Iconic MDT Studio

Course: QHO404
Student ID: 10103142
 SUMMARY OF MY BUSINESS PLAN

PART I. INTRODUCTION SIDE…………………………………………...........................

1. Description of the business idea…………………………………..........................

2. Description of the services offered………………………………………………….
3. The marketing strategy……………………………………………………………...
4. The Competition and risks…………………………………………………………..

PART II. FINANCIAL SIDE………………………………………………...........................

a. Fixed and variable costs…………………………………………………………….

b. Cash flow and budget………………………………………………………………...
c. Breakeven point………………………………………………………………............
d. Profit Forecast…………………………………………………………………………
e. The Margin of
safety……………………………………………………………………….
f. The bottom line………………………………………………………………………..

PART III. REFERENCES………………………………………………..............................

 PART I. INTRODUCTION SIDE

1. Description of the business idea

Photography is an exploratory art that could be aimed towards to the knowledge of

the outer or inner world of a human being. It is nothing more than a unique vision, a
great way to see the works, and then to be translated into a new universe. Whether it
is a portrait, a landscape, or even a composition of colors, they will always remain a
memory that can be shared between generations.

Nowadays, people prefer to use their phone cameras to take a few snapshots as this
is a lot easier and less expensive method. They require professional photograph
services only on rare occasions or special events in their lives, such as weddings,
baby shower parties, yearbook, and so on.

This photography business plan shows how Iconic MDT Studio will fulfill the needs of
our customers professionally and present them in the best light. We will establish a
professional relationship with our clients to maintain their expectations at the highest
level.

Iconic MDT Studio will differentiate from others, as we don’t only provide good
quality of our services, but we involve our souls and passion for photography into
that work. We developed a pricing structure that makes our digital work a lot easier,
whether the people would like to join us in our studio based in Manchester, or

their homes.

Our work consists of surprising beauty, naturalness, emotions, and enthusiasm of

humans. And if some people convey stories through words, we reform to convey
stories and feelings through photographs. We'd like to see how happy, comfortable
are the people feeling in the focus of our cameras, and that's why we created a few
goals, such as: to build a long-standing and trustworthy relationship with our clients,
to provide the best quality of our products and services offered and also to increase
the profit of our business as much as possible.

2. Description of the services offered

We wouldn’t exist without our customers so Iconic MDT Studio will help the people to
look their best, and we will capture the special moments of their lives. Our company
offers creative and professional photography services at affordable prices for
everyone. We will generate fantastic eye-catching results as we want to know our
customers are more than excited about our work.

We put quality and creativity at the heart of what we do and Iconic MDT Studio
covers more areas: food and drink, events, various products from large brands
(watches, jewelry), beauty and cosmetics, and so on.

We created three awesome packages which include:

o Premium Package:

This package includes family and baby portrait photography. Our company offers
this premium shooting to produce high quality, stunning, fun, and unique portraits
that a lot of families will be able to enjoy for the rest of their lives. Also, we'd love
to work with toddlers as we truly love children, and to be honest, there isn't
anything more precious than taking photographs with your child as they are only
this little for a short time. Also, this package will include wedding events for lovely
couples to capture that special and unforgettable moment of their lives.
o Gold Package:

We will photograph events that can be covered by our photographer and

videographer, such as ceremonies, parties, promotions, product launches, and
also exhibitions, food, and drinks.
o Bronze Package:

We also offer individual portrait session for those who need

professional photographs for business cards, career purpose, websites, social
media, photos that also are suitable for magazine publication, or even
newspapers.
3. The marketing strategy

The key element of Iconic MDT’s strategy is to reach more website visits as we
consider this is the best way for us in growing our business and promoting our work.
So, as long as we develop high popularity on social media, the customer's requests
will grow up considerably.

Another element in our marketing strategy is to reach more families, especially

young couples so we could collaborate with them in the further special moments of
their lives.

Also, we offer promotions for loyal customers if they choose our studio for a long-
time term, or they give us great feedback and recommend our firm to other nice
customers.
4. Competition and risks

Nowadays, photo studios are quiet various and they depend on education,
experience, and qualification provided by hired employees. Based on our research
found, there are a few competitors in our area:

Competitor The Blackout Studio provides qualified and professional photographers

with experience for over 15 years. They worked in the sports photography area, so
they represent to us a huge competitor. Even so, their prices are the highest in
central London which gives us a little hope that our customers will choose us instead
of them.

Competitor Unique Studio is the most appreciated on social media platforms having
over 200k followers and their prices are at a medium level. The process pictures in
their studio as they are in a partnership with other organizations. The reason for what
most

people don't choose them is because when a customer needs a professional

shooting session, that person is expected to receive the whole package which
included editing and processing the photos.

There are two types of risk within the company: internal risks and external risks. The
first risk that might occur is increasing the number of stronger competitors than our
firm. I consider this risk is really important, as we belong to an actual field that is
continuously increasing.

Another risk that could occur is the political one, because of the political instability
and legislation in force. So because of this reason, taxation is not stable and the
taxes may be increasing in terms of salaries, incomes, and profit.

I consider the political risk is a medium one and because of that the lack of
investment security may occur.
To avoid these risks, and also the failure of the business, we established a KPI
strategy that will help our firm to grow organically and to measure the relationship
between the lifetime value of a customer and the cost of acquiring that customer.

We will get in touch with our customers through social media in promoting our brand
awareness. We will produce an estimative calculation to see how effective is our
website in building an audience taking into consideration each electronic platform.

Financial perspective Customer perspective

- reduce the cost; - lower prices;

- (quick turn around)time;
- increase shareholder value;
- availability;
- increase asset utilization. - functionality;
- the quality of the services
Innovation and growth perspective Internal perspective

- identify the new opportunities; - loyal customers;

- design and develop the quality of - acquire new customer;
our services; - retain existing customers;
- choose wisely the leadership - manage the risks;
- supply and produce efficient

PART II. FINACIAL SIDE

My business is financed in savings of £30.000, a loan of £10.000 from relatives and
a grant of 10.000 from HSBC Bank.

My premises will be in a studio-flat in Manchester rented from a good friend and

which will be cost £500/month.

The required equipment is as follows:

 Adobe Photoshop Program - £45 monthly

 A4 Printer - £89.99
 Organizational equipment - £54.99
 Canon Camera EOS 7D - £1800
 Drone - £2000
 25 Photo Albums - £13.99
 50 Photo Frames - £75.99

Wages and salaries depending on the position held:

Secretary £7/h; 6 hours a day; 5 days a week

Photographer £12/h; 8 hours a day; 6 days a week

Videographer £11/h; 7 hours a day; 5 days a week

Manager £11/h; 6 hours a day; 5 days a week

My incomes will be generated by the packages as follows:

Premium Package £2000 – 400 photos in three different days including special
effects editing, 100 frames and a drone included in shooting;

Gold Package £700 – 200 photos in 5 hours indoors and outdoors, including 70
frames and customized editing;

Bronze Package £430 – 80 photos in 2 hours including editing.

a. Fixed and variable costs

A fixed cost is “a cost that remains the same and does not depend on the number of
goods and services a company produces. A fixed cost is an expense that a company
is obligated to pay, and it is usually time-related” while a variable cost is “a cost that
varies, as the amount of goods and services a company produces fluctuates”.
(Investopedia, 2020)

How will be my costs?

 Fixed: camera, Adobe Photoshop Program, Printing Costs, and monthly car
lease.
 Variable: printing costs, photo albums, photo frames.
 Direct: camera, Adobe Photoshop Program.
 Indirect: organizational equipment, car lease.

b. Cash Flow and Budget

According to The Cambridge Dictionary, a budget shows us "how much money a

person/ organization will earn and how much they will need or be able to spend".

(Cambridge Dictionary, 2006)

According to the Financial Times' dictionary, net profit is: “The profit of a company
after operating expenses and all other charges including taxes, interest and
depreciation have been deducted from total revenue. Also called net earnings or net
income.” (Financial Times, 2007)

“Gross margin is the difference between revenue and cost of goods sold (COGS)
divided by revenue. Gross margin is expressed as a percentage. Generally, it is
calculated as the selling price of an item, less the cost of goods sold (e.g. production
or acquisition costs, not including indirect fixed costs like office expenses, rent, or
administrative costs).” (Wikipedia, 2010)

Below there is my cash flow and budget from January to December as follows:

January February March April May June July August September October November December

Inflows
Sales
Premium Package
Amount of sales 2 2 4 4 8 7 8 7 5 3 1 2
Subtotal 4,000 4,000 8,000 8,000 16,000 14,000 16,000 14,000 10,000 6,000 2,000 4,000

Gold Package
Amount of sales 5 5 4 6 9 11 12 11 7 6 3 1
Subtotal 3,500 3,500 2,800 4,200 6,300 7,700 8,400 7,700 4,900 4,200 2,100 700

Bronze Package
Amount of sales 7 6 5 7 9 10 10 12 8 6 4 2
Subtotal 3,010 2,580 2,150 3,010 3,870 4,300 4,300 5,160 3,440 2,580 1,720 860

Total £
Total Inflows 10,510 10,080 12,950 15,210 26,170 26,000 28,700 26,860 18,340 12,780 5,820 5,560

Outflows

Wages and salaries 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500
Marketing costs 70 70 70 70 70 70 70 70 70 70 70 70
Bills 100 141 122 115 100 110 111 122 119 115 139 153
Property Costs 500 500 500 500 500 500 500 500 500 500 500 500
Car lease 220 220 220 220 220 220 220 220 220 220 220 220
Photo frames 489 483 677 899 1,200 1,231 1,050 973 832 436 318 210
Printing Costs 82 82 82 82 82 82 82 82 82 82 82 82
Adobe Phototshop Program 50 50 50 50 50 50 50 50 50 50 50 50

Sub-total Outflows 3,011 3,046 3,221 3,436 3,722 3,763 3,583 3,517 3,373 2,973 2,879 2,785

Intial Costs
Canon EOS 7D 1,800
A4 Printer 90
Organisational eqp. 55
Drone 2,000
25 Photo Albums 14
50 Photo Frames 76
Sub-total outflows 4,035

Total outflows 7,046 3,046 3,221 3,436 3,722 3,763 3,583 3,517 3,373 2,973 2,879 2,785

Total Fixed Costs 2,422 2,422 2,422 2,422 2,422 2,422 2,422 2,422 2,422 2,422 2,422 2,422

Total Payments 16,967 16,537 19,407 21,667 21,667 32,457 35,157 33,317 24,797 19,237 9,855 12,017
Cumulative Payments 16,967 33,504 52,911 74,578 96,245 128,702 163,859 197,176 221,973 241,210 251,065 263,082

Cash Flow
Net Cash Flow 6,475 7,034 9,729 11,774 22,448 22,237 25,117 23,343 14,967 9,807 2,941 2,775
Opening Bank Balance 5,000 1,475 8,509 18,238 30,012 52,460 74,697 99,814 123,157 138,124 147,931 150,872
Closing balance 1,475 8,509 18,238 30,012 52,460 74,697 99,814 123,157 138,124 147,931 150,872 153,647

c. Breakeven point

“The breakeven point is reached when the total revenue exactly matches the total
costs and the business is not making a profit or a loss. If the firm can sell at
production levels above this point, it will be making a profit.

Establishing the breakeven point helps a firm to plan the levels of production it needs
to be profitable.” (BBC, 2016)
Below there is the breakeven point established for these three packages we are
selling as follows:

Premium Package Gold Package Bronze Package

Selling Price 340.00 245.00 180.00

Variable Costs 27.6 41 64

Contribution/Unit 312.40 204.00 116.00

Fixed Costs divided evenly 61,000 61,000 61,000

B.E.P Fixed Costs 61,000 61,000 61,000

Cont/Unit 312.40 204.00 116.00

Breakeven Point/ Product 195 299 526

d. Profit Forecast
“A calculation of a company's possible future profit in a particular period made by its
managers or by analysts (= people who study companies' financial performance).”
(Cambridge Dictionary, 2017)
In another words, profit forecast helps us to manage our company costs and net
profit, so we will know exactly the volume of sales we need to produce to keep our
business growing.
Lower down I attached the profit forecast table that indicates us how much we need
to produce for the proper functioning of our company:
 January February March April May June July August September October November December Totals
Sales 4,000 4,000 8,000 8,000 16,000 14,000 16,000 14,000 10,000 6,000 2,000 4,000 106,000

Less
Cost of sales 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00

Wages/Salaries (Variable)

Gross Profit 6,000.00 6,000.00 10,000.00 10,000.00 18,000.00 12,000.00 18,000.00 16,000.00 12,000.00 8,000.00 4,000.00 6,000.00 108,000.00

Less
Fixed Costs
Wages & Salaries 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 18,000.00
Rent 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 6,000.00
Marketing etc 70.00 70.00 70.00 70.00 70.00 70.00 70.00 70.00 70.00 70.00 70.00 70.00 840.00
Car lease 220.00 220.00 220.00 220.00 220.00 220.00 220.00 220.00 220.00 220.00 220.00 220.00 2,640.00
Printing costs 82.00 82.00 82.00 82.00 82.00 82.00 82.00 82.00 82.00 82.00 82.00 82.00 984.00
Adobe Photosop Program 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 600.00

Net Profit 8,422.00 8,422.00 12,422.00 12,422.00 20,422.00 14,422.00 20,422.00 18,422.00 14,422.00 10,422.00 6,422.00 8,422.00 137,064.00

GPM % 150% 150% 125% 125% 113% 86% 113% 114% 120% 133% 200% 150% 102%
NPM% 211% 211% 155% 155% 128% 103% 128% 132% 144% 174% 321% 211% 129%

e. Margin of safety
The margin of safety represents the gap between the revenues and the level of sales
that may decrease before the company becomes unprofitable. It is important to know
when the level of sales are decreasing, and so we could intervene and solve the
company.

In the following table we established some target sales, and recording to the
breakeven point we will calculate the margin of safety.

Packages Target of Sales Breakeven Point Margin of Safety

Premium Package 5 3 2

Gold Package 4 2 2

Bronze Package 3 2 1
f. The bottom line

In the beginning, the company's sustainability will be ensured by our funds, but also
we intend to apply for a loan. Afterward, we assemble a list of people in which we
could address and that we think we should convince to invest as associates who
would not be part of another company and a list of relatives and friends who might
be able to lend us with a small amount of money in developing our firm.

We will investigate and we will make a list of organizations who financing low-risk
activities. Also, we've been thinking to contact the local branch of organizations that
takes care of small businesses and who analyzes the application forms of credit they
have, and eventually, we would complete an application in a preliminary form.

Our company wishes in the short term to enter the market with attractive prices, but
the emphasis will be on the quality of services provided as well as on the kindness of
our staff will provide to our customers.

The medium-term objectives are those to attract a blanket of customers who really
appreciate our photo-video services and so they will promote our firm on social
media. The long-term objectives are those to perform photo-video services for
important events of customer's lives, as well as in the training of specialized
personnel and in achieving a high artistic and qualitative level. Another goal for our
firm is to invest in our employees to help them to achieve great performance in our
company. We would like to see how our personnel improve their standards, and also
how they learn principles and techniques of photography, to appreciate and analyze
what one has done correctly and focused on that in the future.

We also intend to provide for our employees' training (it is needed) if they will require
it.

Nowadays, photography exceeds the moment when we took pictures 2-3 times per
year. The photography is a new stylistic language, it is a way of actual and modern
communication. Even if we don't realize, we communicate through photography in a
reflex mode, thereby we upload a picture on social media and send a message
through photography.
The digital revolution puts its stamp on communication between us. Even our mobile
phones with cameras included influence our way of engaging with other people. We
all agree that photography is a visual language and a way to communicate.

Any spokes language has semantic and respects grammatical structures, to

understand the message that has been sent to us. The same goes for photography,
as we need to understand the semantic and grammatical structures. Thus, our
pictures are only noise, or in a better case a primitive language, a jargon understood
by a relatively tight number of friends. Photography means art, but this art comes
along from our capacity as humans to convey ideas, feelings, and thoughts that we
should never forget.

That being said, our company aims to highlight developments and the impact of
photography in our society. We rely on the quality of our services provided consistent
with the prices and we believe this business will be successful, whereas we count as
a threshold in this great business. Our customers will be more than satisfied with our
services, and we consider they are our main key in a way to succeed.
 PART III. REFERENCES

MAYNARD, J., 2017. Financial accounting, reporting, and analysis. 5th ed. London:
Learning Matters.

COLLINS, H., 2018. Collins English Dictionary. 6th ed. Scotland: Glasgow.

MICHALOWICZ, M., 2018. Clockwork. Design your business to run itself. 2nd ed.
New York: Library of Congress

FARELL, I., 2017. Complete guide to digital photography. 4th ed. Oxford: Focal

DALY, T., 2014. The fundamentals of digital photography. 3rd ed. New York: Fairchild
Books

BBC, 2016. BBC Bitesize [viewed 12th April 2020]. Available from:
https://www.bbc.co.uk/bitesize/guides/zt2xn39/revision/1

Bankofengland.co.uk. (2019). Financial Stability Reports. Available at:

https://www.bankofengland.co.uk/financial-stability-report/financial-stability-reports

[Accessed 10 Feb. 2020].

Investopedia. (2020). The Difference Between Fixed Cost, Total Fixed Cost, And
Variable Cost. Available at:
https://www.investopedia.com/ask/answers/032715/what-difference-between-fixed-
cost-and-total-fixed-cost.asp

[Accessed 13 May 2020].

Cambridge Dictionary, (2006). BUDGET. Meaning In The Cambridge English

Dictionary. Available at:

https://dictionary.cambridge.org/dictionary/english/budget

[Accessed 7 June 2020].

Wikipedia, (2010). Gross Margin. Available at:

https://en.wikipedia.org/wiki/Gross_margin

[Accessed 7 April 2020].