Open After Dark - Page 3 of 5 - Black Enterprise

Page: 1 2 3 4 5

Black Enterprise Magazine July/August 2018 Issue

Page: 1 2 3 4 5

promotions. Some establishments spend as little as $3,500 per year. Some spend that in a week. Still others put on promotional events that cost $10,000 each. An average promotions/advertising budget is about $30,000 a year.

Liquor and cash control systems: Manual liquor control gauges can cost as little as $100. But for the high-tech stuff, expect to pay between $2,500 and $5,000. This price doesn’t necessarily include the software systems that can cost several hundred dollars. Cash control systems hover in the $3,000 to $10,000 range.

ID verification systems: The bulk of this expense comes from the electronic data storage of driver’s license information and camera setup at the club’s entrances and exits. Costs can range from $1,000 to $4,000.

Security systems: Price varies greatly and depends on the scope and size of your system. Industry guidelines dictate that every nightclub needs a minimum of one security guard per 50 patrons. For owners with a taste for all things digital, security systems can cost from $50,000 to $100,000 depending on venue size. However, simpler systems can be obtained for as little as $10,000.

Payroll: This depends on the size of your staff, but a nightclub owner’s annual salary could range from $80,000 to $100,000. Nightclub managers can make between $50,000 and $70,000, and sometimes more.

Attorney fees: This type of business requires having a lawyer on retainer. Fees depend on a variety of factors, but most lawyers charge at least $200 an hour.

It’s said that in certain industries, three elements are most important: location, location, and location. As with many servi
ce-based businesses, the success of a nightclub hinges in large part on its address and appearance. “If you’re in a major city, a prime location is typically the downtown area. Corner spots are usually the best, and two stories are better than one,” says Rau. “Also, any property with a basement or lower level works well as that, typically, is great space for dance areas and/or VIP areas.”

Bowyer found securing a location one of his biggest obstacles: “I had to research the market value or leases for that size space and the [type of business I wanted to open.] I had to [look into the business that was there previously,] the reasons why it had failed, and if those were systemic problems inside of the business or issues outside of the business. I had to check the flexibility of the neighborhood because [the property] was located inside of a residential neighborhood. I also had to make sure that I could get through planning and review for the type of liquor license that I wanted to hold.”

After that came negotiations with the property owner, who wanted Bowyer to pay nearly $11,000 a month in rent. Not pleased with that amount, Bowyer walked away from the deal. A second round of negotiations wasn’t much better, so he rejected the deal again. After holding out for three months for a better price, Bowyer received not only a reduced rent but the existing kitchen equipment, which

Page: 1 2 3 4 5

Join the Conversation