Restaurant/Bar

BUSINESS PLAN

THE PLUGGED NICKEL BAR

772 S. Cassopolis
Detroit MI 48222

April 1995

This business plan for a bar with entertainment highlights the advantages and cost benefits of an owner-managed business. The proposed business is in an Economic Empowerment Zone, and notes this as one of the reasons for the request for loan.

• `
• background
• goals
• logistics
• marketing
• expenses

BUSINESS

The Plugged Nickel Bar, on South Cassopolis in Detroit's new Empowerment Zone, will become a high quality venue for original creative arts. Live music, original theatre, performance art, and comedy will be featured, along with displays by local artists. With high quality entertainment and attention to detail, it will become a destination for patrons of the arts. Live recordings of performances will be released on CD and cassette. The diversity of the metro area will be utilized, to provide a greater variety of entertainment currently available anywhere. Well-lit parking will be available, and Chinese food from Wang's Restaurant will be available until 12:00 a.m. The business will be open Thursday through Saturday nights.

TARGET MARKET

Original music venues are gaining in popularity due to the past success of alternative rock, and the "back to basics" approach that many musicians are taking. The Plugged Nickel will recreate the energy, experimental feel, and diversity that popularized alternative rock in the first place, before it was homogenized by corporate interests. People want something that is new and different, as what was once avant garde but has become mainstream. Current patrons of clubs would find new excitement, and others would be encouraged.

UNIQUENESS

Most clubs center on one style of music or performance, or perhaps devote different nights to particular styles. Sometimes this works, but other times there are complaints that it all sounds the same. This complaint will never be heard at the Plugged Nickel. On any given night, customers will experience at least two completely different acts. It will be normal to have an evening that might include classical, jazz, latin, rock, blues, bluegrass, folk, or any named or as yet unclassified forms of music. These could be combined with performance art, comedy, poetry or original theatre for a completely new experience.

In order to complete renovation of the building at 772 South Cassopolis in Detroit's Empowerment Zone, I am requesting a loan of $ 10,000, at an interest rate of 10%, amortized over five years.

PURPOSE

1. To renovate and re-open the Plugged Nickel bar as a premier venue for original creative arts. Live music, original theatre, performance art, and comedy will be welcome, along with exhibits from local artists, most likely from the neighboring universities.
2. Take advantage of renewed interest in original music, and the increasing popularity of the entertainment districts in downtown Detroit.
3. Provide greater exposure for the diverse and innovative music created in the region, through the production of CDs and cassettes recorded "Live at the Plugged Nickel."
4. Utilize the benefits of renovation in the Empowerment Zone.

BACKGROUND

Building and Bar

The Plugged Nickel bar, at 772 South Cassopolis, was opened in 1936. In 1990, the name was changed, and the business closed in 1993. Over the years, through changes in management and ownership, it has had a wide variety of themes and customers. Despite some damage due to roof leakage and vandalism, classic features remain, including the bar area, mirrors, and indirect lighting. In addition, the stage, stage lights, and dressing rooms are complete and appropriate to the proposed new usage. The bar building, two additional attached storefronts, and an adjacent large storage garage were purchased in March, 1995 by Nigel Y. Mea. There are no mortgages, liens, or back taxes owed on the property.

Nigel Y. Mea

In 1988, Mr. Mea was a student at the Berklee College of Music in Boston, Massachusetts, with the aspiration of eventually making a living as a producer and sound engineer. Upon viewing the difficulties of life as a "starving artist," he returned to the University of Minnesota to finish dual degrees in Mathematics and English, and start his own production company. Metro Productions began in August 1988, as a small recording studio, and soon branched out into live music production, involving booking and promotion of acts, as well as operation of sound reinforcement equipment. It also provided income to help complete the degrees. In 1990, Mr. Mea graduated and moved to the Detroit area for a highly successful career as a Systems Engineer at Corporate Data Systems, and more recently, Midwest Research. Throughout this time, he continued as a performing musician, producer, and sound engineer, scheduling and promoting local shows. As the business will be operating only three or four nights per week, current professional employment will be maintained.

GOALS

1. To establish a profitable venue by providing a greater variety of entertainment than any currently operating establishments by utilizing the diversity of the Detroit area to the fullest potential. Many clubs feature the same kind of music every night: jazz, blues or rock, etc. Some give different nights to different styles. Ideally, the Plugged Nickel will have two or three distinctly different styles on every night of operation. It would be possible, for example, to experience classical, Latin, and alternative rock in one night. The establishment will be open to the public three or four nights per week.
2. Promote original music in the area, particularly at the Plugged Nickel, through the use of the facility for live and studio recording, including the production of a CD featuring music recorded at performances. Mr. Mea currently owns recording studio equipment, and has had live recordings used on locally-released CDs and demo cassettes.

LOGISTICS

1. The Plugged Nickel is located on South Cassopolis Avenue in Detroit, just South of Wang's Restaurant. It is centrally located, less than one mile from Oakland State University, the Center for Fine and Applied Arts, Mexicantown, many revitalized theatres, downtown Detroit, the New Center area, and other music venues.
2. The customer area is approximately 35' by 55', and includes alarge stage opposite the bar. Dressing rooms are located at the back of the building, away from the customer area. Capacity is rated at 74 with dancing, and 107 without. Sufficient parking is available in a paved lot beside the bar.
3. Identifiable customer base:
   1. Current patrons of other music bars in Detroit and Hamtramck, looking for a greater variety and higher quality of entertainment.
   2. Students of local universities.
   3. Audiences of diverse musical styles not represented by the current club scene.
   4. Artists and musicians seeking a more supportive and performer-friendly environment.
4. Immediate competition includes the following:
   1. Melvin's, located about one mile south on South Cassopolis, and features live music on weekends and some weeknights. Usually alternative rock. Typically draws 150 customers per weekend night.
   2. The Old Havana, approximately five blocks south on South Cassopolis featuring alternative and punk rock on weekends. Audience size ranges from 30 to 75.
   3. St. Phillip's Hall in Mexicantown. A large club open for dancing and nationally known alternative rock bands. Draws consistently large crowds.
   4. The Impressionistic Theatre. Similar in size and clientele to St. Phillip's. It continues to enjoy good crowds, despite complaints of poor sound quality from performers and patrons.
   5. Pay stubs, Lilian's, and the Hamtramck Corner Bar in Hamtramck, small clubs for local rock bands.

These establishments, though similar in initial appearance, do not feature the diversity that will be unique to the Plugged Nickel.

MARKETING

1. Marketing efforts will center around weekly advertisements in local publications, most likely "Metro Times," "Spirit," and "The Monitor."
2. Regular advertising will be supplemented by occasional advertisements in diverse cultural and ethnic publications such as "Latino World," "National Entertainment Plus," "Jazz Quarterly," and any many others that appear viable and inexpensive.
3. Monthly fliers of scheduled events will be posted in record stores, and at the local universities.
4. A one-page flier, "Guide to Dining and Entertainment in the South Cassopolis District" with a map and very brief reviews of establishments in the vicinity, from the Whitmore, Stu's, Onion Street, and the others, to Melvin's, The Old Havana, the many theatres, and more. Of course, the Plugged Nickel will be featured prominently. This flier will be distributed at establishments inside and outside the immediate area, to promote the area as an entertainment center.

EXPENSES

Plugged Nickel Expenses ALL already paid by Nigel Y. Mea

Items listed below were previously purchased by Nigel Y. Mea, and will become part of the assets of the Plugged Nickel.

Projected Revenue/Expense

Cost Breakdown

Projected Revenue/Expense — Following Year

Restaurant/Bar

BUSINESS PLAN

THE WATERING HOLE

1019 Oak Lane
Galina, IL 34309

May 1995

The following business plan outlines a bar/restaurant venture that takes advantage of renovations in the surrounding area to help drawn in clientele for itself The business takes an existing venue and updates it, thereby contributing to the urban renewal taking hold in this previously neglected area.

• purpose
• background
• goals
• logistics
• marketing
• projected revenue/expense
• cost breakdown

PURPOSE

First, to renovate and re-open the Watering Hole tavern in the Oak Lane Hotel into an eastern, urban style corner pub that offers a casual environment and bill of fare as well as live acoustic type of music and/or jazz.

Secondly, to take advantage of the increased entertainment business caused by renovation of the Wolfe and Evergreen Theatres. More business will be garnered with the opening of the Galina Centennial Choir in 1996 (additional seasonal business will be derived from the downtown enhancement project it if is implemented). Other immediate sources of business include Artie's Comedy Club patrons as well as Galina University students.

Thirdly, to provide local residents as well as area workers an alternative to existing restaurants and pubs.

Fourthly, to supplement business for the Broadway Cafe, a deli-style restaurant which is currently situated across the lobby from the proposed bar facility.

Finally, to provide additional support to the City of Galina as it strives to attract new business.

BACKGROUND

The Oak Lane Hotel has been a family-owned business since 1967. The hotel is a full-time residential facility consisting of 170 residents. Over the past several years the hotel has enjoyed consistent occupancy in excess of 90%. The owner, S. Lord Properties, (Steven Lord) provides store front space to Luke Lord to own and operate a deli/cafe known as the "Broadway Cafe". The cafe was renovated with family funds in 1992 and has been run profitably for the past 2.5 years. Across the hotel lobby from the cafe is an empty room that is 76.6' × 48' × 13.6' × 23'. As mentioned above, the Lords plan to re-open the bar that used to operate in the now-empty room. As of this writing, the family is seeking funds to renovate and equip this facility. Currently, the Broadway Cafe has a multi-year open-ended lease for $1.00 per month. The same lease provisions will be arranged with the Watering Hole. The Hotel is free and clear of mortgages or any other liens according to a title search by Black Sea Title Co. in December 1994.

GOALS

To recreate and update the original Watering Hole into a profitable business that will benefit both the immediate geographical area and enhance the Oak Lane Hotel's amenities for its residents. The Watering Hole was considered a prominent entertainment spot during the 1940s and 1950s. In short, turn unused street-level space in the Hotel into a profit center.

LOGISTICS

Oak Lane Hotel (hence, The Watering Hole) is located at the corner of Oak Lane and Forrest in Galina. It is located one block west of Goddard Ave., two blocks north of Main St. and one block east of Maple. It is readily visible to pedestrian traffic at street level.

Immediate identifiable customer base:

• Cheezy's Pizza corporate headquarters, which is located one block west. Population of approximately 460.
• Galina Fire Department, which is located across the street (Oak Lane) and has a population of approximately 125.
• Oak Lane Hotel with a population of 170 residents.
• Wolfe Theatre (one block west) has a population of approximately 60.
• Sundry weekend foot traffic generated by events at the Wolfe Theatre, the Evergreen, Diamond Theatre, Artie's Comedy Club and Restaurant, and in 1996, the Galina Centennial Choir.

Size of facility is approximately 76.6' × 48' × 13.6' × 23' ft. with a maximum planned capacity of approximately 155 persons.

Immediate competition is somewhat limited due to customer focus of this establishment (i.e., pub style). Jake's Bar is located at Patricia and Main, and Strikers is located 4 blocks north on Main. Both are within a 1/2 mile radius. Any other similar establishments are located approximately 1.5 miles north in the University area or approximately 1 mile south in and around Galina's central business district. The key difference between the Watering Hole and immediate competition will be live acoustic/jazz entertainment which will make it a true alternative to other pubs in the area. Parking is readily available in the Wolfe Theatre Garage and on the street.

MARKETING

Marketing efforts will consist of advertisement in entertainment section of local publications such as The Galina Post and The Reader, as well as hand bills when appropriate.

A twenty-foot vertical, neon sign affixed to the southeast corner of the Oak Lane Hotel will be highly visible to immediate residents as well as evening foot traffic on Main St.

PROJECTED REVENUE/EXPENSE

(Quarterly Basis)

Notes:

1. The Watering Hole anticipated opening by June 1995. This is a one month projection based on average of 25 customers per day (1.67 customers per hour based on a 15 hour day) with an average order of $6.00.
2. Represents beverage costs only. All food costs will be borne by the Broadway Cafe and calculated into yearly revenue/expense base of that entity.
3. There will be two employees that will work a 5 hour shift, 6 days per week at $4.20 per hour. Luke Lord will work daily approximately 8 to 10 hours with no compensation.
4. Lease is $1.00 per month to S. Lord Properties with an indefinite tenor.
5. Principal and Interest payment is calculated for a $200M note with an interest rate of 10% and amortization of 15 years.

Notes:

1. See Notes 1 & 3 for the Previous Quarter
2. Revenues represent an average of 75 customers on a daily basis (5 customers per hour). These customers can be anticipated to spend approximately $8.00 per day. Increases in spending per customer and daily client base are attributed to familiarity with product and establishment and willingness to spend more time in tavern based on seasonal attitudes.
3. Cost of Goods Sold is a 50% increase over previous quarter.

COST BREAKDOWN

(Dimensions of Tavern: 76.6' × 48' × 13.6' × 23')