Computer Simulation with Concert Tour Entrepreneur ©1Creative Learning Systems Becoming a Music Mogul – Level www.creativelearningsystems.com What You’ll Learn… The origin and meaning of the word “entrepreneur” The many business decisions involved in running a business The difference between gross sales, net sales and profit How to use Concert Tour Entrepreneur to simulate a music business Stuff You’ll Need… Concert Tour Entrepreneur software © Creative Learning Systems www.creativelearningsystems.com What You Should Know… What does it mean to be an “entrepreneur”? There’s no one “right” answer. The word entrepreneur was coined by a French economist named JeanBaptiste Say in the early 19th century. It has its roots in the Latin words entre, meaning between, and prendre, meaning to take. So in French, the word entreprendre is a verb meaning, to undertake. Say described an entrepreneur as “one who undertakes an enterprise, especially a contractor, acting as an intermediary between capital and labor”. Jean-Baptiste Say More commonly, an entrepreneur is considered to be someone who assumes personal responsibility for a business or enterprise. It often implies identifying a market opportunity and developing a product or service to address it. Entrepreneurship is often associated with innovation, leadership, and a certain amount of personal, professional and/or financial risk. © Creative Learning Systems www.creativelearningsystems.com What You Should Know… Running a business… Have you ever tried to run a business? Even small ventures like baby-sitting or mowing lawns probably turned out to be more complicated than you thought. You needed to decide what product or service you would offer and how much to charge for it. You had to get the word out to potential customers. You may have had to purchase supplies or find resources like equipment or transportation. You probably found that other people were also offering the same product or service. You may have even had difficulties collecting money on occasion. © Creative Learning Systems www.creativelearningsystems.com What You Should Know… Running a business… The complexity of running larger businesses grows quickly! A great idea, a strong work ethic and a desire to succeed aren’t nearly enough. Soon entrepreneurs need to hire employees. They have advertising and marketing expenses. There are overhead costs for things like rent and electricity. They may need to borrow money from a bank or investors (and pay it back!). They have lots of suppliers – each of whom has their own business to worry about. There are many customers (hopefully) with different needs that need to be satisfied. There are complicated laws and regulations that affect the way businesses must operate. And wherever there is opportunity, there are sure to be lots of competitors. It’s no wonder that most new enterprises go out of business in the first ten years! © Creative Learning Systems www.creativelearningsystems.com What You Should Know… Running a business… Almost everyone knows a little about the music business. We’ve all probably bought CD’s or MP3 downloads. Most of us have been to concerts. You might have a t-shirt or poster of your favorite band. When we listen to the radio, we’re taking part in an important part of the music industry. The music industry is BIG business and we’ve all participated in the industry as consumers. But have you ever thought about what it takes to actually run a music business? © Creative Learning Systems www.creativelearningsystems.com What You Should Know… Running a business… Think about a concert you attended. Some company had to put on that concert. They had to contract with a band to perform. They had to schedule concerts (plus rehearsals and rest days) in many cities, booking concert halls or arenas well in advance. They had to get the band and all the equipment from place to place and arrange for places to stay when they got there. They contracted with ticket agencies to sell tickets. They had to advertise the concerts in each city and work with radio stations to promote the band and its music. They had to hire set and lighting designers, road crews, costume and makeup artists, tour bus drivers, lawyers, accountants, marketing and business managers, caterers…the list goes on and on! It costs a lot of money to put on a concert, so it’s a pretty good bet that the tour promoter had to borrow money from a bank to help with all the up-front expenses. Money the bank will want repaid! To pay for all the costs (and hopefully make some money), the promoter has to sell a LOT of tickets! And band merchandise. They may have even contracted with a sponsor like a soda company to pay for advertising rights. It’s big business. Probably a lot more complicated than you ever thought, right? © Creative Learning Systems www.creativelearningsystems.com Finding Concert Tour Click Start > Quick Access > Concert Tour Entrepreneur © Creative Learning Systems www.creativelearningsystems.com What You Should Know… Concert Tour Entrepreneur Concert Tour Entrepreneur (CTE) is a business simulation program that puts YOU in the role of a music industry executive! You will borrow money to start your business, contract with a band, book concert venues, schedule rehearsals, invest in advertising, and sell tickets and merchandise. And hopefully make some money in the process! You can choose to either launch CTE and follow along with this tutorial, or read it first and wait until the Do It! section to begin your game. When you first launch CTE, you’ll select your name and be given the option of starting a new game or continue an existing game. Unfortunately CTE does not save your game day-to-day. Select your name here -orEnter a new name here Select Old or New Game here © Creative Learning Systems www.creativelearningsystems.com What You Should Know… Concert Tour Entrepreneur Next, you’ll see a welcome message. Be sure to read it, and then click “continue”. Since this is a new business, you’ll need to borrow some money. So the next screen will take you to the bank where you will choose what kind of loan you’ll need to start out. Remember that you’ll need to pay it back from concert earnings – with interest! During your game, you’ll make frequent visits to the bank. Here, you can borrow and repay money as well as use the ATM to make withdrawals and deposit money to your account. Be sure to click Help if there’s anything you don’t understand. © Creative Learning Systems www.creativelearningsystems.com What You Should Know… Concert Tour Entrepreneur Your next task is to sign a band! There are 24 bands you can choose to represent. Each band plays one of 8 different styles of music: Blues, Country, Jazz, Latin, R&B, Rap, Reggae or Rock. You can also choose to create your own band, but we’ll save that for another time. You can scroll through each band to see their name, style of music, how many concerts they’ve performed (and how often they’ve missed the concert or arrived late). You can read a brief description about the band and listen to a sample of their music. You’ll also see their proposed agent’s cut: the amount they are willing to give you to be their agent. The agent’s cut is expressed as a percentage of net sales. Net sales is the amount of proceeds from ticket and merchandise sales left over after deducting the cost of each concert and the merchandise sold. Once you’ve picked a band to represent, you can either accept their offer for your cut, or click the negotiate button to see if you can get a better deal! The amount of sales before deducting costs is often called Gross Revenue. © Creative Learning Systems www.creativelearningsystems.com What You Should Know… Concert Tour Entrepreneur So you have some money, called capital, to start your business, and you have a product, a band to represent. It’s time to test your business skills as a music mogul! The screen shown below is the main screen for this business simulation. From this main screen you will access all the activities necessary to run your business. Look here for important summary information about your business Click here to check in with the band to see how they feel or renegotiate your contract Click the t-shirt to order supplies and set prices for band merchandise Click here to access spreadsheets for important information about your business Click here to visit the bank to borrow or pay back money or use the ATM You can listen to different types of music on the radio. Tune in to station 107.1 FM to hear the reviews of your last concert Music magazine has lots of useful industry information to help you manage your business Click here to schedule concert dates and advertising, plan rehearsals and rest days, and see what else is on the calendar © Creative Learning Systems www.creativelearningsystems.com What You Should Know… Concert Tour Entrepreneur Start out by doing a little research on the area music scene. Click the music magazine and see what useful information you can find about where to book your band, how CD sales are doing, etc. Another source of useful information is the Info I Need pull-down menu at the top of your screen. Here you can find how much people are willing to pay for tickets, when advertising is most effective and access all your financial spreadsheets. The Help menu tells you more about how each area of the game works Click here to find helpful hints for succeeding in the music industry “Info I Need” Menu Music Style Popularity Chart © Creative Learning Systems www.creativelearningsystems.com What You Should Know… Concert Tour Entrepreneur Managing the schedule is a critical function in this business! Drag the icons from the bottom into your datebook to schedule concerts, rehearsals, rest days and advertisements. You’ll need to book a concert before you can schedule any advertising. Whenever you have booked a concert, be sure to click here to set ticket prices. Free tickets are popular, but not very profitable! © Creative Learning Systems www.creativelearningsystems.com What You Should Know… Concert Tour Entrepreneur When you book a concert by dragging the concert icon into your date book, you’ll see the screen below. Click on a city to see the venue (concert hall) choices. As you’d expect, bigger venues cost more money! Click on a concert venue to see how many people it will hold and how much it costs to book. Then click “Place a Reservation” to book it! Be sure to plan ahead or you might find all the locations have been booked by other bands! You can click the mileage chart to see how far it is from one city to another. If you make your band travel too far without rest, they get tired and their performance quality will suffer! © Creative Learning Systems www.creativelearningsystems.com What You Should Know… Concert Tour Entrepreneur Now that you have your band booked for a concert, you’ll want to purchase some advertising to let people know where your band will be playing. When you drag the advertising icon onto your datebook, you’ll see the screen below. TV and radio advertising costs more but reaches more people! And don’t forget to buy some merchandise and decide how much to charge. The band’s fans will want some souvenirs from the show! © Creative Learning Systems www.creativelearningsystems.com What You Should Know… Concert Tour Entrepreneur Did you remember to schedule some rehearsals? You want to make sure the band is ready for the big show. Otherwise, you’ll have some pretty unhappy fans. And give the band a little rest to keep them happy too. When you’ve got everything planned, click the Play next concert button and see how your business decisions play out! Be ready for the unexpected problems and opportunities that can arise in any business! © Creative Learning Systems www.creativelearningsystems.com What You Should Know… Concert Tour Entrepreneur Now sit back and enjoy the show. The two indicator bars at the top show you how sales are doing and how much the audience is enjoying the concert. Audience Reaction Ticket Sales © Creative Learning Systems www.creativelearningsystems.com Questions/Research Concert Tour Entrepreneur So how did your concert do? Answer these questions for at least three (3) different concerts. Did you sell many tickets? How were merchandise sales? Were you able to cover all your costs and maybe make a profit? You can review your ticket and merchandise sales here. This chart shows how the proceeds from the concert are divided. You are reimbursed for your costs (assuming there’s enough sales). Any remainder, Net Sales, is split between you and the band according to your contract. Your share is your profit! What can you conclude from this concert experience? What decisions do you think contributed to the concert’s success (or lack of success)? What might you do differently for the next concert to try and improve your results? © Creative Learning Systems www.creativelearningsystems.com Do It! Concert Tour Entrepreneur Are you ready to try running your own music business? In this activity, your challenge is to learn as much as you can about running a successful concert tour business using the Concert Tour Entrepreneur simulation program. Start a new game. Schedule a minimum of one concert a week and play for at least three months, or as long as it takes to pay down your first loan, whichever is longer. Keep a daily log of what you learn from your concert experiences and how you might use that knowledge to improve the results of your next concerts. © Creative Learning Systems www.creativelearningsystems.com Questions/Research Create your own band by clicking the “create a band” note on the band selection page. Concert Tour Entrepreneur is a business simulation game. How do you think it’s similar to a real concert tour business? How do you think it’s different? Create a tutorial or list of helpful hints for other students in the STEM Lab. But don’t give too much away - everyone needs to learn their own lessons about the music business! © Creative Learning Systems www.creativelearningsystems.com