Are you about starting a karaoke bar? If YES, here is a complete sample karaoke bar business plan template & feasibility report you can use for FREE.
Okay, so we have considered all the requirements for starting a karaoke bar. We also took it further by analyzing and drafting a sample karaoke bar marketing plan template backed up by actionable guerrilla marketing ideas for karaoke bar companies. So let’s proceed to the business planning section.
Table of Content
- Why Start a Karaoke Bar Business?
- 1. Industry Overview
- 2. Executive Summary
- 3. Our Products and Services
- 4. Our Mission and Vision Statement
- 5. Job Roles and Responsibilities
- 6. SWOT Analysis
- 7. MARKET ANALYSIS
- 8. Our Target Market
- 9. SALES AND MARKETING STRATEGY
- 10. Sales Forecast
- 11. Publicity and Advertising Strategy
- 12. Our Pricing Strategy
- 13. Startup Expenditure (Budget)
- 14. Sustainability and Expansion Strategy
Why Start a Karaoke Bar Business?
If there is anything that would make it easier for you as an entrepreneur, it would be starting a business that you are passionate about. A business that you have good knowledge of, a business you are proud of and of course a business that you can go the extra mile for.
The truth is that if you start a business just for the sake of making money, you are likely going to struggle to grow the business. When the going gets tough as expected, you are likely going to pull out. One business that falls under this category is a karaoke bar; you cannot successfully run a karaoke bar business if you aren’t a music lover yourself.
If you are sure that this type of business is what you truly want to do after you must have conducted your market research and feasibility studies, then the next step to follow is to write a good business plan; a detailed blue print of how you intend raising your seed capital, setting up the business, managing the flow of the business, sorting out tax and marketing your services.
Below is a sample karaoke bar business plan template that can help you to successfully write your own with little or no difficulty.
A Sample Karaoke Bar Business Plan Template
1. Industry Overview
Establishments in the karaoke bar industry basically offer karaoke entertainment along with food and drinks. Karaoke is a form of interactive entertainment in which amateur singers can sing along with recorded music (or a music video) using a microphone and public address system. Businesses in this industry usually provide limited food and alcohol services as a means of increasing their revenue generation.
If you are a close observer of happenings in the karaoke bar industry, you will agree that the escalating external competition and tepid growth in alcohol expenditure have harmed the performance of the Karaoke Bar industry over the five years to 2017.
Consumer spending has assuaged these factors somewhat, as renewed interest in high-end karaoke bars has stimulated consumer interest in urban areas. Nevertheless, the primary drive behind the industry’s structural decline has been the continued shift of karaoke fans away from karaoke bars and into the comfort of their own homes.
Going forward, industry revenue is anticipated to continue its descent, even though at a slower rate than during the previous five years. As a means to counteract the industry’s structural decline, karaoke bars are anticipated to focus closely on their target markets in the years ahead.
The Karaoke Bar industry is indeed a thriving industry in the united states, Canada and in most countries in Europe. Statistics has it that the Karaoke Bars in the United States of America are worth $435 million, with an estimated growth rate of -1.2 percent.
There are about 1,270 legally registered and licensed karaoke bars scattered across the United States of America and they are responsible for employing about 6,288 people. The industry is an open industry hence a low level of market share concentration.
A recent report released by IBISWorld shows that the Karaoke Bars industry is in the decline stage of its economic life cycle. This stage is characterized by a slow decline in the number of establishments and stable product lines. Industry value added (IVA), which measures an industry’s contribution to the overall economy, is expected to decrease at an annualized rate of 0.5 percent over the 10 years to 2022.
On the other hand, US GDP is projected to grow at an annualized rate of 2.0 percent during the same period. These figures signify that the industry’s share of the domestic economy is slowly declining. Over the 10 years to 2022, the number of domestic karaoke bars is forecast to decline at an annualized rate of 1.7 percent to reach 1,190 locations.
Any entrepreneur who wants to start a karaoke bar business in the US would definitely be confronted with tough competition. The truth is that you will not only compete with karaoke bars in your location or city, but you would be competing with every other entertainment options such as wine bars, night clubs, restaurants, casinos et al where people are allowed to perform karaoke.
2. Executive Summary
Black Street® Karaoke Bar, LLC is a neighborhood karaoke bar that will be located in the heart of Las Vegas – Nevada close to a residential estate. We have been able to secure a one-year lease of a vacant facility within the city. We are fortunate to secure a facility with an option of renewal for 5 years at an agreed rate that is favorable to us.
We are going to be involved in operating karaoke lounges, serving alcohol, serving food and nonalcoholic beverages et al to visitors in a conducive environment that is specifically designed for socializing and networking, and free from all forms of violence.
Black Street® Karaoke Bar, LLC is designed to meet both the health and safety standard as recommended by the local authority. Our customers are going to be treated with good music at all times. We have made provision for live band, karaoke, country side music and jazz et al. This will be played at the background to create the ambiance that our customers will cherish.
We are in business to make profits at the same time to give our customers value for their money; we want to give people the opportunity to choose from a wide genre of music, and drinks manufactured in the United States of America and overseas. We aware that karaoke bars easily attract music lovers and we know that the campus community is one of the places where we can easily tie down these people especially when they have to socialize.
We will ensure that all our employees are selected from a pool of customer centric people in and around Las Vegas – Nevada. We will make sure that we take all the members of our workforce through the required training that will position them to meet the expectation of the company.
Black Street® Karaoke Bar, LLC is owned by Ella Middleton and her immediate family members. Ella Middleton has managed several karaoke bars and night clubs in Los Angeles and Las Vegas prior to opening her own karaoke bar.
3. Our Products and Services
Black Street® Karaoke Bar, LLC is going to operate a standard karaoke bar in the heart of Las Vegas that will also make available assorted wines and alcoholic drinks. We are in the karaoke bar line of business to make profits and we will do all that is permitted by the law of the United States to achieve our business goal, aim and objectives.
These are some of our product and service offerings;
- Operating karaoke lounges
- Serving alcohol
- Serving food and nonalcoholic beverages
- Cover fees and song charges
4. Our Mission and Vision Statement
- Our vision is to establish a standard karaoke bar in Las Vegas – Nevada that will be the melting pot of all lovers of karaoke and good music in and around the location where our karaoke bar is located.
- Our mission is to establish a karaoke bar business that will become a leading brand in the Karaoke bar industry in Las Vegas – Nevada.
Our Business Structure
Black Street® Karaoke Bar, LLC is a business that is established to be a pacesetter when it comes to how a standard karaoke bar should be run. We have the goal of assembling a team of dedicated workforce who will give our customers excellent customer service at all times, a team that will ensure that we will continue to have repeated customers and a team that will indeed make us the melting pot for karaoke lovers in and around Las Vegas – Nevada.
We will work hard to ensure that we only attract people with the right mindset to help us achieve our business goals and objectives. Below is the business structure that we will build Black Street® Karaoke Bar, LLC;
- Chief Executive Officer (Owner)
- Karaoke Bar Manager
- Procurement Officer
- Greeters / Customer Service Agent / Table Attendant
- Security Officers
5. Job Roles and Responsibilities
Chief Executive Officer – CEO:
- Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions.
- Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- Responsible for fixing prices and signing business deals
- Responsible for providing direction for the business
- Responsible for signing checks and documents on behalf of the company
- Evaluates the success of the organization
Karaoke Bar Manager:
- Responsible for managing the daily activities in the karaoke bar
- Ensures that the facility is in tip top shape and conducive enough to welcome customers
- Interfaces with vendors
- Reports to the Chief Executive Officer
- Attends to Customers complains and enquiries
- Responsible for Training and Development in the organization
- Responsible for procuring of supplies
- Handles any other duty as assigned by the CEO
- Interacts with customers; takes orders for drinks and snacks.
- Plans and presents bar menu to clients.
- Checks identification of the guests to make sure they meet age requirements for purchase of alcohol and tobacco products.
- Mixes ingredients to prepare cocktails and other drinks.
- Mixes drinks, cocktails and other bar beverages as ordered and in compliance with standard drink recipes.
- Prepares alcohol or non-alcohol beverages.
- Arranges bottles and glasses to make attractive displays.
- Assesses customers’ needs and preferences and make recommendations
- Makes lists of supplies in conjunction with the bar manager/management
- Prepares inventory or purchase requisitions as needed to replenish supplies.
- Ensures that the assigned bar area is fully equipped with products needed for mixing beverages and serving guests.
- Responsible for preparing financial reports, budgets, and financial statements for the organization
- Provides managements with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
- Responsible for financial forecasting and risks analysis.
- Performs cash management, general ledger accounting, and financial reporting for one or more properties.
- Responsible for developing and managing financial systems and policies
- Responsible for administering payrolls
- Ensures compliance with taxation legislation
- Handles all financial transactions for the company
- Serves as internal auditor for the company
Disc Jockey (DJ)
- Coordinates karaoke sessions
- Ensures that customers are entertained with the best of music
- Manages the sound system for the karaoke bar
- In charge of music collections
- Responsible for developing music playlists.
- Responsible for mixing music tracks
Greeters/Customer Service Agent/Table Attendant
- Opens door and welcome customers
- Ensures that customers feel relaxed and at home
- Handles customers’ enquiries
- Assesses customers’ needs and preferences and make recommendations
- Provide recommendations and suggestions to guest for choosing drinks and snacks.
- Serves customers in a friendly manner.
- Determines when a customer has had too much alcohol and if required refusing any further serving in a polite way.
- Demonstrates a thorough knowledge of company alcoholic products, menus and promotions
- Handles any other duty as assigned by the karaoke bar manager
- Cleans up after customers
- Clears ashtrays as and when required.
- Washes glassware and utensils after each use.
- Maintains a clean working area by sweeping, vacuuming, dusting, cleaning of glass doors and windows, etc. if required.
- Ensures that toiletries and supplies don’t run out of stock
- Handles any other duty as assigned by the karaoke bar manager
- Ensures that the karaoke bar facility is secured at all time
- Controls traffic and organize parking
- Gives security tips to staff members from time to time
- Patrols around the building on a 24 hours’ basis
- Submits security reports weekly
- Any other duty as assigned by the karaoke bar manager
6. SWOT Analysis
Black Street® Karaoke Bar, LLC is established with the aim of becoming the melting point for karaoke lovers in Las Vegas – Nevada which is why we have taken our time to conduct a SWOT analysis to be able to identify areas we need to work on if indeed we want to achieve our business goal.
No investor would want to invest his or hard earned money without assessing the risks involved in the venture and also his or her capability to deliver and make profits from the business. The ability to make profits from any business and to favorably compete with competitors in the industry starts with the result you get from your SWOT analysis.
Below is a summary of the result that was generated;
Our strength as a company are excellent and detailed customer service, well-coordinated karaoke sessions and a wide range of assorted tobaccos, and alcoholic drinks both from the United States and other parts of the world. Excellently secured facility, good ambiance and perfect location are also our strengths.
Our perceived weakness could be that we are a new business, and we may not have the financial muscle to sustain the kind of publicity we want to give our business.
There are unlimited business opportunities available to karaoke bar businesses in busy cities like Las Vegas – Nevada; Las Vegas is one of the cities in the world where social life is at its peak. Besides, the city where our karaoke bar is located is one of the busiest in the United States and it is open to loads of opportunities due to the influx of tourists.
Another opportunity that we stand to leverage on is the fact that we can easily order any brand of tobacco, wine and drinks directly from the manufacturers with little or no stress.
Securing license from music artists might pose a threat for our new karaoke business. Another major threat that we are likely going to face is economic downturn. It is a fact that economic downturn affects purchasing/spending power which ultimately affects social life. Another threat that may likely confront us is the arrival of a new karaoke bar within same location where our target market exists and who may want to adopt same Business model like us.
7. MARKET ANALYSIS
- Market Trends
The trend in this line of business is that karaoke bars are anticipated to more closely focus on their target markets to counteract declines in demand. Despite the fact that the karaoke bars industry has long existed in the United States, it is starting to come back into fashion. Innovative music genre and sound system technology have increased demand over the last five years.
A close observation of the trends in the industry shows that patrons of karaoke bars have increased dramatically among American and European youths in recent years because of the social atmosphere it creates, and because many young adults believe karaoke bars can give them the pleasure they will get by attending expensive musical concerts. In order to remain open, many karaoke bars started selling food or beverages.
Many of these karaoke bars are furnished with cozy booths encased in rich colors and plush surroundings in hopes their guests will linger. The phlegmatic environment lends itself to a good socializing setting with a less crowded feel and more intimate appeal.
A host of karaoke bars have begun to incorporate a larger variety of alcoholic drinks and food choices as part of their product offerings. It is obvious that adding these product offerings help in creating alternate source of income even if they struggle to attract people who are only interested in being entertained.
8. Our Target Market
Before starting our karaoke bar business in Las Vegas – Nevada, we conducted a market survey and feasibility studies and we are certain that there is a wide range of people who would patronize our karaoke bar on a regular basis. In view of that, we have created strategies that will enable us reach out to various groups of people who are likely going to become our loyal customers.
Below are our target markets;
- Corporate Executives
- Taxi Drivers
- College Students
We are mindful of the fact that there are competitions in the karaoke industry in the United States of America; hence we have been able to hire business developers to handle our sales and marketing.
Part of the competitive edge we will be bringing to the market is the fact that we already have a loyal customer base, our ability to quickly adopt new technology in the industry and we aware that we must adhere to licensing requirements.
So also, the fact that we operate a standard karaoke bar in a perfect location for the kind of business that we run and also the fact that our karaoke bar facility is highly secured counts favorably for us. We are not ruling out the fact that we have a dedicated and customer centric workforce that are willing to go the extra mile to give our customers full value for their money and time whenever the patronize our karaoke bar.
We are not ignoring the fact that we are among the few neighborhood karaoke bars in Las Vegas – Nevada and we sell almost all brands of tobacco and alcoholic drinks available in the United States of America.
Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category (startups karaoke bar businesses in the United States) in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives.
9. SALES AND MARKETING STRATEGY
- Sources of Income
Black Street® Karaoke Bar, LLC is established with the aim of maximizing profits in the karaoke bar industry and we are going to go all the way to ensure that we do all it takes to attract our target market. The sources of income for Black Street® Karaoke Bar, LLC are stated below;
- Operating karaoke lounges
- Serving alcohol
- Serving food and nonalcoholic beverages
- Cover fees and song charges
10. Sales Forecast
One thing is certain when it comes to karaoke bar business, if your karaoke bar is cozy, relaxing, well stocked and centrally positioned, you will always attract customers cum sales and that will sure translate to increase in revenue generation for the business.
We are well positioned to take on the available market in Las Vegas – Nevada and we are quite optimistic that we will meet our set target of generating enough income from the first six months of operation and grow the business and our clientele base.
We have been able to critically examine the karaoke bar market, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions that are peculiar to similar startups in Las Vegas – Nevada.
- First Fiscal Year: $120,000
- Second Fiscal Year: $350,000
- Third Fiscal Year: $750,000
NB: This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor offering same products as we do within the same location. Please note that the above projection might be lower and at the same time it might be higher.
- Marketing Strategy and Sales Strategy
Top of the list on our marketing and sales strategy is generating a buzz for our karaoke bar via word-of-mouth and leveraging on road show around UCL campus community.
Despite the fact that our first outlet is located in the heart of town in Las Vegas – Nevada, the model of karaoke bar we intend running is a neighborhood bar hence we are not going to rely only on conventional ways of marketing. We don’t have the plans to run paid adverts on Local TV and radio stations or even local newspapers but we will sure maximize every other available means to promote our business.
Our unique selling proposition is that we have a collection of almost all the genre of music and we also have assorted alcoholic and non – alcoholic drinks et al. In view of that, we are going to adopt the following marketing strategies to ensure that we do not only attract customers but generate repeated sales from them. Parts of the marketing and sales strategies that we will adopt are;
- Open our karaoke bar in a grand style with a party for all.
- Introduce our karaoke bar by sending introductory letters alongside our brochure to organizations, households and key stake holders in Las Vegas – Nevada
- Ensure that we have a wide range of tobacco, wines, beers, liquors, distilled spirits, martinis and non-alcoholic drinks at all times.
- Make use of attractive hand bills to create awareness and also to give direction to our karaoke bar
- Delivering consistent customer experience to all our guest; making our first impression count positively
- Position our signage / flexi banners at strategic places all around Las Vegas
- Position our greeters to welcome and direct potential customers
- Create a loyalty plan that will enable us reward our regular customers
- Engage on roadshows within our neighborhood to create awareness for our karaoke bar.
11. Publicity and Advertising Strategy
Black Street® Karaoke Bar, LLC is a neighborhood karaoke bar and we will ensure that we create the buzz that will make people in our area know about us and what we do. We are quite aware that one of the effective ways of promoting our karaoke bar is to create special internal promotions which in turn will help us achieve our aim of leveraging on word of mouth publicity.
Here are the platforms we intend leveraging on to promote and advertise Black Street® Karaoke Bar, LLC;
- Encourage the use of word of mouth publicity from our loyal customers
- Leverage on the internet and social media platforms like; YouTube, Instagram, Facebook, Twitter, LinkedIn, Snapchat, 4Share, Google+ and other platforms (music online forums) to promote our business
- Ensure that our we position our banners and billboards in strategic positions all around Las Vegas – Nevada
- Distribute our fliers and handbills in target areas in and around our neighborhood
- Advertise our karaoke bar business in our official website and employ strategies that will help us pull traffic to the site
- Brand all our official cars and vans and ensure that all our staff members and management staff wears our branded shirt or cap at regular intervals
12. Our Pricing Strategy
Black Street® Karaoke Bar, LLC will charge our clients flat fees except for few occasions where there will be need for us to charge special clients on monthly basis.
At Black Street® Karaoke Bar, LLC we will keep our fees below the average market rate for all of our clients by keeping our overhead low. In addition, we will also offer special discounted rates to all our clients at regular intervals.
The prices of our services will be same as what is obtainable in the open market in the United States of America.
- Payment Options
The payment policy adopted by Black Street® Karaoke Bar, LLC is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.
Here are the payment options that Black Street® Karaoke Bar, LLC will make available to her clients;
- Payment with cash
- Payment via credit cards/Point of Sale Machines (POS Machines)
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
In view of the above, we have chosen banking platforms that will enable our clients make payment for our services without any stress on their part. Our bank account numbers will be made available on our website and promotional materials.
13. Startup Expenditure (Budget)
In setting up any business, the amount or cost will depend on the approach and scale you want to undertake. If you intend to go big by renting a place, then you would need a good amount of capital as you would need to ensure that your employees are well taken care of, and that your facility is conducive enough for workers to be creative and productive.
The tools and equipment that will be used are nearly the same cost everywhere, and any difference in prices would be minimal and can be overlooked. As for the detailed cost analysis for starting a karaoke bar business; it might differ in other countries due to the value of their money.
This is what it would cost us to start Black Street® Karaoke Bar, LLC in the United of America;
- The total fee for registering the Business in the United States of America – $750.
- Legal expenses for obtaining licenses and permits as well as the accounting services totaling – $1,200.
- Marketing promotion expenses (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
- The cost for hiring business consultant – $2,500.
- Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
- The cost of accounting software, CRM software and Payroll Software – $15,000
- Cost for payment of rent for 12 months at $1.76 per square feet in the total amount of – $105,600.
- The cost for facility remodeling – $25,000.
- Other start-up expenses including stationery – $500
- Amount needed for phone and utility deposits – ($2,500)
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
- The cost for start-up inventory (assorted tobaccos, assorted cigars and alcoholic and non-alcoholic drinks) – $16,027
- Storage hardware (bins, utensil rack, shelves, glass cases) – $3,720
- The cost for counter area equipment (counter top, sink, ice machine, etc.) – $9,500
- The cost for serving area equipment (glasses, flatware) – $3,000
- The cost for store equipment (cash register, security, ventilation, signage) – $13,750
- The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al) – $4,000.
- The cost of launching a website – $600
- The cost for our grand opening party – $5,000
- Miscellaneous – $2,500
We would need an estimate of two hundred and fifty thousand ($250,000) to successfully launch our karaoke bar in downtown Las Vegas – Nevada.
Generating Startup Capital for Black Street® Karaoke Bar, LLC
Black Street® Karaoke Bar, LLC is a private business that is owned by Ella Middleton and her immediate family members and they intend to finance the business alone. Although they have plans to make the karaoke bar manager part owner of the business after 5 or 7 years of service.
Since they are the sole financiers of the business, they have decided to adopt the following means to generate startup capital for the business;
- Generate part of the startup capital from his personal savings and sale of his stocks
- Source for soft loans from family members and friends
- Apply for loan from the Bank
N.B: Mrs. Ella Middleton and her family have been able to generate $100,000. The breakdown shows that they generated $75,000 from their personal savings and sale of their stocks and they generated $25,000 soft loans from their family members and friends.
The balance of $150,000 will be generated as loan facility from the bank. All the papers and documents have been duly signed and submitted, the loan has been approved and any moment from now our account will be credited.
14. Sustainability and Expansion Strategy
The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategies and business structure. If all these factors are missing from a business, then it won’t be too long before the business closes shop.
One of our major goals of starting Black Street® Karaoke Bar, LLC is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running. We know that one of the ways of gaining approval and winning customers over is to properly position our karaoke bar, ensure adequate security, availability of various brands of tobacco, alcoholic and nonalcoholic drinks and excellent customer service et al.
Black Street® Karaoke Bar, LLC will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and re – training of our workforce is at the top burner.
As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of three years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
- Business Name Availability Check: Completed
- Business Registration: Completed
- Opening of Corporate Bank Accounts: Completed
- Securing license from music companies: In Progress
- Securing Point of Sales (POS) Machines: Completed
- Opening Mobile Money Accounts: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Renting of facility and remodeling the facility plus installation of sound system: In Progress
- Conducting Feasibility Studies: Completed
- Generating capital from family members: Completed
- Applications for Loan from the bank: In Progress
- Writing of Business Plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents and other relevant Legal Documents: In Progress
- Design of The Company’s Logo: Completed
- Printing of Promotional Materials: In Progress
- Recruitment of employees: In Progress
- Purchase of the needed furniture, electronic appliances, office appliances and bar accessories: In progress
- Creating Official Website for the Company: Completed
- Creating Awareness for the business both online and in the neighborhood: In Progress
- Health and Safety and Fire Safety Arrangement (License): Secured
- Opening party/launching party planning: In Progress
- Establishing business relationship with vendors – suppliers of cigars, wine, alcoholic and non – alcoholic drinks, tobacco etc: In Progress
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