New Business
Hints & tips
IN ORDER TO ENSURE A WELL-RUN BUSINESS, WITH EFFICIENT USE OF
TIME AND RESOURCES, ALWAYS BE AWARE OF POTENTIAL PROBLEMS AND
RISKS. AIM FOR A GOOD FIT BETWEEN LOCATION, TARGET GROUP AND
CONCEPT.
01 | Personal motivation
In most cases, your personal motivation (rather than your training and work experience)
is the decisive factor for the successful launch of your outlet. So first ask yourself whether
this industry suits you. An ideal trade operator:
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Knows what he wants to achieve
Is prepared to give his all
Always keeps his promises
Is able to improvise
Can deal with time pressure and setbacks
Dares to take decisions and initiative
Sets realistic targets
Is capable of planning and organising efficiently
Knows how to interpret financial figures
Thinks in terms of solutions instead of problems
Has an eye for what’s happening on the market
Attaches great importance to customer satisfaction
Is a good negotiator
Source: Guidea 2012
If you lack certain qualities, draw up a plan to improve your performance in those areas or
think about how you can compensate.
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02 | Outlet profile
Ask yourself what kind of outlet you want to establish. This decision has a serious impact
on your location and target group. The example below illustrates the differences between
various types of outlets.
Drinking houses
• Lounge bar: in the centre of a large city, modern and clean interior, the ‘place to be’,
trendy nightlife audience, hip staff, higher price range
• Music bar: focussed on nightlife, colourful interior, weekend-oriented, energetic staff,
middle price range
• Local bar: in a small town, simple and sober interior, regular customers, manager
behind the bar, lower price range
Source: Guidea 2012
Eating houses
• Luxury restaurant: refined cuisine, quality label, limited menu, formal etiquette,
personal service, open at night, upper social class and business relations, higher price
range
• Tapas bar: foreign cuisine, small dishes and fingerfood, open at night, trendy and hip
audience, average price range
• Brasserie: standard cuisine, quick service, open during the day and at night, no
reservations, shoppers and families, lower price range
Source: Guidea 2012
Haven’t made up your mind yet? Check the overview of outlet profiles we have listed on
bar-expert.co.uk.
03 | Location
If you already have a location in mind, determine whether it is suitable for the new
business you want to launch. Points to consider:
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Capacity and lay-out of the building
Recognisability as on trade location
Position
Image of the neighbourhood
Presence of the target group in the region (composition of the population, business
parks, associations, educational institutions, shopping areas, attractions)
• Accessibility (both to suppliers and customers)
• Safety
• Presence of other outlets (Is there sufficient potential or are you entering a full
market?)
Inquire with the official bodies about possible plans for the future and options for
alterations, use of outdoor areas or events. Ask local authorities for a description of the
local on trade (number, profiles).
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Are you still looking for a location? First determine your minimum requirements in order
to filter the abundance of available buildings on the basis of fixed categories. On barexpert.co.uk we have listed a few websites offering on trade property.
Ask officially recognised experts (real estate brokers, consultants) for advice if you want to
buy on trade premises; always request offers from several parties.
When taking over another business you are often expected to pay goodwill based on
recent business performance, future expectations and the good reputation of the
business. Be critical and seek advice in these matters.
04 | Customer needs
Determine which types of customers you want your business to reach. Each target group
visits outlets for specific reasons; you can use this to your advantage. Generally, on trade
customers can be classified as follows:
Beverage consumers
• Explorers: new experiences, meeting people, unique locations, trying new drinks, just
dropping in, independent, adventurous
• Exclusives: standing out, networking, status, special music, stylish interior, highly
skilled, successful
• Thinkers: talking, sharing experiences, peaceful atmosphere, often with colleagues,
shorter visit, urban, intellectual
• Listeners: having a good time, being together, routine, intimate atmosphere, quiet,
small-scale
• Chatterers: meeting people, warm colours, pleasant music, child-friendly, regular,
social
• Partygoers: recreation, party or event, dancing, having fun, bustle, student, large
cities, exuberant, larger groups
Source: Guidea 2012
Food consumers
• Globetrotters: spontaneous, trying new dishes, total experience, seeing people, quick
service, large choice, exotic cuisine, optimistic
• Choosy customers: culinary, enjoying themselves, being seen, high quality, stylish
interior, prone to reviews, sufficient space, making an impression, highly skilled
• Connoisseurs: culinary, trying out, entire evening, special dishes, healthy and fresh,
intimate, explanations of ingredients, demanding
• Family eaters: environment-minded, healthy lifestyle, value for money, familiar
cuisine, homey atmosphere, small-scale
• Casual eaters: being together, romantic, informal, pleasant bustle, good price/quality
ratio, child-friendly, families
• Snackers: with friends, quick service, focus on quantity, relaxed atmosphere, easy
going
Source: Guidea 2012
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05 | Competitor research
The success of your outlet always depends on the position taken by your competitors.
Map the on trade market in your region, determining the number of companies, the
presence of concentration areas and the strengths and weaknesses of competitors. Points
to consider:
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Image
Number of customers
Situation
Capacity
Range of products
Price/quality ratio
Swiftness and friendliness of staff
Entertainment
Source: Guidea 2012
We have listed a useful tool when doing competitor research on bar-expert.co.uk.
06 | Unique Selling Points
The formula is the core of your business’s identity; it indicates what you offer, to whom
and why. One concept may include limited opening hours and a wide range of products,
various kinds of preparations and personal service, while another may focus on long
opening hours, a limited range of products and self service. When determining your
formula, always keep your customers’ wishes in mind and consider to what extent you
distinguish yourself in this respect. Do you offer something different than what’s already
available on the market? A useful tool to develop your concept is a marketing plan
describing the various marketing tools (also called the 6 Ps):
Place
The location where your business is established. Take into account situation, accessibility,
capacity and layout (also see tip 03). Pay attention to the routing in your establishment.
Make sure it is logical for both customers and employees.
Product
The range of food & drinks and, on a more abstract level, the degree of hospitality. Make
sure the product is aligned to the target group.
Price
The price level you apply. Take into account the cost price (what is the minimum price I
should charge?), the customer (what is the maximum price my target group is willing to
pay?) and the competition (what are others charging?).
Promotion
All activities you undertake to promote your business, such as a website, advertisements
or free publicity. Remember that promotion can be very important for starters in the on
trade market. Prepare an annual budget based on a few percents of the turnover. For
more information, take a look at our tool containing advice on promotion in the on trade.
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Personnel
Your staff. Market research shows that personnel is one of the decisive ranking factors
for customers of on trade outlets. Demand neatness and politeness from your staff. Also
provide a good mix of knowledge, experience, male and female staff, appearance and
age.
Presentation
The interior and exterior of your outlet. Consider the atmosphere, furniture, lighting,
flooring, facade, entrance, and outdoor area, as well as the menu and the choice of music.
07 | Inspiration tour
Search for outlets that inspire you based on your vision of a perfect outlet. Investigate
online and explore at home and abroad. You can visit outlets on your own or accompanied
by an architect or interior designer. First drop in on a more experienced operator with
a similar concept and experience the flow of the staff and the reactions of the guests
personally. Do you see anything that needs fixing? Try to come up with solutions. If you
have the opportunity, ask the manager some critical questions. Take notes and pictures.
It’s all about translating ideas to your own business. Aim to combine the strongest
elements of each outlet without copy-pasting. Use the checklist provided on bar-expert.
co.uk when you embark on your search.
For additional inspiration, we have highlighted two successful concepts on our website,
too.
08 | Opportunities and threats
You can determine the viability of your outlet by means of a SWOT analysis. A SWOT
analysis provides an overview of strengths, weaknesses, opportunities and threats.
Possible strengths are: a strong financial position, a large market share or a positive
image. Examples of weaknesses include an unprofitable product, a small market share
or a damaged image. Chances and opportunities focus on the external environment,
considering factors such as legislation, customer behaviour and market behaviour (also of
the competitors) and other social developments. This type of analysis gives an indication
of your points of improvement and your USPs (Unique Selling Points). It is recommended
to repeat this test on a regular basis as the weakness of one year will not necessarily be
identical to the weakness of the next, taking into account the experience gained over
time.
Source: Guidea 2012
09 | Sales estimate
Estimate when and how many consumers will visit your outlet and how much they will
spend. Schedule a number of day types (normal/busy week days, normal/busy weekend
days) and carefully write down how many guests you expect to have per time slot. Make
an estimate of the order per guest, taking into account dishes and drinks. The result
gives you a reliable turnover forecast. The tool provided on bar-expert.co.uk is a handy
instrument for this calculation.
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10 | Financial plan
Performing a financial analysis, you check the viability and profitability of your project.
Elements to be mapped:
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Investments (e.g. alterations)
Financing plan (e.g. mortgage, loans, own contribution)
Turnover forecast (e.g. drinks, cuisine); also see tip 09
Staff costs
Accommodation costs (e.g. rent, insurances)
Sales costs (e.g. decoration, music)
Operating costs (e.g. laundry, glassware)
Car costs
Depreciation costs
General costs (e.g. telephone)
Taken together, these items constitute the profit and loss account and the balance sheet
of your outlet. Ensure that your budget is not too tight: allow a buffer to offset possible
setbacks. Use the handy tool provided on bar-expert.co.uk to perform a financial analysis.
Seek the support of an accountant or bookkeeper when drawing up a financial plan.
Looking for a financial advisor? Go to the regular banks.
11 | Business plan
Draw up your business plan based on the above information. Key elements that need to
be discussed include:
Entrepreneur
Overview of your personal details as well as your qualities and vision as an entrepreneur
(see tip 01).
Market
Description of the place of business (also see tip 03), the target group (also see tip 03 and
tip 04) and the competition (see tip 05).
Business formula
Summary of your concept: what are you offering, to whom and why. Specify this
information in a marketing plan (also see tip 06). Possibly list a number of reference
companies that (partially) serve as an example for your outlet.
SWOT analysis
Description of the strengths, weaknesses, opportunities and threats of your business (see
tip 07).
Financial plan
Overview of all future investments, revenues and costs (see tip 09 and tip 10).
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The business plan is an important document not only for you as entrepreneur, but for
all parties involved in your undertaking. On the basis of this document the banks will
determine whether you quality for financing. On bar-expert.co.uk we provide a document
for drawing up a business plan for the on trade.
Seek the support of an accountant or bookkeeper when drawing up a financial plan.
12 | Legal requirements
One legal requirement for all businesses serving alcohol is a license. You can contact your
local authorities to obtain information and guidance on the application procedure. For all
other legal requirements, please seek advice from a suitably qualified professional.
13 | Performance tracking
Ensure you have sufficient data to periodically (daily, weekly or quarterly) check whether
the actual turnover and profit are in line with the set objectives. As such, you can check
whether the revenues suffice to pay the costs. For effective performance tracking it is
useful to analyse key figures. A number of examples are provided below:
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In general: number of visitors, turnover per capita, profit %
Beverages: gross margin, stock rotation, loss
Food: cost %, stock value, popular dishes
Personnel: labour productivity, days lost to illness, employment period
Marketing: top 10 of guests, advertising costs, customer satisfaction
Administration: liquid assets, outstanding accounts, return on investment
Source: Guidea 2012
Barexpert.co.uk provides you with practical key figures for on trade performance tracking.
Always ask yourself the following questions when assessing these figures:
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Why do we fail to reach the key figures?
What influence do I have on this in my capacity as trade operator?
What measures should I take?
What aspects are successful and is there still room for improvement?
What aspects are less successful and can/should they be stopped?
Ensure that team meetings are held on a regular basis; use these opportunities to draw
attention to the achievement of the targets. Monitor the action items voiced during
conversations and meetings. Translate the targets of the business as a whole to the
individual employee.
Source: Guidea 2012
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