Nightclub, Dance Classes Business Plan

The concept of E3 Playhouse (E3) is to provide an entertainment, education, and restaurant venue in downtown Santa Cruz. The establishment will provide a live entertainment venue; a restaurant; community-based courses in music and the arts; a retail component offering arts-based retail merchandise; and venue rental services for the Santa Cruz area.

E3 Playhouse, which is in a startup position, has a starting date of July 2004. The business plan’s purpose is to estimate the start-up and ongoing cost, identify revenue streams, forecast net cashflow and profits. The company plans to lease space in June 2004 and build the space over three months. We anticipate opening the doors to the public in mid September. The company has a fiscal year that runs from July to June.

The company CEO is Michael Horne. Michael Horne, the company’s CEO, has extensive experience in managing live entertainment venues throughout Santa Cruz. He previously owned and operated a similar venue over six years. Wes Anthony is the owner of the management team. As a professional musician and teacher, Wes is uniquely qualified to develop an entertainment and education venue.

The nightclub and bar industry is shifting toward a more entertainment-oriented concept. These bars and nightclubs offer guests an exciting place to mingle and mix, as well as a chance to be part of the entertainment via interactive contests and theme nights. We intend to heavily utilize entertainment-oriented marketing in an effort to withstand the perpetual shift in trends and cater to as large a client base as possible.

It covers 6,600 square feet and will house the company’s corporate office. The bar and dance club will host 200-400 guests. Santa Cruz’s premier entertainment venue will feature state-of the-art audio, lighting, or video systems. The venue will look clean, bright, and appealing to the customer. The demographics of the venue are favorable, with very little competition from bars and other venues that cater to dance-themed events.

E3 will be able to generate sales through seven revenue stream that consist of the company’s services and products:

• 
  Membership Charges
  
• 
  Education Courses
  
• 
  Food and Beverage
  
• 
  Gate/Entertainment
  
• 
  Retail Merchandise
  
• 
  Arcade
  
• 
  Site Rental
  

Managing seven separate revenue streams requires ramping up each one individually, ensuring that each area performs well before developing the next revenue stream. Food/Beverage, Gate/Entertainment and Food/Beverage are the most stable revenue streams.

The venue appeals to four major market segments:

• 
  Young Professionals
  
• 
  College Student
  
• 
  Tourists and Business Travelers
  
• 
  Senior Citizens
  

The E3 Playhouse’s Santa Cruz location in the heart of downtown and its low competition are all major factors that will ensure the success of this venture. The proposed venue will offer a local solution for the lack of entertainment venues and social atmosphere in the area.

This business plan will estimate startup and ongoing costs, identify revenue streams, and forecast net cashflow and profits. Wes Anthony pays $190,260 as capital to start up and operate the business.

The total investment of the owner is $190,260. We anticipate a start-up date of July 2004, with several months build-out of an appropriate leased space. A grand opening date is set for September 2004. Our goal month to break even is July 2005. The per-unit variable cost for each unit is 60%. Fixed monthly costs are $26,558.

The start-up expenses and negative net profit are the reason that our first year’s total net profit was approximately negative ($161,000). The second-year forecast projects a positive net profit of $122,400. This will increase to $129,800 in the third year. Our net cash flow for the first year is projected at $22,000, increasing to $93,000 in our second year and $81,700 in our third year. We project ending our first year with a cash balance of $23,000, increasing to $117,000 in our second year and $198,000 in our third year. We project our accounting networth at the end of our first financial year to be negative ($10,000), rising to positive $62,000 our second year, and $198,000 our third.

The owner is fully aware of the high risk nature of opening an entertainment-based restaurant. If the venture fails, the owner’s paid-in capital and expenses may not be recovered. If the venture is undercapitalized and requires more working capital, the owner will consider bringing on investment partners. In order to make more money, the owner will examine the return-on investment. In the event that net profitability cannot be attained, the owner will take sequential steps to exit the venture, as outlined in the Exit Strategy section of the Financial Plan.

1.1 Mission

E3 Playhouse was established to bring entertainment, community education, as well as a dining and entertainment venue to Santa Cruz. E3 is an affordable venue that offers unique entertainment to all visitors.

The purpose of E3 Playhouse is to provide the residents of Santa Cruz County, and beyond, with quality entertainment in an enjoyable, pleasant atmosphere. It will provide excellent an place and opportunity for social interaction with dancing, games, educational classes, and special events, with an emphasis on “Live” dance music, including Salsa, Swing, R&B, and Americana. It will have a casual dining ambience, great food, and excellent customer service. The restaurant will have a beer- and wine-bar, live entertainment, and an arcade.

1.2 Keys for Success

The E3 Playhouse venue has three keys to success.

• Location–The E3 Playhouse will be strategically located to maximize the revenue derived from the live entertainment consumer. Santa Cruz will host the showcase. This is an excellent location for multi-purpose entertainment, community education, and restaurant with live music.
• Low Operating Cost–E3 Playhouse will be managed specifically to maintain targeted operating ratios that allow for maximum net profits. For initial construction and build out, E3 Playhouse management will keep construction costs at a minimum. The venue will be based in a leased space. All operating expenses will be kept to a minimum, with cost of sales and margins reviewed on a monthly basis. Cost of sales is targeted at 40%.
• Wide range of ServicesE3Playhouse will offer entertainment and community education courses. It also has a full-service restaurant/nightclub, an arcade, a retail merchandise section, and rental services. The goal is to maximize revenue per visitor and prolong each visitor’s time at the venue.

1.3 Objectives

This business plan estimates startup and ongoing costs and identifies revenue streams. It also forecasts net cash flow and profits. Only the owner will pay in capital.

E3 Playhouse’s purpose is to offer entertainment, education, as well as a restaurant in downtown Santa Cruz. The venue will be a venue for live entertainment; a restaurant; community-based music and arts courses; a retail component that sells arts-based merchandise; and a rental service for Santa Cruz. The objectives are to:

• Remodel a leased area and launch the venue within a $40,000 starting budget and an infusion capital of $150,000 for the first 30 days. After three months of leasing the space, the venue will be open. Leasing is expected to begin June 2004.
• Reach a first-year sales goal of $427,757 and second-year goal of $1,222,164. The third-year goal is conservative growth of 7%.
• You should maintain a 40% gross margin.