In 2011, the nightclub industry was worth more than $50 billion, according to the National Bar & Restaurant Management Association. The average salary of a nightclub owner is difficult to pinpoint, but generally ranges between $80,000 and $100,000, according to the CBS C-Net Business Library. The size, theme, products, services, location and associated overhead expenses of a nightclub make a significant impact on the owner's take-home pay. Actual salaries vary significantly by establishment, but industry professionals and online resources provide detailed information from which you can calculate reasonable estimates.
Gregory Bowyer is the owner of The National Grill, a two-level, 2,200-square-foot restaurant and nightclub in Washington, D.C. Not including the initial, one-time startup fees, Bowyer's regular annual expenses included: rent of $106,800; licensing at $5,000; food at $50,000; liquor at $7,000; insurance at $10,000; promotion at $10,000; and $80,000 for payroll. In 2004, Bowyer generated $350,000 in revenue. After deducting his total expenses of $268,800, his take-home salary would be near $81,200 annually.
Rent and Staff
The rent for a nightclub can range between about $2,000 and $30,000 per month. Actual amounts vary depending on city, state, proximity to residential communities and the size and capacity of the club. The number of employees determines your payroll expenses and usually corresponds to the size of the nightclub and volume of patronage. C-Net reports that nightclub owners generally pay at least $50,000 to $70,000 annually to the general manager alone. Owners who act as the operational managers avoid this expense, increasing their overall pay.
Most nightclubs are staffed with tipped employees, enabling owners to pay lower wages and creating minimal payroll expenses for nonsupervisory positions. Based on these figures, the average rent expenses for a nightclub owner are between $24,000 and $360,000 annually, and up to about $100,000 in payroll. According to Second Wind Consultants, a successful industry allocates no more than 30 percent of its revenue to payroll.
Food and Liquor
As a nightclub owner, your salary will also depend in part on the types of foods and beverages served and their associated expenses. Nightclubs with simple menus and generic beverages will pay considerably less than those serving top-shelf, name-brand liquors and more sophisticated food items. Nightclub owners can expect to spend anywhere from $20,000 to $50,000 per year in food and liquor, according to the editor of "Nightclub & Bar" magazine, Taylor Rau.
License and Insurance
Rau also states that nightclub owners typically pay about $10,000 per year in various insurance policies, including property, fire, flood, assault, battery, vandalism, equipment and general and liquor liability coverage. Yearly insurance premiums are based on projected gross revenues, so high-end establishments sometimes pay as high as $40,000 annually for nightclub insurance.
The cost of a liquor license and other necessary permits can cost a club owner between $1,200 and $170,000 depending on the market and club specifics, such as zoning, entertainment or outdoor/sidewalk seating. Overall, the cost of licenses and insurance can run between $11,200 and $210,000 per year.
Promotion and Advertising
The cost of marketing the venue also falls on the nightclub owner and varies significantly by establishment. Smaller nightclubs often spend as little as $3,500 per year on advertising, while larger establishments pay up to $10,000 for a single promotional event. The average marketing, promotions and advertising budget for club owners is about $30,000 per year, according to C-Net.
The Bottom Line
The bottom line is that no real "average" salary exists for nightclub owners because the types of establishments are so widely varied. According to C-Net, the combined expenses of owning a nightclub can range anywhere from $180,780 to $750,000 per year. Nightclub Biz reports that in 2011 total revenues range from $50,000 monthly in a modest establishment to $900,000 in extraordinary instances.
The expected salary of a nightclub owner relies entirely upon how much is spent and earned by each individual establishment. The U.S. Bureau of Labor Statistics reports that the 50 percent median of general and operation managers in 2010 earned $45.38 per hour, or $94,400 annually. These figures are fairly consistent with C-Net reports of $80,000 to $100,000 nightclub owner salaries.