Open a Nightclub

Have you ever dreamed of running a nightclub business? Though it takes careful planning and a considerable amount of time, a properly managed nightclub can be a very profitable business for years to come. If this is your dream, start the planning process as soon as possible.

Steps

Planning Your Nightclub

1. Do market research. Before you begin planning what you want your nightclub to look like, you need to make sure you have a good understanding of Find Your Target Market, what they want, and how much they are willing to spend.
   • You can conduct primary market research by surveying potential customers in your area and conducting focus groups to find out what kinds of clubs your customers are interested in. You can conduct secondary market research by gathering statistical data from sources such as your local chamber of commerce, trade associations, and the US Census Bureau. You can do market research yourself or you can hire a marketing company to do it for you.
   • Think about the demographics of your area, including average age, education level, and income. Whatever concept you come up with will need to be appealing to the people who actually live and work in your area.
   • If there are already too many nightclubs in your area, it may not be a good idea to try to open another one. Try visiting all of your competitors to get a good idea of how busy they are and what demographics they are attracting.
   • If you are flexible regarding the location of your nightclub, it might be best to develop your concept first, and then look for a town that can support it.
2. Come up with a concept. When developing the concept of your nightclub, you should try to come up with something that will stand out from the competition and attract your Find Your Target Market.You concept will dictate almost everything about your club, from your hours to your prices to your decor, so make sure to spend some time on it.
   • When choosing a name for your nightclub, make sure it goes with your concept. It's important to think about what potential customers will assume about your business when they hear its name. You might want to try asking people for opinions before settling on a name.
   • Think carefully about what kind of entertainment you will offer. If possible, offer something that your customers won't find anywhere else in the area, whether it's live music or amazing special effects.
   • Your food and drinks need to match your concept too. You might have a comprehensive menu, or you might just focus on a few specialty items, depending on what kind of image you want to project.
   • If you want your club to seem exclusive, it's important to act the part. You should have limited hours, enforce a strict dress code, and offer premium services at premium prices.
3. Find partners. Once you know what kind of nightclub you want to own, you will need to think very carefully about whether or not you have what it takes to do it all by yourself.
   • If you don't have much experience managing bars and clubs, you will probably want to hire an experienced manager.
   • If you don't know much about marketing, you may want to consider hiring someone who has experience promoting nightclubs. This person will know how to reach your target market and what kinds of promotions to offer.
   • Depending on your financial situation, you may just want to hire employees or you may want to find people who are willing to be your business partners. Keep in mind that opening a nightclub can be a very costly endeavor. Your costs will vary greatly depending on your location and your concept, but you can expect to invest tens of thousands of dollars into the business at the very least. If you have partners, you may be able to share these costs.
4. Write a business plan. A business plan is essential no matter what kind of business you plan on opening. Your business plan should contain detailed information about how you will run your business, what your expenses will be, what services you will offer, how you will market yourself, and what your projected profits will be.
   • Your business plan should include a separate section on each of the following topics: the organization and management structure of the business, how much money you will need to get started, what will make your business stand out from the competition, what market you will serve, what you will sell, your financial projections for the business, your market analysis, and the marketing strategy for the business.
   • If you need to borrow money, your lending institution will want to see your business plan, so make sure you are very thorough.
   • If you have never written a business plan before, you may want to hire a professional to help you. You can also find lots of templates online, which will help you figure out what information to include and how to format it.
5. Find a location. Once you know exactly what you want your club to be like, you need to find a location that can make it all work. Be sure to consider the monthly cost, the investment that will be required to build out the space to your liking, and the capacity of the space.
   • You will have to decide whether buying or leasing a space makes the most sense for you. The right choice will depend mostly upon your finances and the availability of properties in your area.
   • The ideal location for you will depend on your concept and your competition. If you think your club will be a destination in and of itself, it may be perfectly fine for it to be in a quiet area. If you want to take advantage of the active night life downtown, it's essential that your club be centrally located.
   • If you're on a tight budget, look for a location that used to be a nightclub and just needs a little bit of a face lift. You may also be able to negotiate the rent with the landlord, especially if the building has been empty for some time.
   • Before buying or leasing any property, be sure to check with your community's local planning board to make sure the zoning regulations will allow you to operate a night club there.
   • Think about how many people walk or drive past the location every day. This is important because the more traffic the area gets, the better your visibility will be. It is also important to think about how your target market prefers to travel to night clubs in your area. You want t make sure your club is convenient for the majority of your customers, whether they tend to prefer driving, walking, or taking public transportation.
6. Obtain permits and licenses. There is a lot of legal red tape involved in opening up a nightclub, so you may want to hire an attorney to help you. The specific regulations you will need to abide by will depend upon the city, county, and state that your business will be located in. Common requirements include a general business license, a liquor license, a sign permit, a building permit, a seller's permit, and a health permit.
   • In order to apply for permits, you will first need to incorporate your business and register it with the appropriate tax agencies.
   • Nightclubs in the United States are regulated by the federal Alcohol and Tobacco Tax and Trade Bureau (TTB), as well as their state's Alcohol Beverage Control (ABC) agency.
   • You will also need to make sure you have the legal rights to play copyrighted music. You can obtain music licenses from organizations like the American Society of Composers, Authors, and Publishers.
   • Don't forget to do your research on insurance. Owning nightclub involves a lot of liability, so you want to make sure that you have as much protection as possible.
   • In addition to a lawyer, you should also have a good accountant who can help you with your payroll and taxes.

Setting Up Your Nightclub

1. Renovate. It's time to bring your concept to life! You will need to make sure the space functions well as a club, looks absolutely amazing, and sends the right message to your customers. It's probably a good idea to work with an architect and/or designer who has experience designing bars and clubs.
   • Comfortable, intimate interiors are in style, so make sure your guests are comfortable enough that they will want to stay a while.
   • Don't forget seemingly small details, like lighting. The wrong lighting can completely ruin your atmosphere.
   • If your location has an outdoor space, make sure to optimize it and make it just as inviting as the indoor space.
   • When planning your layout, be sure to keep function in mind. A good layout will naturally lead customers towards the bar and will not require the bartenders to move around too much to serve customers.
   • If you're on a budget, focus on pieces of furniture that can be moved around to create different seating arrangements. You can also make a big statement without spending much by painting walls and furniture with bold colors and incorporating colorful fabrics into your design.
   • Keep in mind that your space will have to be ADA accessible, which means you may have to add wheelchair ramps and other accommodations if they don't already exist.
2. Develop relationships with all your distributors and suppliers. You will need people to supply your food, drinks, utensils, marketing materials, and more. Talk to several different companies to secure the best deal on everything you need.
   • There are tons of vendors out there for all of your needs, from alcohol to linens and glassware. A quick internet search will help you find many different options. It is important to compare them carefully to find out who offers the lowest prices, the lowest delivery charges, the best selection, and the best delivery schedule.
3. Hire the right staff. You will need to hire lots of employees to keep your business running smoothly. Make sure you have enough staff to keep your customers safe and happy. You also need to make sure your staff is friendly, professional, and efficient.
   • Your front of house staff should include bartenders, servers, hosts, and security guards. Your back of house staff should include a head cook, prep cooks, line cooks, and dishwashers. You may also need maintenance staff, office staff, expediters, bar backs, and bussers, depending on the volume of business you anticipate. It is very important that there always be a dedicated manager during every shift.
   • Look for employees who are enthusiastic, friendly, responsible, and have some experience in a similar work environment.
   • Interview prospective employees thoroughly to make sure they have the right personality type for your nightclub. It is helpful to come up with a list of important characteristics when creating your job descriptions. Experience is not everything!
4. Develop the proper systems. In order for your nightclub to be successful, you will need to make sure you have systems in place for things like taking and tracking orders, receiving payments, managing staff, and tracking inventory. Without these systems, you will be vulnerable to problems like theft, poor service, and an under-stocked bar, none of which are good for business.
   • Make sure your managers all understand the systems well enough to train the rest of the employees.
5. Market yourself. You need to market and promote the club's opening, and then keep promoting any special events you may be hosting at your club. Use word-of-mouth, posters, business cards, social media, direct mail, and other marketing methods to promote the club as much as you can.
   • The perfect marketing strategy will depend on lots of factors, including your location, your concept, and your target market. Having a partner or employee who is well-versed in marketing is extremely important.
   • You will need to make a significant investment into marketing your business, but if you do it properly, it will all be worth it.
   • Make sure people like what they see when they search for you online by managing your reviews, optimizing your site for search engines, and having a diverse social media presence. Some a little unique, like a great variety of videos on YouTube, can help you stand out from your competition.
   • Special events can be a great way to market your business when you first open and to generate excitement for holidays. Depending on your concept and budget, you could consider hosting black tie events, getting well-known musicians or DJs to play at your club, or offering special limited-time drink and food offerings.
6. Host a grand opening. When your club finally opens, host a big party to let your customers know that you're open for business. Your grand opening will be your opportunity to impress customers and convince them that they need to come back, so make it great!
   • Be careful about planning the date of your grand opening. You need to make sure you give yourself enough time to have the club ready and that your opening day does not coincide with other large events that might pull customers away from you.
   • Your grand opening needs to have something special, whether it's a great band, a visit from a celebrity, or some really amazing food. Try to think of a special promotion that fits with your concept.
   • Get the news out about your grand opening party in any way you can. You should take advantage of all of your local media outlets and social media channels, as well as distribute flyers in places where your target market is likely to see them.
   • Try to generate a lot of hype around your club before the opening by communicating with the local media and giving your customers sneak peaks of what you will offer.
   • You need to offer impeccable service at your grand opening. If you're worried that your staff may need some practice, consider doing a soft opening, when your club is open by invitation only, to get them started.

Running Your Nightclub

1. Work hard. Opening a nightclub is a huge commitment. You will have to be ready to put in long hours and devote yourself to taking care of all aspects of the business. Even if you plan to delegate the day-to-day management to an employee, you should expect to be very hands-on in the beginning.
2. Offer exceptional service. Once you get customers in the door, you need to get them to stick around and come back. The best way to do this is to offer them the absolute best experience. Make sure your food, drinks, and music are all up to par, that your atmosphere is pleasant, and that your customers don't have to wait too long for service.
   • Encourage customer feedback so you will know where you have room for improvement.
   • Training your employees is extremely important, but don't micromanage them. It's important that they know how to provide the best service possible and are able to use their best judgement to determine how to do that.
   • If your nightclub is all about great music, make sure you don't skimp on a sound system. Customers will notice and they won't like it!
3. Stay relevant. Trends are always changing, and it's important to keep offering your customers what they want. This may mean offering a different kind of promotion than you used to, or even giving your concept a major face lift. If customers don't find your nightclub interesting and exciting anymore, they won't come back.
4. Pass your inspections. In order to avoid being put out of business, it is vital that you stay in compliance with all of the requirements set forth by federal and local laws. Your facility will be inspected on a regular basis for violations of your local health code and other laws.
   • Facilities that serve alcohol are required to keep detailed records regarding the source of their inventory, so make sure you have an established system to take care of this.

Tips

• Starting a nightclub will take a lot of time and effort. Opening a nightclub without properly planning can set you up for failure.
• Don't be afraid to ask for help, especially if you're new to the industry. Just because you're the owner doesn't mean you need to do everything all by yourself.
• Create a lot of hype around your grand opening, and then make sure you live up to your customers expectations.

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Sources and Citations

See also

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• Manage a Hotel
• Open a Restaurant
• Research Effectively Before Opening Your Own Bar
• Make a Restaurant Menu
• Set up a Hostel
• Start a Cafe
• Buy a Restaurant
• Open a Fast Food Franchise Business
• Start a Small Restaurant or Coffee Shop

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