CONFIDENTIAL

Pacific Boarding House

Defending the American Table

Business Plan
PBH11
Prepared January 2015

Contact Information
Oliver West
olliewest@live.com
310/927-9090

Table of Contents
Executive Summary ..................................................................................................................... 1
Who We Are ......................................................................................................................... 1
What We Sell ........................................................................................................................ 1
Who We Sell To ................................................................................................................... 2
Financial Summary ............................................................................................................. 3
Company ....................................................................................................................................... 5
Company Overview ............................................................................................................ 5
Management Team .............................................................................................................. 6
Marketing ...................................................................................................................................... 8
Target Market ....................................................................................................................... 8
Competitors .......................................................................................................................... 9
Products and Services ....................................................................................................... 10
Future Products and Services .......................................................................................... 11
Strategy and Implementation .................................................................................................. 13
Marketing Plan .................................................................................................................. 13
Financial Plan ............................................................................................................................. 22

Revenue Forecast ............................................................................................................... 22

Personnel Plan ................................................................................................................... 24
Budget .................................................................................................................................. 26
Cash Flow Assumptions .................................................................................................. 32
Loans and Investments ..................................................................................................... 34
Financial Statements ................................................................................................................. 35
Profit and Loss Statement ................................................................................................ 35
Balance Sheet ..................................................................................................................... 38
Cash Flow Statement ........................................................................................................ 39
Appendix ..................................................................................................................................... 41
Revenue Forecast ............................................................................................................... 41
Personnel Plan ................................................................................................................... 43
Budget .................................................................................................................................. 45
Loans and Investments ..................................................................................................... 49
Profit and Loss Statement ................................................................................................ 50
Balance Sheet ..................................................................................................................... 55
Cash Flow Statement ........................................................................................................ 57

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Executive Summary
Who We Are
My great aunt wrote a book called Chicken Every Sunday. It told the story of my
familys boarding house in Tucson, AZ at the turn of the century. Her food became so
famous that locals and visitors alike would stop in for dinner, especially for Chicken
Every Sunday. Below is a quote from the book, which has served as inspiration for not
only for this concept, but also for my culinary journey:
One of the boarders who ate Mother's chicken every Sunday summed it up
when he said, I was told that in your house I'd have some good food and a good
time . Well They all had fun, and they all became part of the family. So If you
have room, for some fun and old-fashioned enjoyment, Mother's sure to have
room for you
The Pacific Beach Boarding House is traditional American food, cooking everything
from scratch, sourcing the best local ingredients, all for a price everyone can afford. In a
market saturated with college bars, Mexican restaurants and sushi bars, fast food joints
and white tablecloth, theres a definite need for what were offering.

What We Sell
The Pacific Beach Boarding House (PBH) is a American restaurant delivering quality at
a great value all day. It will provide both a casual dining and fast casual experience.
Our concept incorporates both seafood and American basics- like burgers, sandwiches,
salads, and fries. Gastro elevates the cuisine with a focus on Local, Farm to Table,
Organic, Free Range, and Grass Fed.
PBH will offer Full Table Service for lunch and dinner in a fun, relaxed dining
atmosphere. Lunch entrees will be served from 11am - 4pm, costing between $8 and
$15. Dinner entrees will be served between 4:30p and 11:00pm, costing between $15 and
$22. Guests will be seated by a host or hostess. Servers will help explain menu items
and take orders. While we will foster a casual dining atmosphere, guests can always

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expect professional service. The Bar will be open from 10am til 2am with a limited
menu ending at 1am (pub service). We will charge on average $8 / drink.
We will also offer Fast-Casual Dining, consisting of quick bites and food to go. Guests
will walk up to a service counter, choose menu items from a black board and place their
orders with a cashier. Items are either pre-packed for takeout or cooked fresh and
brought to small cafe tables. Prepared and packaged Food will be in the $7 to $10
range. Juices from the juice bar will be between $8 and $12, all other beverages under
$5.
Fast Casual focuses on those who are on the go: a surfer who wants a breakfast burrito
after a long surf session; Mom who wants a quick salad, while walking her toddler; or a
tourist grabbing some seafood baskets for a picnic on the beach. The Grab and Go food
will be served out of an attached cafe from 8:00am - 3:00pm.

Bar Service: 10am - 2am, $8 / Drink

Lunch Service: 11am - 4pm, $12 / Entree
Dinner Service: 4:30pm - 12am, $18 / Entree
Cafe Service: 7am - 3pm, $8 / Entree

Who We Sell To
First, we want to capture the commuters. Pacific Beach has three highways and an
interstate running through it. On average residents of the nearby communities will
travel through Pacific Beach at least once as a part of their daily commute.
Second we want to capture the Tourists. Pacific Beach has eight major hotels within 1
square mile of each other. Generally people who visit, want to get out early and see as
much of the city as possible. They also grow weary of eating in the hotel every morning.
Being within a short walk or bike ride away, tourists can get an affordable local meal
that tastes great. We expect most will grab their breakfast and head over to the beach,
which is a block away.
Thirdly, we want to capture the active members of the community. Pacific Beach is a
destination for surfers, divers, joggers etc. Most of these people try to squeeze a

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workout in before heading off to work. A place to grab a bite at the doorstep, where
most of these activities take place, only makes sense.
Lastly we want to capture those looking for a late night scene. At night time we strive
to offer is an alternative to the surfed out college bar, giving the locals an inexpensive
gastro pub and sea food restaurant thats hip, fresh, serving farm to table cuisine. This is
similar to what Bobeau did in Ocean Beach. (BO-Beau kitchen bar
www.cohnrestaurants.com)
The Pacific Beach Boarding House will offer Signature Cocktails, Craft Beers, and a
large selection of American Whiskeys and Bourbons. A DJ will play music ranging from
indie folk, blues, old school hip hop, mashups. This is NOT a nightclub. There will be
no trance, no dub step, no glow sticks, no crazy light arrangements or fog machines. We
want people to hang out and talk with good bar food and good drinks.

Financial Summary
PBH will require an initial investment of $778,326. These funds will be used for:

Move in
Buildout and Furnishing
Initial Purchase of Food and Beverage
Ordering Systems
License and Permits
Insurance
Marketing and Advertising
Website

We will have four main revenue streams with a 23.25% food cost:

Liquor Bar
Raw Bar
Dining Room
Cafe

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Not listed are ancillary revenue streams we aim to build, which can add up to $500,000 in
additional each year . These numbers are not included in our financial projections.
Delivery
Catering
Location Rental.
Daily sales will average $14,659, with hourly sales of $732.96

26 Checks / Hour
$28 Check Average
$732.96 / Hour
$14,659 average sales / day

Sales will grow by 9% each year. We will work to maintain a gross margin of 76%:
Year 1 $2,461,440 (7 months)
Year 2 $3,724,318
Year 3 $4,096,733

Financial Highlights by Year

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Company
As mentioned in the Executive Summary, the Pacific Beach Boarding House (PBH) is an
American restaurant incorporating, both seafood and American basics- like burgers,
sandwiches, salads, and fries. Our food will have an emphasis on Local, Farm to Table,
Organic, Free Range, and Grass Fed. (Please refer our menu proposal)
Our Location
The Pacific Boarding House will be located in Pacific Beach California. Our aim is to
find a property that meets the following criteria:
Under $4.00 a Square Foot / Month
Between 4000 and 6000 Square Feet
Is an existing restaurant space with an Ansel System, restaurant specific
plumbing, electrical, and duct work, water heater, C02 Lines, and a walk-in.
Is located no more than 4 blocks from the beach
Has either an attached parking lot, is near a shared parking structure, or has
substantial street parking surrounding it.
Our Target Customer

Between the ages of 28 and 34

Athletic
Lives within walking distance
Frequents the area for an activity or late night scene
Works in the neighborhood
Stays in one of the eight major hotels in walking distance
Visits the beach for vacation or weekend getaway
Commutes through Pacific beach
Earns more than 50 times his or her monthly rent or 40 times his or her mortgage

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Our Hours and Price Point

Bar Service: 10am - 2am, $8 / Drink

Lunch Service: 11am - 4pm, $12 / Entree
Dinner Service: 4:30pm - 12am, $18 / Entree
Cafe Service: 7am - 3pm, $8 / Entree

Management Team
Oliver West - Founder, Managing Partner
Oliver West has over 10 years experience in the restaurant industry. From creating and
opening his own bar and restaurant in Cabo San Lucas to general managing and
heading up catering for a very popular American Cuisine locale in New York
City.These experiences have given a diverse understanding of all administrative and
operational aspects of the bar and restaurant trade, including but not limited to design,
menu development, team building, supply management and bookkeeping.
General Manager at Ej's Luncheonette - New York, NY
September 2012 - Present
EJs is a cash only business that has been open for 22 years. We serve close to 1000
people each day and sell between $100,000 and $120,000 per week. 30% of our sales are
derived from phone and online orders (delivery.com, seamless.com, grubhub.com,
eatstreet.com , and ejsluncheonette.com).
Since taking over he has done the following:
Successfully launched new menus for Breakfast, Lunch, Dinner and Brunch
Service aimed at elevating the EJ dining experience.
Hired and Trained front of house staff to meet our sales and service objectives
from Phone Order takers, Packers, Runners, Bussers, Servers, Counter Servers
and Delivery Men and Women.
Worked with Ownership to restructure our back of the house staff in order to
reduce our labor costs and increase efficiency.

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 Built and Launched an online menu to fulfill delivery and takeout orders, adding
$3,000 in revenue per month and growing.
Created a new social media campaign through foursquare, yelp, trip advisor,
Facebook, google + and twitter.
Increased profitability by 10%.
Catering Director at EJ's Luncheonette - New York, NY
May 2012 - Present
As the Catering Director he did the following:
Created a new menu that celebrates everything from traditional "Home-Cooked
American Cuisine" to Fine Dining".
Grew the business to handle events that range from 10 - 300 people, from
birthday parties to corporate events.
Developed craft and film location catering services.
Grew our client base to include JP Morgan, NBC Universal, ITG, Douglas
Elliman, and The Ronald MacDonald House.
Increased monthly revenue from an average of $1500 to $10,000.
Owner, Director of Operations at Cabo Collective SA de Cv - Cabo San Lucas, Mexico
July 2011 - May 2012
Designed a restaurant and bar (Faraway Bar), contracted the entire
construction, brought it from concept to completion under budget.
Built a brand and created a marketing strategy which rewarded service providers
for bringing their clients to our restaurant: taxis, shuttles, concierges, DMCs,
OPCs, time share liners and closers.
Built the business operations, performed all the hiring, and set up all of our
accounts with the various Vendors.
Managed Day to Day operations

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Marketing
Target Market
Pacific Beach is a 4.4 square mile beach community in San Diego, California. It is nestled
between La Jolla, Bird Rock, Mission Beach, and Mission Bay.
Residents are generally single between the ages 25 and 34, renting at average rate of
$1300 / month, earning between $60 and $80 thousand per year. 60% of Residents are in
Sales (Real Estate or Time Share), Hospitality (Hotel or Food Service), and Management.
Surrounding communities are more family oriented and affluent, with La Jolla having
the highest concentration of wealth in the greater San Diego area.
San Diego is also one of the top tourism destinations in the United States with over 33
million visitors each year, spending a total of 8.4 billion dollars. Tens of thousands visit
the beach every day with Pacific Beach being the most accessible in the city.
First, we want to capture the commuters. Pacific Beach has three highways and an
interstate running through it. On average residents of the nearby communities will
travel through Pacific Beach at least once as a part of their daily commute.
Second we want to capture the Tourists. Pacific Beach has eight major hotels within 1
square mile of each other. Generally people who visit, want to get out early and see as
much of the city as possible. They also grow weary of eating in the hotel every morning.
Being within a short walk or bike ride away, tourists can get an affordable local meal
that tastes great. We expect most will grab their breakfast and head over to the beach,
which is a block away.
Thirdly, we want to capture the active members of the community. Pacific Beach is a
destination for surfers, divers, joggers etc. Most of these people try to squeeze a
workout in before heading off to work. A place to grab a bite at the doorstep, where
most of these activities take place, only makes sense.
Lastly we want to capture those looking for a late night scene. At night time we strive
to offer is an alternative to the surfed out college bar, giving the locals an inexpensive
gastro pub and sea food restaurant thats hip, fresh, serving farm to table cuisine. This is
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similar to what Bobeau did in Ocean Beach. (BO-Beau kitchen bar

www.cohnrestaurants.com)
The Pacific Beach Boarding House will offer Signature Cocktails, Craft Beers, and a
large selection of American Whiskeys and Bourbons. A DJ will play music ranging from
indie folk, blues, old school hip hop, mashups. This is NOT a nightclub. There will be
no trance, no dub step, no glow sticks, no crazy light arrangements or fog machines. We
want people to hang out and talk with good bar food and good drinks.

Competitors
There are nine restaurants in Pacific Beach that are categorized as having Seafood:
4 of the restaurants have Bar Service passed 9pm and are located near the beach;
however, only two of those restaurants have 10 or more seafood items on the menu.
The first is World Famous. It has a higher check average and no grab and go. The higher
price point is mostly due to its ocean front property: better views more expensive. With
a higher price point you elevate the cuisine and narrowly target the type of customer
you can serve, alienating locals, focusing on high net worth tourists and individuals
from the surrounding communities. This business model tries to maximize profits on
limited tables. Capturing the guest on the go is less of a priority for these types of
establishments mainly because it diminishes the exclusivity of upscale dining.
PBH will target the same demographic, but in a different way. The value of cool
should never be underestimated, especially when targeting high net worth individuals.
Fashion and Music produce products that can appeal to a diverse group of individuals
both in social status and ethnicity- primarily because its deemed hip. A restaurant can
also target broadly; the distinction has less to do with whats being sold, rather the
environment its being sold in. The food is a huge part, but attraction is first a visual
response, taste will keep them coming back. We will put a huge emphasis on designing
the perfect space to accomplish this end. (refer to design section)
The second potential competitor is Oscars Mexican Restaurant. It shares the most
similarities with the exception of Late Night Bar Service, Grab and Go and Style of Food
Preparation. Oscars is narrowly focused on Mexican preparation. There is an

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abundance of Mexican Food options in San Diego and with such a specific menu it
becomes difficult to recapture the same guest multiple times in a week. With a more
southern, Louisiana style, we can incorporate the spices of Latin America and the
simplicity of North Eastern preparation - i.e. from gumbo to poached salmon. The idea
is to give the guest options.
There are 4 Restaurants that are categorized as Organic: Fig Tree, JRDN, Bareback
Grill and Isabels Cantina.
Of these, the most similar to our concept is the Fig Tree. It is Moderately priced, Close
to the beach, Open Early, Serves Organic Food and has a similar look. The Fig Tree
though is focused exclusively on breakfast / brunch food. It isnt open late and doesnt
serve dinner. Ultimately the Fig would affect only one revenue window for our
business. But, with limited seating and lack of parking, the affect would be minimal.
Then theres the Bareback Grill. Its Open Late, moderately priced, close to the beach,
serves organic and grass fed food, and has a full bar. But its a burger joint. As with a
strictly Mexican Food Restaurants, it limits its ability to recapture the same guest
multiple times in a week.
There are no restaurants categorized as a Gastro-Pub or Gastro-Diner.
The Pacific Boarding House serves traditional American food, cooking everything from
scratch, sourcing the best ingredients available, for a price everyone can afford. In a
market saturated with College Bars, Sushi Bars, Mexican Restaurants, Fast Food Joints
and White Tablecloth, theres definitely a need for what were offering.

Products and Services

The Pacific Beach Boarding House attracts prospective customers by offering an
exciting and unique dining experience. High quality food, friendly and professional
service, and an entertaining, fun-filled environment differentiate PBH from its
competitors.
The products sold by The Pacific Beach Boarding House fall into the following
categories:

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Smoothies, Blended Juice: $8

Fresh Squeezed Juice: $4.50
Fountain Soda: $3.00 (unlimited refills)
Premium Soda / Bottled Water: $3.00
Coffee / Tea: $2.50
Beer: $5
Wine: $7
Liquor: $8
Build a Buscuit: $5
Build a Burro: $5.50
Grits Bar: $4
Salad Bar: $10
Sandwiches: $11.50
Off the Grill: $11
Tacos: $8.50
Seafood Basket: $7
Seafood Plate: $9.5
Raw Bar: $13
Seafood Stacks: $55
Soup: $6.5
Moules Frites: $15
Pie: $5
Ice Cream: $3
Doughnuts: $5
Lunch Specials: $12.5
Dinner Specials: $17.5

Future Products and Services

There are three ancillary revenue streams we aim to build; combined they have the
potential to add $500,000 in revenue.
Delivery
(phone and online ordering).

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Delivery business will start as pick up only. Over time we will expand our reach,
starting with a higher delivery minimums $65 / order (aimed at groups) and shorter
travel distances. As deliveries pick up the minimums will reduce to $25 / order and our
delivery zone will grow commensurately. With a $9 / hour delivery guy and a $10 /
hour phone server, deliveries cost the business $19 / hour in fulfillment alone;
compound that with a 22% cost of goods, $1 in paper goods, and $3 in gasoline / hour,
we would need to sell $27 to break even. To maintain a 75% adjusted gross margin we
would have to sell $108 every hour. For this reason we want to slowly grow in to
deliveries, developing a loyal and local customer base.
Catering
(in house and on location).
We will also develop a catering business. San Diego is a destination for Weddings,
Corporate Meetings and Conventions. Developing a solid relationship with the area
hotels is essential to both our survival and prosperity. We will develop a separate menu
that will celebrate everything from traditional "Home-Cooked American Cuisine" to
"Fine Dining". Our pricing will range from $18 / person for continental Breakfast to $27 /
person for Dinner. Party sizes will range in size from 10 - 300 people. We will offer both
drop catering and full service catering.
Location Rental.
This can either be a booking for a room, section or the entire restaurant. Pricing will
cover the loss of potential business 50% of the hourly rental fee. Potential customers
include:

Birthday Parties
Bachlorette / Bachelor Parties
Corporate Christmas Parties
Industry Events / Get togethers
Charity Events / Auctions
Film and Television Location Rental

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Strategy and Implementation

Marketing Plan
Marketing Materials
While a printed marketing kit will not generally be used, it can be prepared based on
the same items on the The Pacific Beach Boarding House website. The marketing kit
will be used as a press kit and when seeking relationships with membership
organizations which can provide referrals, although it will not be sent or provided to
consumers.
The press/marketing kit will include:
Case statement - Covering the need for a reasonably priced farm to table concept
in the San Diego marketplace.
Difference summary - Describing how the theme plays out in the restaurant Ideal
customer description - an actual story of a regular customer who brings his
friends and family to The Pacific Beach Boarding House.
Copy of menu and prices
Description of our theme nights, with customer testimonials for each
List of upcoming theme nights
General testimonials
FAQs - with information on directions, parking, policies and rules, etc.
Selection of press articles
Testimonials will be requested on a card provided with the checks given to each table.
They will be sifted through once a week by the manager and the top 10 or so will be set
aside for potential inclusion in the marketing kit and website.
The marketing kit will be updated once a quarter. A cover letter will be tailored to
individual prospects or press outlets as needed.
Web Plan
The The Pacific Beach Boarding House website will serve the following purposes:
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 Educate prospects with an eye towards encouraging them to try out the
restaurant
Inform customers about the upcoming events, menu, and key information about
coming to The Pacific Beach Boarding House
Prospects will be encouraged through the fun, colorful, playful atmosphere of
the website, which mirrors that of the actual restaurant.
A photo gallery will provide a visual tour of the restaurant to demonstrate its
decor and atmosphere as well as actual customers in groups enjoying the
restaurant.
Folk Indie Music from the will play on the website for visitors with sound
enabled on their computers.
The Website will be HTML 5 enabled and mobile optimized.
There will be an Online Ordering Platform with an Order Now button
prominently displayed.
The first-timer discount coupon and code will also be prominently displayed on
the website's homepage to encourage prospects to become customers.
Existing customers will be further encouraged to deepen their relationship with The
Pacific Beach Boarding House through information on the upcoming events, along with
the ability to forward that information directly from the website to their friends. Sign-
up for the PBHPoints and referral programs will be available directly through the
website as well.
Social Media Plan
A The Pacific Beach Boarding House blog will be shared between the managers and
servers at the restaurant. Before and after events, they will write about the events,
giving a bit of a review and a taste of what the evening was all about. Blog posts will
also pose recipes of the food items and where theyre from, which are all drawn from
either points in history or regions in the United States. This will encourage user
comments and answers while publicizing the menu of The Pacific Beach Boarding
House.
The Pacific Beach Boarding House will establish a Facebook page with links to the blog
and shortened versions of its posts. Customers will be encouraged to become fans of the
Facebook page and then to share the page with their friends.

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Having owned and managed restaurants, Ive learned the importance of non traditional
advertising and social media management. Well have Main Street Hub manage our
online customer outreach. We will also invest in marketing programs offered by Yelp,
Foursquare and Google +.
Lead Generation Plan
The Pacific Beach Boarding House will generate leads through the following means:
Advertising
Radio advertising - fun and playful ads with first-timer code for discount
(distinct codes for each radio campaign and station)
Online pay-per-click advertising - text ads for Gastro Pub" and related
keywords
Local media print advertising - fun and playful ads with first-timer code for
discount (distinct codes for each print media outlet)
Referrals
Customer referrals
Membership organization referrals
Direct Mail Campaign
1,000 prospects in the San Diego area chosen from a purchased list. Over a six
month period, one postcard offering a first-timer discount will be sent to the list
each month. Switch to a new 1,000 prospects after six months.
Lead generation tracking will be through the POS system at the host stand of the
restaurant. The database will track customers by name and part of their address and
will include information on the source of each customer. All customers who take
advantage of first-timer discounts or sign up for PBHPoints must be registered in the
system. The system will be able to attach dollar values to the different sources of leads
so that they can be evaluated periodically, and the campaigns can be adjusted or ended
if they are not yielding satisfactory results.

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Referrals
The Pacific Beach Boarding House will seek referrals from returning registered
customers after each meal is completed. The individual who is paying the bill, or other
adults at the table, will be given coupons for first-timers marked "courtesy of THEIR
NAME". They will be invited to pass these on to others who might enjoy the restaurant
and who can take advantage of the coupon. When a coupon is used, 50 PBHPoints will
be awarded to the referring customer (equal to a $5 value).
Professional referrals will be sought through fraternal and community organizations
such as the Lion's Club, Shriners, Wind and Sea Surf Club through college alumni and
parents associations (SDSU, UCSD, MCC, SCO, Point Loma Nazarene), and through
local professional organizations (bar association, San Diego Accountants, San Diego
Medical Association, etc.) Membership first-timer discount offers will be sent to these
organizations, which can be advertised to their members and students through their
newsletters, websites, or emails.
Lead Conversion Plan
Leads will be developed by distributing coupons to targeted groups at events such as
Revolt Summer Surf Series annual, Summer Concert Series, Parents Day at the
surrounding colleges, and local professional organizations meetings and events
(Comicon). Leads will also be brought in through referrals from regular customers, and
through interaction with the PBH website.
Well partner with San Diego based promotional company Fortune 421 to increase our
exposure and strengthen our brand within the San Diego restaurant scene. Over the
past 9 years, this company has grown to become one of the preeminent Southern
California promoters. They will give us access to the hottest events in order to promote
our brand.
Community outreach is essential to increasing our exposure and generating leads. We
will sponsor San Diego Rescue's Children Shelter (http://www.sdrescue.org/). We will
donate a portion of our proceeds for books and toys. We will also sponsor a biannual
"Day at the Beach", where we'll take the kids out for a fun day of swimming and games,
at the end of which we'll throw a big BBQ for them. We will reach out to newspapers,

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bloggers, radio shows and nightly news to promote our event. Potential customers will
be directed to both our website and our physical location.
Prospects, defined by The Pacific Beach Boarding House as customers who have
received a first-timer discount, will all be treated as potential regular customers.
Prospects who receive discounts via the website will have provided their email address
to obtain their first-timer discount code. From that point, they will receive all the
mailings the regular and premuim customers receive.
Walk-ins or those who come in without a discount and are trying the restaurant for the
first time will be enticed by their servers to join the email for the following reasons:

To stay updated about upcoming theme nights

To receive coupons that they can pass on to others
To join the PBHPoints program
To be entered into a drawing for a free dinner

The final option may entice those who did not see themselves being regular customers,
but are interested in the excitement of a drawing.
The next step of lead conversion is a mail and email campaign which is directed at those
who are already registered customers. Quarterly postcards will be sent to the email of
registered customers, with information on upcoming theme nights and coupons they
can pass on first-timers. Monthly email newsletters will be sent to all registered
customers with valid email addresses (all customers who register will be required to
provide an email address).
Once prospects are converted to customers, the goal will be to promote them into
premium customers who return a number of times a year for meals and theme nights.
We will reach out to Hotel Concierges, developing lasting partnerships, offering
exclusive discounts to their guests. Along with Hotels, well reach out to car rental
companies and partner with Triple A. Once we've opened we will continue to dedicate
our resources to building and maintaining our relationship with them

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Service Experience
Customer loyalty is encouraged and rewarded through both financial means
(PBHPoints which translate into coupons for $10 off a meal) and qualitative means
(ongoing theme nights held approximately every other week, which provide many
different experiences for customers). All customers are encouraged to provide feedback
at every meal on their survey cards and on the website through comments emailed to
the company. All email comments will be answered appropriately with at least a form
letter thanking them for their suggestion. The goal of these connections with customers
is to make customers feel that the The Pacific Beach Boarding House is "their" place.
Loyalty Product/Service Offerings
The The Pacific Beach Boarding House theme nights are primarily focused on premuim
clients. Each theme night will feature a performance by a live musician. There will be no
additional cost to attend a theme night, although reservations will be taken to
encourage attendees to plan ahead and invite additional family or friends.
Accommodations will be made to seat large groups together at theme nights.
The PBHPoints program also directly involves loyal customers in the process of
building the customer base by inviting them to refer customers and earn 50 PBHPoints
for each customer they refer.
WOW Process
The Pacific Beach Boarding House's WOW process includes the following elements:
Customers will be asked to name and rate their server on the survey card provided to
each table. This will not be seen by the server directly. Customers will drop it into a box
as they leave. These cards are dated so that the experience can also be tied to that night's
kitchen staff.
Manager will review the survey cards each night and flag any unsatisfactory remarks
for discussion with the server and kitchen staff. They will review how to handle the
situation in the future.

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Three problems with the same server in one month period will call for discussion with
the manager and then a period of supervision to determine how to rectify the situation.
Servers who don't have their heart in it will generally quit rather than being subject to
observation of this type.
Servers who are eager to improve will accept feedback, and managers will be able to
spot specific areas they can improve from this observation period. Manager personally
stops by each table as they are finishing their meals to ask about the food and
experience.
Written cooking and preparation guidelines for each item on the menu are given to all
kitchen staff and posted in the kitchen at the preparation stations.
Servers and kitchen staff with consistently excellent results will be rewarded with a
monthly bonus, as well as consideration for promotion from within as positions open.
Daily marketing activities include the following:
Review staff reviews and customer suggestions from the previous day - first thing in
the morning
Devote one hour to the marketing "theme" of the month activity - 8 to 9 am
Devote one hour to other marketing activities (newsletter, advertising, direct mail, PR,
professional referrals, etc.) - 12 to 1 pm
The monthly marketing theme focus will be broken into four weeks of actionable steps
for a total of 20 hours devoted the marketing theme each month. This breakdown will
be done one week before the beginning of each month.
Critical Numbers
Critical numbers will be tracked through the CRM system of the marketing. This system
incorporates data from the POS system, which tracks customer sales as well. All of the
key marketing metrics, as well as customer transactions and the source of each
customer, will be entered into this system. Servers will enter transactions as they occur

Page 19 of 60

and the manager will enter the total testimonials and PR mentions on a weekly basis.
The system can generate a custom report of the key marketing metrics upon request.
Marketing Expense Budget
The marketing expense budget is approximately $32,000 for 2015. This encompasses
external marketing efforts as well as internal activities such as marketing training.
Marketing expenses will increase with inflation in 2016 and 2017, projected at 4%, with
the exception of the loyalty program expense which will grow faster along with sales.
Each of the major areas described under lead generation and conversion will be funded
significantly and consistently to pay for services required. Labor will be provided by the
company's CEO and the cost of that labor is not included in the expense budget, as it is
part of general salaries.

Page 20 of 60

Important
The financial assumptions listed below have
been made utilizing available data provided
by nationally accredited sources and from
local business owners.
These are forward looking statements and in
no way reflect a guarantee; however, based
on personal experience and the experiences
of businesses in the targeted area, we
believe these goals are attainable.

Page 21 of 60

Financial Plan
Revenue Forecast
FY2016

FY2017

FY2018

Liquor Bar

$400,464

$604,336

$664,768

The Cafe

$393,976

$607,600

$668,360

Raw Bar

$353,434

$533,328

$586,656

$2,107,350

$3,180,204

$3,498,210

$3,255,224

$4,925,468

$5,417,994

Liquor Bar

$80,093

$120,867

$132,954

The Cafe

$98,494

$151,900

$167,090

Raw Bar

$88,359

$133,332

$146,664

$526,838

$795,051

$874,553

Total Direct Cost

$793,784

$1,201,150

$1,321,261

Gross Margin

$2,461,440

$3,724,318

$4,096,733

76%

76%

76%

Revenue

In House Dining

Total Revenue
Direct Cost

In House Dining

Gross Margin %

Page 22 of 60

Revenue by Month

About the Revenue Forecast

In order to achieve our revenue goal of $4,925,468 million:

Checks / Hour - 26
Check Average - $28
Sales / Hour - $732.96
Total Sales - $14,659

Sales will increase by 150% for the weekend because of special events, weekend prom
otions, and brunch. While a 20 hour day seems long, it's important to note that the Cafe
will be the only part of the restaurant open from 7am to 10am. This gives us a 10 hour
turn around reducing our labor cost, giving us time to thoroughly prep and clean.

Page 23 of 60

Personnel Plan
Personnel Table
FY2016

FY2017

FY2018

WAITSTAFF - 16

$115,200

$172,800

$172,800

BARTENDER - 8

$58,752

$88,128

$88,128

BUSSERS - 8

$70,560

$105,840

$105,840

RUNNERS - 4

$35,280

$52,920

$52,920

BACKS - 4

$36,000

$54,000

$54,000

DISHWASHERS - 9

$97,280

$145,920

$145,920

KITCHEN - 14

$199,680

$299,520

$299,520

PREP - 12

$103,040

$154,560

$154,560

FLOOR MANAGERS - 3

$91,800

$122,400

$122,400

ASSISTANT GENERAL MANAGER

$36,000

$48,000

$48,000

GENERAL MANAGER

$55,000

$60,000

$60,000

SOUS CHEF

$39,600

$52,800

$52,800

STEWARD

$28,160

$42,240

$42,240

CHEF

$41,400

$55,200

$55,200

MANAGING PARTNER

$72,000

$72,000

$72,000

BOOK KEEPER

$38,400

$38,400

$38,400

$1,118,152

$1,564,728

$1,564,728

Total

About the Personnel Plan

PBH will have a maximum total labor cost of $1.6 million per year, which is
approximately 35% of the projected gross revenue.
Front of the House staff includes waiters, bartenders, bussers, barbacks, runners, and
hosts. BOH staff includes line cooks, prep cooks, and dishwashers.

Page 24 of 60

 PBH is in line with industry norms for similar concepts. Too low and service suffers,
too high and the business becomes inefficient. There is room to reduce the total cost;
however, that determination would need to be made while the business is operating.

Page 25 of 60

Budget
Budget Table
FY2016

FY2017

FY2018

$1,118,152

$1,564,728

$1,564,728

$223,632

$312,948

$312,948

$13,000

$10,000

$10,000

PR

$1,500

$1,500

$1,500

Direct Marketing

$6,750

$7,000

$7,250

$10,000

$9,500

$9,500

Other Marketing Expenses

$4,000

$4,000

$4,000

Kitchen and Service Ware

$45,000

$45,000

$45,000

$9,000

$12,000

$12,000

Paper Supplies

$31,500

$42,000

$42,000

Office Supplies

$6,300

$8,400

$8,400

Equipment Repairs

$6,750

$9,000

$9,000

Cleaning Company

$40,500

$54,000

$54,000

Exterminating

$5,850

$7,800

$7,800

Linen Company

$16,200

$21,600

$21,600

Trash Removal

$9,000

$12,000

$12,000

$77,000

$96,000

$96,000

$162,000

$216,000

$216,000

Real Estate Tax

$54,000

$54,000

$54,000

Credit Card Charges

$42,500

$60,000

$60,000

$4,122

$5,496

$5,496

Property Insurance

$38,880

$38,880

$38,880

General and Liability Insurance

$24,000

$24,000

$24,000

Complimentary Meals

$10,000

$10,000

$10,000

Accountant

$3,500

$3,500

$3,500

Lawyer

$5,000

$5,000

$5,000

Operating Expenses
Salary
Employee Related Expenses
Advertising

Web Development

Cleaning Supplies

Utilities
Rent

Bank Charges

Page 26 of 60

Permits

$20,075

$0

$0

$865

$0

$0

$1,989,076

$2,634,352

$2,634,602

Kitchen Equipment

$225,000

$0

$0

Buildout and Furnishing

$350,000

$0

$0

$575,000

$0

$0

Incorporation

Total Operating Expenses

Major Purchases

Total Major Purchases

Expenses by Month

About the Budget

Below are our budget targets as a percent of our year 2 Gross Revenue:
Cost of Food and Beverage (23.25%):This is usually the most expensive part of any
meal. Depending on the type of food served at a restaurant, food costs are usually
targeted for between 25-30%. This is a huge portion of the cost and includes only the
food used. Waste, spoilage, mistakes, and items a guest doesnt like all raise this overall
number considerably on the balance sheet.

Page 27 of 60

Hourly and Salaried Labor (36.1%): Hourly Labor covers the person who cut the
tomatoes, seats the guest, makes the drink, takes the order, cooks the burger, brings it to
the table, cleans the table after, and washes the dishes. Some employees are making less
than minimum wage due to tip credits. This also includes the labor for people who are
in the restaurant hours before it opens preparing for the day and the people who clean
it up afterwards. Salaried Labor pays the person who ordered all the food, the person
who scheduled all the people, supervises them, and keeps track of all of the numbers.
The many hats of a restaurant manager cover far more ground than just fielding guest
complaints.
Supplies (2.2%):This includes plates, glasses, silverware, ramekins, saltshakers, sugar
caddies, cleaning supplies, and the countless other things that are brought to a table.
This is not the cost of originally purchasing these items to open a restaurant, but only
the cost of replacing what gets lost or broken. Packaging for carryout, napkins, paper
towels in the restroom, and all other non-food items consumed by a guest are accounted
for in this section.
Utilities (2%): Running ovens, stoves, and fryers for 15 hours a day can drive a gas bill
through the roof. The air conditioner must not only counteract all of that heat, but also
compensate for the hundreds of guests that keep opening the door. The cost of
hundreds of glasses of water is actually pretty minimal compared to the price of a
couple thousand cycles of the dishwasher.
Marketing (1.3%):Getting guests in the door is not cheap. This includes television,
radio, newspapers, direct mail, etc. This would also include participating in community
events, booking talent for shows at the restaurant and the myriad of other expenditures
it takes to build a customer base.
Fees and Licenses (8%):Restaurants pay taxes. Municipal, county, state, and federal
taxes all must be paid. Liquor licenses, business licenses, food handling permits, fire
inspections, and countless other requirements all must be paid. Restaurants often frame
these licenses and post them conspicuously as tribute to the most expensive pieces of
dcor in the restaurant.
Maintenance (2%):This is the line item that keeps restaurant owners up at night. Many
pieces of equipment are required to keep a restaurant up and running. When anything

Page 28 of 60

from a fryer, to an air conditioner, to a toilet breaks it goes to this line item. Failing to
keep this under control can lead to it skyrocketing into the double digits and wiping out
any hopes of profitability for the period.
Other (.2%): This is the catchall category including lawyer fees, accountant fees, and
architect fees.
All of the expenses listed are considered above the line. This means that they are
directly controllable by a restaurant manager in theory. These percents serve as targets
that a restaurant manager is expected to meet. These are incredibly aggressive goals
and can often be made unattainable by unexpected expenses. The two that are most
often seen as places to make up lost ground are in hourly labor and supplies. This
means operating with fewer cooks and servers in slow periods or holding off on
ordering supplies that make the service run smoother.
Fixed Costs (7%): These are items that are out of the control of a restaurant manager.
They include some significant expenses. Rent, insurance, corporate salaries, and debt
service form most of this category. A variety of insurance policies covering everything
from injured workers to sexual harassment to food borne illness are required to run a
restaurant.
One of the most significant costs is the expense of opening the restaurant (15%): So far
we have accounted for replacing the broken plate, but not buying the hundreds of
original plates needed to open the restaurant. Every piece of furniture, plate ware,
dcor, and glass has to be originally purchased.

Startup Costs
Initial Investment
The Pacific Boarding House will require an initial investment of $685,276; which can be
broken down in the following areas:

Move in Cost $104,000

Buildout and Furnishing $417,767
Initial Purchase of Food and Beverage $8,000
Ordering System $14,768
Page 29 of 60

License and Permits $20,340

Marketing and Advertising $32,500
Utilities $5000
Property Insurance $9,720
Accountant $873
Lawyer $1,248
Permits $20,075
Incorporation $865
Web Development $5,000
Employee Salaries and Expenses $45,120

BUILDOUT AND FURNISHING

This by far is the largest expense category Totaling $417,767
Buildout and Construction can be prohibitively expensive, depending on the location.
We intend on taking over an existing restaurant space, in order to avoid the
considerable expense of having to install an exhaust system, Ansel system, specialized
plumbing and electricity, walk-ins, soda lines etcetera. Based on the design and style of
business, we will have some flow and cosmetic changes; however there is no intention
on making any major structural changes.
PURCHASE OF FOOD AND BEVERAGES
This will give the restaurant a base inventory and cover a large opening week. Most
vendors won't extend credit without a purchase history, so every purchase for the first
month will have to be made COD. We will need enough funds in reserve to cover these
purchases.
LICENSE AND PERMITS
Business License
The city will issue a business license. This process normally involves the restaurant
owner completing a business license application and paying a licensing fee. The
business owner must typically renew the license annually, which requires a fee.

Page 30 of 60

Resale Permit
Because San Diego has a sales tax, the restaurant must obtain a resale permit from the
state, which allows the restaurant to charge and collect the required sales tax from
customers. This permit requires a fee.
Building Health Permit
The restaurant will obtain a health permit from the city health department. A permit
holder is subject to periodic health inspections to ensure the location is sanitary and
complies with established food management practices. If the restaurant fails to comply,
it might be fined or risk losing the health permit.
Employee Health Permit
Not only does the building normally need a health permit, but so also do the employees
handling food and beverages. Usually, employees must successfully complete a state-
approved food handlers course and purchase a food handlers permit. The food
handlers course teaches employees about proper sanitation practices, food storage and
food handling, to avoid spreading food-borne disease.
City and Fire
A restaurant in San Diego needs additional permits from the building department,
requiring the building to comply with applicable building and safety codes.
Periodically, the fire marshal will inspect the premises ask for PA Plans, PA Permits,
check the Ansel Systems, Tags on Fire Extinguishers and that building is up to fire
code.
Liquor License
We need a liquor license issued from the state to sell wine, beer or alcohol. Licensing
requirements and fees vary by state. Normally, a beer and wine license costs less than a
full liquor license, and a restaurant liquor license costs less than a bar license, in which
case little or no food is served in the establishment.

Page 31 of 60

ORDERING SYSTEM
We will use a tablet based system called Breadcrumb Pro- it is among the best iPad POS
systems. It has excellent features for managing a restaurant, including an order interface
organized into sections, tables and specific customers. The software caters specifically to
restaurants.
One of the main benefits of using this iPad POS system is it can handle most of the
reporting. It can clock employees in and out. Breadcrumb also can keep track of
different tabs on different table numbers. It primarily connects to the cloud, but if the
internet goes down, Breadcrumb Pro can reroute to a router without the cloud in order
to send signals to peripherals such as kitchen printers, cash printers and cash drawers.

Cash Flow Assumptions

Cash Inflow
% of Sales on Credit

0%

Cash Outflow
% of Purchases on Credit

30%

Avg Payment Delay (Days)

30

Inventory
Months to Keep on Hand

Minimum Inventory Purchase

$0

About the Cash Flow Assumptions

Inventory on hand is kept relatively low, since all meats and other perishables must be
kept extremely fresh: (Listed below are delivery days)
Dairy - Monday and Thursday
Grocery - Monday and Thursday
Page 32 of 60

Produce - Monday, Wednesday and Friday

Meat - Monday, Wednesday and Friday
Fish - Monday, Wednesday and Friday
Bread - Monday, Wednesday and Friday
Coffee - Monday
Iced Tea - Once / Month
Alcohol - Monday
Beer and Wine - Monday
Paper Goods - Monday and Thursday
Our inventory purchases (Direct Cost) will be approximately $25,000 / week or $100,000
/ month. Since we don't sell on credit, we are paid at the time of sale. This will help to
keep our monthly cash flow positive. As a result, we intend to meet our bill payment
obligations on a 30-day turnaround. We need to maintain a consistent payment
schedule to our suppliers because of our weekly inventory purchases.

Page 33 of 60

Loans and Investments

Investor A
Investor B
Investor C
Investor D

Total Amount Received

FY2016

FY2017

FY2018

$401,017

$0

$0

$150,000

$0

$0

$100,000

$0

$0

$127,309

$0

$0

$778,326

$0

$0

Page 34 of 60

Financial Statements
Profit and Loss Statement
Profit and Loss Statement
FY2016

FY2017

FY2018

$3,255,224

$4,925,468

$5,417,994

Direct Cost

$793,784

$1,201,150

$1,321,261

Gross Margin

$2,461,440

$3,724,318

$4,096,733

76%

76%

76%

$1,118,152

$1,564,728

$1,564,728

$223,632

$312,948

$312,948

$13,000

$10,000

$10,000

PR

$1,500

$1,500

$1,500

Direct Marketing

$6,750

$7,000

$7,250

$10,000

$9,500

$9,500

Other Marketing Expenses

$4,000

$4,000

$4,000

Kitchen and Service Ware

$45,000

$45,000

$45,000

$9,000

$12,000

$12,000

Paper Supplies

$31,500

$42,000

$42,000

Office Supplies

$6,300

$8,400

$8,400

Equipment Repairs

$6,750

$9,000

$9,000

Cleaning Company

$40,500

$54,000

$54,000

Exterminating

$5,850

$7,800

$7,800

Linen Company

$16,200

$21,600

$21,600

Trash Removal

$9,000

$12,000

$12,000

$77,000

$96,000

$96,000

$162,000

$216,000

$216,000

Revenue

Gross Margin %
Operating Expenses
Salary
Employee Related Expenses
Advertising

Web Development

Cleaning Supplies

Utilities
Rent

Page 35 of 60

Real Estate Tax

$54,000

$54,000

$54,000

Credit Card Charges

$42,500

$60,000

$60,000

$4,122

$5,496

$5,496

Property Insurance

$38,880

$38,880

$38,880

General and Liability Insurance

$24,000

$24,000

$24,000

Complimentary Meals

$10,000

$10,000

$10,000

Accountant

$3,500

$3,500

$3,500

Lawyer

$5,000

$5,000

$5,000

Permits

$20,075

$0

$0

$865

$0

$0

$1,989,076

$2,634,352

$2,634,602

$472,364

$1,089,966

$1,462,131

Interest Incurred

$105,484

$53,004

$24,254

Depreciation and Amortization

$107,500

$115,000

$115,000

$51,876

$184,392

$264,575

$3,047,720

$4,187,898

$4,359,692

$207,504

$737,570

$1,058,302

6%

15%

20%

Bank Charges

Incorporation

Total Operating Expenses

Operating Income

Income Taxes

Total Expenses
Net Profit
Net Profit / Sales

Page 36 of 60

Gross Margin by Year

Net Profit (or Loss) by Year

Page 37 of 60

Balance Sheet
As of Period's End

FY2016

FY2017

FY2018

Cash

$312,505

$997,748

$2,046,051

$0

$0

$0

$100,093

$110,102

$110,110

$412,598

$1,107,850

$2,156,161

$575,000

$575,000

$575,000

Accumulated Depreciation

($107,500)

($222,500)

($337,500)

Total Long-Term Assets

$467,500

$352,500

$237,500

Total Assets

$880,098

$1,460,350

$2,393,661

$49,268

$51,950

$51,959

$0

$0

$0

$396,017

$236,017

$111,017

$445,285

$287,967

$162,976

$0

$0

$0

$445,285

$287,967

$162,976

$227,309

$227,309

$227,309

$0

$207,504

$945,074

$207,504

$737,570

$1,058,302

Total Owner's Equity

$434,813

$1,172,383

$2,230,685

Total Liabilities & Equity

$880,098

$1,460,350

$2,393,661

Accounts Receivable
Inventory

Total Current Assets

Long-Term Assets

Accounts Payable
Sales Taxes Payable
Short-Term Debt

Total Current Liabilities

Long-Term Debt

Total Liabilities
Paid-In Capital
Retained Earnings
Earnings

Page 38 of 60

Cash Flow Statement

Cash Flow Statement
FY2016

FY2017

FY2018

Net Profit

$207,504

$737,570

$1,058,302

Depreciation and Amortization

$107,500

$115,000

$115,000

Change in Accounts Receivable

$0

$0

$0

($100,093)

($10,009)

($8)

$49,268

$2,682

$9

$0

$0

$0

$264,179

$845,243

$1,173,303

($575,000)

$0

$0

Investments Received

$227,309

$0

$0

Change in Short-Term Debt

$396,017

($160,000)

($125,000)

Change in Long-Term Debt

$0

$0

$0

$48,326

($160,000)

($125,000)

$0

$312,505

$997,748

$312,505

$685,243

$1,048,303

$312,505

$997,748

$2,046,051

Operations

Change in Inventory
Change in Accounts Payable
Change in Sales Taxes Payable

Net Cash Flow from Operations

Investing & Financing
Assets Purchased or Sold

Net Cash Flow from Investing &

Financing
Cash at Beginning of Period
Net Change in Cash

Cash at End of Period

Page 39 of 60

Cash Flow by Month

Cash Flow by Year

Page 40 of 60