Da Alibi Daiquiri Lounge

I have the expectation to expand into the  daiquiri/ hookah lounge business to fill a niche that is currently not being met in the industry in the San Antonio, TX area. 

Executive Summary

The purpose of this business plan is to raise $189,324 for the development of a Daiquiri/Hookah Lounge while showcasing the expected financials and operations over the next three years. The Da Alibi Daiquiri Lounge. (“the Company”) is a Texas based LLC that will provide a comfortable environment with a focus on a sophisticated adult atmosphere with Daiquiri products range will include quality rum and 10 fresh fruit flavors alcoholic and nonalcoholic, local beer, wines produced in Texas, and food services to customers in its targeted market includes 25-45-year-old professionals, college students, military, men and women. The Company was founded by Deandrae Fillmore.  

 

Da Alibi Daiquiri Lounge will feature approximately 4,700 square feet of space that will also encompass an outdoor seating area. This will allow for the lounge to successfully continue to operate with added Covid-19 restrictions. The facility will have a full bar that will serve spirits (with a heavy focus on daiquiris and frozen mixed drinks), wine, and beer. It should be noted that the business will provide its entire daiquiri, frozen cocktails, and shisha menu on a take-away basis. 

 

The Company will also have TVs to show televised sporting events, a DJ, live entertainment area for customer enjoyment. The location will also have a moderately sized food service that will serve foods normally associated with Daiquiri Lounges.  At all times, the business will comply with all social distancing guidelines through the course of the pandemic. 

 

The Company will also enact strict policies regarding underage drinking, and the business will comply with all state regulations regarding the sale of alcohol to the public.

 

The third section of the business plan will further describe the operations by Da Alibi Daiquiri Lounge.

 

We are seeking to acquire $100,000 loan from bank. The interest rate and loan agreement are to be further discussed during negotiation. This business plan assumes that the business will receive a 7year loan with a 6% fixed interest rate. The financing will be used for the following:

 

·         POS System and Financial software.

·         Daiquiri machines and Hookah equipment.

·         Development of the Company’s Daiquiri Lounge location.

·         Financing for the first six months of operation.

·         Capital to purchase the alcohol, food, and tobacco inventory.

 

Da Alibi Daiquiri Lounge’s mission is to become the recognized leader in its targeted market by providing provide a variety of daiquiris both alcoholic/non-alcoholic to the public in addition to food and tobacco products in a safe environment with the options to sit in/drive thru/carryout.  We are looking to provide a world class, luxury location to allow for a memorable experience with unforgettable taste in a sophisticated adult atmosphere.

 

Mr. Fillmore has a significant amount of experience. Through his expertise, he will be able to bring the operations of the business to profitability within its first year of operations.

Mr. Fillmore expects a strong rate of growth at the start of operations. Below are the expected financials over the next three years.

 Expansion Plan

Management intends to implement marketing campaigns that will effectively target individuals within the target market. The Founder may seek to develop additional locations after the third year of operations. 

Da Alibi Daiquiri Lounge. The Company is registered as an LLC in the State of Texas.

Currently, Da Alibi Daiquiri Lounge requires $189,324 of debt funds. Below is a breakdown of how these funds will be used:

 

 | Projected Startup Costs | 
| Business Startup Year | 1
| Lease Deposit | $73,800
| Leasehold Improvements | $20,000
| Working Capital | $40,000
| Furniture, Fixtures, and Equipment | $25,000
| Legal and Accounting Fees | $15,000
| Utility Deposit | $5,000
| Insurance | $500
| Licensure Fees | $7,500
| Grand Opening Marketing Budget | $24
| Miscellaneous and Unforeseen Costs | $2,500
| Total Startup Costs | $189,324

  

We are seeking potential investors through offering a 15% return on investment.  The payments would begin after the first year of business and paid quarterly over a three-year period.

 

 

Deandrae Fillmore owns 100% of Da Alibi Daiquiri Lounge.

 

 

If the business is very successful, we may seek to sell the business to a third party for significant earnings multiple. Most likely, the Company will hire a qualified business broker to sell the business on behalf of Da Alibi Daiquiri Lounge. Based on historical numbers, the business could receive a sales premium of up to 4 times earnings.

 

 

Below is a description of the products and services offered by Da Alibi Daiquiri Lounge.

 

Regarding Da Alibi Daiquiri Lounge location, the facility will also feature several amenities including a large LCD TV (for sports events), a DJ, outdoor patio, live entertainment stage and other entertainment focused installations that will fit appropriately into the Company’s overall sophisticated adult atmosphere.  

Da Alibi Daiquiri Lounge will offer a wide variety of liquors and alcoholic beverages that are available on the menu. The restaurant will maintain a full bar including liquors, spirits, several vintages and types of wine, as well as an extensive number of bottled and draught beers. Approximately 70% of sales are expected to come from the sale of daiquiris and other frozen mixed cocktail beverages (such as Pina Colodas). 

At all times, Da Alibi Daiquiri Lounge will comply with all state and municipal regulations regarding the sale of alcohol. For each patron, a valid ID will be required to ensure that the patron is 21 or older. For very busy evenings, Mr. Fillmore will hire a part time door bouncer to check identifications as customers enter the lounge. Additionally, Management will keep all liquor licenses up to date, and will file the appropriate documentation and fees on a quarterly basis.

The Company will also provide a moderate sized food service that will consist of traditional bar style food and tapas. Management anticipates that approximately 35% of the Company’s revenues will come from food sales.

 
Strategic and Market Analysis

 

This section of the analysis will detail the economic climate, the bar venue industry, the customer profile, and the competition that the business will face as it progresses through its business operations.

 

Currently, the economic climate is uncertain. The pandemic stemming from Covid-19 has created a substantial amount of turmoil within the capital markets. It is expected that a prolonged economic recession will occur given that numerous businesses are being forced to remain closed for an indefinite period (while concurrently having their respective employees remain at home). It should be noted that central banks around the world have taken aggressive steps to ensure the free flow of capital into financial institutions. This is expected to greatly blunt the economic issues that will arise from this public health matter. 

 

However, the current economic climate should have a minimal impact on the Company’s ability to generate revenues. As the economy is reopening, more people are eager to resume their normal lifestyles (including going to venues such as daiquiri bars). Additionally, the Company will offer a host of “take-away” daiquiris and cocktails. This will further ensure that the business will always operate profitably and with a positive cash flow.

 

 

There is a plethora of bars and drinking establishments in the United States. A U.S. Economic census report indicates that there are over 60,000 individual establishments in the country. This number is expected to continue as bars (including daiquiri bars) remain a popular form of entertainment among people under forty. 

 

Each year the industry generates more than $24 billion dollars of revenue. The industry also employs more than 360,000 people nationwide. This is a mature industry, and the future expected growth rate is expected to mirror that of the general economy. 

 

Da Alibi Daiquiri Lounge average client will be a middle to upper middle-class man or woman living in the Company’s target market. Common traits among clients will include:

 

 
Competition

Sales in the drinking place sector in the United States have steadily grown since the mid 1990's reaching 23.15 billion U.S. dollars in 2015. The sector includes bars, pubs, lounges, taverns and nightclubs as well as other drinking places that primarily sell alcoholic beverages for immediate consumption. The National Restaurant Association estimated that food and drink sales in U.S. bars and taverns would reach 19.9 billion U.S. dollars in 2016. This is a relatively small figure in comparison to the wider restaurant industry, for which food and drink sales were expected to rise to approximately 783 billion U.S. dollars during the same year.

 

Bars and taverns are places that serve alcoholic beverages to paying customers who consume their purchases on-premises, either on a stool at the bar or around tables provided by the establishment. Nightclubs also serve alcoholic beverages, but, unlike most bars and taverns, are usually characterized by their late opening hours, loud music and dance floor facilities. More than 590 thousand bartenders were employed in the United States in 2015, and this number was forecasted to increase to 696 thousand by 2026.

 

The types of alcohol purchased in bars, taverns and nightclubs ranges from beers and wines to liquors and cocktails. A bi-annual survey by market research company Nielsen Scarborough found that the number of Americans purchasing wine in bars and nightclubs has been declining since 2008. The number of consumers buying liquor, on the other hand, is much higher and has remained consistent over a four-year period.

 

·         The Bars & Nightclubs industry generates approximately $26.6 billion with households dominating at 93.6% of earned revenue.

·         The major markets are segmented by age (from 25 to under to 65 and over).

·         The age demographic breakdown is in the following order:

·         Consumers in the age group of 21-34 comprise about 22.9% of industry revenue. This age group tends to have more free time and less responsibilities than older age groups so they frequent bars the most.

·         The 35 to 44 age group is 19.8% of industry revenue. These customers tend to have less free time to visit bars but have begun to become more financially established, spending more than their younger counterparts.

·         Consumers aged 45 to 54 are 17.4% of industry revenue. Although they do not frequent bars as much as younger groups, when they do attend, they tend to spend more, eating food or purchasing more expensive and higher quality drinks, as they tend to be more established in their careers.

·         The age group of 55-64 ad 17.4% continues the trend of older people being more financially secure but having less interest in going out for drinks.

·         People aged 65 and above are the smallest sector, at 16%. People over the age of 65 tend to not stay out as late as their younger counterparts, which keeps them from visiting many establishments.

·         Some revenue is derived from the private sector (6.4%) such as businesses seeking to rent facilities for special functions.

 

The Bar and Lounge industry is estimated to be at $23 billion in revenue each year. Alcohol sales are expected to increase by 3.2% in 2021. Half of the revenue will be generated by bars, lounges, nightclubs, and restaurants. With the new normal being social distancing as a factor in businesses being able to deliver products while easing health fears of consumers, to-go alcoholic beverages have been approved and implemented in more conservative geographic areas across the United States. San Antonio, Texas is estimated to have at least 1.5 million people according to the U.S. Census Bureau statistics of 2019. Texas overall is listed as number three of states worth the most bars, lounges, and taverns. Demands for healthier drinks, local beers, and premium mixers have increased the chances of developing new strategies to sell to consumers. This includes using fresh fruits, less sugars, and providing a variety of healthy drink options.

 

Da Alibi Daiquiri Lounge intends to maintain an extensive marketing campaign that will ensure maximum visibility for the business in its targeted market. Below is an overview of the marketing strategies and objectives of the Daiquiri Bar.

 

 

 Marketing Strategies

We intend on using several marketing strategies that will allow Da Alibi Daiquiri Lounge to easily target both men and women within the target market. These strategies include: 

·         Alcoholic and non-alcoholic beverages and food exhibitions and shows

·         Speaking Engagements at food events

·         Networking events with customers

·         Digital flyers circulation

·         traditional print advertisements and ads placed on search engines on the Internet. 

 

In addition to the high visibility location, the Company will also use the following forms of advertising to promote traffic to the Da Alibi Daiquiri Lounge:  

·         Get in potential customer cell phones:

Da Alibi Daiquiri Lounge can use different interactive channels to reach into the customer’s cell phones.  This can create more attention Through the use of text messages or phone calls to its clients once in a week. 

·         Create a podcast:

Da Alibi Daiquiri Lounge will use podcast to reach all its target audience, which is another digital medium for sharing information, news, and ideas in a more social media type of environment. This number provides a good indication of the CPM. 

·         Email marketing:

Email is also one of the best ways to communicate with the customers, through email marketing to promote alcoholic and non-alcoholic beverages to its customers. This will allow for rigorous marketing to its customers.

During the grand opening period, the Company will offer extended “happy hours”, discounts on drinks, and other promotions that will draw patrons to the location. Management feels that this will solidify a repeat customer base that will regularly frequent Da Alibi Daiquiri Lounge.

 

The business will also use an expansive online marketing strategy to further drive traffic to the location while also making the public aware of the Company’s take-away daiquiris and cocktails. The business will develop an expansive website that showcases the operations of the business, the menu, pricing information, and contact information. The website will be mobile friendly and search engine optimized. The website will be ecommerce enabled so that patrons can place orders for take-away beverages through the course of the pandemic. 

 

Beyond the Company’s proprietary website, Da Alibi Daiquiri Lounge will maintain profiles on popular social media platforms including Facebook, Twitter, Instagram, and YouTube. The Company’s website will feature links to all social media platforms. Beyond social media sites, the business will also have profiles on Yelp.com. 

 

Most importantly, Management expects that the business will benefit greatly from the positive reviews that will be on these sites from customers (which will further boost the r brand while concurrently contributing a substantial benefit for the Company’s search engine optimization strategies).

 

Moving forward, the business may seek to further promote Da Alibi Daiquiri Lounge by hiring a social media influencer that lives within 20 miles of the Company’s location. This individual (with a major online following) would have their experience at the location filmed, and they will distribute it through their respective social media channels. This can be a very high impact method of increasing awareness of the brand.

 

 

For daiquiris, cocktails, and related alcohol beverages – the business will charge $ $8. This includes take-away beverages. For food items, the average price will be $7 per item. 

 

For alcoholic beverage sales, Management anticipates gross margins of 80%. For food sales, gross profits will be 68%. 

 

The Company has based its proforma financial statements on the following:

 

 

The Company’s revenues are only modestly sensitive to negative changes in the economic climate. Foremost, the business will provide all its daiquiris and cocktails on a take-away basis to ensure stable income generation throughout the course of the pandemic. The location will feature substantial outside seating to comply with social distancing regulations. As the pandemic subsidies, people are expected to substantially frequent nighttime venues. This massive demand will produce substantial revenues for the Company. Daiquiri Bar will maintain a moderately low operating and overhead cost infrastructure. 

 

 Financing  (Estimated)
Equity Contributions 
| Management Investment | $89,324.00
| Total Equity Financing | $89,324.00
| Banks and Lenders | 
| Banks and Lenders | $100,000.00
| Total Debt Financing | $100,000.00
| Total Financing | $189,324.00