This week, you’re going to help develop the forward-looking financial statements

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This week, you’re going to help develop the forward-looking financial statements for an entertainment business. Introducing the 2Live Venue, a small 300-capacity startup business where indie bands perform concerts four times per week. In real life, you’ll be required to start from scratch and completing this task could take weeks, even months. For this assignment, many of the numbers have been entered already. Your job is to complete some of the more meaningful portions of the task of forecasting. I’ll walk you through each step below. Happy Forecasting!! Two Most Important Goals of Forecasting:
Make the business profitable within two years (bottom-line of Income Statement starts out negative but turns positive, then “Breaks Even” within two years)
Ensure that the business does not run out of cash (end-of-period balances on the cash flow statement are ALL POSITIVE (absolutely no negatives) Deliverables
Your deliverables include only one file: the financial forecast in excel format (Blank Template is below). No other documents should be submitted.
If you worked in a group on this assignment, please include everyone’s last name in your saved excel file when submitting.
Important Note:
When opening your Excel TEMPLATE below: choose “Enable Macros” and then choose “do not update”
Students who use Numbers but not Excel:
an alternative, Numbers file is located below
Financial Forecasting TEMPLATE… .xlsm
567 KB
Financial Forecasting 2022 TEM… .numbers
1 MB
Forecasting Introduction.pdf
24 KB
Sales Projections Tutorial.pdf
518 KB
Assignment Objectives: Develop and explain assumptions underlying esti­mates in budgets and pro forma financial statements
Describe components of sales forecast
Develop a pro forma statement(s) from budget assumptions Your grade will be based on how well you achieve the following real-world goals & objectives just as you would do if you completed a financial forecast for a project at an entertainment company or for your own startup business:
Points by Objective Possible
Goal #1: Profitable within two years 20
Goal #2: Cash flow positive 20
Sales projections calculated correctly 10
Realistic growth pattern in sales 10
Marketing budget was completed 10
marketing budget spent entirely 5
Marketing is targeted 5
All ownership shown 10
Reasonable capital raised/valuation 10
Total Possible 100
Important Note:
When opening your Excel TEMPLATE below: choose “Enable Macros” and then choose “do not update”
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Watch this segment of ABC’s Shark Tank
Sales Projections
Two tasks should be completed here:
Forecast the ticket sales of the venue for the entire two years by quarter (ticket sales unit volume, which is the quantity of tickets sold).
Forecast the retail price of the merchandise that is purchased by an average merchandise buyer. Note: The unit volume for this is already calculated automatically using an assumption that 30% of ticket buyers will buy merchandise.
Approach this portion of the financial forecast by thinking about the effect that marketing will have on your sales:
marketing efforts enable new businesses to grow because of the network effect (for example, some customers will attend one of your shows, and if they like it, they will tell others). multiple/repeat marketing messages are pursued in order to get the attention of your prospects within the context of an over-marketed society and fragmented attention span.
What does this mean? The network effect combined with repeat marketing messages means that the sales of a well marketed new business will grow exponentially; not in a straight line.
Please review the following blog post for more: The Pattern of Your Sales Forecast
5 Key Tips Sales Forecasting Business Owners
Marketing Budget
Use one of Full Sail’s library resources (Music Business Association) to gain insight into your customers and custom tailor your marketing budget to reflect these insights. Spend all of the marketing budget of $43,200 for the two years by focusing on the top 3 or 4 marketing channels that directly pertain to your customer (based on demographics, etc.) Ask yourself:
what types of marketing are most likely to bring in new customers and generate the level of sales you projected?
What types of marketing are most likely to directly reach your desired / ideal customer.
Capital Investments
I call this section of the workbook “the Shark Tank page” because it explains, in simple terms, who owns the business (owner and investor section), how much ownership is theirs (% equity), and how much money ($ investment amount). The total amount of money contributed from both the owner and investor(s) should equal a large enough amount to completely compensate for (or make up for) the negative “end of month” balance on your cash flow statement.
Please watch the segment of ABC’s Shark Tank below.
Click on the link above to watch Sales Projections Tutorial
Click on the link above to watch Sales Projections Tutorial
Learn More
Want to explore the topic of Preparing Financial Forecasts even further? The following direct links will show you how, courtesy of Equidam.
Financial Projections LINKS
Learn more about how to create your own financial projections from scratch:
https://www.equidam.com/startup-projections-how-to-start/
Building a forecast from the bottom up:
https://www.equidam.com/financial-projections-bottom-up-approach/
Building a forecast from the top down:
https://www.equidam.com/financial-projections-top-down-approach/
Estimating Market Size for Top Down:
https://www.equidam.com/how-to-estimate-market-size/
How to decide on an appropriate growth rate:
https://www.equidam.com/average-growth-rate-for-startups/
Optional Additional Resources:
Managing a concert in a large venue (ARTICLE from Ticketonomics Part I)
Blank Template: Creating a Fin… .zip
10 MB
Completion
Login for FSO:will be provided to the assigned writer

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