CASHFLOW + SEASONAL BUSINESSES + OPERATIONS Flashcards
Ways in which BON can improve its cashflow management
Advance Ticket Sales: Encourage early ticket purchases by offering discounts, which provides early cash inflows.
Sponsorships: Partner with brands for sponsorships, securing upfront payments to fund festival operations.
Diversifying Income Streams: Offer exclusive experiences, merchandise, and VIP packages for additional revenue.
Efficient Inventory Management: Carefully manage merchandise inventory to avoid overstocking and tying up cash.
Expense Forecasting: Forecast and plan for major expenses, such as cleanup costs, to avoid cash flow surprises.
Staggered Payments to Suppliers: Negotiate staggered payment terms with suppliers and contractors to align outflows with cash inflows.
Budget Control: Tighten budgeting practices to monitor and control costs throughout the festival planning and execution phases.
Leveraging Technology: Utilize cash flow management software to accurately forecast and monitor cash flow in real-time.
Advantages of being a Seasonal Business
Peak Performance Alignment: Ability to align staff and resources with peak periods, ensuring efficiency.
Marketing Opportunities: Capitalize on the build-up to the season for promotional activities, creating a sense of urgency and exclusivity.
Strategic Planning: Off-season periods can be used for strategic planning and improvements without operational pressures.
Revenue Concentration: Potential to generate significant revenue in a short period, allowing for strong cash inflows that could be spread throughout the year.
Niche Specialization: Specialize in a niche market, building brand recognition and loyalty among festival-goers.
Dynamic Workforce: Ability to hire temporary staff and freelancers to manage peak times without committing to year-round employment costs.
Disadvantages of being a Seasonal Business
Revenue Fluctuation: Heavy reliance on income during the festival season can lead to cash flow issues during the off-season.
Workforce Instability: Challenges in retaining a temporary workforce and ensuring the same quality of staff each season.
Demand Uncertainty: Variability in attendance can cause unpredictability in revenues and difficulty in scaling operations.
Operational Inefficiency: Downtime during off-seasons can result in underutilized assets and resources.
Lean Production
Lean production is a systematic method for waste minimization without sacrificing productivity. BON could apply lean principles by optimizing the setup and dismantling processes for efficiency and cost reduction.
Cradle to Cradle Manufacturing
Ways to Improve Financial Sustainability (Forms of finance)
Long-Term Loans: To finance permanent structures that can be used yearly.
Equity Financing: Selling additional shares if BON needs significant capital for expansion.
Government Grants: For environmental sustainability initiatives.
Sponsorships and Partnerships: To fund specific aspects of the festivals.
Liquidity Issues
Delayed Receivables: If BON has payment terms with vendors or sponsors, they need to ensure timely collection to avoid liquidity issues.
High Fixed Costs: The costs of setting up stages and infrastructure can strain liquidity; negotiating better terms or leasing options may help.
How to reduce clean up costs
Volunteer Programs: Engage volunteers in exchange for free attendance.
Recycling Incentives: Implement a deposit system for recyclables to encourage self-cleaning by festival-goers.
Local Vendor Partnerships: Collaborate with local waste management companies for discounted services in exchange for advertising.
Location
SWOT Analysis for BON post Covid-19
Strengths: Established brand, loyal customer base.
Weaknesses: Possible reduced attendance due to lingering health concerns.
Opportunities: Growing demand for live experiences post-pandemic.
Threats: Future pandemics, increased competition from virtual events.
How can BON grow
Diversification: Expand into new genres or geographical locations.
Digital Presence: Enhance live experience with digital offerings.
Strategic Partnerships: Align with travel and hospitality businesses to offer comprehensive packages.
Community Engagement: Host smaller, year-round events to maintain engagement and brand visibility.
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