How to Start a Night Club Business

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On the surface, night clubs look like loads of fun, at least when you're on the partying side of things. However, when it comes down to business, there are many steps that you need to take in order to start a night club business. To be safe, you should allow yourself at least a year to launch a new night club.

Visit areas where existing clubs thrive. Take notes on how the club owners set up their promotions and look for spaces that are for rent in the area. Many clubs are clustered together, because club goers tend to go to the same area to party (for example, the Meat Packing district in New York City) and hop around. Choose a location that gets a lot of night traffic and is spacious enough to fit your desired capacity. Most clubs take in around 200 or 300 people.

Decide if you want to operate as a sole proprietorship, partnership, or corporation. Due to the high risk of operating a night club, many club owners will choose to file as a corporation because it offers you a layer of protection (your personal assets aren't usually at stake). File a business application with your state (see resources for a link to your state's application). Your business name does not have to be the same as your club name.

Put a down payment on your location, and hire a crew to come in and clean it out. If the space needs a conversion, hire a construction crew that specializes in building bars and installing special effects (such as lighting and sound systems). Get quality business insurance to cover your club and your future patrons. A night club business should have product liability insurance and liquor liability insurance. The United States Liability Insurance Group provides this type of coverage for bar businesses (see "Resources" for a link).

Hire bartenders, barbacks, DJs, and cooking personnel if you are going to be serving food. Many new clubs will hold an open house hiring event where they can hire all of the staff that they need.

Contract with local distributors to provide you with beer, liquor, and food products. Shop around to find a deal with distributors that have reasonable payment terms, are easy to work with, on time with deliveries, and provide quality goods. You also want to make sure that your distributors have a good return or exchange policy so that you won't be stuck with excess product that's not selling in your bar.

Decide on a special promotion for your grand opening night. This should be something that will easily draw people in, such as free drinks until a certain time, or a ladies night (all ladies for free). Keep in mind that the more women come to your club the more successful it is likely to be; women bring men.

Hire an experienced event and promotions team. This team will design and print flyers for your night club business, distribute the flyers, post information about your club on the Internet, hire special guests, and talk up your event in the community. They will also give you ideas for promotions that work. Don't forget to place ads on local radio stations advertising your club.

Set a date for opening night, preferably on a Saturday night since that is the night when most people (young and older) like to get out and have fun. Have your staff arrive at least three hours before the club opens to make sure that everything is in place.

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