Bar Business Plan
If you’re starting a bar business or looking to expand your existing bar, a solid business plan is the first step to success.
The following bar business plan template outlines the key elements to include in a successful bar business plan. This template can be used to create a business plan for various types of bar concepts, including but not limited to: craft bars, sports bars, cocktail lounges, and dive bars.
Example Business Plan for a Bar or Pub
I. Executive Summary
Business Overview
[Company Name] is an upscale yet affordable bar and lounge strategically located in west Los Angeles near one of California’s premiere universities. [Company Name] is focused on creating an exciting environment where college students can purchase affordable drinks and dance to the latest music on our newly designed dance floor. Our lounge meets the demand for college students who want an alternative to the usual fraternity or apartment party. The [Company Name] spacious design and elegant pictures foster an environment of relaxation and college fun. At [Company Name] it is always happy hour.
Products Served
[Company Name]will sell imported and domestic beers both in the bottle and in draft. In addition, it will have a wide selection of hard alcohols for mixed drinks. All drinks will be sold at happy hour prices all night long.
In addition to alcoholic drinks, the Company will sell appetizers and main dishes for consumption during all hours of operation .
Customer Focus
[Company Name] will primarily serve college students and residents within a 5-mile radius of our location. The demographics of these customers are as follows :
- 39,650 students
- Average disposable income of students $7,000
- Majority of students are single
- 25% are over the age of 21
Management Team
[Company Name] is led by [Founder’s Name] who has been in the bar industry for 20 years. While [Founder’s Name] has never run a bar herself, she has worked and managed many bars throughout her college years and has taught bartending courses for the last five years. As such [Founder’s Name] has an in-depth knowledge of managing and promoting a bar including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.).
Success Factors
[Company Name]is uniquely qualified to succeed due to the following reasons :
- There is currently only one bar available for students within walking distance of the university. In addition, we have surveyed students and received extremely positive feedback saying that they explicitly want to frequent our business when launched.
- Our location is in a high-volume area where students can walk to and from our location.
- The management team has experience in successfully managing a bar.
- Operating a bar is a proven business and has succeeded in various college towns throughout the nation.
- Market trends show that college students are consuming alcohol in greater amounts than previous years.
Financial Highlights
[Company Name] is currently seeking $406,645 to launch. Specifically, these funds will be used as follows:
- Bar design/build: $262,200
- Working capital: $144,445 to pay for Marketing, salaries, and lease costs until [Company Name] reaches break-even
Top line projections over the next five years are as follows:
| Financial Summary | FY 1 | FY 2 | FY 3 | FY 4 | FY 5 |
|---|---|---|---|---|---|
| Revenue | $560,401 | $782,152 | $1,069,331 | $1,379,434 | $1,699,644 |
| Total Expenses | $328,233 | $391,429 | $552,149 | $696,577 | $776,687 |
| EBITDA | $232,168 | $390,722 | $517,182 | $682,858 | $922,956 |
| Depreciation | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 |
| EBIT | $225,168 | $383,722 | $510,182 | $675,858 | $915,956 |
| Interest | $6,016 | $5,264 | $4,512 | $3,760 | $3,008 |
| Pre Tax Income | $219,152 | $378,458 | $505,670 | $672,098 | $912,948 |
| Income Tax Expense | $76,703 | $132,460 | $176,985 | $235,234 | $319,532 |
| Net Income | $142,449 | $245,998 | $328,686 | $436,864 | $593,416 |
| Net Profit Margin | 25% | 31% | 31% | 32% | 35% |
II. Company Overview
Who is [Company Name]
[Company Name]is located in West Los Angeles near one of California’s premiere universities. [Company Name]is a new bar and lounge focused on creating an exciting environment where college students can purchase affordable drinks and dance to the latest music on our newly designed dance floor. Our lounge meets the demand for college students who want an alternative to the usual fraternity or apartment party. The [Company Name] spacious design and elegant pictures fosters an environment of relaxation and college fun. At [Company Name] it is always happy hour.
[Company Name]was founded by [Founder’s Name]. While [Founder’s Name]has been in the business for some time, but just recently decided to launch [Company Name]. Specifically, during this time, [Founder’s Name] took a trip to Los Angeles to visit her son and realized that there was only one bar to accommodate a large student population. During her trip, [Founder’s Name]frequented the local bar that enjoyed tremendous success. After several discussions with the manager [Founder’s Name]realized that there was enough demand from the local student population to sustain profitable growth for another bar.
Specifically the customer demographics and competitive situations near the university validated that her venture would work. Furthermore, after surveying the local student population, this theory was proven .
The [Company Name’s] History
Upon returning from [location], surveying the local customer base, and finding potential retail locations, [Founder Name]incorporated [Company Name]as an S-Corporation on July 1, 20XX.
The business is currently being run out of [founder name] home office, but once the lease on [Company Name] retail location is finalized, all operations will be run from there.
Since incorporation, the company has achieved the following milestones :
- Found a location
- Developed the company’s name, logo and website located at [x]
- Created the menu
- Determined equipment and inventory requirements
- Began recruiting key employees with experience
The [Company Name’s]Products
Below is the [Company Name]initial menu. As you can see all items are classified under the following five main categories :
- Beer
- Hard Alcohol
- Appetizers
- Sandwiches
- Specialties
| Appetizers | Price |
|---|---|
| French Fries | $5 |
| Buffalo Wings | $9 |
| Nachos | $9 |
| Cheese Bread | $7 |
| Beer | Price |
| Budweiser | $5 |
| Miller | $5 |
| Coors | $5 |
| Corona Extra | $5 |
| Heineken | $5 |
| Modelo | $5 |
| Tecate | $5 |
| Hard Alcohol | Price |
| Vodka | $4 |
| Tequila | $4 |
| Rum | $4 |
| Brandy | $4 |
| Whiskey | $4 |
| Sandwiches | Price |
| Chicken | $11 |
| Steak | $12 |
| Veggie | $10 |
| Pastrami | $11 |
| Cold Cut | $11 |
| Specialties | Price |
| Water | $3 |
| Soda | $3 |
| Juice | $3 |
Bar Design
[Company Name] will develop a 1,000 square foot bar whose key elements will include the following :
- Kitchen area
- Ordering counter
- Tables and couches
- A dance floor
- Restrooms
Below please find a rough sketch of the floor plan. [Add diagram of floor plan]
The location has 20 dedicated parking spots which should suffice even in peak hours.
[Company Name] plans to be open 7 days a week, from 11am to 2am. As demand dictates, we may extend or reduce our hours. Likewise, as demand dictates, we may offer delivery service.
III. Industry Analysis
[Company Name]directly or indirectly competes with all bars and restaurants nearby our location that offer similar products, mainly alcohol and food .
Industry Statistics & Trends
The following industry size facts and statistics bode well for [Company Name].
The percentage of beer, wine, and liquor consumed in bars and restaurants as opposed to private settings is growing. The U.S. Department of Commerce reported that alcohol sales were up 5.2 percent to nearly $9.2 billion. Beer accounts for approximately 40 percent of sales, distilled spirits or hard liquor 30 percent, food and non-alcoholic beverages 10 percent, and wine 7 percent.
The industry is highly fragmented with taverns accounting for the largest sector with 19,660 drinking places. Bars and lounges represent 19.8 percent of the market.
Additional industry stats include:
- Last year, the bar and nightclub industry’s drinking establishments primarily engaged in the retail sale of alcohol drinks numbered 60,876
- The establishments generated approximately $15 billion in combined annual sales
- The average establishment generated approximately $200,000
- States representing the majority of establishments included: Wisconsin (4,489), California (4,449), Texas (4,388), New York (4,283), Illinois (3,634), Pennsylvania (3,572), Florida (3,191), and Ohio (3,201).
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name] will serve the residents of [company location] and the immediately surrounding areas as well as those who work in [company location ].
The precise demographics of the town in which our bar resides is as follows :
| UNDERGRADUATE PROFILE | ||
|---|---|---|
| TOTAL ENROLLMENT | 25,928 | |
| GENDER | ||
| Women | 14,349 | 55% |
| Men | 11,579 | 45% |
| RACE ETHNICITY | ||
| African American / Black | 865 | 3% |
| American Indian / Alaskan Native | 108 | <1% |
| Asian / Pacific Islander | 9,968 | 38% |
| Hispanic | 3,812 | 15% |
| International | 1,075 | 4% |
| White | 8,861 | 34% |
| Race/Ethnicity unknown | 1,239 | 5% |
| GEOGRAPHIC DISTRIBUTION | ||
| California | 24,307 | 94% |
| Other US (44 states and DC) | 9 47 | 4% |
| Other Countries (63 countries) | 6 74 | 3% |
| AGE | ||
| Average age | 21 | |
| Percent of Undergrads age 25 or Older | 6% |
Customer Segmentation
We will primarily target the following three customer segments:
- College Students: The establishment will be located near a predominant university and tailor its services and products for its target customer
- Local office workers: Approximately 3,000 individuals work in offices within a quarter mile of our location, and we expect a fair portion of these individuals to frequent the establishment from 5:00pm on.
- Local residents: Approximately 1,000 residents live near the surrounding area and a majority will frequent the establishment.
V. Competitive Analysis
Direct & Indirect Competitors
The following bars and restaurants are located within a 2-mile radius of [Company Name], thus providing either direct or indirect competition for customers :
B’s Bar & Lounge
B’s is the only bar located near the university within walking distance and has been in operation for 15 years. The bar offers a wide selection of alcohol and food items, but offers no entertainment.
Many alumni visit the establishment and host events. However, many students complain that the establishment is too small and needs to be remodeled. In addition, B’s offers a variety of items, but the items are overpriced.
Salsa & Chips
Salsa & Chips has been in business for 7 years and is a restaurant with a small bar located inside its establishment.
However, [Company Name] has several advantages over Salsa & Chips including:
- Salsa & Chips does not offer entertainment
- Salsa & Chips offers only Mexican beers
- Salsa & Chips closes early
- Salsa & Chips does not have a happy hour
Pub & Deli
Pub & Deli is located four stores to the East of us. It has been in business for the past 10 years and enjoys great success, primarily due to its prime location (which we will also have).
[Company Name] has several advantages over Pub & Deli including:
- Pub & Deli does not offer products, including imported beers and hard alcohol
- Pub & Deli does not offer entertainment
While we expect that Pub & Deli will continue to thrive based on its location and customer relationships, we expect that more and more customers will frequent [Company Name] based on our lounge catered for students and their desire for place to dance and drink.
Competitive Pricing
| Type of food | B's | Salsa & Chips | Pub & Deli |
|---|---|---|---|
| Apps | $5 - $12 | $6.95 - $12.95 | $8.95 - $16.95 |
| Lunch | $9 - $18 | $7.95 - $12.95 | $12.95 - $15.95 |
| Dinner | $15 - $25 | $17 - $27 | $18 - 26 |
| Drinks | $7 - $11 | $9 - $14 | $8 - $12 |
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. These advantages include :
- Location: [Company Name]’s location is near a university, giving us access to students, workers, and residents that live nearby.
- Decor and Environment: The bar and lounge will have the latest decor and premiere sound system to attract students.
- Management: Our management team has years of business and management experience that allows us to market and serve customers in a much more sophisticated manner than our competitors.
- Relationships: Having worked in the industry for 25 years [founder’s name] has the contacts with suppliers and promoters to successfully launch a bar.
VI. Marketing Plan
The Marketing Plan describes the type of brand [Company Name] seeks to create and the Company’s planned promotions and pricing strategies.
The [Company Name] Brand
The [Company Name] brand will focus on the Company’s unique value proposition :
- Offering premiere drinks at an affordable price.
- Offering a convenient location that offers a place to dance and drink
- Providing excellent customer service
Promotions Strategy
[Company Name] expects its target market to be students and individuals working and/or living within a 5-mile radius of its establishment. The Company’s promotions strategy to reach these individuals includes :
Direct Mail
[Company Name] will blanket neighborhoods surrounding its locations with direct mail pieces. These pieces will provide general information on [Company Name], offer discounts and/or provide other inducements for people to frequent the bar.
Public Relations
We will contact all local and area newspapers and television stations to tell them about the opening and unique value proposition of [Company Name].
Advertising
[Company Name] will initially advertise in local newspapers and sponsor community events in order to gain awareness.
Pre-Opening Events
Before opening the bar, [Company Name] will organize pre-opening events designed for prospective customers, local merchants and press contacts. These events will create buzz and awareness for [Company Name] in the area.
Pricing Strategy
[Company Name]’s pricing will be moderate, so customers feel they receive great value when patronizing the bar .
VII. Operations Plan
Functional Roles
In order to execute on [Company Name]’s business model, the Company needs to perform many functions including the following :
Administrative Functions
- General & Administrative functions including legal, marketing, bookkeeping, etc.
- Sourcing and storing ingredients
- Hiring and training staff
Kitchen Functions
- Food preparation
- Ongoing menu creation and modification
Bar Functions
- Order taking and fulfillment
- Customer service
- Janitor/maintenance personnel to keep the bar clean
Milestones
[Company Name] expects to achieve the following milestones in the following [] months :
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out bar |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Launch [Company Name]bar |
| [Date 5] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name]is led by [Founder’s Name] who has worked in the industry for over 20 years.
[Founder] has also worked part-time at bars throughout the [region] over the past 10 years. Specifically, he has worked for the StarLight Bar where she has managed a crew of 10 people. She has also taught various bartending courses .
[Founder] graduated from the University of ABC where he majored in Communications .
Hiring Plan
[Founder] will serve as the bar manager. In order to launch our bar, we need to hire the following personnel :
- Wait staff (2 full-time equivalents to start-support staff)
- Bartender (1 to start)
- 1 Cook (1 to start-support staff)
- Assistant Manager (will manage cash register and other administrative functions)
- Additional Support Staff
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s revenues will come from the sale of alcohol and food to its customers.
The major costs for the company will be food production costs and salaries of the staff. In the initial years, the company’s marketing spend will be high, as it establishes itself in the market .
Capital Requirements and Use of Funds
[Company Name] is seeking a total funding of $406,645 to launch its bar. The capital will be used for funding capital expenditures, manpower costs, marketing expenses and working capital.
Specifically, these funds will be used as follows:
- Bar design/build: $262,200
- Working capital: $144,445 to pay for Marketing, salaries, and lease costs until [Company Name] reaches break-even
Key Assumptions & Forecasts
Below please find the key assumptions that went into the financial forecast and a summary of the financial projections over the next five years.
| Number of customers per day | Per location |
|---|---|
| Year 1 | 100 |
| Year 2 | 120 |
| Year 3 | 130 |
| Year 4 | 140 |
| Year 5 | 150 |
| Average tab | $55.00 |
| Annual Lease (per location) | $70,000 |
| Yearly Lease Increase % | 2.50% |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRE-TAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
