How much investment to start medium sized dance club in medium-large city?
Posted on Jan 03, 2010 under investment |Obviously this can vary a lot and depends on a lot of different factors, but suppose 2 story club in Raleigh, NC. Any ballpark figures or ranges that anyone could estimate?
January 3rd, 2010 at 12:10 pm
A business means owning or leasing the real estate, the fees of incorporation, marketing, furniture, renovation, etc…
As a dance club, the absolute minimum you should have is about $200,000 to manage good cashflow. If you’re leasing, you’ll have enough to keep you afloat if by any chance your business doesn’t take off for some time.
Best of luck! Feel free to email me directly if you need any help.
January 3rd, 2010 at 12:10 pm
the number i get when you describe the setup is $210,000
if the building was used for a similar purpose in the past (old club/ bar/gym, etc) the investment would be a lot less. that may be your best bet in saving yourself some money. i know a guy who bought out an old animal hospital to open a restaurant and the cost of renovations alone was about 150 grand.
January 3rd, 2010 at 12:10 pm
Well since Raleigh is a up and coming/growing town and considered more upscale it would be slightly more.
But some very basics.
Sign a lease on a building, being a business least this will be a minimum of 3 if not 5 year lease. So figure 2 store, dance, bar, back area….about 5,000 sq feet minimum and a rate of about $3.50 per sq ft. So thats $17,500 rent per month. Plus figure they will want at least first month and last month rent as a deposit. So thats now $52,500.
Now you will need a license if not a liquor license which is even more and harder to get. Normally you have to get on a waiting list as towns normally only issue so many per year. So not until old places close can new places get a permit. Lets just say for ease we spend $3,000 in license. So now we are up to $55,500.
Now you will need insurance on the business, normally an umbrella policy of at least 1 million. And with this we will include the bar, stools, tables, sinks, dance floor, lighting, stage, music system, etc etc. For ease again we’ll just put this at $15,000. So now we are up to $70,500.
Now you still need advertising, newspaper, web site, sign on front of building, uniforms, name tags, etc etc. Easy $15,500. Just a lit sign can be as much as 10,000. So now we are up to $86,000.
Now deal with basic utilities, electric, gas, water, sewage, trash dumpster, janitorial not to mention any vendors you have to deal with. Food, beer, liquor. So just to get all this started figure around $9,000. So now we are up to $95,000.
Now you have to hire people, run ad’s for employement, do background screenings, police checks. Deal with unemployment taxes and payrol taxes and a payroll service. Not to mention attorney and accountant for the business if not even a secretary to do the books. Easy $15,000 again just to get all this up, done and running. So now we are at $110,000.
So now you are close to being ready to open, might have a few glitches here and there that have to get done, paid off, etc. Just claim a low $5,000. So now you are at $115,000….you’ve yet to make a penny and you’ve yet to open your doors.
On top of this, you still have to pay rent, utilities, etc each month from the money you make. Average business pulls a bottom line of 12-21% meaning only 2 dimes are left over after every dollar that comes in the door after all the bills are paid.
Will a bank help with such a project? Doubtful unless you have credit or colateral. Otherwise this is a risk business to a bank as few stay open longer than a few years.
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