How to write a business plan for a bar
Tips / 22.06.2023
Running your own bar, pub, tavern, tap house or whatever name you give it, is an exciting way to start your own business, escape the nine-to-five grind and reap the rewards of your own unique ideas, drive, determination, and of course, the profits you can make.
However, starting a bar or a pub is not as easy as one might first assume. It involves great consideration of many different factors (often at the same time) to ensure that your bar concept gets off the ground and turns into reality.
Although you may have given your bar concept a lot of thought already, nothing will help you conceptualize every step of the process more than a business plan for pubs. These “road maps” are there for several reasons and in this article, we’ll cover them as well as the essential components of a pub business plan. With this in mind, let’s get started.
Table of Contents
- Why do you need a business plan for your bar?
- Essential components of a business plan for a bar
- Executive summary
- Company overview
- Management team and staff
- Market analysis
- Menu description
- Marketing strategy
- Business operations and accepting payments
- Financial projections and forecasts
- How to present your bar’s business plan to investors
Why do you need a business plan for your bar?
At the outset of your planning and preparations process, you might be wondering why you need a business plan for a pub in the first place. You have already jotted down the key elements related to your bar’s opening either on a piece of paper or on your computer. Isn’t that enough? The answer is no and there are several reasons behind this.
As the “road map” to your successful venture in opening a bar, you need a business plan for a bar because it will help you put every single element and facet of opening your bar in one place. This information and the process of doing so itself will help you identify gaps that you may have missed out or help you see opportunities for future scaling and growth. As such, a bar business plan is an essential way to help you get more awareness and clarity for yourself as you embark on this venture.
However, there is another important reason why you need a business plan for pubs. And that is that this plan or document needs to be presented to investors or lenders. It is going to either convince them to support your bar project financially or not support you at all. These days, few people have sufficient savings to start up a bar on their own and they will need a lender’s helping hand to do so. Therefore, to attract investors and prove the profitability of your concept to them, a business plan will be necessary.
This is because one part of the business plan entails a financial section and this section is where you’ll also outline what your projected profits will be over the next few years as well as how you plan on paying your bar business loan back. The more clarity you can provide lenders with in this regard, the more likely you are going to be able to convince them that your bar idea should indeed be backed by them.
Essential components of a business plan for a bar
Creating a business plan for a bar is not something you can just sit down and get done in a couple of hours. It’s a longer process that involves in-depth research, a lot of collection of information (regarding licenses, permits, building regulations, marketing, etc.) and painstaking attention to detail to ensure that whoever reads your bar business plan will be ready and happy to invest in your concept.
But what goes into this type of business plan? There are eight key items that are usually covered, although some business plans for bars may cover more while others less. It all depends on your aims. However, essential sections and components that should not be left out of it include the following.
1. Executive summary
First up is your executive summary. If this is bringing back memories of a paper you wrote back at university or high school, you’d be right in a sense because much as the name suggests, you are literally presenting a summary of your bar business plan to the investors, lenders or interested parties who will read it. This is why it’s important to actually leave this part for last. The summary of information will be based on more in-depth information that appears in the remaining sections of your bar business plan and therefore, writing this last when you have all the data at hand can help you save a lot of time.
But what do you put in the executive summary once all the information has been collected and gathered? The answer is a bit of everything. You’ll specifically and immediately want to indicate that your business concept is for a bar or for a pub. Secondly, you’ll want to identify what your business name will be. When choosing a name, you want to keep it short, simple and memorable and avoid over-complicated names that will not be easy to remember or pronounce. Therefore, putting careful thought into your business name will be a good idea.
As a side note, if you choose to create a website for your bar or pub (which is a very good idea and will be covered in more detail in the marketing section below), you’ll want to have a short URL to make it easier for your customers to find you online.
After these initial elements are out of the way, you will also want to summarize the company structure and business model that you will be following. This will help investors see what sort of risks you are willing to take financially and whether or not you are willing to keep your business finances and liabilities separate from your personal ones.
Another important note to add is brief information about the management team and staff members that you want to hire. What sort of experience do they have that you want to emphasise to potential investors to convince them that your dream team really can deliver the results you expect them to?
Furthermore, you’ll want to present the investors with a brief snapshot of the industry you’ll be operating in, while emphasising your strengths and weaknesses, threats and opportunities for growth through a summarized SWOT analysis.
In addition, you’ll want to present your readers with a brief outline of your menu. What sort of drinks will you be serving, where and at what price?
In the next part of your executive summary, you’ll want to provide a short and concise marketing strategy that you plan on following to ensure that your business gets the right recognition and exposure both online and offline.
Next up, you want to discuss how your business will operate and indicate the methods you’ll use to accept payments.
The final piece of this puzzle involves presenting a financial forecast and projections of expected turnover and profits over the next three to five years as your business starts out initially and then becomes more well-known.
Each of these elements must be included in a short and concise manner in the executive summary to give your reader a comprehensive overview and a bird’s eye view of what to expect in the rest of the business plan. If your executive summary is not detailed enough or is missing critical information or components, the chances of keeping the investors’ attention are slim and they may just pass up your idea in favour of supporting someone else’s more well-fleshed-out business idea.
2. Company overview
We now come to the company overview part of your business plan. This section will have details including the name of your business and the type of business structure that you plan on using. The business structure is important because as mentioned earlier, it signals to investors how risk-averse you are and what sort of division between personal and professional finances and liabilities you are likely to be more comfortable with.
You should consider providing a reason behind the rationale for selecting a certain business “vehicle” over others. For example, if you choose to be a sole proprietor or be in a partnership, what is the reason why you are willing to accept your business’ liabilities personally?
On the other side of the coin, you may wish to explain why you have chosen to open a corporation that separates business and professional liabilities and finances and then indicate the reasons why either option is the right one for your business idea.
Further important details to add in the company overview include mentioning your mission and vision statements as well as your bar or pub’s unique selling points (USPs). When presented to lenders, you need to use these USPs to indicate how they set you apart from others in the market. However, this issue will be discussed in more detail under point (4) below.
Also worth adding here is an expansion strategy for your bar business. Are you planning on only opening one venue or do you have more lined up for the future? A business plan for a bar that shows potential for growth is more attractive than one with stale turnover and revenue projections and this is something worth considering as well.
3. Management team and staff
Potential lenders and investors will also be interested in finding out who is behind the bar concept and operation. They will look for prior experience of the owner and the management team. Therefore, emphasising past skills and experience in successfully running or managing other bar establishments will be to your advantage.
The management and the rest of the team should be broken down and presented in a hierarchical order (consider using a graph to illustrate this more simply) to show your lenders what sort of management structure you have envisioned. And to help support this section in your bar business plan, you might consider adding the management team’s CVs as an appendix to it.
4. Market analysis
It’s important to show investors that you have analysed and studied your industry and market in-depth. This means looking at everything from your chosen location to your target market and competitors.
Industry analysis involves looking at the bigger picture of your bar within the context of the bar sector as a whole. What type of percentage of market share do you intend to capture? Will this share be carved out from your competitors or will you forge out your own path and strive to reach an untapped as yet market?
This will be highly dependent on the location of your bar. The location should get high foot traffic, be close to public transportation routes, possibly near popular landmarks and attractions and have good provision for parking. If not, and you are planning on developing a new location, you need to be able to prove that this new location will bring enough patrons to your bar establishment for you to be able to earn a sufficient amount from them in terms of your financial projections.
Further important details to consider are your target market. You need an ideal buyer persona to indicate who you are going to target. The ideal buyer will be who you are targeting and will represent the overall audience of your bar. You need to carefully study this aspect and mention in your bar business plan what income levels you are aiming to cater to, their ages, what genders and cultural groups, what pain points you are going to address, how you will satisfy demand and more.
A further and by no means least important aspect is studying your competition. How many bars are on the same street where you plan to open? What about the surrounding neighbourhood? What about the entire town? Depending on the number of competitors you are going to be up against, you need to carefully study what items they offer on their menu, what atmosphere they have created, what their target market is and importantly – how you plan on beating them or gathering parts of their market share if you intend to be a direct competitor to them.
If you don’t plan on being in direct competition, then you’ll need to carve out an interesting and unique bar or pub concept that is different from everything else. Either way, you need to show investors that you can beat the competition and that you’ve carefully considered their presence in the industry to enable you to come to the conclusion that you can actually outperform them.
5. Menu description
Your prospective investors will also want to know what will set you apart from the rest of the bars and pubs in your city. Apart from the furnishings, music and atmosphere that you’ll create, they will want to see your menu. In a bar setting, the drinks are what make up the majority of the menu. From cocktails to imported wines to beer – every bar and pub caters to a particular clientele.
Because you’re not going to try to cater to absolutely everyone with your bar concept (and it’s not a good idea to do so in any case), you need to niche out and offer one thing or a couple of things but be really good at that offering. With this in mind, you may need some experienced and capable barmen to tend to your bars and create your drinks. Their skills and experience should also be exemplified in your bar business plan.
Further aspects to consider are what sort of food will be on your menu to complement the drinks. Will you serve burgers and chips or tapas and finger foods or will you opt for peanuts and other related snacks? These questions need to be fleshed out in full for your investors so that they can perfectly visualise your bar offering and concept and be able to give you their backing.
6. Marketing strategy
We now come to your marketing strategy. This is a very important aspect of your bar business plan because this is where you will set out not only the marketing plan and strategy for your soft launch but also for the rest of the time that your bar will be operating.
Let’s start with your website. This is essential to have because more and more people today look at bar establishments online to decide whether to pay them a visit or not. Your website is like your bar’s business card. It needs to be attractive, easy to navigate and informative. To this end, you may want to display a gallery of images that capture the extent of your menu in an attractive way. You may also want to indicate on your website your contact numbers and location so that it’s easy for patrons to book a table and/or find your location with ease.
Speaking of finding the location with ease, you will also need to have a Google My Business listing. With its three-part map pack, this is essential for small local businesses because over 70% of searches on Google are related to local searches for local businesses. Your bar business should be there so that you capture a wider net and get more patrons to visit you as a result of your listing.
You will also need to set up social media accounts and regularly update them. Whether you’re offering discounts for happy hour or you are going to have a live band perform on a certain night of the week, this is one of the best ways to get this information out to the public so that they know what you are offering. However, you will also need someone to manage your social media handles and accounts and with this in mind, it’s worth indicating who will manage your marketing efforts and why.
Other advertising options you can consider include printing flyers with discount coupons for your soft launch, advertising in your local newspaper or radio station and using guerilla marketing tactics to promote your brand.
And with regard to your brand, you need to be super consistent with your brand identity and ensure that your logo, tagline and brand tone of voice are consistent across every online and digital platform that you will be operating.
7. Business operations and accepting payments
A further important aspect that relates to making a business plan for a bar entails specifying the ways in which you will be managing your business operations. You need to first figure out which business trading licenses and permits you need from your local council. Examples of these will be your music and alcohol license, a food handling license, a health and safety license, a building license and more.
Apart from these, you will also need to get your furniture and equipment in order. This necessarily means equipment to help your bar run better, smoother and more efficiently. Examples of technology that you may need to implement include point-of-sale (POS) terminals because most customers these days prefer the cashless payments route because it’s faster, simpler and more convenient. It’s also a great way to reduce waiting times and queues at your bar during busy periods.
However, when choosing your POS provider, you should ensure that you get all the perks possible out of them. For instance, you will want to ensure that they offer instant settlement of funds, a merchant account where the received payments will go into, a business card to handle your funds, support and the ability to accept payments such as Apple Pay and Google Pay in addition to other cards such as Visa and Mastercard, among others.
8. Financial projections and forecasts
As the final point of your business plan for a bar, you need to set out your financial projections and forecasts. First, you need to create a list of all the expenses that you’ll need to incur. These will be divided into regular and one-off expenses.
Then you need to project your profits based on anticipated sales. In addition, you should create projections of your business’ growth over the short- to medium-term and also indicate how and how much you’ll be able to repay investors once you start turning a profit.
How to present your bar’s business plan to investors
You are finally ready with your business plan and you are ready to present it to investors. But how should you do so? The answer is in the most professional way possible. When you go into your bank or building society to speak to them for a loan, they will either want to see your business plan and take time to go over it or they will want you to present it to them as they ask you questions that may arise. You should be as prepared for either scenario as possible. However, if you aren’t able to answer some of their questions, you should be honest and upfront about this and indicate that you will get back to them with an answer.
Perhaps the most important thing to do before you actually present is to let someone you trust go over your business plan and spot any gaps or loopholes and check for any errors or typos you may have missed. Remember that presentation is everything and you need to be as professional as possible.
With your bar business plan now carefully and thoughtfully developed, you are ready to proceed to approach investors for funding assistance. Be prepared to be as professional as possible both in your approach and in your presentation. You will want to rely heavily on facts and figures that you have extracted as part of your research process and not base your business plan on thin air or material that doesn’t stand rigorous testing.
The more prepared and thorough you are in your bar business plan preparation process, the higher the chance of success you’re likely to experience. Remember that it’s a road map for your success and that it’s a living document that you will always be able to redevelop as your bar business scales and grows. Use it to help guide you to your future success.