Open After Dark

Starting a nightclub is tough, but with the right location, look,and a little bit of luck, you can make millions

On a typical Saturday night, Gregory Bowyer can be found moving swiftly and inconspicuously through the crowd at Excalibur, his year-old nightclub. While he’s checking on operations and making sure his clientele is happy, hip-hop and R&B beats swell the air. And the number of young club-goers sipping mixed drinks and hitting the dance floor grows by the hour.

Patrons arriving at the Washington, D.C., hot spot are welcomed by medieval decor. There’s a knight’s full coat of arms, and replicas of King Arthur’s legendary sword—the namesake of the lounge—adorn the walls and ceiling of the 2,200-square-foot space. Excalibur is the top floor of The National Grill, Bowyer’s three-level restaurant, bar, and lounge. By day, customers can dine on classic American fare as they sit amidst walls decorated with pictures of area landmarks. When the sun goes down, the clientele head upstairs for the nightclub experience.

Business is solid. Bowyer’s establishment generated $350,000 in revenues in 2004 and he anticipates generating $500,000 in 2005. But success has not come to the 33-year-old entrepreneur without a lot of hard work and long hours. “This isn’t the type of business where you sit home and wait for a check to come to you monthly,” he says. “You have to be involved on a daily basis with the intimate details of it—down to cleaning the bathrooms and shellacking the floor. There’s no time to be hands-off, so your heart really has to be in it.”

Bowyer is just one of many people looking to cash in on the demand for the dimmed lights, music, drinks, and dancing that is the nightclub business. According to the National Bar & Restaurant Management Association, the nightclub and bar hospitality industry is valued at upward of $50 billion. But half of all new nightclubs fail within the first three to four years of operation. Some succumb to increasing competition. Others find it hard to keep up the financial and work pace needed to maintain such an operation. But those who plan properly and tough it out have the potential to make millions. In this installment of the BLACK ENTERPRISE Dream Business series, we look at some of the pitfalls and rewards of starting a nightclub.

COVER CHARGES
Whether it’s a Technicolor dance club, ultra-hip lounge, or another type of space, it takes a lot of money to get this party started. Startup costs vary greatly depending on the location, size, and type of club, but a small club in a small market may cost between $50,000 and $100,000 to launch. New club owners wanting to open larger establishments in more posh areas can expect to spend $500,000 or more to get started. “A million-dollar club used to be a big deal, but when you start talking about real estate prices, a million dollars can be eaten up really fast,” says Michael Harrelson, chief editor of the NBRMA’s Nightclub & Bar magazine.

Bowyer’s space may be small by club standards, but its price tag wasn’t: $2.7 million. But rather than purchase the property

Pages: 1 2 3 4 5
ACROSS THE WEB