Do you want to start Music Venue Business?

Are you thinking about opening a music venue? Music is part of the society and has been around for ages. There are different types of music genres and performances that take place on a daily basis. Musicians and performers rely on proceeds from concerts to make a living and this means there is a high demand for the music venue business. With a good plan to execute this business, you can open a music venue that will attract different types of performances for a fee. It is a profitable business that yields good returns so long you have a smart strategic business plan in place. As music continues to become popular, demand for music venues remains high.

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Executive Summary

2.1 The Business

The music venue will be registered under the name BeeMusicals, and will be located in downtown Los Angeles. BeeMusicals will be owned and managed by Robin Bade who is a famous rock music icon. The music venue will offer a cozy, welcoming and entertaining environment that will allows hosting of various music concerts.

2.2 Management Team

BeeMusicals is managed by Robin Bade who is a rock musician and has been in the music industry for over twenty years. His love for music coupled with immense experience in the music industry has been the key driving factor for starting a music venue. Robin aims to offer a customized and unique experience that will set him apart from his competitors.

2.3 Customer Focus

BeeMusicals will primarily cater for musicians and music lovers in Los Angeles looking for a perfect spot to have fun in the city. The music venue will attract people of various ages, cultural and social backgrounds.

2.4 Business Target

BeeMusicals aims to offer a nice venue where various types of musicians and performers can stage performances for their fans. The business will put in place the entire infrastructure required to meet customer expectations.

Music Venue Business Plan - 3 Years Profit Forecast

Company Summary

3.1 Company Owner

Robin Bade is a successful rock musician who has performed for over two decades. He started as part of a popular rock band until ten years ago when he decided to launch his solo career. Bade has performed in big concerts across the U.S. and globally. He’s been nominated severally for various local and global music awards.

3.2 Aim of Starting the Business

Due to his love for music and long music career, Robin had the dream of opening his own music venue because he clearly understood challenges musicians go through to secure a perfect venue for their performances. BeeMusicals will help musicians and performers find a convenient and affordable venue to host functions.

3.3 How Business will be Started

For BeeMusicals to succeed, Robin has hired experts to advise him on how to start a music venue business. This business plan captures the entire financing aspect and sales forecasts. A breakdown of key financial information has been shared below.

Music Venue Business Plan - Startup Cost
Start-up Expenses 
Research and Development$6,000
Expensed Equipment$30,000
Start-up Assets$0
Cash Required$400,000
Start-up Inventory$150,000
Other Current Assets$50,000
Long-term Assets$65,000
Total Requirements$700,000
Start-up Expenses to Fund$150,000
Start-up Assets to Fund$130,000
Non-cash Assets from Start-up$100,000
Cash Requirements from Start-up$0
Additional Cash Raised$50,000
Cash Balance on Starting Date$210,000
Liabilities and Capital$0
Current Borrowing$0
Long-term Liabilities$0
Accounts Payable (Outstanding Bills)$0
Other Current Liabilities (interest-free)$0
Planned Investment$0
Investor 1$20,000
Investor 2$23,000
Additional Investment Requirement$0
Loss at Start-up (Start-up Expenses)$350,000
Total Funding$600,000

Services for Customers

BeeMusicals is a fully serviced music venue that will host various types of events which include:

  • Live music venue for with full modern equipment to support live concerts and performances
  • Weddings with different packages offered to suit client needs
  • Reunions i.e. family and class reunions
  • Designing customized apparel and accessories for different venues
  • Entrepreneurial and corporate trainings especially during daytime hours

Robin has demonstrated how to open a music venue and make good profits means diversifying service provision and not focusing only on music events.

Marketing Analysis of a Music Venue

To ensure the music venue business achieves its targets, BeeMusicals has done a detailed market analysis. This music venue business plan is meant to formulate a business strategy that will be implemented once operations commence. It is important for BeeMusicals to identify strategies that will help it operate effectively in a highly competitive market.

5.1 Market Segmentation

After completing a market survey, BeeMusicals has identified the following customers to be the target audience.

Music Venue Business Plan - Market Segmentation

5.1.1. Musicians and Performers

To market and sell their music, musicians often have to organize regular live performances to showcase their talent and interact with their customers. Both upcoming and established musicians and performers are always on the lookout for perfect venues where they can hold their concerts. The concert business is big and this live music venue business plan will help to elaborate strategies to be used to attract artists. This category of clients is ready to spend a lot of money on booking and using a concert venue, and therefore are a key customer target.

5.1.2 Corporates

Aside from hosting live music performances, BeeMusicals intends to provide a venue for corporate organizations hosting different events. Such events include staff get-together, Christmas parties, CSR events and trainings. Companies always have regular events and need to hire venues which are nice, cozy, secure and accessible. They are definitely a lucrative target market in this music venue business plan template. BeeMusicals intends use its strategic location to reach out to corporate organizations looking for venues to host their events.

5.1.3 Schools

Schools always have an event packed calendar and occasionally, identify external venues where they can hold their events. BeeMusicals is a large music venue with an extended sitting capacity and therefore, can comfortably hold school events. Such events include fun days, music and theatre performances and school parties. Given the high number of schools in Los Angeles, there is a ready market for the business to tap into. This customer segment will most likely seek for venue services at specific times of the school calendar.

5.1.4 Residents/General Public

This is a diverse customer group but is critical for the business because residents and families often look for venues to host receptions, weddings, get-togethers and reunions. Given the high number of residents in the city, it is a lucrative target that will encompass people of different cultural, religious and social backgrounds.

Market Analysis       
Potential CustomersGrowthYEAR 1YEAR 2YEAR 3YEAR 4YEAR 5CAGR
Musicians and Performers35%20,00023,00026,00029,00032,00013.43%
School20%15,00018,00021,000 24,000 27,000 9.00%
Residents/General Public10%10,00012,00014,00016,00018,00015.32%

5.2 Business Target

BeeMusicals aims to be the best music venue in the entire Los Angeles downtown neighborhood. According to financial statistics and forecasts, the business intends to have fully recovered the initial capital after a period of three years. Projected average sales growth will range between 10%-15% as Robin has adequately planned how to start a music venue business offering numerous services to guarantee steady income throughout the year.

5.3 Product Pricing

Pricing of services has been decided after a careful evaluation of the market and prices other music venues are offering. BeeMusicals will offer customer friendly but competitive prices to grow its market segment and meet its financial goals. These are the prices for major services offered.


In line with business goals, Robin Bade has identified a sales strategy he believes will attract and grow customer numbers. After considering the cost of opening a music store, expenses and other critical financial information, the following sales strategy will be used to develop and market the music venue.

6.1 Competitive Analysis

BeeMusicals is opening when other music venues have already established themselves. The music venue’s strategic location, sophisticated facilities, investment in modern technology and a unique and comfortable environment will be the biggest selling points.

6.2 Sales Strategy

To succeed and become a market leader, BeeMusicals has put in place the following sales strategies.

  • Focus on upcoming musicians and performers looking for an affordable yet nice and accessible music venue to host their events.
  • Offer attractive packages with start-of-the-art equipment and technology to boost sales.
  • Vigorously advertise and market the music venue in local media and digital channels such as social media.
  • Uniquely design the venue with attractive colors and designs to ensure the facility has a comfortable and welcoming feel.
  • Capitalize on the strategic downtown location to attract direct walk-in traffic to make inquiries.

6.3 Sales Forecast

The business has come with sound policies and strategies to boost profit making and make the brand a household name. Sales forecasts show a steady increase in annual sales which are illustrated in the tables and charts below.

Music Venue Business Plan - Unit Sales
Sales Forecast   
Unit SalesYear 1Year 2Year 3
Live music venue Package200,000250,000300,000
Weddings Package350,000400,000430,000
Reunions Package300,000330000360,000
Designing customized apparel Package250,000270,000300,000
Entrepreneurial  Trainings Package200,000240,000280,000
Customized Trainings Package150,000170,000200,000
TOTAL UNIT SALES1,450,0001,660,0001,870,000
Unit PricesYear 1Year 2Year 3
Live music venue Package$200.00$220.00$230.00
Weddings Package$240.00$260.00$280.00
Reunions Package$180.00$200.00$210.00
Designing customized apparel Package$150.00$170.00$150.00
Entrepreneurial  Trainings Package$100.00$130.00$160.00
Customized Trainings Package$210.00$230.00$250.00
Live music venue Package$300,000$310,000$320,000
Weddings Package$260,000$270,000$290,000
Reunions Package$170,000$185,000$195,000
Designing customized apparel Package$150,000$180,000$210,000
Entrepreneurial  Trainings Package$120,000$140,000$180,000
Customized Trainings Package$100,000$130,000$160,000
Direct Unit CostsYear 1Year 2Year 3
Live music venue Package$0.50$0.60$0.70
Weddings Package$0.70$0.80$0.90
Reunions Package$0.60$0.70$0.80
Designing customized apparel Package$3.00$2.50$3.20
Entrepreneurial  Trainings Package$0.40$0.50$0.60
Customized Trainings Package$0.35$0.45$0.50
Direct Cost of Sales   
Live music venue Package$120,000$140,000$160,000
Weddings Package$100,000$120,000$140,000
Reunions Package$80,000$100,000$120,000
Designing customized apparel Package$60,000$80,000$100,000
Entrepreneurial  Trainings Package$40,000$60,000$80,000
Customized Trainings Package$20,000$40,000$60,000
Subtotal Direct Cost of Sales$420,000$500,000$660,000

Personnel Plan

BeeMusicals hopes hire qualified and competent personnel with top-notch skills to enable it open a music venue that will become a popular brand in downtown LA. The business has identified a small but effective team that will oversee business operations on a daily basis.

7.1 Personnel Plan

BeeMusicals is owned and managed by musician Robin Bade who will be the Manager of the business. Kevin, an Assistant Manager will be responsible for administration, marketing and staff welfare. In addition, there will be 3 production staff, 2 marketing staff and 1 administrative staff. All staff will undergo intensive training before deployment.

7.2 Average Staff Salaries

In the first three years, BeeMusicals intends to pay its staff the following average pay packages.

 Personnel Plan   
 Year 1Year 2Year 3
Assistant Manager$60,000$70,000$80,000
2 Sales and Marketing Executives$100,000$120,000$130,000
2 Production Staff$110,000$120,000$130,000
Total Salaries$390,000$450,000$500,000

Financial Plan

BeeMusicals has an elaborate financial plan that will guide how the business will operate and meet its financial goals. The music venue business will be financed by Robin Bade and two investors. The current funding is sufficient to facilitate business set-up; no credit financing for business is required at the moment. The following tables, graphs and chart show a detailed financial analysis as well as forecasts to tabulate before you start a music venue business.

8.1 Important Assumptions

BeeMusicals has tabulated its financial projections in line with the assumptions below.

 General Assumptions   
 Year 1Year 2Year 3
Plan Month123
Current Interest Rate12.00%10.00%13.00%
Long-term Interest Rate13.00%11.00%10.00%
Tax Rate20.00%25.00%27.00%

8.2 Brake-even Analysis

See the graph below showing the Brake-even Analysis for the business.

Music Venue Business Plan - Brake-even Analysis
 Brake-Even Analysis 
Monthly Units Break-even10000
Monthly Revenue Break-even$200,000
Average Per-Unit Revenue$230.10
Average Per-Unit Variable Cost$1.10
Estimated Monthly Fixed Cost$210,500

8.3 Projected Profit and Loss

This Profit and Loss data will be tabulated on monthly and annual trading periods.

 Pro Forma Profit And Loss   
 Year 1Year 2Year 3
Direct Cost of Sales$50,000$53,000$56,000
TOTAL COST OF SALES$60,000 $64,000 $68,000
Gross Margin$310,000$340,000$360,000
Gross Margin %90.00%93.00%95.00%
Sales and Marketing and Other Expenses$2,000$3,000$4,000
Leased Equipment$0$0$0
Payroll Taxes$40,000$45,000$50,000
Total Operating Expenses$220,000$240,000$260,000
Profit Before Interest and Taxes$100,000$120,000$140,000
Interest Expense$0$0$0
Taxes Incurred$30,000$34,000$38,000
Net Profit$100,000$120,000$140,000
Net Profit/Sales20.00%30.00%40.00%

8.3.1 Monthly Profit

Music Venue Business Plan - PROFIT MONTHLY

8.3.2 Yearly Profit

Music Venue Business Plan - Profit Yearly

8.3.3 Monthly Gross Margin

Music Venue Business Plan - GROSS MARGIN MONTHLY 1

8.3.4 Yearly Gross Margin

Find an analysis of Profit and Loss in the table below.

Music Venue Business Plan - Gross Margin Yearly

8.4 Projected Cash Flow

Subtotal cash spent, subtotal cash spent on operations, subtotal cash from operations, subtotal cash received and Pro forma cash flow statistics in diagram below.

Music Venue Business Plan - Cash Flow

8.5 Projected Balance Sheet

Projected Balance Sheet is the sum of BeeMusicals’ capital, liabilities, assets, current liabilities and long-term assets.

 Pro Forma Balance Sheet   
AssetsYear 1Year 2Year 3
Current Assets   
Accounts Receivable$40,000$60,000$80,000
Other Current Assets$3,000$6,000$9,000
TOTAL CURRENT ASSETS$385,000 $430,000 $500,000
Long-term Assets   
Long-term Assets$15,000$17,000$20,000
Accumulated Depreciation$18,000$20,000$23,000
TOTAL LONG-TERM ASSETS$1,000 $3,000 $5,000
TOTAL ASSETS$300,000 $350,000 $400,000
Liabilities and CapitalYear 1Year 2Year 3
Current Liabilities   
Accounts Payable$10,000$12,000$14,000
Current Borrowing$0$0$0
Other Current Liabilities$0$0$0
Long-term Liabilities$0$0$0
TOTAL LIABILITIES$10,000 $9,000 $7,000
Paid-in Capital$40,000$45,000$50,000
Retained Earnings$50,000$55,000$60,000
TOTAL CAPITAL$180,000 $200,000 $220,000
TOTAL LIABILITIES AND CAPITAL$210,000 $230,000 $240,000
Net Worth$300,000$320,000$340,000

8.6 Business Ratios

Business ratios, ratio analysis and net worth for the business have all been captured in the table below.

 Ratio Analysis    
Sales Growth5.00%20.00%40.00%5.00%
Percent of Total Assets    
Accounts Receivable6.61%5.61%2.90%10.70%
Other Current Assets2.00%1.02%3.29%17.30%
Total Current Assets120.00%130.00%143.45%60.00%
Long-term Assets-7.00%-10.20%-14.00%48.00%
TOTAL ASSETS100.00%100.00%100.00%100.00%
Current Liabilities3.50%2.50%2.20%30.10%
Long-term Liabilities0.00%0.00%0.00%27.20%
Total Liabilities5.68%4.04%3.76%55.10%
NET WORTH97.00%100.02%103.66%54.80%
Percent of Sales    
Gross Margin84.20%83.00%90.52%0.00%
Selling, General & Administrative Expenses64.29%61.83%70.37%75.20%
Advertising Expenses3.06%2.11%1.28%1.50%
Profit Before Interest and Taxes36.47%39.30%34.00%3.80%
Main Ratios    
Total Debt to Total Assets3.68%2.04%0.88%70.00%
Pre-tax Return on Net Worth72.00%69.00%6500.00%5.40%
Pre-tax Return on Assets60.10%63.30%66.70%10.00%
Additional RatiosYear 1Year 2Year 3 
Net Profit Margin20..2%22.40%2440.00%N.A.
Return on Equity50.20%54.00%5800.00%N.A.
Activity Ratios    
Accounts Receivable Turnover55.36.2N.A.
Collection Days808595N.A.
Inventory Turnover20.12427.2N.A.
Accounts Payable Turnover13.214.515.79N.A.
Payment Days303030N.A.
Total Asset Turnover2.421.8N.A.
Debt Ratios    
Debt to Net Worth0-0.06-0.03N.A.
Current Liab. to Liab.122N.A.
Liquidity Ratios    
Net Working Capital$230,000$260,000$280,000N.A.
Interest Coverage000N.A.
Additional Ratios    
Assets to Sales0.550.480.45N.A.
Current Debt/Total Assets5%4%3%N.A.
Acid Test20.223.226.7N.A.
Sales/Net Worth2.682.291.2N.A.
Dividend Payout000N.A.

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