Mark, Bar Manager. He has come fifteen years bartending and bar management experience. He is eagerly awaiting the opportunity to work at a restaurant/ bar where things are done correctly and the customers is put first
THE SERVICES
In this section I will be describing how I will provide our service and what we will do to make it special and different from every other Night Club business.
The emergence of the main Street area of Central London represents a unique opportunity for a high-energy, dance-themed venue. The development’s central location, demographics, and lack of direct competition are major advantages to this project. The proposed venue will provide a local solution to the lack of social atmosphere and live sport venues geared primarily toward the 21-35 age groups in the West London area and will help keep late night entertainment expenditures within the localized region.
The new venue will specialize in high-energy themes a quality video and gaming area, and will offer beer, wine and an array of liquors and mixed drinks. In addition, the venue will sell non-alcoholic beverage such as soft drinks, juices and bottle water. A ‘casual’ food menu consisting mostly of appetizers and small entrees ranging in cost from six to nine pounds will also be available. The initial hours of operation will be 11.00 P.M to 2.00 A.M. four nights a week and 11.00 P.M to 5.00 A.M on weekends. The establishment will draw primarily from the London market while attracting guest from the area’s other surrounding cities and towns.
Strategy and Implementation on the Services
In order to place emphasis on exceptional service, our main tactics are bi-monthly service training, employee recognition, and higher service employee to customer ratios. Our specific programs for training include employees, and sharing of success stories among employees and management. Our specific employee recognition programs include employee of the month with a personal parking space, service excellence recognition awards of specific employee attached to advertising.
To achieve higher service employees to customer ratios, we include separate beverage servers and bussing personnel, as well as maintaining a comfortable count fro the wit staff.
Our second strategy is emphasizing entertainment. The tactics are interactive entertainment, constant sensory appeal, and unique event viewing. Our specific programs for interactive, constant sensory appeal are frequent contests, games, music, and karaoke all hosted by an in- house DJ who is also in charge of event programming for the main room and lounge. A billiard room will overlook the main area. Billiards was selected due to its widespread popularity (fifth most popular spot in the world, according BBC)
Our promise fulfillment strategy may be our most important. The necessary tactics are ongoing value- based training, maintenance and attention to detail, especially after popularity has been established. Through empowerment of service employees to solve problems without making a customer wait for management consultation we create a win-win situation for the customer and the restaurant.
Continuous and never-ending improvement is the order of the day through our training sessions and meetings.
MARKET STRATEGY
The market strategy refers to how I am going to sell my services to the public the strategy would be based on the research I have carried out in my market research.
The strategy I will use for my business will be a simple one; this will be a satisfying customer. It is obvious that when a customer leaves the club they will tell other about how much they enjoyed themselves.
I have carried out a research based on what type of advertising will be the best one for the business and the research proved to me that the best way is to provide the best services to our customer. This therefore means that the word of mouth is the best advertising for the Club 40/40.
Marketing Mix
The marketing mix refers to those elements of the firms marketing strategy, which are designed tom meet the needs of the consumers, and the necessities of the business. The marketing mix falls into main parts; Product, Price, Promotion and place.
W3hen producing my marketing mix I will need to consider the following factors: the types and number of services offered, my target market, the degree of competition and the marketing mix of competitors. I will need to create a successful marketing mix in order for the business to successful
Product: a product is something that is offered to the market. In this case, I am selling a service. In my Night Club
Promotion: this is an important aspect of a business marketing strategy. It will allow me to present the right image, what the business offers and show the consumer that5 my business is competitively better. It will also promote the business as a reputable, recognized name and strengthen its position in the market. There are two types of promotion; above the line and below the line. Above the line is more costly and you have less direct control, but it is more effective, reaches a larger consumer audience and include su7ch methods as radio, television and newspapers. While below the line promotion is less expensive, you have more direct control over the area you wish to promote to, and it includes fliers and direct mail advertising. I have decided that it would be beneficial to use element of both types of promotion. I will place an advert on every fortnight in the local newspaper as well as distributing fliers through out the local area.
Price: this plays critical part in marketing activity. An incorrect pricing policy could reduce the number of customer and lose revenue.
Since I am a new business trying to gain a high market share I will need to charge prices that will attract my consumers.
I will adapt the penetration pricing policy for my services. As the business goes on I will gradually increase my prices to suit my business. The price will increase does not mean that I will charge ridiculously but reasonably.
Place: this aspect refers to the distribution of product or services. The environment where I am located seams to be safe and clean enough for my customer to be comfortable. An attractive sign could further attract new customers.
FINANACIAL ANALYSIS
Club 40/40 as a business will seek to stay financially sound throughout our business operation. We intend to operate in such a way that will achieve a good level of profit in our first and subsequent years. Other financial aspect of our operation will also be closely and carefully managed to ensure our competitiveness.
Projected Profit and Loss Account
Projected profit and loss statement for the nightclub follows. Three years' annual totals are shown below. Monthly breakdown for year one appears in the appendix.
Project balance sheet for 40/40
Project cash flow
The following table illustrates our monthly cash flow for year one. The table shows three years of annual totals. The months are weighted according to the amount of weeks in that month in a typical calendar year.
Break-even analysis
Break-even Analysis
Club 40/40’s Break-Even Analysis formulas are presented in the text below.
Fixed Costs £1,570,970
Variable Costs £32,000
Revenue (Estimated) £520,000
Break Even Point = £
Average Nightly Break Even Revenues – approximately £ 3,500
Minimum Nightly Required Spending per Person - £8.75 + £9.75 = £18.50
Minimum Nightly Required Incoming Traffic – 450
Break-Even Analysis
(£)
Important Assumptions:
- We assume a slow-growth economy of five percent the first year, and three percent thereafter, without major recession.
- We assume that we will grow as managers during the process, this growth will manifest itself as flat line expense growth over the five-year period, leading to increased annual cash flow.
- We assume access to equity capital and financing sufficient to maintain our financial plan as shown in the tables.
- We assume continued popularity of nightclubs in the UK and the growing demand for high-energy themed and casual dining venues.
VIABILITY OF MY BUSINESS
I am doing my viability based on the first year of our business. The viability helps to
Net profit margin
Net profit/sales X 100%
371,901/2,276,340 X 100% =
16.34%
The net profit margin shows that our business will perform, well due to the sale we will receive at the start of the business.
Acid Test Ration
Liquid assets / current liabilities: 1
521,740 / 67,339: 1 =7.74:1
This ratio does not include the closing stock, but it shows our true cash position if we start the business i.e. money will be available in the business.
Gross profit percentage
Gross profit / sales X 100%
1,908,960 / 2,276,340 X 100% = 86.86%
This helps to show the true performance of our business i.e. receiving more sales than to purchase things that we need.
Net Worth- that is our working capital shows to me that money will be available in the business to cover my cost that the business will need to have during the running of the business that means more will be available and my business will not need to go in the future because we will not run out of cash in the future.
Appendix 1
Market analysis
The concept and management of the Nightclub has been well received, and has been offered key placement on Carnaby Street in Central London. This commercial centre spans 138 acres and promises an immediate primary trade population of 232,000 people with a secondary population of 164,000 people. The Boulevard at the Avenue average daily traffic counts are currently 53,000, and will increase to 72,000 by 2005 following the Boulevard's connection to The West End. At the centre of the complex will be a 16-screen Cinemark and IMAX theatre opening March 2005. The Centre’s planners having met the Nightclub's management and have reviewed the concept. They have indicated that the Nightclub is "exactly" what they were looking for and wish to place it directly in front of the theatre. The annual projected traffic for what Cinemark is calling their 'flagship' location is 1.4 million people, which exceeds their current location at Waterloo
The Nightclub will be a 10,000 square foot unit, which will also house the company's corporate business office.
The dance club and bar will accommodate 550 people. With Central London’s rapidly growing population, the variety of the Nightclub from across the country would create mass appeal for all of the Nightclub's customers. The store will be equipped with state-of-the-art audio and video systems like none other found in Central London. It will serve the need for a true nightclub in London. The general appearance will be clean, open, and pleasing to the customer. The demographics are favourable, with minimal competition from other dance-themed venues and bars.
Market research
Market research is very beneficial to my business, as I can analyse the market place within the West. This will allow me to see the size of the market, available market share and the competitors located within the market place. I can also use market research to identify particular segments within the market place that other firms have overlooked or not perceived. I can use market research to analyse future trends within the market place, perceive times of recession and anticipate changes within the market that could affect my business. It’s most important advantage is that it will allow me to build up a consumer file, discover their likes and dislikes, their needs and whom my firm needs to target most to be successful.
In using market research I will also be able to analyse the potential strengths and weaknesses of my competitors and in doing so set up benchmarking targets to which the performance of my business can be measured.
Primary research or field research involves collecting data that does not already exist. I will be sending letters and e-mails too different companies, as well as conducting a questionnaire to obtain information. I intend to have mostly closed questions (quantitative). However, some questions will be left open (qualitative) to allow the individual to give their opinion. I will attempt to take a random sample of the target market. Another advantage to questionnaires is that they are quite cheap. Other methods of primary research include personal interviews and postal surveys etc. These however are likely to be expensive and time consuming.
Using primary research to carry out a research has its benefit. Primary research gives a full range and depth information directly from consumers. However using a primary research could cause consumer to give opinion that it could be very time consuming.
Appendix2
Secondary research
Secondary research, or desk research, involves using data that already exists. This could include market intelligence reports retail audits among various other things. I will be viewing web sites of various Night Club suppliers as well as visiting some local Club to help gather data.
Market segmentation
We see the Nightclub as appealing to three major market segments. Fortunately, the long, late night hours of operation help the Nightclub lend itself to multiple segment appeal. Our market segmentation scheme allows some room for estimates and non-specific definitions.
Childless Young Professionals--Due to our proximity to the IMAX and Cinemark theatres, we must appeal to single adults and young couples. Whether it is a group of friends or a couple out to see a movie together, these people need a place to eat/drink either before and/or after their movie. These customers will range in age from 19 to 40. The Nightclub will appeal to this category by switching the tempo and entertainment to be more appealing to adults as it gets later into the evening. We also anticipate a 15% annual growth rate in tandem with the growth rate of Central London and through increased popularity.
College & University Students--By creating an environment that is appealing to college students, we secure a natural progression between the high school student and the young professional. Through word of mouth, the Nightclub expects realize an increase of five percent annually from this segment. The Club’s close proximity to the London School of Economics (LSE) will also provide a viable customer base.
Tourists and Business Travellers--More and more business and travellers and tourists are finding themselves in London every year as is made evident by the increased demand and subsequent expansion of the local airport. We plan to reach these people through direct marketing to local hotel patrons (e.g. Marriott). We anticipate a 20% annual growth rate in this segment. As our relationships grow with the local hotels, so too will the word of mouth recommendations from the hotel staff as well as the patronizing of our restaurant by their families. Our future plan is to publish a simple website in order to create awareness to any traveller who wants to take an advanced look at the club before their visit.
Business Analysis
I will be examining the ‘how, what and why’ of the Club’s activity. I will be analysing the internal problems and advantages facing the club. This will give an insight into the factors that could affect the business strategy. The outcome of this will be to find out the strengths, weaknesses and capabilities and its commercial and operational advantages and the wider pressures and the wider general pressures and constraints on the business.
SWOT Analysis
PEST Analysis
The external environment will have an impact on Club 40/40. This analysis will provide a visual representation of the external pressures facing the Club.
Political:
- There are several legislations to be taken into consideration. These include; the Sales of Goods Act 1979, which covers the conditions of sale; The Supply of Goods Act, 1982, which protects customers of Club 40/40; Food and Safety Act etc.
- The UK operates a progressive tax structure; this will affect the amount of corporation tax by the Club.
Economic:
- The economy is experiencing a growing trend of inflation; this will make the pricing of the services and goods sold by the Club expensive to its customers.
- At present there is a low unemployment rate in the UK. However, with the expected influx of immigrants from South Europe into the UK this will cause a rise in unemployment. This will adversely affect patronage of the Club by people as they will have no money to spend.
Social:
- The social factors should positively affect Club 40/40 as more and more people engage in social activities. This change in lifestyle will make the Club more profitable.
Technological:
- New technological might affect the Club negatively. Tests are already being carried out on a revolutionary music player that will make DJ’s extinct. This will remove the energy brought in by DJ’s which might make customer bored and reduce sales.
The following chart and table outline the target market segments for the 40/40 Nightclub, and include annual growth projections.
Market Analysis
Market analysis pie
Our strategy is based on serving our niche markets exceptionally well. The nightclub enthusiast, the tourist and business traveller, the local nightclub crowd, the local service industry as well as groups going out together, can all enjoy the 40/40 experience.
Appendix 3
Primary research
TEST QUESTIONNAIRE
Q1. What age are you?
____________________________
Q2. How often would you go to a Night Club?
___________________________
Q3. What do you think of the current Club facilities available in the West?
___________________________________
Q4. What facilities would you like to see within the Club?
________________________________
Q5. Would you prefer if there were a membership scheme offered that gave members special offers and discounts? (Please circle appropriate answer)
YES NO
(If ‘NO’ please go to question 8)
Q6. How much would you be willing to pay for a year’s membership?
______________________________
Q7. At what times would you prefer that the Club was open?
_______________________________
QUESTIONNAIRE
I am currently an A- level student studying business studies at Archbishop Michael Ramsey College. And for my coursework I am carrying out a feasibility study into opening a Night Club. It would be very helpful if you could please take the time to fill in this questionnaire, thank you.
Q1. What age category do you fall into? (Please circle the correct answer)
Under 16 16 to 25 26 to 40 Over 40
Q2. How often would you go to a Night Club (Please circle the correct answer?)
Daily Weekly Monthly Never
Q3. What do you think of the current Night Club facilities available in West London? (Please circle the correct answer)
Very Good Good Reasonable Bad
Q4. If a new Night Club were opened in the centre of West London would you be interested in using it? (Please circle the correct answer)
YES NO
Q5. Would you prefer if there were a membership scheme offered that gave members special offers and discounts? (Please circle appropriate answer)
YES NO
(If ‘NO’ please go to question 8)
Q6. How much would you be willing to pay for a year’s membership? (Please circle appropriate answer)
£0> £2 £2>£5 £5>£8 Over £8
Q7. At what times would you prefer that the Night Club to open? (Please circle appropriate answer)
8pm to 2pm 9pm to 4pm 12am to 7am
Thank you for taking the time to fill in this questionnaire
QUESTIONNAIRE RESULTS
Appendix 4
The budget, at this stage of my course work I am going to make use of the result I have derived from my primary research to prepare a budget.
Daily Revenue Forecast
This table illustrates our daily revenue forecast for 1,200 total square feet.
We are assuming a seating capacity for said space of 350 guests. In addition, we expect just less than one complete rotation of this space for food and beverage guests alike.
Sales Forecast
This chart represents our forecast for Income on a monthly basis. The table presents yearly-expected sales. Complete monthly forecast figures for the first year are presented in the appendix above.
Sales Monthly
(£)
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Appendix 5
The inside for club 40/40
