People, now more than ever, want to have fun after a hard day of work, to forget about the every day problems. So they prefer to spend their evenings and weekend nights in such clubs as our will be.
The three of us (mentioned in the header) will be the only owners of this business. Split ownership in equal parts we believe to be the key to success. Roughly speaking, being equal partners it involves that we talk about every business problem that we will meet and finally we will solve it unanimously agreeing. So we, the three partners, will be the only members of the Board of Administration.
The new night club will specialize in high-energy themes, a quality video and gaming area, and will offer beer, wine and an array of liquors and mixed drinks. In addition, the venue will sell non-alcoholic beverages such as soft drinks, juices and bottled water. A "casual" food menu consisting mostly of appetizers and small entrees will also be available. The initial hours of operation will be 11:00 p.m. to 2:00 a.m., four nights a week.
We will come up with something special because our club will approach stylish costumers and not only by prices but also by the quality of our services. Another kind of service that we would like to provide for our usual customers is no charge transportation to our club. With up-market services it won’t be too hard for us to get a name in our branch, in spite of the many and strong competitors in the same area as: Office Club, Quando, Once Upon a Time, Yellow Bar.
Talking about location, the night club will be located in Roman Circus. The placement in a very popular area will make it easier to be found and also will be in the way of well-off foreigners, who usually hang in central neighbourhoods. The property will be leased at about 1500$/month. Of course we will have to advertise properly the club and it will be the best if we use as way of advertising mass media.
Regarding the required equipment we inform you that we intend to start the business with the strictly necessary and we will continue to invest in it. For the beginning we will need: two computers, one for the bookkeeping, the other for the DJs, a sound amplification system, one limousine, club furniture etc. Because of the profile of our business we won’t need any manufacturing equipment.
The firm will have about twenty employees: an accountant, four waiters, two bartenders, four bodyguards, two DJs, a cleaning woman, a parking lot watchman, two drivers. Beside this we will collaborate with troupes of professional dancers.
3. Strategy
The key elements of the night club concept are as follows:
- Entertainment and dance based themes -- The company will focus on themes that have mass appeal (we intend to collaborate with different beer companies which want us to promote their products setting special designed frames for themed nights-for example Skoll night);
- Distinctive design features -- The night club will be characterized by the elaborate dance club situated in a spectator setting which comfortably accommodates 150 guests. The adjoining dining room and bar will present an inviting and relaxing atmosphere, which displays a collection of musical and dance. A live DJ will coordinate the events and entertain the patrons with music and games during music breaks and off-times;
- Location -- One of the major advantages that the night club will have over its competition will be its location in the City Centre, the Roman Circus;
- Gaming -- The night club will provide several interactive style video games and pool tables to provide for both additional entertainment and revenue;
- Exceptional service -- In order to reach and maintain a unique image of quality, the night club will provide attentive and friendly service through a high ratio of service personnel to customers, and will also invest in the training and supervision of its employees. We estimate nearly one service staff member for every 35 guests.
4. Industry Description and Statistics
High energy and dance themed venues have significantly impacted cities from Eastern Europe in the nineties. Speaking about the state of the market, this domain is not a vulnerable one, on the contrary, one might say that it is a growing market. First place on this market belongs to Poland. In Poland the annual average turnover of such a club is about $375.000.This has had consequences in the music culture allowing different kinds of music to develop faster, like latino, Greek, house. Other countries in this area, which have been the “victims” of the music industry development and its ties related to the markets which supply to the public their services, are: Greece, Hungary. All this are pointing out the general trend of the market that shows how less risky would be an investment of this kind.
Entrancing their audiences with high-powered lights, sound, music, and interactive entertainment, these clubs are still one of the highest cash flow businesses in the world. Our localized studies have shown that the average person will spend three to four hours per weekend in this type of an environment.
Here is the annual average yield, in dollars, obtained by a club, as we want ours to be, in Romania in the last five years (the following are average figures):
The typical night club of our style is open from 8:00 p.m. to 2:00 a.m., and within this time frame, it can achieve gross revenues nightly. The primary sources of revenue in a night club of this type are high volume traffic, coupled with comparably nominal spending.
Entertainment venues in the late 1980’s and 1990’s focused on high-energy light and sound, multiple source video screens, and participative events. This relatively simple concept is still quite popular today. However, these concepts have greatly evolved with society. In recent years this industry has become more sophisticated with the availability of new technology. Larger metropolitan areas have taken this technology to new heights with sound, lighting, video and interactive designs that create an exciting and memorable experience. Additionally, the nightclub and bar industry is shifting towards a more entertainment-oriented concept. Guests of these venues are not only offered a dynamic place to gather and mingle, but also a place to participate in the entertainment through interactive contests, theme nights, and other events.
Night clubs and other drinking establishments rely heavily on their primary suppliers. The primary suppliers are the various beverage distributors that provide the establishment with both alcoholic and non-alcoholic beverages. The alcoholic beverages (beer, wine, and liquor) are the primary sources of income in this industry. Other beverage suppliers also play a crucial role by providing non-alcoholic beverages. These are either served alone or mixed with alcohol.
In the area, all major brands of alcoholic beverages are available, in addition to several regional brands of beer. Initial research shows that the major distributors in the market have a high rating in both product availability and delivery. For instance we have already showed our interest in a future collaboration with the prestigious Tuborg company, which is located on the eastern side of Bucharest-that means low costs for transportation, so: low retail prices. They seemed to like our idea because they have promised us their support.
5. Financial Forecasts
The first months will test our ability in handling tough situations because of the strong competitors we will have to deal with, who, for sure, will not make it easy for us. We have done some mathematics that are saying that the night club will obtain, after the first year, a value of the turnover of $180.000. According to our expectations, in a couple of years, we will own more clubs, similar to the one we are talking about now, all across the country.
Here is the estimated turnover, in dollars, the club will obtain in the next five years:
To start this business we would need a loan of about $100.000 to buy the most useful and indispensable equipment. We are aware of the fact that it is an important amount of money and we decided to use as collateral our three apartments rated by S.C.Construct S.A., at a total market value of $120.000.
About the interest rate, we are waiting for a competitive quotation level and we are ready to negociate it. We want the loan for three years, considering the club’s profits as sources to return the money in fall-due, what will not be hard to achieve as forecasts are highlighting.
You can communicate us your answer at the phone numbers 093256798 or 0934776890 or you can fax it to 01/3425982. We declare ourselves available for discussions or further information.
