The Watertower Cafe

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Cafe Bistro Coffeehouse Business Plan

Strategy and Implementation Summary

The Watertower's strategy is based upon targeting and serving:

  • The atypical Atlanta intown resident. This urban professional works long hours and has relatively little time to cook at home. She/he has an active social life and spends a substantial amount of disposable income maintaining it.

  • The many downtown businesses which regularly use restaurant dining as an function of conducting business.

  • The tourist and convention populations centered in downtown venues.

5.1 Competitive Edge

The Watertower maintains a competitive edge in several significant areas:

  • The facility's location puts it into close proximity to substantial populations of affluent Atlantans.

  • The owner, a 16-year-resident of Atlanta, was educated in and works professionally in northeast Atlanta. His early work experience included a substantial period working within a casual/upscale restaurant in the mid-to-late 1980s in Virginia Highland. As the Dean of Students at Emory University School of Law, he has conferred over 1,300 law degrees during his tenure, most of them have remained in the Atlanta area. His position at Emory also required him to manage significant catering budgets. The owner, through his business, academic, and community activities, maintains a substantial Atlanta-based network of professionals.

  • The facility's construction will easily allow for flexible dining/coffeehouse/entertainment options making it attractive to numerous populations.

  • The facility's location in an Empowerment Zone and local Enterprise Zone provides significant tax advantages.

5.2 Value Proposition

We think our value proposition is quite clear and quite easily distinguished from most others in the market. We offer affordable and accessible menu items and entertainment as measured by their inherently natural value, at an affordable price that will encourage regular visits.

5.3 Sales Strategy

The first category of our sales strategy is to establish and maintain a position with our primary constituents: intown Atlanta residents within a 4 mile radius of The Watertower's location. We will depend upon keeping these people happy with our food and beverage products and entertainment options.

Our second strategy is to utilize the downtown hotel/convention business through developing and maintaining close relationships with the planners of upcoming conventions and their respective attendees in order to create a "private function/party" option for corporations visiting Atlanta during the early part of the week, as well as encouraging individual visits by conventioneers later in the week. This strategy will also target the many hotel concierges who are available to promote dining options located within two miles of downtown hotel venues.

Our third strategy targets the more than 500,000 visitors to the Martin Luther King National Historic Site. This segment provides mainly lunch business.

Fourth, the restaurant will target sales to downtown and midtown businesses (particularly law firms) for regular business lunch and dinner entertaining.

5.3.1 Sales Forecast

Our sales forecast assumes no change in cost of prices, which is a reasonable assumption for the last few years.

We are expecting to increase sales from $2.0 million at the end of 2002, to $2.5 million by the end of 2004. The growth forecast is in line with the restaurants in the area and is tied to the projected increase in population of the immediate area.

The combined sales figures (across all sale items for the restaurant and coffee shop) presume an average of 2.5 "turns" per day for a 155 seat dining room with an average tab of $12.54. The business will be open an average of 26 days per month.

The projections show increases in:

November, resulting from Halloween party planning for Emory University graduate and professional students.

January, based upon corporate Christmas party and New Year's Eve programming.

May, as a result of catering programming scheduled for Emory University Commencement functions.

Sales Forecast
Year 1 Year 2 Year 3
Sales
Restaurant $1,926,217 $2,078,138 $2,285,951
Coffeehouse $260,384 $273,403 $287,073
Total Sales $2,186,601 $2,351,541 $2,573,024
Direct Cost of Sales Year 1 Year 2 Year 3
Restaurant $1,270,196 $1,277,010 $1,340,860
Coffeehouse $78,112 $0 $0
Subtotal Direct Cost of Sales $1,348,308 $1,277,010 $1,340,860

5.4 Milestones

The accompanying table lists important program milestones, with dates and managers in charge, and budgets for each. The milestone schedule indicates our emphasis on planning for implementation.

What the table doesn't show is the commitment behind it. Our business plan software includes complete provisions for plan-vs.-actual analysis, and we will be holding monthly follow-up meetings to discuss the variance and course corrections.

Milestones
Milestone Start Date End Date Budget Manager Department
Leasehold Buildout 11/1/2000 2/1/2001 $30,000 David Patton Owner
Equipment Installation 1/1/2001 2/1/2001 $75,000 David Patton Owner
Marketing Plan 1/1/2001 5/1/2001 $4,500 Cindy Abel Marketing
Fixture/table Construction 12/1/2000 5/1/2001 $3,500 David Patton DNP/PTC
Begin Construction Process 10/1/2000 3/1/2001 $0 M.Syphoe HDDC
Design Management 5/1/2000 12/1/2000 $0 R.Rauh R.Architects
Legal Research 1/1/2000 4/1/2000 $1,000 Patton/Moser Legal
Interior Design 10/1/2000 7/1/2000 $0 K.Brown C.Concepts
Entertainment Research 2/1/2000 12/31/2000 $0 David Patton Owner
Purchasing Research 1/1/2000 10/1/2000 $0 David Patton Owner
Totals $114,000

5.5 Marketing Strategy

The most important element of our marketing strategy is the delivery of a quality product. Our food, beverage, newspaper/magazine, and entertainment products must first sell themselves through word of mouth.

Next, the packaging of The Watertower's concept and external messages have to fit our positioning. We offer an upscale feel without a required "pinch" in your wallet. We then communicate this through the free weekly media (Creative Loafing, Southern Voice, and others), radio advertising on particular jazz, acid-jazz, Latin, and dance-oriented music shows, and traditional public radio sponsorships.

Through establishing relationships with the concierges of the local hotels and with the Atlanta Convention and Visitors Bureau, we will then attempt to create opportunities for visitors to the city to look forward to experiencing The Watertower.

5.5.1 Sales Programs

Specific Sales Programs:

  1. Special Event Sales: Develop opportunities to sell to companies for private parties and special events. The specific responsibility is with the owner with assistance from the manager on staff and Real World Communications.

  2. Music Related Special Events: Develop relationships with artists and promoters in the area to feature artists rising in popularity, either through CD release parties or live performances.

  3. Artist/Studioplex Special Events: Develop opportunities to host or cater artist openings.

5.5.2 Positioning Statement

For our most important target market, local residents who crave new and sophisticated dining/entertainment/coffeehouse options, The Watertower satisfies the need for a casual, all-in-one dining and entertainment experience. Unlike our key competition, The Watertower is designed to handle this need from its inception, starting with the general construction of the facility. The general food programming, coupled with the entertainment programming, will offer the customer an experience unlike anything he or she has currently available.

5.5.3 Pricing Strategy

Our food, drinks, and entertainment options are priced to give us an attractive margin while at the same time offering value to the consumer. We want repeat business. We also want the experience to remain fresh. Therein lies why the food, beverages, and musical/entertainment programming will be relatively flexible.

A sample menu is included in an appendix.

**Some supplemental materials are not available for this sample plan.

5.5.4 Promotion Strategy

We will promote our company name and label almost more than the product itself, because to be successful we have to stand for brand-name integrity, excellent menu offerings, and first class entertainment and fun. Therefore, our promotion strategy includes focusing on events and messages that match:

  1. Our participation in the Chocolate Soul and Funk Jazz Kafe' special promotions and the Sweet Auburn and Inman Park festivals is important because these are events that bring our target market together.

  2. Our participation in local radio and specifically targeted PBS shows on the local stations.

  3. Public relations programs focusing on related opportunities, guest appearances on local radio, etc.

  4. Advertising placed carefully, in mostly-alternative channels like Creative Loafing, Southern Voice, university newspapers, etc.

5.5.5 Marketing Programs

Our marketing program will be handled by Cindy Abel of Real World Communications. With an annual budget of $16,000, and with a milestone beginning in August, Ms. Abel will assist with the initial marketing programs and ongoing efforts to increase the visibility of The Watertower and its offerings.

5.6 Strategic Alliances

We depend on our alliances with personnel at Emory University, the Historic District Development Corporation, the Atlanta Executive Network, The Atlanta Convention and Visitors Bureau, and local music promoters to generate continuous leads for new sales and promotional opportunities. We need to make sure that the personnel of these allies are especially aware of our support and reciprocation.