April 9, 2015
Pete Peterson’s
Sports Bar & Grill
Business Plan
Prepared by: Robin Mkangwana
Executive Summary
The Town of Lanigan provides an opportunity for Pete Peterson’s Sports Bar and Grill with a current
population of families and individuals that would be willing to spend disposable income on an adequate
dining and nightlife experience, as well there is potential growth of this type of population in the near
future. Lanigan does not have any appealing venue where customers can receive a well-prepared quality
meal and watch professional sporting events in a fitting environment, with a variety of beverage
options.
Pete Peterson’s will be the venue in town to provide a quality food menu for individuals and families to
dine for an evening, as well as a nightlife atmosphere suitable for the typical sports fan and socializing
individual on a daily basis. Other restaurants and bars in the surrounding area do not provide many of
the key amenities that Pete Peterson’s offers, such as the open floor concept with the bar in the centre,
an upstairs level for additional seating, and 16 TVs that can be viewed from any seat in the building.
Pete Peterson’s most critical variable will be consistently getting targeted customers through the doors
on a regular basis. In order to ensure that this occurs, we will be implementing appropriate marketing
initiatives, such as radio campaigns at the beginning of operations, advertising in the local newspaper,
placing flyers around town and the area promoting special events, and consistently communicating with
potential customers through Facebook. As well, there is an opportunity to become more involved in the
community by providing sponsorships and donations. The most influential factor for getting customers
through the door is through positive word of mouth.
Through calculated financial projections at various levels, Pete Peterson’s does appear to be
economically feasible and will be profitable beginning in the first year of operations. The key factor to
remaining profitable, and therefore feasible, is ensuring that our customers per day is above the breakeven points in each year. Based on the first 5 years of operations, this does occur in every single year.
Pete Peterson’s ultimately strives to create an environment where the big sports fan can indulge in the
big game with a suitable crowd. With maintaining that nightlife type of atmosphere, we can see the
socializing and nightlife seeking individual wanting to spend an evening just letting loose. Aside from the
nightlife atmosphere, we want to create a suitable dining experience in creating a family friendly
atmosphere. In all, Pete Peterson’s will be the location that offers multiple experiences into one
building.
Table of Contents
1.0 Overview……………………………………………………………………………………………………………………………………….1
1.1 Introduction………………………………………………………………………………………………………………………………1
1.2 Mission Statement…………………………………………………………………………………………………………………….1
1.3 Goals and Objectives………………………………………………………………………………………………………………….1
2.0 Operations Plan................................................................................................................................... 5
2.1 Location Plan ................................................................................................................................... 5
2.2 Floor Plan ........................................................................................................................................ 5
2.3 Hours of Operations…………………………………………………………………………………………………………………..4
2.4 Restaurant/Bar Menus and Applicable Permits………………………………………………………………………….4
2.5 Quality Control…………………………………………………………………………………………………………………………..5
2.6 Supply Analysis…………………………………………………………………………………………………………………………..5
2.7 Planned Capital Budget………………………………………………………………………………………………………………5
3.0 Human Resources Plan…………………………………………………………………………………………………………………..7
3.1 Organizational Structure…………………………………………………………………………………………………………….7
3.2 Job Descriptions………………………………………………………………………………………………………………………...7
3.3 Wage/Salary Costs……………………………………………………………………………………………………………………10
3.4 Human Resources Policies………………………………………………………………………………………………………..10
4.0 Marketing Plan…………………………………………………………………………………………………………………………….10
4.1 Target Audience……………………………………………………………………………………………………………………….11
4.2 The Marketing Mix…………………………………………………………………………………………………………………..11
4.3 Competitive Analysis………………………………………………………………………………………………………………..13
4.4 Marketing Budget…………………………………………………………………………………………………………………….17
4.5 Revenue Projections…………………………………………………………………………………………………………………17
4.0 Financial Plan……………………………………………………………………………………………………………………………….18
4.1 Financing………………………………………………………………………………………………………………………………….18
4.2 Dividend Payout Structure……………………………………………………………………………………………………….18
4.3 Investment Analysis…………………………………………………………………………………………………………………19
4.4 Break-even and Sensistivity Analysis………………………………………………………………………………………..20
6.0 Summary……………………………………………………………………………………………………………………………………..21
Appendices………………………………………………………………………………………………………………………………………..22
Appendix A…………………………………………………………………………………………………………………………………….22
Appendix B: Financial Projections…………………………………………………………………………………………………..25
Table of Figures
Figures
Page Number
Figure 1: Location
Figure 2: Floor Layout
Figure 3: Pete Peterson’s Hours of Operations
Figure 4: Kitchen and Bar Hours
Figure 5: Total Capital Asset Costs
Figure 6: Cost of Goods Sold
Figure 7: Operating Expenses
Figure 8: Net Working Capital
Figure 9: Employee Scheduling
Figure 10: Customer Projections
Figure 11: Employee Salaries and Wages
Figure 12: Competitive Bars
Figure 13: Competitive Restaurants
Figure 14: Positioning Map
Figure 15: Estimated Marketing Budget
Figure 16: Estimated Revenue Projections
Figure 17: Retained Earnings Accounts
Figure 18: Robin’s Compensation
Figure 19: Individual Investor Return
Figure 20: Net Income Breakeven
Figure 21: Sensitivity Analysis
2
3
4
4
5
6
6
6
9
9 & 17
10
14
15
16
16
17
18
18
18
19
19
1.0 Overview
1.1 Introduction

Pete Peterson’s Sports Bar and Grill will be the place to grab a bite to eat, have a drink, and
watch the big game. Pete Peterson’s will provide a variety of professional sporting events to the
biggest fans, as well as an atmosphere for individuals that appreciate the nightlife experience.
Located along Highway #16 on the west side of Lanigan, Pete Peterson’s also wants to provide a
restaurant where individuals and families in the area can receive a well-prepared quality meal.
1.2 Mission Statement

“Pete Peterson’s Sports Bar and Grill will provide the perfect atmosphere for the biggest sports
fan and the nightlife seeking individual, as well as a family-friendly environment when providing
meal services. Pete Peterson’s will be a place that offers multiple experiences”.
1.3 Goals and Objectives





Build a reputation in the Lanigan and surrounding area as the primary location to receive an
adequate dining and nightlife experience.
Provide a fitting atmosphere and environment for the biggest sports fans, nightlife individual,
and young to mid-aged families
Utilize strategic and effective marketing campaigns to attract customers, as well as retention.
Obtain a loan from the bank and attract investors to cover the initial capital and start-up costs.
Begin operations in 2016 and produce attractive revenues in that first year.
2.0 Operations Plan
2.1 Location Plan
Pete Peterson’s will be located on the Southwest corner of Lanigan, SK, right along Highway #16. This
was the most desirable location for Pete Peterson’s because it is easily accessible to residents of
Lanigan, as well it will be highly visible for any highway traffic. Along Highway #16, there is no desirable
sports bars, or restaurants that this traffic would be intrigued to stop and enter. There is a small amount
of restaurants and bars within the targeted area, so there is a lack of immediate and direct competition.
In Lanigan and the surrounding area, there is a need that is not currently being met, so Pete Peterson’s
desires to aid to meeting demands.
Figure 1: Location
2.2 Floor Plan
The floor plan shown below provides a visual perspective of the inside layout of Pete Peterson’s. The left
part of the layout is where there will be a storage area, main kitchen and the manager’s office. Pete
Peterson’s has an open floor concept for the main area of the bar/restaurant. In this area, the bar is
placed in the centre of the room, with bar stools surrounding, as well there are tables placed along most
of this area. On the south side of the building there will be the main entrance, the hostess/pay area, and
a VLT room. Along with this main area, there will be an upper level to provide additional seating that will
be located on the west side of the building. There are 16 TVs, in total, so that each seat in the house will
have ample viewing opportunities.
Figure 2: Floor Layout
2.3 Hours of Operations
The following tables show the hours of operations for Pete Peterson’s. The first table shows the full
hours of operations, while the second table shows the times that the kitchen and bar will be open and
closed.
Figure 3: Pete Peterson’s Hours of Operations
Sunday
11:00am – 8:00pm
Monday
11:00am –
11:00pm
Tuesday
11:00am –
11:00pm
Wednesday
11:00am –
11:00pm
Thursday
11:00am –
11:00pm
Friday
11:00am –
1:00am
Saturday
11:00am –
1:00am
Figure 4: Kitchen and Bar Hours
Sunday
Monday
Tuesday
Wednesday
Thursday
Friday
Saturday
Kitchen
11:00am – 8:00pm
11:00am – 8:00pm
11:00am – 8:00pm
11:00am – 8:00pm
11:00am – 8:00pm
11:00am – 11:00pm
11:00am – 11:00pm
Bar
2:00pm – 8:00pm
4:00pm – 11:00pm
4:00pm – 11:00pm
4:00pm – 11:00pm
4:00pm – 11:00pm
4:00pm – 1:00am
4:00pm – 1:00am
Note: All hours are applicable to change for holidays and/or special events.
2.4 Restaurant/Bar Menus and Applicable Permits
Pete Peterson’s will provide a food menu that features different types of sandwiches and burgers, as
well as a wide selection of entrée options. The ten different appetizers available can be served in the
form of a platter for the whole group. A food safety permit will be issued by the Canadian Food
Inspection Agency (CFIA). Also, they will inspect our practices on a regular basis to ensure that food is
being handled safely.
For the drink menu, there will be a variety of beers on tap, as well as available in bottles. Coolers,
Caesars and Cocktails will be the source of hard liquor for customers. Pete Peterson’s will offer drink and
food specials to customers on several evenings during the week. The Saskatchewan Liquor and Gaming
Authority (SLGA) will be issuing the liquor license.
A further detailed list of the items and specials that Pete Peterson’s will provide can be found in
Appendix A.
2.5 Quality Control
Pete Peterson’s will abide by all rules and regulations enforced by the CFIA to ensure that customers are
receiving food that meet the safety standards. Pete Peterson’s will also abide to the rules and
regulations established by the SLGA. A key aspect of the business is to provide customers will a quality
nightlife experience. However, it is crucial that this experience is provided in a safe manner for the
benefit of the customer. To ensure that customers are satisfied with their products, service, and overall
experience, Head Manager Robin Mkangwana will coordinate with all employees interacting with
customers to gain their feedback on a regular basis.
2.6 Supply Analysis
Pete Peterson’s will have five key suppliers to provide the essential materials necessary for operations.
Russell Food Equipment LTD. in Saskatoon will supply all the general cooking equipment. For the food
inventory, Drake Meats will supply all the beef and pork needed for the menu. Drake Meats is located
approximately 10km south of Pete Peterson’s, so they are more accessible compared to other potential
suppliers. As well, they are a trusted and well respected business within the community and surrounding
area, which will help customers feel ensured that they are receiving a quality product. The remaining
food inventory will be supplied by Gordon Food Service in Saskatoon. The SLGA will supply all the
alcohol available, as well as assist in providing the VLTs. Utilities, such as electricity, natural gas, and
water, will be provided by SaskPower and SaskEnergy for Pete Peterson’s.
2.7 Planned Capital Budget
The maximum seating capacity will be 71 people. With a total of 8 employees on staff, there should be a
sufficient amount to meet the demand of full capacity. The scheduling of each position is further
displayed in Figure 9: Employee Scheduling.
Figure 5: Total Capital Asset Costs
Asset
Land (23,000 square feet)
Building (4,000 square feet)
Equipment, Furniture, and Fixtures
Total Capital Asset Costs
Year 1
(2016)
$45,000
$600,000
$105,000
$750,000
Year 2
(2017)
$0
Year 3
(2018)
$0
Year 4
(2019)
$10,000
$10,000
Year 5
(2020)
$0
Figure 6: Cost of Goods Sold
Gross Profit Margin
Food
Alcohol
Total COGS
60%
77%
Year 1
Year 2
Year 3
Year 4
Year 5
(2016)
(2017)
(2018)
(2019)
(2020)
$155,938 $171,025 $184,065 $198,100 $233,511
$48,281 $52,952 $56,989 $61,355 $72,298
$204,218 $223,976 $241,055 $259,435 $279,217
Figure 7: Operating Expenses
Advertising
Electricity
General Supplies
Insurance
Miscellaneous
(based on Sales)
Natural Gas
Property Taxes
Repair/Maintenance
Water
Salaries/Wages
Employee Benefits
Capital Cost Allow.
Debt Interest
Total Expenses
Year 1 (2016)
$3,840
$13,000
$1,000
$5,000
$5,998
Year 2 (2017)
$3,567
$13,325
$1,025
$5,125
$6,578
Year 3 (2018)
$3,656
$13,658
$1,051
$5,253
$7,079
Year 4 (2019)
$3,748
$14,000
$1,077
$2,384
$7,619
Year 5 (2020)
$3,841
$14,350
$1,104
$5,519
$8,200
$2,000
$2,000
$1,600
$1,000
$251,368
$35,091
$22,500
$24,500
$368,537
$2,050
$2,050
$1,640
$1,025
$257,652
$35,968
$42,420
$23,365
$395,790
$2,101
$2,101
$1,681
$1,051
$264,094
$36,867
$37,699
$22,172
$398,464
$2,154
$2,154
$1,723
$1,077
$270,696
$37,789
$36,722
$20,921
$403,113
$2,208
$2,208
$1,766
$1,104
$277,463
$38,734
$36,126
$19,606
$408,388
Figure 8: Net Working Capital
Account
Inventory
Accounts Payable
Year 1 (2016)
$5,673
($8,564)
Year 2 (2017)
$6,222
($9,348)
Year 3 (2018)
$6,696
($10,028)
Year 4 (2019)
$7,207
($10,759)
Year 5 (2020)
$8,495
($11,545)
The Cash Conversion Cycle will be equal to -4 days. With the combination of food and alcohol, cash will
be held up in inventory for 10 days. Cash will be held up in accounts payable for an average of 14 days,
as well. The inventory average is higher than common averages in the industry due to our location
relevant to suppliers. With Drake Meats located close to Pete Peterson’s, as well as relationship we will
build amongst one another as locally supportive businesses, cash can be held in account with them as
long as 30 days. Accounts Payable with Gordon Food Services is negotiated at 14 days. There will be no
credit issued to customers, so the collection period will be equal to 0.
3.0 Human Resources Plan
3.1 Organizational Structure
Head
Manager
Cooks
Servers
Bar
Supervisor
Bartender
As part-owner and head manager, Robin is at the top of the hierarchy, where all cooks, servers, and the
bar supervisor would answer to Robin. There will be one full-time cook that could establish authority
over the two part-time cooks. With this, Robin will be able to focus most of his attention on the front of
house. The one full-time bartender would mainly answer to the bar supervisor.
3.2 Job Descriptions
Head Manager
As Head Manager, Robin would lead in all day-to-day activities and will aid in making the final decision in
all crucial aspects of the operations, along with the other equity shareholders, and execute on these
decisions. Responsibilities for the Head Manager include:
•
Recruit, select, and compensate employees
•
Order and manage all inventories
•
Manage financial and accounting measures
•
Maintain a positive atmosphere throughout the restaurant/bar
•
Assist any employee when necessary
•
Supervise and schedule all staff
•
Coordinate and perform opening and closing duties
Bar Supervisor
There will be one full-time Bar Supervisor. Responsibilities for the Bar Supervisor would include:
•
Assist bartender in providing drinks and filling food orders
•
Maintain quality control of beverages
•
Perform opening and closing duties for the bar area
Bartender
There will be one full-time bartender on staff. Responsibilities for the bartender would include:
•
Provide drinks and fill food orders
•
Maintain organization and restock bar supplies
•
Maintain cleanliness of the bar area
•
Assist with opening and closing duties for the bar area.
Cooks
There will be two part-time and one full-time cooks on staff. Responsibilities for the cooks would
include:
•
Prepare and fill food orders
•
Maintain organization and restock food inventories
•
Maintain cleanliness in the kitchen area
•
Assist with opening and closing duties for the kitchen area
Servers
There will be one part-time and one full-time servers on staff. Responsibilities for the servers would
include:
•
Respectfully greet and interact with customers
•
Take and deliver food orders
•
Handle payments of the served customers
•
Clean respective sections after customers leave
•
Assist with opening duties
The following table shows the times of each employees’ shift on each day of the week for the first year
of operations.
Figure 9: Employee Scheduling
Head
Manager (1)
Sunday
10:00am 6:00pm
OFF
Monday
10:00am –
3:00pm;
5:00pm –
8:00pm
3:00pm –
9:00pm
Tuesday
10:00am –
3:00pm;
5:00pm –
8:00pm
3:00pm –
12:00am
Wednesday
4:00pm –
12:00am
Thursday
4:00pm –
12:00am
Friday
10:00am –
2:00am
Saturday
10:00pm –
2:00am
3:00pm –
10:00pm
3:00pm –
12:00am
8:00pm –
2:00am
8:00pm –
2:00am
OFF
6:00pm –
12:00am
OFF
OFF
3:00pm –
12:00am
4:00pm –
9:00pm
10:00am –
4:00pm;
4:00pm –
8:00pm
OFF
3:00pm –
1:00am
10:00am –
8:00pm
6:00pm –
12:00am
Bar
Supervisor
(1)
Full–time
Bartender (1)
Full-time
Cook (1)
Part-time
Cook (2)
1:00pm –
9:00pm
10:00am –
6:00pm
6:00pm –
9:00pm
5:00pm –
12:00am
1:00pm –
9:00pm
10:00am –
1:00pm
Full-time
Server (1)
Part-time
Server (1)
10:00am –
5:00pm
5:00pm 9:00pm
3:00pm –
11:00pm
OFF
OFF
10:00am –
4:00pm;
4:00pm –
9:00pm
3:00pm –
11:00pm
OFF
10:00am –
4:00pm; 4:00pm
– 9:00pm
10:00am –
4:00pm
4:00pm –
10:00pm
10:00am –
7:00pm
5:00pm –
9:00pm
10:00am –
4:00pm
4:00pm –
8:00pm
4:00pm –
9:00pm
9:00pm –
12:00am
4:00pm –
12:00am
The following table shows the amount of projected customers on each day of the week in key hourly
ranges. This table will help display the decision behind hiring the amount of staff above, and their
weekly hours.
Figure 10: Customer Projections
11:00am
– 1:30pm
1:30pm –
5:00pm
5:00pm –
7:00pm
7:00pm Close
Total
Sunday
(open until
8:00pm)
28
Monday
(open until
11:00pm)
20
Tuesday
(open until
11:00pm)
20
Wednesday
(open until
11:00pm)
20
Thursday
(open until
11:00pm)
24
Friday
(open until
1:00am)
28
Saturday
(open until
1:00am)
38
24
14
14
14
14
14
26
18
26
30
30
40
42
40
6
14
14
25
16
50
38
76
74
78
89
94
134
142
3.3 Wage/Salary Costs
The Head Manager (Robin) and the Bar Supervisor will receive annual salaries, while the other
bartender, all cooks, and servers will be paid based on wages. All employees will be receiving the legal
employee benefits. These benefits are included in the table in Figure 7: Operating Expenses.
Figure 11: Employee Salaries and Wages
Head Manager
Bar Supervisor
Bartender
Cooks (3)
Servers (2)
Total Cost
Year 1 (2016)
$45,000
$40,000
$32,640
$86,352
$47,376
$251,368
Year 2 (2017)
$46,125
$41,000
$33,456
$88,511
$48,560
$257,652
Year 3 (2018)
$47,278
$42,025
$34,292
$90,724
$49,774
$264,094
Year 4 (2019)
$48,460
$43,076
$35,150
$92,992
$51,019
$270,696
Year 5 (2020)
$49,672
$44,153
$36,028
$95,316
$52,295
$277,463
3.4 Human Resources Policies
Upon being hired, new employees will go through a one week training process. In this process, they will
follow established staff members of the same position. By following established staff during their shift,
they will be able to recognize the key actions of the position and understand how to execute
accordingly. In order to get further familiarized with the food menu, new servers will be able to get one
free meal from Pete Peterson’s at the beginning their tenure, but must select a different item every
shift.
All tips made by the servers and bartenders will be equally distributed. The servers and bartenders will
divide 70% of the tips amongst themselves. The other 30% will go to the kitchen staff. The servers and
bartenders will also be required to wear a uniform during their shifts. As sales increase, we will provide
jerseys to these employees to wear on specified game days. The cost of the jerseys will be accounted for
in the miscellaneous variable costs expense account, which can be seen in 2.7.3 Operating Expenses.
4.0 Marketing Plan
“The spot that offers multiple experiences”.
Pete Peterson’s will be known as the place where the big sports fan can watch their favorite team and
the nightlife seeking individual can let loose for an evening in Lanigan. As well, Pete Peterson’s will
provide a dining experience that families can enjoy and appreciate. Pete Peterson’s will ensure that
customers are gaining the experience that they desire through consistently providing a quality product,
substantial service, and the appropriate atmosphere on a day-to-day basis.
4.1 Target Audience
Pete Peterson’s will target a variety of potential customers. First, the sports fan who enjoys spending
their leisure time watching sporting events with an intensity and passion. Second, the socializer who
needs a bar/pub setting for an evening. Finally, young to mid-aged families where the children would
range from 6 to 18 years old, and the parents from 24 to 45 years old. These families would appreciate
receiving a quality meal that they don’t have to worry about preparing themselves. Although these
families would be a target market for the dining experience, Pete Peterson’s would not be exclusive to
only these types of customers.
4.2 The Marketing Mix
Product
Sports Fanatics
Pete Peterson’s wants to provide the big sports fan with an experience where they feel as if they are at
the actual sporting event. With a welcoming atmosphere, where a large amount of fans can come
together and indulge in the games being played, this desired experience will be fulfilled. Along with the
same quality service provided by the staff on a regular basis, and the variety of domestic, premium, and
imported beers available, Pete Peterson’s will become the only option for sports fanatics in Lanigan.
The Socializer
Once the big game is over, Pete Peterson’s will become a suitable location for the nightlife crowd. The
open concept of the building will provide space for these individuals to relax and let loose. Pete
Peterson’s will be able to accommodate these individuals with the variety of beverage items available,
such as beer, Caesars, coolers, and cocktails. The “after hours” atmosphere will be perfect for the
socializer.
Young/Mid-Aged Families
Aside from the sports and nightlife atmospheres, Pete Peterson’s wants to provide a dining experience
that would be suitable for families as well. This experience will be achieved by providing a variety of
quality, and well-prepared foods, such as sandwiches, burgers, and deluxe entrees, as well as a kid’s
menu. In order to ensure these customers are satisfied, the staff must provide an enjoyable and
memorable service as well.
Place
Pete Peterson’s will be located right along Highway #16 on the south west corner of Lanigan. With being
located right along the highway, it will be more easily accessible to customers coming from surrounding
areas. Also, with an appealing store front and adequate signage, Pete Peterson’s will be highly visible for
regular highway traffic. There is a small hotel right beside this location, so these outside customers could
easily spend the evening if need be. This location will also be adequate for accessibility for residents of
Lanigan as well.
Price
Pete Peterson’s will use a competitive-based pricing strategy. Although each competitor does not
provide all the offerings that Pete Peterson’s does, by combining all offerings from all competitors the
prices for items that Pete Peterson’s can be determined. In other words, the alcohol prices from the
competitive bars will be evaluated, the appetizer, sandwich, and burger portion of the food menu from
select bars and restaurant, and the remaining portion of the food menu from the restaurants will be
evaluated as well. The competitive advantage will be maintained by offering food and drink specials to
customers on certain nights of the week, and for special sporting events in order to help retain
customers. For example, Wing Night Wednesday, where customers will receive an order of wings and
pitcher of beer on discounts. Each night would attempt to focus on one of the target markets. For
example, Ladies Night on Fridays, where the socializing woman would receive a discount on dips and
cocktails.
Promotion
As Pete Peterson’s offers food and drink specials as a pricing strategy to maintain the competitive
advantage, it will also be used as a promotional strategy to entice customers to continue to come into
the building regularly. In order to reach the target markets within Lanigan and the surrounding area,
communication channels such as newspaper, flyers, radio, and Facebook will be used. The Lanigan
Advisor distributes a weekly newspaper to subscribers. Most of the subscribers to the newspaper live in
or around town. To promote food and drink specials, flyers placed at designated local businesses, as well
as campaigns on Humboldt’s Bolt FM would help customers become more informed on what Pete
Peterson’s has to offer and which specials may be suitable for them. The radio campaign would only run
for the first six months of operations as an awareness tactic. Pete Peterson’s will also use Facebook to
interactively communicate with customers.
Pete Peterson’s would want to create greater visibility within Lanigan by being highly involved in the
community. A fitting way to increase community involvement would be to sponsor local sporting
activities. Examples would include the local senior and minor hockey teams, the high school football and
volleyball teams, and donations towards annual golf tournaments. Through these communication
channels, high community involvement, and meeting the needs of the target markets, Pete Peterson’s
hopes to generate positive feedback from the current customers. These customers can entice more
potential customers to come into the building through word of mouth that exemplifies the quality
products, substantial service, and matchless experience offered every single time. Although these
promotional strategies are intended to get customers to continue coming into the building, a food take
out menu will be available to those who decide they would rather enjoy their meal at home.
4.3 Competitive Analysis
Pete Peterson’s competes with two types of businesses: Bars and Restaurants. With the bars, the Lagana
Hotel & Bar is located in Lanigan, while the others are within a 25km radius. As well, all of the bars are
located along Highway 16. All of the restaurants are located within Lanigan. The two following tables
describe the offerings of each business in further detail.
Figure 12: Competitive Bars
Bar
Lagana Hotel & Bar



Jansen Hotel & Steak Pit




Hwy 16 Bar & Grill



Plunkett Hotel Bar & Grill



Product
Variety of beers on
tap and bottles
Hard Liquor
Light snacks (chips,
nuts, beef jerky, etc.)
Variety of beers on
tap and bottles
Hard Liquor
Appetizers
Entrée menu (during
special events)






Variety of beers on
tap and bottles
Hard Liquor
Appetizers


Variety of beers on
tap and bottles
Hard Liquor
Appetizer and Burger
Menus




Service
No servers
Lack of customer
interaction from
bartenders
Drinks are presented
to customer
expectation
One or two servers
per night
Customer interaction
from bartenders and
servers
Meals and drinks are
prepared and
presented to
customer expectation
No servers
Customer interaction
from bartenders
Appetizers and drinks
are prepared to
customer expectation
One or two servers
and cooks per night
High customer
interaction from
servers
Meals and drinks are
prepared to customer
expectation









Atmosphere
Generally a sitdown/relaxed type
of atmosphere
Occasionally
provides more of a
nightlife type of
experience
Sit-down/relaxed
type of
atmosphere
Several TV’s
available for
viewing sporting
events
Occasionally
provides a dining
experience that
can be suitable for
families
Sit-down/relaxed
type of
atmosphere
Sit down/relaxed
type of
atmosphere
Occasionally
provides more of a
nightlife type of
experience
Provides a dining
experience;
however may not
be suitable for
families
Figure 13: Competitive Restaurants
Restaurant
Wong’s Restaurant


Product
Predominantly
Canadian-Chinese
food
No alcoholic
beverages



Subway (Franchise)

Predominately
sandwiches and
other items that
would be
appropriate for
lunch meals



King of Pizza


Lanigan Golf & Country
Club (Hours of operations
are only during the
summer months)


Predominately
pizza, with a
variety of side dish
items
No alcoholic
beverages

Food menu offers
appetizers,
sandwiches,
burgers, and a
limited amount of
entrée options
Alcohol provided
includes bottles of
beer and several
options for hard
liquor




Service
Typically one
server per shift
Low customer
interaction from
servers and
management
Meals are prepared
to customer
expectation
Two to four
“sandwich artists”
per shift.
High customer
interaction, but
only for short
periods of time
Meals are prepared
and presented to
customer
expectation
Food is presented
over the counter
Low customer
interaction
Meals are prepared
either meeting
customer
expectation or
below
Customer
interaction from
servers
Meals are wellprepared and
drinks are provided
to customer
expectation








Atmosphere
Sit down/relaxed
type of
atmosphere
Provides a family
friendly dining
experience
Customers are
expected to order
food, pay and
leave; however
there is the option
of staying in, with
minimal seating
availability
Provides a family
friendly dining
experience
Customers are
expected to order
food, pay and
leave, with in store
seating available
The restaurant
does not provide
any memorable
experience for
customers
Sit down/relaxed
type of
atmosphere
Provides a family
friendly dining
experience;
however older age
demographics tend
to be the typical
customer
The key aspects that differentiate Pete Peterson’s from the competitors is based on two criteria. First,
with a variety of beer on tap and bottles, hard liquor, and a food menu that includes appetizers,
sandwiches, burgers, deluxe entrees, and kid’s options, Pete Peterson’s offers a wider selection than any
other business to be considered a competitor. The second criteria involves the service that is provided,
as well as the experience/atmosphere that is demonstrated. The Positioning Map as follows helps to
illustrate these two criteria in relation to the competitors.
Interactive
Figure 14: Positioning Map
Pete
Peterson’s
Variety of Food and
Drink
Vs.
Jansen
Subway
Plunkett
High
Low
Service and
Experience
Lagana
Hwy 16
LG&CC
Wong’s
King’s
Low-Key
4.4 Marketing Budget
As stated earlier, Pete Peterson’s plans to use print media, radio campaigns, social media, and
sponsorships/donations as part of the promotional strategy. The following table displays 5 year
estimates of the marketing budget.
Figure 15: Estimated Marketing Budget
Total Budget
Year 1 (2016)
$3,840
Year 2 (2017)
$3,567
Year 3 (2018)
$3,656
Year 4 (2019)
$3,748
Year 5 (2020)
$3,841
4.5 Revenue Projections
Pete Peterson’s bases revenue projections on the amount of customers that is expected to be served
daily on average, which has been determined by estimating the amount of customers to come in on
hourly ranges each day of the week, including the food and drink specials listed in Appendix A. The
following table demonstrates these estimates.
Figure 10: Customer Projections
11:00am
– 1:30pm
1:30pm –
5:00pm
5:00pm –
7:00pm
7:00pm Close
Total
Sunday
(open until
8:00pm)
28
Monday
(open until
11:00pm)
20
Tuesday
(open until
11:00pm)
20
Wednesday
(open until
11:00pm)
20
Thursday
(open until
11:00pm)
24
Friday
(open until
1:00am)
28
Saturday
(open until
1:00am)
38
24
14
14
14
14
14
26
18
26
30
30
40
42
40
6
14
14
25
16
50
38
76
74
78
89
94
134
142
For the first year of operations, Pete Peterson’s expects to receive 98 customers per day on average.
The amount of customers is multiplied by the average amount that will be spent per customer to
determine revenue. For the first year of operations, the average amount spent per customer will $17.
The following table displays 5 year estimates for revenue projections.
Figure 16: Estimated Revenue Projections
Food
Alcohol
Total Revenue
Year 1 (2016)
$389,844
$209,916
$599,760
Year 2 (2017)
$427,561
$230,225
$657,787
Year 3 (2018)
$460,163
$247,780
$707,943
Year 4 (2019)
$495,250
$266,673
$761,924
Year 5 (2020)
$533,013
$287,007
$820,020
From Year 1 to Year 2, Pete Peterson’s will see an increase in total revenue of 7%. From Year 2 to Year 5,
the increase in total revenue will drop to 5% for each year. As well, there will be inflation of 2.5% each
year on the amount spent per customer.
4.0 Financial Plan
The following is a summary of the financial plan. Refer to Appendix B for all financial projections.
4.1 Financing
Pete Peterson’s will need to obtain $760,000 in financing to cover the total capital asset costs. The debt
to equity ratio is 64%, where $490,000 is borrowed from the bank, and $270,000 will be raised through
equity. Robin’s sister (Haley) and her husband (Kyle) will be co-signing on the loan. Haley and Kyle own
Subway franchises in Lanigan and Humboldt, which has given them the ability to have a desirable
relationship with the bank. With Haley and Kyle co-signing on the loan, we have projected that we will
be able to receive the loan on a 5% interest rate.
4.2 Dividend Payout Structure
Dividends will be paid out when the cash balance is greater than $2,000, so they are projected to be
paid out by Year 2. The following table of the Retained Earnings Accounts displays the dividend payouts
for all investors.
Figure 17: Retained Earnings Accounts
Year 1
$23,494
$23,494
Beg. RE
Net Income
Dividends
End. RE
Year 2
$23,494
$33,078
$34,178
$22,394
Year 3
$22,394
$59,529
$51,890
$30,033
Year 4
$30,033
$86,457
$72,399
$44,092
Year 5
$44,092
$115,201
$85,162
$74,130
4.3 Investment Analysis
The equity investment totalling $270,000 will all be provided by external investors. Three investors will
provide $90,000 each, where Robin will not be providing any funds. In order for the investors to get a
return on their investment in a reasonable amount of time, as well due to the valuation of the business
set at $379,000, each investor will receive 27.5% equity in return for their investment. This will leave
Robin with 17.5% equity in the business. The following tables display Robin’s annual compensation and
each investor’s return.
Figure 18: Robin’s Compensation
Owner’s Compensation
(17.5%)
Annual Salary
Dividends
Total Compensation
Year 1
Year 2
Year 3
Year 4
Year 5
$45,000
$45,000
$46,125
$5,981
$52,106
$47,278
$9,081
$56,359
$48,460
$12,670
$61,130
$49,672
$14,903
$64,575
Figure 19: Individual Investor Return
Investor
Return
(27.5%)
Dividends
Share of
Terminal
Value
Total Return
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Total
Dividends
-
-
$9,399
-
$14,270
-
$19,910
-
$23,420
$115,618
$25,617
-
$92,616
($90,000)
$0
$9,399
$14,270
$19,910
$139,037
$25,617
If we were to sell Pete Peterson’s in Year 5, each investor would receive just under $140,000, which
includes their dividends for that year. Upon calculating dividends past Year 5, each investor would
receive just over $92,000 by Year 6, which suggests this is the time that they receive a full return on
their $90,000. As well, Pete Peterson’s has a required ROI at 19%. Based on the calculations at base
case, this scenario produces a return of 29.6%. These calculations help to justify Pete Peterson’s
feasibility.
With these equity disbursements, Robin and the three investors would act as a Board of Directors for
Pete Peterson’s. They will be in charge of making major decisions involved with the business, then Robin
would be responsible for adequate execution as Head Manager.
4.4 Break-even and Sensitivity Analysis
The following scenario analyzes can show the importance of the number of customers consistently
coming into Pete Peterson’s. Specifically, the sensitivity analysis shows that the amount these customers
spend is a key factor to success.
Figure 20: Net Income Breakeven
Number of Customers per
day
Net Income Breakeven
140
120
100
80
116
121
105
110
91
96
94
92
91
1
2
3
Year
4
5
98
60
40
20
0
Following the first two years of operations, Pete Peterson’s continuously grows further from the breakeven points each year, which is based on the number of customers per day. We are able to maintain
healthy cash flows because we are receiving enough cash from customers to pay suppliers. This
contributes to the ability to maintain above the break-even points.
Figure 21: Sensitivity Analyzes
Customers/Day
70
80
90
98
110
120
130
Average Net Income
BROKE
BROKE
$30,825
$63,552
$112,642
$153,551
$194,460
Average Purchase Price/Customer
14
15
16
17
18
19
20
Average Net Income
BROKE
$16,386
$39,969
$63,552
$87,135
$110,717
$134,300
The increase or decrease of the amount of customers per day has a substantial influence on our average
net income. With these projections Pete Peterson’s must put strong consideration on initially getting
customers through the door, as well maintaining customer retention. Although fluctuations of the
average price that each customer spends doesn’t have as large of an impact on net income, it is still
desirable that customers spend $17 or more at a base case of customers set at 98.
6.0 Summary
Through the calculated financial analysis, Pete Peterson’s appears to be feasible. With three investors
providing $90,000 for 27.5% equity in the business, they will be essentially guaranteed a return on their
investment by Year 6 of operations, at least. The most critical factor is to be above the break-even point
for each year based on the number of customers per day. Although the first two years of operations lie
close to the break-even, Pete Peterson’s continuously grows further and further from those points.
With this, the most critical factor is the amount of customers that Pete Peterson’s can get through the
door on a regular basis. Implementing our marketing strategies will be crucial to achieve this goal. Aside
from that, we need to be able to provide the appropriate atmosphere, experience and product on a
regular basis. Through the marketing and the service/product provided, we will be able to build
customer loyalty and a positive reputation, specifically in Lanigan and the surrounding area.
Pete Peterson’s is going to be known as “the spot that offers multiple experiences” within Lanigan. It will
be the spot where the sports fanatic can indulge in any sporting event, the socializer can let loose for an
evening, and importantly, where families can enjoy a well-prepared meal with exceptional service that
will create the appropriate family-friendly atmosphere. There is recognition that there is a need for this
type of business in Lanigan to provide for residents, as well as those in surrounding communities. The
most important initiative of Pete Peterson’s is to give back to this community.
Appendices
Appendix A
FOOD ITEMS
Appetizers
Sandwiches
Burgers
Wings (1lb)
($5.50)
Clubhouse
($7.50)
Sliders (3)
($7.25)
Chicken Breast
($8.25)
Bacon
Cheese
($8.00)
Mushroom
($8.00)
Dry Ribs
($6.25)
Chicken Wrap
($7.00)
Loaded
($8.00)
Mashed Potatoes
Chicken Fingers
(4)
($4.00)
Mozzarella Sticks
(6)
($3.00)
Onion Rings
($3.00)
Pulled Pork
($9.25)
Onion Ring
($8.50)
Baked Potato
Sausage Smokies,
Perogies ($9.00)
Beef Dip
($9.50)
Chicken
($8.50)
Mozzarella Sticks
Steak
($9.75)
Mac and
Cheese
($8.75)
Onion Rings
Poutine
($4.50)
Nachos
($6.00)
Dips
($6.75)
Mac and Cheese
Balls (8)
($3.25)
Deep Fried
Perogies (6)
($3.50)
Side Dishes
(with Sandwiches and
Burgers)
French Fries
Sweet Potato Fries
Soups
Salads
Vegetables
Rice
Entrees
Kid’s Menu
Steak, Potato,
Vegetables
($13.25)
Chicken, Rice,
Vegetables
($12.50)
Lasagna, Garlic Toast
($10.25)
Dry Ribs, Caesar Salad
($8.00)
Grilled Cheese,
French Fries
($5.00)
Chicken Fingers,
Mozzarella Sticks
($5.75)
Slider, French
Fries
($5.25)
Lasagna, Garlic
Toast
($6.25)
Macaroni and
Cheese ($4.00)
Fish, French/Sweet
Potato Fries
($8.00)
Poutine and
Carrot Sticks
($5.00)
DRINK ITEMS
Beer (On Tap)
Canadian
(16 oz Pint – $6.00)
(60 oz Pitcher - $13.00)
Coors Light
(16 oz Pint – $6.00)
(60 oz Pitcher – $13.00)
Pilsner
(16 oz Pint – $6.00)
(60 oz Pitcher - $13.00)
Bud Light
(16 oz Pint – $6.00)
(60 oz Pitcher - $13.00)
Kokanee
(16 oz Pint – $6.00)
(60 oz Pitcher – $13.00)
Great Western Original 16
(16 oz Pint - $7.50)
Alexander Keith’s
(16 oz Pint – $7.50)
Strongbow
(16 oz Pint - $7.50)
Shock Top
(16 oz Pint – $7.50)
Coors Banquet
(16 oz Pint - $7.50)
Beer
(Bottles)
Canadian
($4.25)
Hard Liquor
Non-Alcoholic
Caesars
($5.50)
Pop
($1.75)
Coors Light
($4.25)
Coolers (Smirnoff Ice,
Twisted Tea, Palm Bay)
($5.00)
Cocktails (Martinis, Bellinis,
Daiquiris, Sangrias)
($6.25)
Hi-Ball Fish Bowls
($11.25)
Juice
($1.25)
Pilsner
($4.25)
Bud Light
($4.25)
Kokanee
($4.25)
White/Chocolate Milk
($1.25)
Coffee, Tea
($1.00)
SUPPER AND DRINK SPECIALS
All supper and drink specials will be applicable from the time the bar opens to the time the kitchen
closes. For example, Wednesday Wing Night would run from 4:00pm until 8:00pm. The drinks offered on
these days would be on discount for customers after this time until close. For example, the pitcher of
domestic beer offered on Wednesday Wing Night would be $10.00 from 8:00pm until close. Once the
kitchen closes and the bar is the main service to customers, Pete Peterson’s will have a bell that any
customer can ring in order to offer to pay for a round of drinks to everyone in the bar.
Monday
Gentlemen’s Night
 3 sliders with a
pint of
premium and
imported beer
($12.25)
Tuesday
Group Night
 Platters at
half off
regular price
that consist
of wings, dry
ribs,
mozzarella
sticks, and
onion rings
($7.50)
Wednesday
Wing Night
 1lb of
wings and
a pitcher
of
domestic
beer
($14.50)
Thursday
Entrée Night
 Choice of
entrée for
25% off
regular
price
Friday
Ladies Night
 Ladies are
offered a
special on
one of the
dips and a
cocktail
($9.00)
Saturday
Fish and Chip Night
 Order of fish
and fries with a
bottle of beer
of choice
($9.50)
LUNCH SPECIALS
All lunch specials will be offered from 11:00am until 2:00pm as follows:
Friday
Dry Ribs and Caesar Salad
Entrée
($7.00)
Saturday
Mac and Cheese Burger with
the Poutine
($11.00)
Sunday
Clubhouse Sandwich, Soup of
the Day, and Choice of Potato
($8.00)
Other specials will be available upon different sporting events, such as Rider Game Days, NHL Stanley
Cup Playoffs, World Junior Hockey Championships, Primetime NFL Games, MLB World Series Playoffs,
NCAA Basketball March Madness Playoffs and PGA Major Tournaments. During these events we will set
up different games and contests, with the intent to further entertain customers and entice these
customers to continuously come through the door, as well as inform other potential customers of our
offerings. An example of a game that could be used during an event, such as Monday Night Football, is
called Shosha, which is the Japanese word for winner. Each customer will pick a piece of paper out of a
hat. Each piece of paper in the hat will have a play related to the football game that is being played. For
example, it could have touchdown for Team A, interception for Team B, etc. If one these plays occurs
and a customer has that play on the paper, they would yell Shosha. The first person to yell Shosha will
win a prize.
Appendix B: Financial Projections
All financial projections are shown in the Excel spreadsheet attached.