The first issue to consider from a night club expert viewpoint is the ratio of sales in terms of tickets or door cover charges, beverage revenues and retail if any. The next crucial areas are costs and expenses, particularly the mix of sales and entertainment. And the last, are the fixed overheads such as rent, insurance, leases and debt service. Let’s look at sales first… Most nightclubs generate revenues based on the following types of sales: Liquor, beer, wine and non alcoholic drinks; Cover charges or tickets, if live venues; and Miscellaneous sources of retail income, such as t-shirts, music copies, artist paraphernalia and tourist trinkets, if in a namesake destination. If you are thinking like a night club expert or hiring one, here is what to look at and consider as part of your nightclub business planning and whether it is potentially a good investment: – Is the ratio of liquor type drinks versus all others at least 60% to 70% of total sales? – Are ticket revenues at least 10% to 20% more than the musicians cost if there is live entertainment? – Does the sale of retail items create more expense than profit and can it be outsourced to collect a commission instead? As it concerns bar sales ratios and what many nightclub consultants evaluate, this is indicative of either a) the type of customers that this bar and nightclub attracts, b) price points that may be too high for cocktails and liquor drinks, and/or c) promotions that are not geared to focus or capture higher drink check averages. In the next related blog, we will look at the sale ratio issues closer and what a night club expert considers are the key areas to examine. If you are considering a potential bar or club acquisition, keep following our blogs or get a preliminary consultation below.
Perry Group
Hotel & Restaurant Experts For The Hospitality Industry
