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General
nightclub venture FAQ
This FAQ addresses a few of the common questions sent to me. Some of the answers are somewhat verbose, but that's better than vague/ ambiguous responses. Other answers are shorter and more accurately addressed by speaking to me in person. I'll be adding to this FAQ periodically. Click on any question to see the answer:
That's like saying I've never built a car before -what do I need to know? The problem with posting a generic startup list is that it's misleading. There's no such thing as 20-steps to getting started in the nightclub business, for if there were, I would have already written the book on it. Each startup and the priority of issues to consider are unique to the concept, marketplace, and goals of the entrepreneur. The easiest way to get the 'right' answers quickly is to speak with me in person. For a modest fee, you may do so within hours. Alternatively, you may continue combing the web until your hearts content, and or simply wild guess the answers. That could eat up considerable amounts of your time --not very efficient.
Nightclub
concepts are often confused with 'décor schemes'. People
are not going to flock to your nightclub, or show up week after
week spending lot's of money because you've got an out of this world
interior theme. The actual concept is what it is you're doing
for your audience. Are you attracting a sane ratio of males
to females? Are people having a good time? Are people purchasing
alcohol product? Are people interacting with one another? Does the
atmosphere make it easy for people to meet, romance, and eventually,
well, you know… Some cool looking nightclub décor idea will NOT accomplish these objectives alone, and in a number of cases not at all. Many dinosaurs think that investing gazillions into mind numbing décor schemes will somehow result in a strong social atmosphere miraculously falling into place all by itself. Well guess what… It won't. Being an entertainment operator means you 'must' be able to entertain your room. That means you actually need to understand your marketplace, as opposed to trying to fool them with hype, screaming, and plenty of eye candy. The public is not that stupid -at least not anymore! :-) If you're stumped on how to determine the attributes of your specific marketplace and developing a concept that will synchronize with its needs, consider speaking to me in person where I'll assist you with this part of the conceptual development.
Probably not… 90% of aspiring nightclub operators are mistakenly led to believe that investing many thousands of dollars and countless hours of time into a nightclub business plan is one of the first steps to moving forward. In the vast majority of cases, the business plan ends up on the shelf. Since only a very very small number of nightclub proposals ever get funded, (and largely because they're premature), you may want hold off on this, or if you must, consider a 7 to 10-page executive summary instead. For more help on composing a nightclub executive summary, and or when to consider a full scope business plan, consider speaking with me in person. I may be able to save you a lot of grief, time, and money.
Generally no and for a host of reasons I'm not going into here. In short, nightclubs are not high mileage machines. They reach their prime early in the game. After that, they usually take a gradual or sharp downward slope. Some operators sell as soon as this prime is reached. To the layman nightclub investor, the past 12-months of searing revenue reports can create the illusion of a turnkey cash cow with many great miles left. Not likely… You see, in this business, everything is not always as it seems. Before you cut that check for $750,000 to 3.5-million, speak to me first where I'll work with you in determining the actual merits of the offering.
Indeed… Nightclubs do have a habit of getting themselves into trouble, but what matters is that you're reading this, which means you've taken the first step to admitting a problem in the operations model. How do I know this is where the problem is? Easy… Because nightclubs do not get into trouble through bad luck or unfortunate happenstance -there's always a 'cause and affect' reaction no matter how much many operators claim they're being unfairly targeted. Fixing a nightclub in trouble is not always easy, depending on how deep its dug itself in. And contrary to misguided belief, fixing a distressed nightclub is rarely as simple as changing one single thing, and or other silly nonsense, such as bringing in promoters, DJ's, or spending yourself silly on gimmick based ideas. Before you begin writing checks, consider speaking with me first.
Maybe… Nightclub investors so to speak are a sparse commodity. This is largely due to the high failure rate resulting from many mom and pops diving into the business head first with (what they believe) is the cash cow concept of a lifetime. 75% says it'll fail within the first 12-months and sure enough, it usually does. Sadly, some poor investor/s have lost a substantial amount of money and as the result of putting their faith into some amateurs ill thought out idea. In case anyone's wondering… Nightclubs rarely fail because the market had no interest in nightclub entertainment -they fail because the entrepreneur and or management FAILED to understand the innate characteristics of the unique marketplace, thus how to provide the product that was actually appealing to them. Consequently, investors are somewhat leery on risking their dollars on yet another (great idea gone south) nightclub venture. Additionally, investors have become the wiser to understanding nightclub investments, and most notably proposals /business plans that are so cookie-cut it's almost comical. One prime example excerpt… We're serving exotic cocktails, in a mind-blowing themed out lounge, with big name DJ's, promoters, and blah blah blah… We're projecting year-1 revenue of 4-million. Year-2, 6-million, and so fourth. Yawn… Looks like the last 300-nightclub proposals I've looked over. Dull, boring, and predictable… At any rate, attracting the interest of lenders for a nightclub venture is becoming increasingly difficult. The high return on investment is most certainly there, however the talent to do so is often not!. If you've hit a dead end regarding issues, consider speaking to me in person and I'll see if I can dawn some new perspective on the equation.
This question was sent to me twice in the past 3-months, so I figured I'd include it here. The question by very definition is almost comical. I've reviewed a lot of the info on nightclubs throughout the web. What I continue to see is: Pages
upon pages of redundant information, which is as canned as it gets.
Canned meaning, "here's a generic way to open a nightclub."
Here's what the bouncers do… Here's what the bartenders do…
And you need music, DJ's, lights, and promotions… DUH! Most
12-year olds could tell you this
After a few more, you're pitched on books and guides, which promise to get you well on your way to launching a high cash flow entertainment venture. Sigh… I find it hard to believe that anyone would actually take any of these websites seriously. But then again… Many want to believe that getting into the nightclub business is really that easy. Well… Just remember where the industry failure rate stands…
After much reading through these sites, one particular question continues to come to mind, which is who exactly are these people and what's the extent of their operations background? Titles, portfolios, and million dollar success stories disregarded… Show me tangible proof! More disillusioning is the increasing amount of ambiguity being conveyed through success stories and even portfolios, which appear to be nothing more than a red herring -a means to divert attention away from the real issue, which is the 'scope of real operations background' and whether the entity is actually qualified to be giving advice on an exceptionally high risk business venture. The problem with claims or success stories in the nightclub business is that they could never be verified with any degree of certainty in a million years. Nightclubs frequently change hands, expire, or disappear into the night so to speak. References and testimonials are moot, as anyone, such as a friend, family member, or the man in the moon for that matter can be coached to endorse the claims upon receiving the inquiring phone call. But is there anyway at all to verify claims and success stories? In theory yes: Success stories and portfolios would need to be accompanied with P&L statements, cash balance sheets, and or 'certifiable' copies of 1040, 1065, 1099, or W-2 returns, which certify the gross and net income of the business, and or individual. Additionally, those claiming award-winning success stories in nightclubs they've supposedly consulted would 'also' need to quantify those claims through a "Before and After" submission of the above financial statements. THEN we could see the result of their work through actual financial performance, which at the end of the day is all that really matters! I'm
not accusing these individuals of grossly exaggerating or telling
fibs -All I'm really saying is to put your money where your mouth
is. If you're going promote larger than life success stories, then
BE PREPARED to back them up with incontrovertible proof -not talk!
How about me? I don't engage in ego mongering, or lame attempts
at baffling my readers through storytelling, therefore I have nothing
to prove to anyone Most of my writings are based on a combination of experience, trial, error, and philosophical approach. You actually need real life experience to write in depth about anything, and that includes the nightclub business. How is Nightlubbiz.com really that different? Here at Nightclubbiz.com, substantial efforts (over the past 14-years) have been invested into building a resource, which is designed to enlighten you on "what you didn't know", as opposed to the painfully obvious.
In conclusion, the very idea of comparing Nightclubbiz.com to the increasing amount of doo doo's now appearing on the web is something we consider insulting. You get what you pay for, and if the opening price of $69.95 to too much to swallow, then how you're going to seriously pursue a $500,000 to 5-million dollar business venture is anyone's guess. Just remember that about 0.01% of proposed nightclub ventures ever move much beyond that of a dream on paper. The focus of Nightclubiz.com is to work with operators in designing social entertainment concepts that attract a money-spending demographic, as opposed to the proverbial (give almost everything away) to attract an audience type of business model. The shear volume of nightclubs that literally pull down their pants and bend over in desperate attempts at filling a room is beyond unfathomable at times. The indisputable truth is this: Nightclubs can generate unbelievably large amounts of income, and quite likely the highest cash flow business next to casinos. You do however, need the concept and experience to attract people who will actually spend money. Freebies attract freeloaders… Cheap stuff attracts cheap people… This is an official truism in the nightclub business. Give free stuff away -attract free loaders. Cheap booze will ALWAYS attract cheap people! Suffice it to say, there are few success stories published on nightclubs that give everything but the shirt of their back to attract customers -customers that will bail at the first sign of getting it elsewhere for a few cents less. As a result, Nightclubbiz.com is no longer interested in the free information audience, as the mathematical odds of these people ever opening a nightclub are infinitesimal to say the least! If you're really serious about this business, then as hard as it may be swallow, you may need to spend some money sooner or later. You do not get into a 3-million dollar a year business venture with buttons and scotch tape.
These are the types of things new operators should be most concerned about, as opposed to becoming sidetracked on the latest trend, decor, or promotion. Have a look at my nightclub startup package here. |
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