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Restaurant Sample Business Plan

This sample business plan will provide you with the ideal guidelines for opening up a Mediterranean restaurant.

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Restaurant Business Plan

Executive Summary

On the Water is a new Mediterranean restaurant on the Sunset Strip. On the Water will target both fun-seeking as well as sophisticated diners looking for good food in a fascinating atmosphere. On the Water will seek to earn 85% gross margins through an innovative setting, a wonderful menu, and an experienced restaurateur.

The Market

On the Water will be targeting locals and tourists who are active restaurant seekers. There will be a special focus on young adults with $15K-$60K of income looking for good food and a great time. In addition to the young adults with money to spend, On the Water will also be targeting adults and tourists known to frequent Sunset Blvd. The general demographics are males and females ages 20-50 with some or all of a college education. In addition to local Hollywood area people, On the Water will also serve party animals from neighboring cities and tourists.

Historically, if there is a dip in the general economy, the restaurant industry is usually effected far less that the overall economy. To some degree this is because of people’s perception that food, regardless whether it is from the grocery or a restaurant is a fundamental necessity of life and spend accordingly.

The Service and Products

One thing that is always consistent with On the Water is their impeccable service. All server staff hired have extensive experience and all go through three weeks of training, ensuring benchmarked customer service. On the Water’s services are all delivered in their extraordinary atmosphere which includes a comprehensive art and culture collection from Mediterranean Europe. This provides an authentic surrounding that at times seems to distract everyone as they analyze the wealth of artifacts on display.

The menu is Lily Valdivia’s pride. It is a culmination of over 20 years of cooking. The menu contains traditional favorites such as hummus, baba ganouj, and tabouli. These favorites are differentiated through the use of the freshest organic ingredients. Most people are not aware of how much better the items taste when they are prepared with the freshest ingredients and made with love. Other menu items are kebobs, chutneys, flat breads and desserts. Everything is fresh, homemade, and prepared daily.

Management
The restaurant is led by Lily Valdivia, an industry veteran. Her restaurant experience began 12 years ago as a server. She quickly moved up to fine dining serving where she perfected her formal, customer-centric serving approach. For the last five years Lily has been the manager at a European restaurant with over $2.5 million in annual sales. As mentioned earlier, Lily started cooking 20 years ago as a child in Greece. Lily came from a large family and it quickly became her responsibility to cook for the entire family. Her mother, who had three generations of traditional recipes, trained her. Lily quickly mastered these and began experimenting with her own dishes. The feedback from her family was always very positive. She knew one day she would have to parlay this skill into a business opportunity.

On the Water is forecasted to reach profitability by month two. Sales are forecasted to reach $1,785,000 by year two and grow to $2,345,000 by year three. We forecast a high net profit on these sales.

1.1 Objectives

  • Sales increasing to more than $2,345,000 by the third year.
  • Keeping gross margin at approximately 80%.
  • Improve inventory turnover to two-hundred turns next year in year two, and to 240 in year three.

1.2 Mission

On The Water is a business that envelopes fine dining of unique mediterranean taste and an excellent bar and grill atmosphere. The mission is not only to have great tasting food, but have efficient and friendly service. Our dining environment is not only welcoming and sophisticated, it is unique in design, with walls on almost all sides that are constantly wet with running water and a lush jungle ceiling that will hang from above. We concentrate on customer satisfaction and quality food that is always fresh and specially selected. We will not judge a customer on class or dress. We want the On The Water grill to be place people can enjoy a good meal and meet new friends at our tropical Mediterranean Honey bar located inside the restaurant.

Company Summary

On The Water creates and serves a wild atmosphere for dining and eloquent mediterranean feasts for people who love the restaurant and bar scene, as well as a good time spent out on the town. Its customers are creative, fun-seeking, and sophisticated diners who wish to be best served by the restaurant they choose.

2.1 Company Ownership

On The Water is a sole-proprietorship business owned in majority by its founder and president Lily Valdivia. The business employs the owner, one investor and eight employees.

2.2 Start-up Summary

Our start-up expenses come to $61,450 which is mostly expensed equipment, rent, and legal and consulting costs associated with opening our first restaurant. We also require $69,000 of start-up assets, which includes $22,000 cash and $45,000 of long-term assets. The start-up costs are to be financed some by direct owner investment, as well as with the help of a major investor.

Products and Services

On The Water provides delicious mediterranean cuisine, with friendly, efficient service and atmosphere. We are especially focused on providing a unique environment for people to dine and meet. We have a full Mediterranean Honey bar for young adults and adults to enjoy drinks and music. We also provide the value of flawless and creative staff at a “hip” location located on Sunset Strip with valet included.

Market Analysis Summary

On The Water focuses on local and tourist active restaurant seekers, with special focus on young adults with a $20-30,000/year income and a desire for good food and a fascinating atmosphere as our target market.

4.1 Market Segmentation

Our target market segmentation is divided between young restaurant seekers with money to spend, as well as other adults and tourists who are known to frequent Sunset Blvd. for recreational enjoyment. Defining the high-end crowd is difficult because most of Sunset Strip goers are such.

We generally know the characteristics of our clientele with our available demographics of the area, our personal crowd would consist of young adults (ages 20-29) and adults (ages 30-50), both male and female, usually at least one year of college if not already fully graduated. Our geographics include people from the local Hollywood area, party animals from other neighboring cities, and tourists from other states and countries. The psychographics of our clientele include “yuppies, big spenders, club hoppers, baby boomers, Sunset rats, etc…”  The buying patterns of our clientele will be people who like to spend money on pampering themselves, on quality food, feeling special, projecting an image of wealth, trying new things, and thrill seeking.

4.2 Target Market Segment Strategy

On The Water will focus on attracting young adults and adults ages 20-55, with an annual income of at least $15,000 to $60,000. We will concentrate on the high-end spenders who enjoy new restaurants, eating out, a fun atmosphere, and high-end food and service. We want the yuppies, baby boomers, high-end clubbers, tourists with money, wealthy image seekers and compulsive spenders. We focus on these specific groups because these are the types of people who frequent other clubs and restaurants like ours on Sunset Blvd. They are the ones that are willing to spend their money on good dining and service at high prices.

We generally know the characteristics of our clientele with our available demographics of the area, our personal crowd would consist of young adults and adults ages 20-55, both male and female, usually at least one year of college if not already fully graduated. Our geographics include people from the local Hollywood area, party animals from other neighboring cities, and tourists from other states and countries. The psychographics of our clientele include “yuppies, big spenders, club hoppers, baby boomers, Sunset rats, etc…”  The buying patterns of our clientele will be people who like to spend money on pampering themselves, on quality food, feeling special, projecting an image of wealth, trying new things, and thrill seeking.

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Restaurants & Bars

Nightclub Sample Business Plan Sample

If you are looking into starting a nightclub then this sample business plan is a great guide.

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If you are looking into starting a nightclub then this sample business plan is a great guide. Use this example to compile your own.

1Executive Summary

The Nightclub will be the premier, high-energy, themed dance and nightclub in Waldport, Your State. Our goal is to remain a step ahead of our competition through an exemplary service provision. We expect our guests to have more fun during their leisure time. We will provide more video and electronic technology per square footage than anyone else in the region.

A simple, yet unique, themed menu and atmosphere will create a sense of ‘belonging’ for locals and tourists alike. Our operating credo is: “happy enthusiastic employees create happy enthusiastic guests.”

Download: Free Business Plan Template Download

The main objectives of the development of this new venue are:

  • Capitalise on excellent location opportunity with swift commitment to the new Town Square development.
  • To launch the venue with a highly publicised grand opening event in the summer of Year 1.
  • To maintain tight control of costs, operations, and cash flow through diligent management and automated computer control.
  • To maintain a food cost below 33% of food revenue.
  • To maintain a total beverage cost below 25% of beverage revenue.
  • To exceed $3 million in annual sales by the fourth year of plan implementation.

The keys to success in achieving our goals are:

  • Provide exceptional service that leaves an impression.
  • Consistent entertainment atmosphere and product quality.
  • Managing our internal finances and cash flow to enable upward capital growth.
  • Strict control of all costs, at all times, without exception.

2Company Summary

nightclub-business-advice

The key elements of The Nightclub’s concept are as follows:

      • Entertainment and dance based themes – The company will focus on themes that have mass appeal.
      • Distinctive design features – The Nightclub will be characterised by the elaborate dance club situated in a spectator setting which comfortably accommodates 350 guests. The area will also offer three private sky boxes which can be combined for use in a conference or private party setting. This room is intended for special events and daily use. The adjoining dining room and bar would present an inviting and relaxing atmosphere, which displays a collection of musical and dance memorabilia. A live dj will coordinate the events and entertain the patrons with music and games during music breaks and off-times.
      • Location, location, location – One of the major advantages that The Nightclub will have over its competition will be its location in the new, high-profile Your Town Centre.
      • Gaming – The Nightclub will provide several interactive style video games and pool tables to provide for both additional entertainment and revenue.
      • Quality food – All would be lost without special attention being paid to the level of food quality. A simple menu offering foods similar to those found at a premier venue. Traditional ‘bar’ appetizers will be on hand for people craving nachos, wings, or quesadillas while they drink and enjoy themselves.
      • Exceptional service – In order to reach and maintain a unique image of quality, the Nightclub will provide attentive and friendly service through a high ratio of service personnel to customers, and will also invest in the training and supervision of its employees. We estimate nearly one service staff member for every 35 guests.

2.1 Start-up Summary

The company is seeking a loan for start-up purposes for a new entertainment venue in Waldport. Funds needed to accomplish goal referenced above will be $x.x million. The applicant will require the entire $x.x million to finish project build-out. We will utilise the anticipated loans in the amount of $x.x million to build out the approximate 10,000 square foot space and purchase equipment necessary for the start-up of a new nightclub venue. The following tables and charts illustrate the capital requirements.

2.2 Company Ownership

The Nightclub is a privately-held LLC, the details of which have not been solidified as of the date of this publication. The LLC consists of three principals DD, HK, BK. D D holds a BS in business administration from the The State University. He has held restaurant management positions for the PepsiCo Corporation.

He successfully opened and managed two nightclubs, and went on to open other operations including a sports bar. He is currently in his fifth year in the hotel industry, where he manages a successful sales department. HK holds a BA in Industrial Media Management, with a concentration in marketing.

She has held a financial analyst position with Lockheed Martin and L3 Communications for two years. BK has been managing a staff for eight years. He is currently in his fifth year in the automotive industry, where he is a successful finance manager.

Related: Where Your Business Is Located is Super Important


3Services

nightclub-business-services

The emergence of the Main Street area of Waldport represents a unique opportunity for a high-energy, dance-themed venue. The development’s central location, demographics, and lack of direct competition are major advantages to this project.

The proposed venue will provide a local solution to the lack of social atmosphere and live sports venues geared primarily toward the 21-35 age group in the Waldport area and will help keep late night entertainment expenditures within the localised region.

The new venue will specialise in high-energy themes, a quality video and gaming area, and will offer beer, wine and an array of liquors and mixed drinks. In addition, the venue will sell non-alcoholic beverages such as soft drinks, juices and bottled water.

A “casual” food menu consisting mostly of appetizers and small entrees ranging in cost from six to nine dollars will also be available. The initial hours of operation will be 11:00 P.M. to 2:00 A.M., four nights a week. The establishment will draw primarily from the Waldport market while attracting guests from the area’s other surrounding cities and towns.

Related: Free Job Description Template Download 


4Market Analysis Summary

nightclub-market-analysis-summary

The concept and management of the Nightclub has been well received, and has been offered key placement at the centre of Waldport’s new First & Main Town Centre development. This commercial centre spans 138 acres and promises an immediate primary trade population of 332,000 people with a secondary population of 164,000 people.

The Boulevard at the Avenue average daily traffic counts are currently 53,000, and will increase to 72,000 by 2003 following the Boulevard’s connection northward to I-25 in 2001. At the centre of the complex will be a 16-screen Cinemark and IMAX theatre opening March, 2000.

The Centre’s planners having met the Nightclub’s management and have reviewed the concept. They have indicated that the Nightclub is “exactly” what they were looking for and wish to place it directly in front of the theatre. The annual projected traffic for what Cinemark is calling their ‘flagship’ location is 1.4 million people, which exceeds their current Tinseltown location at the arena.

The Nightclub will be a 10,000 square foot unit, which will also house the company’s corporate business office. The dance club and bar will accommodate 750 people. With Waldport’s rapidly growing population, the variety of the Nightclub from across the country would create mass appeal for all of the Nightclub’s customers. The store will be equipped with state-of-the-art audio and video systems like none other found in Your City.

It will serve the need for a true nightclub in Waldport. The general appearance will be clean, open, and pleasing to the customer. The demographics are favourable, with minimal competition from other dance-themed venues and bars.

Related: How To Create A Marketing Strategy

4.1 Market Segmentation

We see The Nightclub as appealing to three major market segments. Fortunately, the long, late night hours of operation help The Nightclub lend itself to multiple segment appeal. Our market segmentation scheme allows some room for estimates and nonspecific definitions.

Childless Young Professionals – Due to our proximity to the IMAX and Cinemark theatres, we must appeal to single adults and young couples. Whether it is a group of friends or a couple out to see a movie together, these people need a place to eat/drink either before and/or after their movie.

These customers will range in age from 27 to 40. The Nightclub will appeal to this category by switching the tempo and entertainment to be more appealing to adults as it gets later into the evening. We also anticipate a 15% annual growth rate in tandem with the growth rate of Waldport and through increased popularity.

College Students – By creating an environment that is appealing to college students, we secure a natural progression between the high school student and the young professional. Through word of mouth, the Nightclub expects realise an increase of five percent annually from this segment.

Tourists and Business Travelers – More and more business and travelers and tourists are finding themselves in Waldport every year as is made evident by the increased demand and subsequent expansion of the local airport. We plan to reach these people through direct marketing to local hotel patrons. We anticipate a 20% annual growth rate in this segment. As our relationships grow with the local hotels, so too will the word of mouth recommendations from the hotel staff as well as the patronizing of our restaurant by their families. Our future plan is to publish a simple website in order to create awareness to any traveler who wants to take an advanced look at the club before their visit.

4.2 Target Market Segment Strategy

Our strategy is based on serving our niche markets exceptionally well. The nightclub enthusiast, the tourist and business traveler, the local nightclub crowd, the local service industry as well as groups going out together, can all enjoy The Nightclub experience.

The marketing strategy is essential to the main strategy:

  • Emphasise exceptional service.
  • Create awareness of The Nightclub’s unique features.
  • Focus on our target markets.

We must charge appropriately for the high-end, high-quality service and food that we offer. Our revenue structure has to match our cost structure, so the wages we pay and the training we provide to assure superior quality and service must be balanced by the fees we charge.

Part of the superior experience we offer is the simplicity o the menu items. While being unique, they are relatively inexpensive and easy to prepare. While a premium is appropriate for the experience, the pricing has to be balanced in accordance with what we are serving.

All menu items will be moderately priced. We expect an average guest expenditure of $12.50 for beverages and $7.50 for the percentage of our guests who choose to take advantage of our food menu. Our target customer spends more than the industry average for moderately priced establishments. This is due to our creating an atmosphere that encourages longer stays and more spending, while still allowing adequate table turns due to extended hours of appeal.

4.3 Service Business Analysis

High energy and dance themed venues have significantly impacted cities from coast to coast in the nineties. Los Angeles’ Hollywood, New York’s Times Square, and Seattle’s Pioneer Square are just a few examples. Entrancing their audiences with high-powered lights, sound, music, and interactive entertainment, these venues are still one of the highest cash flow businesses in the world.

Our localised studies have shown that the average person will spend three to four hours per weekend in this type of an environment and will spend an average of twenty to fifty dollars in that time frame. As we approach the new millennium, this trend shows no signs of declining.

The typical venue of our style is open from 8:00 P.M. to 2:00 A.M., and within this time frame, the venue can achieve gross revenues anywhere from $3,500 to $25,000, nightly. The primary sources of revenue in a venue of this type are high volume traffic, coupled with comparably nominal spending. In addition to alcohol revenues, we will also generate substantial revenues from food sales that can typically range from seven to ten dollars per person, and admission fees that range between five and ten dollars per admit.

Entertainment venues in the late 1980’s and 1990’s focused on high-energy light and sound, multiple source video screens, and participative events. This relatively simple concept is still quite popular today. However, these concepts have greatly evolved with society. In recent years this industry has become more sophisticated with the availability of new technology. Larger metropolitan areas have taken this technology to new heights with sound, lighting, video and interactive designs that create an exciting and memorable experience. Fortunately, no one in Your State area has been a pioneer in this specific segment of the industry as of the date of this report.

Additionally, the nightclub and bar industry is shifting towards a more entertainment-oriented concept. Guests of these venues are not only offered a dynamic place to gather and mingle, but also a place to participate in the entertainment through interactive contests, theme nights, and other events. We intend to heavily utilise entertainment-oriented marketing in an effort to withstand the perpetual shift in trends and cater to as large a client base as possible.

Nightclubs and other drinking establishments rely heavily on their primary suppliers. The primary suppliers are the various beverage distributors that provide the establishment with both alcoholic and non-alcoholic beverages. The alcoholic beverages (beer, wine, and liquor) are the primary sources of income in this industry. Other beverage suppliers also play a crucial role by providing non-alcoholic beverages. These are either served alone or mixed with alcohol.

In the area, all major brands of alcoholic beverages are available, in addition to several regional brands of beer. Initial research shows that the major distributors in the market have a high rating in both product availability and delivery.

4.3.1 Main Competitors

The Nightclub competition lies mainly with other casual facilities and less with conventional and chain entertainment establishments. We need to effectively compete with the widely held idea that you can’t get good service anymore, while maintaining the idea that being out can be a lot of fun. Our polling has indicated that consumers think of atmosphere, price, and quality respectively. Additionally, price was frequently mentioned by pointing out that if the former concerns are present then they are willing to pay more for the experience.

Our review of the market concludes that there are four entertainment venues that can be considered direct competition to the proposed new venue. We do realise that the proposed venue will also compete indirectly for every entertainment dollar spent in the Waldport area.

Related: Free Competitor Analysis Example

The main competitors of the Nightclub will be:

Club A
Hours of Operation: 5:00 P.M.-2:00 A.M.
Wednesday through Saturday
Capacity: 300
Wednesday College Night ($1 beers)

  • This nightclub appeals to a college crowd seeking cheap drinks.
  • The club is known for being dingy and dirty.

Bar B
Hours of Operation: 10:00 A.M.- 2:00 A.M.
Monday through Sunday
Capacity: 400
Thursday College/Ladies Nights

  • This club appeals to 25-35 year olds.
  • Pool and video games are central focus.
  • Dancing is pushed to the back of the club.

Grill C
Hours of Operation: 6:00 P.M.-2:00 A.M.
Wednesday through Saturday
Capacity: 250

  • This club’s target customer is 25 to 45 years old / middle class or above.
  • This club is known for its older, dressed up crowd and cramped space.

Club D
Hours of Operation: 11:00 A.M.-2:00 A.M.
Monday through Sunday
Capacity: 350

  • This club’s target customer is 25 to 45 years old.
  • This club is known for live jazz and blues entertainment and their draught beers.

4.3.2 Business Participants

The Nightclub will be part of the restaurant and bar industry, which includes several kinds of businesses:

  • Locally Operated Bars and Nightclubs – This genre usually appeals to the local neighbourhood clientele. This same client base dictates that the average price structure be drastically scaled down in order to create “regulars.”
  • Nightclub Entertainment Complexes – This type of complex represents the concept we will most closely compete with. They are typically placed in high traffic locations and are normally treated as destination entertainment. An admission charge is usually in place and the associated price structure is also most like our proposed structure. Thankfully there is not an abundance if this type of entertainment within our region.
  • Conventional Dining – Primarily owned by large national chains, usually less than 10,000 square feet, focused on serving good quality food in a reasonable amount of time in a dining room setting. The service and food quality are superior to that of a fast food establishment. People go there to eat and leave when they’re done eating since there’s rarely a reason to stay.
  • Formal Dining – Similar to conventional dining yet offering a higher quality of food and service for the added expense. As with the conventional dining facilities, there is little interaction and when people are done eating, they leave.
  • Casual Dining – Commonly building upon conventional dining with the addition of a bar, playing of music and sporting events on numerous televisions. Some establishments offer their own brand of beer made on the premises. The food quality and service are at best, similar to that found in a conventional dining experience.
  • Chain Entertainment – Typically manifested in each market through the Hard Rock Cafes, the Planet Hollywoods, etc. We expect to create an atmosphere that thrives on its trendy feel. These chain entertainment venues can not hope to draw the same “hip” clientele.

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Restaurants & Bars

Organic Restaurant Sample Business Plan

By using this sample plan you can read through some of the key elements that you can use in your own organic restaurant business plan.

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Organic Restaurant Business Plan

Executive Summary

This restaurant business plan is for Studio67, a new medium-sized restaurant located in a trendy neighborhood of Portland, Oregon. Studio67’s emphasis will be on organic and creative ethnic food. An emphasis on organic ingredients is based on Studio67’s dedication to sustainable development. Additionally, the restaurant procures local foods when possible, reducing their dependence on fossil fuels used for transportation.

Services
Studio67 offers Portlanders a trendy, fun place to have great food in a social environment. Chef Mario Langostino has a large repertoire of ethnic ingredients and recipes. Studio67 forecasts that the majority of purchases will be from the chef’s recommendations. Ethnic recipes will be used to provide the customers with a diverse, unusual menu. Chef Mario will also be emphasizing healthy dishes, recognizing the trend within the restaurant industry for the demand for healthy cuisine.

Customers
Studio67 believes that the market can be segmented into four distinct groups that it aims to target. The first group is the lonely rich which number 400,000 people. The second group that will be targeted is young happy customers which are growing at an annual rate of 8% with 150,000 potential customers. The third group is rich hippies who naturally desire organic foods as well as ethnic cuisine. The last group which is particularly interested in the menu’s healthy offerings is dieting women which number 350,000 in the Portland area.

Management

Studio67 has assembled a strong management team. Andrew Flounderson will be the general manager. Andrew has extensive management experience of organizations ranging from six to 45 people. Jane Flap will be responsible for all of the finance and accounting functions. Jane has seven years experience as an Arthur Andersen CPA. Jane’s financial control skills will be invaluable in keeping Studio67 on track and profitable. Lastly, Studio67 has chef Marion Langostino who will be responsible for the back-end production of the venture. Chef Mario has over 12 years of experience and is a published, visible fixture in the Portland community.

Most important to Studio67 is the financial success which will be achieved through strict financial controls. Additionally, success will be ensured by offering a high-quality service and extremely clean, non-greasy food with interesting twists. Studio67 does plan to raise menu rates as the restaurant gets more and more crowded, and to make sure that they are charging a premium for the feeling of being in the “in crowd.”

Objectives

  • Sales of $350K the first year, more than half a million the second.
  • Personnel costs less than $300K the first year, less than $400K the second year.
  • Profitable in year two, better than 7.5% profits on sales by year three.

Mission
Studio67 is a great place to eat, combining an intriguing atmosphere with excellent, interesting food that is also very good for the people who eat there. We want fair profit for the owners, and a rewarding place to work for the employees.

Company Summary

Studio67 is a single-unit, medium-sized restaurant. We focus on organic and creative food. The restaurant will be located in a prime neighborhood of Portland. Most important to us is our financial success, but we believe this will be achieved by offering high-quality service and extremely clean, non-greasy food with interesting twists.

Company Ownership

The restaurant will start out as a simple sole proprietorship, owned by its founders.

Start-up Summary

The founders of the company are Andrew Flounderson and his companion Jane Flap. Jane focuses on the financial issues and Andrew on the personnel issues. Jane earned her business major undergraduate degree from the University of Berkeley.

We have found the location and secured the lease for $2,000 per month. We will be able to set up shop in time to begin turning back a profit by the end of month eleven and be profitable in the second year. The place is already equipped as a restaurant so we plan to come up with a total of $40,000 in capital, plus a $100,000 SBA-guaranteed loan, to start up the company.

Services

The Menu
The menu is going to be extremely simple but changing every day. We will keep a small group of constants on the menu and then feature a chef’s recommendation that we plan to have 85% of meals ordering. This will help us to reduce waste and plan ingredients and purchasing.

Organic Ingredients

The organic ingredient element will allow us to price to the extremely wealthy Internet entrepreneurs who are looking to spend an exorbitant amount of money to have peace of mind that their money is still coming back to themselves. We will be extremely ecologically conscious as well, and spread this across our literature. Eating at Studio67 will feel like having contributed to the Sierra Club and drinking fresh squeezed orange juice.

Ethnic Ingredients and Recipes

Our chef will have great latitude in designing and producing menu offerings from many different world cultures. We will endeavor to procure all the traditional, authentic ingredients necessary to hold true to these varied and interesting cultural recipes.

Interior Accoutrements
People need to keep life interesting, and our artwork will reflect the world influences that are core to the attitude of the Studio67 chef.

Market Analysis Summary

Because of the founders’ connections within the very trendy area of Portland, we have an excellent feel for the area and its core group of customers. They will all share something alike, which is a feeling of being in the “in crowd” and having “gotten it” in life. Although the crew will be different and not connect with each other in each segment, each segment is complementary to the others. We do plan to raise menu rates as the restaurant gets more and more crowded, and to make sure we are charging a premium for the feeling of being in the “in crowd.”

Market Segmentation

The Lonely Rich
Most of the lonely rich are tech workers these days, and most of those tech workers are Internet workers. Their life has become their website servers and code they write, and the people who help them to make the decisions in that world. They hang out with each other, but desperately want to get away from it and use the money they are racking up. Because this wealth has come fairly easily for them, it is particularly easy to separate them from their money again – they spend the most on drinks, appetizers and tips.

Young Happy Couples
The restaurant will have an atmosphere that encourages people to bring dates and to have couples arrive. It won’t be awkward for others, and Studio67 does want to be a social place where people meet each other and develop a network. These young couples are generally very successful but balanced and won’t be spending as much on drinks.

The Rich Hippies
The rich hippies in Portland are a massive group with tremendous influence over the city’s government and private enterprise. They wear tie-die but drive BMWs and crave the feeling of being in a social circle that is changing the world – even if in different ways than in their glory days. We will cater to their ecological ideology and contribute to charities to help them part with more of their money.

Dieting Women
The organic food menu will always have a line of extremely delicious very low-fat meals. Studio67 will have tables of women meeting like they do in shows like Sex and the City, to discuss all types of matters while feeling good about the food they eat.

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Restaurants & Bars

Irish Pub Bar Business Plan

A sample business plan to show you how to start a traditional pub.

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Irish Pub Bar Business Plan

Executive Summary

Introduction
McKnight’s Pub has been a successful Irish bar in the heart of downtown Portland, Oregon for one hundred years. However, recently McKnight’s has seen a drop in its clientele due to the rise of microbreweries in the Portland area. In order to successfully compete with this new threat, McKnight’s objectives are to create its own microbrewery on-site and to offer superior kinds of beers than that of its new competitors.

The Company
McKnight’s Pub was established in 1902 by Walter McKnight and over the years has become a well known fixture of Portland. Two years ago, Charles McKnight sold the pub. The establishment is now a sole proprietorship owned and operated by Ian Davis. The company is licensed in Oregon.

McKnight’s Pub is located in one of the most outstanding downtown places in Portland as it is strategically located to attract the middle-class and upper middle-class working public during lunch and after quitting time. The building itself is one of the oldest still standing in Portland and has an old world style to it.

The Products
McKnight’s Pub offers a wide variety of spirits, from domestic and imported beers to hard alcohol with concentration on imports from Ireland. In addition, the pub offers a limited menu of light food and snacks, and specialty items for holidays.

Once the brewery begins production, we will concentrate on ale production including wheat beers, stouts, and porters as these include the more traditional types of Irish brews. We intend to initially start with five different types of beer, eventually increasing to ten. All brews will have a different brand name.

The Market
Over the past five years, McKnight’s has seen a declining trend in sales. Much of this is due to the rise of microbreweries in the Portland area. Many customers are taking advantage of the proliferation of beer varieties in the U.S. (due to changes in the law on alcohol production) by seeking establishments that have unique brew styles.

The market segmentation is divided into the leading target markets. The division reflects the differences in marketing strategy that will be used to target each different market.

Middle class, “white collar” office workers from the downtown area.
Late nighters and weekend partiers.

Brew Connoisseur
McKnight’s Pub exists in a highly competitive industry whose environment creates low margins due to the high amounts of pressure placed upon participants from customers, suppliers, other rivals, potential entrants, and substitute products. This has created a fragmented industry in which no one participant has significant market share.

Financial Considerations
Break-even analysis indicates that at the moment McKnight’s is close to dropping below its level to produce profits unless margins are increased or the number of customers is increased. In order to finance the changes and expansion needed, McKnight’s will secure a long-term loan of $390,000. This will keep initial growth slow and manageable, and will allow the management to maintain control. With the new expansion and the forecasted increase in clientele, McKnight’s will remain profitable and keep a positive cash flow.

1.1 Objectives

McKnight’s Pub has been a successful Irish bar in the heart of downtown Portland, Oregon for one hundred years. However, recently McKnight’s has seen a drop in its clientele due to the rise of microbreweries in the Portland area. In order to successfully compete with this new threat, McKnight’s objectives are to create its own microbrewery on-site and to offer superior kinds of beers than that of its new competitors.

1.2 Mission

In the past, McKnight’s (soon to be called McKnight’s Pub and Brewery) philosophy was to create an old world pub style atmosphere that attracted it high-end clientele and offered excellent customer service. With its new strategy to include a brewery, McKnight’s also plans to offer specialty in-house, local, and international brands of beer to attract a new type of customer, the brew connoisseur.

1.3 Keys to Success

To succeed McKnight’s must:

  • Implement a successful advertisement and marketing campaign to inform the existing clientele and the public of our new image.
  • Purchase new brewery equipment.
  • Retain the services of a reputable brewmaster.
  • Build brand image and brand equity through marketing.

Company Ownership

McKnight’s Pub was established in 1902 by Walter McKnight and over the years has become a well known fixture of Portland. This includes having articles published in various travel magazines such as Oregon Magazine and US Travels and recommended by Portland Online as one of the most popular drinking establishments in the city. Two years ago, Charles McKnight, Walter’s grandson, sold the pub, citing poor health and lowering profits. McKnight’s Pub is now a sole proprietorship owned and operated by Ian Davis. The company is licensed in Oregon.

2.1 Company Locations and Facilities

McKnight’s Pub is located at the corner of SE Salmon St and SE 19th Ave. approximately four blocks from Ladd’s Circle and within walking distance of the city’s business district. This is one of the most outstanding places for a pub in Portland as it is strategically located to attract the middle-class and upper middle-class working public during lunch and after quitting time.

The building itself is one of the oldest still standing in Portland and has an old world style to it. Presently the establishment can seat 96 customers. McKnight’s has secured the purchase of the adjacent storefront for its expansion, and with renovation, will have room for the brewery and another 24 persons. The current facilities, including two large bars and fireplace, kitchen, and plenty of room for darts, pool, and other amusements make this an excellent attraction.

Products

McKnight’s Pub offers a wide variety of spirits, concentrating on imports from Ireland such as Harps, Guiness, Erin’s Rock, Murphy’s Irish Stout, and Wild Irish Rouge on tap along with Baileys Irish Creme, St. Brendan’s and other liquors. In addition the Pub offers domestic and other imported beers by the bottles and a full bar for mixed drinks. In the back the pub has a small kitchen that offers a limited menu of such things as sandwiches, fish and chips, etc. For St. Patrick’s Day and other Irish holidays the pub offers traditional favorites such as Irish stew, leek and potato soup, and corned beef and cabbage.

Once the brewery begins production, we will concentrate on ale production including wheat beers, stouts, and porters as these include the more traditional types of Irish brews. We intend to initially start with five different types of beer, eventually increasing to ten. All brews will have a different brand name.

3.1 Sales Literature

Although McKnight’s has never printed or distributed sales literature by itself, it has certainly taken advantage of the various articles in the local paper and travel/entertainment magazines that have been written about the pub. With the change in focus to a pub and brewery, Mr. Davis, the owner, plans to insure that the press is made aware of the changes in the hopes that this will create additional articles and literature.

3.2 Sourcing

The Pub purchases large quantities of alcohol from local and regional distributors including Kitsap Distributors and Darian Beverages. Most of the inventories of food come from Portland Produce. McKnight’s receives discounts when certain volumes are purchased. The pub seeks to maintain good relations with its distributors in order to insure high-quality products are delivered on time. McKnight’s markup prices from that of wholesale generally runs between 15-20% depending on the drink or meal. Junkboxes, pool tables, and other amusements between are leased and serviced by the leasing company under existing contracts.

The new brewery equipment to be installed in March of 2003 will come from Key West Brewery Equipment. Much of this equipment will be secondhand, but all of it will be personally selected by our new brewmaster, Mark Hudson. Storage, kegging and bottling of our in-house brews will be done personally.

3.3 Technology

The pub as a whole is a relatively low-technology establishment in keeping with its old world personally. The establishment does use a computer to track inventory, sales and other crucial aspects of profitability. In addition there is an electronic cash register used to ring up sales.

Much of the brewing process done these days is computer controlled so as to insure that heat, pressure, fermentation, and other aspects of beer production stay constant and insure high quality. McKnight’s will be investing in two top of the line Pentium three computers plus all the necessary gauges for production.

3.4 Competitive Comparison

McKnight’s primary competitive advantages are its existing reputation, location, and high quality establishment with expensive and decorative exterior and interior that embraces the Irish motif.

3.5 Future Products

As stated earlier, McKnight’s is currently expanding its products by including a microbrewery establishment gauges. This includes installation of a mash kettle, fermentation tanks, agitators, pumps, heat exchanger, refrigeration unit, etc.

Mr. Davis plans to observe how sales of in-house microbrews develop to determine if there is a future market for bottling the pub’s homebrews for sale in the pub and in local beer stores.

At this time, Mr. Davis is also contemplating expanding the limited kitchen facilities so as to furnish a larger number of meals with greater variety. However, this expansion is not planned for the immediate future.

Market Analysis Summary

Over the past five years, McKnight’s has seen a declining trend in sales. While some of this is due to the lack of initiative on behalf of the old management, much of this is due to the rise of microbreweries in the Portland area. Many customers are taking advantage of the proliferation of beer varieties in the U.S. (due to changes in the law on alcohol production) by seeking establishments that have unique brew styles. In this day and age of massive fragmentation and proliferation of brew recipes, innovation and experimentation is the name of the game.

4.1 Market Segmentation

The market segmentation is divided into the leading target markets. The division reflects the differences in marketing strategy that will be used to target each different market.

  • Middle class, “white collar” office workers from the downtown area. These are people seeking to have a drink or some quick food during lunchtime and sometimes want to show out-of-towners some of the local highlights. In addition, the pub can expect to see these types of customers dropping in for some hours after work to unwind. The growth of this market segment as demonstrated in the Market Analysis table is based on the estimated growth of business establishments in the Portland downtown area.
  • Late nighters and weekend partiers. These are the folks that drop by and stay for many hours socializing and drinking. Growth of this segment is based on the estimated population growth of Portland itself.
  • Brew Connoisseur. These customers are a relatively new type to the American scene. Although there have been beer connoisseur all over since beer was invented, until recently government regulation was such that the industry was concentrated within a few national companies such as Anheuser Busch, Coors, etc. These companies had few product lines and sought to produce large amounts of beer over very short time periods. This made for an overall low quality of domestic beers available to Americans at reasonable prices. Since deregulation the industry has rapidly fragmented, allowing small brewers to compete against the larger established companies on a local and even national level. All this has inspired new connoisseur in brewing that has revolutionized the industry. With so many new types and brands of beer available, the customer that wants to try new types is being wooed by all industry participants.

4.2 Target Market Segment Strategy

McKnight’s Pub exists in a highly competitive industry whose environment creates low margins due to the high amounts of pressure placed upon participants from customers, suppliers, other rivals, potential entrants, and participants products. This has created a fragmented industry in which no one participant has significant market share.

Customers have an great deal of power and influence in this industry since there are virtually no switching costs.

Customers regularly go to more than one pub or bar to socialize and drink. In addition, while this pastime is very popular, the overall quality of the customer’s life is unaffected if they choose to forgo pursuing it.

Finally, even with the rise of microbreweries, many customers still find that most pubs have the products that they seek, making the pub visit itself undifferentiated.

Suppliers also have a great deal of power in relation to the pubs and taverns. Almost all suppliers are regional companies that have a wide variety of customers including grocery stores, liquor stores, restaurants, caterers, etc.

This means that any one customer of these distributors makes up a fraction of their sales and has little influence on their prices, quality and terms.

Furthermore, while these distributors often sell a wide variety of products such as produce, poultry and meat products, tobacco, and others, pubs and taverns are solely dependant upon the distributors for all their merchandise. The only real way to offset the distributor’s influence is to backward-integrate by brewing and marketing the alcohol itself.

The rivalry among other taverns, bars, pubs, etc. is especially intense. This is because there is a large number of them in the Portland area who are more or less equally balanced in terms of size, popularity, and resources.

Since industry growth is small, there is strong moves by all competitors to gain market share at the expense of others. The lack of a differentiated product or service by most pubs or taverns only makes this worse.

In this type of environment, each firm tries to cut prices, increase services and products and cut costs. This in turn creates retaliation among rivals and leads to lower profits.

There are relatively few barriers to entry in the pub/tavern industry, making the threat of new entrants to the market very real. The capital costs of starting up a bar or tavern are low and access to distribution channels is quite easy.

Where firms seek advantages is in gaining a favorable location, building brand equity through customer loyalty, creating a unique environment, or backward-integration by producing unique products. All this takes luck, persistence, and awareness of customer needs.

Finally, the existance of substitutes creates a great deal of pressure on pubs and taverns to attract and retain customers. Restaurants, breweries, and any other place where drinking and socializing goes on is a direct threat to McKnight’s and other rivals.

In addition, grocery and liquor stores that sell alcohol are an indirect threat that offers alternatives to potential customers. These substitutes, who often offer lower costs, decrease the overall potential of the pub and tavern industry as a whole.

4.2.1 Main Competitors

There are a wide variety of bars, restaurants, nightclubs and other direct and indirect competitors in the Portland area. Some of the closest in terms of location and quality include the following:

  • Columbia River Alehouse and Brewery. Columbia River offers the largest threat to McKnight’s as it has created an excellent reputation for its microbrews by retaining the services of Michael Evan, a former brewmaster for Henry Weinhards. Columbia River specializes in beers with lots of hops, such as hefeweisens. Furthermore the establishment has just had a very favorable article written about its cuisine in the Oregonian. Its separate bar has an established clientele that attracts the young college crowd.
  • Fitzgerald’s Sportsbar. This establishment is located only one block from McKnight’s Pub. It attracts a niche market of sports fans especially as it has widescreen TV’s and hosts parties during Portland Trailblazer games. During other times it attracts some of the customers that McKnight’s is targeting such as the late night crowd.
  • Argosy Brewery. Argosy is local brewery more oriented toward production and distribution of its premier lagers and stouts in the pacific northwest region. However, its tasting room has recently been expanded into a full-time pub and has gotten great reviews. Its location close to the waterfront draws a large crowd.

4.2.1.1 Market Growth

McKnight’s opens at 11 a.m. each day to catch the lunch crowd and closes at 2 a.m.. Revenues are quite variable in the short-term with the majority of sales occuring on the weekends between the hours of 8 p.m.-midnight. Seasonally, McKnight’s is usually more busy during the summer months due to the heat and with more people wishing to be outside during this time.

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