Wine Bar Business Plan
Wine Bars are licensed premises offering a selection of wine, spirits and champagne, as well as a cocktail menu and bottled or draught beers. They also provide lunch and evening menus. Wine bars usually have a late license and often provide entertainment, for example a DJ or televised sports. Wine bars are usually situated in busy town and city center locations or near colleges, universities or areas with plenty of offices.
Your goal is to create a wine bar where everyone can get some great food, cold drinks, and relax in a laid-back, casual atmosphere and watch their favourite sports. You want your customers to have more fun during their leisure time. You should combine menu selection, atmosphere, ambiance, and service to create a sense of "place" in order to reach your goal of over-all value in a dining/entertainment experience.
A large volume of wine is imported, particularly from European countries such as France, which is the largest supplier . Interest in wines from other countries is growing, including Eastern Europe, Australia and South Africa although sales of German wine have fallen. Wine consumption has soared over the last decade and continues to increase steadily, as the quality and range of wine available improve. Customers are now willing to spend more per bottle on wine than in previous years.
Wine bar customers are becoming more interested in, and educated about, different types of wine.
A specialist wine bar sells a wide range of alcoholic beverages to the general public. These include beer (bottled and canned), wines, fortified wines, spirits, champagnes and specialty drinks. Some combine this with other services, such as a deli, a café, video rentals or general convenience store retailing. In keeping with the trend towards organic food, some producers are now introducing organic beer, wine and lager. The supermarkets, driven by consumer demand for other forms of organic produce, seem to be taking the lead in stocking these products.
In general the liquor trade (e.g. specialist wine merchants, grocery multiples, convenience stores) continues to take market share from the on-trade (pubs, restaurants, clubs etc). This is due to several factors, such as advances in home entertainment (e.g. satellite, cable and digital television), the increasing expense of going out and stricter drink / driving legislation. Also, increased interest in wine means that more people see it as a natural accompaniment to a meal. However, the liquor trade is fiercely competitive and the number of specialists is falling. The major threats to specialists are the grocery multiples, which are perceived as being cheap, convenient and stocking an excellent range of drinks.
Alcoholic consumption is decreasing, partly due to increased health awareness. Many people now prefer to drink less, but of a higher quality (e.g. premium bottled lager, more expensive wine).
Wine (especially red wine) consumption continues to rise, with increased interest in New World wines. Tastes can change very quickly, as evinced by the rapid rise and decline of alcopops. It is vital for a wine merchant to keep up with consumer demand. Sales are seasonal (with Christmas being the busiest time) though can be boosted by a hot summer or a major sporting event.
Location is a vital consideration. Ideally a wine bar should be situated where there is a large volume of pedestrian traffic to encourage passing trade and impulse buying, e.g. beside a fast food outlet or video rental shop.
Another wine bar nearby need not necessarily prove a disadvantage as many people will visit more than one bar in an evening. Some wine bars specialize in real ale or fine wine, attracting custom from outside the immediate catchment area.
Sales of wines priced at $10 to $14 a bottle have climbed 14 percent over the past 12 months and sales at $25 a bottle (and up) have grown 18 percent. The trend is expected to continue. Consumption trends and demographics point to robust wine sales growth for the next 15 years.
Wine demand is likely to be boosted strongly by the aging of the population. Per capita consumption of wine increases with age, with early consumers drinking only 6.6 bottles per year. Consumption peaks at 16.4 bottles annually among adults 50-59 years old. "Baby boomers, more than any other previous generation, view wine as a simple, affordable luxury." Given that the strongest growth in population over the next 10 years will be among these adults, who currently consume about 40 percent of all wines.
The influence of demographics on wine consumption is so strong that if the current growth rate in wine sales were adjusted to account for the population changes, then wine consumption potentially could increase 80 percent by 2020 due to demographics alone. Also, comprehensive industry research has shown that downturns in the economy appear to have no impact on wine sales. In fact, wine sales rose slightly during previous stock market declines.
Your wine bar should be located close to a large local population if you are to give your wine bar the best chance of success. Other than the location it is vital that you have the right people in place to run your wine bar if you don't intend to do this yourself due to other committments. A good manager is an essential ingredient for your wine bar business to thrive.
The unfortunate reality of operating a bar is dealing with the negative affect on profits due to shrinkage. In particular, bar operations are likely to have lost potential profits due to careless draft beer pouring by bartenders, unauthorized giveaways, over-pouring liquor shots to boost tips, cash skimming and outright product theft. It was concluded that the average bar is missing more than 25 percent of their liquor, wine and beer profits.
By having a good manager in place this 25% figure can be reduced drastically.
More and more people are drinking wine. According to Vinexpo, the world’s largest wine trade fair, wine consumption has risen by 60% in the last ten years, which is quite something from a nation that is perhaps more associated with having less culinary qualities and flavors than its European counterparts. In fact we drink around 20 bottles of wine each per year as well as having some of the most adventurous tastes in the world with wines from approximately 43 different countries available on the retail market.
Although figures are not everything they do prove that a boom in the wine market has taken place in recent times. So how can you take advantage of this? Perhaps you could start exporting and / or importing wine and join the long queue of competition?
This is an area that also has stiff competition, particularly from larger corporates but also a market where wine is the core product. So what’s stopping you popping a few corks and taking advantage of this trend? After all, even though there is a supposed global downturn, sales don’t appear to be letting up and people always appreciate a good tipple. A wine bar is a more up market operation, often with wooden floors, subtle lighting and more classical or jazz related music instead of the piped lift music that some pubs have.
Wine bars also vary from bars in others ways. There is generally a larger selection of wines but beer is now also sold in many outlets. The clientele is often younger - 21 to 35 years old. There is also a more trendy and fashionable element to some wine bars with many people frequenting them to be seen in the right place and with the right people, so you will have to decide what image you wish to portray.
Communication is a skill you simply cannot learn. So before jumping the gun, this is where your first taste of working with the public and serving them wine, beers and spirits should begin. Gaining the right experience before spending large sums of money is crucial. If you don’t have the academic skills that relate to purchasing, administration and book keeping it does not matter – these areas can be farmed out to other people such as solicitors, lawyers and accountants.”
If you do not have the experience, now is the time to go and get some. A period of time spent working in a wine bar will help to focus your own plans for the business, as well as giving you an idea of what music people like to listen to, what wines and drinks they prefer and, most importantly, give you an insight into the type of clientele you will be dealing with. You will need a knowledge of what is happening on the street and what people in that area want as well as learning how the younger set like to relax in a wine bar.
Many wine bars now operate a catering element whereby high-quality food operation whereby high quality food is added to high quality drinks. To utilise this additional source of revenue you will need to either have some catering experience yourself or hire outside help, which, with a high turnover in catering positions, may be a costly alternative – so think hard about catering.
Your starting point in a Wine Bar Business should always be 'do I really want to do it?'. If you do and are driven by the idea then gaining some kind of experience should always be the starting point. Buying premises and starting from scratch maybe putting a lot of risk in too early. A good way to gain experience is to become a manager of a wine bar in a leased or tenanted operation, you can then also input your own ideas and judge the market before taking the plunge.
Once that experience is in place you will have to balance the business side of things which means preparing your Wine Bar Business Plan. This will involve setting out how much money you need to fund your project, where you intend to locate and what you plan to do that is different from the other licensed premises in your area.
Your Wine Bar Business Plan must demonstrate that you have
- the right location
- an understanding of the marketplace and the demographics of your area
You must include competitor analysis - who’s doing what well and how many licensed properties there are surrounding your Wine Bar Business and how that level of service can be improved on.
Once you have decided on the location, the size of the premises is important. Do you want to serve a hundred people or a thousand? Who will be your main customers and how will you make them interact? If you only have two people in your Wine Bar who are at separate ends of the room, for example, you need to find a link between them both in order to get them talking and bring more people into the Wine Bar. This is the secret to any Wine Bar – to make your customers interact and feel part of the whole atmosphere.
To gain the right atmosphere you will need to sell the right products. How large a selection of wines and other alcoholic and non-alcoholic drinks do you wish to sell? If your knowledge of wine is limited, then stick to what you know best but if you are more of a connoisseur and decide the market is craving for more vintage wines, let your imagination run riot and use your strengths as much as you can. Beware however to control your stock levels and how many wines are opened at the same time.
Before you start out it is also essential that you get the right supplier(s) and the best procurement deal for equipment, food and drink as you won’t have enough time when things get going. This is particularly important if you are planning to serve food on the premises. Fresh food will be more costly so scan the area for the best deal and above all, don’t take the first offer that’s put on the table.
As well as the above criteria, you’ll need to get the look and feel of your wine bar right first time. Will you choose to have wooden floors, low lighting, soft music and plain coloured walls or go for a more vibrant feel?
Your objectives on opening your wine bar should be:
- Launch the venue with a highly publicized grand opening to capitalize on the excellent location.
- Maintain tight control of costs, operations, and cash flow through diligent management and automated computer control.
- Maintain food costs (including labor) below 60% of food revenue.
- Maintain total beverage costs (including labor) below 60% of beverage revenue.
Your mission to run a successful wine bar should be based on an accurate understanding of the core customers. By creating an environment that satisfies the changing tastes and expectations of your core customers. In order to achieve this goal, you must constantly improve your response to the customers' entertainment needs.
Your keys to success in achieving your goals are:
- Product quality.
- Provide exceptional service that leaves an impression with your core customers.
- Consistent entertainment atmosphere and product quality.
- Managing your internal finances and cash flow to enable upward capital growth.
- Strict control of all costs, at all times, without exception.
Marketing is the process of creating customers and customers are the lifeblood of your Wine Bar. In this section, the first thing you want to do is define your marketing strategy. There is no single "right" way to approach a marketing strategy. Your Wine Bar marketing strategy should be part of an ongoing self-evaluation process, and unique to your Wine Bar. However, there are steps you can follow which will help you "think through" the strategy you would like to use.
An overall Wine Bar Marketing Strategy would include a clear strategy for growing your Wine Bar. This growth strategy might include:
- an internal strategy such as how to increase your human resources;
- an acquisition strategy such as buying another wine business;
- a franchise strategy for branching out;
- a horizontal strategy where you would provide the same type of products to different users; and/or
- a vertical strategy where you would continue providing the same products but would offer them at different levels of the distribution chain.
How are you going to reach your customers? Usually some combination of the following works the best:
- public relations;
- personal selling; and / or
- printed materials such as brochures, catalogues, flyers, etc.
Writing A Wine Bar Business Plan
Writing A Wine Bar Business Plan
It is helpful to use the bankers’ model in your decision making process. Use a skeptical attitude as a counterweight to your optimism to get a balanced view of your prospects. What is it that makes you think you will be one of the minority of small businesspeople who will succeed? If you don’t have some specific answers, you are in trouble. Most new Wine Bars fail, and the large majority of survivors do not genuinely prosper.
Does the Wine Bar you want to own require skills and talents you already possess? If you have the necessary skills, do you enjoy exercising them? Think about this for a good long time. The average Wine Bar Business owner spends more time with his venture than with his family.
Be sure you are not so blinded by one part of a Wine Bar Business that you overlook all others. Who is going to meet customers, keep the books, answer the phone and let potential customers know you are in business? If you hate all these activities, you either have to work with someone who can handle them, or do something else.
Here is one last thing to think about when considering how much you like your business idea. In fact, it’s a danger that threatens almost every potential Wine Bar owner. Precisely because your business idea is yours, you have an emotional attachment to it. You should. Your belief in your idea will help you wade through all the unavoidable issues that is between a good idea and a profitable Wine Bar. However, your ego involvement can also entail a loss of perspective.
The first issue is your understanding of the roots of your Wine Bar Business Plan. As an owner you have centuries of business thinking embedded into your psyche and that thinking is based on a model now considered obsolete or at least under suspicion. A completely new way of viewing the world has opened our thinking about the leadership of people and the management of Wine Bars. In a nutshell, every business model we know is up for review. Concepts once held dear, like the span of control of five to seven people, are now being questioned. The traditional chain of command is being replaced with other ways of thinking. Rigid organizational structures, once thought to be permanent, are being replaced with evolving structures of a fluid nature.
Your overall attitude towards Wine Bar Business Planning is vital. A timid Wine Bar owner approaches the Wine Bar Business Planning process differently from an arrogant owner. A conservative owner produces a Wine Bar Business Plan far different from an aggressive Wine Bar owner who does not believe in planning in the first place. Timidity and arrogance are the two ends of the continuum for failure, each with a different Wine Bar Business Plan that ultimately fails.
Your Wine Bar Business Plan will be enhanced if it covers a longer period of time. This makes it more believable. The resulting Wine Bar Business Plan will appear more logical if your time frames are realistically matched to your vision. This match creates congruence in your Wine Bar Business Plan.
You need to be clear about the basic assumptions you make for your Wine Bar Business Planning. What guesses are you making about the future? Assumptions are those things you believe to be true that affect your Wine Bar Business Plan if changed over time. The more accurate your assumptions, the more definitive your Wine Bar Business Plans become. Your Wine Bar Business Plan fails if your assumptions are grossly off the mark. The validity of your Wine Bar Business Plan is also questionable if your assumptions don’t make sense. This creates a problem of congruence, authenticity, and believability.
Start with a small group of people you trust and admire. You can turn to friends, relatives, professional acquaintances — anyone you think may contribute a new and useful perspective.
Consider inviting a few people who can stretch the group’s thinking, challenge assumptions, and take the group in new and unexpected directions, even if these individuals may make you feel a bit uncomfortable.
To inspire creativity, change the scene. Go to a park, a coffeehouse, or a hotel lobby. The same old places can lead to the same old thinking, so be inventive.
Explain what you want the group to achieve and act as the group’s conductor. Keep the process moving without turning into a dictator. Use these tactics:
- Encourage alternatives: How else can we do that?
- Stimulate visionary thinking: What if we had no constraints?
- Invite new perspectives: How would a customer see this?
- Ask for specifics: What exactly do you mean?
- Clarify the next steps: How should we proceed on that?
Designate a person to take notes throughout the session, or record the session to review later. Remember, the best ideas are often side comments, so capture the offbeat comments as well as the mainstream discussion. Set aside time after the brainstorming session to distill the discussion down to three or four ideas that you want to continue working on.
Wine Bar Business Plan
Wine Bar Business Plan
When a Wine Bar Business Plan is used to back up a loan application or explain to potential investors, it may require a special summary document as well as a complete Wine Bar Business Plan. Many investors like to see a brief summary, and a loan application does not always require a complete Wine Bar Business Plan. If you develop your Wine Bar Business Plan in the right way, you can use the summary paragraphs of the main sections - company, market, product, etc. - to create these specialized summary documents.
Regarding the span or length of focus of a Wine Bar Business Plan, its timeframe, opinions vary. A Wine Bar Business Plan should normally project sales by month for the next 12 months, and annual sales for the following two years. This does not mean Wine Bars should not plan for a longer term than just three years. It does mean, however, that the detail of monthly forecasts does not pay off beyond a year, except in special cases. It also means that the detail in the yearly forecasts probably does not make sense beyond three years. Plan your business for 5, 10, and even 15-year timeframes; just do not do it within the detailed context of Wine Bar Business Plan financials.
Even for an ongoing Wine Bar, take the time to step away from the Wine Bar and look at the basics. Do your business numbers make sense? For a first look, consider your objectives, mission statement, and keys to success in your Wine Bar Business Plan.
A Great Wine Bar did not just happen
It was planned that way
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