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BUSINESS PLAN 11 Business Plan Hong Pan BA 435B Penn State University-Abington College BUSINESS PLAN Business details The company’s name is Blue Moon Bar, it will be located at W Main Street, Uniontown, Pennsylvania 15401. It will be a partnership business that will offer fun and entertainment and a platform for single adults. The Industry The nightclub and bar industry has shown a modest growth in the past five years, as overall consumer spending and confidence in the industry continue to increase gradually. In the United States, premium beverage consumption is rising in a promising rate that is valuable to operators in the industry. Over the five years period there has been a change in consumer’s drinking patterns, compelling the bar business operators to adapt flexible menus that suit changing customer preference and tastes (Nieuwenhuizen, Rossouw & Badenhorst 2008). Bar operators are likely to benefit in the next five years as a result of the expected rise in per capita income and customer spending. Nightclub and bar owners are likely to face a decline in their sales volume due to the American adult lifestyle that is aimed at regulating alcohol consumption thus a decrease in expenditure on alcohol. Products and services Blue Moon bar will be a restaurant and a bar, it will offer customers with serene features, a dance floor, spacious and state of the art guest houses, bonfires, five course meals and outdoor activities such as bike riding, zip lines and forest adventures. The products and services will have a ten percent discount for new customers and loyal customers a unique and attractive feature. The market Blue Moon bar’s target market is the office going population and single people in in Uniontown. The total population in Uniontown is 10,372 people, the working population targeted is around 5,379 this is approximately 51.86% of the population. The working population comprises of the drinking population, young and single people who love fun and entertainment this will suit the products and services that the company will offer. Target Market Strategy Blue Moon Bar’s positioning statement will be; Blue Moon Bar the only place you get to socialize, drink and have lots of fun in one payment package. Entry fee will be affordable and relatively cheaper as compared to other bars in UnionTown. Advertisements and promotion in the industry will be through sales promotion, Blue Moon Bar will offer free drinks and food to customers on its opening ceremony and free gifts for our customers. Social Media will be a major part in our advertising and promotion strategy, considering that our target market is the young, single and working population who are major social media fans. The media will be an advertising platform that will cover people who may not be on social media and the elderly who are still fun and entertainment lovers. Target market sales Approach Blue Moon Bar will be open from Tuesday till Sunday this will be the most appropriate time to attract and host target customers, daily themed entertainment will be available to customers from Tuesday all through to Sunday. Renowned artists in the industry and bands will be frequent entertainment guests, consumer’s will get to interact with them and get mentoring services a chance that will be offered twice yearly. Competitive analysis Competitor name Strengths Weaknesses Club 231 Themed entertainment, dance and music nights Flexible menus Poor marketing strategies Poor customer service. Titlow Tavern & Grille Serves mouth-watering food. High qualified staff. Inflexible menus Poor location Griff’s bar Unique old school style A branded image. Insufficient personnel. Poor management The Marketing Schedule Media Annual Cost Yellow Pages (South Central Edition) Category: Restaurants, Restaurant Guide $1000.00 Newspaper (The Republic: Circulation 28,000) Ad Design Costs $500.00 Media Costs (24 ads @ $200) $3000.00 Direct Mail (Brochures and Special Occasions) Distribution (5,000 @ $.50 per piece @ $.27 postage) $2400.00 Radio (QMIX 103 / Adult Contemporary & WTIU/NPR) Media Costs (600 :30 second ads @ $6.20 per spot) $2000.00 Total Annual Advertising and Media Costs $8900.00 The targeted customers There are 55% people who are not married this is the business target market as it is single they would mingle in Blue Moon Bar. The target market has a relative income thus sparing income for fun and entertainment. The business expects fifty customers per days and a hundred at the peak seasons. The location Blue Moon Bar, it will be located at W Main Street, Uniontown, Pennsylvania 15401. It is an easily accessible location that most of the target market is, it has a low number of bars and nightclubs. Customers will get to the bar through bikes and Blue Moon carts provided by the management, to avoid to minimize cost and traffic congestion. Staff Blue Moon Bar staff will comprise of: The management team, middle staff and the subordinate staff. The management staff will comprise of two managers who will be tasked with overseeing the overall operations in the bar, managers will have delegate duties to junior staff under them as the bar will compromise of two departments (Stokes & Wilson 2010). The first manager will be in-charge of the kitchen department this team will comprise of 2 kitchen cleaners and eight chefs and cook assistants. The second manager will be in charge of the customer care department this team will constitute 20 bartenders and waitresses. Blue Moon Bar will hire a lawyer who will be responsible for carrying out legal formalities and an accountant whose role will be to keep track of the bar’s financial statements and updating book of account at the end of the year and balancing ledgers monthly. The Legal Structure The Blue Moon Bar will be a partnership business to have shared costs and losses. Partnership will increase capital available for the start up and running of the business and there is no cost of creation. Risk Management Penn Summit Insurance Agency will cover Blue Moon Bar property and employees. Employee’s premium will range from $ 2,000 to 10,000 according to the employees employment position. Blue Moon Bar will have a cover for its building and vehicles and the premiums will range from $ 10,000 to $ 30,000. Core scores To measure the success of Blue Moon Bar the following measures will be used; daily customer turn up, number of single people that will get partners, number of drinks served per day and increase of revenue monthly. Required Start-up capital Item Amount Fixed Assets Building $5,000 Equipment $ 5,000 Vehicles $500 Furniture and fixtures $3,000 Working Capital Salaries and wages $30,000 Insurance premiums $ 20,000 Rent $ 7,000 Advertising and promotions $ 9,500 Cash in hand $40,000 Legal and accounting fees $20,000 Total $140,000 Capital Strategy Total Amount Required $964,000 -5 Investors ($5,000 each will get 10% share of company) $25,000 -Commercial Bank Loan (Real Estate & 80% Building) $20,000 -Owners $30,000 Loan Payment Amounts -Principal Amount Borrowed $20,000 -Projected Interest Rate 7.25% -Term In Months 240 Total Monthly Loan Payment $1000.00 Money forecast The starting capital for Blue Moon Bar will be approximately $ 200,000 this will include each members contribution of approximately $ 50,000, $25,000 will be contributed by the manager. The company aims at acquiring a maximum of $ 100,000 revenues within the first years of operations. The revenue expected over the years are as follows; • Year 1: $25,000 • Year 2: $50,000 • Year 3: $70,000 • Year 4: $85,000 • Year 5: $1,00,000 References Nieuwenhuizen, C., Rossouw, D. & Badenhorst, J. (2008). Business management: a contemporary approach. Cape Town, South Africa: Juta. Stokes, D. & Wilson, N. (2010). Small business management and entrepreneurship. Andover: Cengage Learning.