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Entertainment icon Nightclub Business Plan

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The Spot

Executive Summary

Opportunity

Problem

It’s not the lights; it’s not the liquor; and it’s not the sound. It’s the people!

And its the FUN! Successful nightclubs are based on an accurate understanding of the core customers.

Solution

The spot will create a nightclub environment that satisfies the changing tastes and expectations of our core customers; i.e. college-age women. If the women come, the men will follow. In order to achieve this goal, we must constantly improve our response to the customers’ entertainment needs.

Market

The Spot will focus on college-age women who are looking for a high energy, fun nightclub environment to socialize and dance. Of course, we are also focused on college-age men but it has been our observation that the club scene is driven by where women choose to spend their money when they go out with friends.  At present, none of the local bars create an environment that is responsive to the entertainment demands of this core customer group.  This also extends to the areas surrounding the university that we expect will attract new customers to the Spot.

Competition

The current competition is not the point. We are refocusing the competition on having the club that attracts women, for good reasons. And we assume that the way things work will work in our favor when we do. 

We can do competitive analysis in detail for due diligence. It doesn’t affect our plan. 

Why Us?

The mission of the Spot is to create a nightclub environment that satisfies the changing tastes and expectations of our core customers; i.e. college-age women. If the women come, the men will follow. In order to achieve this goal, we must constantly improve our response to the customers’ entertainment needs.

Expectations

Forecast

Our forecast is clearly too profitable, for now. We will be doing annual reviews and we expect to have to revise expense budgets upward over time. 

Financial Highlights by Year

Chart visualizing the data for Financial Highlights by Year

Financing Needed

Each of the three principals will invest $70K, making a total of $210K owner investment. 

Robert Shaw : $70,000

Jill Morse : $70,000

Sheila Thompson : $70,000

We will also need a line of credit to get through early months of negative balances. 

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Opportunity

Problem & Solution

Problem Worth Solving

It’s not the lights; it’s not the liquor; and it’s not the sound. It’s the people!

And its the FUN! Successful nightclubs are based on an accurate understanding of the core customers.

Our Solution

The Spot represents a unique opportunity create a high energy, dance-theme venue that will cater to college-age women. The development’s central location, demographics, and lack of direct competition are major advantages to this project. The new venue will specialize in high-energy themes and will offer beer, wine and an array of liquors and mixed drinks. In addition, the venue will sell nonalcoholic beverages such as soft drinks, juices and bottled water. A "casual" food menu consisting mostly of appetizers and small entrees ranging in cost from six to nine dollars will also be available. The initial hours of operation will be 6:00 P.M. to 2:00 A.M., four nights a week. The establishment will draw primarily from the student population at State University while attracting guests and visitors from outside the area as well.

Target Market

Market Size & Segments

The Spot will focus on college-age women who are looking for a high energy, fun nightclub environment to socialize and dance. Of course, we are also focused on college-age men but it has been our observation that the club scene is driven by where women choose to spend their money when they go out with friends.  At present, none of the local bars create an environment that is responsive to the entertainment demands of this core customer group.  This also extends to the areas surrounding the university that we expect will attract new customers to the Spot.

Our target market segmentation is divided between college-age women and men in and around the State University.

Keys to Success

Keys to success

Our keys to success are: 

  • Having a place where college-age women feel comfortable
  • Provide exceptional service that leaves an impression with our core customers.
  • Consistent entertainment atmosphere and product quality.
  • Managing our internal finances and cash flow to enable upward capital growth.
  • Strict control of all costs, at all times, without exception 
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Execution

Marketing & Sales

Marketing Plan

Word of mouth, social media, followed by social media, and word of mouth. 

Sales Plan

We will have a grand opening weekend where the cover charge will be waved for all women customers. We will then establish a traditional Ladies Night, every wednesday.

The cover charge will be $10.  This is cheaper than the downtown clubs.

Our sales strategy is to open earlier and provide entertainment to bring in an early crowd before 10 P.M.  Comedians and Comedy Acts will be booked into the early evening time slot.  We will also have contests sponsored by businesses and products that are marketing to our core customers.

Operations

Locations & Facilities

Recently, commercial space has become available next to the campus when two adjacent business relocated. The Spot will consolidate this space into a 5,000 square foot night club. The location is on the main street most often used by students. 

Milestones & Metrics

Key Metrics

Our Key Metrics are: 

  • Customer demographics: customers who are college-age women, as a percent of total customers. 
  • the cost of alcohol 
  • the cost of the dj 
  • the entrance fee: keep an eye on the bars and night life not making people pay more than other options. 
  • Facebook Promotions and page views. Facebook likes, Facebook engagement. Facebook reviews. 
  • Twitter: tweets and retweets telling what people think of the dj and place 
  • Google reviews
  •  

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Company

Overview

Ownership & Structure

The management team is a strong one. Together we share a single vision: to provide a unique and entertaining experience through exceptional service.

Team

Management Team

Robert Shaw has a BS in business administration from State University. He successfully managed three bars over the past 10 years.  He is currently in his fifth year as manager of Tom’s Landing, the most popular bar in the university area.

Jill Morse holds a BA in marketing. She has held a marketing positions with Nike and Sony before starting the Olympus nightclub with Sheila Thompson in 1996. 

Sheila Thompson has a BS in business administration. Before co-owning the Olympus, Sheila managed two successful nightclubs, the Arena and the Power Plant, over a 10 year period.

Once opened, the Spot will have the exceptional management team to guide its success. The Spot’s three owners, Robert Shaw, Jill Morse, and Sheila Thompson, have over 25 years of night club management experience between them. Robert has been the manager of Tom’s Landing, the most popular bar in the university area, for the past five years. Jill and Sheila are co-owners of Olympus, a popular downtown night club that has dominated the city’s club scene for the past four years.

Personnel Table

2020 2021 2022
Manager $60,000 $61,200 $62,424
DJ $38,400 $39,168 $39,951
Cleaners (2) $72,000 $73,440 $74,908
Bartenders (2) $72,000 $73,440 $74,908
Cooks (2) $84,000 $85,680 $87,394
Servers (3) $129,600 $132,192 $134,835
Bus Boys (2) $67,200 $68,544 $69,914
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Financial Plan

Forecast

Key Assumptions

Our Key assumptions are: 

  • College kids like to go out and dance and drink 
  • They can pay some entrance fees but there is a threshold (ie too high) 
  • Our survival is based on popularity / the place to be. We keep key people happy and we will keep our club full. 

Revenue by Month

Chart visualizing the data for Revenue by Month

Expenses by Month

Chart visualizing the data for Expenses by Month

Net Profit (or Loss) by Year

Chart visualizing the data for Net Profit (or Loss) by Year

Financing

Use of Funds

Start-up expenses listed in retained earning december 2017: 

Legal $2,000

Stationery etc. $500

Insurance $1,000

Rent $4,000

Interior Refit $30,000

Expensed Equipment $20,000

Air Cond. Upgrade $5,000

Audio/Lighting $10,000

Bar Equipment/Supply $10,000

Fees and Permits $7,000

Bathroom Upgrades $5,000

Initial Marketing $3,000

Opening Salaries Deposits $15,000

TOTAL START-UP EXPENSES$112,500

Sources of Funds

We will be getting $210,000 from the three co owners: 

Robert Shaw $70,000

Jill Morse $70,000

Sheila Thompson $70,000

Statements

Projected Profit & Loss

2020 2021 2022
Gross Margin $1,133,760 $1,262,640 $1,338,871
Operating Expenses
Salaries & Wages $523,200 $533,664 $544,334
Employee Related Expenses $104,640 $106,733 $108,867
Rent $48,000 $48,000 $48,000
Utilities $3,600 $3,600 $3,600
Insurance $12,000 $12,000 $12,000
Leased Equipment $36,000 $36,000 $36,000
Sales $14,400 $14,400 $14,400
Marketing $9,000 $9,000 $9,000
Interest Incurred $2,767 $2,052 $389
Depreciation and Amortization $2,857 $2,857 $2,857
Gain or Loss from Sale of Assets
Income Taxes $56,594 $74,150 $83,914
Total Expenses $1,375,648 $1,454,816 $1,505,940
Net Profit $320,702 $420,184 $475,510

Projected Balance Sheet

Starting Balances 2020 2021 2022
Cash $77,500 $310,295 $680,490 $1,149,490
Accounts Receivable $0 $0 $0
Inventory $204,122 $214,194 $214,197
Other Current Assets
Total Current Assets $77,500 $514,417 $894,684 $1,363,687
Long-Term Assets $20,000 $20,000 $20,000 $20,000
Accumulated Depreciation ($2,857) ($5,714) ($8,571)
Total Long-Term Assets $20,000 $17,143 $14,286 $11,429
Accounts Payable $38,607 $40,193 $40,193
Income Taxes Payable $21,984 $18,571 $20,985
Sales Taxes Payable
Short-Term Debt $0 $52,767 $11,819 $41
Prepaid Revenue
Total Current Liabilities $0 $113,358 $70,584 $61,220
Long-Term Debt
Long-Term Liabilities
Paid-In Capital $210,000 $210,000 $210,000 $210,000
Retained Earnings ($112,500) ($112,500) $208,202 $628,386
Earnings $320,702 $420,184 $475,510

Projected Cash Flow Statement

2020 2021 2022
Net Cash Flow from Operations
Net Profit $320,702 $420,184 $475,510
Depreciation & Amortization $2,857 $2,857 $2,857
Change in Accounts Receivable $0 $0 $0
Change in Inventory ($204,122) ($10,072) ($3)
Change in Accounts Payable $38,607 $1,587 $0
Change in Income Tax Payable $21,984 ($3,413) $2,414
Change in Sales Tax Payable
Change in Prepaid Revenue
Investing & Financing
Assets Purchased or Sold
Investments Received
Dividends & Distributions
Change in Short-Term Debt $52,767 ($40,948) ($11,778)
Change in Long-Term Debt
Cash at Beginning of Period $77,500 $310,295 $680,490
Net Change in Cash $232,795 $370,195 $469,000
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