How to introduce an Upscale Nightclub business to a sleeping community


3

My partners and I are thinking of opening a nightclub in a newly growing community where everything basically close down at 8:00 p.m., How would I prepare a marketing & feasibility study to find my potential customer base?

Marketing Business Plan

asked Jan 2 '11 at 12:02
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Desertvibes
16 points
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  • if the city rolls up at 8pm i'm not sure i would pitch it as a nightclub. maybe a jazz bar with light appetizers or something that develops into a more active nightclub over time, but I'm thinking the city development board or whatever is going to give you trouble – Hbdgaf 8 years ago
  • Maybe you should get into the mattress business? – Frank 8 years ago

3 Answers


4

Great posts by everyone about the legal aspects, but it sounds like you want to know if there is even a customer base there.

Your bread and butter isn't going to be the folks go normally go to bed at 8pm who come out once or twice to check it out...it's going to be the hardcore nightclubbers who want to go on a Tuesday after they already came in on Monday.

I'd say the easiest way to find out if this crowd exists is to throw a party. Rent out a space (or hell, do it at a friend's house) and tell your nightclubbing friends that it's an exclusive, indy party. Tell them only to invite cool people. Have free drinks. Have an awesome DJ. And then see who shows. If there aren't enough of them or they don't seem like the type who will show up on a Tuesday to dance, then you might want to reconsider.

2c from a Community Manager. :)

answered Jan 5 '11 at 03:34
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Evan Hamilton
111 points

3

If you are in the USA, I am guessing by your profile, its a bit more complex.
here are some possible challenges:

You will need either a zoning that allows for this type of use, and if you can't get that, then you will need a conditional use permit. They are next to impossible to get for entertainment. You can check with your local city planning office to see what zones allows this use, and the costs of getting a conditional use permit if they don't have it. The process can take years. I went through it for a car dealership and can tell you it's very expensive, with very political requirements.

Next, you will have to figure out the challenge of an alcohol licence. Every state in the USA treats these differently, but they are usually awarded on a lottery basis every year. They too are hard to get, especially if you are not serving food, but just alcohol. You could buy one, but they run around $50-100k. Sometimes they cannot be transferred to another location: would you have to check with a broker that works in this field.

Your third challenge is getting the fire department to give you approval on the location. Having fire exits and following maximum occupancy rules are usually not enough. The fire department will have their own political requirements you must meet.

Your fourth challenge: Security, theft, and good employees. The nightclub business is notorious for high rate of theft. There is simply no good way to manage a business like this that deals heavily in cash for entrance or for drink poured. You could try setting quotas: some owners do this and accept anything beyond the quota as money that was going to be stolen anyway. Your manager will make sure the quota is met, then probably pocket the next 50% for himself and the staff. You could hire watchers to watch every drink being poured, but talking to doormen and bartenders, none like baby sitters and it defeats employee morale. You could hire family, but you know what they say about family. This challenge exists in many cash businesses, and this is why you see so much of the staff constantly replaced.

Your last challenge is to build a market. After all the hard work above. DON'T! There is no reason where a community that goes to sleep at 8pm needs a night club. It's a romantic notion, but not smart for business. You are fighting an uphill battle, versus doing business in a city that is more night life friendly. This is why you see night clubs near each other in cities like Miami and Hollywood. These are tourist-friendly towns, where the city understands the revenue, and treats you like a partner. There are areas with zoning provisions that allow this type of business. It may cost you more to do business in a more nightclub-friendly town, but that is if you neglect to count against the lower profits, risks of building your own market (which has a huge risk of failure ), and costs of getting set up.

Another thing: If you and your buddy are thinking it would be cool to own a club, think again. I have a friend who owns three nightclubs, and he does it as strictly business. He owns gay night clubs because over his time he has figured the profits to be much higher. He is not a happy dude. If you enjoy the night scene, then your best bet is to create a tanning salon, or less riskier, higher profit (more IRS friendly) business, then you and your partner enjoy night clubs as VIPS guests. Sure you will spend more on bottles and drinks, but you won't have any of the headaches to deal with.

If you are serious and considering it as a business, then remember a business is in business to make profit. Not to enact change, to any other cutesy BS. The cute shit is what businesses tell communities for good PR. Your time and money is at risk. Do yourself a favor, study how people run these operations in cities other than yours, and strongly consider moving to a more tourist-friendly town to create this type of business.

Last point: I spend 5x - 10x more on entertainment when I am on vacation than in my home town. And I live in Hollywood, CA. You want to be where the tourists are. Trust me.

answered Jan 3 '11 at 03:09
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Frank
2,079 points

1

It is all in the zoning. Talk to your local alderman to find out if anything like that is even an option.
I've studied club management back in college and I can tell you, that you are in for a "fun" experience. Liquor licensing, resident groups, etc. etc. etc.

answered Jan 2 '11 at 15:07
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Apollo Sinkevicius
3,323 points

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