Starting a nightclub is a risky venture. Many nightclubs fold within the first year because of poor planning or management, bad partnerships and lack of funds.
The most common issue in nightclub failures is lack of experience in starting new businesses. Other typical problems include disagreements about how the nightclub will operate, promotion, marketing and funding.
- Skill level:
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Things you need
- Business plan
- Investors or start-up funds
- Business and liquor licenses
Check out areas where clubs are doing well. See how club owners do their marketing and promotions and look for space to rent in that area. Find a place that gets a lot of night traffic and is big enough to hold the number of people you want to accommodate; most clubs hold 200 to 300 people.
Decide whether you want to run a corporation, a partnership or a sole proprietorship. Since there is a high risk involved with running a nightclub, many club owners incorporate--it gives some protection because your personal assets generally aren't on the line. You will also need to choose a name and file a business application with your state.
Think about start-up requirements. All business require a lot of time and money, but nightclubs require more than other businesses. You have to be able to furnish extensive financial data if you want to convince investors that your nightclub business is a good idea because it is a risky venture. You also have to get the licenses you need, like business and liquor licenses. Total costs can vary from £16,250 to several million dollars and depend on things like location, size, target market, features and design.
Settle things at the location. If the space needs alterations, employ a construction crew with experience building bars and creating special effects with sound systems and lighting. Also, obtain quality business insurance; you'll need to cover your club and your future clientele. Your business should have two types of insurance: product liability and liquor liability.
Hire employees. This includes bartenders, deejays and cooking staff, if necessary. You'll also need to work with local distributors to supply beer, liquor and food items; look around to find the best deal. You'll want to contract with a company that's easy to work with, that has good payment conditions, delivers promptly and provides quality goods. Also make sure that your distributors have a good return and exchange procedure.
Market your club. You can hire a skilled event and marketing team to help you get the word out. Ways to promote your club include creating and printing flyers, advertising on the Web, creating a website, having special guests, placing ads on your local radio stations, setting up contests--and of course, getting out the word-of-mouth.
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