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Do you want to start a Production business plan?
Do you want to start a production company? With how beneficial a production company is, this is a great idea. However, to execute this idea, you will need to write a business plan for production company. You can start a production company at any scale and then expand it as you go. So, there is a lot of potential for scalability.
Writing a business plan isn’t always easy especially if you don’t have any prior experience. If you are new to starting a business, you can enlist the help of professional business plan writers. You can also go through this document if you want to learn how to write a business plan for a production company. You can also take a look at a business plan of a furniture startup for reference.
Executive Summary
2.1 The Business
Cocoon Productions will be a production company started by Calvin Kornwell. The target of the business will be to provide production services to the businesses in and around Illinois. It will be offering a wide range of services including but not limited to content development, casting and scripting.
2.2 Management of Production Company
To ensure that all aspects of your business are well managed and organized, you need to write a business plan for a production company. Your production company business plan pdf should include all relevant technical and logistic details of your company. If you pay attention to the production portion of business plan, it will help you manage all of your financial and human resources efficiently.
If you want to further improve your business plan, you can take a look at some other plans such as organic skin care business plan. For even more refinement of your business aspects, you can take guidance from business consulting services.
2.3 Customers of Production Company
The customers of Cocoon Productions will belong mainly to the entertainment industry. The main target customers for the business are listed below:
- Event and Live Streamers
- Social Media Marketers
- Big Agencies
- Creative Branding Partners
2.4 Business Target
Our primary target is to become a trustworthy production company in the Illinois area so that they can call upon us any time they need production-related services.
The financial targets we want to achieve in the first three years of launch are mentioned below:
Company Summary
3.1 Company Owner
Cocoon Productions will be owned and operated by Calvin Kornwell. He completed his master’s in media studies 4 years back after which he worked for a few production companies. Afterwards, he decided to start his own production company in Illinois.
3.2 Why the Production company is being started
Calvin noticed a lack of supporting production companies in his hometown Illinois. He realized that he could bridge the gap by developing his own production company that focused mainly on supportive functions. He also realized that he could bring a bit of flexibility and innovation to his company that would help it be more beneficial to the aspiring individuals in the entertainment industry.
3.3 How the Production company will be started
Step1: Plan Everything
The first step to starting any business is to write up a business plan for it. So, naturally, you will need to develop a sample business plan production company. You can refer to a template for starting a biodiesel company business plan, etc. to understand the nuances of the document. To help you in creating your business plan, we have provided a reference production management business plan for Cocoon Productions here. You can refer to this document to learn how to make a business plan for a production company.
Step2: Define the Brand
After developing a business plan production company, the next step is to attract customers to your business. For this, you will need to establish a brand for your company that will emphasize your values and benefits to your customers. You will then need to highlight this brand and market it so that your customers can come to you in response.
Step3: Establish Your Corporate Office
Calvin decided to rent out a couple of offices in a commercial building in the business centre of Illinois to start his production company. He will now take care of stocking up on the required equipment to start the business.
Step4: Establish a Web Presence
The success of a business in the entertainment industry is heavily dependent on its reach. Understanding this, Calvin decided to put some manpower towards the creation and maintenance of social media accounts for his production company. He also decided to get a website developed for the business to showcase all the important details and make communication with clients easier.
Step5: Promote and Market
The last step in developing a business is to execute its marketing plan and attract more people to the business.
| Start-up Expenses | |
| Legal | $132,100 |
| Consultants | $0 |
| Insurance | $29,000 |
| Rent | $35,000 |
| Research and Development | $10,000 |
| Expensed Equipment | $51,000 |
| Signs | $3,400 |
| TOTAL START-UP EXPENSES | $260,500 |
| Start-up Assets | $266,000 |
| Cash Required | $209,000 |
| Start-up Inventory | $39,000 |
| Other Current Assets | $240,000 |
| Long-term Assets | $255,000 |
| TOTAL ASSETS | $1,009,000 |
| Total Requirements | $1,269,500 |
| START-UP FUNDING | |
| Start-up Expenses to Fund | $260,500 |
| Start-up Assets to Fund | $1,009,000 |
| TOTAL FUNDING REQUIRED | $1,269,500 |
| Assets | |
| Non-cash Assets from Start-up | $1,314,000 |
| Cash Requirements from Start-up | $177,000 |
| Additional Cash Raised | $50,000 |
| Cash Balance on Starting Date | $35,000 |
| TOTAL ASSETS | $1,576,000 |
| Liabilities and Capital | |
| Liabilities | $18,000 |
| Current Borrowing | $0 |
| Long-term Liabilities | $0 |
| Accounts Payable (Outstanding Bills) | $52,200 |
| Other Current Liabilities (interest-free) | $0 |
| TOTAL LIABILITIES | $70,200 |
| Capital | |
| Planned Investment | $1,269,500 |
| Investor 1 | $0 |
| Investor 2 | $0 |
| Other | $0 |
| Additional Investment Requirement | $0 |
| TOTAL PLANNED INVESTMENT | $1,269,500 |
| Loss at Start-up (Start-up Expenses) | $236,300 |
| TOTAL CAPITAL | $1,505,800 |
| TOTAL CAPITAL AND LIABILITIES | $1,576,000 |
| Total Funding | $1,269,500 |
Services
Before you start a production business and start to develop a business plan production, you need to decide on the list of services you will initially be offering to your customers. This filtering is an essential part of describing the production process in business plan. These details in a business plan will help you organize your resources more efficiently so that you can cater to all of your customers in the best way.
Since Calvin decided to offer a wide range of services through his company, Cocoon Productions, you can use this production business plan example to guide the development of a business plan for your business. You can also take a look at guides explaining how to start a candle making business plan for a better idea about explaining your services in a business plan.
Below, we have described the services provided by Cocoon Productions:
- Content Development
Cocoon Production will offer services for the development of different types of media including but not limited to the following:
- Graphic Content
- Videos
- Animations
- Sharable Social Media Content
- Casting
Entertainment companies and media houses usually need to hire talent agencies for casting for different projects. Therefore, we will provide casting services in our company as well.
- Hiring
Just like media companies outsource casting, they often outsource the hiring of the entire production crew. We will offer our clients a developed and filtered list of required candidates for different crew posts.
- Script Writing
We will also offer professional script writing services for our clients. Our clients can hire us for assistance in script and plot development as well as for independent scriptwriting for different projects.
- Logistic and Planning Assistance
Media companies usually handle a lot of projects at the same time. A lot of planning goes into different production projects. Therefore, Cocoon Productions will offer assistance, logistic and planning assistance for our clients as well.
Marketing Analysis of Production Company
When you want to start a business, you should have a deep understanding of the target market. And the best way to gain this kind of insight for your production company is to go through a production business plan sample. Business plan for a production company should contain an analysis of past, present and future market trends. This will help you set prices for your services in a way that is profitable to your business.
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To write your business plan for production company, you can take help from an industry business plan. This will guide you when conducting a marketing analysis for your business. A business plan production that contains information about market trends will help you understand your customers better and present your services in a way that gains attraction.
Here, we have described the market trends and customers of Cocoon Productions.
5.1 Market Trends
According to IBISWorld, production companies in the US have a market size of $17 billion with a growth rate of 3.6%. With how much content is consumed daily in just US, there is no expected decline in the industry any time soon. And since the demand is so high, you can be assured that a production company will thrive in the current entertainment climate.
5.2 Marketing Segmentation
The potential customers of Cocoon Productions are categorized as follows:
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5.2.1 Event and Live Streamers
Our primary customers will be the agencies holding symposiums and big events. We expect these customers to utilize our services time and time again. So they will be consistent and lucrative clients of the business.
5.2.2 Social Media Marketers
Most corporate agencies have started to embrace the importance of social media in marketing. As such, they will need our services to make videos to post on social media. We expect to gain many corporate clients through this gig.
5.2.3 Big Agencies
Big agencies are always on the lookout for more help on a project here and there. We expect to gain an in into these agencies through our flexible services. So, we expect big agencies to be regular customers as well.
5.2.4 Creative Branding Partners
Lastly, many standalone creative producers and content creators are looking for support. We aim to present our resources to these clients and gain them as long term customers of the business in a content-driven world.
| Market Analysis | |||||||
| Potential Customers | Growth | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR |
| Event & Live Streamers | 33% | 34,500 | 41,400 | 49,680 | 59,616 | 71,539 | 10.00% |
| Social Media Marketers | 21% | 22,500 | 27,000 | 32,400 | 38,880 | 46,656 | 10.00% |
| Big Agencies | 26% | 21,700 | 26,040 | 31,248 | 37,498 | 44,997 | 10.00% |
| Creative Branding Partners | 20% | 19,000 | 22,800 | 27,360 | 32,832 | 39,398 | 11.00% |
| Total | 100% | 97,700 | 117,240 | 140,688 | 168,826 | 202,591 | 10% |
5.3 Business Target
- To become a reliable source of production resources and assistance.
- To expand the services we provide over time.
- To increase the scale of the company over the years.
- To earn a profit margin of around $75k/month at the end of the first 2 years of launch.
- To gain at least 50 regular clients by the end of our third year.
5.4 Product Pricing
Since we are offering a wide variety of services flexibly, our resources will be less pricey as compared to the market standard.
Marketing Strategy
To succeed in a saturated market, you need several competitive advantages over your competitors. And you need to advertise them adequately. The best way to develop and present your brand is by developing a marketing strategy. You need to work on this strategy while creating your production company business plan.
In this sample production company business plan, we are presenting the marketing strategies to be employed by Cocoon Productions. You can use this as a guide to shape your marketing plans.
6.1 Competitive Analysis
- We offer the flexibility of service packages. Our customers don’t have to pay for services they’ll never use.
- We offer support and resources for not just big agencies but also independent content creators.
- We have an excellent rapport with our clients. They can contact us any time they need.
- Our customers can contact us through our website or reach out to us on social media. So there is no need to cover the distance unless the need to.
6.2 Sales Strategy
- We will attract customers through posters, billboards, social media and Google Ads.
- We will offer service packages at a discounted rate for first-time clients
- We will offer regular discounts to regular clients.
- We will offer budget-friendly services to independent creative minds.
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
| Sales Forecast | |||
| Unit Sales | Year 1 | Year 2 | Year 3 |
| Content Development | 200 | 212 | 225 |
| Casting & Hiring | 250 | 265 | 281 |
| Script Writing | 225 | 239 | 253 |
| Logistic & Planning | 300 | 318 | 337 |
| TOTAL UNIT SALES | 975 | 1,034 | 1,096 |
| Unit Prices | Year 1 | Year 2 | Year 3 |
| Content Development | $2,500.00 | $2,900.00 | $3,364.00 |
| Casting & Hiring | $2,230.00 | $2,586.80 | $3,000.69 |
| Script Writing | $1,950.00 | $2,262.00 | $2,623.92 |
| Logistic & Planning | $2,500.00 | $2,900.00 | $3,364.00 |
| Sales | |||
| Content Development | $500,000.00 | $614,800.00 | $755,958.08 |
| Casting & Hiring | $557,500.00 | $685,502.00 | $842,893.26 |
| Script Writing | $438,750.00 | $539,487.00 | $663,353.22 |
| Logistic & Planning | $750,000.00 | $922,200.00 | $1,133,937.12 |
| TOTAL SALES | $2,246,250.00 | $2,761,989.00 | $3,396,141.67 |
| Direct Unit Costs | Year 1 | Year 2 | Year 3 |
| Content Development | $1,000.00 | $1,100.00 | $1,155.00 |
| Casting & Hiring | $1,200.00 | $1,320.00 | $1,386.00 |
| Script Writing | $750.00 | $825.00 | $866.25 |
| Logistic & Planning | $1,350.00 | $1,485.00 | $1,559.25 |
| Direct Cost of Sales | |||
| Content Development | $200,000.00 | $233,200.00 | $259,551.60 |
| Casting & Hiring | $300,000.00 | $349,800.00 | $389,327.40 |
| Script Writing | $168,750.00 | $196,762.50 | $218,996.66 |
| Logistic & Planning | $405,000.00 | $472,230.00 | $525,591.99 |
| Subtotal Direct Cost of Sales | $1,073,750.00 | $1,251,992.50 | $1,393,467.65 |
Personnel plan
The success of a business in the entertainment industry needs a lot more than a few clients to be successful. For gaining and retaining clients, the behaviour of employees is essential. Calvin understood the importance of a good rapport between clients and the workforce. Therefore, he decided to implement a selection criterion which he included in the production business plans as well.
To find out how to include details about your employees in your business plans, you can refer to the sample production business plan here.
7.1 Company Staff
- 1 Manager
- 6 Experienced Production Video Editors
- 6 Experienced Content Creators
- 12 Support Creatives
- 3 Technician to upkeep the machinery
- 1 Web Developer
- 2 Sales Executives to organize and promote sales
- 1 Accountant
7.2 Average Salary of Employees
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| Manager | $64,000 | $70,400 | $77,440 |
| Video Editors | $172,000 | $189,200 | $208,120 |
| Content Creators | $182,000 | $200,200 | $220,220 |
| Support Creatives | $300,000 | $330,000 | $363,000 |
| Technician | $110,000 | $121,000 | $133,100 |
| Web Developer | $24,000 | $26,400 | $29,040 |
| Sales Execs | $60,000 | $66,000 | $72,600 |
| Accountant | $30,000 | $33,000 | $36,300 |
| Total Salaries | $912,000 | $1,003,200 | $1,103,520 |
Financial Plan
Profits are just one part of the equation of the success of a business. Good management is a very important factor. You need to manage your resources and finances efficiently to make sure that you don’t go into a loss. To ensure good management of all money-related affairs, you will need to conduct a financial analysis. This will help you set the prices of your services in a way that doesn’t bankrupt you and still keeps you attractive to customers.
You can use this production company business plan template to carry out a financial analysis for your business. You can also refer to a production company business plan pdf for help.
Here we’re providing the detailed financial plan for Cocoon Productions. This will help you get a good idea of how to adequately manage your business finances.
8.1 Important Assumptions
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 8.12% | 8.20% | 8.26% |
| Long-term Interest Rate | 8.40% | 8.44% | 8.47% |
| Tax Rate | 24.03% | 24.21% | 24.60% |
| Other | 0 | 0 | 0 |
8.2 Break-even Analysis
| Break-Even Analysis | |
| Monthly Units Break-even | 5340 |
| Monthly Revenue Break-even | $132,500 |
| Assumptions: | |
| Average Per-Unit Revenue | $231.00 |
| Average Per-Unit Variable Cost | $0.62 |
| Estimated Monthly Fixed Cost | $163,800 |
8.3 Projected Profit and Loss
| Pro Forma Profit And Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $2,246,250 | $2,761,989 | $3,396,142 |
| Direct Cost of Sales | $1,073,750 | $1,251,993 | $1,393,468 |
| Other | $0 | $0 | $0 |
| TOTAL COST OF SALES | $1,073,750 | $1,251,993 | $1,393,468 |
| Gross Margin | $1,172,500 | $1,509,997 | $2,002,674 |
| Gross Margin % | 52.20% | 54.67% | 58.97% |
| Expenses | |||
| Payroll | $912,000 | $1,003,200 | $1,103,520 |
| Sales and Marketing and Other Expenses | $145,000 | $148,000 | $156,000 |
| Depreciation | $2,300 | $2,350 | $2,500 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $2,900 | $3,000 | $3,100 |
| Insurance | $2,100 | $2,100 | $2,100 |
| Rent | $2,900 | $3,000 | $3,200 |
| Payroll Taxes | $24,000 | $25,000 | $27,000 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $1,091,200 | $1,186,650 | $1,297,420 |
| Profit Before Interest and Taxes | $81,300 | $323,347 | $705,254 |
| EBITDA | $81,300 | $323,347 | $705,254 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $16,260 | $64,669 | $141,051 |
| Net Profit | $65,040 | $258,677 | $564,203 |
| Net Profit/Sales | 2.90% | 9.37% | 16.61% |
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
| Pro Forma Cash Flow | |||
| Cash Received | Year 1 | Year 2 | Year 3 |
| Cash from Operations | |||
| Cash Sales | $51,000 | $55,080 | $59,486 |
| Cash from Receivables | $22,000 | $23,760 | $25,661 |
| SUBTOTAL CASH FROM OPERATIONS | $73,000 | $79,570 | $85,936 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 |
| New Long-term Liabilities | $0 | $0 | $0 |
| Sales of Other Current Assets | $0 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $0 |
| SUBTOTAL CASH RECEIVED | $74,000 | $79,000 | $85,000 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $42,000 | $42,000 | $45,000 |
| Bill Payments | $27,000 | $28,000 | $31,000 |
| SUBTOTAL SPENT ON OPERATIONS | $69,000 | $70,000 | $76,000 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $0 | $0 | $0 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| SUBTOTAL CASH SPENT | $69,000 | $74,520 | $80,482 |
| Net Cash Flow | $21,000 | $23,000 | $25,000 |
| Cash Balance | $27,000 | $30,000 | $33,000 |
8.5 Projected Balance Sheet
| Pro Forma Balance Sheet | |||
| Assets | Year 1 | Year 2 | Year 3 |
| Current Assets | |||
| Cash | $275,000 | $308,000 | $338,800 |
| Accounts Receivable | $24,000 | $26,880 | $30,213 |
| Inventory | $4,300 | $4,816 | $4,900 |
| Other Current Assets | $1,000 | $1,000 | $1,000 |
| TOTAL CURRENT ASSETS | $282,000 | $315,840 | $355,004 |
| Long-term Assets | |||
| Long-term Assets | $10,000 | $10,000 | $10,000 |
| Accumulated Depreciation | $19,400 | $21,728 | $24,444 |
| TOTAL LONG-TERM ASSETS | $24,400 | $27,328 | $30,744 |
| TOTAL ASSETS | $294,000 | $329,280 | $370,440 |
| Liabilities and Capital | Year 4 | Year 5 | Year 6 |
| Current Liabilities | |||
| Accounts Payable | $18,700 | $20,944 | $23,541 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $19,000 | $21,280 | $23,919 |
| Long-term Liabilities | $0 | $0 | $0 |
| TOTAL LIABILITIES | $15,000 | $16,800 | $18,883 |
| Paid-in Capital | $30,000 | $30,000 | $31,000 |
| Retained Earnings | $53,000 | $57,770 | $63,547 |
| Earnings | $193,400 | $210,806 | $231,887 |
| TOTAL CAPITAL | $285,000 | $310,650 | $341,715 |
| TOTAL LIABILITIES AND CAPITAL | $300,000 | $329,280 | $370,440 |
| Net Worth | $293,400 | $319,806 | $351,787 |
8.6 Business Ratios
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | INDUSTRY PROFILE | |
| Sales Growth | 7.25% | 8.03% | 8.90% | 3.00% |
| Percent of Total Assets | ||||
| Accounts Receivable | 9.21% | 10.20% | 11.31% | 9.80% |
| Inventory | 5.39% | 5.97% | 6.62% | 9.90% |
| Other Current Assets | 2.11% | 2.34% | 2.59% | 2.40% |
| Total Current Assets | 149.80% | 151.00% | 152.00% | 158.00% |
| Long-term Assets | 11.55% | 11.60% | 11.64% | 12.00% |
| TOTAL ASSETS | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 4.90% | 4.94% | 4.98% | 4.34% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 0.00% |
| Total Liabilities | 7.59% | 7.65% | 7.72% | 7.38% |
| NET WORTH | 100.45% | 101.25% | 102.19% | 110.00% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 94.60% | 97.15% | 99.87% | 99.00% |
| Selling, General & Administrative Expenses | 93.56% | 96.09% | 98.78% | 97.80% |
| Advertising Expenses | 1.52% | 1.56% | 1.60% | 1.40% |
| Profit Before Interest and Taxes | 41.50% | 42.62% | 43.81% | 33.90% |
| Main Ratios | ||||
| Current | 34 | 35 | 36 | 32 |
| Quick | 33 | 33.8 | 34.645 | 33 |
| Total Debt to Total Assets | 0.18% | 0.18% | 0.17% | 0.40% |
| Pre-tax Return on Net Worth | 74.08% | 74.89% | 75.00% | 75.00% |
| Pre-tax Return on Assets | 96.30% | 101.12% | 106.17% | 111.30% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 33.56% | 34.60% | 35.67% | N.A. |
| Return on Equity | 55.80% | 57.53% | 59.31% | N.A. |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 7.7 | 7.8 | 7.8 | N.A. |
| Collection Days | 100 | 100 | 100 | N.A. |
| Inventory Turnover | 32.4 | 34.02 | 35 | N.A. |
| Accounts Payable Turnover | 15.6 | 16 | 16.3 | N.A. |
| Payment Days | 27 | 27 | 27 | N.A. |
| Total Asset Turnover | 2.5 | 2.5 | 2.6 | N.A. |
| Debt Ratios | ||||
| Debt to Net Worth | -0.04 | -0.03 | -0.04 | N.A. |
| Current Liab. to Liab. | 1 | 1 | 1 | N.A. |
| Liquidity Ratios | ||||
| Net Working Capital | $244,000 | $257,664 | $272,093 | N.A. |
| Interest Coverage | 0 | 0 | 0 | N.A. |
| Additional Ratios | ||||
| Assets to Sales | 0.85 | 0.87 | 0.89 | N.A. |
| Current Debt/Total Assets | 1% | 0% | 0% | N.A. |
| Acid Test | 29 | 29.12 | 29.16 | N.A. |
| Sales/Net Worth | 2.1 | 2.2 | 2.2 | N.A. |
| Dividend Payout | 0 | 0 | 0 | N.A. |
FAQ
- How do you write a production plan for a business plan?
You can take a look at the above production company business plan sample to learn how to write a production plan for a business plan.
- What are the 5 basic elements of a business plan?
The 5 basic elements of business plans for production companies or any general business plan are:
- Business Summary
- Services of a business
- Marketing Analysis
- HR Management Plan
- Financial Plan
- How do I write a simple business plan?
You can write your own business plan by following the template above.
- What are the 4 main parts of a business plan?
These 4 things make an essential part of business plan:
- Executive Summary
- Management Plan
- Marketing Plan
- Financial Plan
Download Production Business Plan Sample in pdf
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