Why do so many night clubs fail?

[lpool student]

I'm currently carrying out research into the flaws of starting up a night club. Any information/knowledge that anyone may have in this area will be most appreciated!

Thanks,

Andy

[David]

Poor Planning

Bad Management/Employees

No Marketing Plan

No Money or ability to inject funds when needed

No Exit Plan

Lack of Experience

and on and on.

[LEE337C33]

On a personal note, I often find that a poor club simply fails to capture a specific niche. I don't mean they simply open theirs doors with no clear vision, quite the opposite in fact; a vast amount of "Rock/indie" and "Party/cheese" clubs have failed in and around London because of the nostalgic attitudes shown toward these genres by the management. Yes, people love to sing-along with the cheesy 70’s and 80's party classics, but you simply cannot fill a 1500 person venue 8-10 times a month with such a parochial niche. The stubborn loyalty toward the "Rock/indie" genre has seen the near collapse of at least a dozen clubs in Essex simply because naive club managers in their early 30's will not accept that the music that played as a theme tune to their youth isn't as big a crowed puller than the more mundane Urban scene; people, en masse, prefer duller, more vapid and tacky commercial music like Hip-Hop or R N B. So to some up this point in a single word: narcissism

[castlepr]

I would definately say no marketing plan and no money in advertising for the first part ! I have seen clubs open their doors and they just think people will come in to their nightclub with their purple walls and the money will be made !

No promotions and a lot club owners are narcistic !

[andrewsando]

operating expenses are the number one reason for a nightclub to fail.

[rubies2blue]

I fully agree.. Not enough capital and no marketing are the number one causes of failure.

[chop14u]

So how much capital would a person need to run let's say a small club that might hold about 350 to 400...something like a small after hours type thing?

[what2be]

Why do some clubs fail? For the exact reasons people posted above. Why do others fail? Because, for some reason, people equate owning a club as to being "cool" and what a great party place! And with that, they drink/smoke/snort/party their club/bar away while having a great time. And then one day, they dont have any more money and wonder what happened. Any dumbshit can get a SBA loan and open a business. Wanting it to succeed becuase its a business and not your pet toy? alot smaller percentage.

[teenclub]

Why do some clubs fail? For the exact reasons people posted above. Why do others fail? Because, for some reason, people equate owning a club as to being "cool" and what a great party place! And with that, they drink/smoke/snort/party their club/bar away while having a great time. And then one day, they dont have any more money and wonder what happened. Any dumbshit can get a SBA loan and open a business. Wanting it to succeed becuase its a business and not your pet toy? alot smaller percentage.


hmmmm-- i didnt know SBA loans were so easy to get -- i know lots of Dumb S()*U)ts - where do i get an application for them -- since they are not bright - they will give me half and use their other half for nothing

[georgebanister]

A lot of the time, clubs fail due to lack of research and implementation of bad ideas.

I recently set up a sports & leisure club for a private owner, but had to quit when he insisted on implementing ideas which had no foundation for the club (antique furniture in the seating area is one example). The furniture was not suitable for the style and wouldnt last because it wasnt designed for a commercial operation.

Quite often someone setting up a club has their idea but that usually comes into conflict with what is actually practical for the style of the club.

I have seen many clubs fail because of bad management, like putting family members in charge.

It is wise always if you have very little experience in club/bar management to use the services of a well experienced person to get the club up and running first, then see how individual ideas can be put into place.

The branding issue has made it a simple formula for opening venues, but running them to become profitable requires a little tweaking for each individual place.

But effective planning and an experienced management team/consultancy will definitely help you to get going.

[Peeps]

I think a lot of money for marketing really just seriously depends on the crowd you want to attract or what kind of venue you would be running. Word of mouth and "that bar is freaking awesome" is the best marketing and it is not a GL account on the books. For instance you want to run a three story nightclub with celebrity hang outs and such. Then you are going to need promotions, Celebrity DJs, huge drink specials, and special parties, and special guests. This is also going to bring a nightclub crowd with those consequences we all know of. If you want to open up an upscale lounge specializing in imports, premiums and local jazz/blues talent then I think word of mouth will be all you need. Two scenarios in Houston, one bar is the OLDEST bar in Houston and is located in the oldest building in Houston. It has has been able to fight off progressive real estate for a long time. This bar accepts cash only and has no signage out front. It is a wine bar and have a few imported beers. You walk in and the cash register is seriously the old hand crank kind. It's very small and quaint and the jukebox has nothing but 30' and 40' singers and standards. Now this is the place to be in Houston. Reviews read here http://houston.citysearch.com/review/9831773
add some premium single malts and sipping tequilas and I think the crowd here would be the kind that like to spend money on premium drinks.

Second bar is a little place that the max occupancy is 40 people. No I am not lying it says it clearly on the front door. Most of the patrons are old somewhat trashy regulars but thanks to word of mouth they have a huge gathering of all ages and a huge turnout. I have talked these bars up so much just from myself liking them. I am 27 and my entire group of friends can not stand the club scene. We like to not have our drinks spilled and we like to hear each other talk and sip great wine.

OOPS I forgot to get to the root of the question. Bad management of finances, customer service, location, and research are the major failures!

[teenclub]

whoa - 3 story with celeb hangouts? :eek: :eek:

where is your club?

[Peeps]

Actually I said if that is the type of club you are wanting to open, but there are quite a few in Houston, and neither of them I would be caught dead in.

[teenclub]

Actually I said if that is the type of club you are wanting to open, but there are quite a few in Houston, and neither of them I would be caught dead in.

hopefully you don't want your dead body found in any club :p , but why not those in particular may I ask?

[bennyb]

In my humble experience, I have found that many nightclubs were started by the same kind of person who is destined to fail.

Usually it is a single guy or two single guys, who are in their late 30's, early 40's who have done veritibley well in business and figure they'll start up a bar or nightclub, go there a few nights a week to pick up girls and it will make them buckets of money.

Every moment they are not there, and they're not there a lot, everyone who works for them steals them blind, from the bartenders to the busboys to the delivery men to the janitors to the cooks to the chefs to the doormen. Maybe they give away a few free drinks. Maybe they're walking home with big cans of mayonaise in their backpacks. Either way, the cash leaves the business in a hurry.

Meanwhile, you have the ****y owners, who end up telling people like me that the problem in the "location" or the "economy" or an array of other excuses. A huge amount of nightclubs are opened by people like this and help to contribute to the staggering rates of closure within the first couple of years.

[Peeps]

hopefully you don't want your dead body found in any club :p , but why not those in particular may I ask?

I would much rather go to a place where I can enjoy a drink and sit down and actually hear the people I am with. Also where I can just relax. Clubs like the ones I mentioned are basically you walk in and casually dressed men are just standing around staring at every ass that comes in the door, and when I walk into a club I am stared at because I am not wearing as LITTLE as possible and just enough to not get a ticket for lewd exposure. The the bartenders are in a horrible hurry and so half my drink is running down the side of the glass. The music makes me feel like my head will explode and the smoke makes me want to get tested for cancer ASAP. That is just my preference though, there are a lot and I mean A LOT of folks who like that though and more power to them. Houston is home to 8 of the Fortune 500 companies. I would much rather be sitting where those execs are sitting sipping Gin and smoking a nice cigar.

[junger8]

I would much rather be sitting where those execs are sitting sipping Gin and smoking a nice cigar.

The price of your drinks would need to be outrageously high in order to afford the lease and operating expenses. A group of 10 executives smoking a cigar and sipping on one martini per hour will never be as profitable as a group of 10 college kids chugging down import beers and mixed drinks.