How to open a nightclub: a business plan, investments and profitability

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Opening a nightclub is a business that attracts many entrepreneurs who are interested in the entertainment industry. As you know, such establishments, having become famous and popular, are able to bring fabulous money to their owners, as they are the venue for the most striking events. However, before you make a profit from a nightclub, you will need to invest in it financial resources, and quite impressive ones.

Competition in this area is so high that most of these establishments open and close after a while, almost unnoticed by anyone. This problem is especially relevant for large cities. Indeed, in them the number of such establishments for entertainment sometimes exceeds a hundred.

Maybe it's more profitable to open a nightclub in a small town? In this case, the entrepreneur faces another problem. It concerns the low demand for suchestablishments, especially if there are already four or five in a small town. After all, they well cover the needs of residents for nightly rest and dancing.

How to open a nightclub so that all the funds and efforts spent on it are not in vain? To do this, you will need to first draw up a business plan, where profitability calculations will be made, all risks of the event and the amount of required start-up capital will be considered.

Pros of a nightclub

An entrepreneur who is confident that his idea of opening a place for entertainment will certainly be profitable, no doubt, you can try yourself in business. There are enough free niches in the market of this industry. However, before opening a nightclub, you will need to consider its main strengths, but also weaknesses.

The benefits of implementing this idea will be:

1. Possibility of high profit. With a quality business plan that provides for all the nuances of the organization, a nightclub will soon begin to bring its owner a good income. Even a small establishment in just three days, starting from Friday and ending on Sunday, is able to attract from 500 to 600 customers. If the cost of entrance tickets is 500-1000 rubles, then only from their sale the owner of the club will receive 250-600 thousand rubles.
2. The possibility of holding concerts with the participation of stars, which will also allow you to get a good income.

Cons of a nightclub

Like every business, this ideahas its drawbacks. First of all, they are, as mentioned above, in a high level of competition. In addition to similar establishments in the entertainment sector, there are also bars with restaurants that operate at night. Another significant disadvantage of this idea lies in the need for an impressive start-up capital. For an entrepreneur who is thinking about how to open a nightclub from scratch, it should be borne in mind that he is unlikely to be able to save money on opening this institution.

Planning

How to open a nightclub from scratch? At the first stage of bringing this idea to life, it will be necessary to conduct a small marketing research regarding the entertainment industry in the city where the institution will be opened. In this case, the entrepreneur must receive answers to the following questions:

1. Are nightclubs open in the city? If yes, how many are there? What area of the city are they in?
2. Which of these types of operating establishments are doing well, and which are on the brink of bankruptcy?
3. What is the secret of the success of profitable institutions, what are the mistakes of unprofitable ones?
4. Have nightclubs closed in the city lately? If yes, what caused it?

When conducting such a study, it will also be useful to learn about those musical groups that work in existing nightclubs. This will determine what customers like the most.

Select concept

What does it take to open a nightclub from scratch? A business plan for developing such an idea should contain a sectionconcerning the choice of the concept of the institution, high-quality and good music, as well as affordable prices. The last point is very important. After all, the majority of visitors to nightclubs are not we althy bohemians at all. The clients of such institutions are young people up to 35 years old, whose incomes are very modest. It should be noted that the most visited nightclubs see mainly teenagers and students as their clients. The number of this category of visitors reaches 80%.

Of course, elite expensive establishments are considered the most profitable. Their visitors are ready to pay impressive sums for their vacation. The average check in such establishments is close to $100. However, opening a new expensive club is a rather risky business. An entrepreneur may simply not have enough rich clients. Opening an institution in the cheap segment will allow you to earn at the expense of high turnover. Democratic Youth Clubs have an impressive stream of customers, allowing them to make a profit of $50,000 to $65,000 in just one month.

Room

What do you need to open a nightclub? The first stage of the establishment of the institution will be the search for a suitable premises, which will need to be rented. Ideally, the building can be erected by an entrepreneur according to a previously developed project. However, before investing in new construction, it is worth finding out if there are abandoned cultural palaces or other similar buildings nearby. There are many of them in provincial towns. Themthe acquisition will be the best option.

The location of the nightclub will also need to be taken into account in the business plan. Elite institutions should be located in the city center. As for democratic youth clubs, a building located on the outskirts is suitable for them. But in any case, the establishment should be conveniently accessible by public transport.

You should not consider the option of opening a nightclub on the 1st floor of an apartment building. And even if the entrepreneur manages to get permission from the local authorities and he performs soundproofing work, there will always be indignant tenants who will not allow the establishment to work quietly.

Requirements for the premises

What does it take to open a nightclub? To do this, you need a separate room that meets certain requirements. Among them:

• sufficient area (the main hall with a dance floor must be at least 250 square meters);
• high ceilings (about 4 meters), which is important for the placement of sound and lighting equipment.

Required documents

How to open a nightclub? In order for the institution to work legally, its owner will need to draw up an impressive list of documents. It is also worth considering that it will take several months to obtain some of these permits. That is why the preparation of documents should be done in advance. To open a nightclub you will need:

1. Certificate confirming registrationlegal entity. IP in this case is not issued. After all, individual entrepreneurs do not have the right to sell alcohol.
2. Project for the construction of a building or for its conversion. It is necessary that this document be approved by the Ministry of Emergency Situations and the Sanitary and Epidemiological Service. New facilities must also have a permit to operate.
3. Fire safety declaration duly registered.
4. Developed instructions for fire safety, as well as an evacuation plan for the facility.
5. Permission of Rospotrebnadzor for this activity.
6. Orders for sanitary measures.
7. Registers for disinfection of ventilation and disinfectants.
8. Program for the implementation of control over production, which must comply with all modern sanitary standards and technological requirements.
9. Certificates of quality for goods sold.
10. Permit to sell alcohol and tobacco products.
11. Contracts for deratization, disinfection and waste disposal.
12. Regulations on labor protection in a nightclub.
13. Employment contracts with employees and their medical books, which record medical examinations and sanitary training.
14. Order appointing the director, chief accountant, and all employees.
15. Staffing.
16. Certificate confirming completion of specialized fire safety officer training.

As you can see, the list of documents to open the nightThe club is quite impressive. In order to assemble a complete package, it will take approximately 6 months. That is why it will be necessary to deal with this issue in advance, even when the premises are being renovated and are being prepared for operation.

Spectrum of services provided

How to open a nightclub? To do this, you need to decide on the services that the institution will provide to its customers. For example, someone who plans to open a small nightclub can limit himself to a dance hall with music.

In a large-scale establishment, it is recommended to place:

• restaurant;
• hall for rest and negotiations;
• bar counter;
• karaoke room.

The list of services offered to visitors can be further expanded, based on the available opportunity and paying attention to the requests of visitors.

Purchasing equipment

How to open a nightclub? For the functioning of the institution, you will need to purchase equipment. For the kitchen and bar, coffee makers and refrigerators, freezers, juicers and more are needed. From lighting equipment you need spotlights, lamps and mirror balls. To provide musical accompaniment, you will need remotes and speakers, microphones and amplifiers, controllers, etc. In a nightclub, you must also take care of the safety of visitors. This will allow the installation of metal detectors and video cameras. You will also need to purchase walkie-talkies for the guards.

Room decoration

About what should be the interior decoration of the nightclub, it is impossible to say for sure. For example, an entrepreneur who spends $2,000 on interior design may never see visitors. But those businessmen who have laid out only a couple of hundred US dollars to decorate the interior of their establishment sometimes have permanent full houses. The thing is that the entertainment industry attracts with its atmosphere. And only after that the design, food and drinks are taken into account.

For example, today the fashionable trend is the use of rough wood. Such an interior will cost inexpensively, but it will look quite attractive.

Finishing work will require the preparation of an appropriate project. That is why it is impossible to do without specialists here. Their services will cost a lot (from 2 to 5 thousand dollars), but these costs should still be included in the business plan being drawn up. Specialists will not only develop the concept of the institution, but will also help in the preparation of documents allowing its operation.

Recruitment

Nightclub staff must include:

• director;
• manager;
• creative director;
• administrators (1-2 people);
• waiters (6-8 employees);
• chefs (4-5 persons);
• bartenders (2-4 persons);
• 1-2 DJs;
• 2 cleaners;
• 1-2 cloakroom attendants.

To ensure the safety of the establishment and its visitors, you can conclude an agreement with a security company.

Financial part

The business plan for opening a nightclub should cover all upcoming expenses. If the institution will work in a small town, then it will take from 10 to 15 million rubles to start it. This amount will include the following expenses:

• premises - 5 million rubles;
• design and repair - 0.5 million rubles;
• obtaining the necessary documentation - 0.5 million rubles;
• purchase of equipment - 250-500 thousand rubles;
• staff salary - from 3 to 4 million rubles. per year;
• marketing and advertising - 100 thousand rubles.

Making a profit

When developing a business plan for a nightclub, among its income should be taken into account:

• sale of entrance tickets - 7 million rubles per year;
• profit from the sale of snacks and alcoholic beverages - 6-8 million rubles;
• income from additional services - 2-3 million rubles.

Sponsors can bring a certain share of the profits. Due to the fact that advertising of tobacco and alcohol on television is prohibited, a nightclub will be a good place for it.

Approximate net profit for one year will be 17-18 million rubles. Such money can be received by the owner of a club operating in a small town. As for megacities, such establishments will generate income 2-3 times more there. As a rule, such an institution is able to pay off in 6-8 months after its opening. That is why it is safe to say that the profitability of this business is quite high.