Business Plan – “Á Go Go”Authors – Ray Carey, Paul Hand, James Hayde

and Donna O’SullivanModule – Enterprise Development

Lecturer – Clement RyanDate of Presentation – Thursday 12th May

Table Of Contents

Executive Summary1. Goals and Objectives2. The Market2.1 Target Market2.2 Competitors2.3 Marketing Plan3. Primary Research

3.1 Survey Results3.2 Footfall Results

4. Design and Floor Plan5. SWOT & PEST6. Key Personnel7. List of Suppliers and Costs8. Financials

8.1 Expenses8.2 Profit and Loss Statements8.3 Balance Sheet8.4 Cash Budget8.5 Projected wages8.6 Fixture and Fittings8.7 Ratios

9. Conclusion10. Table of contents Appendix…

The purpose of this paper is to outline the authors’ business plan for a new bar which they plan to open in Dublin 2.

The proposed business is to be called Á Go Go. The reasoning behind the name partly pays tribute to the famous Hollywood bar, Whiskey Á Go Go which played a prominent part in the careers of

such legendary bands as The Byrds, Buffalo Springfield and The Doors.

http://www.youtube.com/watch?v=flOvM4Z355A

We have added a fada to the Á to incorporate a touch of Irish-ness into the name.

Á Go Go will open on Aungier Street in Dublin 2. It is a very central location in the

city with Dublin Institute of Technology amongst other colleges all within easy

walking distance.

It is just a short stroll from Stephens Green. The area is easily accessible by bus,

DART and Luas and is heavily serviced by taxis. The building itself has a ground floor

space as well as 3 upper levels.

The bar itself will be styled as a 1960’s bar. Not so much a themed bar, but it will have

a 60’s retro style interior and the music played will be from that era with some modern indie music incorporated also. The ground floor space is 118 square

meters in size. This space could seat 50 people comfortably but the owners plan to have a more casual layout of beer barrel and pod tables with stool seating along

with wall sofas.

The upper levels of the building are all 88 square meters in size and will be open for patrons to consume drinks and listen to

music. The owners will be serving a Pizza Menu

on the ground floor level but patrons will be welcome to move to the 1st floor with their food and drink, where music and comedy nights will take place, the 2nd floor will be

used as storage and staff areas. The owners plan to use the upper levels of

the bar for different themed nights,

At the moment there are numerous bars operating around the Aungier Street area of Dublin 2, but the authors feel Á Go Go will definitely add something to the bar trade and give patrons something different, something new and an alternative to the “old man pub” of which you find a lot around South Dublin City.

The company as mentioned will be known as Á Go Go. The four part owners of the business are Ray, Paul, James and Donna. Their goal is to open a place that attracts a clientele aged from 18 – 40 years old. To attract people who are interested in good music and entertainment. Food service does come secondary in the bar. Therefore the owners do not plan to have an extensive menu running from day into night. The bar will open & serve alcohol from 10.30am Monday – Saturday and from 12pm on Sunday. It will serve until 11.30pm Sunday to Thursday and until 12.30am Friday and Saturday.

There will be a Pizza menu available from 12.00pm each day up until 10pm each evening. It will be available until 9.30pm on Fridays and Saturdays as the bar would tend to be busier on these particular night.

The menu itself will offer a choice of two pizza bases along with a choice of 20-25 toppings, sized small (for one person) medium (for 2 people) and large (for 4 people)

Initial financing

The initial amount of €110,000 to start up the business came from the investment of the shareholders and in the form of a bank loan. The four shareholders and owners of the business are all committing €15,000 each to the business. The remaining €50,000 was loaned from AIB with a 10 year repayment plan with an interest charged at a fixed 7%.

Profit & Loss Statement for A Go Go Bar and Music Venue for year ending 31st May 2012 € € €

Sales 924,896

Beverage (80%) 739,917

Food (20%) 184,979

Less Cost of Sales

Purchases:

Closing Stock 18,000

Beverage (25%) 184,979

Food (10%) 18,498

Less Closing Stock -18,000 203,477

Gross Profit 721,419

Less Expenses

Wages & Salaries 190,372

Rent (260,000/13) 260,000

Rates 14,600

Insurance 12,500

Pest Control 600

Waste Disposal 1,200

Telephone / Broadband 2,002

Stationery 1,800

General Expenses 25,000

Sundry Expenses 6,000

Marketing & Advertising Expenses 12,000

Light & Heat 16,000

Building Repairs 27,000

Depreciation of Equipment (20% of €40,000 straight line basis) 8,000

Depreciation of F&F (20% x €20,000 straight line basis) 4,000

Water Charges 2,500

Professional Fees 22,000

Cleaning & Maintenance 15,600

Bank Charges 2,500 623,674

Operating Profit 97,745

Loan Interest (100,000 @ 7%) 7,000

Net Profit 90,745

Profit &Loss Statement

Profit & LossThe projected sales revenue of €924,896 minus cost of sales of €721,419 and expenses of €623,674 gives us a projected operating profit of €97,745. The majority of our sales stream will be generated through bar sales, with the remaining coming from our pizza only menu. The food operation comes secondary to the business, and is seen as an extra source of revenue for little outlay. We cannot envisage much waste in this department as it is cheap to buy and will be strictly controlled.Bar sales are centred around our market research, which revealed 18-24 year olds spend an average of €20 on a night out in Dublin City Centre. This is a very reserved figure, so we are confident it will be achieved. The management team are all very experienced in this industry, with a combined 30 years of experience between them and are all dedicated to up-selling and increasing sales revenue within the business. They were able to achieve a high mark-up on all products due to previous sales agreements with suppliers in different companies they have worked carried onto their new venture.

Balance Sheet for A Go Go Bar & Music Venue as at 31st May 2012

Fixed Assets Cost € Depreciation € N.B.V. €

Equipment (20% straight line basis) 40,000 8,000 32,000

Fixtures & Fittings (20% straight line basis) 20,000 4,000 16,000

48,000

Current Assets

Stock on Hand 18,000

Prepaid Rent 20,000

Bank Account 180,000

Cash on Hand 25,945

243,945

Current Liabilities

Creditors 50,000

Accrued General Expenses 1,200

-51,200

Long Term Liabilities 240,745

Bank Loan (€50000) 50,000 10,000 40,000

Working Capital 200,745

Financed By

Capital 110,000

Net Profit 90,745

Retained Net Profit 200,745

Balance Sheet

Cash Budget for A Go Go Bar & Music Venue for year ending 31st May 2012            

             

  Jan-Mar Apr-Jun Jul-Sept Oct-Dec Total Payment Due

  € € € € € €

Receipts:            

Share Capital 60,000          

Bank Loan 50000          

Sales (Cash) 231,224 231,224 231,224 231,224 924,896  

  341,224 231224 231224 231224 1,034,896  

Payments:            

Purchases (Beverage & Food) 50,869 50,869 50,869 50,869 203,477  

Wages & Salaries 47,593 47,593 47,593 47,593 190,372  

Rent 21,266 21,266 21,266 21,266 85,064  

Rates 7,300 0 7,300 0 14,600  

Insurance 3,125 3,125 3,125 3,125 12,500  

Pest Control 150 150 150 150 600  

Water Charges 625 625 625 625 2,500  

Waste Disposal 300 300 300 300 1,200  

Telephone / Broadband 501 501 501 501 2,002  

Stationery 450 450 450 450 1,800  

General Expenses 6250 6,250 6,250 6,250 25,000 1,200

Sundry Expenses 1500 1,500 1,500 1,500 6,000  

Marketing & Advertising 3000 3,000 3,000 3,000 12,000  

Light & Heat 4000 4,000 4,000 4,000 16,000  

Building Repairs 6750 6750 6750 6750 27,000  

Professional Fees 5500 5500 5500 5500 22,000  

Cleaning & Maintenance 3900 3900 3900 3900 15,600  

Bank Charges 625 625 625 625 2,500  

Equipment 40,000       40,000  

Fixtures & Fittings 20,000       20,000  

Loan Repayment (€50,000) 2500 2500 2500 2500 10,000  

Loan Interest (7%) 1750 1750 1750 1750 7,000  

  227,954 156,404 163,704 156,404    

             

Net Cash Inflow / Outflow 113,270 74,820 67,520 74,820    

Opening Balance 0 113,270 188,090 225,610    

Closing Balance 113,270 188,090 225,610 330,430    

CashFlow Statement

A Go Go Projected Wages - Year beginning 2011

Position Monthly Yearly Employees Monthly Total Yearly Total

Shareholder / Employee 3,600 43,200 4 14,400 172,800

Part-time Staff 865.00 10,380.00 2 1,730.00 20,760.00

Based on:

€900 per week for 4 full-time staff working 6 days per week

€8.65 per hour, 25 hours per week, 2 employees

Sales Turnover Figures - Year beginning 2011

Formula used to forecast the turnover for A Go Go is:

Number of Seats x Seat Turnover x Average Check x Days Open = Yearly Sales Revenue

Weekdays: Sunday - Thursday

140 x 1 x 20 x 260 x 70% = €509,600

70% full. Approximately 98 customers per day.

Weekdays: Friday - Saturday

140 x 2 x 20 x 103 x 72% = €415,296

72% full. Approximately 101 customers per day.

Average check per customer is estimated at a very reserved €20.00.

€924,896 Projected Sales Revenue

Drink accounts for 80% of turnover.

Projected Costs

A Go Go Equipment, Fixtures & Fittings Analysis        

         

Glassware’s Units Price € Total € Supplier

Wine Glasses 100 €4.00 €400.00 Nisbets

Carafes (1 litre) 30 €4.50 €135.00 Nisbets

Water Glasses 200 €1.20 €240.00 Nisbets

Branded Pint Glasses 300 €0.00 €0.00 Suppliers

Balloon Glasses 20 €1.60 €32.00 Nisbets

Latte Glasses 30 €2.20 €66.00 Nisbets

         

Coffee Cups 50 €2.00 €100.00 Nisbets

Cappuccino Cups 30 €2.50 €75.00 Nisbets

Universal Saucers 100 €1.80 €180.00 Nisbets

         

Bar Equipment        

Wine Buckets 10 €5.00 €50.00 Nisbets

Ice Buckets for Bar 4 €0.00 €0.00 Suppliers

Ice Machine 1 €460.00 €460.00 Nisbets

Drip Mats 10 €0.00 €0.00 Suppliers

Drip Trays 10 €0.00 €0.00 Suppliers

Lemon & Lime Containers 2 €0.00 €0.00 Suppliers

Cocktail Shakers 1 €20.00 €20.00 Nisbets

Costings

General Necessities        

Cafe Barriers 5 €60.00 €300.00 Nisbets

Black Board Sign 2 €90.00 €180.00 Nisbets

7 piece Knife Set 2 €65.00 €130.00 Nisbets

Cool Vent Hats 5 €5.30 €26.50 Nisbets

Safety Shoes 5 €45.99 €229.95 Nisbets

Chopping Boards 5 €18.99 €94.95 Nisbets

Tongs / Utensils 15 €6.00 €90.00 Nisbets

Disposable Gloves x 180 5 €6.70 €33.50 Nisbets

Mobile Trolley 2 €105.00 €210.00 Nisbets

Mop & Bucket 2 €125.00 €250.00 Nisbets

Refuse Bins 5 €150.00 €750.00 Nisbets

Bin Liners x 100 3 €30.00 €90.00 Nisbets

Wall Mounted Ash Tray 3 €60.00 €180.00 Nisbets

Glass Racks 5 €35.00 €175.00 Nisbets

Dishwasher Rack 2 €19.00 €38.00 Nisbets

Blue Roll Dispenser 3 €18.00 €54.00 Nisbets

Blue Roll 10 €6.70 €67.00 Nisbets

Hand Towels 5 €18.00 €90.00 Nisbets

Hand Dryer 4 €100.00 €400.00 Nisbets

Pizza Slice Box 100 €1.00 €100.00 Nisbets

Plastic Cutlery Sets 100 €1.49 €149.00 Nisbets

Salt & Pepper Cruets 20 €2.50 €50.00 Nisbets

Anti-slip Serving Trays 10 €6.00 €60.00 Nisbets

         

  1 €2,000.00 €2,000.00 Nisbets

Preparation Area 1 €1,000.00 €1,000.00 Nisbets

Refrigeration Units 2 €1,000.00 €2,000.00 Nisbets

         

         

Furniture        

Chairs 100 €50.00 €5,000.00 Liquidation

Sofas 10 €100.00 €1,000.00 Liquidation

Tables 20 €180.00 €3,600.00 Liquidation

Barrels 5 €200.00 €1,000.00 Liquidation

Pod Tables 15 €130.00 €1,950.00 Liquidation

Pool Table 1 €2,500.00 €2,500.00 E.J Riley

Juke Box 1 €600.00 €600.00 Amuse.ie

Costings contd.

Fixed assets of A Go Go Ltd. Include fixtures & fittings such as sofas, chairs, tables and bar equipment. This has been purchased from Nisbets Suppliers and from Liquidation sales from flailing business’ who cannot operate anymore.Depreciation for these fixtures and fittings and equipment will be accounted at 20%.The long term loan has been recommended to be paid back over a ten year period.

1. Return on Capital Employed – the primary accounting indicator of overall business performance, is 41%. This percentage is satisfactory after one year of trading, and poses no overall risk for shareholders or lenders.2. Operating Margin – Due to the fact that this was the first year of trading for A Go Go Ltd., there were numerous large financial outlays for the setting up of the business such as furniture, equipment, repairs etc. It is also hoped the market share it possesses and general awareness of the business will be increased in the coming years.3. Gross Margin – The gross margin is affected by the selling price, a shift from less profitable items to more profitable items, or costs and expenses increasing slower than sales. The company achieved a gross margin of 78%, encouraged by up-selling by employees and strict control over budgetary expenses and ordering of stock.4. Beverage Sales were a lot higher than Food Sales, as expected. This corresponds with the projected targets. As the company grows, an increase in food sales is expected as costs will be continually decreased to meet demand exactly.6. Wages & Salaries are at an appropriate level for the type of business, at an accepted 35%. Strict control carried out by the management and a hands-on approach has helped achieve this.

The initial goal when opening the bar is not to make the owners hugely wealthy as such. It is to run a business that will first off be successful and well-known in the city, and then hopefully start to make enough of a profit so the owners can take home a decent monthly salary from the business.

At the moment there is not another bar like it in Dublin City.

Name Location Serves Food Live Music

Bruxelles Harry St, Dublin 2 Yes Yes

The Garage Bar Essex St, Dublin 2 No No

The Workman’s Club Wellington Quay, Dublin 2

No Yes

O’Donoghues Suffolk St, Dublin2 Yes Yes

Foggy Dew Fownes St, Dublin2 No No

Pygmalion South William St, Dublin 2

No No

Hogan’s South Great Georges St, Dublin 2

No Yes

Anseo Camden St, Dublin2 No No

At Á Go Go the owners also plan to host acoustic live music night’s midweek, comedy nights and quiz nights. There is also a plan to install a pool table on the 1st level of the bar where patrons can play for fun.

Obviously at the moment the country is in the middle of a recession but contrary to reports of pubs dying a death and closing down, as pub frequenters themselves the owners feel that if the establishment has a niche, people will still come. There are certain bars in Dublin City Centre that are full almost every night as they cater to a particular market. Currently there are 436 pubs in Dublin and 98 of these pubs are situated in the Dublin 2 area.

As previously mentioned the target market which the owners wish to attract isAged between 18 years & 40 years. People who have an interest in music, retro music from 1960’s / 1970’s and modern indie music. Students from local colleges such as DIT Aungier St and Dublin Business SchoolHave an interest in comedy nightsLike to socialise midweek but more at weekendsAppreciate a good deal i.e. the Pizza MenuAre attracted to a cool retro interiorLaidback and fun crowd

The type of customer that Á Go Go wants to attract would more than likely be an avid social networker.

The colour scheme for Á Go Go will be orange and black, like the colours seen in the company logo. The walls will be painted white & orange but the tables will be black with orange seating (stools and wall sofas). There will also be dark beer barrel tables on each level with stool seating. On each level the walls will be decorated with images of the 1960’s. Pictures of The Beatles, Rolling Stones, Twiggy and other iconic images will adorn the walls.

5. SWOT Analysis:Strengths:It is a new and unique bar.There aren’t many competitors with the same attraction in Dublin City.U.S.P. New and Funky,Live upcoming bands. Ideally situated.Modern yet retro.Marketing: Students and members of the general workforce.Weaknesses:Current Economic Crisis .i.e. Recession.No reputation, presence or reach in the market.New business breaking into an established marketOpportunities: New to the Market. It has a niche target market.It appeals to the masses.Threats: Established Business’s Competitors intentions, Changing Markets, The Recession ,Economy and Seasonality. No student s during the holidays.

Political :Environmental Situation: The RecessionChange in government and the new policies introduced.Whether the funding and grants are still available for the setting up of new business such as pubs or clubs. Economical:The current recession in Ireland.The Dublin Pub Scene has seen a decrease in punters in recent years.Taxes on new businesses.Taxes on punters which have had a decrease on their expendable spend.Social: The Dublin Scene has had a decrease in punters.It will take time to build up a client base especially with the recession.People have less disposable income so the business has to have something special in order to attract them.Located near two colleges so has to appeal to that demographic and also to the regular punter.Technological: Technologies replacement technology/solutions Maturity of technology ,Information and communications ,Consumer buying, technology legislation, innovation potential technology access, Licensing, Patents global communications

Á Go Go will have a number of staff members, all four investors will be working in the bar on a day to day basis, sharing out the main morning and evening shifts. Additional staff will be brought in at the busy weekends and to cover when necessary. Security personnel will be employed at the weekends (Thursday, Friday and Saturday) evenings to ensure no trouble with the expected larger crowds. Each of the investors will be a manager in the business. James will be general manager as he has the most experience in the bar industry. The bar will be run on minimal staffing midweek morning when tea and coffee will just be served, thus resulting in cost savings.

A Go Go Bar & Music Venue will be situated at 79 Aungier Street, Dublin 2. The first rental payment will include a deposit of 1 extra months’ rent. This will increase our annual rent for the first year by €20,000 thus we will automatically have one month’s prepaid rent for the year beginning May 2012.

Fixed assets of A Go Go Ltd. Include fixtures & fittings such as sofas, chairs, tables and bar equipment. This has been purchased from Nisbets Suppliers and from Liquidation sales from flailing business’ who cannot operate anymore.Depreciation for these fixtures and fittings and equipment will be accounted at 20%.The long term loan has been recommended to be paid back over a ten year period.

Thank You For Your Time

Any Questions??????