How to Start a Night Club Business

There are many factors which need to be considered when you decide to open a night club, and many seemingly insignificant details which need to be attended to in order for the venue to be a success.

First and foremost, the location of the nightclub has to be right, in terms of whether you intend on taking over an existing club, or purchasing a brand new piece of real estate. There are advantages to both, in that an existing nightclub will have clear competitors, so you will be fully aware of the dangers that lie ahead. On the other hand, there must be a reason for the original owners to want to sell it on, and this could range from low levels of sales to low attendance.

Once you have decided on the location and premises, the theme of the nightclub needs to be addressed. The target market is possibly the most important factor, and whether you are looking to attract teenagers, young adults or a more mature crowd. This could of course vary during the week, for example a student night on a Wednesday could be replaced by an over-21 night at the weekend. Once this has been agreed, the next challenge is to decide on opening hours, and how many days of the week the club will be open. This leads nicely on to the inside of the club, and decisions on the type of music, resident DJ’s, features (pool tables, plasma screens, laminate flooring, etc) and catering options, such as snacks (crisps, peanuts etc) or fully fledged restaurant capabilities.

One of the most important issues when setting up a nightclub venue is the pricing strategy you are going to adopt. This will often depend largely on location, for example in London you may pay an entry fee of up to £20, whereas in Aberystwyth you would pay under £5. Knowing which brands of beers, wines and spirits to stock is key, as well as the price at which you charge for them. Again, this is highly dependant on location, as some regions are more partial than others to certain types of drink.

Nightclubs need to be able to compete not only on price, but in terms of level of quality as well. Many clubs can offer drinks promotions, free entry and other benefits, but it is quite often the quality of the venue (furnishings, music, and staff) that will make up a clubbers mind as to where to continue their night.

In order to begin to set up a business, you need to have the necessary start-up capital. This can be secured through a bank or investor, but in either case the business plan needs to be flawless, in order to convince them that the venture is likely to be a success. To do this, it is important to show you have covered for all of the common pit falls of starting up a business, as well as having invested a considerable amount of your own money (savings, re-mortgaging your house, etc). On top of the money needed to provide for the likes of rent, refurbishment, resourcing staff, etc, once the club actually opens there will be a period of around two months where the money generated may not be enough to cover expenses such as wages, stock replenishment, and other utility bills. Again, this will need to be covered by the initial investment.

Some banks may not be keen to lend you the necessary capital in order to start up your business. Business Angels are a potential answer to this problem, due to their tendency to take greater risks, but again these risks are measured, and an Angel will only be as committed to the project as you are yourself.

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