Business Plans from the eyes of the experts

As a Business Administration professional, I studied for more than four years the importance of a business plan. I learned the difference between an entrepreneur that takes the time to study the market, the competitors, the legal issues and how to develop a marketing and finance strategy, from entrepreneurs that just decide to go out to the market without any previous study. When you go out and face the real world, as an entrepreneur you have a lot of fears, including failure. However, it is important to know that with good planning and a solid business model the risk decreases.

According to Bloomberg, 8 out of 10 entrepreneurs fail within the first 18 months, and it is not because they did not have a business plan, but because they do not dedicate the appropriate time for its development. As a starting point, the objectives and the goals have to be achievable, the market research should be as detailed as possible and the financial numbers have to be realistic. To analyze what makes a business plan excellent, the best is to review what the experts in business plans suggest.

One of the most successful business founders nowadays is Carlos Slim.  Slim, 74 year-old Mexican, is considered the world's second richest man with a net worth of $78.9 billion (Forbes, 2014). He was born in a Lebanese family dedicated to businesses, so this generates a positive impact in his career. His conglomerate Grupo Carso, founded in 1965, has holdings in companies of different fields such as communications, real estate, airlines, media, technology, retailing, and finance.  Even though he is still conducting some business activities, he is now focused on foundations supporting education, health and employment in Latin America, which represents a valuable investment in countries as mine (Colombia). His power has no limits; he is the owner of one of the most important telecommunications companies in Latin America: Telmex. When he talks about a business he highlights the importance of clear objectives and knowing the tools to reach them. In the Grupo Carso Principles, it is possible to see the reflection of what is important in a business plan. He refers to simple organizational structures to generate flexibility and a fast decision-making culture, as well as to see the market trends in terms of technology to improve the production processes. Creativity and optimism are key. In finance terms, this thought summarizes the smarter way to manage money: “Maintaining austerity in good times strengthens, profits and accelerates the development of the company and averts the bitterly drastic adjustments in times of crisis”.

I decided to consider a perspective more in the side of the entertainment industry, to check how it match with Slim’s point of view, because people often think that products such as movies, music albums or TV programs are just art and do not need market analysis and budgets in the planning process.  For this purpose, Steven Spielberg is the right man. He is more than a talented film director, screenwriter and producer; he is business magnate. He has a net worth of $3 billion. As he could not get into the USC film school, he decided to accept an unpaid internship in the editing department of Universal. He is the founder of the multimedia company Dreamworks. From his experience he talks about the importance of taking risks as he did with the movie Jaws, that was a complete success in the box office. “Failure is inevitable; success is elusive”. With this quote I introduce 5 lessons he gave to entrepreneurs: Overcome your fears, know where to draw the line, find inspiration around you, push your limits and follow your passion.  Behind all his projects there is not only passion, there is also a test based on numbers. As Anil Ambani, the chairman of Reliance Group, said after a negotiation with Spielberg “..Ever since we looked at their business plan, I have never doubted that we would succeed in providing them with the financial muscle required to realize their dreams.”   

These two businessmen show me the importance of passion, as it is the first step making my company a reality. The objectives have to be clear and I have to know my resources inside and out. Showing a different proposal by making a previous analysis of the gap within the market and showing numbers are the evidence of the return in the investment and the tools I want to apply for my business plan development and for my career.

Guerrilla Marketing for Movies

In a digital world, where social media is becoming the most important marketing tool due to its easy use, viral impact capacity, and low cost, there is still space to mix them with unconventional marketing strategies in order to capture the attention of the audience. People love to get involved in different experiences and interact directly with the product or service.  The Guerrilla marketing is a style that combines risk, surprise, events and interaction. This type of marketing is a good option for independent filmmakers who need to optimize their budget in the best way possible. The key is always creativity and imagination.

One of the most interesting and effective ways to promote a movie using guerrilla marketing is with a flash mob event where many people gather in a public area and have a performance. It could be singing, dancing or acting. The idea is to catch the attention of the audience around the place. The first step is to come up with an idea that is directly related with the topic of the movie. Picking a good location is also very important, so it has to be related with the target market of the movie. During the event, it is necessary that someone is there to photograph and film the flash mob.  Social media is a crucial part of the process, because in order to promote the video and make it viral, it is important to post it on Facebook, Instagram and Twitter accounts. An example of a flash mob in a movie release was for Magic Mike, starring Channing Tatum, who appears in the Rockefeller Plaza dancing as the stripper he interpreted in the film.

Another approach to guerilla marketing with a limited budget is to look for speaking opportunities in the field of expertise.  In the filmmaker’s situation, it will be good to talk about film techniques and trends, as they promote the movie at the same time. Opportunities are in schools, colleges, and community organizations, depending on the target market.

Guerilla marketing gives the perfect opportunity to get noticed in the competitive film industry and create an image of being unexpected, different and fun, with a limited budget.

A Great Marketing Campaign with Low Budget

Major film studios have huge budgets for marketing and advertising a movie for release and make it a box office success. However, for independent filmmakers the story is different. They have to measure very carefully how much money they can spend in marketing. Yet, budget constraints do not have to be an obstacle for creativity. Nowadays, it is possible to find support through social media and sponsorships to develop a good promotional strategy. But what happened when social media was not available? One of the most successful viral marketing strategies of all time was developed for The Blair Witch Project in 1999, when Facebook, Twitter and YouTube did not exist. How was this possible?

The Blair Witch Project was a movie about three student filmmakers that were investigating the mystery behind the case of the Blair Witch through interviews of the local people.  The three students disappear and a year later their footage was found.  The actors improvised almost all the lines, what gave the movie a real result. The production company decided to create a low budget website (www.blairwitch.com), that is still working, to document the history of the Blair Witch from 1785 to the day when the footage was discovered. The website has photos, biographies and interviews with family members and is constantly updated with new information. All the evidence made people think it was a true story and encouraged people to talked about it. It also includes trailers with the students’ “real videos” and news coverage of the disappearance.  The most important thing that the team defined very well was the target market. All the ads were shown in college campuses and created a desire to seek more information about the story.  Also, the team took care about details such as listing the three actors as ‘missing, presumed dead’ in IMDb before the release.

The results were incredible: for a $25,000 movie budget, the final production grossed $248 million at the box office (the second highest return on investment for a movie). People made long lines to get a ticket. The success was created on uncertainty and made people think it was a true story. With the technological advances, is very hard to repeat a campaign like this one, but it reminds us of the importance of originality and taking care of the small details to impress the audience.

            

Industry Liabilities

In the entertainment industry a new contract is signed, a new deal is closed, a new license is acquired everyday. This is the reason why is it so important to know the legal terms in order to avoid costly liabilities that can impact the business negatively.  However, any company has a risk to be involved in legal controversies, despite of the experience in the market. The following are some controversies in the film industry.

To entertain the audience with a movie is the principal goal of a film production. The distribution company has the responsibility to develop the marketing campaign for the movie and to find the best screens to capture the target market. But, what happens when the message sent is not appropriate? This was the case of FilmDistrict, an independent movie distributor. In 2011, Sarah Deming, a woman from Michigan, filled a lawsuit against the company for wrong promotion of the movie Driver. After watching the trailer she was expecting a movie similar to ‘Fast and the Furious’, with a lot of racing scenes, but the story was completely different. It was more a drama thriller, so she claimed for a refund of the movie ticket. For many people this lawsuit can be absurd, but I think Sarah is right. In this case, the trailer sells an action movie, when actually it is slow, mystery and focuses on the hard relationship between the driver and his neighbor.  The trailer is the most important advertisement tool to show the public what they should expect from a film, that is why the marketing team has to be very careful with all the elements of it, including the scenes and the music. The trailer has to match the movie content so the public will receive what they are expecting.

The second case is a lawsuit from Peter Jackson to New Line Cinema, the distribution company of the ‘The Lord of the Rings’ movies. The famous director claimed that New Cinema committed fraud in handing revenues of licensing and merchandising for the trilogy. According to The New York Times, Jackson was underpaid by more than $100 million. This is not the only case reported about problems between the distributor and the director of a movie, so it is a reflection of how important is to clearly write all the rights of the parties in the contract and establish the amount limits for different sources of incomes.  The contract must be specific in terms of box office revenues and profits for books, DVDs, merchandising and the responsible for them.

The last case is related to the movie exhibition side of the industry. It is a lawsuit from a local movie theater chain in Georgia, Cobb Theaters, claiming that the big chain AMC Entertainment uses its market power to deprive other competitors to access to films from the most important film distributors. This is not fair for a competitive market and the company is creating a monopoly when they ask for exclusivity for some movies releases. AMC did not talk about the situation. Maybe it is not a case of monopoly, it would be related to the number of screens the company has that allows them to have more movies showing. The important thing is that the market establishes competition rules so all the companies have the same opportunities.  It is clear that the big organizations have more opportunities to capture more audience due to their size and budget, but they have to play fair and do not try to use dirty tricks to affect the normal behavior of the market.

All these cases show the importance of calculate the risks of any project and always have the rights and obligations clear to not be involved in situations that impact the reputation and implicate unnecessary costs.

Live Events Review

What is more important than being in a classroom, solely learning about the artist and product management concepts, is going ‘outdoors’ and experiencing the ‘real world’. To be a part of the audience in a live event, not thinking like a normal customer anymore, yet noticing elements behind the event planning, is now part of my life as a business professional, and as a result, I has furthered my passion of developing a career in the entertainment industry.

The first event at which I had the opportunity to attend this month was a Timucua Concert. I have never attended this event before and I immediately fell in love with the concept. The experience is all about enjoying a concert as if you were in your own living room. They offered wine and food to all of the guests. The venue was small as well, and it was that which created a more intimate relationship between the artist who performed and the audience. The artist that I saw onstage was Ricardo Filipo, who played various Brazilian songs on his classical guitar. In spite of the fact that his singer could not attend the event, he created an experience that developed into a special connection between himself and the audience. Being from Colombia, the sounds were very similar to some music genres of my country. Consequently, I felt as if though was back home with my family. The audience was also excited and you could feel the art within the atmosphere.

On the other hand, recently, I went to a Brazilian Carnival at Firestone - one of the most popular clubs in Orlando. This event was on August 14. During this event, however the audience was completely different - most of them, young people whom like electronic music. The main act was a famous DJ, named F Tampa, starting his concert at 1 am. When he came onstage, the crowd was screamed and began dancing. Although I am not a big fan of electronic music, the energy that the DJ transmitted through his music was amazing. Adding to this experience, one cane view all around the event, dancers and performers related to the Brazilian culture.

Nevertheless, in order to improve the Timucua experience I would make some changes with regards to the operation of the event. After the concert would start, I will close the doors. This way, no one would be able to go outside for more wine and food; mainly because in some parts of the show it turns into a distraction for the audience when the door opens and closes all of the time. In addition, I would invest more in their web page to make it more attractive and interactive. For this type of business it is good to receive feedback from the audience, so I will also create this space or app, which could receive, track and post the feedback - it could be similar to a blog. The investment for the web-page redesign will be around $1,000 - $2000 dollars. With the target market being more adult, I would make an email marketing campaign that would send the calendar of events and the concerts to all recipients. This will cost $1,000 dollars. The overall benefits will come with the highest brand recall.

Lastly, in terms of the Brazilian Carnival, organized by Braslive Entertainment, there were mistakes in the marketing strategy, maybe because this was the first event of the company. For instance, I had done a more aggressive campaign of marketing directly with flyers, as there were not any plans behind the best schedules and the best places to capture the target market that would mainly have been young Brazilian people. The Premium Outlets in Orlando, however, were a good place for this form of marketing strategy because there was a big Brazilian community present, although the models that handed out the flyers, only went there once. On the other hand, the social media strategy was good despite the short promotion time for the events. However, the web page was not ready at the moment of the event.  Yet, with a new development of the web page that will cost around $ 3,500 dollars, for next events, and while the brand will need to keep working on its social media strategy as the target is very young, I see great things in the future for Braslive Events. The attendance at their first event was lower than expected, but anyone could tell that the people who attended the event enjoyed the experience.

All in all, each of the live events are a source of knowledge about the customer’s preferences, and so it is important for these companies to create a team that always has an eye in the market and can bring new ideas that will keep improving the experience for future audiences to come.

TED Talks- Simon Sinek: How great leaders inspire action

In the TED Talk ‘How great leaders inspire action’ Simon Sinek refers to the concept of the golden circle, a concept he created to understand the reason behind a leader’s success. The golden circle includes three levels: what, how and why. Only a few people know why they do what they do, the purpose of why they exist. Sinek said all the great leaders think, act and communicate the same way, while it is the exact opposite for everyone else. The key for inspiration is to reverse the order of the information, to communicate from the inside out, starting always with the ‘why’.  When the consumers buy the ‘why’ of the company instead of the product itself, the connection is special and the company makes them believe in what the company believes.

One of my favorite brands is Coca-Cola because they do not focus on the product in the marketing campaigns; they always involve the feelings of the consumers and make them believe in the company’s values. This is the perfect example of the why, how, what format. Coca-Cola never starts a campaign referring to the product. They sell an experience. They sell ‘happiness’. They are not focused on showing a drink to quench thirst; they show the experience to share it with family and friends. The purpose of the brand is to make people feel happy.  Even though the product does not change, they are always innovating with new, positive messages to send to the audience. They know how to impact people’s emotions.

Simon Sinek also talks about the law of diffusion of innovation. The law shows five different types of groups in the society: the innovators, the early adopters, the early majority, the late majority and the laggards. In terms of fashion products, especially clothes, I fall into the category of innovator. I consider myself a fashion lover.  I have to be first to go into shops such as Zara to buy at least one new dress for the season. I am always willing to take risks and try new fashion styles. On the other side, in terms of technology I fall more in the category of late majority. Despite that fact that I wanted an iPhone 5C so bad, at the moment the product was launched I had other priorities so I decided not to buy it. I was more rational and I thought that since my iPhone 4S was still working, I did not need a new one. Maybe I will wait until the price decreases with the launch of the iPhone 6 that is coming in September and I will get an iPhone 5C.

I really enjoyed this talk because Sinek, as a leadership expert, makes the audience reflect the path to be a leader and be able to hold a position of power with responsibility.