Bar Business Plan

I. Executive Summary

Business Overview

[Company Name] is an upscale yet affordable bar and lounge strategically located in west Los
Angeles near one of California’s premiere universities. [Company Name] is focused on creating
an exciting environment where college students can purchase affordable drinks and dance to the
latest music on our newly designed dance floor. Our lounge meets the demand for college
students who want an alternative to the usual fraternity or apartment party. The [Company
Name] spacious design and elegant pictures foster an environment of relaxation and college fun.
At [Company Name] it is always happy hour .

Products Served

[Company Name]will sell imported and domestic beers both in the bottle and in draft. In
addition, it will have a wide selection of hard alcohols for mixed drinks. All drinks will be sold at
happy hour prices all night long.

In addition to alcoholic drinks, the Company will sell appetizers and main dishes for
consumption during all hours of operation .

Customer Focus

[Company Name] will primarily serve college students and residents within a 5 mile radius of
our location. The demographics of these customers are as follows :

 39,650 students
 Average disposable income of students $7,000
 Majority of students are single
 25% are over the age of 21

Management Team

[Company Name] is led by [Founder’s Name] who has been in the bar industry for 20 years.
While [Founder’s Name] has never run a bar herself, she has worked and managed many bars
throughout her college years and has taught bartending courses for the last five years. As such
[Founder’s Name] has an in-depth knowledge of managing and promoting a bar including the
operations side (e.g., running day-to-day operations) and the business management side (e.g.,
staffing, marketing, etc.).

Success Factors

[Company Name]is uniquely qualified to succeed due to the following reasons :

 There is currently only one bar available for students within walking distance of the
university. In addition, we have surveyed students and received extremely positive
feedback saying that they explicitly want to frequent our business when launched.

 Our location is in a high-volume area where students can walk to and from our location.

 The management team has experience in successfully managing a bar.

 Operating a bar is a proven business and has succeeded in various college towns
throughout the nation.

 Market trends show that college students are consuming alcohol in greater amounts than
previous years.

Financial Highlights

[Company Name] is currently seeking $406,645 to launch. Specifically, these funds will be used
as follows:

 Bar design/build: $262,200

 Working capital: $144,445 to pay for Marketing, salaries, and lease costs until [Company
Name] reaches break-even
Topline projections over the next five years are as follows :
II. Company Overview

Who is [Company Name]

[Company Name]is located in West Los Angeles near one of California’s premiere universities.
[Company Name]is a new bar and lounge focused on creating an exciting environment where
college students can purchase affordable drinks and dance to the latest music on our newly
designed dance floor. Our lounge meets the demand for college students who want an alternative
to the usual fraternity or apartment party. The [Company Name] spacious design and elegant
pictures fosters an environment of relaxation and college fun. At [Company Name] it is always
happy hour .

[Company Name]was founded by [Founder’s Name]. While [Founder’s Name]has been in the
business for some time, it was in June 2008 that she decided to launch [Company Name].
Specifically, during this time, [Founder’s Name] took a trip to Los Angeles to visit her son and
realized that there was only one bar to accommodate a large student population. During her trip,
[Founder’s Name]frequented the local bar that enjoyed tremendous success. After several
discussions with the manager [Founder’s Name]realized that there was enough demand from the
local student population to sustain profitable growth for another bar.

Specifically the customer demographics and competitive situations near the university validated
that her venture would work. Furthermore, after surveying the local student population, this
theory was proven .

The [Company Name’s] History

Upon returning from [location], surveying the local customer base, and finding potential retail
locations, [Founder Name]incorporated [Company Name]as an S-Corporation on July 1, 20XX.

The business is currently being run out of [founder name] home office, but once the lease on
[Company Name] retail location is finalized, all operations will be run from there.

Since incorporation, the company has achieved the following milestones :

  Found a location
 Developed the company’s name, logo and website located at [x]
 Created the menu
 Determined equipment and inventory requirements
 Began recruiting key employees with experience

The [Company Name’s]Products

Below is the [Company Name]initial menu. As you can see all items are classified under the
following five main categories :

1. Beer
2. Hard Alcohol
3. Appetizers
4. Sandwiches
5. Specialties
Bar Design

[Company Name] will develop a 1,000 square foot bar whose key elements will include the
following :

 Kitchen area
 Ordering counter
 Tables and couches
 A dance floor
 Restrooms

Below please find a rough sketch of the floor plan. [Add diagram of floor plan ]

The location has 20 dedicated parking spots which should suffice even in peak hours.

[Company Name] plans to be open 7 days a week, from 11am to 2am. As demand dictates, we
may extend or reduce our hours. Likewise, as demand dictates, we may offer delivery service.
III. Industry Analysis

[Company Name]directly or indirectly competes with all bars and restaurants nearby our location
that offer similar products, mainly alcohol and food .

Industry Statistics & Trends

The following industry size facts and statistics bode well for [Company Name].

According to Market Watch the percentage of beer, wine, and liquor consumed in bars and
restaurants as opposed to private settings is growing.

According to the Distilled Spirits Council on premise volumes of spirits grew an estimated 6.3%
last year. That compares to overall growth of 3.9% while on-premise revenues grew by 11% vs.
7.5% in all channels.

According to Dun & Bradstreet and the National Club Industry Association of America:

 Last year, the bar and nightclub industry’s drinking establishments primarily engaged in
the retail sale of alcohol drinks numbered 60,876

 The establishments generated approximately $15 billion in combined annual sales

 The average establishment generated approximately $200,000

 States representing the majority of establishments included: Wisconsin (4,489),

California (4,449), Texas (4,388), New York (4,283), Illinois (3,634), Pennsylvania
(3,572), Florida (3,191), and Ohio (3,201).

The National Club Industry Association of America reports that the industry is highly
fragmented with taverns accounting for the largest sector with 19,660 drinking places. Bars and
lounges represent 19.8 percent of the market. According to the U.S. Census Bureau’s Statistics of
U.S. Businesses, there were about 351,912 people employed within the industry with nearly $4.1
billion in annual payroll.

The U.S. Department of Commerce reported that alcohol sales were up 5.2 percent to nearly $9.2
billion. According to the National Club Industry Association of America beer accounts for
approximately 40 percent of sales, distilled spirits or hard liquor 30 percent, food and non-
alcoholic beverages 10 percent, and wine 7 percent. Forms of entertainment include live music,
DJs, dancing, and adult entertainment.
IV. Customer Analysis

Demographic Profile of Target Market

[Company Name] will serve the residents of [company location] and the immediately
surrounding areas as well as those who work in [company location ].

The precise demographics of the town in which our bar resides is as follows :

UNDERGRADUATE PROFILE

TOTAL ENROLLMENT 25,928

GENDER

Women 14,349 55%

Men 11,579 45%

RACE ETHNICITY

African American / Black 865 3%

American Indian / Alaskan Native 108 <1%

 UNDERGRADUATE PROFILE

Asian / Pacific Islander 9,968 38%

Hispanic 3,812 15%

International 1,075 4%

White 8,861 34%

Race/Ethnicity unknown 1,239 5%

GEOGRAPHIC DISTRIBUTION

California 24,307 94%

Other US (44 states and DC) 9 47 4%

Other Countries (63 countries) 6 74 3%

AGE

Average age 21

Percent of Undergrads age 25 or Older 6%

Customer Segmentation

We will primarily target the following three customer segments:

 1. College Students: The establishment will be located near a predominant university and
tailor its services and products for its target customer

2. Local office workers: Approximately 3,000 individuals work in offices within a quarter

mile of our location and we expect a fair portion of these individuals to frequent the
establishment from 5:00pm on.

3. Local residents: Approximately 1,000 residents live near the surrounding area and a
majority will frequent the establishment.

V. Competitive Analysis

Direct & Indirect Competitors

The following bars and restaurants are located within a 2 mile radius of [Company Name], thus
providing either direct or indirect competition for customers :

B’s Bar & Lounge

B’s is the only bar located near the university within walking distance and has been in operation
for 15 years. The bar offers a wide selection of alcohol and food items, but offers no
entertainment.
Many alumni visit the establishment and host events. However, many students complain that the
establishment is too small and needs to be remodeled. In addition, B’s offers a variety of items,
but the items are overpriced.

Salsa & Chips

Salsa & Chips has been in business for 7 years and is a restaurant with a small bar located inside
of its establishment.

However, [Company Name] has several advantages over Salsa & Chips including:

 Salsa & Chips does not offer entertainment

 Salsa & Chips offers only Mexican beers
 Salsa & Chips closes early
 Salsa & Chips does not have a happy hour

Pub & Deli

Pub & Deli is located four stores to the East of us. Pub & Deli has been in business for the past
10 years and enjoys great success, primarily due to its prime location (which we will also have).

[Company Name] has several advantages over Pub & Deli including:

 Pub & Deli does not offer products, including imported beers and hard alcohol

 Pub & Deli does not offer entertainment

While we expect that Pub &Deli will continue to thrive based on its location and customer
relationships, we expect that more and more customers will frequent [Company Name] based on
our lounge catered for students and their desire for place to dance and drink.

Competitive Pricing

Type of food B's Salsa & Chips Pub & Deli

Apps $5 - $12 $6.95 - $12.95 $8.95 - $16.95

 Type of food B's Salsa & Chips Pub & Deli

Lunch $9 - $18 $7.95 - $12.95 $12.95 - $15.95

Dinner $15 - $25 $17 - $27 $18 - 26

Drinks $7 - $11 $9 - $14 $8 - $12

Competitive Advantage

[Company Name] enjoys several advantages over its competitors. These advantages include :

 Location: [Company Name]’s location is near a university, giving us access to students,

workers, and residents that live nearby.

 Décor and Environment: The bar and lounge will have the latest décor and premiere
sound system to attract students.

 Management: Our management team has years of business and management experience

that allows us to market and serve customers in a much more sophisticated manner than
our competitors.

 Relationships: Having worked in the industry for 25 years [founder’s name] has the
contacts with suppliers and promoters to successfully launch a bar.

VI. Marketing Plan

The Marketing Plan describes the type of brand [Company Name] seeks to create and the
Company’s planned promotions and pricing strategies.
The [Company Name] Brand

The [Company Name] brand will focus on the Company’s unique value proposition:

 Offering premiere drinks at an affordable price.

 Offering a convenient location that offers a place to dance and drink

 Providing excellent customer service

Promotions Strategy

[Company Name] expects its target market to be students and individuals working and/or living
within a 5-mile radius of its establishment. The Company’s promotions strategy to reach these
individuals includes:

Direct Mail

[Company Name] will blanket neighborhoods surrounding its locations with direct mail pieces.
These pieces will provide general information on [Company Name], offer discounts and/or
provide other inducements for people to frequent the bar.

Public Relations

We will contact all local and area newspapers and television stations to tell them about the
opening and unique value proposition of [Company Name].

Advertising

[Company Name] will initially advertise in local newspapers and sponsor community events in
order to gain awareness.

Pre-Opening Events

Before opening the bar, [Company Name] will organize pre-opening events designed for
prospective customers, local merchants and press contacts. These events will create buzz and
awareness for [Company Name] in the area.
Pricing Strategy

[Company Name]’s pricing will be moderate so customers feel they receive great value when
patronizing the bar.

VII. Operations Plan

Functional Roles

In order to execute on [Company Name]’s business model, the Company needs to perform many
functions including the following:

Administrative Functions

 General & Administrative functions including legal, marketing, bookkeeping, etc.

 Sourcing and storing ingredients

  Hiring and training staff

Kitchen Functions

 Food preparation

 Ongoing menu creation and modification

Bar Functions

 Order taking and fulfillment

 Customer service

 Janitor/maintenance personnel to keep the bar clean

Milestones

[Company Name] expects to achieve the following milestones in the following [] months :

Date Milestone

[Date 1] Finalize lease agreement

[Date 2] Design and build out bar

[Date 3] Hire and train initial staff

[Date 4] Launch [Company Name]bar

 Date Milestone

[Date 5] Reach break-even

VIII. Management Team

Management Team Members

[Company Name]is led by [Founder’s Name] who has worked in the industry for over 20 years.

[Founder] has also worked part-time at bars throughout the [region] over the past 10 years.
Specifically, he has worked for the Star Light Bar where she has managed a crew of 10 people.
She has also taught various bartending courses.

[Founder] graduated from the University of ABC where he majored in Communications.

Hiring Plan

[Founder] will serve as the bar manager. In order to launch our bar, we need to hire the following
personnel:

 Wait staff (2 full-time equivalents to start-support staff)

 Bartender (1 to start)

 1 Cook (1 to start-support staff)

 Assistant Manager (will manage cash register and other administrative functions)

 Additional Support Staff

IX. Financial Plan

Revenue and Cost Drivers

[Company Name]’s revenues will come from the sale of alcohol and food to its customers.

The major costs for the company will be food production costs and salaries of the staff. In the
initial years, the company’s marketing spend will be high, as it establishes itself in the market.

Capital Requirements and Use of Funds

[Company Name] is seeking a total funding of $406,645 to launch its bar. The capital will be
used for funding capital expenditures, manpower costs, marketing expenses and working capital.

Specifically, these funds will be used as follows:

 Bar design/build: $262,200

 Working capital: $144,445 to pay for Marketing, salaries, and lease costs until [Company
Name] reaches break-even
 Key Assumptions & Forecasts

Below please find the key assumptions that went into the financial forecast and a summary of the
financial projections over the next five years.

Number of customers per day Per location

Year 1 100

Year 2 105

Year 3 110

Year 4 116

Year 5 122

Average tab $45.00

Annual Lease ( per location) $70,000

 Number of customers per day Per location

Yearly Lease Increase % 2.50%

5 Year Annual Income Statement

Year 1 Year 2 Year 3 Year 4 Year 5

Revenues

Product/Service A $151,200 $333,396 $367,569 $405,245 $446,783

Product/Service B $100,800 $222,264 $245,046 $270,163 $297,855

Total Revenues $252,000 $555,660 $612,615 $675,408 $744,638

Expenses & Costs

Cost of goods sold $57,960 $122,245 $122,523 $128,328 $134,035

 Year 1 Year 2 Year 3 Year 4 Year 5

Lease $60,000 $61,500 $63,038 $64,613 $66,229

Marketing $20,000 $25,000 $25,000 $25,000 $25,000

Salaries $133,890 $204,030 $224,943 $236,190 $248,000

Other Expenses $3,500 $4,000 $4,500 $5,000 $5,500

Total Expenses & Costs $271,850 $412,775 $435,504 $454,131 $473,263

EBITDA ($19,850) $142,885 $177,112 $221,277 $271,374

Depreciation $36,960 $36,960 $36,960 $36,960 $36,960

EBIT ($56,810) $105,925 $140,152 $184,317 $234,414

Interest $23,621 $20,668 $17,716 $14,763 $11,810

PRETAX INCOME ($80,431) $85,257 $122,436 $169,554 $222,604

Net Operating Loss ($80,431) ($80,431) $0 $0 $0

Income Tax Expense $0 $1,689 $42,853 $59,344 $77,911

NET INCOME ($80,431) $83,568 $79,583 $110,210 $144,693

 Year 1 Year 2 Year 3 Year 4 Year 5

Net Profit Margin (%) - 15.00% 13.00% 16.30% 19.40%

5 Year Annual Balance Sheet

Year 1 Year 2 Year 3 Year 4 Year 5

ASSETS

Cash $16,710 $90,188 $158,957 $258,570 $392,389

Accounts $0 $0 $0 $0 $0
receivable

Inventory $21,000 $23,153 $25,526 $28,142 $31,027

Total Current $37,710 $113,34 $184,482 $286,712 $423,416

Assets 0
 Year 1 Year 2 Year 3 Year 4 Year 5

Fixed assets $246,450 $246,45 $246,450 $246,450 $246,450

0

Depreciation $36,960 $73,920 $110,880 $147,840 $184,800

Net fixed assets $209,490 $172,53 $135,570 $98,610 $61,650

0

TOTAL ASSETS $247,200 $285,87 $320,052 $385,322 $485,066

0

LIABILITIES &
EQUITY

Debt $317,971 $272,54 $227,122 $181,698 $136,273

6

Accounts $9,660 $10,187 $10,210 $10,694 $11,170

payable

Total Liabilities $327,631 $282,73 $237,332 $192,391 $147,443

3

Share Capital $0 $0 $0 $0 $0

Retained ($80,431) $3,137 $82,720 $192,930 $337,623

earnings
 Year 1 Year 2 Year 3 Year 4 Year 5

Total Equity ($80,431) $3,137 $82,720 $192,930 $337,623

TOTAL LIABILITIES & $247,200 $285,87 $320,052 $385,322 $485,066

EQUITY 0

5 Year Annual Cash Flow Statement

Year 1 Year 2 Year 3 Year 4 Year 5

CASH FLOW FROM OPERATIONS

Net Income (Loss) ($80,431) $83,568 $79,583 $110,210 $144,693

Change in working capital ($11,340) ($1,625) ($2,350) ($2,133) ($2,409)

Depreciation $36,960 $36,960 $36,960 $36,960 $36,960

Net Cash Flow from Operations ($54,811) $118,902 $114,193 $145,037 $179,244
 Year 1 Year 2 Year 3 Year 4 Year 5

CASH FLOW FROM INVESTMENTS

Investment ($246,450) $0 $0 $0 $0

Net Cash Flow from Investments ($246,450) $0 $0 $0 $0

CASH FLOW FROM FINANCING

Cash from equity $0 $0 $0 $0 $0

Cash from debt $317,971 ($45,424) ($45,424) ($45,424) ($45,424)

Net Cash Flow from Financing $317,971 ($45,424) ($45,424) ($45,424) ($45,424)

SUMMARY

Net Cash Flow $16,710 $73,478 $68,769 $99,613 $133,819

Cash at Beginning of Period $0 $16,710 $90,188 $158,957 $258,570

Cash at End of Period $16,710 $90,188 $158,957 $258,570 $392,389