g., balance assessment and rehabilitation, programmable devices)?Conducting a Feasibility Study 7The primary purpose of the preliminary analysis is to screen project ideasbefore extensive time, effort, and money are invested.Two sets of activities are involved.2.  Determine whether there are any insurmountable obstacles. A “yes”response to the following indicates that the idea has little chance forsuccess:•  Are capital requirements for entry or continuing operations unavailableor unaffordable?•  Do any factors prevent effective marketing to any or all referral sources?If the information gathered so far indicates that the idea has potential, thencontinue with a detailed feasibility study.Step One: Conduct a Preliminary Analysis8Step Two: Prepare a Projected Income StatementAnticipated income must cover direct and indirect costs, taking intoaccount the expected income growth curve. Working backward fromthe anticipated income, the revenue necessary to generate thatincome can be derived in order to build a projected income statement.Factors that determine this statement are services provided, fees forservices, volume of services, and adjust-ments to revenues (e.g.,actual reimbursement levels).Conducting a Feasibility Study9Step Three: Conduct a Market SurveyA good market survey is crucial. If the planner cannot perform this survey,an outside firm should be hired. The primary objective of a market surveyis a realistic projection of revenues.Conducting a Feasibility StudyConducting a Feasibility Study 101.  Define the geographic influence on the market.2.  Review population trends, demographic features, cultural factors, andpurchasing power in the community.3.  Analyze competing services in the community to determine their majorstrengths and weaknesses. Factors to consider include pricing, productlines, sources of referral, location, promotional activities, quality of service,consumer loyalty and satisfaction, and sales.4.  Determine total volume in the market area and estimate expected marketshare.5.  Estimate market expansion opportunities (e.g., responsiveness to new/enhanced services).The major steps include:Specific market research 11The goal of any market study isto find the point where supplyand demand intersect to supplythe right quantity of a good atthe right price. Since the worldis complex and dynamic, noeconomist can ever identify thatexact point. A market analystaccumulates information on asmany factors as possible tomake an educated guess.The market analysisSpecific market research 12It is important to understand the market environmentyour business is operating in, including political,economic, social, legal, environmental and technologicalaspects that can have an impact on your operations.PESTEL ANALYSIS, SWOT ANALYSISSpecific market research 13How big is your market in terms of sales transactions?MARKET SIZESpecific market research 14Is the market growing compared to previous years or is it contracting interms of sales transactions and increased competition?GROWTHSpecific market research 15What are the main distribution channels in your market?Are sales mainly occurring in store or online and arethere large distributors you can partner withto accelerate growth?DISTRIBUTIONSpecific market research 16Besides the volume of transactions you might want toconsider the profitability of those transactions and thepurchasing power of the customers in that market. Thiswill provide information on whether you will need torevisit your pricing strategy, your costing or yourdistribution channels.PROFITSpecific market research 17What are the main trends in the market that can have an impact on yourproducts and services?For example, are there alternative products being launched in the market?Are there new technologies available and is themarket experiencing mergers and acquisitions?TRENDS18Step Four: Plan Business Organization and OperationsAt this point, the organization and operations of the business should beplanned in sufficient depth to determine the technical feasibility and costsinvolved in start-up, fixed investment, and operations.Conducting a Feasibility StudyConducting a Feasibility Study 19•  Equipment•  Merchandising methods•  Facility location and design (or layout)•  Availability and cost of personnel•  Supply availability (e.g., vendors, pricing schedules.exclusive or franchised products)•  Overhead (e.g., utilities, taxes, insurance)Extensive effort is necessary to develop detailed plans for:20The Opening Day Balance Sheet should reflect the practice’s assetsand liabilities as accurately as possible at the time the practice begins,before the practice generates income.Prepare a list of assets required for practice operations. The list shouldinclude item, source, cost, and available financing methods. Necessaryassets include everything from cash necessary for working capital tobuildings and land. Although the resulting list is rather simple, theamount of effort required may be extensive.Step Five: Prepare an Opening Day Balance SheetConducting a Feasibility Study21Liabilities to be incurred and the investment required by the practicemust also be clarified.These items need to be considered:•  Whether to lease or buy land, buildings, and equipment•  How to finance asset purchases•  How to finance accounts receivableStep Five: Prepare an Opening Day Balance SheetConducting a Feasibility Study22BUDGETING AND FORECASTING, COSTINGBOTH FIXED AND VARIABLE COSTS, INCOMEAND CASH-FLOW ANALYSIS. OVERALL RISKASSESSMENT.23This review is crucial. The planner should determine if any data oranalysis performed should change any of the preceding analyses.Basically, taking this step means “Step back and reflect one moretime.”•  Reexamine the Projected Income Statement and compare with thelist of desired assets and the Opening Day Balance Sheet. Given allexpenses and liabilities, does the Income Statement reflect realisticexpectations?•  Analyze risk and contingencies. Consider the likelihood of significantchanges in the current market that could alter projections.Step Six: Review and Analyze All DataConducting a Feasibility Study24A budget is a detailedforecast of what willbe happeningfinancially at yourevent. It helps controlyour expenses andrevenues, andmeasures thesuccess of yourmeeting or eventperformance.Budgeting and ForecastingConducting a Feasibility Study25On-Site Event ExpensesThese Include the costs and fees typically charged by the event venue.Often the most expensive category, it’s also the easiest to predict since youwill get a formal cost estimate to review in advance.Don’t forget to factor in variable costs that change based on yourattendance numbers. Catering is an example of a variable expense becausethe amount of food you need—and subsequently the cost— increases witheach addition to your party.Corporate Event CostsConducting a Feasibility Study26Venue CostsThese are the premises costs:•  Room Rental•  Security Deposit•  Insurance Coverage•  ParkingCorporate Event CostsConducting a Feasibility StudyFood and CateringHere’s everything tied into eatingand drinking:•  Meals•  Beverages•  Bartender/Server Labor Fees•  Tax and Service/Gratuity Fees27Audio/VisualThese are your presentation costs:•  Microphones•  Screens and Projectors•  Internet Access•  Other Specialized EquipmentCorporate Event CostsConducting a Feasibility StudyThird-Party VendorsThis category represents all theitems and services supplied byvendors outside of the host venue.Each one will bill you independently,so it is important to keep close tabson every vendor. Using aspreadsheet will help organize yourvendor contacts along with thecosts associated with their services.28Décor VendorsMaking things look good will incurcosts for:•  Accent Lighting•  Flowers and Centerpieces•  BalloonsCorporate Event CostsConducting a Feasibility StudyEvent RentalsThese expense relate to anythingyou need to supply:•  Linens, Table Skirting, and ChairCovers•  Tents, Staging, and AmusementAttractions•  Physical Items Not Provided byVenue•  Labor and Delivery for Setup/Teardown29All the preceding steps have been aimed at providing data and analysisfor the “go/no go” decision. If the analysis indicates that the businessshould yield at least the desired minimum income and has growthpotential, a “go” decision is appropriate.Anything less mandates a “no go” decision. Additional considerationsinclude:•  Is there a commitment to make the necessary sacrifices in time,effort and money?•  Will the activity satisfy long-term aspirations?Step Seven: Make “Go/No Go” DecisionConducting a Feasibility StudyAnalysis and assessment 30A feasibility study is usually conducted after producers havediscussed a series of business ideas or scenarios. The feasibilitystudy helps to “frame” and “flesh-out” specific business scenarios sothey can be studied in-depth.During this process the number of business alternatives underconsideration is usually quickly reduced.During the feasibility process you may investigate a variety of waysof organizing the business and positioning your product in themarketplace. It is like an exploratory journey and you may takeseveral paths before you reach your destination. Just because theinitial analysis is negative does not mean that the proposal does nothave merit. Sometimes limitations or flaws in the proposal can becorrected.31ACTIVITY 1.32REFERENCESThe key to successful event planning: a case study on identifying the most appropriate model of event planning. EmmaSmith. Cardiff Metropolitan University April 2017Event stakeholders : theory and methods for event management and tourism / Donald Getz, Mathilda Van Niekerk.Donald Getz, 1949- author.Sadd, D., 2012. Mega-events, community stakeholders and legacy: London 2012. Doctorate Thesis (Doctorate).Bournemouth University.George Kuhn. 4 Key Components of a Market Research Feasibility Study. https://www.driveresearch.com/single-post/2017/02/06/4-Key-Components-of-a-Market-Research-Feasibility-Study. Feb 6.2017