Bar & Restaurant Business Plan

Jonathan

The first step to start a restaurant or to improve an existing bar, is to write a list of things that covers all aspects of a bar business. A well detailed Bar Business Plan will help you in:

  • How to develop a new bar business or where to improve your current bar operations
  • How to make your bar business more profitable cutting costs and developing new bar opportunities
  • How to design a new bar menu and to improve the quality of food and beverage without increasing prices
  • How to select raw materials, to increase the purchasing power and to get discount from your suppliers
  • How to find skilled workers and to provide regular training to update them
  • When to hire bar staff including key managers to manage sales, marketing, accounts and costs
  • Where to locate the bar according to your concept of bar business, with a site evaluation based on site history and potential growth
  • Why emphasize the attention to quality of food and drinks, furniture & design, warm atmosphere, music, and style, all to match your targeted clientele
  • How to stand out among other bars in the area

Before investing your money in a new business, we recommend to write a detailed Bar Business Plan. You can have a look at general guide below. For further information, please don’t hesitate to contact us.

How to Write a Bar Business Plan

  • 10 – 20 slides, less than 1 minute per slide to be read
  • just basic information
  • Introduce your bar idea in a story
  • Use clear fonts to read
  • Use basic design
  • Slides should be printable also on a black and white printer too

Bar Business Plan Basic Scheme

  • Company structure: bar staff and location
  • Company purpose: your concept bar in a sentence
  • Product: list main products and services of your bar
  • Market analysis: overview of present market trends and margins to grow for your bar
  • Problem and solution: write how you will solve problems you could find
  • Timing: give a reason why it is the right time to start a bar business, historical evolution, and future bar trends
  • Market: describe the profile of customers of your bar
  • Competitors: list all bars and restaurants in your area, and why customers will prefer your bar
  • Business model: marketing, pricing, market size, targeted customers, lifetime of your bar business
  • Team: list with enclosed C.V. of founders
  • Financial statement: capitalization, balance sheet, cash flow

Business Plan Template for a Start Up Bar

The Bar Business Plan consists of a description of the company and some financial worksheets, to develop your business in a systematic way. Writing a business plan could take 2-3 weeks, but you will save a lot of money and time later. The following bar business plan is suitable for any bar / restaurant, but please emphasize the innovative ideas for your bar to make a good impression to investors. If you need assistance to write your own bar business plan, contact us. I. Contents II. Summary III. Company IV. Bar Products and Services V. Bar Marketing VI. Operational Plan VII. Management & Bar Staff VIII. Financial Statement IX. Bar Start Up Costs X. Bar Financial Plan XI. Notes XII. Rewriting the Plan I. Contents Bar Name, Address, Tel., E-mail, Founders and Managers. II. Summary Now write just a draft, then rewrite it better. Be enthusiastic but professional. Describe your business, owners and bar staff, food / drinks and services, targeted customers, capitals for start up, and return of investment. III. Company Describe your company, mission and vision. Report some news about bar industry, the present market and why there is an high potential of growth, short and long term forecast, why your bar will be a successful bar business, and what exclusive things will make your bar succeed. Mission is how your bar will be. Why people will appreciate your bar. What is your market and the reason to run a bar business. The goal is what you prefer your bar to be in the future (i.e. an exclusive wine bar or a successful night club). Objectives are progress will be made year by year. Describe the strengths, your and partners background bar experience, competencies, and skills. Legal form of bar company. IV. Bar Products and Services Describe accurately your products and/or services including technical details, drawings, brochures, pricing, etc. Emphasize the key factors that will give you competitive advantages, such as the high quality of your products, and/or or unique services, but report also disadvantages (if any). V. Bar Marketing Market – no business cannot success without a good marketing campaign. The market research is necessary to make sure you’re on the right way. Time spent in writing a detailed research for the business plan is a good investment. Market research should consists of both primary and secondary. Because the marketing plan is the centerpiece of all earnings projection, report the truth, giving sources, statistics, and numbers.

  • Primary market research consists of using the information given by a homemade research, such as some interviews to know about preferences of your potential clientele, or checking how many existing bars there are in the area
  • Secondary research use public information such as trends & news given by TV or newspapers & magazines, chambers of commerce data

Economics – describe in details your bar idea: Market size, % market share, present potential customers, future trends, new development, opportunity for your bar. Write down all the difficulties you can find to opening a new bar:

  • Start up capitals
  • High costs for rent
  • Long time and high costs for alchol license
  • High marketing costs
  • Long time for a good quality bar recognition from clients
  • Long time for bar staff training
  • Hard to find local reliable suppliers
  • High speed in trends changing
  • Unsuspected change in local economy

Bar Food & Drinks features and benefits – describe your exclusive bar services, first as you see them, then as your clients will see them. Write the distinctive features emphasizing advantages compared to bars nearby. Outstanding all features allow a your drink be sold at higher price than other bars (benefits). Fresh home made juice is considered a feature for your drink, the high price is your bar benefit. Clients – describe your targeted clientele making a demographic profile for each customer group as follows:

  • Location
  • Age
  • Gender
  • Education, Job, Income level
  • Tastes and preferences
  • Other details useful to your business

Competitors – list bar, restaurant and night club companies that compete with you, directly or indirectly. Direct competitors run a very similar business, indirect competitors offer only few drinks that can influence your bar business. Fill out the competitive analysis table with the key factors that describe you bar and emphasize the difference with your competitors. Be honest and think as a bar customer. Read strong and weak points for each factor, list all other bars, and number the importance of each factor from 1 (essential factor) to 10 (less important factor). Now you can list competitive advantages and disadvantages to know what your potential clients will think of your bar. Strategy – write a marketing strategy that will fit for your potential clients. Promotion – spell out the image of your bar. Put a budget for promotion including the design of your company logo and advertising costs, before start up and ongoing promotion costs. People always forget of assigning money to promotion before opening a new bar. To have a vast clientele, clients must be informed about your products. Define which media (TV, newspaper, magazines, free press, exhibitions, brochures, etc.) better suite your products according to your promotional budget. Pricing – write down your pricing policy according to the competitive analysis table result and compare prices with other bars. We suggest our clients compete on high quality food & drinks and friendly atmosphere rather than on a low pricing strategy. Low prices don’t allow you have enough margin for developing the bar business. A start up bar that chooses a low pricing strategy to find clients, goes bankrupt within 6 months. Sales forecast – write the sales projection month by month, detailing seasonal food & drinks and special event sales. Use historical data if possible, or study a bar competitor, to write 2 different forecasts: Best Case (your expected sales) and Worst Case (sales in case of some inconveniences occurred such as raining days). Location – location is the key success factor for a bar / restaurant, including parking. VI. Operational Plan Location – write all details about bar location, including city planning, distance from office towers or shopping centers, distance from highways, easy parking, brief description of building if an historical villa or a modern tower, square meters, water & electricity power supply, renting costs, maintenance & utilities costs, why choosing this location. Legal requirements – city planning, regulations, food and alchol licensing, worker health. Production – describe your main food & drinks ingredients and how to make them, costs of ingredents and of time to prepare them, quality control method implemented, quality of service. Suppliers – list your suppliers, detailing all food and beverage products, pricing, payment terms, delivery time, reliability. Check if you can easily change suppliers in case you have problem with some of them. Specify terms of payment. Workforce – detail your bar staff, skills required for each position, training, salary. Inventory – detail your investment in food and bottles, value of stock, you will keep in your inventory turnover and time for reordering for each product. VII. Management & Bar Staff Write the position of owners and bar staff including skills, training courses and previous experience. Write the bar staff chart with key functions and name of person in charge, indicating a 2nd option in case of problem with 1st choice. Basic bar staff be listed: Director, Chef, Barista, Bartender, Restaurant manager, Purchasing manager, Accountant. VIII. Financial Statement Write the financial statements of founders. Investors need to know the personal assets of future partners. IX. Bar Start Up Costs Be honest to write the forecasts of bar start up costs. Underestimating the costs will leave you without capitals to cover unsuspected expenses. The best way to know the right costs, is to read accounting books of other bars. If you cannot get information from them, we suggest you to increase the costs of 10-20%. X. Bar Financial Plan The estimated time for break-even, cash-flow projection, and balance, constitute the financial future of your bar business. The centerpiece of a business plan is the profit and loss projections for the first year. 1 year profit and loss projections – write the criteria for the forecast profits, and detail profit and loss month by month. Analyzing the 12 month profit and loss projection, you can see if your bar will be a success, and break-even timing. 3 year profit projections – like above projections, just think of unsuspected things that could happen on long term. Projected cash flow – you must know how much capital you need for bar start up, preliminary expenses, and operating expenses. If you are out of cash, you cannot pay water & electricity bills, rental costs, and suppliers. The lack of funds is the first cause of bankruptcy, so track all operating data, when you will receive cash (clients) and when you will make payments. With the cash flow table, you can see if your estimated capital is enough. Increase the start up capital if the cash balance turn on negative even if for just a week. Cash flow projection is different from profit and loss projection. You will collect money when while you can get an extended payment in 30 days with most suppliers, but you have to pay in advance rental, maybe some products to take advantage of discounted price or to get exclusive bottles. Projected day balance sheet – the balance sheet reports assets (valuable goods) and liabilities. Use a spreadsheet for start up costs and capitalization, to see the bar estimated financial position for the year. Break-even point – the break-even point is the volume of sales that separate profit from loss. If you fix a sale price for a cup of coffee, the break-even shows you the minimum sales of cups per year necessary to recover both fixed and variable costs related to coffee. Variable costs are given by coffee (raw materials), and will grow up according to level sales. Fixed costs are given by purchasing the coffee maker, barista salary, and a part of rental and bills. XI. Notes List details of sources used for the business plan such as draft od advertising materials, food & beverage industry studies, maps of the city, newspaper articles about bar business, draft contract to rent bar, market research sources, photos of building, rendering of the new bar. XII. Rewriting the Plan The bar business plan described will be modified to suit your specific bar business and your audience. The business plan can be written to better know how to develop business, used for raising capitals from investors, used for a loan from banks. If you intend to present the business plan to banks, pay attention on: Total amount of loan The use of the capitals Why your bar will be a succss Repayment terms (how many years you need to repay), it is better to negotiate a long repayment term that allows a have a good cash flow, rather then negotiating the interest rate. If you intend to present the business plan to investors, pay attention on: Funds needed short-term, in 2 – 3 years Estimated ROI, return on investment Exit strategy for an investor (buyback, sale, or IPO) Detail how the company will use the funds Percent of the ownership given up to investors Involvement of investors in management After writing a first edition of your bar business plan, read carefully it and pay attention on: Company image Food & beverage: the selection of products should be consistent with company image. Bar atmosphere: bar design and staff should be in accordance with company image. Location: check if it gives enough exposure, if it is convenient for your targeted clientele and consistent with company image Pricing policy: prices should be profitable, competitive, and in accordance with company image. Inventory level and average inventory turnover rate: check if you have enough budgeted for startup inventory. Promotion: methods and costs to project a consistent company image.

For further information, don’t hesitate to contact us.

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