Sports Bar Business Plan
TAKE FIVE SPORTS BAR & GRILL
16777 W. Barnes St.
Americus, GA 31709
This business plan serves as a good model for a restaurant looking to franchise. The existing company's profitability is described in full detail and the demand for similar restaurants is communicated well. Note, too, the focused objectives and keys to success. The narrowed focus assures the company won't be spread too thin to achieve their goals. This plan was compiled using Business Plan Pro, by Palo Alto Software.
- EXECUTIVE SUMMARY
- COMPANY SUMMARY
- MARKET SUMMARY
- MARKETING STRATEGY
- MANAGEMENT SUMMARY
- FINANCIAL PLAN
Take Five Sports Bar & Grill has established a successful presence in the food and beverage service industry. The flagship location in suburban Americus (Medlock Bridge) will gross in excess of $2 million in sales in its first year of operation, ending July 1996. First year operations will produce a net profit of $433,000. This will be generated from an investment of $625,000 in initial capital. Since 10 months of operations have already been completed, the confidence level for final first year numbers is extremely high. The first 10 months of start-up costs, sales revenues, and operating expenses are actual.
Expansion plans are already underway. Owner funding and internally generated cash flow will enable additional stores to open. Sales projections for the next four years are based upon current planned store openings. Site surveys have been completed and prime locations have been targeted for store expansion.
The sales figures and projections presented here are based upon an additional four store locations at the most premium sites available in the Americus Metro market area as well as a prime resort location in Destin, Florida.
This plan will result in sales revenues growing to $25 million by FY2000 and generating net income in excess of $5.6 million.
Management has recognized the rapid growth potential made possible by the quick success and fast return-on-investment from the first location. Payback of total invested capital on the first location will be realized in less than 18 months of operation. Cash flow becomes positive from operations immediately and profits are substantial in the first year.
Take Five has the objective of opening additional stores in Americus Metro at Ashford-Dunwoody, Lawrenceville, Buckhead, and East Cobb. Additionally, a store will be opened on the beach at Destin, Florida, a year-round resort destination.
The management of Take Five has demonstrated its concept, execution, marketability, and controls, and feels confident of its ability to successfully replicate the quick ramp-up of the Medlock Bridge location to additional venues.
The following objectives have been established:
- Have all five stores operational by 1998 with a sequential time-line of openings.
- Maintain tight control of costs and operations by hiring quality management at each location and utilizing automated computer control.
- Keep food cost under 32% of revenue.
- Keep beverage cost under 21% of revenue.
- Select only locations that meet all the parameters of success.
- Grow each location to the $3 to $5 million annual sales level.
Take Five Sports Bar & Grill strives to be the premier sports theme restaurant in the Southeast Region. Our goal is to be a step ahead of the competition. We want our customers to have more fun during their leisure time. We provide more televisions with more sporting events than anywhere else in the region. We provide state-of-the-art table-top audio control at each table so the customer can listen to the selected program of his or her choice without interference from background noise. We combine menu selection, atmosphere, ambiance, and service to create a sense of "place" in order to reach our goal of over-all value in a dining/entertainment experience.
Keys to Success
The keys to success in achieving our goals are:
- Product quality. Not only great food but great service.
- Managing finances to enable new locations to open at targeted intervals.
- Controlling costs at all times without exception.
- Instituting management controls to insure replicability of operations over multiple locations. This applies equally to product control and to financial control.
The key elements of Take Five's restaurant store concept are as follows:
- Sports based themes—The company will focus on themes that have mass appeal.
- Distinctive design features—All stores will be characterized by spectacular visual design and layout. Each store will display a collection of authentic sports memorabilia.
- High profile locations—The company selects its store locations based on key demographic indicators, including traffic counts, average income, number of households, hotels, and offices within a certain radius.
- Celebrity events—The company stores will be distinguished by the promotional activities of sports celebrities and by media coverage of appearances and special events.
- Retail merchandising—Each store will include an integrated retail store offering premium quality merchandise displaying the company's logo design. In addition, sports memorabilia will be sold.
- Quality food—Each Take Five store will serve freshly prepared, high quality, popular cuisine that is targeted to appeal to a variety of tastes and budgets with an emphasis on reasonably and moderately priced signature items of particular appeal to a local market.
- Quality service—In order to maintain its unique image the company provides attentive and friendly service with a high ratio of service personnel to customers and also invests in the training and supervision of its employees.
Take Five Sports Bar & Grill is a privately held Georgia company. Joseph A. Smith is the principal owner. It is Mr. Smith's intention to offer limited outside ownership in Take Five on an equity, debt, or combination basis in order to facilitate a more rapid expansion of the Take Five concept.
Mr. Smith holds an M.B.A. in Finance from the University of Georgia. He has held executive level positions in finance with Global Electric and Vacation Inn Worldwide. He is previously experienced in the restaurant industry, having opened Smith's Italian Restaurant in 1993, which still operates successfully under his ownership.
Take Five Sports Bar & Grill was founded in 1995 by Joseph Smith to capitalize on the ever growing market demand for high end technology enhanced sports theme restaurants. Take Five has promoted its brand through the operation of its existing location at Medlock Bridge Road and State Bridge Road in Americus, Georgia. The flagship location provides a unique dining and entertainment experience in a high-energy environment. Customer acceptance has been proven. Regular and repeat customers cross many age demographics and families are frequent diners.
Take Five has promoted heavily with tie-ins to Atlanta professional teams and celebrities. Take Five Sports Bar & Grill is the radio home for the live Monday Night WWHK Americus Horsecats coaches show. This show is broadcast during the hour preceding the telecast of "Monday Night Football." In addition, Take Five hosts the Americus Backboards sports talk show on ABC 750 AM featuring local basketball celebrities. The local baseball team often celebrates victories at Take Five.
|Gross % (calculated)||0%||0%||62.06%|
|Collection period (days)||0||0||0|
|Other Short-term Assets||$0||$0||$17,310|
|Total Short-term Assets||$0||$0||$99,643|
|Total Long-term Assets||$0||$0||$445,782|
|CAPITAL AND LIABILITIES|
|Other ST Liabilites||$0||$0||$40,826|
|Subtotal Short-term Liabilities||$0||$0||$60,866|
|Paid in Capital||$0||$0||$625,000|
|Total Capital and Liabilities||$0||$0||$545,425|
|Sales on credit||$0||$0||$0|
Company Locations and Facilities
The company units will range in size from 6,000 to 9,000 square feet and will seat from 225 to 400 persons. Each Take Five Sports Bar & Grill will feature authentic sports memorabilia such as game jerseys to signed tennis racquets. Each store will be equipped with state-of-theart audio and video systems to enable the customer to enjoy the game of their choice. Every restaurant will be built to existing specifications, clean looking, open, and pleasing to the customer.
Unit locations are as follows:
- Medlock Bridge—This unit is located at one of the busiest intersections in North Fulton County. It is surrounded by four major country clubs, upper middle class neighborhoods, office complexes, and shopping. It encompasses 6,000 square feet of space and has been open since August 1995.
- Ashford-Dunwoody—This unit will open in late summer 1996. Size will be 7,200 square feet. The location is one and one half miles north of Perimeter Mall. Within a three-mile radius there is 20 million square feet of professional office space. Also, an abundance of upscale apartment complexes adjoins the unit. Major chain hotels are located nearby. Perimeter Mall is one of the regional upscale shopping destinations.
- Lawrenceville (New Market)—This site will occupy 6,500 square feet and is scheduled to open in the spring of 1997. It will be built as a free-standing building on a more than 2-acre parcel at the intersection of Route 120 and Route 316. Adjacent to the property is an 18-screen movie theater opened by AMC in March 1996. This is the largest theater AMC has built in the Americus area. New Market Mall has as master anchors Bullseye, Tool Box, and Edwards, among others. The demographics are very favorable with no competition from other sports bar restaurants.
- Peachtree and Piedmont (Buckhead)—This unit will be in the heart of Buckhead, which is Americus's most comprehensive business and entertainment center. In addition to retail space being constructed at this sight the unit will be adjacent to a 200-room America's Suite Hotel. Buckhead is one of the nation's largest and fastestgrowing mixed use urban areas. It includes a dynamic combination of concentrated offices, retail, hotel, shopping, restaurant/entertainment, and residential development.
Take Five Sports Bar & Grill also maintains a corporate business office at 7155 Main Street, Americus, Georgia 31709.
Target Market Segment Strategy
Our strategy is based on serving our niche markets well. The sports enthusiast, the business entertainer and traveler, the local night crowd, as well as families dining out all can enjoy the Take Five experience.
What begins as a customized version of a standard product, tailored to the needs of a local clientele, can become a niche product that will fill similar needs in similar markets across the Southeast.
We are building our infrastructure so that we can replicate the product, the experience, and the environment across broader geographic lines. Concentration will be on maintaining quality and establishing a strong identity in each local market. The identity becomes the source of "critical mass" upon which expansion efforts are based. Not only does it add marketing muscle, but it also becomes the framework for further expansion using both company-owned and franchised store locations. Franchises will first be marketed in late 1997 or early 1998.
A combination of local media and event marketing will be utilized at each location. Radio is most effective, followed by local print media. As soon as a concentration of stores is established in a market, then broader media will be employed.
The strategy of live broadcasting and pro sports tie-ins has been most effective in generating free publicity for the flagship location which has been more effective than any advertising that could have been purchased.
All menu items are moderately priced. An average customer ticket is between $10 and $20 including food and drink. Tickets are considerably larger for game day visitors. Our average customer spends more than the industry average for moderately priced establishments. We tend to believe that this is due to our creating an atmosphere that encourages longer stays and more spending but still allows adequate table turns due to extended hours of appeal.
We promote sports, sports, and more sports. The universal appeal of sports and sports marketing has never been higher. A high growth area such as Americus has an annual influx of new residents from many other parts of the country. This trend is true in the Sunbelt in general.
Many new residents and many existing ones are fans of teams in other markets. Take Five is a place for all. Each patron can watch his or her game of interest. The enabling technology is the benchmark for Take Five.
Advertising budgets and sports event promotion is an on-going process of management geared to promote the brand name and keep Take Five at the forefront of sports theme establishments in each local marketing area.
In addition, funds are budgeted to launch franchise sales activity and lead generation. These funds amount to 20% of projected franchise sales.
Take Five will create an "identity" oriented marketing strategy with executions particularly in local media. Radio spots, print ads, and in-store promotions are designed for transplantation to other markets. A portion of the ad and promo budget is set aside to develop these programs.
The sales strategy is to build and open new locations on schedule in order to increase revenue. Each individual location will continue to build its local customer base over the first three years of operation. The goal is $3 to $5 million in annual sales per unit. A unit will be considered mature once it has passed the $3.5 million mark in annual sales.
We anticipate a rapid sales ramp-up for our first location in only its first twelve months of operation. The two million dollar sales volume represents somewhat less than 50% of the revenue potential of the location.
|Direct Cost of sales||FY1996||FY1997||FY1998|
|Subtotal Cost of Sales||$577,638||$2,531,380||$4,435,640|
Our milestone schedule indicates our emphasis on planning for implementation.
|Business Plan Milestones|
|Milestone||Manager||Planned Date||Dept.||Budget||Actual Date||Actual Budget||Planned Date - Actual Date||Budget - Actual Budget|
|Open Medlock Bridge||JDP||8/1/95||Exec||$625,000||1/1/95||$0||212||$625,000|
|Open Destin, Fla.||JDP||3/1/98||Exec||$1,500,000||1/1/95||$0||1,155||$1,500,000|
|Open East Cobb||JDP||6/1/98||Exec||$600,000||1/15/95||$0||1,233||$600,000|
At the present time Joseph Smith runs all operations for Take Five Sports Bar & Grill. Other key personnel are the management at each location. Candidates have already been identified for the first additional Americus area location. There is not expected to be any shortage of qualified and available staff and management from local labor pools in each market area.
Future organizational structure will include a director of store operations when store locations exceed five and/or the Florida store opens. This will provide a supervisory level between the executive level and the store management level.
A full-time accountant has already been added. Also, a sales/marketing director has been added to oversee the expansion effort both to support the growth of existing business and to execute the franchise expansion strategy. Their salaries are included in the projections.
Operations of individual stores will be the responsibility of the general manager.
Born 11/19/53, Philadelphia, Pennsylvania
Married 17 years—two children ages 10 and 13
U.S. Air Force—1971 to 1975, Vietnam veteran, Communication Surveillance, Top Security Clearance
LaSalle University, M.B.A., Finance; B.S., Finance
- RCA/GE—1978-1988: Finance, Strategic Planning, Corporate Development
- Scientific Americus—1988-1990: VP Finance, Electronic Systems Group
- Vacation Inn Worldwide—1990-1993: Strategic Planning and Corporate Development, reporting to the CFO
- Resigned in 1993 to open and operate Smith's Italian Restaurant
Management Team Gaps
Specific opportunities exist in the store operations supervisory area (not needed initially) and in franchise sales development (not needed initially).
It is expected that these people can be recruited when needed in the Americus market. Americus is now home to more than 40 franchise company headquarters.
Store managers are readily available when needed. Food service managers are plentiful.
|Name or title||$0||$0||$0|
|Name or title||$0||$0||$0|
|Total Payroll Expenditures||$542,976||$3,136,000||$5,432,000|
The over-all financial plan for growth allows for use of the significant cash flow generated by operations.
Equity/debt infusion of $1.5 to $2 million allows for more rapid expansion of store starts than could be accomplished from cash flow alone. Outside investment capital also allows a buffer of excess cash so that the expansion plan can be revised on short notice. Every opportunity will be seized to accelerate expansion past the critical dates in this plan if cash flow from new stores exceeds projections.
It is management's intent to build equity in the brand name and in its franchise. Other models exist in the recent past of successful IPOs on similar concepts.
The financial plan depends on the following key assumptions:
- We assume a slow-growth economy, without major recession.
- We assume access to equity capital and financing sufficient to maintain our financial plan as shown in the tables.
- We assume the continued popularity of sports in America and the growing demand for sports theme venues.
|Short-term Interest Rate %||8.50%||8.50%||8.50%|
|Long-term Interest Rate %||0.00%||0.00%||0.00%|
|Payment Days Estimator||7||7||7|
|Inventory Turnover Estimator||52||52||52|
|Tax Rate %||33.00%||33.00%||33.00%|
|Expenses in Cash %||80.00%||80.00%||80.00%|
|Personnel Burden %||12.00%||12.00%||12.00%|
Key Financial Indicators
The most important indicator in our case is inventory turnover. In the restaurant business turnover exceeds 50, with product being purchased and sold often within the week.
Food costs must be kept below 32%. Beverage costs must be kept below 21%. Above all, controls must be instituted and maintained over multiple store locations.
Take Five now uses state-of-the-art restaurant management control and inventory systems. All systems are computer-based that allow for accurate off-premises control of all aspects of food and beverage service business. The systems used are point-of-sale from HSI and inventory and recipe management from VIP. Also, both are PC-based and have become industry standards. Management's background in corporate finance indicates understanding of the importance of these control systems.
The breakeven analysis is based upon fixed costs at the Medlock Bridge location. This location exceeded required volume to break even in only its second month of operation.
At $15 per average ticket, the breakeven volume at Medlock Bridge is attained in less than one full seating per day. The industry average is between 3 and 4 turns of seating capacity.
|Monthly Units Breakeven||91,892|
|Monthly Sales Breakeven||$91,892|
|Average Per-Unit Revenue||$1.00|
|Average Per-Unit Variable Cost||$0.26|
|Estimated Monthly Fixed Cost||$68,000|
Projected Profit and Loss
We project rapid expansion of sales and profits. Net profits remain above 16% of sales even in the most aggressive expansion period.
|Profit and Loss (Income Statement)||FY1996||FY1997||FY1998|
|Direct Cost of Sales||$577,638||$2,531,380||$4,435,640|
|Total Cost of Sales||$577,638||$2,531,380||$4,435,640|
|Gross Margin %||71.72%||72.48%||72.42%|
|Total Operating Expenses||$800,072||$4,371,000||$7,377,000|
|Profit Before Interest and Taxes||$664,934||$2,295,620||$4,271,360|
|Interest Expense Short-term||$0||$0||$0|
|Interest Expense Long-term||$0||$0||$0|
Projected Cash Flow
We expect to manage cash flow with an additional investment totaling $1.5 to $2 million. All additional requirements can be met from internally generated funds. With investment coming in during late 1996 and mid 1997 there is no point at which future cash flow appears to be in danger.
Pro-Forma Cash Flow
|Change in Accounts Payable||($15,566)||$15,713||$14,012|
|Current Borrowing (repayment)||$0||$0||$0|
|Increase (decrease) Other Liabilities||$0||$0||$0|
|Long-term Borrowing (repayment)||$0||$0||$0|
|Change in Inventory||$2,127||$58,594||$57,110|
|Change in Other ST Assets||$0||$0||$0|
|Net Cash Flow||$522,809||$2,035,184||$2,688,713|
Projected Balance Sheet
We expect a healthy growth in net worth, from approximately $1 million at present to more than $8 million by the end of the third year of operations.
|Other Short-term Assets||$17,310||$17,310||$17,310||$17,310|
|Total Short-term Assets||$99,643||$624,579||$2,718,357||$5,464,180|
|Total Long-term Assets||$445,782||$975,786||$1,395,786||$2,775,786|
|LIABILITIES AND CAPITAL|
|Other Short-term Liab.||$40,826||$40,826||$40,826||$40,826|
|Subtotal Short-term Liab.||$60,866||$45,300||$61,013||$75,025|
|Paid in Capital||$625,000||$1,250,000||$2,210,000||$3,460,000|
|Total Liab. and Capital||$545,425||$1,600,365||$4,114,143||$8,239,966|
Our business ratios are future estimates based upon current assumptions.
|Net Profit Margin||21.81%||16.72%||17.79%||0|
|Return on Assets||27.84%||37.38%||34.73%||0|
|Return on Equity||28.65%||37.95%||35.05%||0|
|Accts Payable Turnover||37.31||37.31||37.31||0|
|Total Asset Turnover||1.28||2.24||1.95||0|
|Debt to Net Worth||0.03||0.02||0.01||0|
|Short-term Liab. to Liab.||1||1||1||0|
|Net Working Capital||$579,279||$2,657,344||$5,389,155||0|
|Assets to Sales||0.78||0.45||0.51||0|
|Current Debt/Total Assets||3%||1%||1%||0|