Matt’s Pool Hall and Bar analysis
1. Business Plan
1. Executive Summary: A pool tournament could be an opportunity to increase the revenue and
reputation of Matt’s Pool and Bar, while at the same time we’re charged for $1500 to host this
event. Revenue and Expense analysis is necessary before hosting the event.
2. Business Description: Matt’s Pool Hall and Bar offers pool tables and food &Beverage
services for customers. From Monday to Thursday the customers are majorly from a Pool
league. The price of F&B is quite attractive, and average check of each pool patron is $35.
Generally Matt’s earns most money from Friday and Saturday, but on Sunday the revenue is
appalling.
3. Environmental Analysis: Based on the information given, Matt’s earns lots of money on
Saturday but not on Sunday, which reflects that people are less likely to go to Matt’s on
Sunday. So the tournament will definitely increase the income a lot on Sunday when lots of
people come to watch the tournament, and make consumption.
Due to lack of information, SWOT analysis is based on projections. Strengthen: The
price of food and beverage is lower than local bar average price; Customer service is very
good according to comments on social media; Location is good and very close to bus
stop/metro station, and has free parking for customers. Weaknesses: The bar has room for
only 50-60 patrons, which is not big enough to hold a very big event. Opportunities: The
reputation of Matt’s is very good, more events might be held by Matt’s in the future. Threats:
There’s also a bar located nearby which provides similar services, it is bigger though the
menu price is higher.
4. Resource Analysis: Matt’s only has rooms for 50-60 patrons, when people would like to
stay inside and watch the game for a long time, the table turnover rate is low. If more people
want to come, they may wait, or just left. The former is bad, and latter is even worse. At the
same time, the tournament will be held 9am, 2am, 7pm, which means Matt’s has longer
opening time and Matt’s work schedule of employees should be arranged properly.
5. Functional Plans: Because the scale of Matt’s is not that big, the division of function is not
so clear, one person can play several roles. Human resource is necessary to deal with
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employees issues, and can be assigned to few persons to take charge. F&B is so important for
this business and should be involved most employees to work on it. Marketing aims to attract
customers or event holders and Financing deals with money, they can be responsible to one
single leader. One general manager will take care of all these departments.
Financial projections, Implementation schedule, End-game strategy and Risk analysis are not
available due to lack of information.
2. Recommended price for Breakfast/Lunch/Dinner
Breakfast
Lunch
Beer/Wine
$6
Beer/Wine
$6
Water/Soft drinks
$3
Water/Soft drinks
$3
Cocktails
$14
Cocktails
$14
Burgers
$12
Burgers
$12
Pizzas
$12
Pizzas
$12
Fries
$6
Fries
$7
Dinner
Beer/Wine
$5
Water/Soft drinks
$2
Cocktails
$10
Burgers
$10
Pizzas
$10
Fries
$5
The menu price for Breakfast and Lunch have been raised comprehensively by about 26%
(counted by a whole bundle of food and beverage, (53-42)/42≈26%). The reason why I raise
the price of Breakfast and Lunch but not dinner, is because generally, Matt’s doesn’t open
until 4pm, which means Matt’s didn’t provide Breakfast and Lunch, unless the tournament
will be held. Expansion of opening time might lead to overtime of employees and Boss might
need to pay extra wages to compensate them. On the other hand, table turnover rate will be
low if most customers want to watch the whole game. What’s more, if the tournament attracts
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many people to come, there’re not enough rooms for customers, then the supply›demand,
customers will become less price sensitive and just want to have a comfortable seat. The
raising price won’t affect the old customers a lot because the price of dinner is still the same.
3. Forecasted Customer Counts & Revenue by meal period for Sat and Sun
Saturday
Usually not that many of people would like to eat breakfast in a bar, However, the
tournament helps a lot. If 5 matches start at 9am (Matt’s has 5 pool tables), all patrons seats
are taken, and all customers want to stay until lunch, then there’re 70 customers inside (10
pool players + 60 patrons=70 persons). The cost to play pool should be neglected because no
reason to charge players on tournament, and table would be preserved and no one else can
play during this Saturday and Sunday. Because the menu price rises by 26%, average check
of pool patron would be $44 (35*1.26). Then the revenue of breakfast is $3080. Lunch is the
same as breakfast, assuming there’re 70 persons pay bills of $44 each, and revenue is $3080.
Dinner would be different because the price is original. Based on given information, on
Saturday Matt’s earns $4000 revenue, while everyone pays $35, so the number of customer is
114. Assuming 70 more people will come to consume, the dinner revenue would be $6400
(174*35).
Sunday
Breakfast and lunch revenue could be treated the same as Saturday ($3080 each meal).
When it comes to dinner, the revenue would be $3650 (35*70+$1200).
Chart 1: Forecasted Revenue of this Saturday and Sunday
Saturday
Sunday
Breakfast
$3080
Lunch
$3080
Dinner
$6400
Saturday total revenue
$12560
Breakfast
$3080
Lunch
$3080
Dinner
$3650
Sunday total revenue
$9810
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4. Overall estimated Profit/Loss Statement
Assuming 3/7 of revenue comes from food and 3/4 comes from beverage (average check
of customer is $15 in food and $20 in beverage, 15/35=3/7, 20/35=3/4), the profit of this
Saturday is $5921 ($12560*(3/7)*(1-0.285-0.2)+$12560*(3/7)*(1-0.215-0.2)=5921); The
profit of this Sunday is $4624 ($9810*(3/7)*(1-0.285-0.2)+$9810*(3/7)*(1-0.215-0.2)=4624)
Chart 2: Overall Profit/Loss Statement
Saturday
Sunday
Food
Beverage
Total
Revenue
$5383
$7177
$12560
Expense
$2611
$4028
$6639
Profit
$2772
$3149
$5921
Revenue
$4204
$5606
$9810
Expense
$2039
$3147
$5186
Profit
$2165
$2459
$4624
5. Is it a good business to open the Tournament
In order to answer this question, we need to see whether the benefits of holding this event
are bigger than the costs of the event.
The pros: 1. Profits. The extra profits result from opening the event, includes profits of
Breakfast, Lunch, and 140 bills (70 patrons*2 nights) at dinner. See the following chart:
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Chart 3: Extra profits result from opening the Tournament
Breakfast
Lunch
Dinner
Total
F
B
Total F
B
Total F
B
Total
Revenue
$1320
$1760
$3080
$1320
$1760
$3080
$1050
$1400
$2450
$8610
Expense
$640
$730
$1370
$640
$730
$1370
$509
$581
$1090
$3830
Profit
$680
$1030
$1710
$680
$1030
$1710
$541
$819
$1360
$4780
Revenue
$1320
$1760
$3080
$1320
$1760
$3080
$1050
$1400
$2450
$8610
Expense
$640
$730
$1370
$640
$730
$1370
$509
$581
$1090
$3830
Profit
$680
$1030
$1710
$680
$1030
$1710
$541
$819
$1360
$4780
Revenue
$2640
$3520
$6160
$2640
$3520
$6160
$2100
$2800
$4900
$17220
(2 nights) Expense
$1280
$1460
$2740
$1280
$1460
$2740
$1018
$1162
$2180
$7660
$1360
$2060
$3420
$1360
$2060
$3420
$1082
$1638
$2720
$9560
Saturday
Sunday
Total
Profit
As we can see, the extra revenue result from the event is $17220, extra expense is $7660,
extra profit is $9560. Minus the hosting fee of $1500, Matt’s still get $8060 net profit. So it
would be a good decision to host the Tournament.
2. The reputation. Holding a well-known tournament will increase the reputation of the
bar, and attract more people to come in the future.
The Cons: Potential risk of losing old customers. The rising rise on Breakfast and Lunch
might still affect small part of old customers, they come to consume but find that the bar
raises the price secretly.
Conclusion
Generally, it’s a good deal to host the Pool Tournament. Raising menu price on breakfast
and lunch, making arrangement and paying extra wage to employee to let them work more
time, these are strategies Matt’s can use to maximize the event.
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Reference
Profit/Loss Statement. Retrieve from http://www.investopedia.com/terms/p/plstatement.asp
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MATT'S POOL HALL AND BAR
Case Study
Matt's Pool Hall and Bar is open 4pm to 1am seven days a week
It has 5 Pool Tables and room for another 50—60 patrons
It hosts Pool Leagues Monday, Tuesday, Wednesday and Thursday evenings
Each League (evening) has 10 teams of 6 players each, and the games generally go from 7pm to
midnight
The cost to play Pool is $2 per game (generally generating $60 per table per night)
Menu prices are
Beer/Wine
Water/Soft Drinks
Cocktails
Burgers
Pizza
Fries
$5
$2
$10
$10
$10
$5
Average check per Pool Patron is approximately $35 ($15 in Food and $20 in Beverage)
Average Revenue per evening---
Night
Sunday
Monday
Tuesday
Wednesday
Thursday
Friday
Saturday
Bar
$500
$1500
$1600
$1600
$1700
$2000
$2000
Food
$700
$1700
$1800
$1800
$1900
$2000
$2000
Food Cost runs 28.5%
Beverage Cost runs 21.5%
Labor Cost runs 20%
Matt's Pool Hall and Bar has been approached to host a Regional Pool Tournament for the weekend of
November 11 & 12 (Saturday and Sunday) with 3 rounds of play (9am, 2pm & 7pm). Though this may
sound like a no-brainer, the Regional Tournament Chairperson wants to charge Matt $1500 for
the opportunity to host said event.
Assignment–Do an analysis of said opportunity and provide detail about what strategies Matt would
need to embrace in order to maximize this event, including menus, pricing, etc. Your overview should
be 3—4 pages of explanation with charts/tables, a P&L, etc. And....be prepared to present your
findings or recommendations to the class in a 3--4 minute presentation. Remember to consider all the
key steps in a ‘Business Plan'....
Fall 2017
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