Are you interested in starting a social club business? If YES, here is a complete guide to starting a social club business with NO money and no experience.
Okay, so we have provided you an in-depth sample social club business plan template. We also took it further by analyzing and drafting a sample social club marketing plan backed up by actionable guerrilla marketing ideas for social clubs. In this article, we will be considering all the requirements for starting a social club business. So put on your entrepreneurial hat and let’s proceed.
Why Start a Social Club?
If you are sociable, and good with networking and organizing events, then you should consider starting a social club in your area. There are various areas of interest you can choose if you desire to start your own social club. You can choose to start a social club that gathers sport lovers or the fans of a football club, you can choose to start a social club that accommodate rock music lovers, jazz music lovers or reggae lovers at. You can also start a social club that accommodates artists or even entrepreneurs.
The essence of social clubs is to provide an avenue of some sort for people of like minds to network and unwind. The bottom line is that you must carefully state you goals and what members tend to gain if they join your social club if you intend attracting the right set of people to your social club. You should also be willing to go out of your way to recruit people into your social club.
No doubts you just have to be very creative if you intend making good money from a social club. Aside from the registration fee and annual membership fee that you are expected to get, you also need to create and organize events that will help you generate money from your social club. You can organize competitions, excursion and exhibition for members of your social club. For illustration; if your social club is a hub for artists, you can organize an exhibition for members to display their works and also generate traffics that will patronize their art works et al.
Starting a Social Club Business – A Complete Guide
- Industry Overview
This industry includes clubs or associations in the gambling, sporting, social (such as RSL clubs) or recreational areas that generate income predominantly from hospitality services. Clubs that mainly provide sporting services, including racing clubs, are not included in the industry. The industry covers both licensed and unlicensed clubs, as well as those that have gambling licences.
- Interesting Statistics About the Social Club Business
Fierce competitions between gambling providers and rising regulatory constraints have restrained the Social Clubs industry’s revenue growth over the past five years. Prior to 2010-11, a steady increase in gaming machine numbers and lax legislation provided some support for the industry.
However, state governments’ introduction of caps on the total number of gaming machines allowed in each club hampered revenue growth, as the industry derives just under 50% of its revenue from gambling. Industry revenue is expected to decline by 0.2% annualised over the five years through 2015-16. This includes a decline of 0.3% during 2015-16, to reach $9.9 billion.
The overall spread and distribution of social clubs around America largely follows trends in population density. As a result, the industry is concentrated towards New York, Los Angeles, Las Vegas, San Francisco and Nevada making up the majority of industry establishments. These states have an extensive network of clubs with gaming machines and have developed along with their gaming and liquor licensing laws. These states also earn significantly more revenue than their share of venues suggests because their venues have a higher percentage of gaming machines.
Starting a Social Club Business – Market Feasibility Research
- Demographics and Psychographics
Just the way people see things from different perspective, so do people join or attend social clubs for various reasons. Social clubs is therefore designed for fun lovers.
List of Niche ideas in the Social Club Business
There are various areas you can choose to build your own social club around; the bottom line is that you should chose an area of interest that you are passionate about and one that you may easily attract like mind with. For instance: if you live in a community with loads of nursing mothers, you can choose to start a social club for nursing mothers. It will be easier for you to attract them to join your social club especially if they know that they will gain a lot by joining your social club.
- Social Club for golfers
- Arts social club
- Music social club
- Social Teens Club
- Social clubs for farmers
- Social Club for doctors
- Social Club for drivers
- Motorcycle social club et al
The Level of Competition in the Social Club Business
Social clubs give individuals with similar interests a way to gather for the purposes of sharing information, ideas, conversations and laughs over food and drink. Social clubs have different structures, with some being set up with free memberships, while others require their members to pay. An aspiring entrepreneur can create a plan for turning a social club into a small business that generates profit.
Revenue for the social club business industry has increased only marginally over the past five years, despite growth in disposable incomes and corporate profit, which would normally drive greater donations to industry organizations. Overall membership rates have declined due to heightened competition for Americans’ time and attention, and because social media has increasingly usurped the industry’s role in connecting like-minded communities.
Even as economic growth expands Americans’ capacity for corporate and private donations, the industry will continue to face these challenges in the coming five years, and many organizations are expected to close as a result.
List of Well Known Brands in the Social Club Business
It might be common for people to feel separated due to an exponentially-growing population as well as the impact of daily tech platforms and devices, yet there is an increasing emphasis on social clubs aiming to bring like-minded people together. Social clubs are arguably a better way to not only meet new people, but create stronger connections, than joining a dating or social media site.
There are no companies with a dormant market share in the social club business.
- CORE – New York
- Cercle de Lorraine – Belgium
- The Hurling ham Club – London
- Silencio – Paris
- The Clubhouse – Buenos Aires
- Blacks – London
- Capital Club – Dubai, U.A.E.
- Kee Club – Hong Kong
- Roppongi Hills Club – Tokyo
- The Club at the ivy – London
It is estimated that the social club industry is in the decline stage of its life cycle. Membership and donations rates have stagnated as Americans embrace technology and social media as alternative ways to form communities. Over the 5 years to 2020, industry value added, which measures the industry’s contribution to the economy, is projected to remain unchanged.
By contrast, GDP is expected to rise 2.2% per year over the same period. Consequently, the industry’s overall share of the economy is projected to shrink. As the industry struggles, larger organizations with broader agendas may absorb smaller, special-interest organizations in an effort to stay financially viable.
Is a Social Club Business Worth Starting from the Scratch or Buying a Franchise Better?
In the social club business, buying a franchise can be a viable alternative to starting your own business. Franchises offer the independence of a business ownership supported by the benefits of a big business network. You don’t necessarily need business experience to run a franchise. Franchisors usually provide the training you need to operate their business model.
Franchises have a higher rate of success than start-up businesses in the social club business industry. You may find it easier to secure finance for a franchise. It may cost less to buy a franchise than start your own business of the same type. Franchises often have an established reputation and image, proven management and work practices, access to national advertising and ongoing support.
Franchising is seen by many as a simple way to go into business for the first time. But franchising is no guarantee of success and the same principles of good management – such as informed decision-making, hard work, time management, having enough money and serving your customers/members well – still apply.
Possible Challenges and Threats of Starting a Social Club Business
Generally, social clubs are membership organizations primarily supported by funds paid by their members. Problems you may encounter when starting a social club business may include
- Choosing a niche
- Registering your social club
- Developing your recruitment plan
- Developing membership packages like bylaws, terms and conditions
- Creating interesting events that will attract people to join your social club
- Choosing a good venue and time for your social club
Starting a Social Club Business – Legal Aspect
- Best legal entity for a social club business
One of the first things that will have to be decided on is the best legal structure to use for the club. The most common and simplest structure for a club is an unincorporated association.
An unincorporated association is a membership organization. It can be whatever its members want it to be, and carry out whatever activity you choose. It is the easiest, quickest and cheapest way for a group to set itself up. This structure is suitable for groups such as playgroups, pensioners associations, film clubs, arts groups and campaigning groups. Many groups fall into this category (sometimes without knowing it).
You do not have to seek approval of any kind before setting up an unincorporated association, nor do you have to register with any regulatory body, if your group’s aims are not charitable.
You are not obliged to keep a membership list unless there is a membership fee – anyone who is entitled by your rules to be a member can simply turn up and take part. However, it can be useful to keep a list so you can inform all your members of meetings, and know who is entitled to vote.
The unincorporated association involves drawing up a set of rules, known as its constitution, to regulate the relationship between the members of the club and it usually provides for a committee to run the club’s affairs. However, under this structure the club has no separate legal personality and the members are personally liable for the actions or debts of the club. If the club wishes to employ staff or lease property, it may find that an unincorporated association is too limited a structure for this.
If your group’s aims, as outlined in your constitution, are charitable, this makes you a Charitable Unincorporated Association.
Catchy Business Name for a Social Club Business
There are several business names that you may want to choose to go with. Here are some;
- Efficient clubs
- Media wit
- The Leaders
- Known figures
- Inspiring shares
- Solar club
- Sea Rolls
Choosing the Right Insurance for a Social Club Business
As an unincorporated association, the club members are personally liable for the actions or debts of the club. Therefore, the club should obtain adequate insurance to cover its members. Insurance for your social or sports club is usually obtained on a package basis, the policy will be split in to a number of different sections, some are compulsory, some you will be able to choose the cover on offer.
These Insurances may include:
- Public liability insurance
- Professional indemnity insurance
- Business interruption insurance
- Employer’s liability insurance
- Contents insurance
- Money and loss of licence cover
- Legal expense insurance
- Natural peril insurance
Protecting intellectual property in the social club business
With little or no patent and copyright to protect in the social club business, what is left is the trademark. Keeping your trademark safe from infringement requires a consistent offense and a sturdy defence. Protecting your trademark is like managing a winning sports team—you need both a good offense and a good defence.
- Choose a strong mark
- Use it or lose it
- Beware the Escalator Fate
- Police your mark
- Enforce your mark
Is Professional Certification Needed to Start a Social Club Business?
Becoming a member of a professional business organization is a great step toward building your business resume. But even being a model member of one of these organizations won’t make up for a lack of knowledge and experience. The social club business as an industry has no renowned professional certification but there few certifications in other related fields a focused entrepreneur can still acquire and be a mile away from his competitors, professional certifications like The American Finance Association (AFA), Entrepreneurs’ Organization (EO) etc.
Legal Documents Needed for a Social Club Business
It is surprising how many people do business without having a formal written contract. While a handshake and a promise can go a long way, a simple written legal agreement can save you time, money and relationships. Documents need for a social club business may include
- Business plan
- Business proposal
- Certificate of incorporation
- Corporate bylaws
- Corporate minutes
- Corporate records
- Non profit bylaws for non profit social club businesses
- Founder’s agreement
Writing a Business Plan for a Social Club Business
As a social club business your business plan will differ slightly in focus from that of a more conventional business. This does not mean that the treatment of the financial and any return on investment can be any less rigorous. Your business plan should evidence that the social purpose or social return on investment are additional features of an otherwise profitable and effective business.
A social club business will often have a legal form and governance to suit the involvement of stakeholders such as employees, customers and the community as well as owners and shareholders – the more common stakeholders. The business plan needs to reflect this and explain the structure and governance in clear and concise terms. You will find similarities and differences between guides and templates that you find on the internet. Take the ideas that work best for you and use a writing style that you are comfortable with.
Although there are no hard and fast rules about structuring a business plan, there are some things that you must include. Those are the elements that all the guides and templates include, such as financial projections and product/service descriptions.
Detailed Cost Analysis for Starting a Social Club Business
Given that most social clubs are non-profit organizations, the economic model is by definition rather different than other known business model. As with all non-profits, clubs exist because a group of people came together with a mission—to socialize, golf, play tennis, etc. Non-profit, thus club economics begin with the determination of this mission aligned to the wishes of members.
Once that mission has been defined, costs can be outlined and a budget built to accomplish this mission. This thought warrants emphasis. Budgets are built from the bottom with costs, not from the top with revenue. Once the cost of achieving the mission (e.g. to have the best golf course, tennis program or dining facility in the area), members need to decide the desired method of financing—dues or user fees.
The goal for non-profit clubs cannot be to drive revenue unless the club changes its mission by adding more services or increasing the quality of existing services. Those changes would, in turn, increase costs, which would then require more revenue from the members.
- Financing a Social Club Business
A well-run enterprise has a medium to long-term strategy running which ensures that it is sufficiently capitalised (i.e. it has sufficient money from loans, share investment and retained profits) to enable it to pursue its business development plan.
When identifying sources of finance, you need to consider:
- cost of the finance, both to raise and service the capital
- how much, if any, control the investor can have in the social club business
- personal risk and repayment terms
- whether you are willing to put at risk the particular investor’s money
- You need to ensure that you have a balanced investment strategy. You should also consider alternative strategies to finance your social business that you could, should or must follow.
Here are some of the types and sources of finance relevant to social club businesses:
- Debt finance
- Supply chain finance (e.g. credit from suppliers)
- Crowd funding
- Social investment
- Venture capital & business angels
- Financing by family and friends
- Reinvestment of retained profits
- Member / Stakeholder investment
- Loan finance
Choosing a Suitable Location for your Social Club Business
Choosing the right premises is a key business decision. Your premises should help you to operate effectively without excessive costs. At the same time, you should avoid being tied to premises that might not suit you in the future. Things to consider when choosing a location for your social club business may include
- Size and layout of the premises
- Structure and appearance, both internally and externally
- Any special structural requirements, such as high ceilings
- Facilities and comfort for employees and visitors – including lighting, toilets and kitchen facilities
- Utilities, such as power and drainage, and any special requirements – for example, 3-phase electricity
- Permission, including planning permission, to use the premises for a social club business
- Access and parking space – for deliveries or customers, including disabled customers
- Whether you need the flexibility to alter or expand the premises
- Your long-term business plans
- Continuing maintenance and repairs
- Building and contents insurance
- Initial purchase costs, including legal costs such as solicitor’s fees and professional fees for surveyors
- Initial alterations, fitting out and decoration
- Transport links and parking – good public transport links and local parking facilities make it easier for members and customers who don’t live within walking distance
Starting a Social Club Business – Technical and Manpower Requirements
A social club business is a business that brings like-minded people together for a purpose. The purpose of social clubs differs so does its technical and manpower requirements. The exact number of equipment, technology or manpower needed to run a social club business cannot be noted categorically until a particular niche would have be decided upon.
However, in a Social Business often their involvement is different and broader – it may include volunteers, employee owners or community owners. Consequently, it is important to put pay particular attention to how they are engaged.
Some social businesses involve their employees in the governance of the organisation; indeed worker co-operatives are owned and run entirely by their employees. In these cases the employment rights and responsibilities are exactly the same as for any other business. The governance of an employee owned business or worker co-operative just needs to take account of the multiple roles as employee, member and director.
Your social club will also need leadership or governing structure. Again, the type of organization will determine whether the structure should be formal or informal. In other words, will you operate through an elected Board of Directors or create a less formal club management arrangement?
Here are some of the key leadership roles you might want to consider:
Key representative who can lead the club and act as a spokesperson, the role title might be: President, Board Chair, Revolving meeting leader, etc.
- Deputy Leader
A supportive role that offers a backup for the Leader
Responsible for keeping track of club moneys, fees, expenses, paying bills, etc.
- Communications Manager / Secretary
This role would be responsible for writing meeting minutes; drafting objectives; keeping track of goal for activities, date for gatherings; sending out meeting reminders and invitations, etc.
- Membership Manager/Officer
Responsible for both maintaining member records as well as developing member recruitment strategies
Regardless of the type of leadership positions or the names you choose, be sure that you develop clearly defined job descriptions that are agreed to by all of the organizing members. After all, the individuals who hold these positions need to fully understand the expectations and responsibilities involved.
Once these roles are defined, open up nominations and hold elections to be sure that roles are filled in a well-documented, democratic manner. As your club grows, you might need to consider having additional roles and/or a full board or executive committee to help manage its operations.
- Service Process of a Social Club Business
A social club is simply a formal acknowledgment of similar thoughts, ideas, beliefs and objective by a group of people in the format of an organization. A social club can be public or private. Sports, functions, meetings, service projects, Spring Sing and great friendships are what can be expected from social clubs.
Successful businesses not only need sound strategic planning and formulation, but also sound strategy execution. However, in most organizations, including clubs, a strategic management process is absent. While generally accepted tools are used to manage finances, members, processes and employees, rarely is one applied to the management of strategy. The Balanced Scorecard is an approach that strategically focused organizations can use to fill this void.
Starting a Social Club Business – The Marketing plan
- Marketing strategies for a social club business
When crafting your marketing and brand strategy, it is best to pay attention to the difference between an overall brand strategy (where are we now, where do we want to go) versus a marketing plan (the tactical executions on the day-to-day to ensure the overall objective is met).
- Don’t just have a mission statement, have a brand promise that truly speaks to your audience. Like building a company, your non-profit organization needs to stand on a solid foundation in order to live up to its mission statement and survive.
- Know who you are marketing too. Your audience is twofold, those who you want to help (the cause) and those who are going to help fund your cause (the drivers). Learn about them, celebrate them, and use them to help market.
- Create a Brand Ambassador program that works. Like stated above, when we can celebrate our audience, we invite them into our “family”, thus giving them a platform to stand on and be our voice. Peer to peer marketing works, and even though most NPO’s do not have a product to promote, the sheer idea of the cause is enough to stir emotions and have your audience willing to want to help spread the story.
- Engage in thought Leadership and content marketing. Be an authoritative figure on your cause and the floodgates will open up. This can be done by blogging, getting quotes in publications and speaking publicly on the subject. No better way to build trust and authority than when you are behind the podium or with a pen in your hand.
- Create a Membership Committee – to brainstorm recruitment strategy and take responsibility for recruiting and orienting new members
- Include a Membership Application on your website – along with ensuring the benefits of membership are clearly outlined on your website (*see #5 below), be sure to include a membership application and option for potential members to contact (via email) a leadership or membership club member with questions.
- Invite non-members to events – create a non-member entrance fee or offer a “trial member” visit to a members-only event
- Start a Member Referral Program – asks each member to recruit another new member. Consider offering incentives for recruitment if there is membership fees involved.
- Hold an Open-House – so that potential members can get to know member benefits first-hand
- Use existing professional networks to recruit new members – ask members to promote the club within their existing networks
Getting the Right Pricing Structure for your Social Club Business
Pricing is the heart of a business. It affects everything you do and is affected by everything you do. Economists talk of supply and demand as key factors behind pricing—successful entrepreneurs manipulate demand by making their products more desirable.
The right price should fall between your cost and the value you offer to customers. Within this range, your prices should be closer to the value of what you’re selling. So to price high, add value, then learn to sell value. The following six steps will help you determine the right price for your social club service:
- Understand Your Customers’ Unmet Needs and the Value You Offer
- Evaluate your competitive strength and weakness
- Choose Your Strategy, Then Link Your Advantage with Customer Needs
- Evaluate Your Costs, and Keep Your Break-Even Low
- Adjust Your Prices Based on Margins, Volume and Cash Flow
Competitive Ways of Winning Competitors in the Social Club Business
Growing a Social club Business can be seen as a route to improved sustainability and social impact. However, it must not be taken lightly or in an organic, unplanned way. Striving in the social club business is all communicating with your existing members and also promotes your club to potential new members. Here are some initial promotional methods to consider:
- Create a membership database
- Develop a club website
- Establish an E-newsletter
- Launch a members forum
- Create an outstanding social media presence for your club
Ways to Increase Members Retention in your Social Club Business
Brand loyalty is one of the most difficult assets for a business to attain. Or, at least it was.
- Make your members your foundation
- Send Fans Something They Didn’t Know They Wanted
- Take members Advice (and Credit Them for It)
- Give members an upgrade
- Be there when they need you
- Help them do something they love
- Give members Something Your Competitors Aren’t
- Be more convenient than anyone else
- Solve a Problem for Your Customer
- Make quality a priority
- Keep the meetings short
Strategies to Boost Brand Awareness and Create a Corporate identity of your Social Club
Brand awareness is the level of consumer consciousness of a company. It measures a potential customer’s ability to not only recognize a brand image, but to also associate it with a certain company’s product or service. Brand awareness is best spread through both inbound and outbound marketing efforts. When competition in an industry is high, brand awareness can be one of a business’s greatest assets.
- Hold an event
- Exhibit yourself
- Sponsor something
- Organise an experiential stunt
- Take to social media
- Launch a PR campaign
- Invest in promotional merchandise
Creating a Supplier/Distribution Network of a Social Club Business
Creating a new business or undertaking change in an existing business is a project which requires co-ordination and effective co-ordination of design and implementation. There are many project management methods, tools and systems available in the business world. The key features of effective project management are:
- Early stage planning and design of a workable plan
- Co-ordination of parts of the project that depend on each other
- Management of risks to the project delivery – contingency planning
- Communication, reporting and information sharing between those involve
Tips for Running a Social Club Business Successfully
Many of the skills needed to run social club businesses are similar to those needed to run a private sector business – some suggest 80% of the skills are common. The other 20% is what makes running a successful social club business more difficult, but also more exciting!
The number of social club businesses is growing dramatically. A recent national survey found a very large proportion of start-ups, three times as high as the proportion of start-ups currently seen in the United Kingdom small business sector. But to compete successfully with for-profit companies, social club businesses may face additional business challenges:
- they often employ people traditionally excluded from the mainstream labour market because they are regarded as being unreliable
- they tend to locate in areas of high deprivation – to be closer to the local community and for affordable rents
- they provide services for people who would not otherwise be able to afford them
There is no one route to setting up a social club business. Ways in which social enterprises may develop include:
- Charging for services which were previously offered free or low-cost such as training, photocopying, or office space.
- Floating a project as an independent enterprise which was previously developed under the umbrella of another organisation such as community transport and furniture recycling. Increasingly this may also be a public service previously run by a local authority
- Meeting a community need – individuals or a community group sets up a business to replace lost services such as a shop, a café, a credit union for affordable loans, or a nursery.
In other to survive and mange your social business successfully, you need to have the following traits
- Self-awareness – about staff expertise and skills gaps.
- Environmental awareness – about trends and opportunities affecting the business.
- Passionate but purposeful – staff are committed but share clarity about the cause.
- Planning for change – plans allow ‘flexibility in a framework’ and are put into effect!
- Fearless with figures – cost, price, value and viability are understood.
- Market knowledge – and the ability to compete on quality and customer focus (not necessarily on price).
- Delegated decisions- staff is trusted to make decisions.
- Ability to take measured risks – seeing failure is a comma, not a full stop.
Above all, it takes the right mix of dedication, determination and skill to run a successful social club business. Whatever business model you choose, it’s likely you’ll be trading with an increasing number of social club businesses in future.