1. St. Edward’s University
Bass-2-Face
Written Business Model, Lean Startup, Plan & Implementation Report
Louis Cooper, Sergio Morales, Eli Fagerstrom, Alan Chapa
ENTR 3391
Tony Alvarado
9 December 2015

2. Executive Summary
Mission and Vision
The Business Model Canvas
Core Components and Sustainable
Competitive Advantage
Industry Analysis (Business Model)
Leaps of Faith
Value Proposition
Key Partners, Activities and Resources
Cost Structure and Revenue Stream
SWOT Analysis
Entrepreneurship & Innovation
Implementation Report
MVP & Lean Startup Approach
Startup Timeline

3. Executive Summary
B2F, or “Bass-2-Face”, is a new nightclub and restaurant created with the aim to
please patrons of all types. B2F has the aim of becoming the leading nightclub, in
downtown Austin, for the customer who wants to experience live music, as well as
extraordinary food in the same establishment. By presenting itself like this we
differentiate ourselves from the market who have an emphasis on solely food, or solely
a nightclub respectively. The demand for different music genres in this city is growing,
and we are dedicated to meeting the customers half-way, when it comes to booking the
B2F venue with new and exciting artists. The location for B2F is on Lavaca St. in
downtown Austin, between 4th and 5th street, on the West Side. Having our restaurant
located on the southwest corner of 5th
St. and Lavaca offers an establishment, within
walking distance, of many buildings and offices located downtown. This location
provides us and our customers an easily accessible nightclub very near the heart of the
city. This proves that there is a market there that can be penetrated by providing Austin
music fans, as well as young professionals, a place where they can enjoy food and
music.
Mission and Vision
B2F wants to strive to become the leading nightclub in Austin, TX. As well, we
would like patrons to think of our “restaurant” as a highly regarded option whenever they
are looking for a place to eat in Austin’s bustling food scene; by incorporating the latest
and greatest food trucks in our city, we will create more demand for these food outlets

4. as well as our venue for those seeking to grab a quick bite whether at night on the
weekends, or lunch during the weekdays as well. We want our customers to think of
B2F whenever they go out in Austin. We want to combine exceptional service with an
amazing atmosphere and great music where people keep coming back week after week
for an unforgettable night. For our networking and employer engagement events, B2F
will strive to provide an adequate environment for these corporate events; the event
space will be designed in a way to provide a great atmosphere that will instigate and
create conversations amongst all. We want our customers to enjoy themselves by
listening to great music and having a great time.These types of establishments stress a
casual atmosphere and efficient but not over-excessive service so that patrons may
gather with friends for a nice dinner, but also stop in for a quick lunch break from work
with a high-quality and flavorful menu from a notable food truck.

5. The Business Model Canvas
Core Components and Sustainable Competitive Advantage
B2F’s Core competency is that it holds customer service and acquisition as a
high-ranking standard. Rather than focusing on the norm, which is a nightclub or a
restaurant, we believe that having a restaurant open by day and in evenings, while
having a nightclub open in the evenings, will give us an advantage and create exposure
for our property at all times of the day. One competitive advantage that will separate us
from other venues will be our implementation of the FiveStars loyalty and rewards
program. This is a program that gives rewards to our patrons in response to the dollars

6. they spend in our establishment. This can be used for alcohol sales in the nightclub, as
well as food and alcohol sales in the restaurant. As well, we will be able to send out
mass announcements for upcoming events, in the nightclub or bar, simply due to the
fact that the patrons sign up with their phone numbers. Through this, we will be able to
send out text messages as well as access their accounts to send out mass emails as
well. This is our sustainable competitive advantage as this diversity allows us to be
different from the nightclub industry locally, as well as nationally.
Industry Analysis (Business Model)
According to the Official Trade Organization of the Nightlife and Club Industry,
Texas is the state with the 3rd highest amount of drinking establishments in the country,
with 4,388. In contrast to the dark, smoke-filled bar of the past, nightclubs are lively, with
an updated, high-energy ambiance.
According to SBDCnet, the ‘bar’ industry in the United States accounts for 45,000
establishments. These establishments, in 2011, had combined revenue of $20 billion.
Bar business & nightclub business revenues grew 3.5% in 2011 and is projected to
increase 3.2% to $22.7 billion in 2012. No major chain took ahold, while the fifty largest
chains accounted for only five percent of total revenue. This industry is highly
fragmented, due in part to the changing liquor laws varying from state to state.
Leaps of Faith
For our venture to be successful we are counting on that a number of
things will come together for us. First, we are going to be in need of an investment of $3

7. Million to be able to launch our venture. Second, we are going to need Ash Seth and his
partners to be a credible source who back us up when the time is needed to raise the
$3 Million.
Once we have secured a venture capital deal we will need that the
renovations of our venue are done in a timely fashion (sometimes renovations can take
longer than expected, and this could hurt us if we need to start showing revenues to our
investors).
Another key leap of faith in our venture is that the B2F gains traction both in the
consumer market space, in which college students and young professionals make our
venture a hype and a trend. The larger the audience we can through social media
marketing and word of mouth will be critical in ensuring that our venture is seen as the
place to be at. We understand that in order for our business to be the next big thing, we
will need to make these leaps of faith and make sure we can deliver on them.
Value Proposition
Our venue offers Austin’s first hybrid restaurant and nightclub that seeks to
highlight our city’s unique culture through music and food. Our venue offers a great
location that is right in the heart of downtown as well as a state of the art sound system.
Not only that, but B2F offers a fully rounded evening experience by providing a
nightclub environment and the ability to walk over to our restaurant to enjoy dinner as
well as stepping out to one of the many popular food trucks in Austin with who we will
partner with.

8. Key Partners, Activities and Resources
For our venture we will need to secure key partnership with Ash Seth, who will be
our mentor and credible source in the industry. On the other hand, we will need to
secure partnerships with the leading and most popular food trucks in Austin, in order to
cater to our customers. We will also need to secure a partnership with HE^RD and C3
Presents in order to have a pipeline of the most trending DJ’s and artists. Because C3 is
the leading talent booking agency in town, it is critical that we attract them to B2F.
For this venture we will also need to partner with large alcohol distributors so that
we can take advantage of all the economies of scale so that we an offer not only good
prices but good service to our customers.
The Key Activities that B2F will have are mainly the renovation of the property
itself, to ensure that we can provide both a nightclub and a restaurant that caters to our
customers’ needs. This is a critical activity that we must nail down before even
considering opening/running the business. The venue itself will be one of our key
differentiators so we must make sure we bring the right renovations team into our
venue. After this activities are completed, we must move on to the second section of
key activities which include the sales of tickets, drinks and the booking of celebrities.
Using celebrities will help us leverage their fan base through social media exposure and
campaigns.
As far as Key Resources, we will need capital to go ahead and do the
renovations which will include the actual bar, the stage for performers and a VIP Section
that we will tailor for celebrities and CEO’s of big corporations. As well as people who
we anticipate to spend large amounts in our venue. We will also need to ensure we

9. have enough alcohol, sound and light equipment, as well as staff that will keep the
customers safe and satisfied.
Cost Structure and Revenue Stream
For our cost structure, we will have four focus areas of costs: rent,
beverages, payroll, and the FiveStars program. Annually, these costs will add up to
$552,870 which will become approximately $1,658,610 after three years. This is
excluding the roughly $3,000,000 that it will cost to renovate remodel, and bring B2F up
to standards of our liking. In total, the first three years will cost us $4,658,610.
For our revenue stream, we based B2F’s revenue and our ticket price of $30 and
alcohol sales individually of $35 (the average between $20 and $50). We created a
revenue stream determined to come from 500 attendees a night, 3 nights a week [1,500
individuals weekly]. This came out to $6,000 monthly from ticket sales and $52,500 from
alcohol sales. Annually, this generates $702,000 in revenue.
Without incorporating restaurant revenue or employer engagement activities,
B2F will create an annual return on investments of $149,130 that can be put towards
paying our fees for renovations and remodeling of both Republic Live and Hudson’s on
Fifth. Our three year revenue predictions come out to $2,106,000 with a projected three-
year net return on investments of $447,390.
SWOT Analysis
For B2F, we have determined some strengths, weaknesses, opportunities, and
threats. To begin with, there are a multitude of strengths in favor of our business.

10. First, the nightclub will emphasize on electronic music [DJs], as well as live music
[bands]. This will attract a large customer base of college students as well as young
professionals and could bring traction in from tourists, as Austin is noted as the ‘live
music capital of the world’. This will especially be helpful during international festivals
such as Austin City Limits (ACL) and South by Southwest (SXSW). These events invite
and attract visitors from all over the globe for our choices in talent booking as well as
the quality of meals in our restaurant. Through the use of FiveStars, we will be able to
gain demographic information on customers, as well as their spending habits. We will
be able to understand what our patrons spend money on, and how much they will be
spending at our establishment.
In the nightclub/music venue market of Austin, Vulcan Gas Company, Rio
Rooftop, Kingdom Nightclub, and Summit are already established brands with a loyal
customer base and following. It may be difficult to sway their customers to come our
way, if possible at all. Countless competitors have tried to enter this market, only to
have failed in comparison to these.
However, according to Nightclub.com, Austin is home to one of the top 100
highest earning nightclubs in America, which is Rio Rooftop. This proves that there is a
good and mentionable market available in Austin that can be tapped into.
Another weakness could be creating an online presence. Many nightclubs and
venues rely heavily on word of mouth advertising. Apps such as Instagram and
Snapchat have become highly-efficient marketing tools that require little to no costs to
implement; they are extremely simple to use and have a very high impact. This is a form
of guerilla marketing used, which is an extremely low-budget marketing technique. The

11. potential revenue stream versus the costs of creating and handing out fliers for our
events could potentially not give us the desired income we need to operate. This is
where FiveStars will be able to separate us from the competition. We will be able to
alert loyal patrons of upcoming events and announcements and add that to our
presence on multiple social media platforms.
A new nightclub and food truck location will also generate some opportunities as
well. First off, we would tap into the restaurant industry. This market has room to
expand, as Austin is known for having less chain restaurants than other cities, noting
the impact of local restaurants on the quality of meals. We would be able to provide
quick meals for the young professional with a 15-minute break from work, as well as
have a higher-end menu and a private party room for luxurious meals and those with
ample time to spend eating, chatting, and drinking at dinner.
Entrepreneurship & Innovation
At B2F we truly believe in the value of employee engagement, recognition and
brand awareness. Most companies in the Austin area are concerned with at least one of
these three key areas that play a role in the culture and values of their company. At B2F
we are providing Austin based startup companies and corporations the opportunity to
excel at those three key areas by partnering with us. Our versatile restaurant and
nightclub will be transformed from a loud party stop for college students into a
professional soothing venue for corporations and companies to hold company meetings,
events, parties and even networking events that will help them reach their employee
engagement, recognition and brand awareness goals.

12. By partnering with local Austin startups and other corporate businesses, we give
these companies and corporations the opportunity to hold such events with a low
monthly payment to be part of our fiscal ecosystem. Once our ecosystem is large
enough that we cover a large area of one industry, we plan on holding industry wide
events that will give recruiters the opportunity to network with and hire upcoming
professionals who are interested in such industry. We plan on collecting the list of
upcoming professionals through our loyalty program that will be used on our night club
(which will target such demographic).
We also plan on adding a state of the art sound system as well as providing a
during-the-day dining location as well as day parties to compliment our lounge area. We
want to incorporate state of the art lighting equipment in order to separate ourselves
from most nightclubs which only have a dj playing; we want to operate as a business far
above the necessary minimum. Our convenient downtown location (4th/5th and Lavaca)
also provides the opportunity for young professionals in the area to come by our
restaurant to enjoy a nice meal or a few drinks after work. We are within walking
distance from the 29-floor Chase Tower, and are near the Frost Bank Tower as well,
both filled with hundreds if not thousands of professionals.
Implementation Report
We released a survey on November 11, of 2015. The intention of this survey was
to gauge interest in our business venture, as well to create some demographics that
would be useful for future target market designations. As of December 7, we received
58 responses to this survey. Many of the questions are related to socializing habits, but

13. we gained some useful insight into our demographics from this. Of the 58 responses,
96.55% of the respondees were between the ages of 18 and 32. Of all responses,
29.82% were female and 70.18% were male. We did not anticipate this overwhelming
major of responses to be of males. Many of those respondees, 65,52%, live 10 miles or
closer to downtown Austin. This is useful in determining ways to create a demand for
our venue by incorporating ways to localize those who are familiar with the area.
18.97% of those surveyed live less than one mile from downtown Austin, which can be
useful in determining the amount of traffic we could generate, mainly with our restaurant
during the day time hours of operation.
When asked what they look for when socializing, many respondees stated the
importance of the amount of people and the atmosphere. People preferred a relaxed
atmosphere with good prices on food and beverages over jam-packed venues that are
too loud to hold a normal conversation in [as anticipated]. For our nightclub-specific
questions, we tried to gauge the consumers spending habits as well as alcohol
consuming habits. 67.92% of those surveyed stated the consume alcohol on a weekly
basis, anticipating spend $20 to $50 a night for alcoholic beverages. On a completely
full night, if our venue reaches maximum capacity of roughly 500 people, based on this
survey, we could generate anywhere to $10,000 to $25,000 in revenue in a single
evening. This does not include those who spend more in an evening, or even those
recurring guests who come multiple times a week. This is also not including restaurant
sales and event space rentals. This can help us determine how the FiveStars system
will be employed at our venue and what we could do to permit future sales growth.

14. There are many steps that need to happen before we can even open the doors to
our venue. First, the venue must be renovated and remodeled. The location we are
using is a former nightclub, called Republic Live, that is attached to a bar called
Hudson’s on Fifth. Republic Live, formerly a venue called Element, had not been
renovated or updated in the fifteen years it was open under either names. Republic Live
will be renovated to become B2F and Hudson’s on Fifth will be transformed into our
restaurant. We want our venue to be multi-purposed, so it will look like an event space
venue during the week but also look like a top notch nightclub and music venue on the
weekends. It should be easily transformed and changed between both uses. The
renovations and remodeling alone, to just bring them up to Austin’s standards [not even
to our own] would cost us at least $1.5 million. I was given this number by Ash Seth.
Ash is a partner in the Fifth Street Entertainment Group LLC who had the previous
lease for the Republic Live and Hudson’s venues. They are current owners of multiple
bars across Austin and Houston such as Voodoo Room and Bungalow Bar. Ash has
given me detailed insight as to what needs to be done in order to create an
establishment that stands out from the rest.
During these renovations, we will also be applying for permits with the city of
Austin such as liquor licenses, food and beverage sales, sales tax permits, and lease
agreements with the property owners as well. To do so, we will need to create or join a
current management team for our goal. We do not have the experience or funding
necessary to create B2F. One thing we do have, though, is the passion. Being young
and driven, our creative minds have no limits and this enables us to think outside the
box when creating our own future. We also have the time and necessary ability to

15. commit that Ash and his current partners may not have. They would have the resources
to fund us and we would have the ability to implement it all.
MVP & Lean StartupApproach
For our MVP we decided to rent out the top area of Concrete Cowboy. It would
be an organized party where we would have the opportunity to test our club ideas and
get a better idea if they are feasible. The only way we can test out if our nightclub ideas/
drinks would work is by hosting an organized party. If we rent out the top area and sell
tickets for the event we can grasp how our customers react to ticket prices etc. It will
also begin to create a image for our business before we fully open. The costs to host
the party are shown in the table below. To sponsor the event on the 2nd floor of
Concrete Cowboy, the total cost for one evening is $20,000.
Rental Fee Alcohol Fee 25% Tip Total Cost
$4k $12.8k $3.2k $20k
By implementing an MVP as early as possible, B2F will be able to gain
actionable metrics about the real-world environment we are entering. By meeting
together monthly to have “pivot” meetings, B2F will be able to convey to all the
members who attend valuable insight into the developments and changes occurring
each month. From these meeting the CMO will make the pivot or persevere decision.
New MVPs will be invented as time progresses. We expect MVP releases to occur
seasonally.

16. New MVPs include seasonal alcoholic drink specials, unique performances by
artists of all kinds, and special events. By comparing data like sales and attendance, we
will be able to validate or discredit our hypotheses about these MVPs. Testing different
performance types, and music genres is the B2F value proposition. Constant
innovation is a driver for traffic, we hypothesize.
Startup Timeline