Fortunes have been made (and lost) in the nightclub business. The business is mainly ideal for individuals who do not mind hard work, yet also want to have fun. The nightclub business can be very profitable depending on the club’s size, its location, and its popularity.
Nightclub owners have to be “night” people. It simply means that they should like staying up all night and sleeping in the day. They also need to be very popular and know many other people who are able to attract customers to their club.
Nightclub owners may have a challenging time running a club. Aside from the fact that they have to spend a lot of money to get the club open, pay their staff and market the club, they are also expected to make sure the club remains compliant with certain laws and local codes. Once a nightclub is open, the owner can expect to receive lucrative profits as long as he keeps customers happy.
Nightclub owners are tasked with ensuring the club continues to turn a profit. They will have to hire staff, which includes bartenders, bar backs, nightclub managers, servers, security, and DJs. They also have to steadily market the club either through hiring club promoters or utilizing television, Internet, or print marketing to maintain and grow clientele. They are also tasked with ordering beverages and other supplies for the club.
They may make themselves available to ensure that certain laws are not broken—for example, selling alcohol to young adults under the age of 21. They also handle payroll for their staff. Nightclub owners are expected to be highly organized individuals. They have to pay attention to details and possess confidence and strong communication skills. They should be able to negotiate and solve problems.
They require computer skills and must be able to understand word processing, spreadsheet, and database software. Nightclub owners are also expected to be able to budget properly and handle large amounts of money. They need interpersonal skills, as they will be meeting people from different backgrounds.
To those considering the business, the glitzy décor, music, drinks, and people dressed up for a night on the town might make a nightclub owner’s job seem more fun than work. However, nightclub owners tend to face varieties of potential problems and are expected to work hard to limit them while providing each guest with a favorable experience.
What Problems Plague Bar and Nightclub Owners?
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Owning and running a Nightclub is not an easy feat. It is not just walking around, organizing your staff, and talking to a few tables now and then. It is a whole lot more than that. Leaders inspire. Leaders challenge. Leaders build trust, and trust builds teams.
Note that it is practically impossible to build a team with the boss mindset. It is only when you evolve into an authentic leadership role that teamwork will begin to form.
In this industry, most people tend to be on the creative side. Note that having a team of staff like this can be both a blessing and a curse—especially when creativity gets out of hand.
Making new menu items is the fun part, but making sure you’re not just being creative for the sake of being creative is the challenge. Note that your menu and offering is one of your best marketing tools. It is one of the first things a guest sees on your website, and it sends a message about who you are, what you do, and how you do it.
Generally, it is far better to be outstanding with a smaller, more focused menu than to be average with a large variety menu. Guests today expect innovation and good drinks. Good is the average, and if you want to succeed, you have to be better.
Sometimes cash flow can become a challenge for a nightclub. Note that this might happen because of poor marketing strategies or slow nights. For instance, if a nightclub is open Thursday through Saturday night, but only reaches its income goal on Friday and Saturday night, it might have trouble paying its bills.
Nonetheless, cutting out the additional night may not prove an option, as doing so could make it hard to compete with other clubs that do operate on Thursday night. Additionally, owners might face cash flow problems when their target market chooses other entertainment options, including attending other nightclubs or drinking at home.
It is indeed shocking how many nightclubs and bars don’t conduct a regular and thorough product and beverage inventory. This is hospitality management 101. You are expected to take inventory of your products if you want to maximize profitability—there’s no way around it.
Inventory is not a should-do; it is a must-do. Aside from counting your club products, either weekly, bi-weekly or monthly, you must take liquor inventory, too. Without the inventory counts, the rest of your nightclub’s numbers won’t represent the whole picture.
Most times, the combination of alcoholic beverages and crowds can take a violent turn. Therefore, nightclubs are expected to employ bouncers to help with crowd control and to remove drunk or disorderly individuals from the premises.
A nightclub owner might also deal with such issues as people bringing weapons into the building. To deal with this, some nightclub owners install metal detectors or instruct employees to search each guest for weapons prior to admittance. Additionally, many nightclub owners hire off-duty police officers to provide additional security, which adds to the overall cost of running this type of business.
If your nightclub is in a large market, think about all that noise being generated on social media. People become desensitized to the standard posts that talk about whatever beverages or drink specials are going on today. To market effectively, you need to first understand the ground rules of social media.
It is all about communication, which is not a one-way street. There has to be dialogue, an exchange, or even banter. Communicate with your guest, not at them. So, back off the relentless sales pitch every time you post. Mix it up, and show the human side of your brand. Be funny, edgy, charitable, or educational.
Nightclub owners are expected to put measures in place to prevent illegal behavior. For instance, underage individuals might try to use fake IDs to gain entry to the nightclub or to buy alcoholic beverages.
In addition, nightclub customers might try to smuggle drugs onto the premises and use or sell them on the grounds. Owners tend to be faced with the balancing act of ensuring that their clubs provide fun and entertainment while upholding local laws.
If owners wilfully serve underage drinkers, they risk the loss of their liquor licenses, fines, and possibly even criminal prosecution. Also, allowing guests to sell or use drugs on the premises can lead to criminal prosecution, fines, and the shutdown of the club.
Nightclub owners are often faced with significant insurance premiums and need several different types of coverage. Notably, nightclubs need property, general liability, and liquor liability insurance. These types of insurance provide coverage in the event of property damage, personal injury, and damages that could result if a guest drinks too much and then causes an accident.
Most nightclubs also need worker’s compensation insurance, which provides protection in case employees suffer injuries on the job, and business interruption insurance, which helps replace lost income if the nightclub must cease operation temporarily. Often, nightclub owners also seek commercial crime insurance, which provides coverage in the event of fraud, forgery, theft, or robbery.
In any business, great culture is established by the owners and management; it flows down, not up. Culture is a living thing and you are expected to nurture and tend to it like a garden. You also need to be aware when the weeds pop up, or before you know it, they will take over.
Always hire for personality over skill. You can train skills, but it is hard to change someone’s personality. You must ensure you have developed sufficient training programs to empower these employees to properly serve your guests.
Have it in mind that no nightclub experiences success based on the owner’s efforts alone. Instead, a successful nightclub requires managers, bartenders, hosts, waiters and waitresses, doormen, and DJs. If the club serves food, the staff are expected to include chefs, dishwashers, and busboys as well.
Sometimes these businesses have a high turnover rate, and finding and training new people can prove an ongoing challenge. Moreover, owners have to focus on choosing the best people for each job. A slow bartender, for example, might annoy customers and make them less likely to return.
Owning a nightclub might seem fun, but it is a difficult business to master. Success can be hard to achieve and even harder to maintain; the music and atmosphere that draws people today might repel them tomorrow.
As with any business, the challenges and risks of a start-up venture are high. Failure rates among all businesses vary and are a hotly debated topic. However, the size and level of risk also correspond to the size and expense of the nightclub.