1.0 Executive Summary
Matt’s Jazz Room LLC (“the Company”) will provide a wide range of nighttime entertainment with a focus on live jazz music and related musical events at its location in Miami, Florida. The Company was founded this year by Matthew Deutsch. Full scale revenue generating operations are expected to commence in the second quarter of next year once the build out of the location is completed. At this time, Management is seeking a $250,000 investment in order to commence operations.
Operations
In order to provide patrons with a unique experience, the Company will work with numerous jazz musicians throughout the greater Miami metropolitan area. The business will also host noted musicians that have national level notoriety. The ambience of the location will be conducive to enjoyment of music. It will feature a relaxing atmosphere as well as a full bar.
In regards to revenue generating operations, the Company will principally produce its revenue from the sales of beverages. The business will have full licensure in place so that beer, wine, and cocktails can be served.
To complement these operations, the business will serve light fare including sandwiches, salads, and small plates.
This third section of this jazz club business plan further discuss operations.
The Financing
The $250,000 a capital so in this document will be principally used for the build out of location, furniture, fixtures, equipment, as well as working capital. The risks related to this financing are offset by the substantial contribution margins of the Company will produce from entry fees as well as sales of beverages and food.
Moving forward, the Company could secure ongoing capital if additional locations are going to be developed in the greater South Florida market area. This document assumes that the business will not acquire any additional funding during the first five years of operations.
The Future
One of the most important aspects of the Company’s growth operations will be to continually source noted jazz musicians and musical groups that will perform at Matt’s Jazz Room’s location. The Company will work with booking agencies throughout the country in order to source ongoing entertainment.
Market Overview
Revenue Forecasts
2.0 The Financing
2.1 Funds Required
The funding discussed in the executive summary will be used for the following:
2.2 Management and Investor Equity
On a preliminary basis, Matthew Deutsch tends to sell a 50% ownership interest in Matt’s Jazz Room in exchange for the funding sought in this document.
2.3 Exit Strategies
Given the substantial contribution margins and profitability of this business, the Company could easily be sold to a third-party for a significant profit. If this event is financially prudent to do so, the Company will retain a qualified business broker that has a specialization in nighttime entertainment businesses. Based on the expected profitability of the business, Matt’s Jazz Room could have a valuation of $1.2 million by the fifth year of operation.
3.0 Operations
The ambience of Matt’s Jazz Room will be that of a classic jazz club that would have been found in the 1930s in 1940s in New York City. This unique ambience will create a major draw the location, especially among people that have an extensive interest in jazz music.
As noted in the executive summary, the Company will work with a number of talent agencies that will provide ongoing bookings for well-regarded jazz musicians that are not only based in Miami, but also on a national basis as well. As this is a niche form of live music, the Company will be able to source numerous musicians, which will draw substantial patronage to the location.
The company will maintain a full bar so that beer, wine, and signature cocktails can be created. The business will employ a mixologist so that jazz themed cocktails can be offered to patrons. These operations will also span small plates. The Company’s executive chef will create unique and seasonal menus of small plates in order to also foster repeat customer base.
4.0 Overview of the Organization
4.1 Registered Name
Matt’s Jazz Room LLC. The business is registered as a limited liability company in the State of Florida.
4.2 Commencement of Operations
Revenue generating operations will commence in the second quarter of next year.
4.3 Mission Statement
To provide an exceptional jazz club experience to patrons within Miami.
4.4 Vision Statement
To become widely respected jazz club that is considered to be a cultural institution within the South Florida market area.
4.5 Organizational Objectives
• Maintain ongoing relationships with national and regional level talent agencies for jazz musician bookings.
• Adhere to all laws and regulations regarding the operations of the nighttime entertainment venue.
• Implement a wide-ranging marketing campaign so that Matt’s Jazz Room becomes the preeminent jazz club in the South Florida area.
• Potentially implementing membership driven program, which would create recurring revenue for the business.
• Continually create new marketing campaigns that will drive new customers to the location on ongoing basis.
• Continually add new items to the Company’s food and beverage menu to drive ongoing patronage.
5.0 Market and Industry Analysis
5.1 External Environmental Analysis
This section of the jazz club business plan will focus on the industry, the competition of the business will face, the current economic climate, and the demographic profile.
Currently, the United States is experiencing a high inflationary rate. This has been principally due to the fact of changing trade policies have caused the cost of imported products to increase. It should be noted that the Federal Reserve has recently lowered the overnight interest rate in order to address these issues while ensuring that employment remains stable.
However, Matt’s Jazz Room will operate as a unique nighttime entertainment venue within the South Florida market. There is an immense demand for these types of facilities given a large population base as well as the substantial amount of tourist traffic that comes to the South Florida area. The Company will generate substantial contribution margins on all revenue streams.
5.2 Industry Analysis
There are 70,000 companies that provide nighttime entertainment to the general public. These businesses produce $40 billion of revenue while providing jobs for 500,000 people.
One of the major trends within this industry is provided unique forms of nighttime entertainment, such as jazz music. Matt’s Jazz Room will capitalize on this demand by continually sourcing nationally noted talent within the field of jazz.
5.3 Customer Profile
Management will use the following profile during the course of marketing Matt’s Jazz Room to the general public:
• Household income of $50,000 to $125,000+
• Has an extensive interest in live jazz music
• Will spend $30 per visit (per person)
• Lives within 15 miles of the Matt’s Jazz Room location
5.4 Competitive Analysis
This jazz club will face modest competition as a establish its operations in Miami and South Florida. Most importantly, the Company intends to develop its operations as a cultural institution for all things related to jazz. This will create an immense different factor for the business as it develops and expands its operations in the coming years.
6.0 Key Strategic Issues
6.1 Sustainable Operations
Matt’s Jazz Room will have sustainable operations as a result of the following:
• The Company is providing a unique service proposition in regards to its nighttime entertainment operations.
• The Company will use multiple forms of marketing in order to properly brand Matt’s Jazz Room as a cultural institution.
• The ability to provide exceptional fare coupled with an extensive beverage venue will create a strong differentiating factor.
• Limited competition with South Florida among companies that operate in a jazz club capacity.
6.2 Basis of Growth
The Company will expand via the following methods:
• Potential development of additional locations within the South Florida market area.
• Implementation of a membership program among major fans of jazz music.
• Continued expansion of the number of prominent musical acts that perform at the location.
7.0 Marketing Plan
7.1 Marketing Objectives
• Prior to the onset of operations, established ongoing relationships with major talent agencies that will have their represented acts perform at Matt’s Jazz Room.
• Implement a wide-ranging online marketing campaign so that the business can be quickly found within the South Florida market.
• Conduct extensive direct outreach with noted music journalist sin Miami that will write articles about the Matt’s Jazz Room location.
7.2 Revenue Forecasts
7.3 Revenue Assumptions
Year 1
• The Company will launch operations in the second quarter of next year.
• Revenue in year one will reach $978,000.
Year 2
• Revenue will reach $1.08 million in the second year of operation.
• The Company’s top line income will increase by 11%/
Years 3-5
• Total income will reach $1.4 million in Year 5.
• Gross profits will reach $1.01 million.
7.4 Marketing Strategies
The Company intends to use a number of marketing strategies that will create significant brand-name awareness in the coming years. Most importantly, the Company intends to work extensively with regional and national level talent agencies that will book their represented acts at the location. On the Company’s website, the business will maintain and showcase a full schedule of all performers at Matt’s Jazz Room. Given the notoriety of the Company’s performers, the business will be able to leverage this as it develops and expands its operations.
As it relates to the Company’s website, this will be a highly interactive platform that showcases do unique ambience, as well as the wide range of jazz music that can be enjoyed at the venue. This website will undergo search engine optimization. Updates the website will occur on a weekly basis with new information about acts that will be performing at the location.
The Company will also maintain a presence on all social media platforms. Ongoing information about upcoming performances will be distributed through these platforms. Additionally, promotion of special programs such as the Company’s membership operations will be heavily promoted to these platforms as well.
The Company also intends to foster ongoing relationship relationships with music journalists that are based in Miami and the greater South Florida area. This will allow for articles to be written about the business, especially as it positions itself as a jazz focused cultural institution within this market.
Management will also conduct direct outreach with real estate brokers and agents in this market as these individuals can provide referrals to new residents that are seeking unique nighttime entertainment venues.
8.0 Organizational Plan
8.1 Organizational Hierarchy
8.2 Personnel Costs
9.0 Financial Plan
9.1 Underlying Assumptions
• The Company will acquire $250,000 of investment capitals establish operations.
• Matt’s Jazz Room will achieve a compounded annual growth rate of 11%.
• The business will achieve gross profits of 68.5% aggregately.
9.2 Financial Highlights
• Substantial revenues generated from multiple income centers.
• The Company will generate immense revenues from ticket sales.
9.3 Sensitivity Analysis
Given the significant population density of Miami, any potential economic recession would only have a modest impact on their Company’s ability to remain profitable. Additionally, this is a highly tourist traffic area that receives tens of millions of visitors on a yearly basis. There is a significant amount of demand for unique jazz clubs in this market. This, coupled with the numerous revenue streams showcased in this document, will ensure that Matt’s Jazz Room is able to remain profitable at all times.
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
• Given the scope and scale of the Company’s planned facilities, the business will face very little issues related to competition.
• The business will provide a unique menu of jazz inspired beverages and small plates which carries significant contribution versions.
• The Company will work with national level talent companies so that the business can provide premium jazz music entertainment.
• A highly experienced Founder, Matthew Deutsch, it has a decade of experience managing nighttime entertainment venues.
Weaknesses
• Operational complexities given that this is a nighttime entertainment business with multiple facets of operation.
• Moderately high cost related to marketing and talent sourcing.
Opportunities
• Continued to expansion of the number of relationships at the Company maintains with talent agencies so that well regarded jazz musicians will perform on site.
• Potential development of additional locations, which would not occur until after the fifth year of operations.
Threats
• Ongoing and significant issues with inflation could cause the Company’s food and beverage cost to increase.
Appendix B – Risk Analysis
Development Risk – Low
The service model that will be employed by Matt’s Jazz Room has already been developed by Matthew Deutsch. The principal matter that needs to be addressed is acquiring in the capital discussed in this document.
Financing Risk – Low/Moderate
The $250,000 discussed throughout this jazz club business plan will be used for the buildout of the location. The risk related to this investment or invaded by the multiple revenue streams that Matt’s Jazz Room will have.
Marketing Risk – Low
As noted earlier, a major portion of the Company’s marketing operations will focus on the fact that noted jazz musicians will be performing at the venue. It will allow for substantial leverage of the Company’s online marketing campaigns in the coming years.
Management Risk – Low
Matthew Deutsch is a highly regarded nighttime entertainment venue entrepreneur who has developed the concept for Matt’s Jazz Room over the next twelve months. He will be able to effectively bring the business to profitability while positioning Matt’s Jazz Room as a cultural institution regarding jazz in South Florida.
Valuation Risk – Low
The valuation risk is offset by:
• Multiple forms of high margin revenue.
• The potential to implement a membership driven program.
• The business will establish a widely respected brand name in South Florida.
Exit Risk – Low
The sale of the business would not occur for a significant period of time. Matthew Deutsch and intends to develop this business for a period of many years prior to potentially selling the Company. In this event, qualified business sales professionals will be hired to assist in managing the sale.
The Jazz Club Business Planning Process
Jazz clubs have enjoyed ongoing popularity over the past 70 years. It is a unique form of music that has found a wide audience in the United States. As such, a number of jazz clubs continue to be developed in order to provide live musical entertainment and access to premium nightlife services. These businesses enjoy a mix of revenue, not only from the sale of admission fees for events but also from bar service.
The first step in creating a jazz club business plan is to complete the market research. Given the unique nature of these businesses, there are usually only a handful of competing enterprises within any target market area. The vast majority of competing businesses are entertainment companies that provide substitutive services such as nightclubs, sports bars, and other types of nighttime entertainment venues. As part of the analysis that we conduct, we always examine the median household income, median home price to determine area wealth, age demographics, population density, as well as reviewing employment statistics for the target market area. This allows us to understand the size of the market, which we then apply national level statistics to determine the number of people that have an interest in attending a jazz club.
We always develop assumptions driven financial models in the business plans that we create. Using the information that we produced from market research, we then developed the full-scale jazz club financial model. This includes a profit and loss statement, cash flow analysis, balance sheet, business ratios, and breakeven analysis. We also include information about the use of capital and how will be allocated to establish the operations of the jazz club.
We then move into developing the jazz club marketing plan. Here, we focus on the extensive use of online marketing strategies in order to promote certain jazz artists that will be performing at the location. It should be noted that one of the benefits of operating this type of venue is that the artist will concurrently promote their attendance at the venue. This significantly reduces the ongoing marketing cost associated with the business over the long run. We also extensively discuss the use of search engine optimization, targeted social media, video marketing, mailed advertisements, and ongoing relationships with touring management companies.
The fourth phase of the business plan development process is the writing of the jazz club operating plan. Here, we discuss the hours of operation, how jazz artists will be sourced to play at the location, human resources matter, as well as regulatory compliance for operating this type of enterprise.
Our business plans also always include a SWOT analysis. This is an overview of the strengths, weaknesses, opportunities, and threats that are faced by jazz clubs. For strengths, these businesses are able to produce significantly high contribution margins from admission fees, special event fees, and bar sales. For weaknesses, these businesses can be impacted by a severe economic recession, and they also have moderately high operating costs related to advertising in payroll. As it relates to opportunities, the company can work with established entertainment firms in order to place high visibility jazz artists to perform. For threats, this is relatively minimal for a jazz club, although there can be competitive issues that occur.
We also address certain ongoing risks associated with the business, which include general operational risks, well also discussing the pre-launch marketing risk and a need for having a very large scale marketing plan in place in order to create brand visibility.
Now that all the primary chapters of business plan are completed, we then move into developing the executive summary. Here, we discussed the operations of the jazz club, the target market area, the experience of the founder, noted jazz musicians that are expected to play at the facility, and providing an overall snapshot of the anticipated revenue and profit of the business over five year timeframe.