The Canal Bar.Final Plan

Business Plan 2008

BUS 4490 - Business Senior Seminar

April 8, 2008

By:

Shanie Cardinal

David Johnson

Andrew Klocek

Michael Gutierrez

Table of Contents:

I. Executive Summary 2

II. Vision and Mission Statement 3

III. Business and Industry Profile 4

IV. Business Strategy 12

V. Company Products and Services 15

VI. Marketing Strategy 15

VII. Location and Layout 20

VIII. Competitor Analysis 22

IX. Description of Management Team 23

X. Plan of Operation 24

XI. Financial Forecasts 26

XII. Investment Proposal 27

XIII. Appendices 28-38

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I. Executive Summary

The Canal Bar

220 E Las Colinas Blvd

Irving, TX 75039

            The Canal Bar is a unique restaurant and bar that focuses on providing a distinct

atmosphere and entertainment that cannot be currently found in Las Colinas, TX. The Canal

Bar provides quality food and drink at a moderate price, with regular weekly live local

entertainment ranging from rock to jazz.

The Target Market is rather open and diverse, but looks to focus on the 21 to 45 year

olds business professionals in the Irving, Texas area, in particular the Las Colinas suburb.

The Strategic Company Advantages include the unique location of the business on one

of the canals of Lake Carolyn. As well as providing one of the very few walking-distance

night-spots, while being the only one to provide weekly live local entertainment.

The Managerial and Technical experience that will be needed include such factors as

TABC certifications, First Aid certifications along with typical food and health certifications.

Experience requirement of the operating team will vary with the respective position.

The Financial Requests will be made from private investors for $1.5 million dollars.

This initial financial investment from these investors will assist in property and renovation

processes.

The Financial Charts can be found in the appendix section of the business plan.

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II. Vision and Mission Statement

Vision

            Las Colinas is a suburb of Irving, a town just west of Dallas, Texas. The suburb is

known locally for its attractive apartment complexes and man-made lake, Lake Carolyn. Once

a thriving economic area for business and living, we look to bring Las Colinas back into the

publics' eye by helping to create a safe and well cultured community by providing a destination

spot to both locals and travelers alike. Being a single location bar and restaurant we look to

focus on developing the community directly around our location while establishing long term

regulars for years to come.

In addition, in the future we look to develop the local canal system to provide a water taxi

service that would not only allow Lake Carolyn residents unique access to our location, but to

tie together the local shops and community. Also, later on we look to incorporate the local

college communities as a source of workforce and economic stimuli. In particular, we look to

purchase other retail space on the same strip, and then rent these to the Business departments

so that they may have active, fully integrated entrepreneur-ships that would change over every

four years. By accomplishing all of this through our restaurant and community efforts we look

to create a retail community that will be seen as the “Venice of Las Colinas.”  

Mission Statement

“The Canal Bar” provides a safe, clean, non-discriminatory and unique atmosphere,

where people of all ages can relax and enjoy distinctive high quality food, extensive drink

choices and local entertainment. In particular: to ensure that each guest receives prompt,

professional, friendly and courteous service; maintaining a clean, comfortable premises for our

guests and staff; and ensuring a personal level of pride in the tasks that our employees partake

in. Through a high level of social and personal responsibility, we look to continuously improve

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not only our service, atmosphere and menu, but our Las Colinas community as well. – “There

is always room for improvement.”

III. Business and Industry Profile

A. Stage of Growth: Maturity:

At this stage of growth the restaurant industry is relatively consistent with sales and

customer bases that fluctuates little.

B. Company Goals and Objectives:

By the start of the sixth year we look to have paid off the initial $1.5 million dollars

from investors, with weekly sales $24 thousand dollars a week in sales. By that point in time we

look to have started the water taxi service as an extended reach of our company. Further out

than that, we look to become a primary location for the Las Colinas residents.

C. Industry Analysis

Industry Definition

In the restaurant industry there are three types of restaurants; fast-food, casual dining, and

formal dining. We would consider ourselves in the category of causal dining. Causal dining can

be defined as an establishment that offers a laid back causal atmosphere with the ability to serve

food at a moderate price. Over the past century, causal dining has formed and changed into a

place were people can sit down and enjoy a meal without worrying about dressing properly.

Prices for casual dining are in a range of $8 to $15 per person. In the current restaurant industry

typical sales per day are at $1.5 billion. Being and staying healthy is important to people and

choosing a place were they will offer a healthy items on the menu will provide a competitive

advantage over others. According to the National Restaurant Association, eighty three percent of

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adults said that there are healthier options at quick service restaurants that there were two years

ago. 1 As far as employees, “women and minorities represent three of five owners of eating and

drinking place firms, compared to less than half of all U.S. firms.”2 The business world is

becoming more diverse especially in the restaurant industry because there are more minority

managers in this industry than any other industry.3 As for the causal dining industry, this holds

true as well. People are also looking for a healthier restaurant that is going to serve and

accommodate to their needs. What matters the most is an overall experience and making the

customer wanting to come back for more.

Government

Government regulations in this industry are very important and one must follow all rules

in order to operate whether its, food safety, licensing, laws and regulations, or taxes. “Food

safety is the most important and is considered the number one concern for the public and

government agencies. The National Restaurant Association on the restaurant.org website offers

information regarding issues like health inspections, keeping salad bars safe, reducing food

spoilage, proper hand washing, food-safety tips for consumers, handling product recalls, and

understanding common food borne-illness pathogens.”4 The restaurant industry has many

resources in order to help with regulations and requirements such as:

- IRS forms and publications for restaurants and bars - IRS information for restaurants- Employment tax forms - State government sites with tax information for employers- Nutrition claims on menus- State alcoholic-beverage agencies- State food-safety agencies

1 http://www.restaurant.org/research/ind_glance.cfm2 IBID3 IBID4 IBID

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Economy

Over the course of the past century, the ways American’s eat out has changed drastically

because of our world and how it has changed. When restaurants first opened, they were thought

of as being very formal and proper. Being properly dressed was very important when going out

to eat. The world was more of a slower time when people had time to sit down and chat for hours

at a restaurant table. Now, we move at a much faster pace and our lives are consistently busy.

This is when the “causal dining” idea came all about. Restaurants now have the ability to offer a

good meal without the interrupting our on the go lives. The distinct idea about causal dining is

that it allows for people to sit down and eat a quick meal and lets customers eat without worrying

about a formal or rushed atmosphere like fast food. The overall experience of eating out in the

early days of restaurants has taken a back seat to what it’s like in today’s world. When people go

out to eat at a “causal restaurant” they want an experience that they can remember along with

good serve and food. According to the Scores for Top 10 Consumer Causal Dining Attributes

charts, the top things that were most important to the customer were; the taste of food,

cleanliness, price, and environment. 5 The main market for this type of industry ranges from all

ages. From college students to people with families, they are looking for a place to eat that has

speed, efficiency, quality, service, and environment.6

Some interesting statistics that is in relation to the industry and economy is that: The overall economic impact of the restaurant industry is expected to exceed $1.5

trillion in 2008, including sales in related industries such as agriculture, transportation and manufacturing.

Every dollar spent by consumers in restaurants generates an additional $2.34 spent in other industries allied with the restaurant industry.

Each additional dollar spent in restaurants generates an additional $0.99 in household earnings throughout the economy.

5 http://www.licensemag.com6 http://www.rimag.com/archives/2007/09/fast-casual.asp

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Average unit sales in 2005 were $833,000 at full service restaurants and $694,000 at limited-service restaurants. 7

Any example of a successful causal dinning restaurant that offers an experience as well as

quality to its customers is Buffalo Wild Wings. Buffalo Wild Wing is a restaurant that has a

full menu that includes salads, appetizers, burgers and most importantly buffalo wings. In the

restaurant they have a sports bar, trivia games, and big-screen televisions were they show

sporting events. “Buffalo Wild Wings is the top 10 Fastest-Growing Restaurant Chains in the

country.”8 There company main focus is to provide, “a relaxed, comfortable atmosphere where

people like to hang out with friends, play games on one of our many big-screen TVs. You can

always feel comfortable pulling some tables together with your friends and staying as long as

you like. We are a fun, edgy, high-energy and easygoing restaurant.”9 Places like Buffalo Wild

Wings sets causal dining apart from home, fast-food, and formal dining restaurants. People

choose casual dining over home cooking because it provides customers with no worries about

buying ingredients, preparing the meal, or clean up. As mentioned before people are on a more

of a fast paced schedule which allows them to have no time to cook meals. They prefer eating

out and in return drive their money into the economy as well as in the industry. Fast-food does

not supply adequate amounts of attention and service people need. The quality of food is not as

good and there is not an atmosphere provided that would meet needs like causal dinners would.

Lastly, in a formal restaurant, while it does provide an atmosphere and good quality of food, it

fails to compete with casual dining in many ways. As mentioned before, price is one of the

most important issues people are concerned about when eating out. Obviously formal dinning

will take you above and beyond the price of food in a causal restaurant. The ability of wearing

comfortable causal clothing is not an option in formal restaurants. Formal restaurants do have

7 Restaurants.org8 Buffalowildwings.com9 IBID

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good quality services but fail to have quick timing on food serve. This is why we chose to

invest and operate our own restaurant in the “causal” setting because it can offer both types of

attributes and qualities that other restaurants have or cannot provide to customers. We would

like to provide to our customers a laid back causal atmosphere with the ability to serve food at

a moderate price while still providing the best attributes from all categories of eating

establishments (home, fast-food, and formal dining).

D. Market and Customer Definition:

Customer Analysis:

The customer analysis for the Irving, Texas begins with the population, which was about

196,084 as of 2006. It has an annual growth of about 2.3% yearly. The market, which we are

targeting, is between 21-45 years of age, which is 61,110 and is 31.17% of the total Irving and

Las Colinas population.10 This particular generation is very Tech Savvy and is considered to be a

group that desires instant gratification and superior service. It’s a very fast paced segment that

has a decent level of income; which is estimated at about $41,645 per year. This crowd tends to

go out at night and on the weekends, but the problem we discovered is that they usually have to

travel to areas rather distant from their homes such as; Greenville, Addison, Deep Ellum, and

Fort Worth. For us, in the development of the Canal Bar in Las Colinas, we want to cut down the

amount of traveling time and costs and be able to provide an experience similar to the ones they

currently desire, but do so within the Las Colinas geographic location.

They are a well-educated segment, which tends to use technology as the prime tool for

communication and research. There is an ever growing level of media usage on the Internet and

radio channels, which we will exploit, as our promotional and brand distribution channels. This

particular food and drink industry is the key focus for many of the members of this segment.

10 http://quickfacts.census.gov8

Furthermore, this location has an extremely low level of entertainment being provided. This will

easily give us the ability and mobility to tap into this market, without much reaction or threats

from the competitors. Most of the restaurants in Las Colinas are food-centered establishments, so

we are going to focus on expanding and developing this area into a prime nightlife experience,

but with all the commodities still available during the daytime hours.

Marketing Analysis:

This segment is much more technologically advanced than the older generations. They

are also a very well educated group, which makes advertising to them and retaining them a very

time-consuming and rapidly evolving segment. This whole segment can be divided into two sub

segments: The first is the 21-30 year olds, which tends to use the Internet and Radio Stations, as

a key device in searching for entertainment; along with the promotional devices we will use

Google as a search engine for distribution, in order to reach this segment. This segment is fast-

paced and changes very quickly, which makes marketing to them a key concern. As they change

and demand different things we will meet those needs as they arise. The 31-45 year old segment

is a more traditional group of individuals that have a higher brand and company loyalty. They

also, use more of the old-fashioned media, than that of our younger generation: our channels will

be the Dallas Morning News and the Yellow Pages (online and book).

This is an area that we have to focus on when thinking long-term. By establishing our

goals and image to the younger generations we intend on keeping them as loyal customers for

years to come.

Marketing Management:

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The typical marketing techniques for this industry are generally: word-of-mouth, radio,

television, billboards, Internet websites, newspapers, phonebooks, and magazines. The radio,

Internet, newspapers, and yellow pages are highly used when getting a message to the consumer.

Radio is the highest used media device for advertising in the Las Colinas area. The average

commercial spot on 106.1 Kiss FM, which runs at about $296.00 dollars for a .30 second spot. In

the newspaper industry we will use Dallas Morning News which runs at an opening rate of

$22.00 to start and depending on size and duration, a one week ad is $20.00 dollars and the more

you purchase the lower the costs becomes (you can buy fixed packages for any duration). In a

future outlook we will use T.V. ads as a promotional tool. It is such a high priced advertising

channel, that it will not be financially beneficial for the initial jump-start of our business.

Strategy

Historical:

 Many strategies have been implemented by local competitors; from Cool River to The

Spirit Grille. The restaurant and bar combination has been used by companies that have come

and gone in the area, those that have gone have been those that have pushed too hard in either

direction or have tried to be to consistently contemporary. The most simplistic downfall that

we have seen is a lack of customer service. This simple issue of customer service has

surprisingly put many more starter companies in this industry to death. The lack of this simple

service can usually be attributed to the desire of a poorly trained wait staff that shoves

customers through the dining process as if they belonged to the fast food industry rather than

the casual dining and bar industry. One of the main factors that have contributed to the success

of other Las Colinas casual dining and bar restaurants is their focus on the atmosphere.

Contemporary:

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The key strategic competitive advantages of the main competitors in this industry have

five things in common: location, quality, service, atmosphere and entertainment. The location

in the Las Colinas area where this company type has been successful has usually been located

in close proximity to a well-known street and just outside other shops and restaurant

communities. The quality of food has always been at least moderate, focusing around some

infusion of American and Latin dining. Service has always been a key competitive advantage

in most any industry, allowing for the greater possibility of repeats customers and in turn, a

stable customer base that acts in and of itself as positive “buzz” advertising. Impeccable

service in the food industry is critical to maintain and display a higher quality above the norm.

Atmospheres at the accomplished casual dining and bar locations have usually been themed

around a southwestern, modern niche, never over doing it, but usually subtle present. Most

importantly though, successful companies have all had some sort of weekly entertainment for

their customers. From karaoke to live bands, this musical aspect has given customers

something special to look forward to.

Future Issues:

            There is the possibility of a recession in the United States economy, which in turn

would limit the amount of free cash to go out and the actual psychological desire to do so.

Investment and actual customer base may decrease. In addition, because of the cost of gas and

a popular trend to focus on organic factors of meals, sales in the restaurant industry my take a

slight hit. Overall though, these kinds of threats are a matter of the ebb and flow of social and

economic trends, they will pass and the industry will suffer no greater loss than others.

IV. Business Strategy

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Image and Position

The Canal Bar’s Image is the same as its vision which is to become the bar to go to in the

Las Colinas Area. Our position is to serve the need for a contemporary but casual place for the

residents in and around the growing Las Colinas area to come and relax. With our mix of live

music and relaxed atmosphere, we will serve the growing Las Colinas area in need of a more

upscale but casual place to go. We will also utilize the restaurant part for the large daytime work

lunch crowd from the surrounding businesses.

SWOT Analysis

The Canal Bar’s strengths are numerous and the upside is huge. Our biggest strength

would be our location. With the Las Colinas Downtown area growing and the redevelopment of

the canal appeal in the future, our location has the advantage of being on the forefront of this

revitalization effort. We find a strong appeal of being on Las Colinas Blvd. while also having

canal access on both sides of our restaurant. This will allow for us to implement a water taxi

service to and from our business to neighboring apartments.

The second strength for The Canal Bar is its variety. Being a bar/lounge as well as a

restaurant, we will provide customers with a unique place with a lot of options. Our unique bar

will give our patrons a lot of choices. Whether dining during lunch or dinner to hanging out and

listening to live music at night; customers will be able to relax or party all in one spot. Along

with the live music capability, The Canal Bar will provide television access to all the major

sporting events for its customers. Also along with food, drinks, sports on TV, and live music;

The Canal Bar will feature a lounge area for VIP parties and will bring out the dance floor for

live bands.

Our third strength would be the atmosphere. It is hard to find the right mix when you talk

about a Restaurant/Bar. But with our mix of bar/lounge and featuring live local bands, The

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Canal Bar will provide an atmosphere unique to the Las Colinas residents as well as those in the

DFW Area.

Our weaknesses are minimal but can be fixed. The major weakness with The Canal Bar

is the experience factor among its openers. This will be the first major Bar opening among the

four of them although some have restaurant/bar experience. To counter this weakness, the goal

is to get investors with vast knowledge and expertise in the industry who will also serve as

mentors as well as investors.

The second weakness would be a weak brand name. As a brand new concept to the Las

Colinas area, it is vital to counteract this weakness with a strong marketing effort as well as a

strong product to help with “word of mouth” advertising. Although the brand name is weak

now, a strong effort within our marketing department as well as the bar opening itself will help

build on that weakness.

Our opportunities are very high within the Las Colinas area when you look at the

demand. With the growing amount of younger demographic residents, the need for The Canal

Bar is there. Our greatest opportunity is to establish ourselves as the market leader in this area.

Along with that, we have opportunities to gain market share during the high peak times in the

area that include the EDS Byron Nelson Tournament Week, the Fourth of July Celebration held

in Las Colinas, and the numerous Conventions and Meetings held around Las Colinas. Also by

establishing ourselves first in the Las Colinas area, we will have become a leader when further

development happens. Las Colinas Live is scheduled to open in 2010 and the opportunity to be a

part of that experience while already being known by that time will only help us grow in

notoriety.

The immediate threats to The Canal Bar are obviously the bar/restaurants in the local

area. They include the Italian Café, Spirit Grill, Firewater, and The Republic. These

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bar/restaurants serve the local area but none give the customer what The Canal Bar is offering.

Another threat you have to consider is possible government regulations regarding zoning and

possible allowance of more of our types of restaurant/bars now in Las Colinas. You have to

consider the development and expansion of the Las Colinas as a threat also. With further

development of the area with the introduction of Las Colinas Live, we will have more entrants

into the market. The last threat we see now is the problem with the economy as a whole. With

our economy as it is right now, aligning ourselves with quality investors will be a key for our

survival in the first few years.

Competitive Strategy

The Canal Bar will be successful in the immediate market due to a lack of competitors

and will use a differentiation focus. By providing a unique customer experience that combines a

restaurant, lounge, and bar; The Canal Bar will cater to the local resident who doesn’t want to

travel to Addison or Downtown to get that. Furthermore with the Las Colinas area booming in

terms of new upscale apartments bringing in the younger demographic crowd; The Canal Bar

will serve these local residents and there multitude of demands.

With our range of capabilities as well as a superb location, The Canal Bar will look to

capitalize on the 21-45 year old market. By offering a variety of activities for the customers to

partake in, our establishment will serve their entertainment need just miles from their own

residences.

V. Company Products and Services

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The Canal Bar is a unique restaurant and bar that focuses on providing a distinct

atmosphere and entertainment that cannot be currently found in Las Colinas, TX. The Canal

Bar provides quality food and drink at a moderate price, with regular weekly live local

entertainment ranging from rock to jazz. Conceptually, The Canal Bar provides a walking

distance destination for a casual nightlife that revolves around the aesthetic beauty of the Lake

Carolyn Canal. Operating hours would be from 11am to 2am every day, with altered hours for

the holidays.

The main room has the main bar to the left as you enter; restaurant seating is in the

middle of the customer area with lounge seating off to the right. The bar and lounge area are

distinguished by glass/ wood walls that allow the sound around them but not so much the

visual encroachment. The outside bar is set up with warm, clear lighting and large dark word

tables. Under the entrance stairs is a game room area with a Golden Tee® golf game and

dartboards that customers may use at any time. At the back of the main room is the stage and

side storage area where many local bands from around the Dallas area will come and entertain

our guests. Free wireless Internet has also been placed in the restaurant for customer use at any

time.

VI. Marketing Strategy:

Target Market:

We want to target 21-45 year old males and females. More so, we want to target the

college generation and young businessmen and women in the Las Colinas vicinity.

Zip Codes Age 21-45 Total Population Percentage of Population Median Age75039 2,215 2,816 78.66% 30.4

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75063 15,472 24,454 63.27% 30.975038 15,386 25,317 60.77% 28.975062 18,206 41,566 43.80% 32   Totals: 51,279 94,153 61% of Target Market Avg. Age 30.55

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Races in Irving and Las Colinas: White Non-Hispanic (48.2%) Hispanic (31.2%) Black (10.2%) Other (10.4%)

In view of our target market we have a diverse selection of races and ethnicities in Las Colinas,

which we will take into account when doing our advertising and promotional incentives (Food

and Music) to attract new customers to the Canal Bar.

Customers’ motivation to buy:

For the restaurant and entertainment industry, the motivations mainly consist of an

experience that is affordable, with a standard of good quality service with a touch of freedom

from their everyday lives. In our concept of motivation, we will use an on-location event, hosted

by the local radio station during the first week of operations: 106.1 kiss fm. The general idea is

to use a well-established company to reinforce our company’s goals and vision, as well as to get

our name into the market and seize the targeted markets attention. Another aspect is to establish

a weekly specials promo, to give us a more diversified image and customer retention. It will

change by month and season.

Canal water-taxi rides get you a drink (promotes to not drink and drive for the local residents).

Indoor and Outdoor venues depending on the season. Rock, Acoustic, Jazz, DJ, etc.

Daily happy hours at 3-5 and 7-9. (2 is better than 1). Margaritas pitchers for $10.00, Domestics for $2.50.

11 http://factfinder.census.gov16

Sunday- focused on a sports related venue (e.g. Cowboys, Mav’s, Stars, Rangers Games etc).

Mondays- Mixed drink Mondays at $3.00 Well drinks and $6.00 for higher quality mixed drink.

Tuesday- Taco Tuesday with Mexican Beer $8.00 dollars for the meal and 2.50 for Mexican beers after the meal purchase and $4.00 mini-margaritas (8oz, size).

Wednesday- Wings and Things (menu items may vary). Thursday- “Until Your Through Thursdays” $25.00 dollars for all you can

drink between (6-10pm). Friday-Live music and contests for free drinks and food. Saturday-Karaoke (will change frequently).

It may also be possible to do seasonal/holiday promotions for example: St. Patrick’s day

(have an Irish promotion for Irish Car Bombs and Guinness discounts, and have an Irish band

along with several themed events throughout the day and into the night. We could also have

Cinco de Mayo days for the Hispanic segment (Mexican food and drink specials). New Years

events, Mardi Gras, Spring Break, 4th of July, and possibly a German fest, when there are more

local businesses established to help promote the event.

Market size:

The Irving population increased from 191,615 in 2000 to 201,927 in 2006. A growth rate

of 0.9% from the year 2000.12

Advertising and Promotion:

The radio media we will use is 106.1kiss fm, which is currently located next to the

restaurant. They can be used for commercials and promotionally sponsored events, such as “Kid

Kraddock in The Morning” for possible morning promotions. In addition, DJ Billy the Kidd,

which will help draw younger demographic on the nights and weekends. This in turn will help to

create “buzz” advertising, which is the cheapest and best form of advertising. The primary time

12 http://cityofirving.org/common/demographics.html17

frame for this media use would be during the Thursday and Friday mornings and afternoons for

upcoming events and specials going on that particular weekend.

The use of Internet ads will help to spur advertising costs as a very low cost media

channel, about $10.00 dollars an advertisements per month and around $200.00 per month on ten

sites. This would include restaurant based search engines for the surrounding areas, Facebook

along with My-Space (free), which have a large reach of the targeted market segment.

The next advertising channel would be in the Yellow-Pages phone book. Although this

method is set at a higher price than the other media channels, it would provide an online

advertisement, as well as an advertisement in the traditional Yellow-Pages book.

The next channel used will be the Dallas Morning News to help establish our name with

the local businessmen and women market. It is a low-cost and effective channel in which can be

placed weekly advertisements for discounts and upcoming events.

Desired image in the market:

The desired image is to be a hotspot in the Las Colinas and Irving area, with a new-age

look that will incorporates a variety of different styled venues and to be able to attract a wide

array of customers from around a 10 mile radius and in the future more distant customers. We

want to be recognized as a place to relax, have a drink, eat lunch, and too just be you. The image

we want to relay is that we are a hip and trendy establishment, that delivers a top-notch

experience to all that come. It will have the feel of a middle-high-class environment with a sense

of a business casual atmosphere. We want a diversified group of customers that will help us

eventually become well known throughout the Las Colinas area as well as within the Metroplex.

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The marketing vision is to build up the surrounding areas and to make it a place to be a

desired destination: especially for the age groups that reside in the area. By the 5th year, we

would begin to expand the business outside of Las Colinas and Irving to another environment

that lacks in the entertainment industry.

Pricing versus competitors:

The local competitors pricing strategy is a high priced experience with a low level of

customer care. The general competitor is the Republic located down 114 about a quarter mile

away. It has a high customer flow, but so high priced that students can’t go there on a more

frequent basis. It also has a white-clothed feel that pushes away the mid 20’s segment. The way

we will implement our strategy is a mid-low ranged priced menu with more daily specials that

will allow the younger market to frequent more often and more so everyone in our targeted

segment. It will have a more friendly-based atmosphere, where we treat everyone with a high

standard of customer care and quality service.

General structure of the market plan and implementation:

In the marketing of this new venture, we want to first reformat the curb appeal of the

building itself.

To create a rather attractive appeal using neon lights in the windows: not to go so extravagant that it would keep the business lunch rush away, but an eye-catching appeal that will trigger their senses and curiosity. There will be a street sign that will allow passers by to see the building that will get their attention.

We want to develop a front appeal that the Omni Hotel occupants can see when staying at the hotel as well as clientele in the surrounding areas.

The Canal Bar is located on a corner next to the canal in Las Colinas. There are 3 different sides

of the building that we will revamp for the surrounding residents. It will allow them to see the

signs from the apartment buildings and offices. As of right now, there is no real usage of the

canal as a promotional and transportation channel. This is something that we will develop

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especially for our outside environment; this is one of our key geographic issues in the

developmental process of the entire area.

The outside atmosphere: We will develop an outside eating area during the day, which we will transform it into

a trendier bar scene at night. There will be a connected bar that is located in the center of the patio between

the two outside doorways. That is only accessed from the outside patio. Depending on the season we would have an outdoor venue twice a month,

with local talent to perform. It would also have the river walk (San Antonio) atmosphere with water taxi’s

that will provide transportation for the local apartment residents and businesses, as well as potential stores up and down the canal.

The indoor atmosphere:

2 bars will be located at the opposite ends of the building, which will be divided into a dining section with a bar and the sports bar and indoor venues in the back which can be accessed from the outside. Directed towards the younger segment and the people who want a quick drink

It will have a more contemporary touch to it than a typical bar and grill. A little more class, but not too much to keep the younger crowd from coming.

VII. Location and Layout

As stated before, the location of The Canal Bar will be a key factor to its success. Its location

will be in the heart of the downtown district of Las Colinas east of Hwy. 114 right on the

Mandalay Canal and Las Colinas Blvd. The physical address of the location will be:

220 Las Colinas Blvd E # 260 Irving, TX 75039

This location was chosen due to its proximity to many large corporations as well as a

large number of residential and hotel developments. It is close to a major road in the DFW area

but far enough to provide an intimate and somewhat serene setting. Sitting alongside the

Mandalay Canal is also a key to this location due to the fact that The Canal Bar will be able to

have an extensive outside area capable of holding events. Also if you look at our demographic

chart of the surrounding area the median age is around 30.55 with over 79% being people over

21. This data shows that our location is in a perfect area to be able to serve our demographics.

20

Data from US Census for 2000, www.factfinder.us.gov

Layout

As you walk into The Canal Bar from our street entrance you are greeted by a panoramic

view of the whole establishment. Our customer walks in and down the stairs into our main room

and is greeted by a hostess. They can choose to enjoy a meal or drinks at either our bar or a meal

in our dining section. Also, the customer has their choice of sitting on our expansive patio,

which main part runs along the outside of our building. The lounge area will be in the back and

will feature large sofas and darker quieter features for customers to relax. The stage for live

music will be located at the back of the lounge and main area, creating a great stage for our local

musicians. The outside patio will have access to both the lounge and the main dining area with a

beer bar on Friday and Saturday nights. This layout can be viewed in it’s entirety in the

appendix.

VIII. Competitor Analysis

Our existing competitors include local restaurant/bars in the area. The main competitors

would be The Italian Café, The Spirit Grill, Firewater, and The Republic. Below is a competitive

profile matrix of the Canal Bar compared to these four competitors. We based it upon Location,

Customer Offerings, Price, and Business Capabilities.

Demographic Analysis of Location vs. Target Customer Profile

Zip CodesAge 21 and up

Total Population

Percentage of Population

Median Age

75039 2597 2816 92.22% 30.475063 19558 24454 79.98% 30.975038 19064 25317 75.30% 28.975062 29431 41566 70.81% 32Average Median Age 30.55  Average Percentage of Population over 21 79.58%      

21

As the table shows, The Canal Bar is ahead of the other four based on these factors. Our

biggest foreseeable competitor is The Republic. They want to serve the wealthier end of our

demographic but in terms of location along with atmosphere, they are comparable. Their biggest

weakness could be the price of going to it as well as not being able to offer a patio bar or live

music.

Firewater has the capabilities to have live music as well as a large patio bar, but their

weakness comes with location. Since ours is in the heart of the Las Colinas downtown district,

we will gain the customers not willing to drive ten minutes away down Northwest Highway.

The other two, Spirit Grill and Italian Café, are more restaurants then bars, and rely heavily on

their food service to gain consumers. Where we will overcome them is with our food service as

well as entertainment options to accentuate the customer’s experience.

Potential Competitors

Our potential competitors include any establishment opening up with a restaurant/bar

style. The biggest potential competitor we foresee coming into our market is Las Colinas Live,

scheduled for 2010. This development will be down the street and offer many bars and

restaurants we will have to compete with. By opening almost a year before development begins,

Competitive Profile Matrix for The Canal Bar    (Scale of 1-5 with 5 being Very Good to 1 being Very Poor)     

FactorThe Canal Bar

The Republic

Italian Café

Spirit Grill Firewater

Location 5 4 5 3 2Customer Offerings 5 3 2 2 3Price 3 2 3 4 2Capabilities 5 3 1 2 4Totals 18 12 11 11 11

22

we will counter this by being a first entrant into the immediate market. By already establishing

ourselves within the community, The Canal Bar will bring a reputation that will just be fueled by

more customers coming to the area.

IX. Description of management team :

    General Manager: Requirements: at least 24 years of age, 3 years experience in food

industry, TABC certified, Food Safety and Training certification.  General Managers, of which

there will be two (one per shift), will help to ensure individual customer satisfaction. They will

also be expected to create scheduling on a bi-weekly basis, order all food and house supplies

and ensure the general atmosphere of the restaurant. They would be responsible for all

computer glitches and need to know how to fix or work around them. Responsible for opening

and closing of the store, as well as making bank deposits.

Bartenders/Manager: Requirements: at least 21 years of age, 1 year of experience (or

previous training) and TABC certified, First Aid certified, of which there will be four (two per

shift).  Bartenders will double as managers in cases where the General Manager is unavailable,

but only as points of reference for minor matters of restaurant upkeep, quality and service.

They would also be responsible for all liquor and beer orders that would need to be made

throughout the week. Responsible for taking bar orders and filling them, fulfilling alcoholic

drink orders from waiters for customer, taking care of all necessary cash and credit transactions

for the bar customers.

  Cook: Requirements: at least 24 years of age, 4 years experience in food industry,

TABC certified, Food Safety and Training certification, of which there will be four (two per

shift). Culinary school degree is an asset to hiring though not necessary. Full knowledge and

preparation capabilities of the restaurant’s menu are necessary.

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Waiters: Requirements: at least 18 years of age, no prior experience necessary (although

preferred), TABC certified. Serving food to customers, handling credit card and cash

transactions of their customers, running food to tables and while taking orders and serving

drinks.

Busboys, Runners: Requirements: at least 18 years of age, no prior experience

necessary. Running out food to appropriate tables and clearing/ resetting them when they are

done.

Dish Washer: Requirements: at least 18 years of age, no prior experience necessary.

Washes dishes regularly, takes out the trash, and brings clean dishes to appropriate locations

for use.

X. Plan of Operation

Form of ownership: “The Canal Bar” will be a limited liability partnership among four

individuals from all over the country and experience to match it. Seeking an opening date of

Summer 2009, The Basement is comprised of Shanie Cardinal, David Johnson, Andrew

Klocek, and Michael Gutierrez. Equal profit and cost sharing will be set up for the first five

years, after that the company will look to either continue on that path or option for a

restructuring of ownership. Our initial ownership set up will allow each owner to invest as

much as they can in the company while still being protected by the legal boundaries if things

fold under. Additional funds will be pooled from loans. Additional investors will be

compensated on basis of percentage return on proportional investments. The company will

never be traded publicly, preventing to some degree, a hostile takeover from that angle.

Company Structure: The business structure is based on a general restaurant/bar format. Ideas for

improvement are welcome from any level in the organization and will be considered.  All levels

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of the organization are encouraged to participate in all decision-making processes. Structure

diagram is in under appendix D.

Decision Making Authority:

All financial decisions regarding the attainment of assets over five dollars will be

handled by the Partnership. The General Managers can handle all financial decisions from two

to five thousand dollars. All financial amounts below that must cleared first by the bartender on

duty then the General Manager. The General Manager on duty must handle customer service

decisions regarding financial transactions post date. Customer service decisions regarding

financial transactions on that date may be handled by the Bartender; ect. complimentary

dinners for one reason or other. All of these financial transactions must be made note of after

they occur. Customer service decisions regarding all else may be made only on the best and

proper judgment of the employee for the greater good of the company.

Compensation and Benefits:

Texas Labor Law stipulates that the minimum wage as of 2007 is $5.85 per hour and

tipped workers are to be paid at least $2.13. Waiters and Waitresses at “The Canal Bar” will

start at $3.00 an hour plus tips. Busboy/Runners will be paid $6.50 an hour plus tips.

Dishwashers will be paid $11.00 an hour. Chiefs will be paid $15.00 an hour, more depending

upon experience, up to $20.00. Bartenders will be paid $7.00 an hour plus tips. General

Managers will be placed upon a salary starting at $40,000. Partners will be provided a

percentage of annual profits not to exceed 20% of the total per partner.

Benefits will not be given to any employee being paid by the hour, though 10 days of

vacation will be granted. Those on salary will be covered by health insurance, along with a 14-

day vacation. Those on a percentage based pay, those of the partnership, will have full

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coverage and 14-day paid vacation. Bonuses can be earned for revenue or cost saving

implementation, 15 percent of the cost saved or revenue earned in direct relation to the

implementation.

XI. Financial Forecasts

The Canal Bar stands to make heavy profits in the coming years. We believe that with

the right mix that we have going, we stand to gain a valuable share of the target demographics.

In terms of sales projections, which are shown in Appendix C, the Canal Bar is looking at an

annual customer growth of 10%. Also by basing the average cost per person to $20 a customer,

we were able to project our sales through April 1214. First year sales should be around $864,000

and they will continue to grow over the years. Our cash flow over the first year is positive each

month gaining about $10,295. Also if you look at our Income Statement over the next 5 years

with the same estimated expenses, The Canal Bar will almost hit the half million-dollar range in

net profits. To see all these broke down please flip to appendices C-F at the end.

The Breakeven Analysis for the Canal Bar represents the annual costs associated with

running the Canal Bar, against the total sales. It shows how much money we need to generate in

order to create a lucrative business. Furthermore, the time, which it will take, is calculated at

10.39 months. For a full break down look into Appendix G.

XII. Investment Proposal

The Canal Bar’s creators have estimated the total cost of purchasing the location as well

as renovating it to our liking to be right at $1,411,996. A full breakdown of the renovation is

included in the appendix for our investors. The rest of the difference will be used for

miscellaneous costs associated with opening if we have any.

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Currently we are estimating that the total amount of money to be invested is 1.5 million

dollars. The Canal Bar is looking for three investors to donate approximately 500,000 a piece.

By our projections, they should look to be paid back in full by the start of the sixth year of

operations. The plan is to take net income annually and split it evenly among all three. After

they have been paid back in full, each investor will get 10% of all net profits annually while

gaining 15% ownership overall. So in total the three investors will be entitled to 30% of net

profit annually as well as 45% ownership of the Canal Bar.

The only way to exit out of investment after signature is to sell your contract to another

investor who will bear the burden you have relinquished. But a consensus decision must be

made between the four partners and the three investors in terms of buyouts after the five year

payback plan is done.

XIII. Appendices

Appendix A

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Appendix B

Information on this Billboard or Outdoor Advertising Location

Brief Description of Outdoor Ad For Rent

Billboards for Lease $375

Type of Outdoor Advertising: Outdoor Billboards

Billboard Location: Anywhere

Circulation: 500,000 +

Visible in What Direction: Any

What_View:Both Left and Right Hand View

Board Location:Any

Illuminated: Yes/No

Rental Rate:$375 (Regularly $995)

Outdoor Advertising Company Contact Information:

Additional Contact: Victoria Wolf CA Mobile Media

Additional E-mail Address:

[email protected]

Mailing Address: 1700 McHenry Ave., Suite 65B-150Modesto, CA 95350

Phone Number:888-635-2599

Advertising Media Costs and Usage     Quantity   Price   Company

Newspaper    1 year fixed 2x7inch ad   $6,000.00  

Dallas Morning News

Phone Book    1 year half-page color ad   $10,000.00   Yellow Pages

Billboards    2 signs for 2 months   $1,500.00  

Outdoor Advertising

Internet Ads    2 months on 10 sites   $400.00   Google

Radio Commercials    

1 month 3 days a week   $10,656.00   106.1 kiss FM

Custom Brochures/Flyers     20,000   $599.49   www.vistaprint.com

       Total Cost $29,155.49    

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Appendix C

29

Appendix DPartners of Company

(4)

General Managers

(2)

Bartenders

(4)

Chiefs

(4)

Dish Washer

(2)

Busboy/ Runners

(2)

Waiters

(8)

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Appendix ESales Projections

Sales Projections For The Canal Bar      

  Year 1 Year 2 Year 3 Year 4 Year 5

  May 2009-April 2010 May 2010-April 2111 May 2111-April 2112 May 1212-April 1213 May 1213-April 1214

Number of Customers a Day (Sunday-Thursday) 100 110 121 133 147

Number of Customers a Day Friday-Saturday 200 220 242 266 293Per Week Average 900 990 1089 1198 1319Per Month Average 3600 3960 4356 4792 5276Per Year Average 43200 47520 52272 57504 63312Average Price of Check $20.00 $20.00 $20.00 $20.00 $20.00Projected Sales $864,000.00 $950,400.00 $1,045,440.00 $1,150,080.00 $1,266,240.00   10% annual increase in customers  This Is based on an average check per customer of $20  

The Canal Bar Sales Projections for its first year will be $864,000      

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Appendix FCash Flow Statement for first year

The Canal Bar First Year Cash Flow Statement      

    May June July August September October NovemberBeginning Cash Balance   $63,754 $74,048 $84,343 $94,638 $104,932 $115,227 Cash Inflows (Income):                Initial Investment 1,500,000              Sales & Receipts 72,000 72,000 72,000 72,000 72,000 72,000 72,000  Other:                                                  Total Cash Inflows $1,572,000 $135,754 $146,048 $156,343 $166,638 $176,932 $187,227                  Available Cash Balance $1,572,000 $135,754 $146,048 $156,343 $166,638 $176,932 $187,227 Cash Outflows (Expenses):              

  Initial Purchase and Renovation 1,411,996              Advertising 29,159              Insurance 800 800 800 800 800 800 800  Inventory Purchases 20,000 20,000 20,000 20,000 20,000 20,000 20,000  Payroll 31,447 31,447 31,447 31,447 31,447 31,447 31,447  Payroll Taxes 3,145 3,145 3,145 3,145 3,145 3,145 3,145  Sales Tax Expense 5,760 5,760 5,760 5,760 5,760 5,760 5,760  Taxes & Licenses 5,386    Utilities 400 400 400 400 400 400 400  Telephone/Internet/TV 154 154 154 154 154 154 154                   Subtotal $1,508,246 $61,705 $61,705 $61,705 $61,705 $61,705 $61,705                    Total Cash Outflows $1,508,246 $61,705 $61,705 $61,705 $61,705 $61,705 $61,705 Ending Cash Balance $63,754 $74,048 $84,343 $94,638 $104,932 $115,227 $125,522

Cash Flow Statement Continued

December January February March April Total (12 Months)$125,522 $135,816 $146,111 $156,406 $166,700  

                     1,500,000

72,000 72,000 72,000 72,000 72,000 $864,000.00                     0          0

$197,522 $207,816 $218,111 $228,406 $238,700 $2,364,000            

$197,522 $207,816 $218,111 $228,406 $238,700             

          1,411,996          29,159

800 800 800 800 800 9,60020,000 20,000 20,000 20,000 20,000 240,00031,447 31,447 31,447 31,447 31,447 377,360

3,145 3,145 3,145 3,145 3,145 37,7365,760 5,760 5,760 5,760 5,760 69,120

  5,386400 400 400 400 400 4,800154 154 154 154 154 1,848

           $61,705 $61,705 $61,705 $61,705 $61,705 $2,187,005

           $61,705 $61,705 $61,705 $61,705 $61,705 $2,187,005

$135,816 $146,111 $156,406 $166,700 $176,995  

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Appendix GIncome Statement

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The Canal Bar Pro Forma Income Statement      Years 1-5            Year 1 Year 2 Year 3 Year 4 Year 5Revenue:              Gross Sales   $864,000.00 $950,400.00 $1,045,440.00 $1,150,080.00 $1,266,240.00   Less: Sales Returns and Allowances          Net Sales   $864,000.00 $950,400.00 $1,045,440.00 $1,150,080.00 1266240Cost of Goods Sold:            Beginning Inventory              Add: Purchases Food and Alcohol $240,000.00 $240,000.00 $240,000.00 $240,000.00 $240,000.00   Freight-in                Direct Labor                Indirect Expenses                  $240,000.00 $240,000.00 $240,000.00 $240,000.00 $240,000.00   Less: Ending Inventory            Cost of Goods Sold   $240,000.00 $240,000.00 $240,000.00 $240,000.00 $240,000.00                  Gross Profit (Loss)   $624,000.00 $710,400.00 $805,440.00 $910,080.00 $1,026,240.00 Expenses:              Advertising   $29,155.49 $29,155.49 $29,155.49 $29,155.49 $29,155.49   Insurance   $9,600.00 $9,600.00 $9,600.00 $9,600.00 $9,600.00   Payroll Taxes   $37,736.00 $37,736.00 $37,736.00 $37,736.00 $37,736.00   Permits and Licenses   $5,386.00 $5,386.00 $5,386.00 $5,386.00 $5,386.00   Sales Taxes   $36,000.00 $36,000.00 $36,000.00 $36,000.00 $36,000.00   Property Taxes   $34,970.00 $34,970.00 $34,970.00 $34,970.00 $34,970.00   Telephone/Internet/TV   $1,848.00 $1,848.00 $1,848.00 $1,848.00 $1,848.00   Utilities   $4,800.00 $4,800.00 $4,800.00 $4,800.00 $4,800.00   Wages   $377,360.00 $377,360.00 $377,360.00 $377,360.00 $377,360.00   Total Expenses   $536,855.49 $536,855.49 $536,855.49 $536,855.49 $536,855.49   Net Operating Income   $87,144.51 $173,544.51 $268,584.51 $373,224.51 $489,384.51

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Appendix H

Employee Cost Breakdown

Employee Wages            

Job Type Wages

Work Each Day

Total Hours a

Day

Total Hours a Week

Total Hours a Month

Total Hours a

Year Total WagesGeneral Manager $40,000 a year $80,000.00Bartender $7.00 3 22.5 157.5 630 7560 $52,920.00Chef $15.00 3 22.5 157.5 630 7560 $113,400.00Server $3.00 8 60 420 1680 20160 $60,480.00Busboy $6.00 2 15 105 420 5040 $30,240.00Dishwasher $8.00 2 15 105 420 5040 $40,320.00

            Totals $377,360.00

Appendix IBreakeven AnalysisBreak Even Analysis for The Canal Bar           Cost Description     Fixed Costs($) Variable Costs(%)Variable Costs    Cost of Goods Sold $240,000.00 100.00%Fixed Costs    Salaries $377,360.00  Payroll Taxes $37,736.00  Advertising $29,155.00  Permits and Legal $5,386.00  TV, Internet, Phone $1,848.00  Utilities $4,800.00  Insurance $9,600.00  Taxes $34,970.00  Total Fixed Costs     $740,855.00     Total Variable Costs     100%   Break Even Sales Level =   $748,339.00           Duration until break even   10.39 months  

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Appendix JInvestment Breakdown

Investor Payout   Year 1 Year 2 Year 3 Year 4 Year 5

Estimated Total Paid back by Year Three

  Initial Investments $87,144.51 $173,544.51 $268,584.51 $373,224.51 $489,384.51  Investor A $500,000.00 $29,048.17 $57,848.17 $89,528.17 $124,408.17 $163,128.17 $463,960.85Investor B $500,000.00 $29,048.17 $57,848.17 $89,528.17 $124,408.17 $163,128.17 $463,960.85Investor C $500,000.00 $29,048.17 $57,848.17 $89,528.17 $124,408.17 $163,128.17 $463,960.85

36

Appendix KRenovation Cost Breakdown

Initial Purchase and Renovation Summary   www.building-cost.net     

Item Name Material Labor Equipment TotalPurchasing price of Location       1,200,000         Excavation/Demolition -- 1,864.00 753 2,617.00

Foundation, Piers, Flatwork 6,442.00 6,316.00 1,532.00 14,290.00Rough Hardware 629 618 151 1,398.00Rough Carpentry 20,831.00 19,169.00 -- 40,000.00Insulation 3,901.00 1,662.00 -- 5,563.00Exterior Finish 11,989.00 4,357.00 792 17,138.00Exterior Trim 751 737 179 1,667.00Doors 1,904.00 996 -- 2,900.00Electronics 3,279.00 1,390.00 -- 4,669.00Finish Hardware 317 166 -- 483

Roofing, Flashing, Fascia 10,638.00 5,562.00 -- 16,200.00Finish Carpentry 1,156.00 3,630.00 -- 4,786.00Interior Wall Finish 5,549.00 5,342.00 -- 10,891.00Painting 3,315.00 4,825.00 -- 8,140.00Wiring 3,366.00 3,962.00 -- 7,328.00Lighting Fixtures 2,524.00 495 -- 3,019.00Flooring 2,157.00 1,908.00 -- 4,065.00Carpeting 4,292.00 954 -- 5,246.00Countertops 2,053.00 1,073.00 -- 3,126.00Cabinets 6,749.00 1,323.00 -- 8,072.00Cooking Equipment 3,284.00 286 -- 3,570.00Plumbing Rough-in and Connection 3,082.00 4,666.00 432 8,180.00Restrooms 6,260.00 1,236.00 -- 7,496.00Heating and Cooling Systems 7,061.00 10,592.00 -- 17,653.00

Subtotal Direct Job Costs $111,529.00 $83,129.00 $3,839.00 $198,497.00

Continued next page….

Final Cleanup -- 1,019.00 -- 1,019.00

30

Insurance 7,131.00 -- -- 7,131.00Permits & Utilities 4,330.00 -- -- 4,330.00Plans & Specs 1,019.00 -- -- 1,019.00

Subtotal Indirect Job Costs $12,480.00 $1,019.00 -- $13,499.00          

Contractor Markup 31,836.00 -- -- 31,836.00

Total Cost of Renovation $124,009.00 $84,148.00 $3,839.00 $211,996.00

Overall Total Cost with purchase       $1,411,996.00

Appendix L

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Insert Menu here!!!!

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