Business Plan

Yvain Reid 310-753-9077

yvain@puremgmtgroup.com www.puremgmtgroup.com

Table of Contents 1.0 Executive Summary ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . 1  

1.1 Object ives ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2  1.2 Company Phi losophy ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3  1.3 Keys to Success ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3  1.4 Investor Return & F inancia l Overv iew ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4  

2.0 Company Summary ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . 4  2.1 Company Ownership .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4  2.2 Pre-Operat ing Source and Use of Funds... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5  

3.0 Services ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6  3.1 PURE Socia l Transformat ions... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6  3.2 PURE’s Locat ion ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8  

4.0 Market Analysis .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . 9  4.1 Market Segmentat ion ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10  4.2 Compet i t ive Landscape... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11  4.3 Industry Summary .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12  4.4 Industry Analys is .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13  

5.0 Marketing Strategy/Implementation ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . 14  5.1 Compet i t ive Edge: Societa l Market ing ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16  5.2 Web Summary .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17  5.3 SWOT Analys is .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18  5.4 Mi lestones ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18  

6.0 Management Summary ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . 19  6.1 Strategic Partnerships/Key Relat ionships ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20  

7.0 F inancial Summary ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . 22  7.1 Revenue Forecast .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22  7.2 Personnel Forecast .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23  7.3 Income Statement .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24  7.4 Statement of Cash F low ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26  7.5 Balance Sheet .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28  7.6 Break-Even Analys is .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29  7.7 Best & Worst Case ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30  

Appendix A – Year 1 Financials .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32  

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1.0 Executive Summary The fashion and entertainment industries are two highly influential components of any culture and economy. Driving these industries are the agents and talent managers skilled in business expertise, innovative marketing, and effective negotiating. The ability to successfully channel these skills is what creates upcoming stars and has the potential to positively influence society’s attitudes and actions. PURE Management Group, Inc. is a powerfully fresh and energetic talent-management company. Designed as a family of senior directors, premier agents, exceptional talent, and social entrepreneurs, PURE aims to sharpen and redefine the cutting edge of entertainment and fashion management while leveraging the industry’s history and culture to spur sustainable social change. Led by a visionary founding team, PURE’s principals have worked with premier brands and publications in the fashion and entertainment industries including Prada, Gucci, Dior, Vogue, Nike, Cover Girl, Sony, and Universal Studios. PURE’s agents and managers will guide the careers of their clients in a comprehensive manner that truly maximizes their potential. Composed of passionately driven, globally minded and socially conscious employees, PURE will be known as the forerunner in managing and delivering exceptional talent while remaining positive agents of change. In this pursuit, PURE aims to create an unparalleled full-service agency that is faithful in representing the most committed and eclectic individuals who are passionate about seeking opportunity to expand upon their talents, including models, athletes, photographers, actors, musicians, and other artists. This holistic approach will create an industry powerhouse capable of attracting a steady stream of sought-after clients. PURE will leverage a roster of promising talent – drawing on close and long-standing relationships with the most exciting model agencies, photographers, art directors, and creative players – to offer a ready-made package of production, casting, and consulting services for a diverse range of international business clients. Embracing fashion, entertainment and sustainability, PURE will pioneer a new business culture. PURE is founded on the belief that the way it treats a single individual is representative of its larger outlook on society. As such, it will transform the current fashion and entertainment industries by encouraging and nurturing individuals, rather than using and squandering them. By radically revolutionizing how a talent agency represents and values its immediate clients and employees, PURE aims to dramatically improve the larger societal impacts that the industry has on indirect, and often ignored, stakeholders. Just as a talent agency can affect success and trends in the fashion and entertainment world, there is also the ability, though often untapped, to positively influence and create significant social change. To accomplish this goal, PURE has created a specialized division called PURE Social Transformations to guide the company’s social and sustainability initiatives. Unlike most talent management agencies, which view concepts such as social change, sustainability, and charity as “checkbook philanthropy” to which they simply donate money, PURE believes that they must be strategically integrated into the business philosophy to make the most impact in and for the world. Sustainability cannot be a concept that exists solely in the nonprofit and private sector – it must be completely and entirely integrated into business and everyday life.

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PURE Social Transformations has a simple mission – to leverage PURE as a force for infusing sustainability more completely throughout society. As the division responsible for overseeing the strategic planning and implementation of sustainability policy at PURE, PURE Social Transformations desires to be the textbook example of how to radically transform an industry from the inside out. To expand PURE’s impact beyond the immediate talent agency divisions, PURE Social Transformations has three key purposes:

Corporate Sustainability – Monitor, evaluate, and strategically improve the environmental and social impacts of a major business entity. PURE will help develop sustainability initiatives that will become standards for the rest of the industry.

Idea Incubator – Create, manage, and support nonprofits and side businesses designed to create societal impacts beyond the immediate operations of the talent agency.

Outreach and Engagement – Plan and execute events that increase public awareness of and support for the sustainability programs operated through PURE.

PURE Management Group will be led by Yvain Reid, a well-seasoned industry professional. With more than a decade of experience in the talent representation industry, he has developed in-depth knowledge and understanding of the industry and its market dynamics. As an experienced team builder with expertise in efficiently coordinating resources, Mr. Reid brings with him a strong background in customer relations, customer service, sales, marketing, operational management and talent selection and development. To achieve its objectives, PURE Management Group is seeking an investment in the amount of $9,000,000 to be allocated over 5 years. 1.1 Objectives

Achieve funding from investors Acquire core staff, along with their existing client lists Cultivate and maintain a solid talent and client base Share knowledge and access to resources to mentor and shape talent Establish a presence in prime locations in the most active markets Develop the PURE Social Transformations division

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1.2 Company Philosophy PURE Management Group Mission: To sharpen and redefine the cutting edge of entertainment and fashion management while leveraging the industry’s history and culture to spur sustainable social change. Vision: To be the forerunner in managing and delivering exceptional talent while remaining positive agents of change. Purpose: To allow those skilled in the arts, entertainment and fashion industry to integrate their craft and talents with their passion for creating meaningful social change in the lives of those around them. Slogan: Quality management. Quality purpose. PURE Social Transformations (PURE ST) Mission: To leverage PURE as a force for infusing sustainability more completely throughout society. Vision: To be the textbook example of how to challenge and radically transform an industry from the inside out. Purpose:

• To monitor, evaluate and strategically improve the environmental and social impacts of PURE.

• To create, manage, and support nonprofits and side businesses designed to create societal impact beyond the immediate operations of the talent agency.

• To plan and execute events that increase public awareness of and support for the sustainability programs operated through PURE.

1.3 Keys to Success

In-depth understanding of the entertainment industry, fashion industries and sustainability movement.

Leverage extensive entertainment and fashion industry contacts. Superior ability to recognize and secure unique and exceptional talent. Service a diverse base of talent. Provide unparalleled service to clients and employees. Stay ahead of the curve in terms of the latest business practices, trends,

and demands. Secure long lasting relationships with a diverse clientele. Always stay faithful to PURE’s original vision.

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1.4 Investor Return & Financial Overview The Investor Return section details the investor(s) initial investment, investment multiple, investment fifth year value, investor(s) share of the Company and the value of the Company in the fifth year.

2.0 Company Summary PURE Management Group is a limited liability company (LLC) registered in the state of California in February 2008, and is located at 113382 Gardena Drive in Garden Grove, California. The Company plans to open offices in both New York City and Los Angeles. The PURE Social Transformations division of the company will be responsible for identifying a need for and creating unique nonprofit organizations and side businesses, which will be operated alongside PURE Management Group. 2.1 Company Ownership PURE Management Group, LLC, is jointly owned by Yvain Reid (45%), Christian Baum (15%), and Spud Marshall (5%), with remaining shares open for investors.

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2.2 Pre-Operating Source and Use of Funds The Pre-Operating Source & Use of Funds section details the Expenses, Assets, Inventory, Investment and Debt needed to facilitate the Company’s business objectives. The Pre-Operating expenses and funding occur before the Company receives revenue.

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3.0 Services In the past year, PURE has gained a great deal of recognition by attracting a growing number of artists from a variety of genres in the entertainment and fashion industries. PURE excels at proactively creating a network of skilled professionals which will transform into an unparalleled in-house production agency, capable of developing and managing ambitious talent of all levels of artistry in a variety of disciplines, including modeling, athletics, photography, acting, music, television, and dancing. PURE provides two major categories of services:

Full-service management for talent ranging from model development, bookings, and business management.

Providing talent to premier brands and publications. As such, PURE will be a horizontally integrated firm that meets the needs of a diverse range of individuals and companies that comprise the fashion and entertainment industries. Agents and managers will help models, actors, sports figures, and other entertainers secure jobs in magazines, the fashion and apparel industry, television, film and commercial advertising. By taking an active interest and managing its clients’ careers on a holistic level, PURE’s team will develop strong and lasting relations that help fulfill their dreams and goals, while creating a sustainable business with long-term, recurring revenue streams. Simultaneously, PURE’s commitment to its clients on the talent side will allow it to offer corporate clients an unparalleled level of access to a large portfolio of in-demand models, actors, and athletes. This production division will help to differentiate it from other agencies, merging two symbiotic functions. Social consciousness and strategic philanthropy also play a major role in PURE’s corporate ethos. As such, PURE Social Transformations will coexist with PURE’s talent management and production divisions, providing a platform for identifying and creating nonprofit organizations and side businesses that focus on societal needs and challenges that are currently lacking the attention they need. PURE’s leadership team will be invaluable to the success of these initiatives, using their knowledge, influence and resources to improve the lives of individuals and communities around the world. In addition to creating and managing unique nonprofits, PURE Social Transformations will also seek to provide assistance to current nonprofit organizations in an effort to help maximize their impact. In the past months, PURE has attracted a growing collection of driven social entrepreneurs to help see these projects come to fruition. PURE Social Transformations is further detailed in the following section. 3.1 PURE Social Transformations One of the unique differences between PURE and competing talent agencies is the establishment of PURE Social Transformations, a division responsible for overseeing the strategic planning and implementation of sustainability policies at PURE, including the creation of affiliated nonprofit organizations. To accomplish this goal, PURE Social Transformations consists of three focuses: corporate sustainability, an idea incubator, and outreach and engagement. Corporate Sustainability The focus on Corporate Sustainability assesses the impacts of PURE with the criteria established through the B Corporation guidelines, innovative certification standards

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designed to differentiate corporations that use “the power of business to solve social and environmental problems.”1 PURE desires to be an example for how other businesses, especially talent agencies and other groups working in the entertainment industry, can practically apply sustainability to their own operations. For this reason, it will use an established certification process to make it easiest for other companies to replicate its approach and impact. Priority assessment categories will include issues such as:

Accountability: Governance, Suppliers/Fair-Trade, Transparency Employees: Compensation and Benefits, Ownership, Work Environment Consumers: Beneficial Service Community: Local, Diversity, Charity/Service Environment: Facilities, Energy Inputs, Design and Development,

Transportation, Materials, Water, Waste, Emissions Idea Incubator One of the core functions of PURE Social Transformations, operated through the Idea Incubator, is to create and operate multiple nonprofits and businesses, each with specific sustainability objectives. Similar to how a talent agency develops individual talent and finds opportunities for them to grow, the Idea Incubator will develop and grow transformative ideas for social change. The Idea Incubator identifies current challenges in society as related to PURE’s business focus, and then finds the right combination of existing nonprofits and social entrepreneurs to translate those ideas into reality. The first nonprofit organization to be created through the Idea Incubator is Common Thread. Common Thread will serve as the tangible equivalent to the modeling division of the Talent Agency with the goal to disrupt and transform the practice of over-consumption and consumerism. The organization will operate a nonprofit clothing company within the retail industry with the desire to challenge society’s understanding of consumption. The organization will rely upon radical transparency to reveal the hidden side of “making stuff” and positively engage individuals on the concept of sustainable consumption. Common Thread will work alongside existing nonprofits and help expand their reach and impact by connecting them with similar organizations that have shared goals and purposes. PURE Social Transformations is also partnering with a nonprofit called New Leaf Initiative (NLI) with the mission “to bring sustainability to life.”2 NLI works to connect individuals, groups and organizations around the world to collaboratively innovate creative solutions to sustainability challenges. NLI specializes in uncovering these innovative solutions and will work with PURE to sharpen the cutting edge of sustainability and provide an outlet in which the ideas can turn into realities. PURE strongly believes in working collaboratively with other mission-driven organizations in the field. When a significant gap is identified, PURE Social Transformations’ team will develop a strategic plan to fill this gap while benefiting society, the environment, and PURE’s business operations. PURE sees the potential of both creating nonprofits to fulfill that need and partnering with existing organizations that have the necessary experience and capacity for handling specific challenges. As such, PURE is more concerned with maximizing the collective impact on society rather than boasting about its individual achievements.

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www.bcorporation.net/about 2

www.newleafinit iative.org

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Outreach and Engagement This department will organize events to raise awareness about PURE and its sustainability initiatives. These events will also be used to raise funds and support for PURE Social Transformations. Through its work, Outreach and Engagement will be responsible for connecting clients and employees at PURE to the Idea Incubator’s work and related charities. Clients and employees are encouraged to work through these organizations to use their role and position in the industry for a greater good. PURE believes through service and giving of oneself, individuals are completely transformed in the way they see the world and society around them. Within the entertainment and fashion industries, individuals can often lose that connection and become overly focused on themselves, losing their relationship with the rest of the world. PURE believes it is vital to provide opportunities for employees to participate in the broader impact and scope of the company. Equivalent to how Google pays its employees to work on creative personal side projects as part of their job, PURE Social Transformations provides an opportunity for these talented individuals to serve those around the world who lack the same opportunities that they have been provided through the entertainment industry. It is a convenient outlet to directly give back and begin to grasp what sustainability means in their personal lives. 3.2 PURE’s Location PURE will be prominently located in a state-of-the-art New York City office, presenting clients with a beautiful and serene space. In year two, PURE will open a Los Angeles office, which will re-focus the company’s talent-management activities in the entertainment industry. As a pioneer of 21st century leadership in business, PURE will engage in numerous corporate sustainability initiatives, including the green design of all its offices, starting with its New York City headquarters. An 8,000-square-foot, two-story retail space at 47 Walker St. in the Tribeca / SoHo area has been located to fulfill PURE’s needs. The pre-remodel exterior and interior of this space is pictured below.

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4.0 Market Analysis Fashion is a $300 billion per year business, permeating every corner of our culture, from couture New York City boutiques to small town big-box stores. The U.S. talent and modeling agency industry, according to market analyst First Research, “includes agents and personal managers who represent or manage actors and entertainers, models, sports figures, and other public figures. Agents focus on finding clients work; personal managers generally find sponsorships and endorsements for clients.”3 The high demand for models in the fashion and apparel industries, as well as top-notch photographers, dancers, entertainers, and exceptional athletes continues to rise, reaching into most every level of our media-based culture and creating an extremely lucrative opportunity for experienced industry insiders such as PURE Management Group. According to Wilhelmina International’s 2009 annual report, “The fashion model management industry is highly fragmented, with smaller, local talent management firms frequently competing with a small group of internationally operating talent management firms for client assignments. New York City, Los Angeles and Miami, as well as Paris, Milan and London, are considered the most important markets for the fashion talent management industry… Apart from Wilhelmina and Paris-based and publicly-listed Elite SA, all other fashion talent management firms are privately held.” Wilhelmina reported gross billings totaling $37.18 million for full-year 2009, with revenues totaling $31.74 million. Additionally, Wilhelmina’s 2009 costs were:4

Model costs totaled $22.37 million Operating expenses were $12.71 million Salaries and service costs were $6.5 million

There are multiple major players in the market, which include companies with bicoastal and international offices (such as those listed in 4.2 Competitive Landscape). Other companies range from mid-size firms to one-or-two person boutiques. The industry also includes production and casting companies that use their relationships with leading model agencies and the fashion industry photographers, art directors, and other creative professionals to produce fashion magazine photo shoots, TV commercials, and other creative material. Atlas Productions Inc. is one such company. Atlas “is a print & film production company, specializing in fashion and commercial shoots,” with recent work including a series of Gap ads, a Wrangler Jeans commercial with Dale Earnhardt, Jr., and ads for Ann Taylor LOFT and Hugo Boss, among others. Atlas has a staff of two and reports annual income of $250,000. It was founded in 2000 and has its office at 325 W 38th in New York.5 Like Wilhelmina and Atlas, etc., the Company’s location in New York places it at the epicenter of the fashion world, surrounded by skilled workers and a business infrastructure that facilitates the industry. According to the New York City Economic Development Corp., “New York City’s fashion industry employs 178,000 people, accounting for 5.7% of the City’s workforce and generating $10 billion in total wages with tax revenues of $1.7 billion.

3 First Research. “Talent and Modeling Agencies Industry Profi le.” May 2010. Obtained at: http://www.firstresearch.com/Industry-Research/Talent-and-Modeling-Agencies.html 4

Wilhelmina press release. “Annual Report.” March 31, 2010. Obtained at: http://biz.yahoo.com/e/100331/whlm.ob10-k.html 5

Atlas Productions (atlaspro.com) data from a paid Dun & Bradstreet report for D-U-N-S # 96-479-6952, obtained at zapdata.com.

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Home to more than 75 major fashion trade shows plus thousands of showrooms, New York City attracts hundreds of thousands of visitors each year.”6 The market for fashion, and therefore agents, is heavily influenced by economic factors. “The business of talent management firms, such as Wilhelmina,” states the Wilhelmina annual report, “is related to the state of the advertising industry, as demand for talent is driven by print and TV advertising campaigns… For the fashion talent management industry, including Wilhelmina, advertising expenditures on magazines, television and outdoor are of particular relevance, with Internet advertising becoming increasingly important.” Total 2009 U.S. advertising in major media – newspapers, magazines, television, cinema, outdoor and Internet – was $156 billion in 2009, down from $180 billion in 2008.7 In North America in 2009, while overall ad spending decreased 1.9%, online/mobile and video game advertising had 6.4% and 13% gains, respectively. This is further broken down below, based on PricewaterhouseCoopers estimates:8

According to PricewaterhouseCoopers’ 2010 Global Entertainment & Media Outlook report, from the period of 2010 to 2014, global advertising will maintain a 4.2% compound annual growth, increasing from $406 billion in 2009 to $498 billion in 2014.9 4.1 Market Segmentation Target clients include designers and brands that require models for displaying their wares at fashion shows for department store buyers, in advertisements for TV commercials and newspaper inserts, and for fashion magazine editorials. The Company will most heavily target major media campaigns from marquee brands. PURE already has a rolodex of over 2,000 potentials clients that the Company’s founder has already worked with in the past, such as Gucci, Prada, Dior, Vogue, Marie Claire, GQ, Stephen Kline, Steven Meisel, Carter Smith, and many more.

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New York City Economic Development Corp. “Fashion.” Obtained at: http://www.nycedc.com/SupportingYourBusiness/Industries/Fashion/Pages/Fashion.aspx 7

Wilhelmina press release. “Annual Report.” March 31, 2010. Obtained at: http://biz.yahoo.com/e/100331/whlm.ob10-k.html. 8

eMarketer. “Watching the Worldwide Ad Spending Scuffle.” July 22, 2009. Obtained at: http://www.emarketer.com/Article.aspx?R=1007186 9

PricewaterhouseCoopers. “Consumer behavior drives change.” June 15, 2010. Obtained at: http://www.pwc.com/gx/en/press-room/2010/E-and-M-players-seek-new-roles-digital-value-chain.jhtml

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4.2 Competitive Landscape According to First Research, the U.S. talent and modeling agency industry includes more than 3,000 businesses, including single-location companies and branches of multi-location companies, as well as many sole proprietorships with no paid employees. Major companies include Creative Artists Agency (CAA); William Morris Endeavor Entertainment (WME Entertainment); International Creative Management (ICM); and IMG. First Research states that, “The industry is fragmented: the top 50 companies account for less than 45 percent of industry revenue… Demand is driven by the performing arts, sports entertainment, and advertising industries. The profitability of individual agencies depends on the success of agents’ talent in winning auditions, leading to a steady stream of contracts. Large agencies have advantages in relationships with major studios, fashion designers, and cosmetic companies. Small agencies can compete successfully by specializing in a particular medium or location and developing niche customer relationships.10 The following chart, from Hoover.com, outlines the top industry players by revenue, which includes only that of publicly reported companies.11

Despite these firms’ presence in the market, the talent representation industry has few examples of organizations designed to create sustainable social impact through their business practices. The majority of talent agencies have created a foundation responsible for charitable giving and connecting employees with causes that match their interests, including UTA, WME Entertainment, Paradigm, ICM and CAA. Beyond this, there has been minimal work done on corporate sustainability reporting and strategic integration of philanthropic giving to the agency’s immediate work. In addition to a lack of internal transparent reporting, there is also a significant lack of external peer-reviewed studies to document and research the environmental and social impacts of talent agency practices. One of the best examples of socially and environmentally conscious business practices in the industry is Creative Artists Agency (CAA). CAA was created to be completely different, in both approach and feel, than the traditional agencies of the time. From a small office set up on a $35,000 line of credit and a loan of $21,000 in 1975, CAA grew to bookings of around $100 million by the early 80s. Led by superstar agent Michael Ovitz, CAA became one of the leading talent management agencies in the world, with bookings estimated at $250-300 million annually.12 To date, the agency has made commitments on a variety of environmental and social standards, including partnering with organizations to ensure that the agency’s

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First Research. “Talent and Modeling Agencies Industry Profi le.” May 2010. Obtained at: http://www.firstresearch.com/Industry-Research/Talent-and-Modeling-Agencies.htm 11

Hoovers.com. “Top Talent & Modeling Companies.” Obtained at: http://www.hoovers.com/industry/talent-modeling-agencies/1061-1.html 12

Statemaster Encyclopedia. “Creative Artists Agency.” Obtained at: http://www.statemaster.com/encyclopedia/Creative-Artists-Agency

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operations are carbon neutral (UTA also supports climate change organizations). In addition, the agency has appointed a Sustainability Director to “influence environmental and sustainability messaging in the media.”13 CAA has also created a philanthropic arm to the organization called the CAA Foundation,14 which aims to connect its employees with charitable organizations and causes, similar to many other competitors in the market. 4.3 Industry Summary The Company will operate in this distinct industry: Agents and Managers for Artists, Athletes, Entertainers, and Other Public Figures (NAICS 711410). Information provided is gathered from the U.S. Census.

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www.caaspeakers.com/john-picard 14

www.foundation.caa.com

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4.4 Industry Analysis The map below shows sales per capita for Agents and Managers for Artists, Athletes, Entertainers, and Other Public Figures.

The map below shows sales (Million $) for Agents and Managers for Artists, Athletes, Entertainers, and Other Public Figures.

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Agents and Managers for Artists, Athletes, Entertainers, and Other Figures This industry comprises establishments of agents and managers primarily engaged in representing and/or managing creative and performing artists, sports figures, entertainers, and other public figures. The representation and management includes activities, such as representing clients in contract negotiations; managing or organizing clients financial affairs; and generally promoting the careers of their clients.

5.0 Marketing Strategy/Implementation PURE Management Group will drive awareness through a wide range of aggressive marketing strategies. Working alongside PURE Social Transformations, PURE will invest in a strategic cause-marketing campaign. PURE will also reach its target audience in niche markets by using time-tested traditional advertising, public relations, direct sales, and a robust search engine optimization and online marketing campaign. PURE Management Group will focus on obtaining top talent for its clients. PURE’s strategic location in densely populated New York City and Los Angeles will provide access to a large number of affluent clients and celebrities. PURE will initially focus marketing efforts within those regions. PURE will also pursue a comprehensive promotional campaign, designed to market itself to a diverse customer base. The marketing strategy will include a carefully blended mix of promotional tools as well as a focus on the growing trend for cause-related marketing. PURE’s marketing strategy includes a combination of the following:

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Advertising: Advertising has the ability to reach masses of geographically dispersed people at a low cost per exposure. The following methods of advertising will be used:

LeBook: A $5,500-per-year fee gets the Company in LeBook’s Paris, London, and New York directory. The following graphic is an example of what will be published.

• Print Collateral: The Company will develop attractive brochures, flyers, and accompanying literature showcasing the Company’s top-notch services.

• Internet Advertising: The Company will allot portions of its marketing budget for strategic Internet marketing, including search engine optimization. This tactic involves organically improving the quality and volume of traffic to its website through search engines. Search engine optimization can also target different kinds of searches, including image, local, and industry-specific vertical search engines.

• Outdoor Marketing: The Company’s signage, on its building and company vehicles, will be prominently placed for maximum visibility to both foot and vehicular traffic.

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Public Relations: Public relations will include news stories, features, sponsorships and events that create a realness and believability to the readers. This will be able to reach many prospects that may be skeptical of salespeople and advertisements.

Press Releases: Press releases will be created, and the Company will contact TV shows, newspapers, industry magazines and websites. This is a free to low cost way to drive awareness of PURE and its product line. Target media titles will include ID, Architectural Digest, Wallpaper, Variety, and The New York Times.

Special Events: PURE will host events nationwide at universities, charity functions through nonprofits, launch parties, fashion events, trade shows, and industry conventions.

Sponsorships: The PURE brand will be marketed through promotional materials for the models and staff and the sponsorship of different sports teams and sports events such as Motocross (with which Mr. Reid has a connection)15

Word of mouth: PURE Management Group’s adherence to offering quality service paired with superior customer assistance will garner a solid and positive reputation within the industry. The Company’s clients will undoubtedly return for additional services, while also spreading the word to their friends, family and colleagues. Through this simple marketing tactic PURE Management Group will become further recognized as the premier talent representation and socially responsible company.

Direct Marketing: Direct marketing will be essential for targeting specific potential clients. This form will be an immediate way to customize our message.

Direct sales: The Company will make sales calls, including cold calling potential clients.

Networking: Personal contacts and networks play a key role within the industry. Yvain Reid will leverage his contacts with over 2,000 previous clients to garner new business for PURE and secure experienced social entrepreneurs for PURE Social Transformations. Among his list of industry contacts with which he has already worked are Gucci, Prada, Dior, Vogue, Marie Claire, GQ, Stephen Kline, Stephen Meisle, and Carter Smith, among others.

5.1 Competitive Edge: Societal Marketing In conjunction with the above concepts, PURE will also employ a societal marketing strategy to deliver value to customers in a way that maintains and improves both the consumer’s and society’s well-being. To ensure marketing concepts balance consumer wants and company profits as well as societal interests, the following concepts will be used: 15

http://www.nytimes.com/2007/10/21/jobs/21pre.html?ex=1350619200&en=f4b2cd9d18f162bb&ei=5124&partner= permalink&exprod=permalink

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Cause Marketing: One of the key differentiating aspects of PURE from its competitors is the integrated strategy between the talent agency and PURE Social Transformations. Through this partnership, a strategic cause-related marketing plan will be designed to directly benefit both divisions, including increased sales, improved visibility, greater customer loyalty, enhanced company image, and positive media coverage. A 2007 Cone Cause Evolution Study found that in the U.S.:16

“87% say when price and quality are equal, they are likely to switch from one brand to another associated with a cause,

77% say a company’s commitment to a social issue is important when they decide where to work, and

92% say they have a more positive image of a product or company when it supports a cause.”

Another study conducted by APCO Worldwide Global CSR found that:16

“Globally, 61% of opinion elites say they have recommended a company to others in response to positive news about a company’s citizenship.”

Company Speaking Sessions: PURE will engage in speaking sessions at various colleges to present some of the innovative projects and new business models the company is pioneering to students and faculty. As sustainability becomes a growing concern on university campuses and in their curriculum, a strong focus will be on how business and industry can be used as a force for good when integrating strategic sustainability decision making into the business. By interacting with thousands of students, the speaking sessions will help spread the name and mission of PURE to the country’s youth, encouraging them to not only want to work for and follow PURE, but to share the concept with their families and friends. 5.2 Web Summary The Company has secured the web address at www.PureMgmtGroup.com, and an attractive and user-friendly website is currently being designed. It will outline the Company’s philosophy and services, as well as spotlight the Company’s approach. The website will be professionally designed and maintained, presenting customers with a dynamic face for PURE Management Group. The website will include an interactive blog in which the public and clients can follow the latest updates from PURE employees. A live camera feed will also be installed in the office and at different project sites for the public to follow and which will ensure PURE stays accountable and transparent to its stakeholders and the public. Few talent agencies focus on heavily interacting with the public, an area that PURE hopes to capitalize on.

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Comprehension Post. Huyse, Kami Watson. “Breakout: Social and Cause Marketing: Creating Value, Building Relationships. October 22, 2007. Obtained at: http://comprehension.prsa.org/?p=52

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5.3 SWOT Analysis The Company has compiled the following summary of its current state of affairs.

5.4 Milestones Year 1

Establish the New York City agency with 20 employees including 10 top-performing agents.

Secure 5 photographers/artists, 40 male models and 20 female models Launch PURE Social Transformations with 3 employees and begin work on

establishing the first nonprofit organization, Common Thread Year 2

Open the Los Angeles office concurrently with the NYC office and staff with 10 employees and 7 agents

Secure a client base of 10 athletes, 10 actors, 10 artists/musicians, and 20 other celebrities/models

Year 4 Establish a London office

Year 5 Take the Company public

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6.0 Management Summary PURE Management Group will be led by Yvain Reid, founder and Chief Executive Officer, who possesses the requisite management skills and experience to successfully run operations. Yvain Reid is an entrepreneurial-minded leader who is highly skilled in talent recruiting and grooming, and hiring top model talent to match the agency’s image. Mr. Reid has been in the industry 12 years, working as an agent in New York. He worked for two start-up companies, including Fusion Model Management, which as a top-performing agent, he helped grow the talent board and client list by 800% in 2 years. He was also responsible for developing new fashion and commercial premiere bookings, introducing top photographers to the agency, and managing and developing male and female models for careers with reputable designers and casting directors. Mr. Reid excelled at winning spots in high profile magazines such as L’Uomo Vogue, GQ & 10 Men, and securing marquis clients including Victoria Secret, Calvin Klein, and Armani. Previously, Mr. Reid was co-owner of Grey Model Management in New York City, where for over four years he administered the men’s model agency, managing 40 to 45 star models and major clients. Currently, Mr. Reid is co-owner of Reid & Scott, a worldwide distributor of leather accessories, which is located in New York City. PURE will be managed and supported by an Executive Core and Talent Agency consisting of the following members. Management Personnel

• Yvain Reid, Chief Executive Officer Public Relations and Marketing

• Christian Baum, Director of Imaging • Giullermo Castillo, Lead Ambassador

Financials

• Matthew Lobach, Director of Business Development • Alvin Grubman, Chief Financial Officer

Operations

• Spud Marshall, Director of PST Operations • Lawrence Smith, Office Manager

Human Resources

• Rebecca Dahl, Director of Human Relations • Kevin Jones, Director of Talent Agency

Talent Agency

• Scott Hetterman, Sports • Catherine Schramm, Photography • Billy Clark, Music • Ingrid McAuliffe, Men's • Charles Short, Women's • Rodney Harris, New Generations

The organizational structure of the Company will be configured according to the following diagram, with members from both the Talent Agency and PURE Social Transformations creating the Executive Core.

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6.1 Strategic Partnerships/Key Relationships Grubman Associates Until a permanent hire is made, Grubman Associates will act as CFO. Handling all accounts, Grubman Associates is a full-service CPA and consulting firm that has been in business since 1965. The firm specializes in music, entertainment, design, and construction businesses. Further details can be found at http://www.grubmannyc.com. DXA Studios The PURE offices will be designed by DXA Studios, a partnership of up-and-coming architects who place a strong emphasis on sustainable building and have extensive working

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knowledge of New York City zoning regulations. DXA strives to work with local artisans and neighborhood groups to impact design at a grassroots level, resulting in projects that reflect the ideals of the community in which they exist. DXA Studios’ principals have worked on numerous marquee projects, including The Theory Building and The High Line Building in Manhattan, The Prudential Center in Newark, the GKD-USA headquarters in Maryland, The Johns Hopkins School of Professional Studies in Baltimore, and the Harvard Graduate Student Housing building in Boston, among many others. * Examples of projects they have worked on are shown below.

New Leaf Initiative New Leaf Initiative is a US-based non-profit organization founded in 2010 with the desire to bring sustainability to life. The organization serves as a hub for individuals, companies and organizations around the world that desire to work collaboratively, design creatively, and solve strategically towards sustainability. New Leaf Initiative uses an approach known as CASE – Connect, Assist, Strategize, Evaluate – to improve the impact of projects and programs. The foundation of the organization is built upon community, which relies largely on allies and partners who are united in their desire to make the world a better place. PURE Management Group will become a member of the New Leaf Partner Network and contribute to the community its expertise within the entertainment and fashion industry and pioneering approach to 21st century business practices and corporate models. New Leaf Initiative will in return connect PURE with other like-minded organizations and individuals to create a passionately driven work force and partner network.

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7.0 Financial Summary 7.1 Revenue Forecast The Revenue Forecast section details the revenue that the Company will receive. This section also details the direct costs. The following graphs illustrate the amount of revenue each line item contributes.

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7.2 Personnel Forecast The Personnel section breaks down the payroll expense line on the Income Statement. It provides total headcount, average salary per category and total pay per category.

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7.3 Income Statement The Income Statement is also known as a Profit & Loss Statement. This table breaks down Revenue, Cost of Revenue, Operating Expenses, Depreciation, Interest, Taxes, and bottom line Earnings for the first five years.

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7.4 Statement of Cash Flow The Statement of Cash Flow illustrates the Company’s cash received and cash spent for the five-year period. The table is broken down into three main categories: Operating, Investing, and Financing. The Operating Activities report the Company’s business operations. Investing Activities detail the Company’s property, plant, and equipment transactions. Financing Activities account for the Company’s paid-in capital and debt.

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7.5 Balance Sheet The Balance Sheet shows the Company’s Assets, Liabilities, and Shareholders’ Equity for a given time period.

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7.6 Break-Even Analysis The Break-Even Analysis details two different break-even points. The Operating Break-Even accounts for the Company’s revenue and expenses on the Income Statement. The Investment Cash Flow Break-Even takes the Operating Break-Even one step further by including the inflow and outflows of the Cash Flow. The Investment Cash Flow Break-Even looks at all transfers of money except investments.

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7.7 Best & Worst Case The Best and Worst Case analysis illustrates what the Company’s financial statements might look like with an increase or decrease in Revenue.

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Appendix A – Year 1 Financials Year 1 Monthly Forecast illustrates the Company’s first 12 months after the Pre-Operating stage.

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