A strip club is place where strippers provide adult entertainment to clients in the form of striptease and other erotic dances. Strip clubs can either adopt the nightclub style or a theater style.
As of 2005, the size of the global strip club industry was estimated to be US$75 billion. In 2002, the size of the U.S. strip club industry was estimated to be US$3.1 billion, generating 19% of the total gross revenue in legal adult entertainment.
Since that time, the number of clubs in the U.S. has grown. The profitability of a strip club will largely depend on its location and the spending habit of its customers. The popularity of a given club is an indicator of its quality and acceptance.
In the strip club business, there is really no niche or area of specialization. This is because the strip club niche is already an area in the adult entertainment industry. Here are some of the ways by which strip clubs make their money.
12 Smart Ways Successful Strip Clubs Make Money
Table of Content
1. Drinks and alcohol
Selling alcohol is the main money maker for strip clubs. Usually, strip clubs gain not less than 150 to 400 percent on drinks. You should however make sure that you do not over price your drinks so as to get consistent drinking.
If the prices are too expensive, people will only buy one or two drinks, however, if they are cheaper, they can afford to buy a lot more. In addition, if your drinks are sold at a reasonable price, you will be more likely to have repeat customers.
2. VIP tables
Some rich customer will prefer to get lap dances in a more private location and as such the club offers a secluded area to them for a fee. The cordoned off VIP area can cost a few hundred dollars and the prices for drinks in the VIP areas are also higher than in the normal areas.
3. Promotional items
If a strip club is quite popular, then it can make a lot of money from branded merchandise (t-shirts, pins, calendars, et al).
4. Cover Charges
Contrary to popular belief, strippers are not usually paid by the strip clubs. They are self-employed. Generally, they have to pay a “cover charge” ranging from very low ($10–20 per 4 hour shift) to very high ($100 or more per 4 hour shift).
5. Lap dances
In addition to cover charges, the strippers are required to pay back a percentage of their earnings to the house. For instance, every $25 lap dance sold, $5–10 goes back to the house.
6. Exchange and withdrawal fees
A lot of strip clubs make use of “fake money”. These currencies look like real money but are not. They are exchanged with real money and are only considered as legal tender within the strip club only. The strippers may have to pay to exchange the fake money issued to customers who pay with their credit cards.
This fee could range from 10% to 25% service charge. Most of the time, strip clubs also charge a service charge to the customers to withdraw cash from credit cards as well.
For instance, every $100 cash advance the customer takes out at the club, he will pay a $20 service fee to the club (this does not include the bank charges). Then the stripper will have to exchange that $100 gift card back to the club for another $20 service charge, with club paying her $80.
7. Hair and makeup services
Some strip clubs require strippers to use their (the clubs) own hair and makeup services to the tune of $50–100 per service offered.
8. House fees
Strippers actually pay the club a “house fee” every day for the privilege of dancing in that club. House fees in Las Vegas range from $40 before 4:00 P.M. to as much as $180 for a weekend prime time shift. Some dancers prefer to work the crowd and skip going on stage. They have to pay an extra fee, often as much as their house fee to do so.
When strippers are fined, the fines can also provide revenue for the business. Strippers can be fined for “offences” such as showing up late for a shift, missing their set on stage, not working a major event, et al. And if a dancer misses her turn on stage because she is with a customer, she is fined and has to pay a fee for missing her turn on stage.
10. Entry fees
Some strip clubs charge a certain amount of money to customers in order for them to have access to the strip club. The entry fee does not include drinks, it just grants a client access to the club. However, a lot of strip clubs do not charge entry fees as they depend on other sources for making their money.
11. Selling snacks and food
When people are asked their reason for coming to strip clubs, food or snacks will be nowhere near the top of the list. Still, there are strip clubs that offer their customers food and snacks which they can have while the dance goes on.
12. Valet Tip
Some strip clubs have a valet service for dancers and customers. A few clubs require the strippers to valet their cars; others make it optional. Depending on the club, the dancer is expected or required to use the valet.
In conclusion when managed correctly, strip clubs can be quite profitable. Just like any other type of business, it has its own fair share of challenges but can be rewarding as well. Do your homework to ensure your licensing and every other thing is in order.