1.0 Executive Summary
The purpose of this business plan is to secure $5 million from the development of a private event venue based in Austin, Texas. Deutsch Events Group LLC (“the Company”) was founded this year by Matthew Deutsch with the intention of providing an exceptional location for personal events, corporate events, and conferences. The business intends to acquire a 10-acre parcel of land that will have the 10,000 square foot facilities. Full scale revenue generating operations will commence in the second quarter of next year once the buildout is complete.
Operations
The first revenue center for the business will come from the ongoing hosting of personal events which will encompass weddings, anniversaries, and other celebrations as well as corporate events. The facilities will have the ability to provide an exceptional and memorable experience for up to 300 people at any given time. The Company will charge $8,000 per event for using the location.
A substantial amount of revenue will come from onsite catering as well as bar service. Although guests will be free to have their own catering completed at the location by a third-party, it is expected that the vast majority of people will use the business’ in internal catering services. As a relates to alcohol sales, this will solely be provided by Deutsch Events Group. The business will hire properly licensed bartenders for each event.
The third section of this event venue business plan will further document operations.
The Financing
As noted above, the Company is aggregately seeking $5 million a capital. Of this funding, $1 million is expected to come from investors while $4 million will be secured through bank financing. These funds were used for land acquisition, building development, furniture, fixtures, equipment, as well as working capital. The Company could secure ongoing rounds of additional capital in order to further fuel the growth of the business. A working capital line of credit could easily be secured based on the accounts receivables that the business will have among guests that will be hosting events in the future. This document assumes that no further capital will be sought outside of the funding discussed in this document.
The Future
Management’s goal is to make Deutsch Events Group into the preeminent event venue within the greater Austin metropolitan area. To that end, the Company will take a broad-based approach with marketing in order to properly position the business as a premium venue. This will include publications across multiple publications as well as an expensive online presence.
Market Overview
Revenue Forecasts
2.0 The Financing
2.1 Funds Required
The $5 million a capital will be allocated as follows:
2.2 Management and Investor Equity
This is to be discussed during negotiation with an investor
2.3 Exit Strategies
The sale of this business would be relatively straightforward given that there is an immense demand for establish event venues that have established premium brand name. In the event that is financially prudent to do so, the Company will coordinate the sale of the business to a third-party with a qualified business broker that specializes in event venue entities. Historically, these businesses typically have a sales premium of four times the prior years, EBITDA plus the value of any owned real estate. Based on this, Deutsch Events Group could have a valuation of up to $10.5 million by the fifth year of operation. It is not expected that the business would be sold within the next ten years.
3.0 Operations
As discussed in the executive summary, Deutsch Events Group has been designed to provide an outstanding and memorable experience for event hosts throughout the greater Austin metropolitan area. The first revenue center for the business will come from the ongoing site fees that will be charged as a flat rate for hosting an event at the facilities. This will be a flat rate of $8,000, which will increase yearly in order to keep pace with inflation. The Company will only host one event per day so that clients have access to the entirety of the facilities.
The highest profit margin center for the business will come from on-site catering as well as sales of alcohol. The Company will employ an executive chef as well as substantial kitchen support staff so that customize menus can be provided for each host. The Company expects that it will generate $150 to $200.per guest for catered meal service. The Company will also provide full bar service, including use of licensed bartenders that are employed by Deutsch Events Group. The Company will be able to provide open bar service as well as cash bar service based on the preferences of the client.
A major component of the Company’s growth will come from the ongoing hosting of conferences and expositions for businesses within Austin. As these events are typically held during the course of the week, the business will be able to maximize its return on investment as the space will be used during the weekdays as well. Personal events will primarily be reserved for weekends.
4.0 Overview of the Organization
4.1 Registered Name
Deutsch Events Group LLC. The Company is registered as a limited liability company in the state of Texas.
4.2 Commencement of Operations
The Company will commence operations next year once to build out of the facilities are complete completed.
4.3 Mission Statement
To provide an exceptional experience for hosting their guests.
4.4 Vision Statement
To become the preeminent event venue within the Austin metropolitan area.
4.5 Organizational Objectives
• During the development period, implement numerous marketing campaigns that will drive extensive interest in the venue.
• Maintain fiscally sound operations of the business is able to remain profitable, even during economic recession.
• Conduct extensive direct outreach with event planners that will recommend that their clients use the Company’s facilities.
• Maintain strong relationships with corporate event specialized that will have their clients host expositions, trade shows, and product launches at the location.
• Adhere to all laws regarding the preparation of food as well as the sales of alcohol.
• Use multiple online marketing platforms that will promote use of the facility for weddings.
• Continue expand the scope of the Company’s market reach so that the business is considered one of the premier event venues in Austin.
5.0 Market and Industry Analysis
5.1 External Environmental Analysis
This section of the event venue business plan will focus on the current economic climate, the event venue industry, the demographics, and the ongoing competition that the business will face.
Inflation has taken centerstage in regards to issues with the US economy. As a result of evolving trade policies, as well as adjustments in federal physical policy, there has been a marked increase in the rate of inflation within the country. It should be noted that the Federal Reserve as well as the United States Treasury are taking appropriate measures in order to ensure that the inflation rate declines while also providing support to ensure that the unemployment rate remains low.
It should be noted that Austin is a very wealthy area that has a significant population density. As such, even during challenging economic climate his business will be able to remain profitable and cash flow positive. As it relates to inflation, this area has historically fared very well.
5.2 Industry Analysis
As of this year, there are 25,000 that operate event venues in banquet facilities throughout the United States. These Company’s aggregately produce $73 billion a year of revenue or providing jobs for 200,000 people.
The growth of this industry has been higher than that of the US economy as a whole as consumers want more extra extravagant weddings and private events. The average cost of a wedding in United States now exceeds $30,000. The Company will be able to capitalize on this trend throughout the life of the business.
5.3 Customer Profile
The demographics that we use Deutsch Events Group for their personal in corporate events are admittedly quite large. Any person that is getting married or any business that is seeking to host a business function is a potential client of the Company. As it relates to individuals, these this group will typically have a household income exceeding $100,000 and will have a budget of $40,000 to $60,000 for their private event. For corporations, these businesses will typically have revenues in excess of $1 million and will have a similar budget range for their corporate function.
5.4 Competitive Analysis
As Austin is a wealthy area, there will be significant competition among more established event venues. The business will maintain a major differentiating factor through the immaculate campus that will have Deutsch Events Group’s facilities. Additionally, the Company seeking to provide end-to-end solutions for events which will include catering as well as bar service.
6.0 Key Strategic Issues
6.1 Sustainable Operations
Deutsch Events Group will have sustainable operations as a result of the following:
• Substantial revenues from each engagement hosted at Deutsch Events Group.
• The Company’s ability to provide catering and bar service will provide a significant competitive advantage.
• Limited competition among venues that operate as the same scale as Deutsch Events Group.
• The Company can easily scale operations by providing unique services that will complement the primary service architecture.
6.2 Basis of Growth
The Company will expand via the following methods:
• Continued expansion of the Company’s marked in campaigns with a major focus on direct outreach with event planners and wedding planners.
• Potential establishment of additional occasions in economically viable markets of Texas.
• Expansion of operations to include entertainment arrangement.
7.0 Marketing Plan
7.1 Marketing Objectives
• Engage in numerous marketing strategies that will properly position the operations of Deutsch Events Group.
• Conduct direct outreach with event and wedding planners.
• Use multiple traditional forms of marketing to create visibility.
7.2 Revenue Forecasts
7.3 Revenue Assumptions
Year 1
• The business will launch its operations next year.
• Revenue will reach $3.6 million.
Year 2
• Management will further expand the scope of marketing.
• Revenue will reach $3.9 million.
Years 3-5
• By Year 5, the Company will operate at maximum capacity.
• Revenue will reach $4.9 million.
7.4 Marketing Strategies
The Company will use a number of marketing strategies that will ensure that the business is able to attract a wide range of clients throughout the greater Austin area. Most importantly, Management intends to conduct extensive direct outreach with event planners, and wedding planners that operate within this market. During the development period, the business will showcase the immaculate campus, facilities, and its ability to provide catering service on site. This will familiarize event planners with the Company’s operations prior to launch the business.
The Company’s website will be an exceptional and interactive platform that showcases each aspect of operations. This will include video walk-through of the facilities as well as the campus. In order to drive traffic to the platform, the Company will use extensive search engine optimization so that when searches for venues in the target market are completed, the business can be quickly found. It will be principally accomplished the ongoing use of written content at discuss is not only the operations of Deutsch Events Group, but also issues that surround planning an event as well.
The Company will maintain an expensive presence on social media to complement is proprietary website. Profiles will be maintained on all social media pages and ongoing images and videos of events that are held at location will be uploaded to these platforms with client permission.
The Company will also maintain extensive relationship relationships with wedding planners in the target market as this will be a highly predictable stream of revenue for the Company. Similar to working with general event planners and corporate event specialists, extensive brochures at feature visually stunning visual will be distributed to these professionals within Austin.
8.0 Organizational Plan
8.1 Organizational Hierarchy
8.2 Personnel Costs
9.0 Financial Plan
9.1 Underlying Assumptions
• The Company will acquire $1 million of equity capital.
• Deutsch Events Group will receive a $4 million business loan.
• The Company will achieve a compounded annual growth rate of 8%.
9.2 Financial Highlights
• For each event, site fees will produce contribution margins of approximately 95%.
• Catering and bar service will produce contribution margins of 70% aggregately.
9.3 Sensitivity Analysis
In the event of an extremely severe economic recession, the demand for premium events may decline. However, the Company is operating within the greater Austin Metropolitan area, which has a far greater degree of economic staying power as discussed earlier. This substantial contribution margins from all services rendered will ensure that the business is able to remain profitable while servicing it’s underlying financial obligations.
9.4 Source of Funds
9.5 Financial Proformas
A) Profit and Loss Statement
B) Common Size Income Statement
C) Cash Flow Analysis
D) Balance Sheet
9.6 Breakeven Analysis
9.7 Business Ratios
SWOT Analysis
Strengths
• The Company is providing an end-to-end solution for people seeking to host personal and corporate events in Austin.
• An experienced CEO, Matthew Deutsch, that will be able to develop Deutsch Events Group into the preeminent event venue in Austin.
• Multiple high margin revenue centers.
• The Company’s marketing and branding campaigns will position the business properly within this market.
Weaknesses
• Operational complexities given the scoop in scale of the business’ operations.
• Moderately high cost related to facility, maintenance, and utilities given the size of the facility.
Opportunities
• Expansion of operations to include event entertainment arrangement services.
• Continued to expansion of the Company’s relationship relationships maintained with event planners, wedding planners, and corporate event specialist.
• Integration of overnight hospitality services, which is feasible given the 10-acre parcel of land.
Threats
• An extremely severe economic recession could impact demand for event hosting in Austin.
• Ongoing competition for more established event venues within the market.
Risk Analysis
Development Risk – Low
The primary matter that needs to be addressed is securing the funding so in this document. Matthew Deutsch has already sourced the parcel of land that will be used to house the Company’s operations.
Financing Risk – Low
A significant portion of the funding sought in this document will be used specifically for the acquisition of land as well as the development of real estate. The risk related to this funding are abated through the multiple revenue sources discussed.
Marketing Risk – Low
The Company will continue to use and expand upon the multiple marketing strategies outlined earlier with immense focus on direct outreach with event and planters in corporate event specialists within Austin.
Management Risk – Low
Matthew Deutsch is an experienced hospitality entrepreneur that will be able to effectively bring the operations of this business to profitability.
Valuation Risk – Low
The valuation risk is offset by:
• The underlying real estate will appreciate during the time it is held.
• The Company is operating in a very wealthy market that has significant staying power as outlined in the fifth section of the business plan.
• The Company could easily integrate additional event focus services into its offerings.
Exit Risk – Low
The sale of this business would be relatively straightforward, and any hospitality group would be able to acquire this business for their portfolio. The sale of this business is not expected to occur for a significant period of time unless it is financially prudent to do so. As needed earlier, qualified business sales professionals will be retained to help manage the sale.