How to Start a Night Club Business

Saturday, April 13, 2013

How to Start a Night Club Business

On the surface, night clubs look like loads of fun, at least when you're on the partying side of things. However, when it comes down to business, there are many steps that you need to take in order to start a night club business. To be safe, you should allow yourself at least a year to launch a new night club.

Instructions

1.Visit areas where existing clubs thrive. Take notes on how the club owners set up their promotions and look for spaces that are for rent in the area. Many clubs are clustered together, because club goers tend to go to the same area to party (for example, the Meat Packing district in New York City) and hop around. Choose a location that gets a lot of night traffic and is spacious enough to fit your desired capacity. Most clubs take in around 200 or 300 people.

2.Decide if you want to operate as a sole proprietorship, partnership, or corporation. Due to the high risk of operating a night club, many club owners will choose to file as a corporation because it offers you a layer of protection (your personal assets aren't usually at stake). File a business application with your state (see resources for a link to your state's application). Your business name does not have to be the same as your club name.

3.Put a down payment on your location, and hire a crew to come in and clean it out. If the space needs a conversion, hire a construction crew that specializes in building bars and installing special effects (such as lighting and sound systems). Get quality business insurance to cover your club and your future patrons. A night club businessshould have product liability insurance and liquor liability insurance. The United States Liability Insurance Group provides this type of coverage for bar businesses.

4.Hire bartenders, bar-backs, DJs, and cooking personnel if you are going to be serving food. Many new clubs will hold an open house hiring event where they can hire all of the staff that they need.

5.Contract with local distributors to provide you with beer, liquor, and food products. Shop around to find a deal with distributors that have reasonable payment terms, are easy to work with, on time with deliveries, and provide quality goods. You also want to make sure that your distributors have a good return or exchange policy so that you won't be stuck with excess product that's not selling in your bar.

6.Decide on a special promotion for your grand opening night. This should be something that will easily draw people in, such as free drinks until a certain time, or a ladies night (all ladies for free). Keep in mind that the more women come to your club the more successful it is likely to be; women bring men.

7.Hire an experienced event andpromotions team. This team will design and print flyers for your night club business, distribute the flyers, post information about your club on the Internet, hire special guests, and talk up your event in the community. They will also give you ideas for promotions that work. Don't forget to place ads on local radio stations advertising your club.

8.Set a date for opening night, preferably on a Saturday night since that is the night when most people (young and older) like to get out and have fun. Have your staff arrive at least three hours before the club opens to make sure that everything is in place.

Tips and Warnings

Your grand opening night is extremely important. If you make a bad impression, word will spread and people are unlikely to come back. However, if you draw a good crowd on opening night and make people happy, you are more likely to be successful on future nights. Some club owners like to create a line outside to give the impression that there are people desperate to get into the club. This doesn't always work. It's best to get as many people into the actual space early on (with free drink offers) and then create a small line outside later on in the evening. Always have a back up distributor in your Rolodex in case there are delivery issues with the first source.
Don't leave anyone waiting outside in the cold for more than 20 minutes. You are a new club; be humble and do whatever you can to please club goers. They have plenty of choices.

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Easy Tips and Ideas to Start Business

Although anyone can start a business, many people fail because of a bad product or improper research. If you want to start your own business, you can improve your chances for success before you even begin. In order to make your business successful, start strong and make sure that your idea will hold out for the long haul.

Have a Good Product

Ensure that you plan to sell something useful. Although you may think that your product is important or special, that doesn't mean the general public will agree. Ask friends, family and strangers what they think of your product. If they don't seem that interested, ask them why. With their suggestions, you can either improve the product or scrap the idea completely. According to Brad Sugars of Entrepreneur magazine, most small businesses fail because they sold a product that didn't have an adequate market. This also applies to small businesses that provide a service. A lawn-care business might be useful for part of the year in a northern state, but it is in-demand year-round in the south. Consider whether people will actually want to use your service and get constructive advice from those not afraid to give their opinion.

Research Local Businesses

Research local companies before starting up your own business. This will not only give you an idea of the amount of competition you will have, but it will also help you price your product or service. If you're looking to start a wedding photography business, you may find during your research that the market is over-saturated in your area. If not over-saturated, you should contact each business and ask them for a price list. Alter your prices so you can stay competitive with the competition in town. Researching similar local businesses will also help you decide where to locate your business location. Try not to start up a store or office close to another business of your type. If your small business is located away from similar business types, this will cause locals to choose you over businesses that are farther away from where they live.

Get Professional Advice

You may know someone who has started their own successful business. Ask him for advice and listen to his stories of how he started his company. You may gain useful advice on the good and bad ways to start a business. Local entrepreneurs can also introduce you to local product providers or advertisers that you may not have met without their help. Accept any advice with open arms, especially if the advice is coming from someone successful in the area.

How to Calculate Business Start Up Costs

Starting a business in no easy endeavor. It takes a great deal of research, perseverance and hard work. While sweat equity will make your small business more successful, you will most likely need real capital to get the business started. Before you start raising capital and/or investing your own funds, the first thing you need to do is determine the total start-up costs.

Step 1

Determine your costs of sales. For most small businesses this means inventory, the cost of raw materials, manufacturing equipment, shipping, packaging, and warehousing. However, not all businesses sell products. In this case, the cost of sales is primarily the direct labor involved in making the sale. For example, to open a small shoe business entails purchasing enough inventory ($10,000) to stock the store.

Step 2

Determine professional fees. Planning your business structure, i.e., limited liability corporation or general partnership, means hiring an attorney. There may also be the need to pay an attorney for help with establishing trademarks, copyrights, and patents. In this scenario, that puts total professional fees at an estimated $20,000.

Step 3

Determine technology costs. Technology can greatly reduce the cost of labor for small business if used effectively. Most small businesses require computers, printers, cell phones, website development, Internet access, software applications, information security, data storage, and outsourced information technology (IT) consulting. If the cost of technology is $10,000 to start, add an additional $5,000 a year for maintenance (hint: maintenance is not included in start-up costs).

Step 4

Determine administrative costs. This varies with business types and may include items such as business insurance, office supplies, product packaging, parking, rent, express shipping, desks, chairs, fax machines, phones, or anything else necessary to operate the business daily. A good estimate for start-up administrative costs would be $5,000 for the first six months.

Step 5

Determine initial sales and marketing costs. Now that you have your product, you need to let folks know about it. Sales and marketing costs generally include marketing materials for presentations, printing stationery, business cards, advertising, trade show events, and public relations. These initial sales and marketing costs can add up to $3,000.

Step 6

Determine the wages and benefits needed to secure a staff. This includes employee salaries, benefits, workers compensation, and payroll taxes. Let's put the cost of wages and benefits estimated at $20,000 for the first three months of business.

Step 7

Add all costs associated with starting the business for a total. Be sure to only include business start-up costs that will be incurred in the first three to six months of operations. For this example, the calculation is: $10,000 + $20,000 + $10,000 + $5,000 + $3,000 + $20,000 = $68,000.

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Saturday, April 13, 2013