The Nightclub

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Nightclub Saloon Business Plan

Market Analysis Summary

The concept and management of the Nightclub has been well received, and has been offered key placement at the center of Waldport's new First & Main Town Center development. This commercial center spans 138 acres and promises an immediate primary trade population of 332,000 people with a secondary population of 164,000 people. The Boulevard at the Avenue average daily traffic counts are currently 53,000, and will increase to 72,000 by 2003 following the Boulevard's connection northward to I-25 in 2001. At the center of the complex will be a 16-screen Cinemark and IMAX theater opening March, 2000. The Center's planners having met the Nightclub's management and have reviewed the concept. They have indicated that the Nightclub is "exactly" what they were looking for and wish to place it directly in front of the theater. The annual projected traffic for what Cinemark is calling their 'flagship' location is 1.4 million people, which exceeds their current Tinseltown location at the arena.

The Nightclub will be a 10,000 square foot unit, which will also house the company's corporate business office. The dance club and bar will accommodate 750 people. With Waldport's rapidly growing population, the variety of the Nightclub from across the country would create mass appeal for all of the Nightclub's customers. The store will be equipped with state-of-the-art audio and video systems like none other found in Your City. It will serve the need for a true nightclub in Waldport. The general appearance will be clean, open, and pleasing to the customer. The demographics are favorable, with minimal competition from other dance-themed venues and bars.

4.1 Market Segmentation

We see The Nightclub as appealing to three major market segments. Fortunately, the long, late night hours of operation help The Nightclub lend itself to multiple segment appeal. Our market segmentation scheme allows some room for estimates and nonspecific definitions.

  1. Childless Young Professionals--Due to our proximity to the IMAX and Cinemark theaters, we must appeal to single adults and young couples. Whether it is a group of friends or a couple out to see a movie together, these people need a place to eat/drink either before and/or after their movie. These customers will range in age from 27 to 40. The Nightclub will appeal to this category by switching the tempo and entertainment to be more appealing to adults as it gets later into the evening. We also anticipate a 15% annual growth rate in tandem with the growth rate of Waldport and through increased popularity.

  2. College Students--By creating an environment that is appealing to college students, we secure a natural progression between the high school student and the young professional. Through word of mouth, the Nightclub expects realize an increase of five percent annually from this segment.

  3. Tourists and Business Travelers--More and more business and travelers and tourists are finding themselves in Waldport every year as is made evident by the increased demand and subsequent expansion of the local airport. We plan to reach these people through direct marketing to local hotel patrons. We anticipate a 20% annual growth rate in this segment. As our relationships grow with the local hotels, so too will the word of mouth recommendations from the hotel staff as well as the patronizing of our restaurant by their families. Our future plan is to publish a simple website in order to create awareness to any traveler who wants to take an advanced look at the club before their visit.

The following chart and table outline the target market segments for the Nightclub, and include annual growth projections.

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Childless Young Professionals 15% 132,000 151,800 174,570 200,756 230,869 15.00%
College Students 5% 100,000 105,000 110,250 115,763 121,551 5.00%
Tourists/Business Travelers 20% 100,000 120,000 144,000 172,800 207,360 20.00%
Total 13.95% 332,000 376,800 428,820 489,319 559,780 13.95%

4.2 Target Market Segment Strategy

Our strategy is based on serving our niche markets exceptionally well. The nightclub enthusiast, the tourist and business traveler, the local nightclub crowd, the local service industry as well as groups going out together, can all enjoy The Nightclub experience.

The marketing strategy is essential to the main strategy:

  • Emphasize exceptional service.
  • Create awareness of The Nightclub's unique features.
  • Focus on our target markets.

We must charge appropriately for the high-end, high-quality service and food that we offer. Our revenue structure has to match our cost structure, so the wages we pay and the training we provide to assure superior quality and service must be balanced by the fees we charge.

Part of the superior experience we offer is the simplicity o the menu items. While being unique, they are relatively inexpensive and easy to prepare. While a premium is appropriate for the experience, the pricing has to be balanced in accordance with what we are serving.

All menu items will be moderately priced. We expect an average guest expenditure of $12.50 for beverages and $7.50 for the percentage of our guests who choose to take advantage of our food menu. Our target customer spends more than the industry average for moderately priced establishments. This is due to our creating an atmosphere that encourages longer stays and more spending, while still allowing adequate table turns due to extended hours of appeal.

4.3 Service Business Analysis

High energy and dance themed venues have significantly impacted cities from coast to coast in the nineties. Los Angeles' Hollywood, New York's Times Square, and Seattle's Pioneer Square are just a few examples. Entrancing their audiences with high-powered lights, sound, music, and interactive entertainment, these venues are still one of the highest cash flow businesses in the world. Our localized studies have shown that the average person will spend three to four hours per weekend in this type of an environment and will spend an average of twenty to fifty dollars in that time frame. As we approach the new millennium, this trend shows no signs of declining.

The typical venue of our style is open from 8:00 P.M. to 2:00 A.M., and within this time frame, the venue can achieve gross revenues anywhere from $3,500 to $25,000, nightly. The primary sources of revenue in a venue of this type are high volume traffic, coupled with comparably nominal spending. In addition to alcohol revenues, we will also generate substantial revenues from food sales that can typically range from seven to ten dollars per person, and admission fees that range between five and ten dollars per admit.

Entertainment venues in the late 1980's and 1990's focused on high-energy light and sound, multiple source video screens, and participative events. This relatively simple concept is still quite popular today. However, these concepts have greatly evolved with society. In recent years this industry has become more sophisticated with the availability of new technology. Larger metropolitan areas have taken this technology to new heights with sound, lighting, video and interactive designs that create an exciting and memorable experience. Fortunately, no one in Your State area has been a pioneer in this specific segment of the industry as of the date of this report.

Additionally, the nightclub and bar industry is shifting towards a more entertainment-oriented concept. Guests of these venues are not only offered a dynamic place to gather and mingle, but also a place to participate in the entertainment through interactive contests, theme nights, and other events. 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.

Nightclubs and other drinking establishments rely heavily on their primary suppliers. The primary suppliers are the various beverage distributors that provide the establishment with both alcoholic and non-alcoholic beverages. The alcoholic beverages (beer, wine, and liquor) are the primary sources of income in this industry. Other beverage suppliers also play a crucial role by providing non-alcoholic beverages. These are either served alone or mixed with alcohol.

In the area, all major brands of alcoholic beverages are available, in addition to several regional brands of beer. Initial research shows that the major distributors in the market have a high rating in both product availability and delivery.

4.3.1 Main Competitors

The Nightclub competition lies mainly with other casual facilities and less with conventional and chain entertainment establishments. We need to effectively compete with the widely held idea that you can't get good service anymore, while maintaining the idea that being out can be a lot of fun. Our polling has indicated that consumers think of atmosphere, price, and quality respectively. Additionally, price was frequently mentioned by pointing out that if the former concerns are present then they are willing to pay more for the experience.

Our review of the market concludes that there are four entertainment venues that can be considered direct competition to the proposed new venue. We do realize that the proposed venue will also compete indirectly for every entertainment dollar spent in the Waldport area.

The main competitors of the Nightclub will be:

Club A
Hours of Operation: 5:00 P.M.-2:00 A.M.
Wednesday through Saturday
Capacity: 300  
Wednesday College Night ($1 beers)
-This nightclub appeals to a college crowd seeking cheap drinks.
-The club is known for being dingy and dirty.

Bar B
Hours of Operation: 10:00 A.M.- 2:00 A.M.
Monday through Sunday
Capacity: 400
Thursday College/Ladies Nights
-This club appeals to 25-35 year olds.
-Pool and video games are central focus.
-Dancing is pushed to the back of the club.

Grill C
Hours of Operation: 6:00 P.M.-2:00 A.M.
Wednesday through Saturday
Capacity: 250
-This club's target customer is 25 to 45 years old / middle class or above.
-This club is known for its older, dressed up crowd and cramped space.

Club D
Hours of Operation: 11:00 A.M.-2:00 A.M.
Monday through Sunday
Capacity: 350 
-This club's target customer is 25 to 45 years old.
-This club is known for live jazz and blues entertainment and their draught beers.

4.3.2 Business Participants

The Nightclub will be part of the restaurant and bar industry, which includes several kinds of businesses:

  • Locally Operated Bars and Nightclubs - This genre usually appeals to the local neighborhood clientele. This same client base dictates that the average price structure be drastically scaled down in order to create "regulars."
  • Nightclub Entertainment Complexes - This type of complex represents the concept we will most closely compete with. They are typically placed in high traffic locations and are normally treated as destination entertainment. An admission charge is usually in place and the associated price structure is also most like our proposed structure. Thankfully there is not an abundance if this type of entertainment within our region.
  • Conventional Dining - Primarily owned by large national chains, usually less than 10,000 square feet, focused on serving good quality food in a reasonable amount of time in a dining room setting. The service and food quality are superior to that of a fast food establishment. People go there to eat and leave when they're done eating since there's rarely a reason to stay.
  • Formal Dining - Similar to conventional dining yet offering a higher quality of food and service for the added expense. As with the conventional dining facilities, there is little interaction and when people are done eating, they leave.
  • Casual Dining - Commonly building upon conventional dining with the addition of a bar, playing of music and sporting events on numerous televisions. Some establishments offer their own brand of beer made on the premises. The food quality and service are at best, similar to that found in a conventional dining experience.
  • Chain Entertainment - Typically manifested in each market through the Hard Rock Cafes, the Planet Hollywoods, etc. We expect to create an atmosphere that thrives on its trendy feel. These chain entertainment venues can not hope to draw the same "hip" clientele.