Mix-N-SipSelf-Serve Bar

AESHM 474

Kelly, Forest Ryan, Cameron Sprenger, Alivia

Table of Contents

Description of the BusinessLocated in the heart of downtown Des Moines, Iowa, near the Polk County

Courthouse, Mix-N-Sip is a nightlife bar with a modern twist unlike anything in the area. Mix-N-Sip is owned primarily by the owners with a joint partnership with a local liquor supplier. Mix-N-Sip gets discounts on purchasing mass quantities of alcohol and the supplier gets to advertise throughout the bar. This is one way the bar gets to cut down on costs as well as becoming more connected to the area.

Staffing is another way to cut down on costs. We have an extremely small staff, consisting of no bartenders and very few employees who assist in stocking, teaching about drinks, and working at the register when needed. We also bring in DJs and live local bands depending on what is planned for the night. When having no bartenders, one might ask how drinks are distributed and that is what makes Mix-N-Sip so special. We have self serve areas, similar to a soda machine in a restaurant, that pre-mixes and pours your drink for you. These machines can be compared to a vending machine where you enter cash or swipe a card to have your drink dispensed. This way you don’t have to wait on a bartender and can focus your social skills on your group that you’re spending the evening with. Depending on the night of the week or if we book a rental, we also have a staff member to teach and assist in the making of special drinks that require more than two or three ingredients. These lessons are done earlier in the night before the bar gets busy.

Like most bars, the hours of business will consist of regular bar hours, being 8:00pm-2:00am 6 days per week. Mondays we will have no hours to provide time off for employees. Per special request we will hold those classes to teach about more unique or difficult to make drinks for people to rent the venue early as 5:00pm any day of the week that can last up to four hours. Our square footage is approximately 3,200 square feet, leaving enough room for the teaching bar, drink stations, a small stage, and a dance floor area.

Personal AnalysisMix-N-Sip is a classier establishment where people come to enjoy a night out,

but not get belligerent. We want to create an upscale and enjoyable environment, but not come off as too high class to scare people off wanting to come in to just relax. We believe that having a self serve bar with classes early on in the night will bring a curiosity to many pursuers as well as an extremely unique way of going out for people who do it often. All of us are in the targeted demographic for our establishment, so know what we want to see and experience during a night out. Mix-N-Sip will not be a one stop, one time thing, but we will have regulars who enjoy what we have to offer. People do not like their time or money wasted, so why not go to a bar where a tip is not needed

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and drinks are made the second you pay. None of us like waiting in line or having to tip a bartender for doing his job.

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Market Analysis Target Market

Our main target market for our bar would be people in college as well as young professionals. The age demographic is 21-35 which is the mean age of people going out and enjoying cocktails. While we would obviously not be opposed to any other age groups older than this, we will use most of our promotional and marketing budget to target this group. Des Moines was recently named the best city to live in for young professionals, so we believe there will be a high attraction to Mix-N-Sip.

The table above shows a breakdown of the age demographic in Des Moines. As you can see, our target market, 21-35 years old, accounts for at least 30% of the total population in Des Moines. This is a good group for our business to target and to be able to attract to our bar. This also seems to be the age group that other competitors in the are targeting to come to their bars.

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The above table is a further breakdown of the population in Des Moines as well as characteristics of people in the city. As the chart shows only about 10% of Des Moines speaks Spanish so while this is not a large portion, it is something that needs to be taken into consideration. This has potential to bring in an entire different demographic of people into Mix-N-Sip. We have a specific target market, but as a business we want to be accommodating to anybody who walks through our doors. This can be done by having a certain night of the week for a certain drink.

Environmental Audit—Macro and Micro

The chart above from the U.S. Census Bureau shows some economic data for Des Moines compared to the average of the rest of the United States. The median household income is just below the country average, which could be due in part to the fact that Des Moines has a lot of young adults and young business people just starting their careers. They also have slightly higher than average poverty rate than the rest of the country. This could pose a small problem because the amount of people are willing to spend on a night out will not be very high. There are numerous bars in the downtown area that are successful leaving little concern for our business.

Some of the local bars in the area that we view as our competitors would include Johnny’s Hall of Fame, Mickey’s Irish Pub, and Pints Patio & Pub. These bars are located in the downtown area of Des Moines and are offering the same goods, but different services. These bars have a lot of people going to them to enjoy drinks casually with coworkers and friends, but also can have an upbeat atmosphere without being too wild.

Mickey’s Irish Pub is similar to Mix-N-Sip in the aspect that they offer live music, which has attracted a lot of customers from our experience. Because we have this similarity we believe that bringing in live music will raise curiosity and bring customers in our doors.

Johnny’s Hall of Fame also has a similar relaxed type atmosphere that we would like to offer at times, but they have a focus on sports while we do not. Another difference from Mix-N-Sip in that they offer food.

Internal Audit for Experience Economy The Harvard Business Review describes economic experience through two

different venues. The first is customer experience. Mix-N-Sip provides a great customer experience by being unique in letting our guests come in and make the drinks

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themselves, and allowing them to make their drink special to them. This is different than other bars where you just go up and order a drink from the bartender and it may not be exactly how you want it. We are giving them an experience by allowing them to do it on their own. The Harvard Business Review discusses two types of customer participation: passive and active. Mix-N-Sip definitely offers an active participation which keeps the guests engaged in what our business is offering.

The second thing the Harvard Business Review discusses is the connection, or the environmental relationship that unites the customers with the business. Mix-N-Sip will still have that bar/club atmosphere where guests can either just hang out and enjoy a drink with friends or play games or dance with the music provided by the DJs we will have. They talk about two different dimensions of connection: absorption and immersion. Guests at Mix-N-Sip will have the option of doing either one of those. They can get as involved with the atmosphere as they would like, but they can also just sit back and relax with friends. The chart below describes these different experiences.

Mix-N-Sip will also offer an educational experience. Throughout the week we will have special nights where we focus on one drink and will have staff to help our guests make these specific drinks. Aside from this, we will also have instructions on display about what is recommended to mix together to make the best tasting drink possible. By doing this we hope to get people to try things they may not normally try at another bar where they may be pressured to just get their usual and then move on so

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other people can order. This is another example of the active participation that will be taking place at our bar, which is unique from many other bars in the area.

Competitive Analysis (SWOT Analysis) Since our bar will be opening in downtown Des Moines we have many

competitors as our neighbors. Those bars include Mickey’s Irish Pub, Johnny’s Hall of Fame (a sports bar), Beer Can Alley, Jokers (a dance bar), The Exchange, and Pints Patio & Pub. There are other bars in the metro area that could be considered competitors as well, but are not located in the downtown area. Wellman’s Pub & Rooftop as well as Shotgun Betty’s are located in West Glen in West Des Moines. In the East Village, about a mile from downtown, we also have Up-Down (a gaming bar), LimeLounge (a nightclub), The Blazing Saddle and The Garden (gay bars), and many others. As an individual that fits our aimed target market, I understand that you choose which location you want to spend your night. After choosing where we want to go we then decide which actual bar we will start our night at. As business owners we want to influence our target market to choose the downtown area and then choose our bar to spend their night at.

SWOT Analysis:Strengths of our company consists of being new to the area so it has a certain

buzz around us. We have a fresh and unique touch to the community. Weaknesses we may have to try harder to reach customers that only go to

certain bars. Our target market is already going to the bars so we face the task of getting them out of their normal scene and getting them into our bar. This is going to be more costly for us as far as advertising goes.

Opportunities we face include changing the bar scene collectively and changing the way bars are run in the future. We also have an opportunity to franchise. If the business is successful then we can franchise and make an impact in the bar scene everywhere.

Threats we face are our competitors around our location. There are a lot of options in the downtown area where are target market can choose to go to instead of us. We face expenses. We have never run a bar on our own before so we have a lack of experience that the others bars have already overcome.

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Mix-N-Sip Mickey’s Johnny’s Wellman’s

STRENGTH-New, Fresh-Unique idea

-Established customer base-Big outdoor patio

-Established customer base-Serves food-Games, pool

-Established customer base-Rooftop-Birthday Thursday-Serves food

WEAKNESS-New-Lack of experience-Costly

-Small inside, bad for winter-Poor customer service

-Only busy in early hours-Lack customer loyalty

-Less appealing during winter-Expensive

OPPORTUNITY-Making a profit-Franchising

-Can improve customer service-Daily deals

-Build stage-Live entertainment to maintain a crowd

-Bring inl Dj’s-Weekend deals

THREAT-Failure-Competitors-Prices

-Mix-N-Sip-Slow in winter-Lack of advertising

-Mix-N-Sip-Going out of business during the long-term

-Mix-N-Sip-Winter-Other bars in West Glen

To show our customers that we value their business we will have them enter their

email when they buy their glass with a microchip inside. We will use their email to establish a loyal relationship with our clients. We will email them when we have drink deals or when we host a special event, making them among the first to be aware of the happenings within Mix-N-Sip. They will also get to know what live entertainment performs and what drinks to order to get deals on game days. We plan on having Bloody Mary bars only available during certain times, also making it easy to communicate with them through e-mail. Punch cards will also be available for a special after a certain number of visits. They’re allowed one punch per visit and once they accumulate 10 punches they get a free Vegas Bomb (a shot mixed with rum, schnapps, whiskey, and an energy drink). These are some of the perks that will keep our customers coming back to our bar and also tactics to build customer loyalty for ourselves.

Marketing TrendsJust like the recent years and years to come, social media will be the best way to

reach the most of your target market in the fastest way possible. Until someone comes up with a better way to reach out to everyone social media will dominate. The social media sites, like Facebook, have made it so easy for anyone to start an event and invite

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all your friends. You can make the event open to the public and have your friends able to invite their friends. People can share it and word of mouth has been taken to a whole other level. Also, you can make your own twitter account or Facebook page to promote a bar or an event at the bar. They encourage people to like it or follow it. If you look at the likes of the bars that we consider threats, you can see that Mickey’s comes in with around 5,800, Johnny’s at 5,900 and Wellman’s that beats everyone at over with 12,200 likes. You cannot go wrong when using social media to promote your brand. Every competitor out there will also have their own website. We must keep this up to date with events and specials on drinks or cover. More ideas that are popular marketing trends would be charity events. People want to feel like they give back to their community, it makes them feel like they are good people. Even if it is in a bar people will find giving back easier to do. It also looks good on the company and gives the brand a positive feel. This way you are profiting the community and your business. This could also get people in that might not go to bars all that often and who knows, maybe they will fall in love and become a regular.

Market Potential The market potential in the Des Moines area is large. The buying force of the

young adults in the area is growing and that just so happens to work for our target market. People 21 to 35 now have more disposable money to use to go out for drinks on the weekends. Des Moines has also been listed as the “Best City for Young Adults”, according to Forbes. The total estimated population of Des Moines in 2014 was 209,220 and of that 24.7% have an education higher than an bachelor's degree. This group is a small part of our whole target market but 24.7% of young business professionals is a lot and a good reason why we choose Des Moines to be the home of our bar.

As far as our market share goes we believe that ours stands out compared to our competitors due to our unique idea. People will want to invest in our idea because it is a fresh, new spin on the bars. There are a lot bars in Des Moines and ours is set apart from the rest so investors would have to agree that our bar will be better than the rest.

Vision and Mission StatementsCreating a unique and socially focused environment is what Mix-N-Sip aims for.

Essentially, everything else about our bar is the considered average, minus we have very few employees working in a night stocking and cleaning. Rather than bartenders there are self serve drink machines where you can choose what you you would like drink for the evening. Earlier in the night we also teach a quick workshop upon booking on how to create fancier drinks. By having few employees we wanted our guests to focus on their personal social experience with either their friend groups or other customers.

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By having a unique place, like Mix-N-Sip, we predict that our business will thrive. People love doing something different and not having to wait on a bartender will certainly save our customers time and money.

Vision Statement“We intend to provide our customers with an excellent and unique experience the

moment they walk into our establishment with quality drinks, an enjoyable atmosphere, and a perfect night out.”

Mission Statement“To provide a brand new approach to a night out.”

Business ObjectivesWe want people to enjoy this change of way. People are so used to going up to

the same bar, waiting to order, waiting for the drink to be made, and then paying with a tip included. At Mix-N-Sip your drink is dispensed automatically right after you pay and takes seconds to fill your cup. We want people to enjoy this experience and realize it saves time and money. We want to know our customers enjoy this unique experience. We will have surveys that people can take for a prepaid bartab to know how enjoyable their experience is with Mix-N-Sip. Through this we can gauge what needs to be done to make the experience even better.

Everyone’s goal is to save and make money. By teaming up with a local liquor provider, we have the ability to do just that. We will not only save by letting them do some advertising throughout the bar and getting price cuts on buying mass quantities of alcohol, but also make money but charging people for the alcohol, mixer, and experience in general. We want to pay our employees, bills, fees, licenses, alcohol, and technology with a large enough profit that we can walk away with a good amount of money too.

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Financial AnalysisFinancial Introduction

Entering a market as a new business with a lot of competition is just as difficult as it sounds, but in the nightlife business you need to be even more competitive than other industries. When creating a business there are countless considerations to make prior to deciding on any final decisions. Determining what type of business that will stand out and what types of products or services that people will want were the initial decisions. We know having something special and innovative will help our chances of survival. After creating a business idea, thinking logistically was the next step. What is the best way to enter the market and make this said business stand out? That is what needs to be answered to start the success of a business. Of course, money is also an issue. How can you get this business financially started before setting yourself up for failure and being in debt forever. We know of many ways to help us in the long run, but we also considered the realistic necessities to get going.

Start-Up CostsMix-N-Sip is the type of business that needs a lot going for it on opening day.

First impressions are crucial, so needing the decor and furniture to look excellent, having a high variety of drinks available, signage that is easily understandable for patrons, and of course, making sure everything is running correctly, including the drink stations, music, and lights, is necessary prior to opening the doors for the first time. All of these things are also costs, as well as assets to our business. The venue space and remodeling will be the first major costs we will face. Furniture, decor of all kinds, lighting, flooring, drink stations, supplies, and electronics are all other costs to start up our business.

The costs and expenses found in our studies come from researching average costs in the Des Moines, Iowa as well as surrounding areas. We used different familiar websites to “online shop” and price checked items and delivery to the store, keeping free shipping and installation in mind. These costs include venue rental in the downtown area, furniture and decor, liquor prices, machine prices, and others, all found in Chart 3: Start-Up Costs.

Source of Funds All being recent graduates from college, we know we won’t have the type of

money to open and fund a bar. We made the decision that we will all go our separate career paths following graduation and save equal amounts while we work. We also decided to take personal donations from friends and family (who will be recognized as VIP members of Mix-N-Sip) and get special offers and discounts. Another thing we know will need to happen is getting a bank loan. We decided to start working so we

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could save up money prior into going into business. We expect to save a total of $45,000, gain $5,000 in donations, and get the rest ($106,295) on a loan. We know $100,000 is a lot for a loan, but believe when we host special events at our venue that we can pay back more than what we owe at certain points in time.

Land and Building Expenses After much research and consideration of rental values of a venue in the

downtown Des Moines area, as well as surrounding areas such as Ankeny, West Des Moines, and Urbandale, we have decided that what we are looking for will be best suit in the downtown Des Moines area. With the target market we want to reach, especially since competition is so close, it is easy to stop by our place on a trip to another. Here we have the opportunity to gain the most foot traffic. We have taken into consideration the prices of utilities and taxes in this area. From our research the venue we chose would be $16.50 per square foot per year, being one of the more expensive options comparing to others. This particular venue comes to $35,260 per year or approximately $3,000 per month. Utilities will change per month, but we are always going to expect them to be much higher so we can be prepared.

Pro-forma Income Statement with Predictions We put in a hypothetical annual revenue for our business and then compared it

to similar bars in the Downtown Des Moines area. The average annual revenue for a bar in Downtown Des Moines is $227,491. Starting off this will be our goal to reach this number in our first few years, and then continue to grow in the years to follow. The first five years will be crucial for the success of our business. If we gain a solid customer base we believe we can reach our goal of $300,000 per year in revenue. The comparing annual revenues of businesses can be seen in Chart 1: Revenue Comparison.

Another figure to show the average annual revenue by business in the Des Moines area is by a map. These numbers are average for bar businesses. The location of Mix-N-Sip is in the shade one down from the top red, stating bars in the area make an average of $220,000-$300,000. The map can be seen in Chart 2: Annual Revenue Map.

Chart 1: Revenue Comparison

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Chart 2: Annual Revenue Map

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Chart 3: Start Up Costs

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Chart 4: Break Even Analysis

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Chart 5: Pro-Forma Income Statement

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Chart 6:Projected Sales

Chart 7: Fixed vs. Variable

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Chart 8: Employee Wage Estimate

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Chart 9: Cash Flow Statements for First Five Years of Operation

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