Our biggest savings of the year
The Spot
Executive Summary
Opportunity
Problem
It’s not the lights; it’s not the liquor; and it’s not the sound. It’s the people!
And its the FUN! Successful nightclubs are based on an accurate understanding of the core customers.
Solution
The spot will create a nightclub environment that satisfies the changing tastes and expectations of our core customers; i.e. college-age women. If the women come, the men will follow. In order to achieve this goal, we must constantly improve our response to the customers’ entertainment needs.
Market
The Spot will focus on college-age women who are looking for a high energy, fun nightclub environment to socialize and dance. Of course, we are also focused on college-age men but it has been our observation that the club scene is driven by where women choose to spend their money when they go out with friends. At present, none of the local bars create an environment that is responsive to the entertainment demands of this core customer group. This also extends to the areas surrounding the university that we expect will attract new customers to the Spot.
Competition
The current competition is not the point. We are refocusing the competition on having the club that attracts women, for good reasons. And we assume that the way things work will work in our favor when we do.
We can do competitive analysis in detail for due diligence. It doesn’t affect our plan.
Why Us?
The mission of the Spot is to create a nightclub environment that satisfies the changing tastes and expectations of our core customers; i.e. college-age women. If the women come, the men will follow. In order to achieve this goal, we must constantly improve our response to the customers’ entertainment needs.
Expectations
Forecast
Our forecast is clearly too profitable, for now. We will be doing annual reviews and we expect to have to revise expense budgets upward over time.
Financial Highlights by Year
Financing Needed
Each of the three principals will invest $70K, making a total of $210K owner investment.
Robert Shaw : $70,000
Jill Morse : $70,000
Sheila Thompson : $70,000
We will also need a line of credit to get through early months of negative balances.
Opportunity
Problem & Solution
Problem Worth Solving
It’s not the lights; it’s not the liquor; and it’s not the sound. It’s the people!
And its the FUN! Successful nightclubs are based on an accurate understanding of the core customers.
Our Solution
The Spot represents a unique opportunity create a high energy, dance-theme venue that will cater to college-age women. The development’s central location, demographics, and lack of direct competition are major advantages to this project. The new venue will specialize in high-energy themes and will offer beer, wine and an array of liquors and mixed drinks. In addition, the venue will sell nonalcoholic 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 6:00 P.M. to 2:00 A.M., four nights a week. The establishment will draw primarily from the student population at State University while attracting guests and visitors from outside the area as well.
Target Market
Market Size & Segments
The Spot will focus on college-age women who are looking for a high energy, fun nightclub environment to socialize and dance. Of course, we are also focused on college-age men but it has been our observation that the club scene is driven by where women choose to spend their money when they go out with friends. At present, none of the local bars create an environment that is responsive to the entertainment demands of this core customer group. This also extends to the areas surrounding the university that we expect will attract new customers to the Spot.
Our target market segmentation is divided between college-age women and men in and around the State University.
Keys to Success
Keys to success
Our keys to success are:
- Having a place where college-age women feel comfortable
- Provide exceptional service that leaves an impression with our core customers.
- 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
Execution
Marketing & Sales
Marketing Plan
Word of mouth, social media, followed by social media, and word of mouth.
Sales Plan
We will have a grand opening weekend where the cover charge will be waved for all women customers. We will then establish a traditional Ladies Night, every wednesday.
The cover charge will be $10. This is cheaper than the downtown clubs.
Our sales strategy is to open earlier and provide entertainment to bring in an early crowd before 10 P.M. Comedians and Comedy Acts will be booked into the early evening time slot. We will also have contests sponsored by businesses and products that are marketing to our core customers.
Operations
Locations & Facilities
Recently, commercial space has become available next to the campus when two adjacent business relocated. The Spot will consolidate this space into a 5,000 square foot night club. The location is on the main street most often used by students.
Milestones & Metrics
Key Metrics
Our Key Metrics are:
- Customer demographics: customers who are college-age women, as a percent of total customers.
- the cost of alcohol
- the cost of the dj
- the entrance fee: keep an eye on the bars and night life not making people pay more than other options.
- Facebook Promotions and page views. Facebook likes, Facebook engagement. Facebook reviews.
- Twitter: tweets and retweets telling what people think of the dj and place
- Google reviews
Company
Overview
Ownership & Structure
The management team is a strong one. Together we share a single vision: to provide a unique and entertaining experience through exceptional service.
Team
Management Team
Robert Shaw has a BS in business administration from State University. He successfully managed three bars over the past 10 years. He is currently in his fifth year as manager of Tom’s Landing, the most popular bar in the university area.
Jill Morse holds a BA in marketing. She has held a marketing positions with Nike and Sony before starting the Olympus nightclub with Sheila Thompson in 1996.
Sheila Thompson has a BS in business administration. Before co-owning the Olympus, Sheila managed two successful nightclubs, the Arena and the Power Plant, over a 10 year period.
Once opened, the Spot will have the exceptional management team to guide its success. The Spot’s three owners, Robert Shaw, Jill Morse, and Sheila Thompson, have over 25 years of night club management experience between them. Robert has been the manager of Tom’s Landing, the most popular bar in the university area, for the past five years. Jill and Sheila are co-owners of Olympus, a popular downtown night club that has dominated the city’s club scene for the past four years.
Personnel Table
| 2020 | 2021 | 2022 | |
|---|---|---|---|
| Manager | $60,000 | $61,200 | $62,424 |
| DJ | $38,400 | $39,168 | $39,951 |
| Cleaners (2) | $72,000 | $73,440 | $74,908 |
| Bartenders (2) | $72,000 | $73,440 | $74,908 |
| Cooks (2) | $84,000 | $85,680 | $87,394 |
| Servers (3) | $129,600 | $132,192 | $134,835 |
| Bus Boys (2) | $67,200 | $68,544 | $69,914 |
| Totals | $523,200 | $533,664 | $544,334 |
Financial Plan
Forecast
Key Assumptions
Our Key assumptions are:
- College kids like to go out and dance and drink
- They can pay some entrance fees but there is a threshold (ie too high)
- Our survival is based on popularity / the place to be. We keep key people happy and we will keep our club full.
Revenue by Month
Expenses by Month
Net Profit (or Loss) by Year
Financing
Use of Funds
Start-up expenses listed in retained earning december 2017:
Legal $2,000
Stationery etc. $500
Insurance $1,000
Rent $4,000
Interior Refit $30,000
Expensed Equipment $20,000
Air Cond. Upgrade $5,000
Audio/Lighting $10,000
Bar Equipment/Supply $10,000
Fees and Permits $7,000
Bathroom Upgrades $5,000
Initial Marketing $3,000
Opening Salaries Deposits $15,000
TOTAL START-UP EXPENSES$112,500
Sources of Funds
We will be getting $210,000 from the three co owners:
Robert Shaw $70,000
Jill Morse $70,000
Sheila Thompson $70,000
Statements
Projected Profit & Loss
| 2020 | 2021 | 2022 | |
|---|---|---|---|
| Revenue | $1,696,350 | $1,875,000 | $1,981,450 |
| Direct Costs | $562,590 | $612,360 | $642,579 |
| Gross Margin | $1,133,760 | $1,262,640 | $1,338,871 |
| Gross Margin % | 67% | 67% | 68% |
| Operating Expenses | |||
| Salaries & Wages | $523,200 | $533,664 | $544,334 |
| Employee Related Expenses | $104,640 | $106,733 | $108,867 |
| Rent | $48,000 | $48,000 | $48,000 |
| Utilities | $3,600 | $3,600 | $3,600 |
| Insurance | $12,000 | $12,000 | $12,000 |
| Leased Equipment | $36,000 | $36,000 | $36,000 |
| Sales | $14,400 | $14,400 | $14,400 |
| Marketing | $9,000 | $9,000 | $9,000 |
| Total Operating Expenses | $750,840 | $763,397 | $776,201 |
| Operating Income | $382,920 | $499,243 | $562,670 |
| Interest Incurred | $2,767 | $2,052 | $389 |
| Depreciation and Amortization | $2,857 | $2,857 | $2,857 |
| Gain or Loss from Sale of Assets | |||
| Income Taxes | $56,594 | $74,150 | $83,914 |
| Total Expenses | $1,375,648 | $1,454,816 | $1,505,940 |
| Net Profit | $320,702 | $420,184 | $475,510 |
| Net Profit/Sales | 19% | 22% | 24% |
Projected Balance Sheet
| Starting Balances | 2020 | 2021 | 2022 | |
|---|---|---|---|---|
| Cash | $77,500 | $310,295 | $680,490 | $1,149,490 |
| Accounts Receivable | $0 | $0 | $0 | |
| Inventory | $204,122 | $214,194 | $214,197 | |
| Other Current Assets | ||||
| Total Current Assets | $77,500 | $514,417 | $894,684 | $1,363,687 |
| Long-Term Assets | $20,000 | $20,000 | $20,000 | $20,000 |
| Accumulated Depreciation | ($2,857) | ($5,714) | ($8,571) | |
| Total Long-Term Assets | $20,000 | $17,143 | $14,286 | $11,429 |
| Total Assets | $97,500 | $531,559 | $908,969 | $1,375,115 |
| Accounts Payable | $38,607 | $40,193 | $40,193 | |
| Income Taxes Payable | $21,984 | $18,571 | $20,985 | |
| Sales Taxes Payable | ||||
| Short-Term Debt | $0 | $52,767 | $11,819 | $41 |
| Prepaid Revenue | ||||
| Total Current Liabilities | $0 | $113,358 | $70,584 | $61,220 |
| Long-Term Debt | ||||
| Long-Term Liabilities | ||||
| Total Liabilities | $0 | $113,358 | $70,584 | $61,220 |
| Paid-In Capital | $210,000 | $210,000 | $210,000 | $210,000 |
| Retained Earnings | ($112,500) | ($112,500) | $208,202 | $628,386 |
| Earnings | $320,702 | $420,184 | $475,510 | |
| Total Owner’s Equity | $97,500 | $418,202 | $838,386 | $1,313,896 |
| Total Liabilities & Equity | $97,500 | $531,559 | $908,969 | $1,375,115 |
Projected Cash Flow Statement
| 2020 | 2021 | 2022 | |
|---|---|---|---|
| Net Cash Flow from Operations | |||
| Net Profit | $320,702 | $420,184 | $475,510 |
| Depreciation & Amortization | $2,857 | $2,857 | $2,857 |
| Change in Accounts Receivable | $0 | $0 | $0 |
| Change in Inventory | ($204,122) | ($10,072) | ($3) |
| Change in Accounts Payable | $38,607 | $1,587 | $0 |
| Change in Income Tax Payable | $21,984 | ($3,413) | $2,414 |
| Change in Sales Tax Payable | |||
| Change in Prepaid Revenue | |||
| Net Cash Flow from Operations | $180,028 | $411,143 | $480,779 |
| Investing & Financing | |||
| Assets Purchased or Sold | |||
| Net Cash from Investing | |||
| Investments Received | |||
| Dividends & Distributions | |||
| Change in Short-Term Debt | $52,767 | ($40,948) | ($11,778) |
| Change in Long-Term Debt | |||
| Net Cash from Financing | $52,767 | ($40,948) | ($11,778) |
| Cash at Beginning of Period | $77,500 | $310,295 | $680,490 |
| Net Change in Cash | $232,795 | $370,195 | $469,000 |
| Cash at End of Period | $310,295 | $680,490 | $1,149,490 |
