Published on February 18, 2009
a Creative Hospitality Group company Business Plan Overview Concept Creative Hospitality Group, Inc. (CCHG) is a portfolio of companies based in Tallahassee, Florida with an income strategy of revenue diversification. The standout company in the portfolio is the Cocktail Experience Lounge, which will cater to the mature working professional between the ages of 25-54 years old. Concept is a green social and business space dedicated to sustainable hospitality; the establishment aims to meet the networking needs of the working professional by providing an atmosphere that is conducive to both social and professional interaction. The mission of the Group is to serve as the hub of business and social activity for the North Florida professional community. The urgent need for Concept is supported by Tallahassee’s risk of losing its creative class to a city with more appealing amenities. The Knight Foundation designated Tallahassee as a participant in its Knight Creative Communities Initiative to study the recent interest in the development of social entrepreneurs to promote community transformation based on Professor Richard Florida's creative class theory to stimulate economic development. Professor Florida designates the creative class as the group of thinkers, innovators and decision-makers who influence cultural phenomenon and impact business. Survey results for the Soul of the Community (SOTC) Gallup Poll of 26 Knight Foundation communities identified “the main driver of Tallahassee’s residents’ emotional engagement to be social offerings (such as entertainment venues for people to meet each other).” In the section that addressed citizen’s perception of the most important problem facing the community, Tallahassee led all other communities in its group with “need more entertainment/nothing to do/need more
a Creative Hospitality Group company activities” in its responses. Community aesthetics, that is, physical beauty and green spaces, were among the aspects that received high ratings for the area and should be leveraged, as they have an impact on the residents’ emotional connections as well. Concept will be the soul of the community. LaTanya White, the entrepreneur who is diligently working on filling the City’s need for such a venue, visualizes the establishment as a 4-story building that will seek Leadership in Energy and Environmental Design (LEED) certification to support sustainable hospitality. Concept’s position on sustainability and green operating is viewed as a grassroots extension of President Obama’s “New Energy for America” plan, steadfastly holding a position of energy efficiency and a minimized carbon footprint along with the creation of at least 25 ‘green’ jobs in the Tallahassee area. This also supports the City’s recent “Gold Certified Green City” award by the Florida Green Building Council, the first in the State to receive such recognition. The ideal location has been identified and is located in the Downtown Tallahassee cluster; it is a 15,000 square foot structure that is conveniently situated a half-mile from the State Capitol Building; the proposed site for the city’s Center for Performing Arts- a 3,000 seat facility and the designated site for Cascades Park. The facility is located at 115 W. Bloxham Street, Tallahassee, FL 32301 and is being offered by Commercial Consultants Corporation; it has been on the market for 5 years. Revenue diversification is the Group’s primary operating strategy by exploiting all available options for revenue per square foot. Six revenue streams have been identified in order to accomplish this strategy- advertising sales, space leased for shared business services, rental
a Creative Hospitality Group company bookings, For Tastemakers Only Membership sales, and food and beverage sales. The retail and office space being leased along with the membership fees generated will be structured in a way that absorbs approximately 10% of the business’ overhead expenses. Concept Creative Hospitality Group, Inc. will be a sustainable hospitality establishment that will support and maintain green operating. White’s current business venture, 71 Proof, will also fall under the CCHG, Inc. umbrella and will serve as the launching pad for the Cocktail Experience Lounge by leveraging the business’ current relationships in the Group’s success. The Cocktail Experience patron is between the ages of 25-54 years old, holds a professional career position and has obtained an advanced academic degree(s). They have disposable discretionary incomes upwards of $15,000 annually and are very technically inclined. Concept will specifically cater to and court this demographic as many other hospitality establishments court the more transient population. Anticipated marketing efforts will include focus groups and various advertising campaigns will be employed to enlist participants. Other marketing and promotional activities will include the development of a social networking website associated with the brand and the granting of exclusive, members-only status to loyal patrons. The lounge area will support social interaction with open, comfortable seating in addition to booths that allow a slightly more intimate level of social activity. It will be replete with a semi-exclusive For Tastemakers Only room, 115- where FTO is the social equivalent of VIP status. Concept is dimly lit with soft seating that includes poufs, banquettes and couches. The interior design theme is modern-traditionalist with a neutral color scheme highlighted with brightly colored accents. 115 is decorated with richer colors that evoke an intimate feel without feeling cramped.
a Creative Hospitality Group company The bill of fare for The Bistro will have organic food and beverages, aiming to meet the needs of the more health-conscious consumer. As Tallahassee is lacking in its offerings of meeting spaces and facilities available for rentals, the basement floor of Concept will be designed to support the inherent flexibility needed for such activities; it will serve as a space dedicated to providing green meetings for citizens and organizations in the North Florida area. The establishment will also be fitted with a roof-top garden area that will further support social networking. Concept is Tallahassee’s only creative hospitality establishment, where creative hospitality is the development of cocktail and food menus that are unique in style, design and manufacture using the farm-to-table theory of base ingredients in the creation of signature items. The menu is seasonal and cyclical, debuting at the beginning of the 3-month period and removed at the start of a new quarter. Concept will have a limited bill of fare that consists mainly of mezze, tapas, heavy hors d’ouevres and entree-sized salads along with speciality desserts and signature cocktails. Breakfast will be served at The Bistro only on Friday, Saturday and Sunday mornings from 1 am until 6 am. Sunday brunch will be available on selected special occasions and will operate from 10am to 2pm on specified dates. The breakfast check average is $8 with 2 anticipated turns for that daypart, where turns are defined as the number of times a new customer is seated in the restaurant during a specific meal service. The average check for a lunchtime meal at The Bistro is $12 and will be prepared only during the hours of 11am to 4pm, operating for a total of 312 days per year. The number of turns for the lunch meal is expected to 4; lunch is available Monday through Saturday at The Bistro. The tapas menu check average is $20 and is only available in the Cocktail
a Creative Hospitality Group company Experience Lounge from 5pm to 2am 7 days per week. The average beverage check is $10 with six turns projected; the preparation and service of these cocktails is available 365 days a year from 5pm to 2am, in accordance with Tallahassee City Ordinance. Concept’s Cocktail Experience Lounge will market itself as Tallahassee’s premier creative hospitality establishment, one that provides an atmosphere that caters to the mature professional by offering a level of service that is currently non-existent in the city. This product differentiation will be easily identified using carefully crafted marketing messages. Concept’s marketing strategy is to deploy full sensory branding; that is, each of the five senses will be engaged at the Cocktail Experience Lounge. Sight and touch will be engaged with the décor and design of the establishment; the food and beverage menu options will be associated with the guests’ sense of taste. Opportunities to socialize with peers and enjoy live musical performances are linked to the hearing sense and scent marketing will be employed to fully engage the Concept customer by creating emotional connections with the brand. ScentAir, a scent marketing solutions firm based in Charlotte, North Carolina and a leader in the industry, will be retained to pinpoint which scents will create the strongest emotional tie to the establishment. Using Kenneth Clow’s direction in the text he authored, The IMC Plan Pro Handbook, to conduct the competitive analysis for Concept it was determined that while there are over 100 bars and clubs that operate in Tallahassee, less than 20% of these establishments will be viable competitors for the venue. Tallahassee, with its two major universities and large community college, has an extremely transient population and most of these hospitality establishments cater to the students that comprise 30% of the city’s population. SOTC results also found that the 25-54 year old demographic are the
a Creative Hospitality Group company least engaged group in our City- a need Concept further aims to fill. Venues that consistently target Concept’s customer are listed below: 101 Mint Lounge - 2 Chez - Café Cabernet - Paradigm - Top Flight Club - The Winery at Red Bar - Wednesdays begin the weekend for many of these venues, which, unless they also operate as a dining establishment, are generally not open for operation Sunday through Tuesday nights. In efforts to establish Concept’s brand of creative hospitality, Sunday, Monday and Tuesday nights will be marketed as invite-only engagements by local celebrities, including well-connected political officials, decision-makers and influencers of the area. Concept will also differentiate itself by being operational 7 days a week, Sunday through Saturday. As Mondays and Tuesdays are typically the slower days for business, they will be designated as ‘reveal’ nights. The FTO: Cocktail Reveal will be the night that a new specialty cocktail recipe will debut at the Cocktail Experience Lounge and will be available as cocktail flights, or samples. It will be marketed as an invitation-only event “for tastemakers only.” In order to begin to achieve the FTO designation, customers will have to sign up on the Concept social networking website and create a profile. This profile will capture customer data on demographics, drink preferences, food preferences and will allow the customer to provide feedback to management. The customers will be tracked to as much detail as possible, including how often they visit the establishment, on what specific occasions and the duration of their visit; members with the most data collected will receive
a Creative Hospitality Group company the FTO designation and will become eligible to gain access to the most exclusive events at the establishment. White has set a soft opening date of Friday, November 27, 2009 as this date will allow for a 34 days of operations prior to the Grand Opening Event to be held on Thursday, December 31, 2009. The Grand Opening event will be marketed as Tallahassee’s Best New Year’s Eve Party and will include a special performance by one of the music industry’s most popular artists. The ceremony will be held in the Cocktail Experience Lounge at 6 o’clock in the evening and will be attended by local celebrities, loyal supporters and industry experts who have been selectively invited to attend. The National Restaurant Association (NRA) generates financial assumptions based on empirical evidence and industry averages. These assumptions have been used in the development of the financial plan for Concept Creative Hospitality Group, which includes the Start-Up Cost Analysis, Statement of Cash Flows, Income Statements, Balance Sheet and Fund Usage Analysis. The financial statements that have been prepared are properly aligned with the marketing and operating strategies set forth by Ms. White. They reflect data from the months of July 2009 through December 2009 (Year 0), as expenses will be incurred for those months since the first day of operation is November 27, 2009. The year 2010 marks the first full calendar and fiscal year of operation. The NRA estimates that, on average, a hospitality venue will only operate at about 67% of its seating capacity; this factor helps generate the estimates for food and beverage sales based on the number of seats, average meal price, number of turns per meal segment and number of days the
a Creative Hospitality Group company establishment operates. Startup costs are a function of the total sales figures and are impacted by various costs based on square footage. The $750,000 construction costs, $450,000 in décor costs and mortgage deposits of $275,000 are each dependent upon the total square footage of the establishment. Square footage is calculated by determining the number of seats needed per seating style. Office inventory, professional fees, pre-opening advertising costs, printing costs, uniform and miscellaneous costs were figures based on empirical data; the figures were given and add to the total startup costs of $2.69 million. The months of July through December 2009 reflects the near non-existing operating activities for the establishment. Financing activities for that same period show the most impact as the loan amount was awarded in the early part of the year. These finances went towards the investment activities used to secure the building, land and equipment for Concept. Upon achieving positive income gain in December 2009, the net income amount is categorized into short-term investment activities, working capital and retained earnings. The net cash flow for 2009 is $689,486.87. Figures of Years 2 and 3 reflect the decrease in financing activities as any further capital needed for growth will come from retained earnings and working capital for Concept. The balance sheet for Concept Creative Hospitality Group, Inc. demonstrates that the establishment’s major liquidity lies in the food and beverage inventory kept on hand. In 2010, the $674,521.09 of inventory accounts for over 60% of Concept’s current assets. This is important to note in the daily operations of the establishment in order to ensure that the proper number of inventory turns are conducted for the most efficient revenue generators. Of the total assets, the fixed building and land assets account for just under half of the total fixed assets contribution.
a Creative Hospitality Group company Long-term notes payable account for all of the establishment’s long term liabilities reflecting the loan amount granted by private investors. Maintaining a 30% food cost and a 20% beverage cost brings the total cost of sales to $901,541.93, generating $2.12 million gross profit on these sales with a margin of 70.36% in Year 1. Total operating expenses, including payroll at 25%, employee benefits at 5% and credit card fees at 2.5%- where each is determined as a function of total sales- amounted to $1,917,836.09. Income taxes payable, at 4% of the Earned Income Before Taxes (EIBT) of $507,566.51, totaled $145,216.16 leaving a net income amount of $362,350.36 for the first full operating year. The full business plan, including the complete marketing and promotional strategy along with all financial projections is available upon request. White is currently actively seeking investors to participate in the project. LaTanya White, MBA 1700 N. Monroe St, 11-171 Tallahassee, Fl 32303 www.71ProofLLC.com latanya@71ProofLLC.com 850.443.8544
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