I have been working on a business plan for starting my own live entertainment venue. The location will serve as a full bar and host a variety of national musical acts. When working on this project I have discovered just how profitable this industry is. I discovered that the average drink at a bar is based off a 300% price mark-up, and according to the Distilled Spirits Council: "The distilled spirits industry generates around $100 billion in U.S. economic activity annually,"
According to Entrepreneur.com: "Successful new bars can be in the black within the first six months, and they can go on to recover their initial investment within three to five years."
However, like any new business, many bars fail. There are many reasons a nightclub can fail including, poor location, lack of capital to keep business going, and the owner having lack of knowledge about the business. Entrepreneur.com says that "you have to look at yourself in the mirror and decide if your the type of person who can run a bar."
Both of my grandfathers owned restaurants when I was growing up. Ever since us grandchildren could walk, we were busing tables, washing dishes, serving water, and greeting guests. This industry is in my blood. Another thing that will help is the fact that I am a night-owl. I am the most productive after midnight and have no problem working late hours. I am young, single, and don't plan on starting a family any time soon. This lends itself to being able to commit long and late hours to my business.
I have been a musician my whole life. I have played live concerts and attended shows for the past 10 years. I know how to run a concert and I know what types of concerts are profitable. I feel that with this business I am combining my passion for nightlife, music, and money. After thinking hard and long, I believe that I am the type of person that can succeed in this industry.
While my youth could be a huge advantage, it could also become a disadvantage. I am not nieve enough to think I know everything about the nightclub industry. When seeking an investor for my business, I plan to seek out someone who has succeeded in the hospitality industry, more specifically the restaurant or bar industry. They will not only be able to provide me with capital, but hopefully act as a business partner and mentor.
http://www.entrepreneur.com/startingabusiness/businessideas/startupkits/article41460.html
When starting a new business financing is key. As a young entrepreneur, I lack much of the capital to start my own business. I have begun to research some of the ways to obtain start-up capital for a small business. The first step is to decide how much money your business requires. This can be done using multiple financial worksheets. During this phase you should determine the costs of:
1. Administrative and General expenses (Salaries, benefits, taxes, rent, insurance, ect.)
2. Your gross and net income.
3. Required startup capital.
4. Your assets.
Almost 50% of new businesses fail due to lack of planning. If you plan your financials for the first few years of operation, you are more likely to get the startup capital you need and profit. When researching how to obtain startup capital for my business I came across a few different options. The first option is applying for a bank loan. A bank loan is entirely based on your credit, so as a young entrepreneur it can be tough to get approved for enough capital. I have decided that in addition to a bank loan, I will seek out further funding through capital investors such as the Winter Park Angels.
From their website: "Winter Park Angels is a group of accredited investors who provide equity capital to early-stage entrepreneurial companies located in Florida. Our members are entrepreneurs and successful business leaders who have founded and built some of the nation's best companies. We have a burning desire to help others succeed. We accomplish this by mentoring and coaching those entrepreneurs in whose businesses we invest; we serve on their boards, provide contacts and assist with strategic planning."
I discovered that the Angel's normally invest $25,000 to $250,000 individually, or up to $2 million as a group. They offer their capital seeking a return 10 times their investment. On they're site they offer online submission for business plans, however I will seek a one-on-one meeting for my proposal. Having the Winter Park Angels invest in my dreams will not only provide the capital I need for my startup, but it will also obtain a business partner. This relationship will help obtain further capital if needed and I will have a successful lender on my side.
According to Entrepreneur.com: "Successful new bars can be in the black within the first six months, and they can go on to recover their initial investment within three to five years."
