Looking for a sports bar business plan? You're in the right place.
A sports bar plan has to answer the questions a bank, a landlord and an investor will ask. How much does it cost to open a room with thirty screens and a full kitchen? What does the summer lull do to cash before the first football Saturday? How much of the bill is food, and what do sports-package fees add? A blank template will not show you what a sensible answer looks like.
In this article we walk through a complete sample business plan for a sports bar and grill in Memphis, Tennessee, section by section. We cover the executive summary, the SWOT analysis and, above all, the financials.
Here's what you'll take away:
- The executive summary: see how to put a bar, a kitchen and a funding request on one page, so a reader knows what you are asking for within a minute
- The SWOT analysis: learn how to name a single-location, season-driven business's weak points honestly without putting a lender off
- The start-up budget: find out what a build-out, thirty screens and a first-year reserve add up to, so the opening does not run short
- The first year, month by month: spot the summer lull and the pre-opening months before you are in them, and plan cash around them
- The sports calendar and its costs: see how football, March Madness, group bookings and sports-package fees shape revenue and expense
- The five-year profit, cash flow and balance sheet, with prime cost: understand how food cost and payroll decide whether a sports bar makes money
- The downside case: have an answer ready for the "what if sales run 20% short?" question, with the steps the owner takes in response
If you're planning a bar or restaurant of your own, read this before you write yours. Pinnacle Sports Grill is fictional, so take what fits and change the rest.
In this plan
If you need a sports bar business plan template for your own plan, start it in the Toolkit.
Pinnacle Sports Grill: Kickoff Summary
Pinnacle Sports Grill is a big-screen sports bar and grill opening on March 1, 2027 in a leased, second-generation restaurant space of 4,800 square feet in Memphis, Tennessee. It seats about 140 and runs about 30 screens, with an audio feed the guest can pick at each booth. The kitchen is the larger half of the business: wings, burgers and a BBQ-influenced menu, served from 11 a.m. to close seven days a week. Marcus Hale, the founder, runs the floor and the books.
The business needs $840,000: $240,000 of Marcus's savings, $200,000 from four local investors at $50,000 each, and a $400,000 bank term loan. The money goes three ways: $437,000 for build-out and equipment, $83,000 for pre-opening costs and opening stock, and a $320,000 reserve held against the pre-opening months, the summer lull and a weak first season.
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Revenue | $1,090,600 | $1,724,300 | $1,907,100 |
| Net income after start-up costs | ($239,708) | $100,840 | $123,459 |
| Closing cash | $188,834 | $263,635 | $344,617 |
Year 1 holds two pre-opening months and ten trading months. The room averages 101 walk-in guests a day over its 306 open days in Year 1 and 137 in Year 3. Revenue follows the fixture list: October and November bring in about $150,000 each in Year 1, against $81,000 in July. Kitchen sales, dine-in food plus takeout, are 56% of Year 3 revenue and drinks are 34%, a higher food share than a drinks-led bar carries. Prime cost, the sum of direct costs and payroll, runs at 73% of revenue in Year 1 and about 65% from Year 2.
A second case cuts every revenue line by a fifth, every year. The owner holds back hires, trims part-time hours and the football-season crew, cuts marketing and his own pay, and pays no distributions. The business is back in profit in Year 3 on that footing, and cash stays positive at every month end in the first two years and every year end after.
The Room, the Screens and the Licenses
Legal name: Pinnacle Sports Grill, LLC, a Tennessee limited liability company. Owner-operator: Marcus Hale, with four minority investors. Premises: 4,800 square feet, about 140 seats, 24 stools at the bar, a small patio, about 30 screens. Hours: 11 a.m. to close, seven days, with the kitchen open until about midnight on game days. Stage: lease terms are being negotiated; the floor plan and kitchen layout are drawn.
What the room is for
Fans who want a screen for every game and a plate that matches the occasion. The room is built around sightlines: every seat has at least two screens in view, the sound is off on most of them, and the booths carry an audio control so a table can listen to its own game. The menu is wings (dry-rub and sauced), burgers, smoked pulled pork and rib tips, and sides, priced for a table of four to share.
Where the money comes from
| Line | What it is | Share of Year 1 revenue (rounded) |
|---|---|---|
| Food | Wings, burgers, BBQ plates, sides | 48% |
| Beer, wine and liquor | Draft, bottles, well and call liquor | 34% |
| Game-day takeout | Wings by the dozen, party trays, pickup | 9% |
| Group bookings | Parties of about 20 with a food package and a bar minimum | 7% |
| Cover charges and event nights | Ticketed fight and playoff nights, draft and trivia entries | 2% |
Alcohol licenses and sports rights
Selling beer, wine and liquor needs state and local permits. The rules differ by the type of permit and by the city, and they change, so Marcus confirms the current requirements with the Tennessee Alcoholic Beverage Commission and the local licensing authority before signing the lease. The plan carries $7,000 for permit and application costs as a planning figure and makes no claim about how many licenses exist or how long they take. The opening date depends on them: every month the doors stay shut costs about $69,000 of fixed running costs from the reserve.
Showing pay-per-view fights and out-of-market sports packages in a bar generally needs a commercial account with the provider, not a residential one. Providers price commercial accounts by quote, often by venue capacity, so the plan sets $40,000 in Year 1 and $50,000 in Year 3 for packages and event fees together. The bar gets written quotes before the lease is signed, because that line rises with seat count. If the quotes came in at double, Year 3 net income would fall from $123,459 to $97,374, and the bar would still be profitable with cash positive.
Memphis on Game Day
What the calendar does to a sports bar
Memphis has an NBA team and a Division I football program at the University of Memphis, draws fans of schools across the Southeast, and has no NFL team of its own. Sunday crowds therefore follow many clubs, which is why the room carries a screen for every game and does not rely on one house team. Football fills the room from September to January. March Madness and the NBA playoffs carry spring. June, July and August are the lull, when only baseball and the occasional fight night give people a reason to come.
The plan models that shape in the monthly Year 1 table. At a steady state the model puts July at 72% of a base month and November at 120%, a gap of about 40% on guest counts, and takeout swings further because wings follow the fixture list. Years 2 to 5 are annual and carry no monthly shape.
Prime cost and where this plan sits
Operators watch prime cost, direct costs plus payroll, as a share of sales. The trade rule of thumb puts a healthy full-service figure at roughly the low-to-mid 60s, and the plan uses it only as a yardstick. Pinnacle's prime cost is 73% in Year 1, then 65% in Year 2, 65% in Year 3, 65% in Year 4 and 64% in Year 5. Food cost on kitchen sales is 31% and beverage cost on drinks is 26%. Year 1 runs high because the crew a seven-day, late-night room needs costs roughly the same whether 100 or 140 guests walk in. A food cost three points higher would cut Year 3 net income from $123,459 to $113,808 and leave the plan profitable.
Who else sells the same Saturday
| Alternative | What a fan gets | Where Pinnacle differs |
|---|---|---|
| National sports-bar chains | Many screens, familiar menu, a brand | A BBQ-influenced local menu and booth-level audio |
| Neighborhood bars with a few TVs | Cheap drinks, one game on the big screen | A kitchen that serves a full table and a screen for every game |
| Casual-dining restaurants with a bar | Full menu, family seating | Game-day volume, audio and a bar that stays open for the second half |
| Stadium and arena concourses | Atmosphere, but only on event days | Open all week and for the games that are not local |
| Watching at home | Free, comfortable, private | Company, a bigger screen and food somebody else cooks |
The table describes categories and is not a ranking.
SWOT
| Strengths | Weaknesses |
|---|---|
| A kitchen that carries a high food share, which smooths the drink-only swings | One location with a long summer lull |
| A founder who has run a floor on a game day | A seat count that caps Saturday revenue |
| Booth-level audio that a loud room needs | Sports-package costs set by the provider |
| Opportunities | Threats |
|---|---|
| Corporate parties and holiday bookings from nearby offices | Chains with larger marketing budgets |
| Watch parties for school and supporter clubs | Wing and beef prices that move faster than menu prices |
| Ticketed fight and playoff nights | Subscription streaming that pulls casual viewers home |
Who Fills the Booths
The Saturday regulars
Fans of the same two or three teams who arrive at the same booth every week from September to January. They order food early, stay through the fourth quarter and tip well when the room is loud and the service is quick.
Weeknight leagues and fantasy players
Fantasy-draft nights, trivia and darts teams fill Tuesday and Wednesday nights, which are the slowest nights of a sports bar. They bring ten to twenty people at a time and rarely pay a cover.
Groups and offices
A department that wants a holiday party, a retirement or a client evening with a big game on. They book ahead, pay a package price and care most about a reserved space and a bill that is simple to expense.
The fan who is visiting
Out-of-town fans of a visiting team, and travelers who want a screen showing their game. They are a small share of guests and a large share of the tables that stay for a second round.
Why a guest comes back
A seat with a view, food that arrives while the game is still close, and a bar that knows the regular's order. A loyalty card that pays out on the tenth visit is funded inside the food cost.
Selling the Fixture List
How a booking and a table are won
Regulars find the bar through search and word of mouth. Groups are won by phone and online inquiry, answered the same day, with a package sheet and a deposit link. The events coordinator joins in month 14; until then Marcus handles every booking himself.
The Year 1 count
| Year 1 | |
|---|---|
| Open days | 306 |
| Walk-in guests | 31,028 |
| Food spend per guest | $16.80 |
| Drink spend per guest | $12.00 |
| Group bookings | about 71 |
| Takeout orders | about 1,622 |
A group booking averages $1,150 in Year 1, a party of about 20 with a food package and a bar minimum. A takeout order averages $58, which is wings by the dozen or a tray for a game-day party. The cover-charge and event line is about a dozen ticketed nights a year, at roughly $3,000 of cover and entry revenue per night once the room is established.
Pricing
Menu prices rise 3% a year from Year 2, in line with pay raises. Spend per guest is $28.80 in Year 1, $30.60 in Year 3 and $32.30 in Year 5.
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Walk-in guests | 31,028 | 47,000 | 49,937 | 53,462 | 55,225 |
| Guests per open day | 101 | 129 | 137 | 146 | 151 |
| Group bookings | 71 | 114 | 132 | 144 | 150 |
Year 2 growth is steep because Year 1 holds only ten trading months, three of them in the summer lull and several on the opening ramp.
Getting Fans Through the Door
Budget and what it buys
The opening-year marketing budget totals $60,000: $24,000 paid from start-up capital before the doors open and $36,000 from the operating budget. Together they equal 5.5% of Year 1 revenue. The operating share costs about $1.16 per walk-in guest in Year 1 and about $0.66 in Year 3, as regulars take over the work.
| Activity | Year 1 spend | What it is expected to do |
|---|---|---|
| Brand, website and online ordering (launch) | $7,000 | A menu, a booking form and a takeout page that load fast on a phone |
| Grand-opening weekend (launch) | $10,000 | A full room on the first Saturday and the first March Madness games |
| Opening-month ads and sampling (launch) | $7,000 | Trial visits from within a short drive |
| Social posts and local ads | $9,000 | Schedule posts, specials and highlights |
| Google Business profile, listings and search | $3,600 | A correct hours listing and a map pin people can find |
| Football-season push | $6,000 | A screen-by-screen schedule and a September opening-weekend promotion |
| Watch parties with alumni and supporter clubs | $4,500 | Standing group nights for school and team clubs |
| Office and group outreach | $4,200 | Package sheets sent to nearby offices before the holiday season |
| Fantasy-draft and trivia prizes | $3,500 | Weeknight leagues that fill the slowest nights |
| Loyalty cards and printed schedules | $5,200 | A repeat-visit card and a fixture list on every table |
Milestones
- March 2027: doors open for the first March Madness weekend.
- June 2027: the NBA finals and the first summer lull, with a summer menu and weeknight leagues.
- September 2027: football season, with the season-opening watch party and a full football-season crew.
- December 2027: holiday group bookings at the top of the calendar.
- Month 14: events and bookings coordinator joins.
Running a Game Day
The space
The lease covers 4,800 square feet of former restaurant space at roughly $24 a square foot all-in ($115,200 in Year 1), on five years with a personal guarantee. The landlord's build-out allowance is a lease term still to be agreed, and $40,000 of the reserve is earmarked for build-out overruns. Year 3 revenue works out to about $400 a square foot and about $13,600 a seat. Rent is 6.4% of Year 3 revenue and rent plus utilities is 8.5%.
A Saturday in October
Kitchen prep starts at 8 a.m. The doors open at 11 for the early college kickoffs, and the room fills in two waves, at noon and at evening. A Saturday in October peaks at about 340 guests, roughly two and a half turns of the 140 seats, with takeout orders stacking between waves. The kitchen runs a short game-day menu so tickets stay fast, and the bar adds a second well station for the evening.
Ingredients and suppliers
Chicken wings, beef, pork and produce come from a broadline foodservice distributor and one regional meat supplier. Wings and beef move in price through the year, and the plan holds direct food cost at 31% of kitchen sales with a menu price review each quarter. Beer comes from state-licensed distributors, and the plan holds beverage cost at 26% of drink sales, the higher end for a beer-led room.
Equipment and screens
Fryers, a flat-top, a smoker, a walk-in cooler, a draft system and about 30 commercial-grade screens with a video distribution system. The plan sets $52,000 for screens, distribution and audio and a replacement reserve that starts in Year 2.
Who is on the schedule
Seventeen people at opening: three salaried managers, three full-time cooks and eleven part-time staff. Three football-season staff work September to January each year, beginning in September 2027. An events and bookings coordinator joins in month 14, a sixth server in month 16, a sous chef in month 20 and an assistant general manager in month 38. Hiring tracks sales, and the downside case below says which positions wait or never arrive.
Insurance, responsible service and safety
Insurance covers general liability, liquor liability, property and business interruption, with a Year 1 premium of $25,000. Workers' compensation is part of the payroll load. Every server and bartender completes any alcohol-service training the licensing authority requires, a contracted door person works the big nights ($9,000 in Year 1), and a written food-safety plan covers allergens and holding temperatures.
The Owner and the Line-Up
Marcus Hale, founder, owner and general manager
Marcus has worked in Memphis restaurants and bars for twelve years, most recently as a general manager of a multi-screen bar and grill, and he has run game-day schedules and a draft system. His $240,000 is savings from those years and a home-equity draw. He pays himself a $62,000 salary and works the floor on game days.
Where the team is thin
Marcus has not owned a bar, negotiated a build-out or priced a commercial sports package. The gaps are closed by a contractor working to a fixed-price bid, a restaurant accountant retained monthly and written provider quotes in hand before signing.
If Marcus is out
The kitchen manager can open and close the building, with a sous chef from month 20. From month 38 the assistant general manager can run a full shift.
Advisers
Outside help comes from a restaurant accountant, an attorney for the lease and loan, and an insurance broker. Investors get a monthly report and take no part in daily running.
Ownership and the bank
Membership interests are issued in proportion to cash invested, so Marcus's $240,000 of $440,000 is about 55%. The lender takes Marcus's guarantee and security over the equipment.
The numbers behind the game day
A single five-year model sits behind every table here: monthly for the opening year, annual after that. Guests, bookings and takeout orders are set first, because each revenue line is built from them.
What it costs to open the doors
| Use of funds | Amount |
|---|---|
| Build-out of a 4,800 square foot second-generation restaurant space (bar, hood, grease trap, restrooms, patio), net of landlord allowance | $225,000 |
| Kitchen: fryers, flat-top, smoker, walk-in cooler, reach-ins, hood make-up air | $85,000 |
| Screens, video distribution, table-side audio, sound system and cabling | $52,000 |
| Bar, draft system, furniture, booths and smallwares | $55,000 |
| Point-of-sale, online ordering, signage, security and music system | $20,000 |
| Liquor, beer and food permits and application costs (planning figure; confirmed with the state and the city) | $7,000 |
| Legal: lease, entity, loan documents; architect and permit drawings | $13,000 |
| Launch: brand, website, grand-opening weekend, opening-month ads | $24,000 |
| Recruiting, training and menu testing for the crew before doors open | $21,000 |
| Opening beer, liquor and food stock before the first sale | $18,000 |
| Cash reserve for the pre-opening months, the first summer lull and a weak first season | $320,000 |
| Total uses | $840,000 |
| Source of funds | Amount |
|---|---|
| Marcus Hale's savings and home-equity proceeds | $240,000 |
| Four local investors, $50,000 each | $200,000 |
| Bank term loan (7 years, interest only for the first 6 months; SBA guarantee if the program allows) | $400,000 |
| Total sources | $840,000 |
The raise is $840,000, a little over half equity. Marcus contributes $240,000 and four local investors $50,000 each, which is $440,000 of equity, 52% of the total. The remaining $400,000 is a bank term loan: seven years, a 10.75% rate used for planning, interest only for the first six months, and an SBA guarantee if the program and the lender allow it. Actual rates and terms are the lender's to set, and the loan would be secured on the equipment with Marcus guaranteeing it personally. The $320,000 reserve is 38% of the raise and is sized to the downside case, whose lowest month-end balance in Year 1 is about $55,000. The base case bottoms out at about $82,000 in August, which is why cash builds in later years.
Guests, covers and game days: the planning figures
- The room seats about 140 and opens every day from 11 a.m.: 306 open days in Year 1 (March 1 to December 31) and 365 after. Walk-in guests average 101 a day in Year 1, 129 in Year 2 and 137 in Year 3, built from a base of 3,600 guests a month at a traffic index of 1.0 that grows to 4,250 in Year 3. Walk-in counts exclude group bookings and takeout.
- Traffic follows the sports calendar. The Year 1 index runs from 0.72 in July to 1.20 in November, with football from September to January, a lift for the Super Bowl and March Madness, and a summer lull in June, July and August. The opening ramp starts at 62% of the steady-state level in March and reaches 100% in October. Years 2 to 5 are annual and carry no monthly shape.
- Food spend is $16.80 a guest in Year 1 and $17.80 in Year 3, and drinks add $12.00 and $12.80. Prices exclude sales tax; tips go straight to staff and are counted in neither revenue nor payroll. Direct costs are 31% of food sales and 26% of drink sales, which blends to 28.8% of revenue; group bookings run at 29%, takeout at 33% and event covers at 4%.
- Group bookings average $1,150 in Year 1 and $1,220 in Year 3, a party of about 20 with a food package and a bar minimum. The room takes about 8 a month at the base index in Year 1 and 11 in Year 3, and December runs at 1.3 times the base. Takeout orders average $58 and $62 and run at 190 and 245 a month at the base index, with February and November at 1.35 times.
- Cover charges and event nights are about a dozen ticketed fight and playoff nights a year plus draft and trivia entries, worth $21,100 in Year 1 and $36,500 in Year 3. Pay-per-view and sports-package fees sit in a separate cost line of $40,000 in Year 1 and $50,000 in Year 3, a planning figure until quotes arrive: providers price commercial accounts by quote, and the bar confirms them before it signs the lease.
- Payroll adds 27% to full-time wages and 15% to part-time wages (12% for the seasonal crew) for payroll taxes, workers' compensation and benefits. Wages in the personnel table are launch rates, and annual pay raises of 3% are charged as a separate line from Year 2. Part-time front-of-house wages are cash wages after any tip credit the law allows, set at $10,000 to $21,000 a year per position. Door security is a contract line, and comps and loyalty redemptions run at about 1% of revenue.
- Occupancy is 4,800 square feet at roughly $24 per square foot, all in, in Year 1, stepping up 3% a year. Utilities are $38,000 for the kitchen, the draft system and about 30 screens. The build-out is net of a landlord contribution, and no free-rent period is counted.
- January and February 2027 are pre-opening months with no revenue. Managers are on payroll from month 1 or 2, line cooks from month 2 for training and the rest of the crew from month 3. The model spreads annual operating cost lines evenly over twelve months, so each pre-opening month carries a full month of rent, utilities, insurance and package fees. That is cautious, and it shows as an EBITDA loss of about $69,000 in each of those months.
- Receivables average 3 days (card settlement and the occasional group invoice) and supplier terms 14 days. Stock holds about 4% of the year's direct costs, $12,561 at the end of Year 1, and $18,000 of opening stock is bought before the first sale.
- Tax is modeled at 21% federal plus a 6.5% Tennessee planning rate, with the Year 1 loss carried forward. An LLC would normally pass profit through to its members, so corporate rates are a cautious planning figure and the state rate may have changed. Owner distributions of $30,000 in Year 2, $45,000 in Year 3, $70,000 in Year 4 and $100,000 in Year 5 cover members' tax on pass-through profit and a modest return, and are paid only from cash the plan can spare.
Where each dollar comes from
| Revenue stream | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Food: wings, burgers and BBQ plates | $521,300 | $813,100 | $888,900 | $978,400 | $1,038,200 |
| Beer, wine and liquor | $372,300 | $582,800 | $639,200 | $700,400 | $745,500 |
| Group, corporate and watch-party bookings | $81,700 | $135,100 | $161,000 | $180,700 | $194,300 |
| Game-day takeout and party trays | $94,200 | $161,300 | $181,500 | $198,800 | $212,900 |
| Pay-per-view cover charges and event nights | $21,100 | $32,000 | $36,500 | $39,500 | $41,500 |
| Total revenue | $1,090,600 | $1,724,300 | $1,907,100 | $2,097,800 | $2,232,400 |
| Growth on prior year | – | 58% | 11% | 10% | 6% |
By line, food supplies 48% of Year 1 sales and 47% of Year 3, drinks 34% in both years, takeout 9% and 10%, group bookings 7% and 8%, and event nights 2% in both. After direct costs a dollar of drinks leaves about 74 cents, food about 69 and takeout about 67. Revenue grows 58% in Year 2, when twelve trading months and a full football season arrive together, then 11%, 10% and 6%.
Month by month through the opening year
| Month | Food: wings, burgers and BBQ plates | Beer, wine and liquor | Group, corporate and watch-party bookings | Game-day takeout and party trays | Pay-per-view cover charges and event nights | Total revenue | EBITDA |
|---|---|---|---|---|---|---|---|
| Jan 2027 | $0 | $0 | $0 | $0 | $0 | $0 | ($69,489) |
| Feb 2027 | $0 | $0 | $0 | $0 | $0 | $0 | ($69,489) |
| Mar 2027 | $37,500 | $26,800 | $5,700 | $5,800 | $2,000 | $77,800 | ($14,091) |
| Apr 2027 | $40,100 | $28,600 | $6,300 | $6,000 | $1,700 | $82,700 | ($10,601) |
| May 2027 | $43,500 | $31,100 | $7,400 | $6,600 | $1,800 | $90,400 | ($5,119) |
| Jun 2027 | $41,600 | $29,700 | $6,700 | $6,200 | $1,600 | $85,800 | ($8,394) |
| Jul 2027 | $39,200 | $28,000 | $6,600 | $6,000 | $1,200 | $81,000 | ($11,812) |
| Aug 2027 | $44,400 | $31,700 | $6,900 | $7,800 | $1,300 | $92,100 | ($3,908) |
| Sep 2027 | $64,500 | $46,100 | $9,400 | $12,800 | $2,700 | $135,500 | $26,995 |
| Oct 2027 | $71,400 | $51,000 | $10,600 | $13,800 | $3,200 | $150,000 | $37,320 |
| Nov 2027 | $72,600 | $51,800 | $10,100 | $14,900 | $2,800 | $152,200 | $38,887 |
| Dec 2027 | $66,500 | $47,500 | $12,000 | $14,300 | $2,800 | $143,100 | $32,407 |
Revenue is $77,800 in March, the opening month, drifts between $81,000 and $92,100 through the summer, jumps to $135,500 in September when football starts and peaks at $152,200 in November. EBITDA, operating profit before depreciation and interest, is below zero from January to August, losing $138,978 across the two pre-opening months and $53,925 across the six trading months of spring and summer, and is above zero from September to December, which earn $135,609 between them. The lowest month-end cash balance is Aug, at about $82,000, after the pre-opening spend and the summer lull.
Who is on the schedule
| Role | Annual wage | Starts | Year 1 end | Year 2 end | Year 3 end | Year 4 end | Year 5 end |
|---|---|---|---|---|---|---|---|
| Founder, owner and general manager | $62,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Kitchen manager | $50,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Bar manager | $42,000 | Month 2 | 1 | 1 | 1 | 1 | 1 |
| Line cook 1 | $33,000 | Month 2 | 1 | 1 | 1 | 1 | 1 |
| Line cook 2 | $33,000 | Month 2 | 1 | 1 | 1 | 1 | 1 |
| Prep and fry cook | $28,000 | Month 3 | 1 | 1 | 1 | 1 | 1 |
| Dish and prep (part time) | $17,500 | Month 3 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Bartender 1 (part time) | $21,000 | Month 2 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Bartender 2 (part time) | $21,000 | Month 2 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Bartender 3 (part time) | $21,000 | Month 2 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Server 1 (part time) | $12,500 | Month 3 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Server 2 (part time) | $12,500 | Month 3 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Server 3 (part time) | $12,500 | Month 3 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Server 4 (part time) | $12,500 | Month 3 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Server 5 (part time) | $12,500 | Month 3 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Host, busser and runner 1 (part time) | $10,000 | Month 3 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Host, busser and runner 2 (part time) | $10,000 | Month 3 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Football-season crew 1 (September to January) | $16,000 | Month 9 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Football-season crew 2 (September to January) | $16,000 | Month 9 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Football-season crew 3 (September to January) | $16,000 | Month 9 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Events and bookings coordinator | $40,000 | Month 14 | – | 1 | 1 | 1 | 1 |
| Server 6 (part time) | $12,500 | Month 16 | – | 0.5 | 0.5 | 0.5 | 0.5 |
| Sous chef | $42,000 | Month 20 | – | 1 | 1 | 1 | 1 |
| Assistant general manager | $46,000 | Month 38 | – | – | – | 1 | 1 |
| Total payroll incl. on-costs | $477,769 | $604,383 | $643,325 | $696,877 | $701,745 |
Marcus, the kitchen manager and the bar manager are salaried, and the line cooks, bartenders and the rest of the crew follow in months 2 and 3. Three football-season staff work September to January and are shown at an annual-equivalent $16,000 each, about $6,700 for the five months. An events and bookings coordinator joins in month 14, a sixth server in month 16, a sous chef in month 20 and an assistant general manager in month 38. Part-time positions show as 0.5 of a full-time equivalent. His $62,000 salary is in payroll from month 1, which means every profit line is stated after the owner draws pay.
Profit and loss
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $1,090,600 | $1,724,300 | $1,907,100 | $2,097,800 | $2,232,400 |
| Direct costs (food, beer, liquor and packaging) | ($314,024) | ($496,490) | ($549,124) | ($604,034) | ($642,790) |
| Gross profit | $776,576 | $1,227,810 | $1,357,976 | $1,493,766 | $1,589,610 |
| Payroll incl. on-costs | ($477,769) | ($604,383) | ($643,325) | ($696,877) | ($701,745) |
| Rent | ($115,200) | ($118,700) | ($122,300) | ($126,000) | ($129,800) |
| Utilities | ($38,000) | ($39,000) | ($40,500) | ($42,000) | ($43,500) |
| Marketing | ($36,000) | ($33,000) | ($33,000) | ($34,000) | ($35,000) |
| Insurance | ($25,000) | ($26,800) | ($28,400) | ($30,000) | ($31,500) |
| Professional fees | ($8,500) | ($8,500) | ($9,000) | ($9,500) | ($10,000) |
| Software subscriptions | ($10,500) | ($11,000) | ($11,500) | ($12,000) | ($12,500) |
| Card processing and online-ordering fees | ($29,000) | ($38,000) | ($42,000) | ($44,500) | ($46,500) |
| Commercial sports-package and pay-per-view licensing (planning figure; set by quote) | ($40,000) | ($48,000) | ($50,000) | ($52,000) | ($54,000) |
| Music, TV and entertainment licensing and permits | ($4,500) | ($5,000) | ($5,300) | ($5,600) | ($5,900) |
| Cleaning, grease trap, hood service and pest control | ($13,500) | ($15,500) | ($16,500) | ($17,500) | ($18,500) |
| Repairs, screen and equipment service | ($7,000) | ($12,000) | ($15,500) | ($18,500) | ($21,000) |
| Uniforms, linen and smallwares | ($5,000) | ($6,500) | ($7,000) | ($7,500) | ($8,000) |
| Equipment and screen replacement reserve | $0 | ($9,000) | ($14,000) | ($17,000) | ($19,000) |
| Third-party delivery and online-ordering commissions | ($3,000) | ($5,500) | ($6,500) | ($7,000) | ($7,500) |
| Door security and event-night staffing (contract) | ($9,000) | ($14,000) | ($15,500) | ($16,500) | ($17,500) |
| Comps, promotions and loyalty redemptions | ($11,000) | ($17,000) | ($19,000) | ($21,000) | ($22,500) |
| Bad debt allowance (group bookings) | ($900) | ($1,700) | ($2,200) | ($2,400) | ($2,600) |
| Annual pay raises (3% a year) | $0 | ($18,131) | ($39,178) | ($64,619) | ($88,075) |
| EBITDA | ($57,293) | $196,096 | $237,273 | $269,270 | $314,490 |
| Depreciation | ($56,900) | ($56,900) | ($56,900) | ($56,900) | ($56,900) |
| Interest | ($42,515) | ($38,356) | ($32,999) | ($27,036) | ($20,400) |
| Income tax | $0 | $0 | ($23,915) | ($48,437) | ($61,990) |
| Net income before start-up costs | ($156,708) | $100,840 | $123,459 | $136,897 | $175,200 |
| Start-up costs expensed at opening (permits, legal, launch marketing, crew training, opening stock) | ($83,000) | $0 | $0 | $0 | $0 |
| Net income after start-up costs | ($239,708) | $100,840 | $123,459 | $136,897 | $175,200 |
In Year 1 EBITDA is a $57,293 loss; after depreciation and interest the loss is $156,708, and $239,708 once $83,000 of start-up costs are written off at opening. Profit arrives in Year 2 at $100,840, free of income tax because the opening loss is carried forward. Net income then runs $123,459, $136,897 and $175,200 in Years 3 to 5, a 7.8% margin at the end. Payroll with pay raises drops from 44% of revenue to 35% while the crew grows by four positions in four years. Prime cost is 73% in Year 1 and about 65% after that.
Cash movements
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Cash from operations | ($192,288) | $152,232 | $178,770 | $192,140 | $230,930 |
| Build-out, kitchen, screens and audio, bar and furniture | ($437,000) | $0 | $0 | $0 | $0 |
| Funding received | $840,000 | $0 | $0 | $0 | $0 |
| Loan principal repaid | ($21,878) | ($47,430) | ($52,788) | ($58,751) | ($65,387) |
| Owner distributions | $0 | ($30,000) | ($45,000) | ($70,000) | ($100,000) |
| Net change in cash | $188,834 | $74,801 | $80,982 | $63,389 | $65,543 |
| Closing cash | $188,834 | $263,635 | $344,617 | $408,006 | $473,549 |
Year 1 ends with $188,834 in the bank after $192,288 went out through operations, $83,000 of it start-up costs. Cash then climbs every year to $473,549 in Year 5, even after $245,000 of distributions and $224,356 of loan principal in Years 2 to 5. Principal begins in month 7 and rises from $21,878 in Year 1 to $47,430 in Year 2. The loan balance falls to $153,766 by Year 5, so cash exceeds the debt from Year 3. A second room or an early payoff would be a real choice by then, and the balance is large because the reserve was sized to the downside case.
Balance sheet
| At year end | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Cash | $188,834 | $263,635 | $344,617 | $408,006 | $473,549 |
| Accounts receivable | $8,964 | $14,172 | $15,675 | $17,242 | $18,348 |
| Beer, liquor and food stock | $12,561 | $19,860 | $21,965 | $24,161 | $25,712 |
| Build-out, kitchen, screens and audio, bar and furniture (net) | $380,100 | $323,200 | $266,300 | $209,400 | $152,500 |
| Total assets | $590,458 | $620,867 | $648,557 | $658,810 | $670,110 |
| Supplier and distributor balances owed | $12,045 | $19,043 | $21,062 | $23,168 | $24,655 |
| Bank loan | $378,122 | $330,692 | $277,904 | $219,153 | $153,766 |
| Paid-in capital | $440,000 | $440,000 | $440,000 | $440,000 | $440,000 |
| Retained earnings | ($239,708) | ($168,868) | ($90,409) | ($23,512) | $51,688 |
| Total liabilities and equity | $590,458 | $620,867 | $648,557 | $658,810 | $670,110 |
Prime cost, margins and break-even
| Measure | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| EBITDA margin | -5.3% | 11.4% | 12.4% | 12.8% | 14.1% |
| Net margin (before start-up costs) | -14.4% | 5.8% | 6.5% | 6.5% | 7.8% |
| Payroll incl. pay raises as share of revenue | 44% | 36% | 36% | 36% | 35% |
| Revenue per full-time equivalent at year end | $83,892 | $111,245 | $123,039 | $127,139 | $135,297 |
| Average monthly revenue | $90,883 | $143,692 | $158,925 | $174,817 | $186,033 |
| Monthly revenue needed to cover operating costs | $97,588 | $120,742 | $131,157 | $143,304 | $149,228 |
| Debt service cover (EBITDA / interest + principal) | -0.9x | 2.3x | 2.8x | 3.1x | 3.7x |
Compare the last two lines of the ratios table. Year 1 averages $90,883 of revenue a month over twelve months, or $109,060 across the ten trading months, against $97,588 needed to cover operating costs, so the bar falls short over the full year even though September to December clear the mark. Year 2 averages $143,692 against $120,742, and Year 3 $158,925 against $131,157, which sits 21% over the mark. Debt service cover is negative in Year 1, 2.3x in Year 2 and 2.8x in Year 3.
A losing season: revenue 20% short
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $872,480 | $1,379,440 | $1,525,680 | $1,678,240 | $1,785,920 |
| Net income before start-up costs | ($246,345) | ($4,702) | $33,110 | $82,476 | $89,353 |
| Net income after start-up costs | ($329,345) | ($4,702) | $33,110 | $82,476 | $89,353 |
| Closing cash | $101,093 | $101,454 | $137,405 | $216,705 | $296,635 |
Every revenue line is cut by 20% in every year, so Year 3 sees about 110 walk-in guests a day. Management responds in this order: the coordinator and the assistant general manager start six months late, the sous chef, the sixth server and the third football-season position are never added, part-time hours fall 15%, marketing and the sports-package line are cut 20% and 10%, the equipment reserve is halved, repairs and utilities are trimmed, Marcus takes a 20% pay cut and distributions stop. With those moves the bar loses $4,702 in Year 2, returns to profit in Year 3 and holds cash at no less than $101,093 at any year end, about $55,000 at its lowest month end in Year 1. Equity closes Year 1 at $110,655, down from $440,000 of paid-in capital, so Marcus would settle covenant terms with the bank before the first test. Net income and cash stay under the base case every year. With no response at all, the same shortfall leaves $35,414 in the bank after Year 1 and a $134,245 overdraft after Year 2.
Sources
- Tennessee Alcoholic Beverage Commission, licensing, for the state's role in alcohol permits. No fee or rule from it is quoted; the plan's $7,000 is a planning figure.
- City and county licensing and health authorities in Memphis and Shelby County, for local alcohol and food-service permits and plan review. Rules and fees are confirmed with each authority before the lease is signed.
- Tennessee Department of Revenue, franchise and excise tax. The model uses a planning rate of 6.5% on net earnings, and the rate may have changed.
- U.S. Department of Labor, minimum wage and tipped employees. Wages in the plan are planning figures, with tips passing through to staff and appearing in neither revenue nor payroll.
- Commercial sports-package and pay-per-view providers price by quote. No provider rate is quoted, and the $40,000 to $54,000 range is a planning figure.
- SBA, 7(a) loan program. The 10.75% rate and 10-year term are planning figures, and lenders set their own terms.
- Prime cost in the low-to-mid 60s as a share of revenue is a trade rule of thumb, not a published statistic.
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