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How to Start and Run a Strip Club Business

Open a Strip Club

Do you want to start a gentleman’s club successfully? If YES, here is a 20-step guide on how to start a strip club business with no money or experience.

Sexual preferences differ all over the world. Whilst some folks just can’t be caught with a sex worker, let alone a stripper, yet others wouldn’t even mind to pay heavily to go watch a stripper. In America, as much as it is in other countries of the world, the strip club business has continued to boom.

The history of strip clubs date back to the 1900s when strippers tease kings. These days’ fellas and even women alike go to these clubs to unwind after a long day’s work.

It is for this reason that the industry still witnesses a boom. Another factor to consider when starting your strip club is where the strip club will be located. Even though it isn’t compulsory that your strip club be located in a highbrow area; however most of the successful strip clubs are those that are located in highbrow areas where social life is at its peak.

Your location should be one that will pass security and fire code before you open the club so as not to run foul of the law. You can start your strip club from a small town in the United States and if you are consistent and creative, it won’t be too long before your strip club becomes a nationally recognized strip club.

20 Steps to Starting a Strip Club Successfully

1. Understand the Industry

It is important to note that businesses in the strip club industry operate adult entertainment venues in which striptease or other erotic or exotic dance is regularly performed for males, females or mixed audiences. Most of them may also serve food and beverages or give their patrons the chance to bring their own beverages.

It has been analyzed that the strip clubs industry is in the mature stage of its economic life cycle. The industry value added (IVA), which measures the industry’s contribution to the US economy, is expected to grow at an annualized rate of 0.5 percent annually.

In recent times, the strip club industry experienced relatively constant demand. Even though changes in consumer spending and behavior can create year-to-year fluctuations in strip club revenue, demand for the industry as a whole has persisted over the years.

In spite of recession-induced dips early in the period, experts project the overall revenue for the industry to increase during the next half decade, many thanks to the renewed consumer spending and pent-up demand.

The strip clubs industry is indeed a large industry and pretty much active in all the countries of the world. Statistics has it that in the United States of America alone, there are about 3,979 registered and licensed strip clubs responsible for directly employing about 58,680 people and the industry rakes in a whooping sum of $6 billion annually.

The industry was projected to grow at 1.8 percent annual growth within 2011 and 2016. It is important to state that no strip club has a lion share of the available market share in the industry.

A recent report released by IBIS World reveals that the strip club industry is in the mature stage of its economic life cycle. Over the 10 years to 2022, industry value added (IVA), which measures the industry’s contribution to the US economy, is projected to grow at an annualized rate of 0.5 percent per year.

In comparison, US GDP is forecast to rise at an annualized rate 2.2 percent during the same period. Further cementing the industry in a mature phase is the slow level of technological change as well as widening markets. The report further stated that technological changes in the strip clubs industry stems from improvements in equipment quality as well as financial management systems.

Some of the factors that encourage entrepreneurs to start their own strip clubs in the united states of America is that the business is a thriving business and most cities in the US enjoy robust social/night life and these are the kind of places highly suitable for businesses such as strip clubs.

The demand for strip clubs is largely driven by the availability of various factors such as social life, security and above all entertainment. Profitability for individual strip clubs depends on controlling costs as well as the availability of complementary services and products.

2. Conduct Market Research and Feasibility Studies

  • Demographics and Psychographics

The demographic and psychographic composition of those who attend or need the services of a strip club is not restricted to men only, it cuts across women and men (adults), of different cultures, race and financial and social status, hence the demographic composition for a strip club business is all encompassing as it relates to drug addicts and substance abusers.

So, if you are thinking of opening your own strip club, then you should look beyond marketing your strip club to just men in your city, but also men and women across the United States of America and visitors/tourists who visit the city where your strip club is located.

3. Decide Which Niche to Concentrate On

There is no niche area of specialization in the strip club business since strip club is a niche area in the adult entertainment industry.

Those who run strip clubs basically add other related complimentary services so as to generate more revenue for the business. Some run membership, sell snacks, serve food, and sell alcohol and other beverages. Most of them also operate chalet/brothel.

The Level of Competition in the Industry

The competitions that exist in the strip club business go beyond competitions amongst strip clubs in your city or country; it is a competition that cuts across all entertainment industry and businesses such as nightclubs and bars et al. This is so because the average patrons of strip club can as well seek for alternate source of pleasure from other entertainment hubs. So, it will be right to say that the competition in the strip club business is tough.

The truth is that, no matter the level of competition in an industry, if you promote your services or business properly, you will always make headway in the industry. Just ensure you have what it takes to entertain patrons of your strip club and you know how to reach out to your target market.

4. Know the Major Competitors in the Industry

In every industry, there are always brands who perform better or are better regarded by customers and the general public than others.

Some of these brands are those that have been in the industry for a long while and are known for that, while others are best known for the extra cum premium services that they offer. These are some of the leading strip clubs/brands in the United States of America;

  • 4Play – Los Angeles, CA
  • 2001 Odyssey – Tampa, FL
  • Acropolis Steakhouse – Portland, OR
  • The Cheetah Lounge – Atlanta, GA
  • Devil’s Point, Portland, OR
  • E11even – Miami, FL
  • King of Diamonds – Miami, FL
  • Great Alaskan Bush Company – Anchorage, AL
  • The Lodge – Dallas, TX
  • Spearmint Rhino – Las Vegas, NV
  • Penthouse Club – New Orleans, LA
  • Vivid Cabaret – New York, NY
  • Mary’s Club – Portland, OR
  • Mons Venus – Tampa, FL
  • Scarlett’s Cabaret – Hallandale, FL
  • Sapphire – Las Vegas, NV
Economic Analysis

If you are looking towards successfully launching a business and maximizing profit, then you need to ensure that you get your economic analysis right and try as much as possible to adopt best practices in the industry you choose to build a business in.

Before starting a strip club business, you have to be sure that it is a business you are ready for, because apart from making profit like any other business, the primary need you want to serve as it relates to night life/social life is  entertainment.

Strip club business is an adult entertainment business and it is not a Green business, as a matter of fact, you will come across several strip clubs all across the United States of America.

So, if you are mapping out your economic analysis, you should carry out thorough market survey and costing of the required labor, facility and supply of tobacco, alcohol, snacks, food and other beverages needed to successfully run the business.

Over and above, if you are considering starting a strip club business, then your concern should not be limited to the cost of setting up the business, but also on branding and on how to build and effectively compete with other competitors within your market space.

The truth is that if you are able to provide premium services for patrons of your strip club, you are sure going to maximize profit in the business.

5. Decide Whether to Buy a Franchise or Start from Scratch

Even though there are strip clubs that are into franchising, the truth is that, you can hardly find a franchise of a strip club that can best suit your style or business model hence it is advisable to start from the scratch. This is so because the business is indeed a thriving one and aspiring entrepreneurs are coming into the industry with business concepts that will enable them effectively compete with well – established brands.

The truth is that it will pay you to start your strip club business from the scratch. Starting from the scratch will afford you the opportunity to conduct thorough market survey and feasibility studies before choosing a location to launch the business.

Please note that most of the big and successful strip clubs around started from the scratch and they were able to build a solid business brand.

It takes dedication, hard work and determination to achieve business success and of course you can build your own strip club brand to become a successful brand with patrons/clients from all across the length and breadth of the United States of America and other countries of the world (tourist and visitors).

6. Know the Possible Threats and Challenges You Will Face

If you decide to start your own strip club business today, one of the major challenges you are likely going to face is the presence of well-established strip club brands whose clients cut across the United States and the global market. The only way to avoid this challenge is to create your own market.

So also, just like any other business, other major threats that you are likely going to face is economic downturn and unfavorable government policies. It is a fact that economic downturn affects purchasing power and spending for entertainment purposes.

Another threat that you may likely face also is the arrival of a new strip club or even nightclub and bar in same location where yours is located.

7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)

When considering starting a strip club business, the legal entity you choose will go a long way to determine how big the business can grow; some strip clubs design their business and services to carter for a general market, while others prefer strictly by membership et al.

Generally, you have the option of either choosing a general partnership, limited liability company which is commonly called an LLC, or a sole proprietorship for a business such as a strip club.

Ordinarily, sole proprietorship should have been the ideal business structure for a small – scale strip club business especially if you are just starting out with a moderate start-up capital. But people prefer limited liability Company for obvious reasons.

As a matter of fact, if your intention is to grow the business and have clients /patrons from all across the United States of America and other countries of the world (tourists and visitors) and also to sell franchise or open outlets in key cities within and outside the United States of America, then choosing sole proprietorship is not an option for you. Limited Liability Company, LLC or even general partnership will cut it for you.

For example, Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. It is not so for sole proprietorships and general partnerships.

Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholders meeting and other managerial formalities. These are some of the factors you should consider before choosing a legal entity for your strip club business; limitation of personal liability, ease of transferability, admission of new owners and investors’ expectation and of course taxes.

If you take your time to critically study the various legal entity to use for your strip club business, you will agree that limited liability company; an LLC is most suitable. You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or an ‘S’ corporation especially when you have the plans of going public.

Upgrading to a ‘C’ corporation or ‘S’ corporation will give you the opportunity to grow your strip club business so as to compete with major players in the industry; you will be able to generate capital from venture capital firms, you will enjoy separate tax structure, and you can easily transfer ownership of the company; you will enjoy flexibility in ownership and in your management structure.

8. Discuss With an Agent to Know the Best Insurance Policies for You

In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. So, it is important to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your strip club business.

Here are some of the basic insurance covers that you should consider purchasing if you want to start your own strip club business in the United States of America;

  • General insurance
  • Health insurance
  • Liability insurance
  • Hazard insurance
  • Fire Insurance
  • Workers Compensation
  • Overhead expense disability insurance
  • Business owner’s policy group insurance
  • Payment protection insurance

9. Protect your Intellectual Property With Trademark, Copyrights, Patents

If you are considering starting your own strip club business, usually you may not have any need to file for intellectual property protection/trademark.

This is so because the nature of the business makes it possible for you to successfully run the business without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties. On the other hand, if you just want to protect your company’s logo and other documents or software that are unique to you or even operational concepts, then you can go ahead to file for intellectual property protection.

If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO. The final approval of your trademark is subject to the review of attorneys as required by USPTO.

10. Get the Necessary Professional Certification

Although you do not need any special professional certification before you can successfully start your own strip club business, but you will do yourself a whole lot of favor if you study adult entertainment or a related course before starting this this type of business.

It will afford you the opportunity to truly maximize the business; you will be able to have full grasp of the business from start to finish especially as it relates to producing concepts that will help you attract celebrities and other high profile clients to your strip club.

11. Get the Necessary Legal Documents You Need to Operate

The essence of having the necessary documentation in place before launching a business in the United States of America cannot be overemphasized. It is a fact that you cannot successfully run any business in the United States without the proper documentation. If you do, it won’t be too long before the long arm of the law catches up with you.

These are some of the basic legal documents that you are expected to have in place if you want to legally run your own strip club business in the United States of America;

  • Certificate of Incorporation
  • Business License
  • Business Plan
  • Security Clearance
  • EIN
  • DBA
  • Non – disclosure Agreement
  • Employee Handbook
  • Employment Agreement (offer letters)
  • Operating Agreement for LLCs
  • Insurance Policy
  • Consulting contract documents
  • Online Terms of Use
  • Online Privacy Policy Document
  • Apostille (for those who intend operating or selling franchise beyond the United States of America)

12. Raise the Needed Startup Capital

Starting a strip club business can be capital intensive especially if you choose to start a standard strip club in a highbrow area with rich nightlife/social life.

Securing a standard and well secured facility is part of what will consume a large chunk of your start–up capital, so, if you choose to start the business on a large scale, you would need to go source for fund to finance the business because it is expensive to start a standard strip club business.

No doubt when it comes to financing a business, one of the first things and perhaps the major factors that you should consider is to write a good strip club business plan.

If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business. Here are some of the options you can explore when sourcing for start-up capital for your strip club business;

  • Raising money from personal savings and sale of personal stocks and properties
  • Raising money from investors and business partners
  • Sell of shares to interested investors
  • Applying for loan from your bank/banks
  • Pitching your business idea and applying for business grants and seed funding from government agencies, donor organizations and angel investors
  • Source for soft loans from your family members and your friends.

13. Choose a Suitable Location for your Business

When it comes to choosing a location for your strip club business, the rule of thumb is that you should be guided by the social life in the area, the demand for such services and easy access to labor in the location you so desire to start the business.

Of course, if you are able to secure a central location for your strip club business, it will enable your clients to easily locate your facility.

It cannot be overemphasized that the location you choose to open your strip club business is key to the success of the business, hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consists of people (adults) with the required purchasing power and social lifestyle.

It is important to note that a business facility in a good location does not come cheap hence you should be able to allocate enough fund for leasing/renting in your budget.

If you are new to the dynamics of choosing a location for a business such as strip club, then you should feel free to talk to a business consultant or a realtor who has a full grasp of the city and perhaps country you intend starting your strip club.

Most importantly, before choosing a location for your strip club, ensure that you first conduct a thorough feasibility studies and market survey. The possibility of you coming across similar business that just closed shop in the location you want to open yours can’t be ruled out.

This is why it is very important to gather as much facts and figures before choosing a location to set up your own strip club business. These are some of the key factors that you should consider before choosing a location for your strip club business;

  • The demography of the location
  • The social lifestyle of residence of the location
  • The demand for the services of strip clubs in the location
  • The purchasing power of the residence of the location
  • Accessibility of the location
  • The numbers of strip clubs and other adult entertainment centers in the location
  • The local laws and regulations in the community/state
  • Traffic, parking and security et al

14. Hire Employees for your Technical and Manpower Needs

If you are considering setting up a strip club business, it means that you should be prepared to purchase equipment and furniture such as chairs, tables, platforms/stages with poles (for pole dancing) filing cabinets, sound system, public address system, computers, bars, serving utensils and entertainment lighting system et al.

These are the basic machines needed to launch the business. If you don’t have enough cash, you can start with fairly used equipment/furniture but if you are financially buoyant, then you should go for brand new ones since they usually have a longer life span.

As regard leasing or outright purchase of a facility, the choice is dependent on your financial standing, but the truth is that to be on the safe side, it is advisable to start off with a short term rent/lease while test running the business in the location.

If things work out as planned, then you go on a long term lease or outright purchase of the property but if not, then move on and source for other ideal locations/facility for such business.

When it comes to hiring employees for a standard strip club, you should make plans to hire a competent Manager (you can occupy this role), Admin and Human Resources Manager, Sales and Marketing Manager, Accountant, Client Services Executive, Disc Jockey (DJ), Security Officers and most importantly, professional strippers.

These are some of the key employees that you can work with. On the average, you will need a minimum of 10 t0 15 key staff members to run a small – scale but standard strip club business.

The Service Delivery Process of the Business

Usually, when a strip club is opened and everything is in place, they will either choose to welcome patrons based on membership, or open their doors to the adult population in the city where the strip club is domiciled.

It is the norm to hear good music in the background, alcoholic drinks, beverages, tobacco, and even snacks being served based on order, while strippers do their thing on the stage with the stage light concentrating only on them while every other place remains dark or partially/poorly lighted.

Other processes involved are customized services that requires strippers giving patrons lap dance/premium services based on demand and at a fee and in some cases having special time alone with strippers in the chalet within or outside the facility.

It is important to state that a strip club may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility; the above stated strip club business cum services process is not cast on stone.

15. Write a Marketing Plan Packed With ideas & Strategies

Generally, running a business requires that you should be proactive when it comes to marketing your goods or services. If you choose to launch a strip club business, then you must go all out to employ strategies that will help you attract customers/patrons or else you will likely struggle with the business because there are well known brands determining the market direction for strip clubs or the adult entertainment industry.

These are some of the marketing ideas and strategies that you can adopt for your strip business;

  • Introduce your strip club and the services your offer by sending introductory letters alongside your brochure to corporate organizations, campuses/colleges, residence, sport clubs and other key stakeholders throughout the city where your strip club is located.
  • Advertise on the internet on entertainment blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across, so that those on the social media or those who read blogs can know where to go when they need to services of a strip club.
  • Open your strip club with a party for the general public so as to capture the attention of residents who are your first and potential patrons.
  • Creating a basic website for your business, so as to give your business an online presence.
  • Directly market your services.
  • Join local strip clubs and adult entertainment associations for industry trends and tips.
  • Provide discount days for your customers.
  • Advertise your business in community based newspapers, local TV and radio stations.
  • List your business on yellow pages ads (local directories).
  • Encourage the use of word of mouth marketing (referrals)

16. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity

If you are in business and you are not deliberate about boosting you brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portrays your business to be. One of the secrets of larger corporations is that they are willing to spend fortunes year in and year out to boost their brand awareness and to continue to communicate their corporate identity the way they want people to perceive them.

If your intention of starting a strip club business is to grow the business beyond the city where you are going to be operating from to become a national and international brand, then you must be ready to spend money on promotion and advertisement of your brand.

No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and brand boosting cum promotion to continue to appeal to your target market. Your corporate identity has a lot to do when it comes to building a business that is profitable and lasts long.

Here are the platforms you can leverage on to boost your brand awareness and create corporate identity for your strip club business;

  • Place adverts on both print (newspapers and entertainment magazines) and electronic media platforms
  • Sponsor relevant community based events/programs
  • Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your business
  • Install your Bill Boards on strategic locations all around your city or state
  • Engage in roadshow from time to time in targeted neighborhoods to create awareness of your strip club
  • Open your strip club with a party for the general public so as to capture the attention of residents who are your first and potential patrons
  • Distribute your fliers and handbills in target areas
  • Contact corporate organizations, campuses/colleges, residence, sport clubs and other key stake holders throughout the city where your strip club is located informing them about your strip club and the services you offer
  • List your strip club in local directories/yellow pages
  • Advertise your strip club business in your official website and employ strategies that will help you pull traffic to the site.
  • Ensure that all your staff members wear your branded shirts and all your vehicles are well branded with your company logo et al.

Frequently Asked Questions

  1. What is an online strip club and how can it modernize the ancient strip club models?

Technology has completely changed the modus operandi of traditional strip clubs. In addition, the recent growth of the webcam modelling industry is a clear insignia that millennial are changing their preferences. Webcam platforms are coming as the new strip clubs of the modern world, and this is referred to as an Online Strip Club.

The webcam industry has grown to become one of the biggest segments of the adult industry and it is attracting both models and strip show lovers at the same time. Note that when models can work right from their home and earn better money, it is nearly possible to prefer working in brick and mortar clubs.

And even though the classic love for strip clubs is still alive, it is certain that strip clubs need to expand their presence beyond the wall and to the web world. It is no more about how to open a strip bar but an online strip club.

  1. What makes starting a strip club different from starting any other business?

Zoning laws, alcohol restrictions, and other regulations unique to strip clubs makes it quite different from starting any other business. For instance, local strip club laws more or less prohibit such businesses from locating near schools or churches, while some ban complete nudity or the sale of alcohol.

Since they vary so much from one city or county to the next, make sure you research local adult entertainment laws before starting that type of business.

  1. Should I start a big club or a small club?

The answer will depend on your business capital and level of popularity. However, a typical smaller club will make its owner $1,000 to $5,000 per week ($50,000 to $250,000 per year). A large metropolitan club can make $50,000 profit in a single night.

  1. How much does it cost to open a strip club business profitably in an online environment?

You will need around $100,000 for the fixtures, supplies, and equipment to open a strip club business profitably in an online environment. You will need to consider the following;

  • Registration

You can start with considering the Limited Liability Company model aka LLC, or gain a sole proprietorship.

  • Documentation

It is an important step and you must complete it before launching your business in the market.

  • Manpower Recruitment

A good website, a small team of web-tech experts and a few webcam models are enough to kick start your business.

  • Insurance

It is compulsory to have at least a basic insurance policy for your business.

  • Intellectual property and trademark

If you are thinking about expanding into an online strip club business with webcam modelling, it is always wise to get some protection and trademarks.

  1. Why are many nightclub and strip club owners considered dangerous guys?

Although this might simply be a stereotype, but nightclub and strip club owners are considered dangerous probably due to what many think may be going on in those places, with reference to illegal activities such as drug dealing or prostitution. These of course are just mere speculations.

  1. How much do the expensive nightclubs make per month?

Expensive clubs in Vegas, LA and Miami for instance, are known generate revenue of anywhere from $25,000, upwards to $80,000 or more nightly. These companies boost of an average net profit margin of 10 to 15 percent.

With a good manager who understands how to handle customers, coupled with happy and hard working staff, a solid marketing, great ambience, and superb dancers, an expensive Nightclub can make from $100,000, upwards to $320,000 per month.

  1. Will the SBA allow clubs that have not won a court order to participate?

No, the SBA’s main small business funding program, known as 7(a), restricts a number of organizations, including churches and strip clubs. Under the PPP, the houses of worship received an exemption from the normal rules, but the business of bare skin is still not allowed.