Strategy and Implementation Summary

The Watertower's strategy is based upon targeting and serving:

The atypical Atlanta intown resident. This urban professional works long hours and has relatively little time to cook at home. She/he has an active social life and spends a substantial amount of disposable income maintaining it.

The many downtown businesses which regularly use restaurant dining as an function of conducting business.

The tourist and convention populations centered in downtown venues.

5.1 Competitive Edge

The Watertower maintains a competitive edge in several significant areas:

The facility's location puts it into close proximity to substantial populations of affluent Atlantans.

The owner, a 16-year-resident of Atlanta, was educated in and works professionally in northeast Atlanta. His early work experience included a substantial period working within a casual/upscale restaurant in the mid-to-late 1980s in Virginia Highland. As the Dean of Students at Emory University School of Law, he has conferred over 1,300 law degrees during his tenure, most of them have remained in the Atlanta area. His position at Emory also required him to manage significant catering budgets. The owner, through his business, academic, and community activities, maintains a substantial Atlanta-based network of professionals.

The facility's construction will easily allow for flexible dining/coffeehouse/entertainment options making it attractive to numerous populations.

The facility's location in an Empowerment Zone and local Enterprise Zone provides significant tax advantages.

5.2 Value Proposition

We think our value proposition is quite clear and quite easily distinguished from most others in the market. We offer affordable and accessible menu items and entertainment as measured by their inherently natural value, at an affordable price that will encourage regular visits.

5.3 Sales Strategy

The first category of our sales strategy is to establish and maintain a position with our primary constituents: intown Atlanta residents within a 4 mile radius of The Watertower's location. We will depend upon keeping these people happy with our food and beverage products and entertainment options.

Our second strategy is to utilize the downtown hotel/convention business through developing and maintaining close relationships with the planners of upcoming conventions and their respective attendees in order to create a "private function/party" option for corporations visiting Atlanta during the early part of the week, as well as encouraging individual visits by conventioneers later in the week. This strategy will also target the many hotel concierges who are available to promote dining options located within two miles of downtown hotel venues.

Our third strategy targets the more than 500,000 visitors to the Martin Luther King National Historic Site. This segment provides mainly lunch business.

Fourth, the restaurant will target sales to downtown and midtown businesses (particularly law firms) for regular business lunch and dinner entertaining.

5.3.1 Sales Forecast

Our sales forecast assumes no change in cost of prices, which is a reasonable assumption for the last few years.

We are expecting to increase sales from $2.0 million at the end of 2002, to $2.5 million by the end of 2004. The growth forecast is in line with the restaurants in the area and is tied to the projected increase in population of the immediate area.

The combined sales figures (across all sale items for the restaurant and coffee shop) presume an average of 2.5 "turns" per day for a 155 seat dining room with an average tab of $12.54. The business will be open an average of 26 days per month.

The projections show increases in:

November, resulting from Halloween party planning for Emory University graduate and professional students.

January, based upon corporate Christmas party and New Year's Eve programming.

May, as a result of catering programming scheduled for Emory University Commencement functions.

Sales Forecast

5.4 Milestones

The accompanying table lists important program milestones, with dates and managers in charge, and budgets for each. The milestone schedule indicates our emphasis on planning for implementation.

What the table doesn't show is the commitment behind it. Our business plan software includes complete provisions for plan-vs.-actual analysis, and we will be holding monthly follow-up meetings to discuss the variance and course corrections.

Milestones

5.5 Marketing Strategy

The most important element of our marketing strategy is the delivery of a quality product. Our food, beverage, newspaper/magazine, and entertainment products must first sell themselves through word of mouth.

Next, the packaging of The Watertower's concept and external messages have to fit our positioning. We offer an upscale feel without a required "pinch" in your wallet. We then communicate this through the free weekly media (Creative Loafing, Southern Voice, and others), radio advertising on particular jazz, acid-jazz, Latin, and dance-oriented music shows, and traditional public radio sponsorships.

Through establishing relationships with the concierges of the local hotels and with the Atlanta Convention and Visitors Bureau, we will then attempt to create opportunities for visitors to the city to look forward to experiencing The Watertower.

5.5.1 Sales Programs

Specific Sales Programs:

Special Event Sales: Develop opportunities to sell to companies for private parties and special events. The specific responsibility is with the owner with assistance from the manager on staff and Real World Communications.

Music Related Special Events: Develop relationships with artists and promoters in the area to feature artists rising in popularity, either through CD release parties or live performances.

Artist/Studioplex Special Events: Develop opportunities to host or cater artist openings.

5.5.2 Positioning Statement

For our most important target market, local residents who crave new and sophisticated dining/entertainment/coffeehouse options, The Watertower satisfies the need for a casual, all-in-one dining and entertainment experience. Unlike our key competition, The Watertower is designed to handle this need from its inception, starting with the general construction of the facility. The general food programming, coupled with the entertainment programming, will offer the customer an experience unlike anything he or she has currently available.

5.5.3 Pricing Strategy

Our food, drinks, and entertainment options are priced to give us an attractive margin while at the same time offering value to the consumer. We want repeat business. We also want the experience to remain fresh. Therein lies why the food, beverages, and musical/entertainment programming will be relatively flexible.

A sample menu is included in an appendix.

**Some supplemental materials are not available for this sample plan.

5.5.4 Promotion Strategy

We will promote our company name and label almost more than the product itself, because to be successful we have to stand for brand-name integrity, excellent menu offerings, and first class entertainment and fun. Therefore, our promotion strategy includes focusing on events and messages that match:

Our participation in the Chocolate Soul and Funk Jazz Kafe' special promotions and the Sweet Auburn and Inman Park festivals is important because these are events that bring our target market together.

Our participation in local radio and specifically targeted PBS shows on the local stations.

Public relations programs focusing on related opportunities, guest appearances on local radio, etc.

Advertising placed carefully, in mostly-alternative channels like Creative Loafing, Southern Voice, university newspapers, etc.

5.5.5 Marketing Programs

Our marketing program will be handled by Cindy Abel of Real World Communications. With an annual budget of $16,000, and with a milestone beginning in August, Ms. Abel will assist with the initial marketing programs and ongoing efforts to increase the visibility of The Watertower and its offerings.

5.6 Strategic Alliances

We depend on our alliances with personnel at Emory University, the Historic District Development Corporation, the Atlanta Executive Network, The Atlanta Convention and Visitors Bureau, and local music promoters to generate continuous leads for new sales and promotional opportunities. We need to make sure that the personnel of these allies are especially aware of our support and reciprocation.

Management Summary

The Watertower is owned by a limited liability corporation including David N. Patton IV and the Historic District Development Corporation. Mr. Patton will also operate as general manager/managing partner. Crucial employees include an additional manager who will assist in maintaining and reviewing operations of the restaurant and the entertainment venue/bar, and a chef who will manage kitchen operations.

Additionally, an assistant manager/senior server and a sous-chef/line cook will perform secondary management functions.

Part-time personnel will be hired to handle bartending, serving, and dishwashing functions.

6.1 Organizational Structure

The Watertower is owned by David N. Patton IV (80%) and the Historic District Development Corporation (20%). Mr. Patton who will also operate as general manager/managing partner.

An additional manager (to be hired) will assist in maintaining and reviewing operations of the restaurant and the entertainment venue/bar.

A chef (to be hired) will manage kitchen operations and be crucial to maintaining food inventory stability and assistance in menu development.

An assistant manager/senior server (to be hired) who will be a salaried employee, will provide regular table service as well as assistance to the manager and the general manager.

A sous-chef/line cook (to be hired) will perform secondary management functions in the kitchen as well as provide assistance to the chef in main kitchen/cooking functions.

Part-time personnel will be hired to handle bartending, serving, and dishwashing functions.

The marketing, and accounting function will be handled by independent contractors/consultants.

6.2 Personnel Plan

The personnel plan calls for hiring 5 full-time salaried employees at start-up. Part time barristas/bartenders will have to be hired to manage approximately 135 hours of operation per week, servers/waiters will have to be hired for approximately 203 hours of operation per week, and dishwashers will have to be hired to handle approximately 62 hours of operation per week.

Any additional hires will be part time and devoted to the expansion of any catering function, as well as increased capacity/operation of a private party function.

Employee salaries are as follows:

Personnel Plan

6.3 Management Team

David N. Patton IV - Owner and General Manager: Mr. Patton worked for 6 years as the Dean of Students for Emory University School of Law. While working at Emory, he was responsible for special event planning and catering, particularly related to student centered events. Mr. Patton is the Chairman of the Board of Directors of the Historic District Development Corporation, an organization devoted to the redevelopment of the properties and neighborhood surrounding Atlanta's Martin Luther King National Historic Site and Preservation District. He is also a member of the Advisory Board for the Atlanta Executive Network, a 1,000+ member business organization in Atlanta, and the past Chairman of the Board of Directors for Fulton County Court Appointed Special Advocates. Prior to his position at Emory, Mr. Patton worked as an attorney for a Cincinnati, Ohio-based law where he specialized in litigation and small business development. Mr. Patton received his law degree from the University of Georgia in 1991 and his undergraduate degree from Emory University in 1988. Mr. Patton put himself through college working in a casual dining establishment in the Virginia Highland neighborhood in the late 1980s.

The following potential managers are under consideration for employment

Nicolas Godebert - Chef: Mr. Godebert is currently the Executive Chef of the Chanteclair Restaurant, St. Martin, F.W.I. He has been in this position since 1997. Prior to this appointment, he was the sous-chef at Dessirier Restaurant, Paris, France and the sous-chef for the Raphael Hotel Restaurant, Paris, France. He received his apprenticeship and cooking school certificate from the Sous l'Olivier Restaurant and the Ecole de Paris des Metiers de la Table in 1993, respectively.

Cristina Brito - Manager: Ms. Brito, currently a food and beverage supervisor for the Westin Atlanta North hotel, received her start in the hotel and restaurant business in Recife-PE/ Brazil. At the Mar Hotel, she was responsible for the sales and marketing of a five-star establishment. She maintained extensive contact with corporate clients, thus requiring her to speak English, French, Italian, and Portuguese fluently. Ms. Brito has extensive experience in Atlanta's catering industry dating from 1988, as well as experience as a chef.

6.4 Management Team Gaps

The management team will have to partially rely upon outside contractors/consultants for both the marketing and accounting functions.

The management team is still in the early stages of formation. Nicolas Godebert and Cristina Brito are under heavy consideration. Cristina Brito is currently working as a consultant on many issues facing the establishment of The Watertower's start-up.

Financial Plan

We want to finance growth mainly through cash flow. We recognize that this means we will have to grow more slowly than we might like.

The most important indicator in our case is inventory turnover. We have to make sure that food inventory turnover stays at approximately four turns per month, or we risk loss through spoilage.

We do not want to let our average collection days get above 45 under any circumstances. This could cause a serious problem with cash flow, because our working capital situation is tight. Most credit sales will be via credit and debit cards. We do have plans to initiate direct billing for law firms and other businesses conducting regular visits.

We must target a net profit of 14% at the least, and hold marketing costs to no more than one to three percent of gross sales.

7.1 Important Assumptions

The financial plan depends on important assumptions, most of which are shown in the following table. The key underlying assumptions are:

We assume a slow-growth economy, without major recession.

We assume of course that there are no unforeseen changes in technology to make equipment immediately obsolete.

We assume access to equity capital and financing sufficient to maintain our financial plan as shown in the tables.

Date: 2016-01-05; view: 834