What’s a Business Plan and Why Should You Create One for Your Bar?
A business plan is a written document for running your bar that includes information about your business, your goals, your strategies, and your financial expectations. Essentially, it’s your road map or blueprint for creating a successful business, and it helps you figure out how (and when) your bar will make money.
This document persuades investors to invest in you and landlords to rent to you. Sometimes, it will be the document that helps you form your team. If you have partners, the document also helps you plot the course. Of course, you can adjust the sails as the winds change, but the business plan keeps your focus on that specific point on the horizon.
Here are the basic pieces of most bar business plans:
Cover page and table of contents: The cover page sets a professional tone for your business plan. The table of contents helps readers see at a glance what information is in your plan and where they can find it.
Definition of your business concept: In this section, you tell your readers what they can expect when they visit your bar. You can include general information about the atmosphere, the types of food and drinks you’ll serve, and the customers who will frequent your bar.
Sample drink and food menu: Here is where you can be more specific about the food — from appetizers to full meals — and drinks — from a wide variety of wines to every mixed drink imaginable — you’ll serve.
Market analysis and clientele demographics: This section of your business plan explains how your bar will be different from other watering holes and describes your intended clients.
Financial data: This is likely to be the most read section of your report. You use this section to show investors how you’ll spend your money to have a successful start-up and then how you’ll keep your bar running in the black.
Management team: This part of your business plan explains who is responsible for running the bar (that would be you, maybe your bar manager, and a head bartender, if it’s a selling point). It helps readers understand your qualifications for operating a successful bar.
A business plan helps you ensure that you do all the background research you need to for optimal success, helps you corral your creative thoughts and define exactly what you want your new business to be, and helps you head off obstacles before they become big problems.
For more help writing (and using) your business plan, take a look at Business Plans Kit For Dummies, 4th Edition, by Steven D. Peterson, PhD, Peter Jaret, PhD, and Barbara Findlay Schenck (Wiley).
Many bar owners skip creating a business plan; they think it’s not worth their time because they can’t accurately predict the future, or they may not know where to begin. Or they’re intimidated by creating such an official-sounding document, if they even know what a business plan is.
Most owners who skip this step fail to see that their bar is, first and foremost, a business. And with a failure rate of 30 percent in the first year, those who plan have a greater chance to succeed. In fact, creating a business plan may be one of the most important steps you take in creating a bar that’s built to succeed.
We firmly believe that your time is well spent creating a solid foundation for the business you’re building.
A business plan is a road map to your bar’s success. Without a map, you won’t know where you are on your road to success or when you can expect to reach that destination. Failing to plan can result in detours (lost time) that cost you money in the long run.
Many successful businesses regularly update their business plans, every year or two (or more often if you prefer), to make sure that they’re on track.
You can use a business plan to regularly assess how well your bar is
Meeting your financial goals: Are you getting enough sales on Friday nights to justify staying open on slow post-football Sundays in February, for example?
Keeping current with changes in the market: Should you consider adding a mud-wrestling pit on Wednesday nights to compete with the new one at Slammin’ Sally’s across the road?
Addressing your customers’ needs: If your new goal is to have a competitive dart league on Thursdays, how’s it affecting the regulars?
Even if you are 100 percent opposed to creating a business plan, create some sort of financial forecasting tool that helps you see your cash flow. It’s too easy to see all the money coming in without a plan for how it must go out in order for you to stay in business.