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The Canal Bar.Final Plan

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Senior Class Project. It is a complete Business Plan.

Senior Class Project. It is a complete Business Plan.

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The Canal Bar.Final Plan Document Transcript

  • 1. Business Plan 2008 BUS 4490 - Business Senior Seminar April 8, 2008 By: Shanie Cardinal David Johnson Andrew Klocek Michael Gutierrez
  • 2. Table of Contents: I. Executive Summary 2 II. Vision and Mission Statement 3 III. Business and Industry Profile 4 IV. Business Strategy 12 V. Company Products and Services 15 VI. Marketing Strategy 15 VII. Location and Layout 20 VIII. Competitor Analysis 22 IX. Description of Management Team 23 X. Plan of Operation 24 XI. Financial Forecasts 26 XII. Investment Proposal 27 XIII. Appendices 28-38 2
  • 3. I. Executive Summary The Canal Bar 220 E Las Colinas Blvd Irving, TX 75039 The Canal Bar is a unique restaurant and bar that focuses on providing a distinct atmosphere and entertainment that cannot be currently found in Las Colinas, TX. The Canal Bar provides quality food and drink at a moderate price, with regular weekly live local entertainment ranging from rock to jazz. The Target Market is rather open and diverse, but looks to focus on the 21 to 45 year olds business professionals in the Irving, Texas area, in particular the Las Colinas suburb. The Strategic Company Advantages include the unique location of the business on one of the canals of Lake Carolyn. As well as providing one of the very few walking-distance night- spots, while being the only one to provide weekly live local entertainment. The Managerial and Technical experience that will be needed include such factors as TABC certifications, First Aid certifications along with typical food and health certifications. Experience requirement of the operating team will vary with the respective position. The Financial Requests will be made from private investors for $1.5 million dollars. This initial financial investment from these investors will assist in property and renovation processes. The Financial Charts can be found in the appendix section of the business plan. 3
  • 4. II. Vision and Mission Statement Vision Las Colinas is a suburb of Irving, a town just west of Dallas, Texas. The suburb is known locally for its attractive apartment complexes and man-made lake, Lake Carolyn. Once a thriving economic area for business and living, we look to bring Las Colinas back into the publics' eye by helping to create a safe and well cultured community by providing a destination spot to both locals and travelers alike. Being a single location bar and restaurant we look to focus on developing the community directly around our location while establishing long term regulars for years to come. In addition, in the future we look to develop the local canal system to provide a water taxi service that would not only allow Lake Carolyn residents unique access to our location, but to tie together the local shops and community. Also, later on we look to incorporate the local college communities as a source of workforce and economic stimuli. In particular, we look to purchase other retail space on the same strip, and then rent these to the Business departments so that they may have active, fully integrated entrepreneur-ships that would change over every four years. By accomplishing all of this through our restaurant and community efforts we look to create a retail community that will be seen as the “Venice of Las Colinas.” Mission Statement “The Canal Bar” provides a safe, clean, non-discriminatory and unique atmosphere, where people of all ages can relax and enjoy distinctive high quality food, extensive drink choices and local entertainment. In particular: to ensure that each guest receives prompt, professional, friendly and courteous service; maintaining a clean, comfortable premises for our guests and staff; and ensuring a personal level of pride in the tasks that our employees partake in. Through a high level of social and personal responsibility, we look to continuously improve not only our 4
  • 5. service, atmosphere and menu, but our Las Colinas community as well. – “There is always room for improvement.” III. Business and Industry Profile A. Stage of Growth: Maturity: At this stage of growth the restaurant industry is relatively consistent with sales and customer bases that fluctuates little. B. Company Goals and Objectives: By the start of the sixth year we look to have paid off the initial $1.5 million dollars from investors, with weekly sales $24 thousand dollars a week in sales. By that point in time we look to have started the water taxi service as an extended reach of our company. Further out than that, we look to become a primary location for the Las Colinas residents. C. Industry Analysis Industry Definition In the restaurant industry there are three types of restaurants; fast-food, casual dining, and formal dining. We would consider ourselves in the category of causal dining. Causal dining can be defined as an establishment that offers a laid back causal atmosphere with the ability to serve food at a moderate price. Over the past century, causal dining has formed and changed into a place were people can sit down and enjoy a meal without worrying about dressing properly. Prices for casual dining are in a range of $8 to $15 per person. In the current restaurant industry typical sales per day are at $1.5 billion. Being and staying healthy is important to people and choosing a place were they will offer a healthy items on the menu will provide a competitive advantage over others. According to the National Restaurant Association, eighty three percent of adults said that there are healthier 5
  • 6. 1 options at quick service restaurants that there were two years ago. As far as employees, “women and minorities represent three of five owners of eating and drinking place firms, compared to less than half of all U.S. firms.”2 The business world is becoming more diverse especially in the restaurant industry because there are more minority managers in this industry than any other industry.3 As for the causal dining industry, this holds true as well. People are also looking for a healthier restaurant that is going to serve and accommodate to their needs. What matters the most is an overall experience and making the customer wanting to come back for more. Government Government regulations in this industry are very important and one must follow all rules in order to operate whether its, food safety, licensing, laws and regulations, or taxes. “Food safety is the most important and is considered the number one concern for the public and government agencies. The National Restaurant Association on the restaurant.org website offers information regarding issues like health inspections, keeping salad bars safe, reducing food spoilage, proper hand washing, food-safety tips for consumers, handling product recalls, and understanding common food borne-illness pathogens.”4 The restaurant industry has many resources in order to help with regulations and requirements such as: - IRS forms and publications for restaurants and bars - IRS information for restaurants - Employment tax forms - State government sites with tax information for employers - Nutrition claims on menus - State alcoholic-beverage agencies - State food-safety agencies Economy 1 http://www.restaurant.org/research/ind_glance.cfm 2 IBID 3 IBID 4 IBID 6
  • 7. Over the course of the past century, the ways American’s eat out has changed drastically because of our world and how it has changed. When restaurants first opened, they were thought of as being very formal and proper. Being properly dressed was very important when going out to eat. The world was more of a slower time when people had time to sit down and chat for hours at a restaurant table. Now, we move at a much faster pace and our lives are consistently busy. This is when the “causal dining” idea came all about. Restaurants now have the ability to offer a good meal without the interrupting our on the go lives. The distinct idea about causal dining is that it allows for people to sit down and eat a quick meal and lets customers eat without worrying about a formal or rushed atmosphere like fast food. The overall experience of eating out in the early days of restaurants has taken a back seat to what it’s like in today’s world. When people go out to eat at a “causal restaurant” they want an experience that they can remember along with good serve and food. According to the Scores for Top 10 Consumer Causal Dining Attributes charts, the top things that were most important to the customer were; the taste of food, cleanliness, price, and 5 environment. The main market for this type of industry ranges from all ages. From college students to people with families, they are looking for a place to eat that has speed, efficiency, quality, service, and environment.6 Some interesting statistics that is in relation to the industry and economy is that: The overall economic impact of the restaurant industry is expected to exceed $1.5 trillion • in 2008, including sales in related industries such as agriculture, transportation and manufacturing. Every dollar spent by consumers in restaurants generates an additional $2.34 spent in other • industries allied with the restaurant industry. Each additional dollar spent in restaurants generates an additional $0.99 in household • earnings throughout the economy. 5 http://www.licensemag.com 6 http://www.rimag.com/archives/2007/09/fast-casual.asp 7
  • 8. Average unit sales in 2005 were $833,000 at full service restaurants and $694,000 at • limited-service restaurants. 7 Any example of a successful causal dinning restaurant that offers an experience as well as quality to its customers is Buffalo Wild Wings. Buffalo Wild Wing is a restaurant that has a full menu that includes salads, appetizers, burgers and most importantly buffalo wings. In the restaurant they have a sports bar, trivia games, and big-screen televisions were they show sporting events. “Buffalo Wild Wings is the top 10 Fastest-Growing Restaurant Chains in the country.”8 There company main focus is to provide, “a relaxed, comfortable atmosphere where people like to hang out with friends, play games on one of our many big-screen TVs. You can always feel comfortable pulling some tables together with your friends and staying as long as you like. We are a fun, edgy, high-energy and easygoing restaurant.”9 Places like Buffalo Wild Wings sets causal dining apart from home, fast-food, and formal dining restaurants. People choose casual dining over home cooking because it provides customers with no worries about buying ingredients, preparing the meal, or clean up. As mentioned before people are on a more of a fast paced schedule which allows them to have no time to cook meals. They prefer eating out and in return drive their money into the economy as well as in the industry. Fast-food does not supply adequate amounts of attention and service people need. The quality of food is not as good and there is not an atmosphere provided that would meet needs like causal dinners would. Lastly, in a formal restaurant, while it does provide an atmosphere and good quality of food, it fails to compete with casual dining in many ways. As mentioned before, price is one of the most important issues people are concerned about when eating out. Obviously formal dinning will take you above and beyond the price of food in a causal restaurant. The ability of wearing comfortable causal clothing is not an option in formal restaurants. Formal restaurants do have 7 Restaurants.org 8 Buffalowildwings.com 9 IBID 8
  • 9. good quality services but fail to have quick timing on food serve. This is why we chose to invest and operate our own restaurant in the “causal” setting because it can offer both types of attributes and qualities that other restaurants have or cannot provide to customers. We would like to provide to our customers a laid back causal atmosphere with the ability to serve food at a moderate price while still providing the best attributes from all categories of eating establishments (home, fast-food, and formal dining). D. Market and Customer Definition: Customer Analysis: The customer analysis for the Irving, Texas begins with the population, which was about 196,084 as of 2006. It has an annual growth of about 2.3% yearly. The market, which we are targeting, is between 21-45 years of age, which is 61,110 and is 31.17% of the total Irving and Las Colinas population.10 This particular generation is very Tech Savvy and is considered to be a group that desires instant gratification and superior service. It’s a very fast paced segment that has a decent level of income; which is estimated at about $41,645 per year. This crowd tends to go out at night and on the weekends, but the problem we discovered is that they usually have to travel to areas rather distant from their homes such as; Greenville, Addison, Deep Ellum, and Fort Worth. For us, in the development of the Canal Bar in Las Colinas, we want to cut down the amount of traveling time and costs and be able to provide an experience similar to the ones they currently desire, but do so within the Las Colinas geographic location. They are a well-educated segment, which tends to use technology as the prime tool for communication and research. There is an ever growing level of media usage on the Internet and radio channels, which we will exploit, as our promotional and brand distribution channels. This particular food and drink industry is the key focus for many of the members of this segment. 10 http://quickfacts.census.gov 9
  • 10. Furthermore, this location has an extremely low level of entertainment being provided. This will easily give us the ability and mobility to tap into this market, without much reaction or threats from the competitors. Most of the restaurants in Las Colinas are food-centered establishments, so we are going to focus on expanding and developing this area into a prime nightlife experience, but with all the commodities still available during the daytime hours. Marketing Analysis: This segment is much more technologically advanced than the older generations. They are also a very well educated group, which makes advertising to them and retaining them a very time- consuming and rapidly evolving segment. This whole segment can be divided into two sub segments: The first is the 21-30 year olds, which tends to use the Internet and Radio Stations, as a key device in searching for entertainment; along with the promotional devices we will use Google as a search engine for distribution, in order to reach this segment. This segment is fast-paced and changes very quickly, which makes marketing to them a key concern. As they change and demand different things we will meet those needs as they arise. The 31-45 year old segment is a more traditional group of individuals that have a higher brand and company loyalty. They also, use more of the old-fashioned media, than that of our younger generation: our channels will be the Dallas Morning News and the Yellow Pages (online and book). This is an area that we have to focus on when thinking long-term. By establishing our goals and image to the younger generations we intend on keeping them as loyal customers for years to come. Marketing Management: 10
  • 11. The typical marketing techniques for this industry are generally: word-of-mouth, radio, television, billboards, Internet websites, newspapers, phonebooks, and magazines. The radio, Internet, newspapers, and yellow pages are highly used when getting a message to the consumer. Radio is the highest used media device for advertising in the Las Colinas area. The average commercial spot on 106.1 Kiss FM, which runs at about $296.00 dollars for a .30 second spot. In the newspaper industry we will use Dallas Morning News which runs at an opening rate of $22.00 to start and depending on size and duration, a one week ad is $20.00 dollars and the more you purchase the lower the costs becomes (you can buy fixed packages for any duration). In a future outlook we will use T.V. ads as a promotional tool. It is such a high priced advertising channel, that it will not be financially beneficial for the initial jump-start of our business. Strategy Historical: Many strategies have been implemented by local competitors; from Cool River to The Spirit Grille. The restaurant and bar combination has been used by companies that have come and gone in the area, those that have gone have been those that have pushed too hard in either direction or have tried to be to consistently contemporary. The most simplistic downfall that we have seen is a lack of customer service. This simple issue of customer service has surprisingly put many more starter companies in this industry to death. The lack of this simple service can usually be attributed to the desire of a poorly trained wait staff that shoves customers through the dining process as if they belonged to the fast food industry rather than the casual dining and bar industry. One of the main factors that have contributed to the success of other Las Colinas casual dining and bar restaurants is their focus on the atmosphere. Contemporary: 11
  • 12. The key strategic competitive advantages of the main competitors in this industry have five things in common: location, quality, service, atmosphere and entertainment. The location in the Las Colinas area where this company type has been successful has usually been located in close proximity to a well-known street and just outside other shops and restaurant communities. The quality of food has always been at least moderate, focusing around some infusion of American and Latin dining. Service has always been a key competitive advantage in most any industry, allowing for the greater possibility of repeats customers and in turn, a stable customer base that acts in and of itself as positive “buzz” advertising. Impeccable service in the food industry is critical to maintain and display a higher quality above the norm. Atmospheres at the accomplished casual dining and bar locations have usually been themed around a southwestern, modern niche, never over doing it, but usually subtle present. Most importantly though, successful companies have all had some sort of weekly entertainment for their customers. From karaoke to live bands, this musical aspect has given customers something special to look forward to. Future Issues: There is the possibility of a recession in the United States economy, which in turn would limit the amount of free cash to go out and the actual psychological desire to do so. Investment and actual customer base may decrease. In addition, because of the cost of gas and a popular trend to focus on organic factors of meals, sales in the restaurant industry my take a slight hit. Overall though, these kinds of threats are a matter of the ebb and flow of social and economic trends, they will pass and the industry will suffer no greater loss than others. IV. Business Strategy 12
  • 13. Image and Position The Canal Bar’s Image is the same as its vision which is to become the bar to go to in the Las Colinas Area. Our position is to serve the need for a contemporary but casual place for the residents in and around the growing Las Colinas area to come and relax. With our mix of live music and relaxed atmosphere, we will serve the growing Las Colinas area in need of a more upscale but casual place to go. We will also utilize the restaurant part for the large daytime work lunch crowd from the surrounding businesses. SWOT Analysis The Canal Bar’s strengths are numerous and the upside is huge. Our biggest strength would be our location. With the Las Colinas Downtown area growing and the redevelopment of the canal appeal in the future, our location has the advantage of being on the forefront of this revitalization effort. We find a strong appeal of being on Las Colinas Blvd. while also having canal access on both sides of our restaurant. This will allow for us to implement a water taxi service to and from our business to neighboring apartments. The second strength for The Canal Bar is its variety. Being a bar/lounge as well as a restaurant, we will provide customers with a unique place with a lot of options. Our unique bar will give our patrons a lot of choices. Whether dining during lunch or dinner to hanging out and listening to live music at night; customers will be able to relax or party all in one spot. Along with the live music capability, The Canal Bar will provide television access to all the major sporting events for its customers. Also along with food, drinks, sports on TV, and live music; The Canal Bar will feature a lounge area for VIP parties and will bring out the dance floor for live bands. Our third strength would be the atmosphere. It is hard to find the right mix when you talk about a Restaurant/Bar. But with our mix of bar/lounge and featuring live local bands, The Canal 13
  • 14. Bar will provide an atmosphere unique to the Las Colinas residents as well as those in the DFW Area. Our weaknesses are minimal but can be fixed. The major weakness with The Canal Bar is the experience factor among its openers. This will be the first major Bar opening among the four of them although some have restaurant/bar experience. To counter this weakness, the goal is to get investors with vast knowledge and expertise in the industry who will also serve as mentors as well as investors. The second weakness would be a weak brand name. As a brand new concept to the Las Colinas area, it is vital to counteract this weakness with a strong marketing effort as well as a strong product to help with “word of mouth” advertising. Although the brand name is weak now, a strong effort within our marketing department as well as the bar opening itself will help build on that weakness. Our opportunities are very high within the Las Colinas area when you look at the demand. With the growing amount of younger demographic residents, the need for The Canal Bar is there. Our greatest opportunity is to establish ourselves as the market leader in this area. Along with that, we have opportunities to gain market share during the high peak times in the area that include the EDS Byron Nelson Tournament Week, the Fourth of July Celebration held in Las Colinas, and the numerous Conventions and Meetings held around Las Colinas. Also by establishing ourselves first in the Las Colinas area, we will have become a leader when further development happens. Las Colinas Live is scheduled to open in 2010 and the opportunity to be a part of that experience while already being known by that time will only help us grow in notoriety. The immediate threats to The Canal Bar are obviously the bar/restaurants in the local area. They include the Italian Café, Spirit Grill, Firewater, and The Republic. These bar/restaurants serve the local area but none give the customer what The Canal Bar is offering. Another threat you 14
  • 15. have to consider is possible government regulations regarding zoning and possible allowance of more of our types of restaurant/bars now in Las Colinas. You have to consider the development and expansion of the Las Colinas as a threat also. With further development of the area with the introduction of Las Colinas Live, we will have more entrants into the market. The last threat we see now is the problem with the economy as a whole. With our economy as it is right now, aligning ourselves with quality investors will be a key for our survival in the first few years. Competitive Strategy The Canal Bar will be successful in the immediate market due to a lack of competitors and will use a differentiation focus. By providing a unique customer experience that combines a restaurant, lounge, and bar; The Canal Bar will cater to the local resident who doesn’t want to travel to Addison or Downtown to get that. Furthermore with the Las Colinas area booming in terms of new upscale apartments bringing in the younger demographic crowd; The Canal Bar will serve these local residents and there multitude of demands. With our range of capabilities as well as a superb location, The Canal Bar will look to capitalize on the 21-45 year old market. By offering a variety of activities for the customers to partake in, our establishment will serve their entertainment need just miles from their own residences. V. Company Products and Services The Canal Bar is a unique restaurant and bar that focuses on providing a distinct atmosphere and entertainment that cannot be currently found in Las Colinas, TX. The Canal Bar provides quality food and drink at a moderate price, with regular weekly live local entertainment 15
  • 16. ranging from rock to jazz. Conceptually, The Canal Bar provides a walking distance destination for a casual nightlife that revolves around the aesthetic beauty of the Lake Carolyn Canal. Operating hours would be from 11am to 2am every day, with altered hours for the holidays. The main room has the main bar to the left as you enter; restaurant seating is in the middle of the customer area with lounge seating off to the right. The bar and lounge area are distinguished by glass/ wood walls that allow the sound around them but not so much the visual encroachment. The outside bar is set up with warm, clear lighting and large dark word tables. Under the entrance stairs is a game room area with a Golden Tee® golf game and dartboards that customers may use at any time. At the back of the main room is the stage and side storage area where many local bands from around the Dallas area will come and entertain our guests. Free wireless Internet has also been placed in the restaurant for customer use at any time. VI. Marketing Strategy: Target Market: We want to target 21-45 year old males and females. More so, we want to target the college generation and young businessmen and women in the Las Colinas vicinity. Zip Codes Age 21-45 Total Population Percentage of Population Median Age 75039 2,215 2,816 78.66% 30.4 75063 15,472 24,454 63.27% 30.9 75038 15,386 25,317 60.77% 28.9 75062 18,206 41,566 43.80% 32 Totals: 51,279 94,153 61% of Target Market Avg. Age 30.55 11 Races in Irving and Las Colinas: 11 http://factfinder.census.gov 16
  • 17. White Non-Hispanic (48.2%) • Hispanic (31.2%) • Black (10.2%) • Other (10.4%) • In view of our target market we have a diverse selection of races and ethnicities in Las Colinas, which we will take into account when doing our advertising and promotional incentives (Food and Music) to attract new customers to the Canal Bar. Customers’ motivation to buy: For the restaurant and entertainment industry, the motivations mainly consist of an experience that is affordable, with a standard of good quality service with a touch of freedom from their everyday lives. In our concept of motivation, we will use an on-location event, hosted by the local radio station during the first week of operations: 106.1 kiss fm. The general idea is to use a well-established company to reinforce our company’s goals and vision, as well as to get our name into the market and seize the targeted markets attention. Another aspect is to establish a weekly specials promo, to give us a more diversified image and customer retention. It will change by month and season. Canal water-taxi rides get you a drink (promotes to not drink and drive for the • local residents). Indoor and Outdoor venues depending on the season. •  Rock, Acoustic, Jazz, DJ, etc. Daily happy hours at 3-5 and 7-9. (2 is better than 1). •  Margaritas pitchers for $10.00, Domestics for $2.50. Sunday- focused on a sports related venue (e.g. Cowboys, Mav’s, Stars, • Rangers Games etc). Mondays- Mixed drink Mondays at $3.00 Well drinks and $6.00 for higher • quality mixed drink. Tuesday- Taco Tuesday with Mexican Beer $8.00 dollars for the meal and 2.50 • for Mexican beers after the meal purchase and $4.00 mini-margaritas (8oz, size). Wednesday- Wings and Things (menu items may vary). • Thursday- “Until Your Through Thursdays” $25.00 dollars for all you can drink • between (6-10pm). Friday-Live music and contests for free drinks and food. • 17
  • 18. Saturday-Karaoke (will change frequently). • It may also be possible to do seasonal/holiday promotions for example: St. Patrick’s day (have an Irish promotion for Irish Car Bombs and Guinness discounts, and have an Irish band along with several themed events throughout the day and into the night. We could also have Cinco de Mayo days for the Hispanic segment (Mexican food and drink specials). New Years events, Mardi Gras, Spring Break, 4th of July, and possibly a German fest, when there are more local businesses established to help promote the event. Market size: The Irving population increased from 191,615 in 2000 to 201,927 in 2006. A growth rate of 0.9% from the year 2000.12 Advertising and Promotion: The radio media we will use is 106.1kiss fm, which is currently located next to the restaurant. They can be used for commercials and promotionally sponsored events, such as “Kid Kraddock in The Morning” for possible morning promotions. In addition, DJ Billy the Kidd, which will help draw younger demographic on the nights and weekends. This in turn will help to create “buzz” advertising, which is the cheapest and best form of advertising. The primary time frame for this media use would be during the Thursday and Friday mornings and afternoons for upcoming events and specials going on that particular weekend. The use of Internet ads will help to spur advertising costs as a very low cost media channel, about $10.00 dollars an advertisements per month and around $200.00 per month on ten 12 http://cityofirving.org/common/demographics.html 18
  • 19. sites. This would include restaurant based search engines for the surrounding areas, Facebook along with My-Space (free), which have a large reach of the targeted market segment. The next advertising channel would be in the Yellow-Pages phone book. Although this method is set at a higher price than the other media channels, it would provide an online advertisement, as well as an advertisement in the traditional Yellow-Pages book. The next channel used will be the Dallas Morning News to help establish our name with the local businessmen and women market. It is a low-cost and effective channel in which can be placed weekly advertisements for discounts and upcoming events. Desired image in the market: The desired image is to be a hotspot in the Las Colinas and Irving area, with a new-age look that will incorporates a variety of different styled venues and to be able to attract a wide array of customers from around a 10 mile radius and in the future more distant customers. We want to be recognized as a place to relax, have a drink, eat lunch, and too just be you. The image we want to relay is that we are a hip and trendy establishment, that delivers a top-notch experience to all that come. It will have the feel of a middle-high-class environment with a sense of a business casual atmosphere. We want a diversified group of customers that will help us eventually become well known throughout the Las Colinas area as well as within the Metroplex. The marketing vision is to build up the surrounding areas and to make it a place to be a desired destination: especially for the age groups that reside in the area. By the 5th year, we would begin to expand the business outside of Las Colinas and Irving to another environment that lacks in the entertainment industry. Pricing versus competitors: 19
  • 20. The local competitors pricing strategy is a high priced experience with a low level of customer care. The general competitor is the Republic located down 114 about a quarter mile away. It has a high customer flow, but so high priced that students can’t go there on a more frequent basis. It also has a white-clothed feel that pushes away the mid 20’s segment. The way we will implement our strategy is a mid-low ranged priced menu with more daily specials that will allow the younger market to frequent more often and more so everyone in our targeted segment. It will have a more friendly-based atmosphere, where we treat everyone with a high standard of customer care and quality service. General structure of the market plan and implementation: In the marketing of this new venture, we want to first reformat the curb appeal of the building itself. To create a rather attractive appeal using neon lights in the windows: not to go • so extravagant that it would keep the business lunch rush away, but an eye- catching appeal that will trigger their senses and curiosity. There will be a street sign that will allow passers by to see the building that will get their attention. We want to develop a front appeal that the Omni Hotel occupants can see when • staying at the hotel as well as clientele in the surrounding areas. The Canal Bar is located on a corner next to the canal in Las Colinas. There are 3 different sides of the building that we will revamp for the surrounding residents. It will allow them to see the signs from the apartment buildings and offices. As of right now, there is no real usage of the canal as a promotional and transportation channel. This is something that we will develop especially for our outside environment; this is one of our key geographic issues in the developmental process of the entire area. The outside atmosphere: • We will develop an outside eating area during the day, which we will transform it into a trendier bar scene at night.  There will be a connected bar that is located in the center of the patio between the two outside doorways. That is only accessed from the outside patio. 20
  • 21. Depending on the season we would have an outdoor venue twice a month, with local talent to perform.  It would also have the river walk (San Antonio) atmosphere with water taxi’s that will provide transportation for the local apartment residents and businesses, as well as potential stores up and down the canal. The indoor atmosphere:  2 bars will be located at the opposite ends of the building, which will be divided into a dining section with a bar and the sports bar and indoor venues in the back which can be accessed from the outside. Directed towards the younger segment and the people who want a quick drink  It will have a more contemporary touch to it than a typical bar and grill. A little more class, but not too much to keep the younger crowd from coming. VII. Location and Layout As stated before, the location of The Canal Bar will be a key factor to its success. Its location will be in the heart of the downtown district of Las Colinas east of Hwy. 114 right on the Mandalay Canal and Las Colinas Blvd. The physical address of the location will be: 220 Las Colinas Blvd E # 260 Irving, TX 75039 This location was chosen due to its proximity to many large corporations as well as a large number of residential and hotel developments. It is close to a major road in the DFW area but far enough to provide an intimate and somewhat serene setting. Sitting alongside the Mandalay Canal is also a key to this location due to the fact that The Canal Bar will be able to have an extensive outside area capable of holding events. Also if you look at our demographic chart of the surrounding area the median age is around 30.55 with over 79% being people over 21. This data shows that our location is in a perfect area to be able to serve our demographics. 21
  • 22. Demographic Analysis of Location vs. Target Customer Profile Total Percentage of Zip Codes Age 21 and up Population Population Median Age 75039 2597 2816 92.22% 30.4 75063 19558 24454 79.98% 30.9 75038 19064 25317 75.30% 28.9 75062 29431 41566 70.81% 32 Average Median Age 30.55 Average Percentage of Population over 21 79.58% Data from US Census for 2000, www.factfinder.us.gov Layout As you walk into The Canal Bar from our street entrance you are greeted by a panoramic view of the whole establishment. Our customer walks in and down the stairs into our main room and is greeted by a hostess. They can choose to enjoy a meal or drinks at either our bar or a meal in our dining section. Also, the customer has their choice of sitting on our expansive patio, which main part runs along the outside of our building. The lounge area will be in the back and will feature large sofas and darker quieter features for customers to relax. The stage for live music will be located at the back of the lounge and main area, creating a great stage for our local musicians. The outside patio will have access to both the lounge and the main dining area with a beer bar on Friday and Saturday nights. This layout can be viewed in it’s entirety in the appendix. 22
  • 23. VIII. Competitor Analysis Our existing competitors include local restaurant/bars in the area. The main competitors would be The Italian Café, The Spirit Grill, Firewater, and The Republic. Below is a competitive profile matrix of the Canal Bar compared to these four competitors. We based it upon Location, Customer Offerings, Price, and Business Capabilities. Competitive Profile Matrix for The Canal Bar (Scale of 1-5 with 5 being Very Good to 1 being Very Poor) The Canal The Italian Spirit Factor Bar Republic Café Grill Firewater Location 5 4 5 3 2 Customer Offerings 5 3 2 2 3 Price 3 2 3 4 2 Capabilities 5 3 1 2 4 Totals 18 12 11 11 11 As the table shows, The Canal Bar is ahead of the other four based on these factors. Our biggest foreseeable competitor is The Republic. They want to serve the wealthier end of our demographic but in terms of location along with atmosphere, they are comparable. Their biggest weakness could be the price of going to it as well as not being able to offer a patio bar or live music. Firewater has the capabilities to have live music as well as a large patio bar, but their weakness comes with location. Since ours is in the heart of the Las Colinas downtown district, we 23
  • 24. will gain the customers not willing to drive ten minutes away down Northwest Highway. The other two, Spirit Grill and Italian Café, are more restaurants then bars, and rely heavily on their food service to gain consumers. Where we will overcome them is with our food service as well as entertainment options to accentuate the customer’s experience. Potential Competitors Our potential competitors include any establishment opening up with a restaurant/bar style. The biggest potential competitor we foresee coming into our market is Las Colinas Live, scheduled for 2010. This development will be down the street and offer many bars and restaurants we will have to compete with. By opening almost a year before development begins, we will counter this by being a first entrant into the immediate market. By already establishing ourselves within the community, The Canal Bar will bring a reputation that will just be fueled by more customers coming to the area. IX. Description of management team: General Manager: Requirements: at least 24 years of age, 3 years experience in food industry, TABC certified, Food Safety and Training certification. General Managers, of which there will be two (one per shift), will help to ensure individual customer satisfaction. They will also be expected to create scheduling on a bi-weekly basis, order all food and house supplies and ensure the general atmosphere of the restaurant. They would be responsible for all computer glitches and need to know how to fix or work around them. Responsible for opening and closing of the store, as well as making bank deposits. 24
  • 25. Bartenders/Manager: Requirements: at least 21 years of age, 1 year of experience (or previous training) and TABC certified, First Aid certified, of which there will be four (two per shift). Bartenders will double as managers in cases where the General Manager is unavailable, but only as points of reference for minor matters of restaurant upkeep, quality and service. They would also be responsible for all liquor and beer orders that would need to be made throughout the week. Responsible for taking bar orders and filling them, fulfilling alcoholic drink orders from waiters for customer, taking care of all necessary cash and credit transactions for the bar customers. Cook: Requirements: at least 24 years of age, 4 years experience in food industry, TABC certified, Food Safety and Training certification, of which there will be four (two per shift). Culinary school degree is an asset to hiring though not necessary. Full knowledge and preparation capabilities of the restaurant’s menu are necessary. Waiters: Requirements: at least 18 years of age, no prior experience necessary (although preferred), TABC certified. Serving food to customers, handling credit card and cash transactions of their customers, running food to tables and while taking orders and serving drinks. Busboys, Runners: Requirements: at least 18 years of age, no prior experience necessary. Running out food to appropriate tables and clearing/ resetting them when they are done. Dish Washer: Requirements: at least 18 years of age, no prior experience necessary. Washes dishes regularly, takes out the trash, and brings clean dishes to appropriate locations for use. X. Plan of Operation Form of ownership: “The Canal Bar” will be a limited liability partnership among four individuals from all over the country and experience to match it. Seeking an opening date of Summer 2009, The Basement is comprised of Shanie Cardinal, David Johnson, Andrew Klocek, 25
  • 26. and Michael Gutierrez. Equal profit and cost sharing will be set up for the first five years, after that the company will look to either continue on that path or option for a restructuring of ownership. Our initial ownership set up will allow each owner to invest as much as they can in the company while still being protected by the legal boundaries if things fold under. Additional funds will be pooled from loans. Additional investors will be compensated on basis of percentage return on proportional investments. The company will never be traded publicly, preventing to some degree, a hostile takeover from that angle. Company Structure: The business structure is based on a general restaurant/bar format. Ideas for improvement are welcome from any level in the organization and will be considered. All levels of the organization are encouraged to participate in all decision-making processes. Structure diagram is in under appendix D. Decision Making Authority: All financial decisions regarding the attainment of assets over five dollars will be handled by the Partnership. The General Managers can handle all financial decisions from two to five thousand dollars. All financial amounts below that must cleared first by the bartender on duty then the General Manager. The General Manager on duty must handle customer service decisions regarding financial transactions post date. Customer service decisions regarding financial transactions on that date may be handled by the Bartender; ect. complimentary dinners for one reason or other. All of these financial transactions must be made note of after they occur. Customer service decisions regarding all else may be made only on the best and proper judgment of the employee for the greater good of the company. Compensation and Benefits: 26
  • 27. Texas Labor Law stipulates that the minimum wage as of 2007 is $5.85 per hour and tipped workers are to be paid at least $2.13. Waiters and Waitresses at “The Canal Bar” will start at $3.00 an hour plus tips. Busboy/Runners will be paid $6.50 an hour plus tips. Dishwashers will be paid $11.00 an hour. Chiefs will be paid $15.00 an hour, more depending upon experience, up to $20.00. Bartenders will be paid $7.00 an hour plus tips. General Managers will be placed upon a salary starting at $40,000. Partners will be provided a percentage of annual profits not to exceed 20% of the total per partner. Benefits will not be given to any employee being paid by the hour, though 10 days of vacation will be granted. Those on salary will be covered by health insurance, along with a 14- day vacation. Those on a percentage based pay, those of the partnership, will have full coverage and 14-day paid vacation. Bonuses can be earned for revenue or cost saving implementation, 15 percent of the cost saved or revenue earned in direct relation to the implementation. XI. Financial Forecasts The Canal Bar stands to make heavy profits in the coming years. We believe that with the right mix that we have going, we stand to gain a valuable share of the target demographics. In terms of sales projections, which are shown in Appendix C, the Canal Bar is looking at an annual customer growth of 10%. Also by basing the average cost per person to $20 a customer, we were able to project our sales through April 1214. First year sales should be around $864,000 and they will continue to grow over the years. Our cash flow over the first year is positive each month gaining about $10,295. Also if you look at our Income Statement over the next 5 years with the same estimated expenses, The Canal Bar will almost hit the half million-dollar range in net profits. To see all these broke down please flip to appendices C-F at the end. 27
  • 28. The Breakeven Analysis for the Canal Bar represents the annual costs associated with running the Canal Bar, against the total sales. It shows how much money we need to generate in order to create a lucrative business. Furthermore, the time, which it will take, is calculated at 10.39 months. For a full break down look into Appendix G. XII. Investment Proposal The Canal Bar’s creators have estimated the total cost of purchasing the location as well as renovating it to our liking to be right at $1,411,996. A full breakdown of the renovation is included in the appendix for our investors. The rest of the difference will be used for miscellaneous costs associated with opening if we have any. Currently we are estimating that the total amount of money to be invested is 1.5 million dollars. The Canal Bar is looking for three investors to donate approximately 500,000 a piece. By our projections, they should look to be paid back in full by the start of the sixth year of operations. The plan is to take net income annually and split it evenly among all three. After they have been paid back in full, each investor will get 10% of all net profits annually while gaining 15% ownership overall. So in total the three investors will be entitled to 30% of net profit annually as well as 45% ownership of the Canal Bar. The only way to exit out of investment after signature is to sell your contract to another investor who will bear the burden you have relinquished. But a consensus decision must be made between the four partners and the three investors in terms of buyouts after the five year payback plan is done. 28
  • 29. XIII. Appendices Appendix A 29
  • 30. Advertising Media Costs and Usage Quantity Price Company 1 year fixed Dallas Morning Newspaper 2x7inch ad $6,000.00 News 1 year half- Phone Book page color ad $10,000.00 Yellow Pages 2 signs for 2 Billboards months $1,500.00 Outdoor Advertising 2 months on Internet Ads 10 sites $400.00 Google Radio 1 month 3 Commercials days a week $10,656.00 106.1 kiss FM Custom 20,000 $599.49 www.vistaprint.com Brochures/Flyers Total $29,155.49 Information on this Billboard or Outdoor Advertising Location Cost Brief Description of Outdoor Billboards for Lease $375 Ad For Rent Type of Outdoor Outdoor Billboards Advertising: Billboard Location: Anywhere Circulation: 500,000 + Visible in What Direction: Any What_View: Both Left and Right Hand View Board Location: Any Illuminated: Yes/No Appendix B Rental Rate: $375 (Regularly $995) Outdoor Advertising Company Contact Information: Victoria Wolf Additional Contact: CA Mobile Media Additional E-mail vwolf@camobilemedia.com Address: 1700 McHenry Ave., Suite 65B-150 Mailing Address: Modesto, CA 95350 Phone Number: 888-635-2599 30
  • 31. Appendix C 29
  • 32. Appendix D Partners of Company (4) General Managers (2) Bartenders Chiefs (4) (4) Waiters Busboy/ Runners Dish Washer (8) (2) (2) 30
  • 33. Appendix E Sales Projections Sales Projections For The Canal Bar Year 1 Year 2 Year 3 Year 4 Year 5 May 2009-April 2010 May 2010-April 2111 May 2111-April 2112 May 1212-April 1213 May 1213-April 1214 Number of Customers a Day (Sunday-Thursday) 100 110 121 133 147 Number of Customers a Day Friday-Saturday 200 220 242 266 293 Per Week Average 900 990 1089 1198 1319 Per Month Average 3600 3960 4356 4792 5276 Per Year Average 43200 47520 52272 57504 63312 Average Price of Check $20.00 $20.00 $20.00 $20.00 $20.00 Projected Sales $864,000.00 $950,400.00 $1,045,440.00 $1,150,080.00 $1,266,240.00 10% annual increase in customers This Is based on an average check per customer of $20 The Canal Bar Sales Projections for its first year will be $864,000 31
  • 34. Appendix F Cash Flow Statement for first year The Canal Bar First Year Cash Flow Statement May June July August September October November Beginning Cash Balance $63,754 $74,048 $84,343 $94,638 $104,932 $115,227 Cash Inflows (Income): Initial Investment 1,500,000 Sales & Receipts 72,000 72,000 72,000 72,000 72,000 72,000 72,000 Other: Total Cash Inflows $1,572,000 $135,754 $146,048 $156,343 $166,638 $176,932 $187,227 Available Cash Balance $1,572,000 $135,754 $146,048 $156,343 $166,638 $176,932 $187,227 Cash Outflows (Expenses): Initial Purchase and Renovation 1,411,996 Advertising 29,159 Insurance 800 800 800 800 800 800 800 Inventory Purchases 20,000 20,000 20,000 20,000 20,000 20,000 20,000 Payroll 31,447 31,447 31,447 31,447 31,447 31,447 31,447 Payroll Taxes 3,145 3,145 3,145 3,145 3,145 3,145 3,145 Sales Tax Expense 5,760 5,760 5,760 5,760 5,760 5,760 5,760 Taxes & Licenses 5,386 Utilities 400 400 400 400 400 400 400 Telephone/Internet/TV 154 154 154 154 154 154 154 Subtotal $1,508,246 $61,705 $61,705 $61,705 $61,705 $61,705 $61,705 Total Cash Outflows $1,508,246 $61,705 $61,705 $61,705 $61,705 $61,705 $61,705 Ending Cash Balance $63,754 $74,048 $84,343 $94,638 $104,932 $115,227 $125,522 32
  • 35. December January February March April Total (12 Months) $125,522 $135,816 $146,111 $156,406 $166,700 1,500,000 72,000 72,000 72,000 72,000 72,000 $864,000.00 0 0 $197,522 $207,816 $218,111 $228,406 $238,700 $2,364,000 $197,522 $207,816 $218,111 $228,406 $238,700 1,411,996 29,159 800 800 800 800 800 9,600 Cash Flow Statement Continued 20,000 20,000 20,000 20,000 20,000 240,000 31,447 31,447 31,447 31,447 31,447 377,360 3,145 3,145 3,145 3,145 3,145 37,736 5,760 5,760 5,760 5,760 5,760 69,120 5,386 400 400 400 400 400 4,800 154 154 154 154 154 1,848 $61,705 $61,705 $61,705 $61,705 $61,705 $2,187,005 33 $61,705 $61,705 $61,705 $61,705 $61,705 $2,187,005 $135,816 $146,111 $156,406 $166,700 $176,995
  • 36. Appendix G Income Statement The Canal Bar Pro Forma Income Statement Years 1-5 Year 1 Year 2 Year 3 Year 4 Year 5 Revenue: Gross Sales $864,000.00 $950,400.00 $1,045,440.00 $1,150,080.00 $1,266,240.00 34
  • 37. Less: Sales Returns and Allowances Net Sales $864,000.00 $950,400.00 $1,045,440.00 $1,150,080.00 1266240 Cost of Goods Sold: Beginning Inventory Add: Purchases Food and Alcohol $240,000.00 $240,000.00 $240,000.00 $240,000.00 $240,000.00 Freight-in Direct Labor Indirect Expenses $240,000.00 $240,000.00 $240,000.00 $240,000.00 $240,000.00 Less: Ending Inventory Cost of Goods Sold $240,000.00 $240,000.00 $240,000.00 $240,000.00 $240,000.00 Gross Profit (Loss) $624,000.00 $710,400.00 $805,440.00 $910,080.00 $1,026,240.00 Expenses: Advertising $29,155.49 $29,155.49 $29,155.49 $29,155.49 $29,155.49 Insurance $9,600.00 $9,600.00 $9,600.00 $9,600.00 $9,600.00 Payroll Taxes $37,736.00 $37,736.00 $37,736.00 $37,736.00 $37,736.00 Permits and Licenses $5,386.00 $5,386.00 $5,386.00 $5,386.00 $5,386.00 Sales Taxes $36,000.00 $36,000.00 $36,000.00 $36,000.00 $36,000.00 Property Taxes $34,970.00 $34,970.00 $34,970.00 $34,970.00 $34,970.00 Telephone/Internet/TV $1,848.00 $1,848.00 $1,848.00 $1,848.00 $1,848.00 Utilities $4,800.00 $4,800.00 $4,800.00 $4,800.00 $4,800.00 Wages $377,360.00 $377,360.00 $377,360.00 $377,360.00 $377,360.00 Total Expenses $536,855.49 $536,855.49 $536,855.49 $536,855.49 $536,855.49 Net Operating Income $87,144.51 $173,544.51 $268,584.51 $373,224.51 $489,384.51 35
  • 38. Appendix H Employee Cost Breakdown Employee Wages Work Total Total Total Total Each Hours a Hours a Hours a Hours a Job Type Wages Day Day Week Month Year Total Wages General Manager $40,000 a year $80,000.00 Bartender $7.00 3 22.5 157.5 630 7560 $52,920.00 Chef $15.00 3 22.5 157.5 630 7560 $113,400.00 Server $3.00 8 60 420 1680 20160 $60,480.00 Busboy $6.00 2 15 105 420 5040 $30,240.00 Dishwasher $8.00 2 15 105 420 5040 $40,320.00 Totals $377,360.00 Appendix I Breakeven Analysis Break Even Analysis for The Canal Bar Cost Description Fixed Costs($) Variable Costs(%) Variable Costs Cost of Goods Sold $240,000.00 100.00% Fixed Costs Salaries $377,360.00 Payroll Taxes $37,736.00 Advertising $29,155.00 Permits and Legal $5,386.00 TV, Internet, Phone $1,848.00 Utilities $4,800.00 Insurance $9,600.00 Taxes $34,970.00 Total Fixed Costs $740,855.00 Total Variable Costs 100% Break Even Sales Level = $748,339.00 Duration until break even 10.39 months 36
  • 39. Appendix J Investment Breakdown Estimated Total Paid Investor back by Year Payout Year 1 Year 2 Year 3 Year 4 Year 5 Three Initial Investments $87,144.51 $173,544.51 $268,584.51 $373,224.51 $489,384.51 Investor A $500,000.00 $29,048.17 $57,848.17 $89,528.17 $124,408.17 $163,128.17 $463,960.85 Investor B $500,000.00 $29,048.17 $57,848.17 $89,528.17 $124,408.17 $163,128.17 $463,960.85 Investor C $500,000.00 $29,048.17 $57,848.17 $89,528.17 $124,408.17 $163,128.17 $463,960.85 37
  • 40. 38
  • 41. Appendix K Renovation Cost Breakdown Initial Purchase and Renovation Summary www.building-cost.net Item Name Material Labor Equipment Total 1,200,000 Purchasing price of Location Excavation/Demolition -- 1,864.00 753 2,617.00 Foundation, Piers, Flatwork 6,442.00 6,316.00 1,532.00 14,290.00 Rough Hardware 629 618 151 1,398.00 Rough Carpentry 20,831.00 19,169.00 -- 40,000.00 Insulation 3,901.00 1,662.00 -- 5,563.00 Exterior Finish 11,989.00 4,357.00 792 17,138.00 Exterior Trim 751 737 179 1,667.00 Doors 1,904.00 996 -- 2,900.00 Electronics 3,279.00 1,390.00 -- 4,669.00 Finish Hardware 317 166 -- 483 Roofing, Flashing, Fascia 10,638.00 5,562.00 -- 16,200.00 Finish Carpentry 1,156.00 3,630.00 -- 4,786.00 Interior Wall Finish 5,549.00 5,342.00 -- 10,891.00 Painting 3,315.00 4,825.00 -- 8,140.00 Wiring 3,366.00 3,962.00 -- 7,328.00 Lighting Fixtures 2,524.00 495 -- 3,019.00 Flooring 2,157.00 1,908.00 -- 4,065.00 Carpeting 4,292.00 954 -- 5,246.00 Countertops 2,053.00 1,073.00 -- 3,126.00 Cabinets 6,749.00 1,323.00 -- 8,072.00 Cooking Equipment 3,284.00 286 -- 3,570.00 Plumbing Rough-in and Connection 3,082.00 4,666.00 432 8,180.00 Restrooms 6,260.00 1,236.00 -- 7,496.00 Heating and Cooling Systems 7,061.00 10,592.00 -- 17,653.00 Subtotal Direct Job Costs $111,529.00 $83,129.00 $3,839.00 $198,497.00 Continued next page…. Final Cleanup -- 1,019.00 -- 1,019.00 30
  • 42. Insurance 7,131.00 -- -- 7,131.00 Permits & Utilities 4,330.00 -- -- 4,330.00 Plans & Specs 1,019.00 -- -- 1,019.00 Subtotal Indirect Job Costs $12,480.00 $1,019.00 -- $13,499.00 Contractor Markup 31,836.00 -- -- 31,836.00 Total Cost of Renovation $124,009.00 $84,148.00 $3,839.00 $211,996.00 Overall Total Cost with purchase $1,411,996.00 31
  • 43. Appendix L Insert Menu here!!!! 32