BA 499 Business Plan

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Table of Contents:
ExecutiveSummary 1
-BusinessDescription 1
-Mission Statement 1
-ProductsAnd Services 1
-CompetitivePosition 2
-TargetMarket 2
-Marketing Strategy 2
-Operations 2
-Management 2
-Financials 3
Club Design 4
Mission 4
Objectives 4
FutureGrowth 4
Site Analysis 5
Industry Analysis 6
Industry Maturity 10
Area Analysis 11
Target Market 12
Competition 15
Management 19
PersonnelPlan 19
OrganizationalStructure 20
Marketing 21
SWOT Analysis 22
Loan FundsDispersalStatement 23
Financials 24
Appendix A:FinancialAssumptions 25
Appendix B:Loan Calculations 27
Appendix C:Pro Forma FinancialStatements 29
References 36

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Executive Summary
Company Description:
La Cantina will be the premier, high-energy, Mexican nightclub that will not only bring
you the best Mexican music but music of all popular genres such as Rap, R&B, Hip-Hop,
Techno, and more. Our goal is to provide innovative entertainment of the highest standard,
which anticipates the needs, and exceeds the expectations of our clientele and community. The
goal of La Cantina is to bring fun, safe, and controlled events such as live entertainment to the
valley that cater to our target market of everybody 18 and older that are social and looking to
meet new people.
One of the main advantages that La Cantina has to offer is that the nightclub will be open
to everybody that is older than 18. Instead of just focusing on the 21 and over market, this is
what many of the nightclubs around the valley do. La Cantina will include the 18-20 market as
well by including them in the special events that the nightclub has to offer. There will also be a
specific night of the week where La Cantina will allow people 18 and over, such as every Friday
of the month or so.
MissionStatement:
“Our mission is to have La Cantina become one of the premier Night-time entertainment
locations in the valley. To achieve this goal, we will offer a fun, friendly, unique nightclub
atmosphere with the best in customer service, satisfaction, and live music entertainment that
keeps up to date with the changing taste and expectations of our core customers.”
Products and Services:
La Cantina will represent a unique opportunity to create a high energy, dance-theme
venue that will feature multiple music genres, specializing in Mexican music, Hip-Hop, R&B,
Techno, and more. The nightclub will cater to people over the age of 18, college students, young
professionals, tourists, as well as singles and couples. The new venue will offer beer, an array of
liquors and mixed drinks. In addition, the venue will sell nonalcoholic beverages such as soft
drinks, juices, and bottled water. A casual bar menu consisting of appetizers and small entrees
ranging anywhere from five to thirteen dollars will be available. The initial hours of operation
will be 9:00pm to 2:00am and will vary depending on how the night is looking like and the
event, two nights a week. The nightclub will feature a dance floor, 2 VIP Luxury rooms, 1
restaurant seating about 100-200 people, and a bar area.

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Competitive Position:
La Cantina will be the only Mexican nightclub to provide multiple types of music genres
such as Banda, Norteña, Corridos, Rap, Hip-Hop, R&B, Salsa, and other popular music genres,
all while appealing and attracting to everybody from age 18 and up. It will be the first nightclub
that will target older teens and students from age 18 and over. There are other nightclubs in the
Valley that allow people 18 and over, however only on certain special events. These nightclubs
can be viewed as competitors to La Cantina.
Target Market:
I see the Nightclub “La Cantina” as appealing to about 4 major market segments, the
young professionals, college students, high school students age 18 & up, as well as tourists and
business travelers. The long day and late night hours of operation will help to multiple segment
appeal. The market segmentation scheme allows some room for estimates and nonspecific
definitions.
Marketing Strategy:
Many new residents as well as existing residents are members of clubs in other markets.
La Cantina will be a place for all, and the enabling technology will be a key part of the
nightclub’s image. Advertising budgets and event promotion are ongoing processes of
management geared to promote the brand name and keep La Cantina at the front of dance theme
nightclubs in the valley. Radio and Social Media advertising will be our main ways of reaching
out to new customers. In terms of advertising we will be developing a core positioning message;
we will concentrate a good amount and use a substantial portion of our daily ad budget towards
the “Grand Opening Event”. La Cantina will also be marketing to local hotels and airport in
order to try and lure the tourists in, along with ads in the college newspapers nearby for the local
campuses of Rogue Community College and Southern Oregon University.
Operations:
The kitchen will be open from 9:00pm to 12:00pm two days a week. The bar will be open
from 9:00pm to 2:00 am, both on Friday and Saturday night. La Cantina Nightclub will employ
21 people to fill various positions of the nightclub.
Management:
La Cantina will be a general partnership with two other potential clients. As of now the
management team consists of only one person which is myself, along with two other friends who
are potentially going to be involved as well. Together we share a single vision: to provide a
unique and entertaining experience through exceptional service. Since none of the owners have
experience in the Bar/Nightclub setting, there will be Assistant Managers hired who will have a
good amount of experience in the Bar/Nightclub setting and will be in charge of managing the

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floor, as well as the bar.
Juan Sauceda, President. Juan is pursuing a bachelor’s degree in business management,
and looks to work his way up in the Nightclub Industry in order to gain experience along the way
and pursue the ambition of opening a nightclub. He has a good taste in music and knows ‘what’s
in’ at the moment. He has a good music contact list that involves different music genres and
entertainers, ranging from groups, solo artists, and DJs as well. These entertainers will be looked
at first in order to get the Nightclub going, and work its way to bringing in the bigger groups and
artists. Juan’s responsibilities will lie primarily with the coordination of events, and oversight of
the operations, and evening activities of the restaurant and bar.
Financials:
La Cantina Nightclub is expected to earn a net income of $261,247 in 2015, $612,060 in
2016, and $1,210,850 in 2017. La Cantina will be keeping the retained earnings in order to
attracter bigger performers for live entertainment.
La Cantina Nightclub will be financed by a 15-year long-term loan at a six percent interest rate
in the amount of $300,000. La Cantina Nightclub will incur interest payments of $17, 653.84 and
a principle payment of $12,732.01 in 2015. Interest payments of $16,868.99 and principle
payments of $13,509.85 will be incurred for 2016.

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Club Design:
La Cantina nightclub will be set up in the way that encourages the people to go out on to
the dance floor and have a good time. There will be tables set up outside the dance floor but to a
limited amount since the idea is to get the people dancing. La Cantina will also be serving small
appetizers as well as a full bar that will be close to the entertainment area. The menu will consist
of traditional bar appetizers with a Mexican taste to it, serving appetizers such as chips and salsa,
quesadillas, tacos, burritos, and more. La Cantina will not stick to one general theme; instead it
will consist of a variety of themes throughout the month with matching interior decorations. We
will be employing multiple DJs in order to stay true to the idea of providing a variety of music to
the people, which is one main area of focus for La Cantina nightclub. We will also be providing
a variety of live entertainment as well. DJs and live entertainment will be the two main sources
of entertainment.
Mission:
“Our mission is to have La Cantina become one of the premier Night-time entertainment
locations in the valley. To achieve this goal, we will offer a fun, friendly, unique nightclub
atmosphere with the best in customer service, satisfaction, and live music entertainment that
keeps up to date with the changing taste and expectations of our core customers.”
Objectives:
 Capitalize on opportunity to become the premier nightclub in the valley
 Open the venue sometime in the next 10-15 years
 Pay back long term loan by year 5
 Provide guests with quality foods,beverages,and entertainment atmosphere
 Maintain tight control of costs,operations,and cash flow through diligent management and automated
computer control
 Control food cost below 30% of food revenue
 Control total beverage cost below 25% of beverage revenue
Future Growth:
La Cantina Nightclub after three years of successful business will have established a
good reputation among its target market and will be considered as the premier nightclub of the
Rogue Valley. After the three years, we will continue to strive to guarantee the best quality of
live entertainment and focus on the customers wants, as to which groups, bands, or artists they
want to see. An idea of adding another floor to La Cantina Nightclub will be looked at in the
future as well, a floor used to play different music than the first floor. After five years, the
reputation of La Cantina Nightclub will have grown to a size where big names of multiple music
genres will be playing at the nightclub on a consistent basis, as well as special events and
holidays. Guest DJs will also be available for special events, popular nights, and holidays.

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Site Analysis:
La Cantina Nightclub will be located at 40 East Tenth Street Medford, OR. This is a
perfect location because it is in downtown Medford, where all the other bars and nightclubs are
located as well. The RVTD (Rogue Valley Transportation District) is within walking distance, as
well as public parking, parking garages, and taxis driving around all the time looking for
customers. La Cantina Nightclub will be located in the old Medford Grocery Company
Warehouse, which also used to be a teen nightclub called “Fat City” in the late 1970s and early
1980s and a tavern before then. The old Medford Grocery Company Warehouse is a two-story
brick building with a basement, built in 1910 (Medford Grocery Company Warehouse- Medford,
Oregon – U.S. National Register of Historic Places). According to an article the Mail Tribune
wrote about the warehouse “….For those 20 or so years, either as a discotheque or tavern, it was
having a lot of fun. People were dancing, listening to music and sometimes downing a few
drinks” (Miller "In the walls of the old brick warehouse"). But due to legal and building code
issues in the early 1990s, the building became vacant and has been ever since.
The building has been vacant for at least the past twenty years now, so a rough estimate of over
$800,000 of renovations will need to take place. Since the warehouse used to be a tavern and
nightclub back then, that means the building already has a nightclub type setup in the inside,
including a dance floor already. The renovations will include of adding a kitchen if it doesn’t
already have one, bringing the building up to codes and regulations, and making the building
look more like an attractive nightclub people want to go to.

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Industry Analysis:
The United States Bar & Night-club Industry includes about 45,000 establishments with
combined annual revenue of about $20 billion. There is no major company that is dominating the
market; varying state liquor laws complicates the ability to be able and form large chains in the
industry. The Bar & Nightclub Industry is considered to be highly fragmented, the 50 largest
companies in the market account for only about 5% of the total revenue.
Bar & Night-club owners will earn the reward of increasing incomes and consumer spending
over the next five years. Revenue is expected to grow at a rate of 2.1 % to $26.1 billion by 2019.
The industry will benefit from an improving economy, lower unemployment rates, and
discretionary spending. Over the next five years to 2019, consumer spending is expected to grow
at a rate of 3%.
Beer, Wine, and Premiumization
In the five years to 2019, alcohol consumption is expected to increase at a minimum level as
moderate alcohol consumption continues to be a part of the American lifestyle. The shift towards
premium beverage consumption will keep on increasing as the economic recovery supports the
average disposable income, leading to consumption rising in the next five years to 2019. Because
of this shift, beer is expected to attract a larger share of the demand for alcoholic beverages in the
next five years.
The interest in local and imported wines is expected to grow as well. The growing interest
among “millenials” (those born in the 80’s and 90’s) who represent a large portion of demand
than baby boomers will also divide growth in the market. The future wine drinkers will certainly
benefit the wine bars and wine sales at drinking locations.
Liquor and spirit demand is expected to grow in the next five years, mainly due to
premiumization and a cocktail culture. In order to be successful, businesses will need to pick up
and respond fast to the cocktail trends during this time. The bars and nightclubs that identify
their niches and adapt to the drink menus to meet the changing customer demand, will be the
most successful.
Competitiveness
Personal income and Entertainment Needs are two factors that drive the demand in the Bar &
Night-club Industry Analysis. Each company’s revenue depends on the ability to drive traffic to
the location and the ability to develop a loyal local clientele. The large companies can offer a
wide variety of food, drinks, and entertainment, and because of this they hold advantages in
purchasing, financing, and marketing. The smaller company’s only way to compete is by being
able to serve the local market at an effective level by offering unique products or entertainment,

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or providing exceptional customer service. The Bar & Night-club Industry is also considered to
be labor intensive, which means needing a large workforce or large amount of work in relation in
order to output. The average annual salary per worker is about $60,000.
Bars and nightclubs compete with any other venue or company that offer alcoholic drinks or
entertainment such as restaurants, hotels, and casinos. Drinking establishments also compete
with the home consumption of alcohol.
Market Industry and Trends
According to IBISWorld, the Bar & Night-club business revenues grew by 3.5% in 2011
and is projected to increase some more by 3.2% to $22.7 billion in 2012. This has been looked at
something promising in the industry since the markets growth rate before has been reasonably
flat since 2007. Even with the 3.2% increase in 2012, the 5 year average annual revenue growth
was still negative at 0.7% through 2012. The large decline in bar and nightclub revenues in 2009,
when the industry revenue fell 9.3% because of a big contraction in consumer spending and
adjusting the alcohol consumption patterns can be looked at factors that play in the market
growth rate trend. The year after in 2010, the Bar & Night-club industry began to recover with a
revenue growth of 1.1% throughout the year.
Consumer spending in the Bar & Night-club Industry is considered to be a luxury
spending, which is true because people usually spend their extra change of their income to go out
for a beer and entertainment at a Bar or Night-club. The Great Recession which affected a lot of
the industries in the US and the high unemployment years caused a lower consumer spending in
2009, down by 1.9%, which lead to a decrease in luxury spending for consumers that included
their trip out for a beer or entertainment at a Bar or Night-club. A societal shift away from
alcohol in order to pursue a healthier lifestyle also contributed to a decline in the amount of trips
to bars and nightclubs. However, with consumer spending increasing the next couple years, it has
brought many consumers back to the bars and nightclubs for their beer and entertainment.
Consumer spending in the Bar & Nightclub industry is projected to keep on growing within the
next couple years, which is good news for the bars and nightclubs because it will help continue
to improve their revenues.
IBISWorld also notes another emerging trend in the Bar & Night-club industry, the increase in
the number of customers choosing to purchase packages beverages for home consumption rather
than buying beverages at bars and nightclubs. This trend is supposed to have big impacts on the
Bar & Night-club business. Because of this trend, the number of bar and nightclub
establishments is forecasted to decrease slightly, an average of 1% to 66,602 in 2017, while the
employment levels are also expected to decrease slightly at an average of 1.2% per year to
345,253 in 2017. Even with these bar and nightclub trends happening, the revenues are expected
to grow as the economy gets back up and running and consumer spending increase. The industry

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revenue is projected to increase about 2.5% per year over the next 3 years, reaching about $25.7
billion in 2017.
Customer Demographics
The following are two data sets that provide facts about the customer demographics in the Bar &
Night-club industry. One data set has to do with the spending regarding beer and ale in bars and
nightclubs and the second data set consists of spending regarding liquor in bars and nightclubs,
besides beer and wine.
Beer and Ale spending in Bars and Nightclubs:
Target Customers: Householders under the age of 35 spend about 51% to 58% above the
average household expenditure of about $71.98 on beer and ale at restaurants and bars. The
people who live by themselves and spend less than average on typical consumer staples, tend to
spend about the same as the rest of the population on beer at bars and restaurants.
Ethnicity: Non-Hispanic whites spend about 16% higher on beer and ale than the national
household average, they also compromise for almost 88% of the market. Other ethnic groups
spend lower than the national average. Hispanics spend about 33% less, Blacks about 73% less,
and Asians about 50% less than the market.
Income Levels: The Households earning $100,000 or more spend about 84% more than
the average household on beer and ales. Households earning $70,000- $100,000 spend 21% more
than average. Households earning between $40,000- $70,000 spend about 15% more than the
national household average, while households earning less than $40,000 spend about 50% less
than the national average.
Liqour spending in Bars and Nightclubs (except beer and wine):
Target Customers: Householders in the ages between 25 and 34 spend about 66%
($83.25) above the national average household. Householders in the ages below 25 spend 30%
($65.50) more than the average household, and householders aged 45-54 spend about 11%
($55.62) above the national average.
Ethnicity: Non-Hispanic whites spend 13% more than the national household average on
liquor and also compromise 87% of the market. Other ethnic groups such as Hispanics spend
about 38% less, Blacks about 51% less, and Asians about 8% more than the market.
Income Levels: Households earning $100,000 or more spend 82% more than the average
household on liquor. Households earning $70,000-$100,000 spend 20% more than the average
household. Households earning $40,000- $70,000 spend about 8% more than the average
household, while households earning less than $40,000-$70,000 spend about 46% less than the
national average household.

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Key Success Factors in the Bar & Night-club Industry
According to IBISWorld, there are 250 success key factors for a business. The most
important factors for this particular are having a loyal customer base. It’s important to be able to
ensure a high amount of regular customers who spread their word to their friends, the more
regulars the better. The ability to adapt to new technology is another key factor because it helps
you keep track of areas such as stock control, which is another key factor. Effective cost
controls, having these costs in place is essential in this low profit margin industry. Always
having the appropriate licenses is a big factor because if you don’t always meet the conditions of
the licenses, your business could be in trouble. The last key success factor according to
IBISWorld is access to niche markets because it’s important to keep track and have a very good
understanding of the markets and the consumers changing needs.
Barriers to Entry
The barriers to entry in the Bar & Nightclub Industry are low and steady, given that an operator
can sometimes lease the premises, equipment, furniture and fittings, can be beneficial because it
lowers the initial capital costs, outlays, and borrowings.
The majority of the businesses in the industry are small businesses who have only a small
number of employees, which is an indicator of the fragmented nature in the industry, like I
mentioned before. The main barrier to entry is obtaining a suitable liquor license. The entry costs
can be lowered by leasing or managing an establishment already on behalf of the owner. There
are some local government planning regulations which a business has to comply with, such as
zoning and location of the business as well as parking and access by patrons. This planning
approval includes aspects such as noise, security measures, and operating hours.
Future Risks
Concerns over a potential rise in binge drinking rates, mainly among young adults, could place
the Bar & Night-club Industry under increased government scrutiny. According to the US
Department of Health, the highest prevalence of binge and heavy drinking occur among young
adults in the ages of 18 to 25, with the rates peaking at 21. A total of 38.7% of young adults are
classified as binge drinkers. As a result of all this, future restrictions may arise in order to fight
with binge drinking. The restrictions could include control over sale of kegs, happy hour
specials, beer sales of pitchers and large containers, alcohol advertising, limiting the potential
revenue growth.

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Industry Maturity:
The Bars and Nightclubs Industry is a very mature industry that has been around for a
very long time, little changes have been made in this industry during its time of existence. It is
not an industry that relies on technological advances and has very low barriers of entry, which
can be a good but yet, a bad thing. Low barriers of entry can lead to a highly competitive market,
which is exactly what the Bars and Nightclubs industry is, along with very high regulations.
Unlike other industries, the bar and nightclub industry does not have any major players and the
majority of revenue is not controlled by a small number of businesses. This industry is highly
affected by consumer spending. If consumer spending decreases, then the number of people
going out to a bar or nightclub also declines. During the 2008 recession, dramatic drops in
revenue and consumer spending led to many businesses closing because they weren’t able to
survive the recession. Over the five years to 2019, the industry is projected to continue facing
competition from the rise of in-home alcohol consumption and non-industry establishments that
also serve alcohol, restaurants for example. Even with these factors affecting the industry, the
industry’s financial performance is forecast to strengthen as the economy improves and
consumer spending increases. Again, in the five years to 2019, the industry is forecast to
moderately increase at an annualized rate of 2.1% to $26.1 billion.

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Area Analysis:
La Cantina Nightclub will be located in Medford, OR, which is the largest city in
the Jackson County, and as of July 1 2012, has a population of 76,462. Medford is located in
Jackson County, which has a population of 207,010, making the Medford MSA the 4th largest
metro area in Oregon ("Medford, Oregon"). The fastest growing cities in the Jackson County are
Central Point and Eagle Point, with Medford and Phoenix not far behind ("Housing Costs"). This
can be seen as a positive because they are within a 15-minute drive range from the location of La
Cantina Nightclub.
Persons of Hispanic or Latino origins, which will be one of the main target audiences for
the nightclub, compromise the largest ethnic group in the Rogue Valley. In the last two years, the
number of Hispanic or Latino persons increased from 6.7% to 8.3% of the population ("Housing
Costs"). An area where the Hispanic and Latino population is increasing needs entertainment
options such as a Hispanic nightclub that can cater to the population.
From 2000 to 2010, the Latino population in Jackson County grew by almost 80% to
about 22,000, and the number of Hispanic-owned firms grew from about 350 to 1000. At the
forefront of this is a new, highly motivated and educated group of Latino Entrepreneurs like
myself who are trying to find ways to reach out to the Hispanic community (Doussard "Latino
business grows in south").
Medford is world renowned for its pears and other agricultural products. However, in
recent years, Medford has gone through somewhat of a transformation from agricultural to a
tourist center. It is still an agricultural base, but this just means Medford has gotten enough
tourists in order to make changes. It has added malls, began restoring historic downtown and
other attractions for the tourist so that it is more attractive to the visitor ("Oregon").

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Target Market:
I see the Nightclub “La Cantina” as appealing to about 4 major market segments, the
young professionals, college students, high school students age 18 & up, as well as tourists and
business travelers. The long day and late night hours of operation will help to multiple segment
appeal. The market segmentation scheme allows some room for estimates and nonspecific
definitions.
1. Young Professionals- Due to a great number of businesses that relate to single adults and
young couples, such as theaters, other bars & nightclubs, and restaurants, it is only smart
to appeal to this type of market. Whether it is a group of friends, or a couple out to see a
movie together, these people need a place to eat/drink before and/or after their movie.
These customers range from 26-40. The nightclub will appeal to this category by
switching the tempo and entertainment to their taste as it gets later in the evening on the
weekdays.
2. College Students- By creating an environment that is appealing to college students, we
secure a strong progression between the high school student and young professional.
Through word of mouth between the local college and universities, La Cantina expects
this segment to keep in increasing.
3. High School Students age 18 & Up- Many popular nightclubs have their age limit set at
18 and La Cantina will be one of these nightclubs. Even though the legal drinking age in
the Jackson County is 21, La Cantina will still appeal to the 18 and over crowd. With a
large number of High Schools in the valley, there is a big amount of students who are 18
and over that my nightclub can appeal to.
4. Tourists and Business Travelers- With Ashland close by and being one of the biggest
touring destinations in the valley, I believe I can attract people from that area because
there is no nightclub like La Cantina in Ashland. Not only in Ashland, but more and more
businesses and travelers and tourists are finding themselves in the Jackson County, I
believe my nightclub can grab many of the people in this segment. I plan to reach these
people as well as the other people from other segments by word of mouth, direct
marketing, online marketing, and other techniques.
Geographic Description
The main target markets are locals and visitors of Medford, and the surrounding cities
nearby, however; all of the Jackson County will be also be targeted as well. There is a
Community College nearby as well as a University in a town nearby, which will be greatly
targeted since La Cantina will have the atmosphere for this type of segment. Direct Marketing,
Word of Mouth, Online Marketing, and Social Media, as well as any other business partnerships
will help target and reach the rest of the county as well as the wider geographical area beyond
Jackson County.

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Lifestyle and Psychographic Description
College students are usually part time workers with a low budget and high need for
entertainment and leisure activities, mainly because they need something to get their mind off of
school for a while. Budget restrictions and high gas prices are some of the barriers La Cantina
will need to take on in order to attract students from the bigger university in the valley, which is
in Ashland, but won’t be as much of a problem for the students who attend the Community
College nearby in Medford. However, carpooling is known to be a popular strategy among
college students because it is a cheaper form of transportation and saves everybody money, so
there are some ways around these barriers that could help attract the university students. They
frequently use the web and social networks such as “Facebook”, and “Twitter” to find out about
the latest events going on in the area. The students targeted are in the age of 18 to 25, fun
seeking, outgoing, people who are looking for a good time. It is therefore important to keep up
with the latest and hottest music in order to appeal and attract.
Tourists and business travelers visit the city of Medford on the way through the Jackson
County after they have visited some of the biggest attractions around such as the Oregon
Shakespeare Festival in Ashland, or the big wineries in Medford and surrounding areas. These
aspects will be considered in the choice of marketing channels and business partners. After a
long day of sightseeing, tourists want to be able to eat, have a drink, and dance to top off their
evening. La Cantina will meet this demand by offering a unique experience that they won’t be
able to get at any other nightclub. Tourists also want to take pride in telling friends about their
vacation experience. La Cantina is a unique nightclub that will offer a variety of music to get you
moving.
High School students age 18 & up are similar to those of college students, except at an
earlier stage. They are usually part time workers with low budget and high need for
entertainment and leisure activities. The difference with this group is that they are not at the
drinking age limit so they won’t be able to enjoy all the features that La Cantina will have to
offer; only some that are appropriate for their age. The same marketing techniques that will be
used to appeal and attract the college students will be the same used to attract the older high
school students age 18 and over, around the valley.
Young Professionals have similar needs as tourists and business travelers, and look to
have a unique experience when visiting a nightclub. They are all about having some fun and
looking forward to the nightlife after a long day of hard work. This type of segment will usually
take advantage of the entertainment opportunities the surrounding area has to offer. Whether it is
watching a movie first or grabbing a bite to eat, they usually end up at a nightclub at the end of
the night for drinks and some dancing to cap off their night.

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Purchasing Patterns Description
College and High School students have restricted budgets, which will allow them to be
able to enjoy the nightlife only when they have enough cash, or during hard and stressful times
that school puts on them, such as midterm or finals week, that is why students will usually not be
known as regulars but those who come several times when they have a chance.
Tourists, business travelers, and young professionals usually search on the internet for
offers or hear about specific destinations through word of mouth. If the experience was good and
unique enough, they will let their friends know about the good time they had and will also
usually come back for a second time. Because tourists and business travelers come only on
certain times of the year, young professionals are usually the ones known as regulars because of
the constant nightlife they maintain, going out almost every weekend or after a long day at work.
Buying Sensitivity Description
Students are especially known to be sensitive to prices but can be attracted and grabbed
through special offers and advertising. Image and looks is very important when it comes to
attracting a younger age group segment.
Tourists, business travelers, and young professions look more for the experience rather
than being price sensitive, this is why they will be attracted to the main features that La Cantina
has to offer such as special events, special deals, VIP seating, and more.

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Competition:
Competitive Position
La Cantina will be the only Mexican nightclub to provide multiple types of music genres
such as Banda, Norteña, Corridos, Rap, Hip-Hop, R&B, Salsa, and other popular music genres,
all while appealing and attracting to everybody from age 18 and up. It will be the first nightclub
that will target older teens and students from age 18 and over. There are other nightclubs in the
Valley that allow people 18 and over, however only on certain special events. These nightclubs
can be viewed as competitors to La Cantina.
Nightclubs with competing features are:
1.Tequila Nightclub- allows people 18 and over, provides similar music genres, similar
target market. Known to be small and dirty.
2.Guadalajara Nightclub- Only allows people 21 and over, similar target market. Has
good reputation as a Mexican Nightclub in the Medford area.
3.Si Casa Tequila Bar & Grill- New bar in town has occasional “Latin Nights” that play
similar music genres to La Cantina.
Although there are a numerous amount of Mexican restaurants in the valley that offer
occasional music events such as “Latin Nights” or bring in groups for live entertainment, they
don’t offer these services at a consistent level because they are restaurants and not nightclubs.
The main competitors would be Tequila Nightclub and Guadalajara Nightclub because they offer
these types of services and special events at a consistent level, while providing much of the
similar music genres as La Cantina.
Competitive Edge
La Cantina’s competitive edge is reaching out to a younger target market that includes
people with the age 18 and over, which is not fulfilled to its potential at the moment, and
providing excellent customer service along with a friendly and clean environment where
everybody who comes to La Cantina will have a unique experience and a good time.
There is a good amount of High Schools in the valley, which means there are a lot of students
who are at the age of 18 that can be targeted. Having events such as 18 and over nights, as well
as including them with other special events that La Cantina has to offer, will be a good way to
reach out to this market. Not many nightclubs in the area reach out to an 18 and over target
market and if they do, then they include them on special events only that happen every now and
then. La Cantina will win a competitive advantage by offering an 18 and over-night on the

16
weekend, couple times a month, as well as including them in other events that La Cantina offers,
as I stated before.
Currently, Tequila Nightclub brings in groups for live entertainment on a constant basis, as well
as DJ’s to play on the weekends. Guadalajara Nightclub also brings in groups for live
entertainment but not as consistent as Tequila, and not how they did before. However, both of
these venues are sometimes small for the big names that come every now and then. La Cantina
will be in a bigger venue where it will be able to support big name groups on a constant basis and
where the customers will also feel more comfortable.
Market Share Distribution
There are currently only two Mexican nightclubs that can be identified as direct
competitors and offer the same services and features as La Cantina. Only Tequila Nightclub
brings in groups on a consistent level for live entertainment which will be a key feature for La
Cantina. The market for Mexican nightclubs in the Medford area is not very competitive at the
moment with none of the direct competitors really dominating the market. This means it’s a good
time of joining the market and making a name for La Cantina, in order to dominate the market
and be known as the best Mexican nightclub in the valley.
Future Competition and Barriers of Entry
Keeping up with the special permits that are required in order to run a nightclub in the
valley is a reason why many of the new nightclubs that open, fail within a couple of months,
which is why many people are hesitant of opening a nightclub because it can be a lot of work to
maintain and run the business. By establishing strong business partnerships with other businesses
who can help benefit La Cantina in their special events and by developing a strong presence and
popularity as a Mexican nightclub in the valley, the market will appear unattractive for future
competitors.
The barriers to entry in the Bar & Nightclub Industry are low and steady, given that an operator
can sometimes lease the premises, equipment, furniture and fittings, can be beneficial because it
lowers the initial capital costs, outlays, and borrowings.
The majority of the businesses in the industry are small businesses who have only a small
number of employees, which is an indicator of the fragmented nature in the industry, like I
mentioned before. The main barrier to entry is obtaining a suitable liquor license. The entry costs
can be lowered by leasing or managing an establishment already on behalf of the owner. There
are some local government planning regulations which a business has to comply with, such as
zoning and location of the business as well as parking and access by patrons. This planning
approval includes aspects such as noise, security measures, and operating hours.
Strategic Position & Risk Assessment

17
La Cantina’s main objective is to become the most popular Mexican nightclub in the
Medford area as well as the surrounding communities for providing a unique nightclub
experience to the city, as well as the locals and regulars. La Cantina will capitalize on the
following core competencies to become the main nightclub destination in the valley:
-Exceptional Customer Service
-Unique experience
-Big Name Groups
-Friendly Environment
-Special Events/Features
La Cantina’s strategic position is based on evaluating the following factors:
1. Industry Trends and Opportunities
2. Customer Needs
3. Competitive Environment
4. Strengths
5. Risks
Customer Needs
La Cantina’s target markets are young professionals, High School students age 18 and
over, College Students, as well as tourists and business travelers. Regardless to the differences
between the four target markets, all of them have one similarity when it comes to visiting La
Cantina, and that is to have a good time after a long day of hard work, school, studying, or
whatever the reason may be. This is where La Cantina steps in to offer the people a nice, clean,
and friendly environment as well as the hottest and latest music around to fulfill that need.
Personal income and entertainment needs drive demand. The profitability of individual
nightclubs depends on the ability to drive traffic and develop a loyal clientele. Large companies
can offer a wide variety of food, drinks, and entertainment, which is what La Cantina is aiming
to be. Small companies can compete effectively by serving a local market, offering unique
products or entertainment, or providing superior customer service.
Competitive Environment
There is no comparable Mexican nightclub such as La Cantina in the Medford area yet.
Although, many different nightclubs provide some of the same features and events as La
Cantina, the business concept of La Cantina will be unique. As a first mover into the market, the
management team and staff will work hard to make La Cantina appropriate and suitable for
people of all ages over 18, instead of just focusing on the 21 and over market which most of the
nightclubs in the area do. I have seen and been to nightclubs that are 18 and over, and the turnout
they have achieved has been great. I hope to bring the same concept to La Cantina.

18
Strengths
Compared to the smaller venues that Guadalajara and Tequila Nightclub, our direct
competitors have, one of our strengths will be the size of our venue because it will allow for a
more relaxed and comfortable environment, instead of a small venue where people are constantly
squished together. The idea to reach out to the 18 and older market is also another one of our
strengths. Because of the big number of high schools in the valley, there is a big market of
people 18 and over who are not targeted by nightclubs. As being one of the first nightclubs in the
valley to do this, I believe there could be potential in this market that could benefit La Cantina.
As I stated before, the goal of La Cantina is to become the main destination for nightclubs while
being suitable and appropriate for people 18 and over.
Risks
Concerns over a potential rise in binge drinking rates, mainly among young adults, could
place the Bar & Night-club Industry under increased government scrutiny. According to the US
Department of Health, the highest prevalence of binge and heavy drinking occur among young
adults in the ages of 18 to 25, with the rates peaking at 21. A total of 38.7% of young adults are
classified as binge drinkers. As a result of all this, future restrictions may arise in order to fight
with binge drinking. The restrictions could include control over sale of kegs, happy hour
specials, beer sales of pitchers and large containers, alcohol advertising, limiting the potential
revenue growth.
Another risk that can potentially happen is by allowing people 18 and over, they aren’t at the
drinking age limit in Oregon yet, so some alcohol problems could come up in regards to serving.
One way to resolve this is by giving those who are 21 and over wristbands to be able to identify
who’s at the legal age and who is not. This is just one of the many ways we can be able to work
with this risk and potentially stop it from being a big problem for La Cantina.
Strategic Position
After assessing the risks, we realize that the biggest threat to La Cantina is the availability
of alcohol while there are people who are not at the drinking age limit yet. This is our biggest
threat because it could involve some serious legal problems and could potentially run the
nightclub out of business. There have been many nightclubs in the valley that have been faced
with this problem and couldn’t find a way to overcome it, so they had to shut down. Obviously, I
don’t want this for La Cantina, so as long as we come up with working strategies in order to fight
this threat, the nightclub will be in good position. The ability to provide solutions to these types
of threats and everyday problems that occur in the nightclub business, as well as being able to
react quickly to changes in demand will reduce the risk of failure and help the company achieve
the goal of being the main destination for clubbing in the Medford area.

19
Management:
La Cantina will be a general partnership with two other potential clients. As of now the
management team consists of only one person which is myself, along with two other friends who
are potentially going to be involved as well. Together we share a single vision: to provide a
unique and entertaining experience through exceptional service. Since none of the owners have
experience in the Bar/Nightclub setting, there will be Assistant Managers hired who will have a
good amount of experience in the Bar/Nightclub setting and will be in charge of managing the
floor, as well as the bar.
Juan Sauceda, President. Juan is pursuing a bachelor’s degree in business management,
and looks to work his way up in the Nightclub Industry in order to gain experience along the way
and pursue the ambition of opening a nightclub. He has a good taste in music and knows ‘what’s
in’ at the moment. He has a good music contact list that involves different music genres and
entertainers, ranging from groups, solo artists, and DJs as well. These entertainers will be looked
at first in order to get the Nightclub going, and work its way to bringing in the bigger groups and
artists. Juan’s responsibilities will lie primarily with the coordination of events, and oversight of
the operations, and evening activities of the restaurant and bar.
The other two friends who might be potentially involved in this nightclub will cover the
responsibilities of administrative management such as inventory, accounts payable, purchasing,
payroll, and public relations with limited marketing involvement. Other responsibilities include
the main marketing scheme to radios and newspaper, as well as personnel to manage the bar. The
positions of office, kitchen and dining room managers, as well as bartenders, have yet to be filled
at this time and will be hiring employees on the way before the opening day.
Personnel Plan:
We will be looking to find a security agency to work with in order to acquire security
guards and ensure that top quality service will be a priority at La Cantina Nightclub. Bartenders
who will be hired will have at least 3 years’ experience and ensure that the drinks are served with
the best quality, and are capable of handling customer rushes when they occur. Hiring for lower
positions such as bartenders and servers will be mainly conducted by the managers, but the final
decision will lie within the owners.

20
Organizational Structure:
The main areas of focus at “La Cantina Nightclub” are the entertainment, bar, and
kitchen. The managers will have most of the responsibilities in these areas since the security will
be from an outside source potentially, and the cleaning crew will have a cleaning supervisor. The
security will be there in order for back up for any emergency situations and if there is a need for
the manager at the front door, he will be equipped with an ear piece to be in touch with everyone.
Illustrated below is the organizational structure for “La Cantina Nightclub”.

21
Marketing:
Many new residents as well as existing residents are members of clubs in other markets.
La Cantina will be a place for all, and the enabling technology will be a key part of the
nightclub’s image. Advertising budgets and event promotion are ongoing processes of
management geared to promote the brand name and keep La Cantina at the front of dance theme
nightclubs in the valley. Radio and Social Media advertising will be our main ways of reaching
out to new customers. In terms of advertising we will be developing a core positioning message;
we will concentrate a good amount and use a substantial portion of our daily ad budget towards
the “Grand Opening Event”. La Cantina will also be marketing to local hotels and airport in
order to try and lure the tourist’s in.
With a large number of people on social networking platforms, including Facebook and
Twitter, Social media advertising will be a big part of the marketing strategy. We will be able to
stay in touch with customers and have a direct line with them. Specials, deals, and other ideas
can be possible through these outlets. One example is offering people who “check in” deals to
buy one and get the second free, restricted to a specific amount of people. We will also be able to
promote performers on these social networks and be able to provide people with short clips of
performers, so future customers can have a taste of what La Cantina provides.
La Cantina will create an identity orientated marketing strategy specializing mainly in
radio media, social media, print ads, and in store promotions. We will be running regular local
radio and newspaper ads to create brand awareness, as well as local hotel guests and airport, like
I said before, in order to attract business travelers and tourists with little knowledge of where to
go in the evening. Ads will also go into the college newspapers for the local campuses of Rogue
Community College and Southern Oregon University.
Marketing will also be heavily utilized for the opening of La Cantina Nightclub. Local
radio will be heavily utilized for promoting the opening of La Cantina Nightclub with prizes and
tickets. This advertisement will be mostly focused in February and March of 2015 spending
about $2,125.000 a month and after the opening the marketing will be reduced to around $750,
eliminating the billboard.
(Gaebler, 2011)

22
SWOT Analysis:
Strengths
-La Cantinawill be providingmultiplepopularmusicgenressuchasBanda,Corridos,Nortena,Rap,Hip-
Hop, andmore,insteadof justfocusingona few
-Customershave asay inthe live entertainmentwe provide
-TargetMarket is wide,includesalotof potential customers
-Greatlocationand size
-Affordabledrinksandqualityfood
Weaknesses
-Nota lot of experience inBar/Nightclubbusiness
-There are a couple of well-establishedbusinessesinarea
-Financesthe firstcouple months,since we willbe anew business
-Longwork hours
Opportunities
-Lowbarriersof entry
-Nomajorplayersdominatingthe marketshare inthe area
-Easyentry
-If opportunityis there,addanotherfloordependingif businessissuccessful ornot
-Become the premiere nightclubinthe Rogue Valley
Threats
-Competitionnearbyhave establishedthere loyalcustomersalready
-Economicdownturnwill cause forareductioninconsumerspending
-Increasedcompetition
-Liabilitiescanbe a big problem

23
Loan Funds DispersalStatement:
-A loan total of 300,000 will be required for the start of La Cantina Nightclub.
-Paid-In Capital will total $120,000
Paid-In Capital:
Self $20,000
Parents $50,000
Grand Parents $20,000
Spouse $10,000
Sister $10,000
Brother $10,000
Total: $120,000
Capital Expenditures Cost
Marketing $2,875.00
Permits $45,000.00
Renovations $168,000.00
Audio Systems $ Lighting $40,000.00
Office Equipment $1,000.00
Furniture, Carpet, Tables, etc. $40,000.00
POS System $1,300.00
Bathroom/Cleaning Supplies $500.00
Bar Equipment $15,000.00
Total: $313,675.00

24
Financials:
La Cantina Nightclub is expected to earn a net income of $261,247 in 2015, $612,060 in 2016,
and $1,210,850 in 2017. La Cantina will be keeping the retained earnings in order to attracter
bigger performers for live entertainment.
La Cantina Nightclub will be financed by a 15-year long-term loan at a six percent interest rate
in the amount of $300,000. La Cantina Nightclub will incur interest payments of $17, 653.84 and
a principle payment of $12,732.01 in 2015. Interest payments of $16,868.99 and principle
payments of $13,509.85 will be incurred for 2016.
La Cantina Nightclub will also have positive cash flows for the projected three years. We plan on
paying off the long-term loan after five years.
The profit margin for La Cantina Nightclub will be 12.60% in 2015, 14.28% in 2016, and
14.44% in 2017. These numbers are a bit off from the industry norms, which is usually around
20-25 percent of sales.
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
2015 2016 2017
Amount$
Year
Net Income
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
2015 2016 2017
Amount$
Year
Cash Flows

25
Appendix’s
Appendix A: Financial Assumptions
-Occupancy levels for La Cantina Nightclub based on days of the week are as follows:
-Occupancy levels by day:
Friday 40.00% 600
Saturday 60.00% 900
-La Cantina Nightclub will start operations in January of 2015 and are projected for three years.
-La Cantina Nightclub will start the lease for the property at 40 E 10th St in January of 2015 and
will -Immediately start with renovations as well as installation of kitchen, lighting, stage, sound
system, and more if it doesn’t already have some.
-Grand Opening of La Cantina Nightclub is scheduled for January, 2015
-Renovation Cost will be about $100-$120 per square foot.
Sales:
-Cover charge will vary depending on the event and time, but will be every Saturday. Cover
charge will be between $10 and $20, averaging out to be $15.
-Sales of drinks are distributed as follows: Beer/Ale 30%, Distilled Liquor/Cocktails 60%, Non-
alcoholic 10%. Food cost will be monitored to be around 25%.
-Capacity for La Cantina Nightclub is about 1,500 people.
-Each person will order one plate of food and two drinks while watching a performance and one
in four people will order a plate of food and each person will order three drinks throughout the
night after 11pm, in the nightclub.
Sales Prices Price Range Average Price
Beverage Beer/Ale $3.5-$6 $4.75
Distilled $8-$12 $10.00
Non-Alcoholic $2.5-$4 $3.25
Capacity:
http://www.banquettables.pro/space-and-capacity-calculator

26
Expenses:
-Expenses are based off of a “How to start your own nightclub” book. The example is a 1,500
person capacity nightclub with a full service bar, located in the downtown area of a metropolitan
city.
Salaries:
-Salaries are distributed as follows:
Salaries # Needed # of Hours Wage $/hr Total per night Total per week Total by Month Total by position
Position:
Bartender 3 5 $9.75 $146 $584 $1,170 $1,170 Bartender
Host 1 3 $10.01 $30 $120 $240 $240 Host
Security 3 5 $12.04 $240 $960 $1,920 $1,920 Security
Performers 3 4 $29.14 $349 $1,396 $2,792 $2,792 Performers
Cleaning Crew 3 3 $10.24 $200 $800 $1,600 $1,600 Cleaning Crew
Kitchen Staff 3 3 $20.39 $280 $1,120 $2,240 $2,240 Kitchen Staff
DJ 1 $200 $800 $1,600 $1,600 DJ
Owner 2 7 $36 $504 $2,016 $4,032 $4,032 Owner
Bar Manager 1 5 $26.40 $132 $528 $1,056 $1,056 Bar Manager
Kitchen Manager 1 5 $15.41 $77 $308 $616 $616 Kitchen Manager
Operations Manager 1 7 $31.68 $222 $888 $1,776 $1,776 Operations Manager

27
Appendix B: Loan Calculations
Purchase & Financing Information
Sales Price: $300,000
Percentage Down: 0%
Length of the Loan: 15 Years
Annual Interest Rate: 6%
Loan Payment Information
Down Payment: $0.00
Amount Financed: $300,000
Monthly Payment: $2,531.57
Payment Principal Interest Balance
1 ($2,531.57) $1,031.57 $1,500.00 $298,968.43
2 ($2,531.57) $1,036.73 $1,494.84 $297,931.70
3 ($2,531.57) $1,041.91 $1,489.66 $296,889.79
4 ($2,531.57) $1,047.12 $1,484.45 $295,842.67
5 ($2,531.57) $1,052.36 $1,479.21 $294,790.31
6 ($2,531.57) $1,057.62 $1,473.95 $293,732.69
7 ($2,531.57) $1,062.91 $1,468.66 $292,669.78
8 ($2,531.57) $1,068.22 $1,463.35 $291,601.56
9 ($2,531.57) $1,073.56 $1,458.01 $290,528.00
10 ($2,531.57) $1,078.93 $1,452.64 $289,449.07
11 ($2,531.57) $1,084.33 $1,447.25 $288,364.74
12 ($2,531.57) $1,089.75 $1,441.82 $287,275.00
Totals for year 1:
I will spend $30,385.85 on my loan in year 1.
$17,653.84 will go towards Interest.
$12,732.01 will go towards Principal.

28
13 ($2,531.57) $1,095.20 $1,436.37 $286,179.80
14 ($2,531.57) $1,100.67 $1,430.90 $285,079.13
15 ($2,531.57) $1,106.17 $1,425.40 $283,972.96
16 ($2,531.57) $1,111.71 $1,419.86 $282,861.25
17 ($2,531.57) $1,117.26 $1,414.31 $281,743.99
18 ($2,531.57) $1,122.85 $1,408.72 $280,621.14
19 ($2,531.57) $1,128.46 $1,403.11 $279,492.67
20 ($2,531.57) $1,134.11 $1,397.46 $278,358.56
21 ($2,531.57) $1,139.78 $1,391.79 $277,218.79
22 ($2,531.57) $1,145.48 $1,386.09 $276,073.31
23 ($2,531.57) $1,151.20 $1,380.37 $274,922.11
24 ($2,531.57) $1,156.96 $1,374.61 $273,765.15
Totals for Year 2:
I will spend $30,378.84 on my loan in Year 2.
$16,868.99 will go towards Interest.
$13,509.85 will go towards Principal.

29
Appendix C: Pro Forma Financial Statements

36
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1. Brennen, Andy. "Bar & Nightclubs in the US." IBISWorld. N.p., Jan. 2014. Web. 2 Feb.
2014.
2. "Bar Business 2012." SBDCNet SBDC Clearinghouse. N.p., n.d. Web. 07 Feb. 2014.
3. New Strategist Publications: New Strategist Publications. N.p., n.d. Web. 10 Feb. 2014.
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n.d. Web. 1 June 2014. <http://www.oregonbusiness.com/articles/111-january-
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Advertising-In-Medford---OR>.

37
10. "In the walls of the old brick warehouse." mailtribune.com. N.p., n.d. Web. 6 June 2014.
<http://www.mailtribune.com/apps/pbcs.dll/article?AID=/20110227/NEWS/102270332/-
1/rss01
11. "Loan Amortization Table Calculator." Loan Amortization Table Calculator. N.p., n.d.
Web. 6 June 2014. <http://www.amortizationtable.org/>.
12. "Medford Grocery Company Warehouse – Medford, Oregon - U.S. National Register of
Historic Places on Waymarking.com." Medford Grocery Company Warehouse –
Medford, Oregon - U.S. National Register of Historic Places on Waymarking.com. N.p.,
n.d. Web. 6 June 2014. <http://www.waymarking.com/waymarks/
13. http://commons.wikimedia.org/wiki/File:Medford_Grocery_Company_Warehouse_-
_Medford_Oregon.jpg
14. http://clients.ibisworld.com/reports/us/industry/ataglance.aspx?entid=1685

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