A cocktail bar is a bar or small restaurant where cocktails are the main drinks available; a characteristic feature of many standard cocktail bars is a wide selection of assorted cocktail drinks available by the glass. A cocktail is a mixed drink typically made with a distilled beverage (such as gin, brandy, vodka, whiskey, tequila, cachaça, or rum) that is mixed with other ingredients. If beer is one of the ingredients, the drink is called a beer cocktail.
Cocktails contain one or more types of liqueurs, juice, fruit, sauce, honey, milk or cream, spices, or other flavorings. Cocktails may vary in their ingredients from bartender to bartender, and from region to region. Two creations may have the same name but taste very different because of differences in how the drinks are prepared.
Steps on How to Write a Cocktail Bar Business Plan
Table of Content
Executive Summary
Daniel Jones® Cocktail Bar, Inc. is a niche bar business that will operate world-class cocktail bars across major cities in the United States of America with its headquarters in the heart of Las Vegas, Nevada.
Daniel Jones® Cocktail Bar, Inc. will operate in a centrally located facility in a busy street and with a capacity to accommodate 50 people per time with enough parking space and valet services. Daniel Jones is the founder and CEO of Daniel Jones® Cocktail Bar, Inc.
Company Profile
a. Our Products and Services
Daniel Jones® Cocktail Bar, Inc. will be involved in the sale of;
- Assorted cocktails
- Nonalcoholic drinks and food
- Offering cocktail tasting for patrons
b. Nature of the Business
Our cocktail bar will operate the business-to-consumer model.
c. The Industry
Daniel Jones® Cocktail Bar, Inc. will operate in the cocktail bars industry.
d. Mission Statement
Our mission is to establish a standard and world-class cocktail bar business that will make available assorted cocktail drinks in a conducive environment.
e. Vision Statement
Our vision is to establish a cocktail bar that will become the number one choice for both residents and tourists in and around our cocktail bar locations.
f. Our Tagline (Slogan)
Daniel Jones® Cocktail Bar, Inc. – The Melting Pot for Cocktail Lovers!
g. Legal Structure of the Business (LLC, C Corp, S Corp, LLP)
Daniel Jones® Cocktail Bar, Inc. will be formed as a Limited Liability Company (LLC).
h. Our Organizational Structure
- Chief Executive Officer (Owner)
- Bar Manager
- Accountant
- Barman
- Bartender, Waiters, and Waitresses
- Cleaners
- Security Guard
i. Ownership/Shareholder Structure and Board Members
- Daniel Jones (Owner and Chairman/Chief Executive Officer) 52 Percent Shares
- Ruka Birds (Board Member) 18 Percent Shares
- John Wade (Board Member) 10 Percent Shares
- Henry Brian (Board Member) 10 Percent Shares
- Regina Luther (Board Member and Sectary) 10 Percent Shares.
SWOT Analysis
a. Strength
- Ideal location for a cocktail bar business
- Highly experienced and qualified employees and management
- Access to finance from business partners
- Access to varieties of cocktail ingredients
- Excellent customer testimonials.
- A reliable and efficient method of preparing cocktails.
b. Weakness
- Financial Constraints
- A new business that will be competing with well-established cocktail bars and other bars that retail cocktails.
- Inability to retain our highly experienced and qualified employees longer than we want
c. Opportunities
- A rise in the number of people who want to socialize after the prolonged covid19 lockdown and cocktail bar provides such an opportunity
- Online market, new services, new technology, and of course the opening of new markets.
i. How Big is the Industry?
The cocktail bar industry is a big and thriving industry and the Global Cocktail Market size is worth US$ 86 million. It is estimated that it will reach US$ 1.4 billion by 2027 with an annual development rate of 6% between 2022 and 2027.
ii. Is the Industry Growing or Declining?
Yes, the cocktail bar business is growing. It might interest you to note that the market is expected to grow annually by 7.45 percent (CAGR 2022-2025).
iii. What are the Future Trends in the Industry
The future trends when it comes to the cocktail bar business will revolve around technology and software that is meant to predict what customers want from a cocktail bar business.
iv. Are There Existing Niches in the Industry? If YES, List them
No, there are no existing niches when it comes to the cocktail bar business.
v. Can You Sell a Franchise of your Business in the Future?
Daniel Jones® Cocktail Bar, Inc. has plans to sell franchises in the nearest future and we will target major cities with thriving cocktail drink markets in the United States of America.
d. Threats
- The arrival of a new cocktail bar business within our market space
- Unfavorable government policy and regulations.
- Steady wage expenses
- Economic uncertainty
- Liability problems
- The U.S. Food and Drug Administration (FDA) could change its regulatory status and decide to enforce strict regulations that can strangulate new businesses like ours.
i. Who are the Major Competitors?
- The Broken Shaker
- The Patterson House
- Smuggler’s Cove
- The Varnish
- Velveteen Rabbi
- Zig Zag Café
- Angel’s Share
- The Violet Hour
- Clover Club
- The Alembic
- Comstock Saloon
- Holeman Finch
- Eastern Standard
- Rickhouse
- Arnaud’s French 75
- Columbia Room
- The Whistler
- Pegu Club
- The Edison
- The Franklin Mortgage Investment Co.
ii. Is There a Franchise for the Cocktail Bar business?
- Snowy River Cocktail Bar Franchise
- The Middle Spoon Desserterie and Bar
- Bar Louie
- Barrel House.
iii. Are There Policies, Regulations, or Zoning Laws Affecting Cocktail Bar Business?
Of course, there are county, state regulations, and zoning laws for cocktail bars in the United States. Please note that the primary Federal law governing alcohol policy is the 21st Amendment, which repealed national prohibition. It also gives individual States control over whether to allow the sale of alcohol in the State and whether to allow importing alcohol into the State.
Marketing Plan
a. Who is Your Target Audience?
i. Age Range
Our target market comprises adults above 18 years who have the finance to purchase cocktail drinks from us.
ii. Level of Educational
We don’t have any restrictions on the level of education of those we will welcome in our cocktail bar business.
iii. Income Level
There is no cap on the income level of those we will sell cocktail drinks to.
iv. Ethnicity
There is no restriction when it comes to the ethnicity of the people that will purchase cocktail drinks from us.
v. Language
There is no restriction when it comes to the language spoken by the people that will purchase cocktail drinks from us.
vi. Geographical Location
People from any geographical location are free to buy and drink our cocktails.
vii. Lifestyle
Daniel Jones® Cocktail Bar, Inc. will not restrict any customer from purchasing cocktail drinks from us based on their lifestyle, culture, or race.
b. Advertising and Promotion Strategies
- Deliberately brand all our vans and trucks.
- Tap into text marketing.
- Make use of billboards.
- Share Events in Local Groups and Pages.
- Turn Social Media Channels into a Resource
- Develop Business Directory Profiles
- Build Relationships with players in the event planning and catering services industry.
i. Traditional Marketing Strategies
- Marketing through Direct Mail.
- Print Media Marketing – Newspapers & Magazines.
- Broadcast Marketing -Television & Radio Channels.
- OOH, Marketing – Public Transits like Buses and Trains, Billboards, Street shows, and Cabs.
- Leverage direct sales, direct mail (postcards, brochures, letters, fliers), print advertising (magazines, newspapers, coupon books, billboards), referral (also known as word-of-mouth marketing), radio, and television.
ii. Digital Marketing Strategies
- Social Media Marketing Platforms.
- Influencer Marketing.
- Email Marketing.
- Content Marketing.
- Search Engine Optimization (SEO) Marketing.
- Affiliate Marketing
- Mobile Marketing.
iii. Social Media Marketing Plan
- Start using chatbots.
- Create a personalized experience for our customers.
- Create an efficient content marketing strategy.
- Create a community for our target market
- Gear up our profiles with a diverse content strategy.
- Use brand advocates.
- Create profiles on relevant social media channels.
- Run cross-channel campaigns.
c. Pricing Strategy
When working out our pricing strategy, Daniel Jones® Cocktail Bar, Inc. will make sure it covers profits, insurance, premium, license, economy or value, and full package. In all our pricing strategy will reflect;
- Cost-Based Pricing
- Value-Based Pricing
- Competition-Based Pricing.
Sales and Distribution Plan
a. Sales Channels
Our channel sales strategy will involve using partners and third parties such as referral partners, affiliate partners, and strategic alliances in the event and party planning industry.
Daniel Jones® Cocktail Bar, Inc. will also leverage the 4 Ps of marketing which are the place, price, product, and promotion. By carefully integrating these marketing strategies into a marketing mix, we can have a visible, on-demand service that is competitively priced.
b. Inventory Strategy
The fact that we will need supplies such as white rum, vodka, whiskey, dark rum, syrup, limes, oranges, soda water, glass cups, and straws mean that Daniel Jones® Cocktail Bar, Inc. will operate an inventory strategy for ordering, maintaining and processing items in our warehouse.
Daniel Jones® Cocktail Bar, Inc. will make sure we work with “Just-in-time (JIT) inventory” – (JIT involves holding as little stock as possible, negating the costs and risks involved with keeping a large amount of stock on hand.)
c. Payment Options for Customers
Here are the payment options that Daniel Jones® Cocktail Bar, Inc. will make available to her clients;
- Payment with cash
- Payment via credit cards
- Payment via online bank transfer
- Payment via mobile money transfer
d. Return Policy, Incentives, and Guarantees
At Daniel Jones® Cocktail Bar, Inc., our customers are our top priority hence if you receive cocktail drinks that are different from what you paid for, we will sincerely apologize. You can call us as soon as you notice that there was an error in your order and you can come to pick up the correct cocktail drinks.
For credit card payments, you will be refunded the sales price associated with the error and recharged for the new items’ price. For cash payments, you will be asked to pay the difference of the balance if the new cocktail has a greater value than the cocktail received in error. Please, if you have any questions regarding the Return & Refund Policy, please call our customer care services.
e. Customer Support Strategy
Our customer support strategy will involve seeking customer feedback. This will help us provide excellent customer service to our clients, it will help us to first understand their needs, experiences, and pain points. Regularly, we will work towards strengthening our Customer Service Team and also Leverage Multi-Channel Servicing as part of our customer support strategy.
Operational Plan
We plan to expand our revenue by 25 percent in the second year and the plan will include a marketing, sales, and operations component. The operations component of the plan would include attracting partnership and retainers deals that will enable us to boost our cocktail bar business sales and support revenue growth.
a. What Happens During a Typical Day at a Cocktail Bar Business?
- The business is open for the day’s work
- The serving area is cleaned and ready for the day’s business
- Supplies such as white rum, vodka, whiskey, dark rum, syrup, limes, oranges, soda water, glass cups, and straws are purchased, and ready for use
- Customer’s orders are taken and they are served
- Cashier collects cash and reconciles account for the day
- Administrative duties are carried out
- The store or warehouse is restocked when required.
- The business is closed for the day.
b. Production Process (If Any)
The production process of cocktail drinks involve;
- Wash and prepare the oranges and limes
- Mix the supplies in the appropriate liqueur portions.
- Fill in cups and serve the cocktail drinks.
c. Service Procedure (If Any)
The service procedure of a cocktail bar business starts with a customer requesting cocktail drinks. Once the request is gotten, it will be processed and the customer will be served or the order delivered to a location as requested.
d. The Supply Chain
Daniel Jones® Cocktail Bar, Inc. will rely on key players in the event and party planning industry to refer business deals to us. So also, we have been able to establish business relationships with wholesale suppliers of white rum, vodka, whiskey, dark rum, syrup, limes, oranges, soda water, glass cups, and straws et al.
e. Sources of Income
Daniel Jones® Cocktail Bar, Inc. makes money from the sale of;
- Assorted cocktails
- Nonalcoholic drinks and food
- Offering cocktail tasting for patrons
- Franchise
Financial Plan
a. Amount Needed to Start your Cocktail Bar Business?
Daniel Jones® Cocktail Bar, Inc. would need an estimate of $250,000 successfully set up our cocktail bar business in the United States of America. Please note that this amount includes the salaries of all our staff for the first month of operation.
b. What are the Costs Involved?
- Business Registration Fees – $750.
- Legal expenses for obtaining licenses and permits – $1,300.
- Marketing, Branding and Promotions – $1,000.
- Business Consultant Fee – $2,500.
- Insurance – $1,400.
- Rent/Lease – $45,000.
- Other start-up expenses like commercial satellite TV subscriptions, stationery ($500), and phone and utility deposits ($1,800).
- Operational Cost (salaries of employees, payments of bills et al) – $70,000
- Start-up Inventory – $25,000
- Bar Equipment (cash register, security, ventilation, signage) – $1,750
- Furnishing and Equipping the Cocktail bar business – $80,000
- Website: $600
- Opening party: $3,000
- Miscellaneous: $2,000
c. Do You Need to Build a Facility? If YES, How Much Will it Cost?
Daniel Jones® Cocktail Bar, Inc. will not build a new facility for our cocktail bar business; we intend to start with a long-term lease and after 5 years, we will start the process of acquiring our own facility.
d. What are the Ongoing Expenses for Running a Cocktail Bar Business?
- Supplies such as white rum, vodka, whiskey, dark rum, syrup, limes, oranges, soda water, glass cups, and straws
- Utility bills (gas, internet subscriptions, phone bills, signage and software renewal fees et al)
- Salaries of employees
- Insurance
- Marketing costs
e. What is the Average Salary of your Staff?
- Chief Operating Officer (Owner) – $65,000 Per Year
- Bar Manager – $45,000 Per Year
- Accountant – $32,630,000 Per Year
- Barman – $30,800 Per Year
- Bartender, Waiters, and Waitresses – $28,100 Per Year
- Cleaners – $25,000 Per Year
- Security Guard -$24,000 Per Year
f. How Do You Get Funding to Start a Cocktail Bar Business?
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for a loan from your bank/banks
- Source for soft loans from your family members and friends.
Financial Projection
a. How Much Should You Charge for your Product/Service?
The price of our cocktail drinks will depend on the type of cocktail drinks, but on average, we will sell a glass of our cocktail drinks between $10 and $16 or more.
b. Sales Forecast?
- First Fiscal Year (FY1): $360,000
- Second Fiscal Year (FY2): $650,000
- Third Fiscal Year (FY3): $1.2 million
c. Estimated Profit You Will Make a Year?
- First Fiscal Year (FY1) (Profit After Tax): $175,000
- Second Fiscal Year (FY2) (Profit After Tax): $300,000
- Third Fiscal Year (FY3) (Profit After Tax): $650,000
d. Profit Margin of a Cocktail Bar Business
The ideal profit margin we hope to make at Daniel Jones® Cocktail Bar, Inc. will be between 40 and 80 percent all things being equal.
Growth Plan
a. How do you intend to grow and expand?
Daniel Jones® Cocktail Bar, Inc. will grow our cocktail bar business by first opening other outlets in key cities in the United States of America within the first five years of establishing the business and then start selling franchises from the sixth year.
b. Where We intend to expand to and why?
Daniel Jones® Cocktail Bar, Inc. plans to expand first to Green Bay, Wisconsin, Iowa City, Iowa, Corvallis, Oregon, Lincoln, Nebraska, Janesville/Beloit, Wisconsin, Grand Forks, North Dakota, Watertown-Fort Drum, New York, and Fairbanks, Alaska.
The reason we intend to expand to these geographical locations is that available statistics show that the cities listed above have the most thriving market for cocktail drinks in the United States. Green Bay, Wisconsin is the drunkest city in the United States. Approximately 26.5% of adults drink to excess. 50.5% of driving deaths in Green Bay involve alcohol.
Exit Plan
The founder of Daniel Jones® Cocktail Bar, Inc. plans to exit the business via family succession. We have placed structures and processes in place that will help us achieve our plan of successfully transferring the business from one family member to another and from one generation to another generation without hitches.