The results show that 62 per cent of people would welcome a new nightclub to the Maidenhead compared to 38 per cent who would not. The fact that there are more people who are for the proposal than against is very positive, especially the high number of 62 per cent. This in turn means that in the age group of 21-39 there are a large number of people who would use the facility rather than people would not.
Question 4).
This question asked how often people would use the new nightclub per week?
The results show that 64 per cent of people asked would use the nightclub once per week, and because in question 2 most people said they go out on a Friday night or Saturday night, it would be obvious to say that these nights would be the most popular. A moderate 33 per cent of people said they would use the night club at least twice a week, with only a total of 3 per cent saying they would use the nightclub more than three times per week. The information collected from the results suggests that it would be best to open on two nights, preferably Friday and Saturday because this is when demand is at its highest.
Question 5).
This question asked how much on average people spend on a Friday or Saturday night
out in Maidenhead.
From the graph, it is evident that no one I asked said they
spent below £10, only one person said they spend £10, two said they spend £15 and
three said they spent £20. On the other hand twenty people said they spend at least
£30 and twenty-six people said they spend £40. Six people said they spend around
£50 and only two people said they spend £60 or more. On the whole three quarters of
all the people asked said they spend at least £30 ( 46 people out of 60 people).
These are quite high figures considering the average drink price for a pint in a bar is
only £2.60, but this is due to the high incomes of people who live in the Maidenhead
area, as previously discussed in my research. If the nightclub was full with its 600
capacity and roughly three quarters of the people in there were people who spend at
least £30-£40, but assuming that at least half of what they spend on a total night out is
spent in the nightclub (i.e 450 people spending at least £17) then a total estimated
income from drinks can be calculated for one night. The estimated income for one
night would be around £7650 without taking into account costs. However this
estimate is only if the nightclub was full capacity, and due to the on going war in Iraq,
this may not be the case.
Question 6).
This question investigated what drinks people most prefer to drink when they are out. More than one option could be chosen.
The results show that people desired all drinks that were put down on the questionnaire. Some were more popular than others such as alcohpops for example. These were the most popular with 40 people saying they drink these when they go out. Other alcoholic drinks such as bottled beer, beer pints, gin, vodka, Bacardi and archers all had over 20 people saying they drink them when they go out. The least popular drinks were pints of bitter, pernod, scotch and whiskey, but they were still desired by people who would be willing to use the nightclub and so it is essential them as customers needs and wants are met. All drinks mentioned on the questionnaire would be provided by the new nightclub, but there would be less of drinks such as pints of bitter, pernod, whiskey and scotch and more of bottled beer, beer pints, gin, vodka, bacardi and archers, coke, lemonade, orange juice, cocktails and water as these drinks are more popular and so more money will be made from them.
Question 7).
This question set out to find out consumers tastes in music.
The results from this question show that the most popular consumer taste in music was ‘disco’ with 58 per cent of all people asked choosing this category of music. Second most popular was ‘80’s’ with 25 per cent of people asked choosing this category. Garage, Hip hop, Drum and Bass and Rock ‘n’ Roll all had 3 per cent, with Jungle being least favourite with 0 per cent. From these results it would be more viable for the new nightclub to concentrate on playing disco and 80’s music, also because my target market is over 20’s this music would appeal to them more, rather than 18 –19 year olds who might prefer Garage music.
Summary of “consumer questionnaire ” (see appendix 1.6), results.
From the results gained from this research there are several conclusions that can be drawn. Firstly, the location of Sinners would be best situated to as near to Heroes, Bar 38, Whetherspoons and the Bear as it can so it can capitalise on as much custom from people leaving them bars when they close. Location options are discussed in the Marketing section of this project.
It would be in the nightclubs best interests to open on a Friday and Saturday night, because these two nights are by far the most popular nights for people visiting Maidenhead.
The proposal of the nightclub is favourable with the residents of Maidenhead. Although 38 per cent of people do not feel that the nightclub should open, 62 per cent of people do, and so the demand is there for a venture of this type.
If the nightclub reached full capacity every weekend and everyone spent at least£17 average per night, then the revenue made on drinks alone would be around £7650. On top of this would be a £5 entry fee, meaning that revenue for one night would be very high is the club filled out.
All drink mentioned in the questionnaire (see appendix 1.6 question 6), would be sold in the nightclub because there is demand for all of the drinks mentioned. However, for some drinks there is a higher demand e.g. bottled beer, pints of beer, gin, vodka, Bacardi, archers and coke, lemonade and orange juice and so there would be more of there drinks stocked because demand is higher and so the majority of revenue will be made from there drinks.
The results collected from the questionnaire are first hand as they have not been taken from a secondary source, but have been gathered from the residents of Maidenhead themselves. However, the following sections that deal with Health and Safety and Human Resources have been taken from more secondary sources.
Health and Safety
From researching health and safety regulations for night clubs it has been found that Sinners could have a total of around 600 people in at once to comply with health, safety and fire regulations. It was found out from “Heroes” (a bar in Maidenhead) that for a 200 square foot room it is viable for about 30 people to be in it at once for it to be safe, and so for a 4000 square foot building in total 600 people can be in side at once. This an extremely huge number of people compared to competitors such as Smokey Joes who can have around 350.
Whilst researching health and safety issues, it was come across that there are several legislations that need to be taken into consideration.
Health and Safety at Work Act 1974-
Employers have a general duty to provide for health, safety and welfare of those they employ. Information needs to be displayed about any work related hazards and the precautions needed to contain them.
This will affect the business because induction training will have to be carried out to make all employees aware of hazards so the risk of injury is minimised to as low as possible. Short-term effects of not doing this could be saving time and money, but long-term effects could be loss of reputation if an employee seriously harmed himself or herself.
Race Relations Act 1970 –
Protects individuals against discrimination in terms of race, colour, nationality or ethnic origin. This could be for recruitment, or just for possible promotion opportunities.
Equal Pay Act 1970 –
Women performing a similar job to men should be treated equally. This includes pay, work conditions and also opportunity for promotion and recognition.
Both the above legislations need to be treated very carefully in terms in Sinners the nightclub. Everyone carrying out the same jobs, with the same responsibilities no matter what their sex need to be paid the same wages to avoid possible discrimination charges.
There are many other legislations to take into consideration dealing with a number of aspects. However it was hard to find information on these but it has been recognised. These include noise. Firstly because there are residents reasonably near by it goes without saying that noise needs to be kept to a minimum out side of the premises. Doormen also have very strict legislation that applies to them. They can only remove somebody from the premises with necessary force, and on most occasions this usually just means seeing somebody out of the premises without physically touching them. However on some occasions this is not the case and physical force is needed, but there are legislations that are in place to restrict what doorman can do. They cannot touch anyone who is not on the premises nor do they have the right to touch somebody or use physical force unless they are hit or touched first by the aggressor.
The following section of work goes into the staff requirements of the organisation, including doormen. There are wage levels that need to be considered due to the equal pay act .
Human resources
After looking at the local borough website it was found out that the average wage in Maidenhead for a waiter/ waitress is £5.00 per hour. This wage is between the hours of 7.00pm to 11.00pm, and so it is evident that for the nightclub a higher wage would need to be paid as the hours are from 9.30pm until 2.30pm. The reason for this is that the hours are unsociable and people would not want to work until the early hours of the morning for a low wage. There is no motivation for people working unsociable hours for a low wage, and so a reasonably high wage needs to be paid. However this does not necessarily mean that people will be motivated solely just for the money (Theory X), and so there are many non-financial motivational reasons for working in a nightclub, such as the good atmosphere, good social side to the job and it can be enjoyable as it is not boring (Theory Y).
It is felt that an adequate wage for bar staff in the new nightclub would be £6.50 an hour because it is above the national average, and is also above the average wage for other bars in Maidenhead. Staff would be required to work five and a half hours starting at 9.30pm and finishing at 3.00pm, leaving 30 minutes for staff to clear up after the nightclub closes. There will be one bar manager who will have extra supervisory roles and so they will be on a wage of £7.50 per hour. Glass collectors will be paid slightly below the rate for bar staff due to their role being less comprehensive, but doorman would be paid around £12 an hour due to their role being dangerous.
Bar Staff
Because the nightclub has a capacity of 600, it is felt that four bars will be needed to accommodate for the large number of people once the nightclub is full. People do not want be waiting twenty minutes for a drink, if they are they will prefer to use competitors such as Smokey Joes, and this would lower the market share the nightclub could have if a faster and more efficient service was provided. There will be two bars on each floor of the nightclub, one of which is small and the other being large. There needs to be at least three bar staff on each of the large bars and one on each of the small bars, meaning a total of 8 bar staff would be needed, one being a bar manager. There needs to be this many bar staff due to the very large number of people that will be in the nightclub all wanting drinks, and so there needs to be enough bar staff to be able to cope with such a large number.
Glass collectors
Sinners will be a new nightclub in Maidenhead if it is opened, and so a good first impression to its customers is vital. This is why glass collectors are needed. They have the role of keeping the facility clean so customers can enjoy their night out in a clean but lively atmosphere. People do not want to go to a nightclub where glass is smashed all over the floor, tables are obstructed due to empty glasses etc. So it is essential this service is provided for the sake of keeping custom. Because the facility has two floors and is a very large building it is felt that three glass collectors will be needed on each floor, meaning there will be a total of six, again one being the supervisor.
Doorman
Sinners would be a nightclub and so on occasions there may be cases of violence breaking out. It is in the nightclubs best interest that it takes into consideration social responsibility, and so is essential there are doorman on the premises to prevent noise pollution outside the club, to prevent underage drinking protecting the nightclubs licence, and to prevent violence as much as possible. There are many reasons why social responsibility is important such as image to other consumers and to prevent damage to the nightclub, reputation wise and physically. Because of the dangerous role that has to be carried out and the size of the building there needs to be at least 8 doormen all on a high wage. There needs to be a doorman in every corner of the room, and because there are two floors 8 doormen would be needed.
DJ
The DJ is as important as any member of staff. He or she provides the atmosphere, and so it is essential that a good DJ is employed soothe best possible atmosphere can be created for the customers. Without a good atmosphere there will not be any customers, and no customers will mean no revenue.
Marketing
Objectives
- Focus on target markets
- Create awareness of nightclubs unique features
- Provide products that are market led and what are desired.
Price
It has been decided that because the new nightclub sinners has such a large capacity of 600, which is double Smokey Joes full capacity, that instead of pricing drinks higher than Smokey Joes drinks will be priced just below the market price, thus using a predatory pricing strategy. Due to the large capacity Sinners will hold, a large proportion of market share will instantly be gained off Smokey Joes who have 100 per cent of the nightclub market share in Maidenhead, because the drink prices will be slightly lower attracting people to the new nightclub. The drinks however will not be priced dramatically lower as this would affect profitability, and people of Maidenhead above the age of 20 have high incomes as previously recognised in the research, and so pricing to low would not take advantage of the high disposable income people have and are willing to spend. It has also been decided that there will be a £5.00 entry fee for Sinners because this is the standard rate for nightclubs in Maidenhead. The unique feature of cheaper drinks will entice people to the club, especially the happy hour where drinks are half price.
Product
Advertising will focus and emphasise the lower drink prices, especially the happy hour between 9.30pm until 10.30pm. This happy hour will differentiate Sinners from Smokey Joes and is a good tool to gain market over its nearest competitor. Based on the consumer questionnaire the results show that all the drinks (see appendix 2.0 graph f) are desired. Because Sinners is in favour of meeting people’s needs and desires, all the drinks on the graph will be sold to meet everyone’s needs. Obviously drinks such as alcohops and Vodka will be stocked in higher amounts as there is a higher demand for them, and drinks such as Scotch will be stocked in small amounts, as there is less demand. The drinks will be used in the happy hour to entice people to the club, and spend their money rather than going to another bar or Smokey Joes. To meet people’s need in music, there will be two floors to the nightclub, one being a disco and 80’s room, and the other being a Garage, Hip Hop and drum and bass room. This will meet 92 per cent of the consumer markets tastes (see appendix 2.1 graph g).
Promotion
Advertising mediums used will firstly be a newspaper advert. After researching prices in the local newspaper “The Maidenhead Advertiser”, it is evident that a three-column width, with a 15 cm depth will cost £160 plus VAT (see appendix 2.4) Because the nightclub has a very large capacity that needs to be filled to maximise profits and achieve capacity utilisation, advertising needs to stretch further than just Maidenhead. Public relations and direct selling are seen as very good promotion tools because the customer is being approached directly and will take more notice. Leaflets will be distributed to the target market in Windsor, Bracknell, Slough and Reading by employed PR representatives. Promotion however will be mainly concentrated on in Maidenhead and Windsor because as previously discovered in the research the royal borough of Windsor and Maidenhead is one of the wealthiest parts of the UK. This is where the majority of customers are going to come from and so it is essential they are targeted thoroughly. Posters will be displayed in windows of bars and also coffee houses. Many business associates between the ages of 20-39 use coffee houses for lunch and so this would be the perfect place to target them.
Place
Location
It was discovered that there is only one nightclub already in Maidenhead, which is called Smokey Joes Roadhouse. This would be the only direct competition if a new nightclub was to locate in Maidenhead. However, there are 11 bars in Maidenhead being Chicago Rock Café, Whetherspoons, Bar Soviet, The Bear, The Bell, The Newt and Cucumber, The Roof, Heroes, Bar 38, The Honey Pot and The Toad. All these bars close at 11.30pm. As Sinners would be a nightclub the business would close at 2.00am the same time as Smokey Joes, therefore meaning Smokey Joes is my only direct competition. The remaining bars are more “feeder” bars, where people will leave and then make their way to my nightclub, and so it is important to look at where they are located in the town. Because of this I feel that 9.30pm would be an adequate opening time. Although the bars do not close until 11.30pm it would be hard to attract customers at times between 9.30pm and 11.30pm because people would still be in the bars, but the nightclub would offer a happy hour between opening time and 10.30pm hopefully attracting people away from the bars and into the nightclub. Also there will be no £5 entry fee before 10.30pm, where as after this time there will be. This again will be used to attract people to the venue earlier rather than later in the night.
On the map (see appendix 1.5) the 11 bars have been marked by pink dots according to where they are located in Maidenhead. Smokey Joes my direct competition has been marked with the green dot. The orange dot on the map is where the new nightclub would be located. The name of the location is Grenfel Island, and already located there is UCI Cinemas, David Lloyd Heath and Fitness Centre, Heroes and Bar 38. There is an available building to let located next to David Lloyd Health Centre, and it is felt it is in prime location as there are 9 potential “feeder” bars in 50 metres walking distance. This is perfect for people who come out of a bar when it closes and do not want to walk 200 metres to Smokey Joes. The location of the nightclub would be much more adequate than Smokey Joes is for people, and so I feel this location is perfect.
After researching the available property on Grenfel Island the report shows out that it is £70,000 per annum to rent, and has two floors which is perfect for a night club. It is a very large building of approximately 2000 sq ft. for each floor.
Swot Analysis of chosen location
Summary of SWOT analysis
Over all there are some very good strengths and opportunities if Sinners was situated in the proposed location. The fact that the area of Maidenhead as a whole is a very wealthy area is both a strength and opportunity and so there is interdependence. There is only one other nightclub located in Maidenhead also which means there is a gap in the market for competition, and for Maidenhead to be introduced with something different in terms of music. There is a chance to premium price due to lack of competition, and also the chance to experiment with happy hours early on in the night to increase revenue. However there are some drawbacks. These include the extremely high land values for being located in Maidenhead. Because there is high competition for houses in Maidenhead, due to the job prospects etc, house prices are forever increasing therefore pushing up other land values. Also there is a threat of Smokey Joes being able to cut prices, as they have been in operation for over 15 years and so know the “tricks of the trade”. This is where Sinners need to be careful because being a new enterprise cannot afford to lower prices to much, but needs to keep on level terms with competition to remain competitive in the market.
The placement of Sinners is ideal for people coming out of bars. There are 9 bars with in 50 metres walking distance, where as Smokey Joes is around 200- 300 metres away from the nearest bar. This gives Sinners an advantage as it is closer and saves people having to walk a large distance and so meets their needs. Smokey Joes on the other hand is further away from the nearest bars, which is a huge advantage for Sinners as just mentioned. The high disposable incomes of the people in Maidenhead are very high as it is one of the wealthiest parts of the country, and so the placement is ideal for profit related reasons.
Although the marketing strategy has been implemented and staffing requirements have been worked out, there further external influences that need to be evaluated to see the effects they will have on Sinners, and how Sinners could overcome them.
PESTLE analysis
This shows some of the external influences Sinners will have to take into consideration before being clarified as viable to open.
All of these external influences will affect Sinners in several ways. All issues whether they are Political, Economical, Social, Technological, Legislative or Environmental are all as important as one another.
Along with the external influences on Sinners are several costs that need to be considered before the final decision can be made to whether it would be feasible to open the nightclub. These include start up costs, how much money is going to be made against costs and how long it will take before the company starts making a profit and competing competitively.
Costs
It was easier to find costs using primary research, where as I could not find much using the Internet, and so my costs are mainly based on the nearest competitor Smokey Joes.
Based on the Smokey Joes Questionnaire the following results were found:
Question 1)
This question asked what Smokey Joes business rates are per month.
As shown on the questionnaire (see appendix 2.3) the average cost for business rates are £1 300 per month, meaning that they are around £16 000 per annum. As a nightclub in Maidenhead it would be advisable to base the proposed nightclubs rates on its nearest competitors because there are no other sources of information i.e. secondary research where information on business rates can be obtained.
Question 2)
This question asked how much Smokey Joes spend on alcohol per month.
The results from the questionnaire state that Smokey Joes spend approximately £9 100 per month on beverages, meaning £109 200 is spent per annum. As the capacity of Smokey Joes is only 300 and Sinners is double it is advisable that these costs are doubled to get the rough estimate on how much is needed to be spent per annum for the proposed nightclub.
Question 3)
This question asked how Smokey Joes spend on legal fees per annum.
The results from the questionnaire state that Smokey Joes spend £5300 per annum of legal fees. Legal fees would roughly be the same for the proposed nightclub “Sinners” because opening times and closing times are almost identical to Smokey Joes and so there would be no difference in license fees.
Question 4)
This question asked how much Smokey Joes spent on bar equipment when they first opened.
The results from the questionnaire show that Smokey Joes, when they first opened spent £2,000 on bar equipment. Again because Sinners is double the size it is assumed that £4 000 would be spent on bar equipment at there are four bars in Sinners and only two in Smokey Joes.
Question 5)
This question asked how much Smokey Joes spent on lighting, sound equipment and air conditioning when first opening.
The results from the questionnaire (see appendix 2.3) state that Smokey Joes spent £2000 on lighting, £1 500 on air conditioning and £5 000 on sound equipment. Again because it was hard to find information elsewhere on this information it will be assumed that because Sinners will be double the size then roughly double needs to be spent on each of lighting, air conditioning and sound equipment.
Question 6)
This question asked how much Smokey Joes spent on furniture e.g. tables and chairs, when first opening.
The results from the questionnaire state that they spent £1 310, and so again it is assumed that because Sinners is double the size then double will be spent.
Business Rates and Rent:
It was found out by looking on the website that the rent value of the property is £70 000 per annum, and via questionnaire it was found out that business rates are around £16 000 per annum.
Recruitment and Training:
It was found on that a bar staff course is £395 (see appendix 2.4) A doormen course is £200.
This profit and loss account assumes that 75 per cent of the full capacity of Sinners
(600), will spend at least £17 a night each when in the club. This is an average taken from question 5 on the primary research, and so means that some people will spend more and some will spend less. Also included in the sales revenue figure is an estimated figure that 600 people will each pay an entry fee of £5.00.
Forecasted Profit and loss account for the nightclub Sinner’s for one year.
This profit and loss account shows the sales revenue made in one year against the cost of sales, and also other expenditure. It is a tool used to show how much profit will be made after one trading year. The net profit of Sinners after the first year would be £646, 584 assuming the club was full on a Friday and Saturday night with everyone spending an average of £17. This is a reasonable average because my research shows that there are 54 out of 60 people who would spend more than £17 on a night out.
It has been worked out that due to lag time suppliers will take to deliver equipment such as furniture, sound equipment, lights, air conditioning etc, and the time it will take for all equipment to be fitted, the facility will not open until march as it will take 2 months before the club is ready to be opened. All equipment will take 30 days to be delivered before building can commence. Also it will take 21 days for the licence to be received, and recruitment and training will take a total of 28 days to carry out.
From this critical path analysis I can produce a cash flow forecast as shown below. The critical path shows when activities can start, and when they have to finish so the next activity can be done in time for the opening of the nightclub.
Cash Flow
Analysis of costs
It has been calculated that an initial investment of £22,632 is needed before the nightclub makes any cash from entry fees and drinks sold. This initial investment is needed to pay for the rent and rates for January and February, along with the legal and advertising costs in February. The large costs for equipment and decoration are due in the same month as money starts being made by the business, and so based on the financial figures in the cash flow diagram they can be paid for from the £45,953 profit made that month.
There are several ways of raising the finance needed for the first two months. There are either internal sources or finance or external sources of finance that are available. Because the nightclub is starting up, there is no retained profit, and assets cannot be sold, as they would not have been brought. However, external financing has many options. Firstly the most viable options would be a bank overdraft because it is a short term source of finance and allows sinners to borrow only what it needs. Another possibility would be a bank loan. After researching, it was found out that Natwest offer a £25,000 loan at 10.1 % apr. This would be for the first two months, but would be paid back by at least may when the business is well underway.
Methodology
I feel that the research carried out was very accurate, more secondary than primary. The demographic information gained from the royal borough website was very recent, being for the year 2000. The research could have been improved however if there were population figures estimated for the future, so I could calculate what sort of demand there would be in the future. Also with secondary research it was hard to find costs, and work out incomes, only estimated and rough incomes could be worked out from the average drink price and the average amount of money someone spends on a night out. Exact figures could not be worked out, due to the lack of information available. In terms of primary research I feel not enough people were asked the questionnaire, because the capacity of the nightclub is 600, and only 60 people were asked, then conclusions were drawn from this. I feel ideally more questions need to be asked and more people, but due to lack of time this was impossible.
However, regardless of the amount of research carried out, there may be many unforeseeable circumstances that could affect the profitability of the business, external factors such as a recession for instance.
Evaluation
This investigation set out to see if it would be feasible to open a new nightclub, ‘Sinners’ in Maidenhead town centre. Both primary and secondary techniques were to be carried out, and analytical tools were to be used to draw conclusions from the research. From all of the research findings I feel that there is a great chance of success for Sinners the proposed nightclub.
Firstly based on the proposed location it is evident that there are huge benefits from locating at the proposed location. Maidenhead is a very wealthy area as proven from my secondary research. From the two tables 1.1 and 1.2 “Housing Tenure and Car Ownership” it is evident that of the borough’s total households, 82 per cent have access to a car compared to 66 per cent in Great Britain as a whole. Also 74 per cent of the borough’s households are owner occupied, compared to only 66 per cent in Great Britain as a whole. By referring to table 1.3 and graphs 1.1 and 1.2, it is evident that more people own houses in Maidenhead than the national average, as it is 74 per cent against the Great Britain average of 66 per cent. Table 1.3 shows that in Maidenhead house prices are far higher than the national average, as detached houses are almost £250,000 more expensive in Maidenhead. This itself shows that people who live in Maidenhead must have exceptionally high incomes because 74 per cent of them actually own their houses even though the house prices are much higher than the national average. The fact that 28 per cent of the total population fall into the 20-39 age segment means that about one in every three owner occupied there is someone between the age of 20-39, which is extremely high and shows that their income must be high. For a nightclub, whose main aims are income related, these figures are very promising because the incomes of people in Maidenhead are extremely high, and the fact that 62 per cent of all people asked in the consumer questionnaire said they would welcome the proposed nightclub is again very promising because only 60 people between the age of 20-39 were asked. This proves that the demand is there and the fact there is only one nightclub in Maidenhead called Smokey Joes shows that there is a gap in the market to be exploited and to be capitalised upon.
The actual proposed location of Sinners, shown on map, see appendix 1.5, shows that Sinners would be located within 50 metres of 9”feeder” bars, which will be the source of most customers. This again provides an advantage over Smokey Joes its nearest competition because Sinners has the chance of attracting more customers due to its closer location to the majority of bars. However there are some potential problems with the proposed location. Firstly because the cost of living in Maidenhead it so expensive, land values and rent is very high compared to the rest of England meaning costs will be higher. Also because Smokey Joes are located in a more secondary region of the town their rent is much cheaper than Sinners would be. This could possibly allow them to cut their drink prices because they can afford to, and therefore dominate the market.
There are several external influences that are not in direct control on Sinners nightclub that need to be considered. The fact that there is an on going war with Iraq could mean that people discard their leisure wants, and focus on needs. If this happened, which is not likely as the war is in Iraq and not in the UK, then as a consequence Sinners would have to lower drink prices to hopefully keep up demand. Economical issues such the economic climate of the local area could also mean Sinners would have to change their strategies. Falling house prices could mean that people have less money to spend, and so again would mean pricing strategies would have to be changed from premium to market led or alternative strategy that allows the business to keep trading. Social responsibility is a very important factor to consider. Too much violence in the club and outside could have devastating effects. Firstly there could be the threat of being closedown by the local authorities if violence is continuous, and also the chance of losing custom, as violence will put people off who will go to Smokey Joes instead. CCTV and bouncers who will be highly trained to cope with violence and anti-social behaviour will control this. With this follow Environmental issues such as litter and loud music. The music will be contained with in the walls of the nightclub, and would not be heard from the nearest neighbourhood, and litter will be controlled outside the club by the use of litter bins. However litter will not be a major problem, as all drinks must be consumed inside the premises by law.
The research from the consumer questionnaire shows that there is a huge market for drinking in bars and clubs in Maidenhead. The results show that from the 12 options possible the results show that the most popular bars that people drink in are firstly Heroes with 17 per cent, Bar 38 with 14 per cent, Whetherspoons with 13 per cent, The Bear with 12 per cent and The Toad with 11 per cent (see appendix 1.7 graph A). These are the most popular bars according to the questionnaire results. Four out of the top five bars are all located within 50 metres walking distance of the proposed location of the new nightclub sinners, and so shows that the proposed location of Sinners is a respectable one and a good one, as nine feeder bars are located in that specific area four being the most popular bars in Maidenhead. There is also only a percentage of 1 for the number of people, who did not drink in any of the bars. From this conclusions can be drawn that the demand for this service is very high, and more specific to the nightclub industry it was evident that a very high percentage of 62 said they would welcome a new nightclub compared to 38 per cent who said they would not and so demand is not a problem at all.
Questions 2 and 4 interlinked to provide information about when the best possible times the nightclub should be open. The results from the two questions proved that Friday with 33 per cent and Saturday with 26 per cent are by far the most popular days when people visit the bars in Maidenhead. 15 per cent of people asked said they visit on a Wednesday and 9 per cent on a Thursday, but Monday, Tuesdays and Sundays are un-popular, as only a total of 17 per cent of people in total said they visit on the three days (see appendix 1.7 graph B). This would mean that it would be in the nightclubs best interests to definitely open on Friday’s and Saturday’s, as these are the days when there will be most custom because less people work on Saturday and Sunday day’s meaning they will not have to worry about getting up in the morning for work. There is no point the nightclub being open on weeknights such as Monday’s because there will not be the demand due to people having to get up for work the next morning. Question 5 set out to find out how much people would be willing to spend on a night out. The results proved that no that was asked said they spend below £10, only one person said they spend £10, two said they spend £15 and three people said they spend £20. On the other hand twenty people said they spend at least £30 and twenty-six people said they spend at least £40. Six people said they spend around £50 and only two people said they spend £60 or more. On the whole three quarters of all the people asked said they spend at least £30 (46 out of 60 people). These are quite high figures considering the average drink price for a pint is roughly £2.60, but the high figures are due to the high incomes of people who live in the Maidenhead area, as previously discussed. If the nightclub was full with its 600 capacity and roughly three quarters of the people in there were people who spend at least £30-£40 on a night out, but assuming that only at least half of the total they spend on a night out is in Sinners (i.e. 450 people spending at least £17), then a total estimated income from drinks can be calculated for one night. The estimated income for one night would be around £7650 without taking costs into consideration, how ever this added to entry fee cash intake exceeds human resource, rent and advertising when all added up on a weekly basis as shown in the cash flow forecast for April.
It has been felt that a successful nightclub is a nightclub that provides products that people want. The nightclubs unique features need to be recognised by people who are most likely to use the facility and so there is very high emphasis on advertising. Several methods have decided to be used because the nightclub has such a large capacity, and it needs to be full as often as possible to maximise profits. This means that advertising will stretch further than Maidenhead, thus meaning public relations and direct selling are seen as the best promotion methods because the customer is being approached directly and will take more notice. Employed PR representatives will distribute leaflets to the target market in Windsor, Bracknell Slough and Reading. Promotion however will be mainly concentrated on in Maidenhead because as previously discovered in the research the Royal Borough is one of the wealthiest parts of the UK, and so Sinners will capitalise on this. This is where the majority of the customers are going to come from and so it is essential they are targeted thoroughly. Posters will be displayed in windows of bars and coffee shops, because many business associates between the ages of 20-39 use coffee houses for lunch and so are the perfect place to target them. Advertising will focus and emphasise the lower drink prices, especially the happy hour between 9.30pm until 10.30pm. This happy hour will differentiate Sinners from Smokey Joes and is a good tool to gain market over its nearest competitor. Based on the consumer questionnaire the results show that all the drinks (see appendix 2.0 graph f) are desired. Because Sinners is in favour of meeting people’s needs and desires, all the drinks on the graph will be sold to meet everyone’s needs. Obviously drinks such as alcohops and Vodka will be stocked in higher amounts as there is a higher demand for them, and drinks such as Scotch will be stocked in small amounts, as there is less demand. The drinks will be used in the happy hour to entice people to the club, and spend their money rather than going to another bar or Smokey Joes. To meet people’s need in music, there will be two floors to the nightclub, one being a disco and 80’s room, and the other being a Garage, Hip Hop and drum and bass room. This will meet 92 per cent of the consumer markets tastes (see appendix 2.1 graph g).
In terms of human resources it found that the average wage in Maidenhead for a waiter/ waitress is £5.00 per hour. This wage is between the hours of 7.00pm to 11.00pm, and so it is evident that for the nightclub a higher wage would need to be paid as the hours are from 9.30pm until 2.30pm. The reason for this is that the hours are unsociable and people would not want to work until the early hours of the morning for a low wage. There is no motivation for people working unsociable hours for a low wage, and so a reasonably high wage needs to be paid. However this does not necessarily mean that people will be motivated solely just for the money (Theory X), and so there are many non-financial motivational reasons for working in a nightclub, such as the good atmosphere, good social side to the job and it can be enjoyable as it is not boring (Theory Y). From this it was decided that Doorman wages should be £12.00 per hour, Bar Staff wages should be £6.50 and glass collectors should be £6.00 per hour. However because Bar Staff are the business essentially (they take the money), it is essential that they are as quick and efficient as possible meaning they are to be sent on a course to improve their skills. The same applies to Doorman because they are in a way very interlinked with the social responsibility of the nightclub. They help to prevent violence, noise pollution etc and so it is essential they can do this to the best of their ability, meaning they will undertake a course as well.
The profit and loss account shows the sales revenue made in one year against the cost of sales, and also other expenditure. It is a tool used to show how much profit will be made after one trading year. The net profit of Sinners after the first year would be £646, 584 assuming the club was full on a Friday and Saturday night with everyone spending an average of £17. This is a reasonable average because my research shows that there are 54 out of 60 people who would spend more than £17 on a night out, and so I have been very realistic if not generous with the figures I have used to construct the chart. However if the figures were of the same that are shown a huge margin of £646, 584 would be made after costs have been accounted for. This proves the proposed business venture would be worth while carrying out, as shown in the cash flow forecast only a small loan of that covers £22,632 is needed as an initial investment to get the club up and running in terms of rent and rates for the first two months, and advertising in February when no income is coming into the business. After this second month income is made meaning the loan would be paid off within two months if needed be, as the closing balance for April, only the second month of trading, is £116,586. This would cover all costs and would repay the loan still leaving money left over to reinvest into the nightclub. Although there would be continuous extra costs such as maintenance and repair, the retained profit at the end of each year easily cover for any incurred extra costs.
The main restrictions with this type of project were lack of time and trouble finding costs. If I was to carry out a project of this nature in the future with more time allocated, I would definitely take a much larger sample, of possibly 300- 400 people rather than just 60 people when it came to the questionnaire. I would also possibly interview nightclub managers from outside Maidenhead to gain a view from them and try to implement them into my work. I may even consider the option of opening a branch of nightclubs, because from the project I brought together I feel it is more than feasible for opening a nightclub in Maidenhead, and possibly even in surrounding areas because there is such a huge demand in the UK for this type of business.
Such high demand was the cause of the forecasted profit and loss account and such high sales revenue being generated, and if this is so and demand is so high there is no reason why this could not happen.
Other restrictions I had were finding out information on licensing laws and costs. Bars in Maidenhead were reluctant to give financial information for business reasons, apart from Smokey Joes who in the end did give over some information but not much.