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How to Write a Winning Lounge Business Plan (+ Template)

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Creating a business plan is essential for any business, but it can be beneficial for lounges who want to improve their strategy or raise funding.

A well-crafted business plan outlines your company’s vision and documents a step-by-step roadmap of how you will accomplish it. To create an effective business plan, you must first understand the components that are essential to its success.

This article provides an overview of the key elements that every lounge owner should include in their business plan.

What is a Lounge Business Plan?

A lounge business plan is a formal written document describing your company’s business strategy and feasibility. It documents the reasons you will be successful, your areas of competitive advantage, and it includes information about your team members. Your business plan is a critical document that will convince investors and lenders (if needed) that you are positioned to become a successful venture.

 

Why Write a Lounge Business Plan?

A lounge business plan is required for banks and investors. The document is a clear and concise guide to your business idea and the steps you will take to make it profitable.

Entrepreneurs can also use this as a roadmap when starting their new company or venture, especially if they are inexperienced in starting a business.

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Writing an Effective Lounge Business Plan

The following are the key components of a successful lounge business plan:

Executive Summary

The executive summary of a lounge business plan is a one- to two-page overview of your entire business plan. It should summarize the main points, which will be presented in full in the rest of your business plan.

  • Start with a one-line description of your lounge 
  • Provide a summary of the key points in each section of your business plan, which includes information about your company’s management team, industry analysis, competitive analysis, and financial forecast among others.

 

Company Description

This section should include a brief history of your company. Include a short description of how your company started and provide a timeline of milestones your company has achieved.

If you are just starting your lounge, you may not have a long company history. Instead, you can include information about your professional experience in this industry and how and why you conceived your new venture. If you have worked for a similar company or been involved in an entrepreneurial venture before starting your lounge company, mention this.

You will also include information about your chosen lounge business model and how, if applicable, it is different from other companies in your industry.

 

Industry Analysis

The industry or market analysis is an essential component of a lounge business plan. Conduct thorough market research to determine industry trends and document the size of your market. 

Questions to answer include:

  • What part of the lounge industry are you targeting?
  • How big is the market?
  • What trends are happening in the industry right now (and, if applicable, how do these trends support your company’s success)?

You should also include sources for your information, such as published research reports and expert opinions.

 

Customer Analysis

This section should include a list of your target audience(s) with demographic and psychographic profiles (e.g., age, gender, income level, profession, job titles, interests). You will need to provide a profile of each customer segment separately, including their needs and wants.

For example, a lounge’s customers may include:

  • Business professionals who want to have a place to relax after work
  • People who are looking for a place to have a drink and socialize with friends
  • Young adults who want to go out and meet new people

You can include information about how your customers decide to buy from you as well as what keeps them buying from you.

Develop a strategy for targeting those customers who are most likely to buy from you, as well as those that might be influenced to buy your products or lounge services with the right marketing.

 

Competitive Analysis

The competitive analysis helps you determine how your product or service will differ from competitors, and what your unique selling proposition (USP) might be that will set you apart in this industry.

For each competitor, list their strengths and weaknesses. Next, determine your areas of competitive differentiation and advantage; that is, in what ways are you different from and ideally better than your competitors.

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Marketing Plan

This part of the business plan is where you determine and document your marketing plan. . Your plan should be clearly laid out, including the following 4 Ps.

  1. Product/Service: Detail your product/service offerings here. Document their features and benefits.
  2. Price: Document your pricing strategy here. In addition to stating the prices for your products/services, mention how your pricing compares to your competition.
  3. Place: Where will your customers find you? What channels of distribution (e.g., partnerships) will you use to reach them if applicable?
  4. Promotion: How will you reach your target customers? For example, you may use social media, write blog posts, create an email marketing campaign, use pay-per-click advertising, or launch a direct mail campaign. Or you may promote your lounge business via word-of-mouth marketing or public relations.

 

Operations Plan

This part of your lounge business plan should include the following information:

  • How will you deliver your product/service to customers? For example, will you do it in person or over the phone only?
  • What infrastructure, equipment, and resources are needed to operate successfully? How can you meet those requirements within budget constraints?

You also need to include your company’s business policies in the operations plan. You will want to establish policies related to everything from customer service to pricing, to the overall brand image you are trying to present.

Finally, and most importantly, your Operations Plan will outline the milestones your company hopes to achieve within the next five years. Create a chart that shows the key milestone(s) you hope to achieve each quarter for the next four quarters and the following four years. Examples of milestones for a lounge business include reaching $X in sales. Other examples include adding new products or services, expanding to new locations, or increasing market share.

 

Management Team

List your team members here, including their names and titles, as well as their expertise and experience relevant to your specific lounge industry. Include brief biography sketches for each team member.

Particularly if you are seeking funding, the goal of this section is to convince investors and lenders that your team has the expertise and experience to execute your plan. If you are missing key team members, document the roles and responsibilities, you plan to hire for in the future.

 

Financial Plan

Here, you will include a summary of your complete and detailed financial plan (your full financial projections go in the Appendix). 

This includes the following three financial statements:

Income Statement

Your income statement should include:

  • Revenue: how much revenue you generate.
  • Cost of Goods Sold: These are your direct costs associated with generating revenue. This includes labor costs and the cost of any equipment and supplies used to deliver your product/service offerings.
  • Net Income (or loss): Once expenses and revenue are totaled and deducted from each other, this is the net income or loss.
Sample Income Statement for a Startup Lounge
Year 1 Year 2 Year 3 Year 4 Year 5
Revenues
Revenues $ 336,090 $ 450,940 $ 605,000 $ 811,730 $ 1,089,100
Total Revenue $ 336,090 $ 450,940 $ 605,000 $ 811,730 $ 1,089,100
Direct Cost
Direct Costs $ 67,210 $ 90,190 $ 121,000 $ 162,340 $ 217,820
Total Direct Costs $ 67,210 $ 90,190 $ 121,000 $ 162,340 $ 217,820
GROSS PROFIT $ 268,880 $ 360,750 $ 484,000 $ 649,390 $ 871,280
Other Expenses
Salaries $ 96,000 $ 99,840 $ 105,371 $ 110,639 $ 116,171
Marketing Expenses $ 61,200 $ 64,400 $ 67,600 $ 71,000 $ 74,600
Rent/Utility Expenses $ 36,400 $ 37,500 $ 38,700 $ 39,800 $ 41,000
Other Expenses $ 9,200 $ 9,200 $ 9,200 $ 9,400 $ 9,500
Total Other Expenses $ 202,800 $ 210,940 $ 220,871 $ 230,839 $ 241,271
EBITDA $ 66,080 $ 149,810 $ 263,129 $ 418,551 $ 630,009
Depreciation $ 5,200 $ 5,200 $ 5,200 $ 5,200 $ 4,200
EBIT $ 60,880 $ 144,610 $ 257,929 $ 413,351 $ 625,809
Interest Expense $ 7,600 $ 7,600 $ 7,600 $ 7,600 $ 7,600
PRETAX INCOME $ 53,280 $ 137,010 $ 250,329 $ 405,751 $ 618,209
Taxable Income $ 53,280 $ 137,010 $ 250,329 $ 405,751 $ 618,209
Income Tax Expense $ 18,700 $ 47,900 $ 87,600 $ 142,000 $ 216,400
NET INCOME $ 34,580 $ 89,110 $ 162,729 $ 263,751 $ 401,809
Net Profit Margin (%) 10% 20% 27% 32% 37%

Balance Sheet

Include a balance sheet that shows your assets, liabilities, and equity. Your balance sheet should include:

  • Assets: Everything you own (including cash).
  • Liabilities: This is what you owe against your company’s assets, such as accounts payable or loans.
  • Equity: The worth of your business after all liabilities and assets are totaled and deducted from each other.
Sample Balance Sheet for a Startup Lounge
Year 1 Year 2 Year 3 Year 4 Year 5
ASSETS
Cash $ 105,342 $ 188,252 $ 340,881 $ 597,431 $ 869,278
Other Current Assets $ 41,600 $ 55,800 $ 74,800 $ 90,200 $ 121,000
Total Current Assets $ 146,942 $ 244,052 $ 415,681 $ 687,631 $ 990,278
Fixed Assets $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000
Accum Depreciation $ 5,200 $ 10,400 $ 15,600 $ 20,800 $ 25,000
Net fixed assets $ 19,800 $ 14,600 $ 9,400 $ 4,200 $ 0
TOTAL ASSETS $ 166,742 $ 258,652 $ 425,081 $ 691,831 $ 990,278
LIABILITIES & EQUITY
Current Liabilities $ 23,300 $ 26,100 $ 29,800 $ 32,800 $ 38,300
Debt outstanding $ 108,862 $ 108,862 $ 108,862 $ 108,862 $ 0
Total Liabilities $ 132,162 $ 134,962 $ 138,662 $ 141,662 $ 38,300
Share Capital $ 0 $ 0 $ 0 $ 0 $ 0
Retained earnings $ 34,580 $ 123,690 $ 286,419 $ 550,170 $ 951,978
Total Equity $ 34,580 $ 123,690 $ 286,419 $ 550,170 $ 951,978
TOTAL LIABILITIES & EQUITY $ 166,742 $ 258,652 $ 425,081 $ 691,831 $ 990,278

Cash Flow Statement

Include a cash flow statement showing how much cash comes in, how much cash goes out and a net cash flow for each year. The cash flow statement should include:

  • Cash Flow From Operations
  • Cash Flow From Investments
  • Cash Flow From Financing

Below is a sample of a projected cash flow statement for a startup lounge.

Sample Cash Flow Statement for a Startup Lounge
Year 1 Year 2 Year 3 Year 4 Year 5
CASH FLOW FROM OPERATIONS
Net Income (Loss) $ 34,580 $ 89,110 $ 162,729 $ 263,751 $ 401,809
Change in Working Capital $ (18,300) $ (11,400) $ (15,300) $ (12,400) $ (25,300)
Plus Depreciation $ 5,200 $ 5,200 $ 5,200 $ 5,200 $ 4,200
Net Cash Flow from Operations $ 21,480 $ 82,910 $ 152,629 $ 256,551 $ 380,709
CASH FLOW FROM INVESTMENTS
Fixed Assets $ (25,000) $ 0 $ 0 $ 0 $ 0
Net Cash Flow from Investments $ (25,000) $ 0 $ 0 $ 0 $ 0
CASH FLOW FROM FINANCING
Cash from Equity $ 0 $ 0 $ 0 $ 0 $ 0
Cash from Debt financing $ 108,862 $ 0 $ 0 $ 0 $ (108,862)
Net Cash Flow from Financing $ 108,862 $ 0 $ 0 $ 0 $ (108,862)
Net Cash Flow $ 105,342 $ 82,910 $ 152,629 $ 256,551 $ 271,847
Cash at Beginning of Period $ 0 $ 105,342 $ 188,252 $ 340,881 $ 597,431
Cash at End of Period $ 105,342 $ 188,252 $ 340,881 $ 597,431 $ 869,278

Appendix

You will also want to include an appendix section which will include:

  • Your complete financial projections
  • A complete list of your company’s business policies and procedures related to the rest of the business plan (marketing, operations, etc.)
  • Any other documentation which supports what you included in the body of your business plan.

 

Conclusion

Writing a good business plan gives you the advantage of being fully prepared to launch and grow your lounge. It not only outlines your business vision but also provides a step-by-step process of how you are going to accomplish it.

A well-written lounge business plan is a must for any business owner. It’s a great tool for attracting investors and keeping the company focused.
 

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