Every modern dude enjoys a night out on the town every once in a while, but have you ever considered turning your love for nightlife into a career? Starting a night club is an enticing business venture that draws in entrepreneurs of all ages, and for good reason. Nightclubs provide a bustling work atmosphere, offer a great deal of prestige, and if successful, can offer lucrative profits. However, opening and maintaining a successful nightclub can be a challenge, thanks to long hours, massive upfront costs, and legal vulnerabilities. If you’re considering a foray into the world night club ownership, follow these guidelines.
Create an Airtight Business Plan
Before contacting investors and putting in applications for a business loan, do your homework. It’s important that you sit down and create a detailed business plan long before you scout locations and take a look at vendors. Your plan should assess a multitude of facets, including the type of clientele you’re planning on targeting, the revenue you can realistically expect, and how you’ll run your business. The nightlife industry is extremely competitive, so you’ll need to prove to investors the validity of your plans and show the steps you’ll take to achieve them. If you need help creating your business plan, work with seasoned professionals at Optimus Business Plans to better ensure your chances of success.
Finding Your Funding
If you’re looking for a cheap business venture, a nightclub isn’t for you. Opening a club can quickly exceed hundreds of thousands of dollars in expenses. After you have a solid idea of the amount of capital you need to get your idea up and running, consider approaching a variety of financers and lenders. Many club owners began with financing from grants through the SBA, and some find success with bank loans. Keep in mind that traditional loans are much harder to come by these days. As banks and financial institutions have tightened the reins on loan applications, your chance of approval is based on your debt history, proof of revenue, past business successes, and credit score. If you don’t have prior experience, you’ll likely find it difficult to obtain funding from traditional lending sources. In these cases, you can pursue financing through crowdfunding campaigns or angel investors from Angel.co.
Find the Perfect Location
Much of your success is riding on location. Depending on what kind of demographic you’re hoping to attract, how you want your bar to look, and your financial status, there are a variety of location options. Do you intend on renting for the foreseeable future, or will you purchase the building straight out? As you browse locations, there are a few essential factors you must keep in mind before making your decision. What is the neighborhood like? If it’s filled with families and older residents, noise complaints could become an issue. Is your club easy to find? If it’s hard to access, you may lose out on lucrative business. Take a qualified real estate agent with you to these commercial spaces, and look for an agent who has previous experience in nightlife real estate acquisitions.
Getting a Liquor License
A liquor license is integral to your club’s success, but acquiring the right permit can often be the most difficult part of the process. While availability and regulations vary by state, by and large, the liquor license industry is a competitive space. In many areas, liquor licenses are limited by county or locality. Once all of the allotted licenses have been dispersed, no more will be issued. That leaves you scrambling to find a license transfer from a private seller, which often translates to higher prices. The type of liquor license you need will weigh heavily into price and availability. Consider California, for example. Proprietors who wish to serve alcohol to patrons in a nightclub (21 and older) must acquire a type 48 liquor license. Thanks to high demand, it can be extremely expensive to purchase this type, often seeing entrepreneurs spending upwards of $100,000. However, this investment is essential, and can serve as a make or break factor for your business.
If you’re considering opening a nightclub, be sure to consider all aspects of the purchase and management processes. Keep these tips in mind and make your venture successful.