Bar Business Plan Template

Written by Dave Lavinsky
bar business plan template
Table of Contents
Table of Contents

Bar Business Plan

If you want to start a bar business or expand your thriving bar business, you need a great business plan.

The following bar business plan template gives you the key elements to include in a successful bar business plan. This business plan can be used for any type of business in the bar industry including, but not limited to: a sports bar, a dive bar, a neighborhood bar, wine bar, cocktail bar, and more.

You can download our Bar business plan template (including a full, customizable financial model) to your computer here.

 

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 SummaryFY 1FY 2FY 3FY 4FY 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 Margin25%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 :

  1. Beer
  2. Hard Alcohol
  3. Appetizers
  4. Sandwiches
  5. Specialties
AppetizersPrice
French Fries$5
Buffalo Wings$9
Nachos$9
Cheese Bread$7
BeerPrice
Budweiser$5
Miller$5
Coors$5
Corona Extra$5
Heineken$5
Modelo$5
Tecate$5
Hard AlcoholPrice
Vodka$4
Tequila$4
Rum$4
Brandy$4
Whiskey$4
SandwichesPrice
Chicken$11
Steak$12
Veggie$10
Pastrami$11
Cold Cut$11
SpecialtiesPrice
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 ENROLLMENT25,928
GENDER
Women14,34955%
Men11,57945%
RACE ETHNICITY
African American / Black8653%
American Indian / Alaskan Native108<1%
Asian / Pacific Islander9,96838%
Hispanic3,81215%
International1,0754%
White8,86134%
Race/Ethnicity unknown1,2395%
GEOGRAPHIC DISTRIBUTION
California24,30794%
Other US (44 states and DC)9 474%
Other Countries (63 countries)6 743%
AGE
Average age21
Percent of Undergrads age 25 or Older6%

Customer Segmentation

We will primarily target the following three customer segments:

  1. College Students: The establishment will be located near a predominant university and tailor its services and products for its target customer
  1. 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.
  1. 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 foodB'sSalsa & ChipsPub & 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

You can download our Bar business plan template (including a full, customizable financial model) to your computer here.

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 :

DateMilestone
[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 dayPer location
Year 1100
Year 2120
Year 3130
Year 4140
Year 5150
Average tab$55.00
Annual Lease (per location)$70,000
Yearly Lease Increase %2.50%

5 Year Annual Income Statement

Year 1Year 2Year 3Year 4Year 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 1Year 2Year 3Year 4Year 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 1Year 2Year 3Year 4Year 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
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