05 Mar Nightclub, Dance Classes Business Plan

E3 Playhouse, (E3), is an entertainment, education, restaurant and retail venue located 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 is in a start-up position, with a beginning date of July 2004. This business plan will estimate startup and ongoing costs, identify revenue streams, and forecast net cash flow. The company intends to lease venue space by June 2004. There will be a three month build-out. The public will be able to see our space in September. The company will be operating on a July through Juniper fiscal year.

Michael Horne serves as the company CEO. 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. The management team is headed by owner Wes Anthony. 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 venues offer guests a lively place to meet and mingle as well as an opportunity to take part in entertainment via 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.

The venue is a 6,600 square foot complex, which will also house the company’s corporate business office. The dance club and bar will accommodate 200-400 people. The venue will be equipped with state-of-the-art audio, lighting, and video systems, serving the need for a true entertainment venue in Santa Cruz. The overall appearance of the venue will be welcoming and clean. With minimal competition from other bars and venues that are dance-themed, the demographics are favorable.

E3 will generate revenue through seven revenue streams, which include the company’s products and services.

• 
  Membership Fees
  
• 
  Educational Courses
  
• 
  Food and Beverage
  
• 
  Gate/Entertainment
  
• 
  Retail Merchandise
  
• 
  Arcade
  
• 
  Venue Rental
  

Each of seven revenue streams is complex and requires individual management. Food/Beverage and Gate/Entertainment will provide the best stable revenue streams.

The venue appeals to 4 major market segments.

• 
  Young Professionals
  
• 
  College Students
  
• 
  Tourists & Business Travelers
  
• 
  Senior Citizens
  

The E3 Playhouse’s Santa Cruz downtown location, demographics, as well as the minimal competition, are major benefits for its success. The proposed venue will offer a local solution for the lack of entertainment venues and social atmosphere in the area.

This business plan estimates start-up costs and ongoing expenses, identifies revenue streams, and forecasts net cash flow and profits. Initial start-up and operating capital of $190,260 is provided as paid-in capital by owner Wes Anthony.

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 is scheduled for September 2004. The July 2005 target month for break-even is July 2005. This would mean that the monthly revenue breakeven will be $66,395, which has a variable cost per unit of 60%, and fixed monthly expenses of $26,558.

Due to start-up expenses, the total net profit for our first fiscal year is negative at $161,000 Our second-year forecast shows a positive gross profit of approximately $122,400. The figure will increase in our third year to $129,000. The projected net cash flow for the first fiscal year is $22,000. This will increase to $93,000 in the second year, and $81,700 in the third. We anticipate ending the first year with a cash surplus of $23,000. The amount will increase to $117,000 for our second year and $198,000 for our third year. Our accounting net worth will be negative at the end our first year (around $10,000), rising to positive $62,000 in our second and $142,000 respectively in our third years.

The owner is aware of the highly risky nature of launching an entertainment-based restaurant establishment. 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. Owners may also be asked to review their return-on-investment in order to determine if they can provide additional capital. 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

The mission of E3 Playhouse is to create an entertainment, community education, and dining venue for the residents of Santa Cruz. E3 will provide unique entertainment that is affordable and accessible to everyone.

E3 Playhouse was established to provide Santa Cruz County residents with quality entertainment in a pleasant, enjoyable environment. It will be a great place to socialize with others through dancing, games and educational classes. There will also be special events. The emphasis is on live music such as Salsa, Swing, R&B and Americana. It will have a casual dining ambience, great food, and excellent customer service. There will be a beer and wine bar as well as live entertainment and an arcade.

1.2 Keys To Success

Three keys to success in the E3 Playhouse venue are listed below.

• Position E3 Playhouse strategically located to maximize revenue from live entertainment consumers. Santa Cruz will host the showcase. This is a great location for entertainment, community education and a restaurant with live band.
• Low Operating costE3 playhouse will be managed to ensure maximum net profits and maintain targeted operating ratios. E3 Playhouse management will reduce construction costs for initial construction and build-out. The venue will be housed within a leased structure. All operating expenses will be kept to a minimum, with cost of sales and margins reviewed on a monthly basis. Targeted 40% sales cost.
• A Wide Range of Services’#8211:E3 Playhouse provides entertainment, community educational courses, a full -service restaurant/nightclub as well as a shop merchandise area and venue rentals. The aim is to increase revenue per visitor as well as extend the time that each visitor spends at the venue.

1.3 Objectives

This business plan is used to forecast and project net cash flow, profits and costs. The owner will provide the capital.

E3 Playhouse is a Santa Cruz entertainment, education, restaurant and retail venue. The Santa Cruz area will have a variety of services, including a live entertainment stage, a restaurant and community-based arts and music courses. A retail component will sell arts-based merchandise. The following are the goals:

• A $40,000 startup budget was required to remodel a leased space, and the venue was launched within the first month with a capital injection of $150,000. The venue will open within three months of leasing the appropriate space. Leasing is scheduled to begin in June 2004.
• Attain a goal of reaching a first-year revenue goal of $427.757 and achieving a second-year goal at $1,222.164. For the third year, we aim for a conservative 7% annual growth.
• Maintain a 40% gross profit margin.