Executive summary

One Hand Clapping Records will be formed as an inde pendent record label that will work in association with the Mike Seaver Complex Recording Studio. The studio is also owned by One Hand Clapping Records. The company's founders Joseph Gierer and Christopher Schaller are musicians who have worked in the music industry One founder has worked in the recording in dustry and the other has worked in the industry in a marketing and management capacity With their com bined talents, One Hand Clapping Records should be come a major player in the record label industry

esearch Methods

The objectives of the company are to sign three to five musical acts and sell $900$ to $1,000$ CDs per act. The founders expect a gross margin of $30$ percent or higher on CDs and a net income of $25$ to $30$ percent A net in come of $15$ percent is expected on live performances Projected sales, gross margin, and net profn for the first three years is shown below

sses

The music industry has experienced many changes in recent years. Illegal downloading of music from the In terner has had a detrimental impact on CD sales, which

has reduced the income of bands and retail outlets However, other technological changes, such as Apple's iPod, have been beneficial, and many analysts believe it will revolutionize the music industry One Hand Clapping Records will be a Missouri Lim ited Liability Company $($LLC$),$ based in St Louis Start$-$up costs for the record company will total $$7,000$ This

does not include the cost of equipment that is already

owned Almost all of the recording equipment is already

owned and operated

Mission Statement

One Hand Clapping Records in association with the Mike Seaver Complex will become the leading independent record label and recording studio to bands and individ ual musicians in the genres of Rock, Pop. Alternative. Hip$-$Hop, and Rap in the Missouri and Illinois areas

Business Environment

The business environment for the music industry has been chaotic for the past several years. Changes in answer these qustions about this case $1-$Assume you are a potential investor in this company What information has not been included in the business plan that you would like to know? $2-$What is the competitive advantages of One Hand Clapping? Is this important to bands Why or why not? $3-$The break$-$even analysis shows that if CDs are sold for $$10$ each, the company must sell $1,660$ CD the first year to break even Do you believe this s realistic? Why or why not? $4-$Do you believe this business is feasible Why or why not?