BUSINESS PLAN 'Radio Station' (including financial model)
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Business Plan Description
Project idea: the creation of radio station «****» in Moscow, Russia.
Project Audience: the population of Moscow aged from 20 to 30 years. It is expected to attract daily *** listeners after one year of work.
Musical direction: popular foreign and Russian music, themed musical programs, hits and novelties.
Project equipment: the production of such firms as «DELTA», «Sony», «Allen Heath», «Sound King», «Cordial», «Apogee BIG BEN», «Behringer».
Object location: the radio station will be located in rented premises of ** sq. m. Additional costs are accounted in the category «Capital Expenditure» and included in the financial plan.
Among kinds of promotion and marketing the main Internet means will be: the creation of the radio station web-site, social networks, SEO. Also the advertising material will be placed in the print media.
Project implementation: the broadcasting in the FM-frequency range and online-broadcasting in the Internet Network.
Start of project implementation: January 2015.
Basic Financial Indicators
Revenue for 3 years of work
Discounted payback period
Excerpts from Research
Radio networks as a kind of information resource are widely used for carrying out of internal broadcasting in the Russia Federation. The results of survey showed that **% or *** thsd. of Russians have confirmed the presence of at least one radio receiver.
The analysis of functioning of 52 radio stations showed that in total on the Moscow air the entertaining function in the form of musical and humorous content strongly predominates – **%, the information function accounts **% and on the educational – **%.
On the average every quarter of an hour **% of Moscow population listen the radio, at least once a day – **% of population. Herewith on the average those, who contacted the radio, listened it for * h. and ** min. a day.
It is important to notice that about **% of all Moscow radio stations are included in holdings. And the fact that the total amount of registered licenses for broadcasting in 2012 increased by **% approves of the intensity of appearing of new players in the market.
The main source of income of national radio stations is the sale of advertising time. At the end of 2012 the radio advertising market in Russia amounted about ** bln. RUB, in the structure of media advertising yielding to Internet advertising only in growth rate. The capital market of radio advertising makes about **% of all Russian market. The average price for placing on the radio of 1 advertising 30-second spot is about *** RUB in Moscow radio advertising market.
It is not necessary to talk about the seasonality of this kind of business, but the experts are referred to the maximum percentage of radio station workloading: if the radio station is workloaded by ***%, it is a very good indicator.
The initial investment in the radio station of this type accounts approximately *** thsd. RUB: this sum depends on chosen equipment, cost of repair and specialization of premises. The monthly budget for marketing is planned in amount of *** thsd. RUB.
List of diagrams, tables, charts and gigures. 4
Executive Summery. 7
1.0. Project Description. 8
2.0. Radio Market Analysis. 10
2.1. Tendencies of Radio Broadcasting Market in Russia at the national level ……..10
2.2.Analysis of Radio Broadcasting Market of Moscow.. 13
2.3. Market of Radio Advertising in Russia. 16
3.0. Competitive Environmental 19
3.1. General Characteristic of Main Competitors. 19
3.2. Indicators of Audience of Leading Radio Stations in Moscow.. 21
3.3. Cost of Services of Competitors. 22
3.4. Holdings in Radio Broadcasting Market in the Russian Federation. 23
3.4. Intensity of Appearing of New Players in Radio Broadcasting Market of the Russian Federation 28
4.0. Organization Plan. 29
4.1. Organizational and Legal Form.. 29
4.2. Distribution of Object Areas. 29
4.3. Editorial Office Structure. 32
4.4. Functional of Radio Station Staff. 32
4.5. Formation of Wage Fund. 32
5.0. Marketing Plan. 33
5.1. Planning of PR-service. 33
5.2. Radio Station Web-Site. 33
5.3. Search Engine Optimization (SEO)…………………………………………………………….....34
5.4. Registration in Catalogs. 35
5.5. Social Media Marketing. 35
5.6. «Рeople talk about this» (PTAT) 37
6.0. Financial Plan. 39
6.1. Project Assumption. 39
6.2. Sales Revenue. 41
6.3. Project Costs. 42
6.4. Capital Expenditure. 43
6.5. Taxes. 43
6.6. Profit and Loss Statement………………..………………………………………………..………45
6.7. Discount rate. 47
6.8. CashFlow Statement 58
6.9. Analysis of Project Economic Efficiency. 64
7.0. Sensibility Analysis. 67
7.1. Changing of Price Level 67
7.2. Changing of Cost Price. 69
7.3. Changing of Discount Rate. 72
Project General Conclusions…………………………….……………….………………………….…...….74
Diagram 2.1. Distribution of Traditional Functions of Media in Total Air of 52Moscow Radio Stations in 2012 (estimated) 13
Diagram 2.2. Advertising Costs Structure by Sectors in 2011, %.. 17
Diagram 2.3. Advertising Costs Structure by Sectors in 2012, %.. 18
Diagram 3.1. Distribution of Radio Holdings Audience in Russia in 2011, AQH Share, %.. 25
Diagram 3.2. Distribution of Radio Holdings Audience in Russia in 2012, AQH Share, %.. 25
Diagram 3.3. Distribution of Radio Holdings Audience in Moscow in 2011, AQH Share, %.. 26
Diagram 3.4. Distribution of Radio Holdings Audience in Moscow in 2012, AQH Share, %.. 26
Table 2.1. Rating of World Countries by Amount of Transmitters for Internal Broadcasting. 10
Table 2.2. Structure of Types of Radio Receivers, Multiple Response, % of Respondents Number 11
Table 2.3. Distribution of Radio Receivers among Different Age Groups of Population, % of Respondents Number 11
Table 2.4. Ра Distribution of Radio Receivers in Different Types of Settelments of the Russian Federation, % of Respondents Number 12
Table 2.6. Demographic Structure of Radio Audience in Moscow in 2012 . 15
Table 2.7. Market of Media Advertising. 16
Table 2.8. Volume of Advertising Costs for Radio by Sectors for 2012, bln. RUB. 17
Table 3.2. Tariffs fo Rlacement of 1 Advertising 30-Second Spot, RUB. 22
Table 3.3. Radio Holdings Structure. 24
Table 4.1. Schedule of Organizational Works for Half 1 of Project Implementation. 29
Table 4.2. Distribution of Main Areas of Objects, sq. m. 30
Table 4.3. Cost of Equipment Purchase. 31
Table 4.4. Furniture and Household Appliances for Premises. 31
Table 4.5. Wage Fund. 32
Table 6.1. Project Assumption. 39
Table 6.2. Sales Revenue, RUB.. 41
Table 6.3. Project Costs, RUB.. 42
Table 6.4. Amounts of Paid Taxes, RUB.. 44
Table 6.5. Profit and Loss Statement 45
Table 6.6. Calculation of Long-Term Profits over CAPM for Portfolios of Decimal Groups NYSE/AMEX/NASDAQ.. 52
Table 6.7. Algorithm for Determining the Risk of Company. 53
Table 6.8. Algorithm for Calculating the Specific risk Premium.. 54
Table 6.9. Calculation of Discount Rate by WACC-Method. 56
Table 6.10. Cash Flow Statement 68
Table 7.1. Changing of Price Level 67
Table 7.2. Changing of Fixed Costs. 69
Table 7.3. Changing of Discount Rate. 72
Chart 2.1. Dynamics of Average Daily Coverage of Total Radio Audience in Moscow in 2010-2012. data: Age 12 years and older 15
Chart 3.1. Distribution of Average Share of Leading Radio Station Audience in Moscow in 2012. First 25 Items are Showed. 21
Chart 6.1. Dynamics of Revenue and EBITDA for Project Implementation Period, RUB.. 46
Chart 6.2. Dynamics of Net Profit for Project Implementation Period, RUB. 46
Chart 7.1. Dynamics of Net Profit due to Changing of Sales Price, RUB.. 67
Chart 7.2. Dynamics of NPV due to Changing of Sales Price, RUB.. 68
Chart 7.3. Dynamics of IRR due to Changing of Sales Price, %.. 68
Chart 7.4. Dynamics of Simple (PP) and Discounted (DPB) Payback Periods due to Changing of Sales Price, months. 69
Chart 7.5. Dynamics of Net Profit due to Changing of Fixed Costs, RUB. 70
Chart 7.6. Dynamics of NPV due to Changing of Fixed Costs, RUB. 70
Chart 7.7. Dynamics of IRR due to Changing of Fixed Costs, %.. 71
Chart 7.8. Dynamics of Simple (PP) and Discount (DPB) Payback Periods due to Changing of Fixed Costs, months. 71
Chart 7.9. Dynamics of NPV due to Changing of Discount Rate, RUB………………………….……72
Chart 7.10. Dynamics of Discount Payback Period due to Changing of Discount Rate, months. 73
Figure 4.1. Layout of Radio Station Premises………………………….. 30