1.0 Executive Summary
The purpose of this business plan is to acquire $525,000 a capital for the development of a bar based in Meade County, South Dakota. Bar LLC (“the Company”) was founded with the intention of providing an upscale nighttime entertainment experience that provides an exceptional range of alcoholic beverages as well as a welcoming ambience. The Company is seeking intends to launch its operations in the fourth quarter of this year.
Operations
The primary revenue center for the business will come from the ongoing sale of alcoholic beverages. The Company is developing a wide range of signature cocktails, a highly curated wine list, as well as an expanse menu of microbrewery beers. This will provide a unique experience for patrons.
On weekends, the Company intends to host musical acts that will play downtempo and jazz style music in order to contribute to the unique ambience at the management is fostering. The Company will not charge any cover fees on the weekends for enjoying nighttime entertainment.
The third section of this bar business plan will further document the operations of the business.
The Financing
As noted above, the Company is currently seeking $525,000 via a business loan to establish operations. This document assumes that the Company will receive a seven-year loan carrying a 7.75% interest rate. The primary use of the funds are as follows:
• Location development
• Furniture, fixtures, and equipment
• Working capital
Although is not expected, the Company could secure ongoing capital in order to fuel the growth of business in the years. In the event that an additional bar location is to be established, Management may acquire a second business loan for this purpose.
The Future
To foster repeat patronage, the Company will continue to integrate new signature cocktails into its menu while also having unique musical acts perform at the location on an ongoing basis. The Company may establish additional bar locations after the fifth year of operation.
Market Overview
Revenue Forecasts
2.0 The Financing
2.1 Funds Required
The bar startup costs are as follows:
2.2 Management and Investor Equity
The Founder is the 100% owner of Bar LLC.
2.3 Exit Strategies
As bars are economically stable businesses, there would be a significant demand among third-party entrepreneurs that are looking to acquire this type of establishment. In this event, the Company would coordinate with a qualified business sales specialist that would find a suitable buyer for the business. The Company would also have a formal valuation conducted prior to sale.
3.0 Operations
As noted in the executive summary, the bar will provide Meade County patrons for a wide range of exceptional alcoholic beverages as well as nighttime entertainment. The Company intends to hire and mixologist that will create a number of signature cocktails, which will provide a significant differentiating factor for the Company. On average, the per drink price will be $12.00.
To complement the primary revenue center of the business, the Company will also offer a limited selection of food options to complement its beverage menu. For these operations, the Company anticipates that will generate contribution margins of 70%.
Unique nighttime entertainment and musical acts will be one of the key focuses of the bar’s operation. Management will work with numerous regional talent agencies to place musical acts for weekend evenings.
4.0 Overview of the Organization
4.1 Registered Name
Bar LLC. The Company is registered as a limited liability company in the state of South Dakota South Dakota.
4.2 Commencement of Operations
Manage expects at the bar will launch operations in the fourth quarter of this year.
4.3 Mission Statement
To provide exceptional nighttime entertainment in a wide range of beverages to the general public.
4.4 Vision Statement
To operate as the preeminent bar venue within Meade County.
4.5 Organizational Objectives
• Properly establish the bar location once the funding has been secured.
• Development number of signature cocktails that will provide a significant differentiating factor for the business.
• Established ongoing relationships with talent agencies so that nighttime entertainment can be provided.
• Engage in a wide-ranging marketing campaign in order to drive traffic to the bar location.
• Potentially establish additional locations after the fifth year of operation.
• Adhere to all laws and regulatory frameworks regarding the operations of the bar on a day-to-day basis.
• Provides stable and upwardly mobile employment opportunities for bartenders, barbacks, and administrative staff.
5.0 Market and Industry Analysis
5.1 External Environmental Analysis
This section of the bar business plan will focus on the industry, the current economic climate, the competition, and a demographic profile.
At this time, economic climate in the United States is moderate. As a result of complex changes to trade policy, there has been a significant degree of inflation introduced to the economy. The appropriate federal government agencies are making adjustments to their fiscal policy to ensure that the economy continues to grow.
Bars remain as a popular nighttime entertainment destination. The business will generate substantial contribution margins from the sale of beverages as well as small food items. This will significantly contribute to the economic stability of the business.
5.2 Industry Analysis
As of this year, there are 66,000 bars and nightclubs that operate for the United States. These businesses currently generate $81 billion of revenue per year. The ongoing growth rate of the industry is expected to be similar to that the economy as a whole.
5.3 Customer Profile
Any individual that is over the age of 21 as a potential customer for the bar. Given the unique ambience that is being provided, it expects that most patrons will be between the ages of 25 to 50. These individuals will have a household income exceeding $65,000.
5.4 Competitive Analysis
The ongoing competition at the business face is modest. Most importantly, the unique ambience coupled with the wide range of signature cocktails will provide a significant differentiating factor for the business. The Company will implement numerous marketing messages that speaks to its higher end nature.
6.0 Key Strategic Issues
6.1 Sustainable Operations
The Bar will have sustainable operations as a result of the following:
• Efficient support for managing the day-to-day operations of the business.
• Limited competition among bars that operate with a higher end ambience.
• The Company will generate substantial contribution margins on both alcohol and food sales.
• The businesses musical entertainment will provide a significant different factor.
6.2 Basis of Growth
The Company will expand via the following methods:
• Continued expansion of Company’s marking campaigns.
• Establish ongoing relationships with agencies so that new musical entertainment can be sourced on an ongoing basis.
• Expansion that Company’s ability to host private events.
7.0 Marketing Plan
7.1 Marketing Objectives
• Properly implement a wide ranging grand opening campaign during the time that the bar is being developed.
• Launch an expensive online presence that showcases all aspects of the bar.
• Continue to operate as a community minded business in order to further increase the brand profile.
7.2 Revenue Forecasts
7.3 Revenue Assumptions
Year 1
• First year revenue will reach $1.02 million.
• Gross profits from all revenue centers will reach $752,000.
Year 2
• Revenue will reach $1.09 million.
• Gross profits will reach $805,000.
Years 3-5
• In year 5, the bar will generate $1.3 million.
• Gross profits will reach $986,000.
7.4 Marketing Strategies
The Company will use numerous marketing strategies in order to drive significant traffic to the bar on a day-to-day basis. Most importantly, the Company will implement a wide-ranging pre-launch marketing campaign that showcases every aspect of the bar’s operations. This will include establishing the Company’s online presence during the development phase. Numerous photos and videos of the development of the location will be posted during this time.
The Company will maintain an expansive online presence that is search engine optimized for Meade County. This will include reservation functionality for very busy evenings. The website will also showcase musical acts that will be performing at the bar location on an ongoing basis. This will ensure that a significant amount of traffic is driven to the location during weekend.
Use of social media is also a significant importance to the Company. Similar to the website, the Company’s online presence will be established throughout the development phase. The Company will frequently post information about new signature cocktails, musical events, community events, as well as other social gatherings at the bar.
Prior to the launch of operations, the Company will distribute flyers with a 10-mile radius of the bar’s location. This will further drive brand visibility during the grand opening phase.
8.0 Organizational Plan
8.1 Organizational Hierarchy
8.2 Personnel Costs
9.0 Financial Plan
9.1 Underlying Assumptions
• The Bar will have a compounded annual growth rate of 8%.
• Management will contribute $100,000 towards venture.
• The Company will secure $525,000 to establish operations.
9.2 Financial Highlights
• The Company will achieve contribution margins of 85% on all beverage sales.
• Food sales at the bar will generate contribution margins of 70%.
9.3 Sensitivity Analysis
Even during challenging economic climates, there is a significant demand for access to reasonably priced nighttime entertainment. The Company will be located in a population dense market, which will further contribute to the economic stability of the business. The Company will generate significant contribution margins on all aspects of its operation.
9.4 Source of Funds
9.5 Financial Proformas
A) Profit and Loss Statement
B) Common Size Income Statement
C) Cash Flow Analysis
D) Balance Sheet
9.6 Breakeven Analysis
9.7 Business Ratios
Appendix A – SWOT Analysis
Strengths
• Strong demand among Meade County residents for nighttime entertainment venues.
• The Company will be able to scale operations in the coming years to increase marketing.
• Numerous musical acts will provide ability to have repeat patronage.
Weaknesses
• Operational complexity is as this is a bar and food service business.
• The Company has to operate during evening hours.
Opportunities
• Potential development of additional locations in South Dakota.
• Expansion of private event hosting as this can create significant profits.
• Continued expansion Company’s marketing operations.
Threats
• An extremely severe economic recession could impact demand.
Appendix B – Risk Analysis
Development Risk – Low
Management has already sourced the location that be used to house the operations of this bar. The primary matter that needs to be addressed to secure the funding discussed in this document.
Financing Risk – Low/Moderate
The $525,000 of capital will be principally used for the buildout as well as equipment. The risk related financing or offset by the substantial contribution more generated from all aspects of operation.
Marketing Risk – Low
The Company will use and expand upon the pre-launch marketing campaigns discussed in seventh section of this document. Given the strong demand for bars and nighttime entertainment venues, the Company will be able to effectively showcase the high in nature of this location.
Management Risk – Low
The Founder is an experienced entrepreneur who will be able to properly established the operations of this bar.
Valuation Risk – Low
The valuation risk is offset by:
• Significant contribution margins on all revenue.
• Limited economic risks.
Exit Risk – Low
As noted earlier, a qualified business broker would be hired to manage the sale of the bar to a third-party. This event is not expected to occur for a significant period of time.