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Buying a nightclub: an industry guide

At a glance

  • The lines between pubs, clubs, bars and restaurants have blurred in recent years
  • Some clubs cater for an older crowd, incorporating a restaurant and having a strict dress code and an age minimum of 21
  • Settling down later, people are also clubbing later in life. 'Superclubs' are out; intimate venues are in
  • Start-up costs are high, and getting and keeping licences tricky
Nightclub, lights, dancefloor

As the distinction between pubs, clubs and bars for sale, and even restaurants has blurred over the years, a greater range of nightspots have been granted late licences and encroached onto the traditional nightclub trade.

Nowadays, you get venues which are a halfway house between a bar and a club and even restaurant-bar-club combinations. Even before the most recent relaxation of the licensing laws, bar-club hybrids were able to open into the early hours because they had a dance floor, putting them into direct competition with the traditional high street nightclub.

New generations reaching adulthood still want to go out dancing, while previous ones are clubbing for longer and settling down later

Now pubs, too, can open later, so theoretically, people stay longer in the pub before progressing to a club, perhaps not going at all.

And yet, clubbing is as popular as ever. New generations reaching adulthood still want to go out dancing, while previous ones are clubbing for longer and settling down later.

Evolution

Traditional clubs are still viable - if they evolve. Just as bars have become more like clubs in recent years, clubs have moved away from the original, staid formula.

Some clubs have introduced a 'feeder bar', an adjoining room which essentially operates as a pre-club bar. Customers can proceed to the rest of the club at any point, subject to an entrance charge. Sometimes the feeder bar will close before the actual club.

A breed of clubs emerged in the 1990s that saw themselves as 24-hour operations, acting as a cafe-bar in the day, a livelier bar and restaurant in the evening, and a full-on nightclub after 11pm, with food available throughout.

Tiger Tiger, a chain of nine venues that began back in 1998, is a notable exponent of this 'supervenue' idea, and aims for a slightly more mature market than most clubs. Recognising that people are settling down later and partying for longer, it charges expensive door fees, has strict dress codes, has an age minimum of 21 and generally puts more effort into the decor.

Of course, this format requires a considerable degree of financial and personal investment, whereas in a bygone age, owners lucky enough to have a town's sole late licence could operate a run-down establishment and still make a fortune in entrance charges and drinks sales every Friday and Saturday night.

The current rise in suburban discos, such as Bop Local, where club nights start and end earlier than in traditonal clubs, shows that there is still a market for clubbing, even for those over 30 and 40.

On the other hand, the jack-of-all-trades nightclub can make money day and night, seven days a week. This horizontal integration of evening entertainment services - to create "a one-stop shop", as Tiger Tiger operations manager Robert Cohen described it - works so well because it negates the hassle of finding somewhere good to drink, then somewhere to eat, and then queuing in the cold for a club.

 

Student populations

Despite the evolution of clubs, the 'cheap and cheerful' venue, dubiously decorated but with plenty of drinks offers, still thrives. Clubs playing a broad mix of popular music - or 'cheese' as some would deride it - are particularly successful in areas with high student populations.

Other clubs cater for people who would claim to take their music more seriously, usually specialising in either dance or rock music. Some venues offer a mixture of live and recorded music.

Drugs do find their way into clubs, but proprietors must be seen to be vigilant. They must also handle trouble appropriately, prevent minors getting in and buying alcoholic drinks, and conform to health and safety legislation. The spectre of being closed down by the police or getting their licence revoked by the council is never far away.

Clubbers in dance-music clubs value high-quality sound systems and comfortable 'chill-out' rooms. Some clubs with a big reputation, like The End in London or Sankeys in Manchester, compete nationally, as clubbers are willing to travel across the country to attend.

They might not sell as many drinks as traditional venues, but they compensate by charging more for those drinks and for entrance fees, which can cost as much as £20. However, they need to justify that fee, and this means hiring expensive, big-name DJs.

Sometimes it's the event that attracts clubbers, and if it switches venues then it takes its clientele with it at a stroke. Famous examples include Godskitchen in Birmingham, Gatecrasher in Sheffield and Back to Basics in Leeds, all of which built up huge followings.

Clubs can also become big brands. None come bigger than Cream, which still organises a festival, or Ministry of Sound, which set up spin-off bars, franchised its club model internationally and even set up a television station.

Like tourist attractions, both sell merchandise. But this breed of 'superclub' declined in popularity due to diversification in the night-time economy and a resurgence in illegal raves. This shows how susceptible the industry is to the whims of fashion, and while you can change your music offering, you cannot change the size and composition of your venue with a click of your fingers.

 

Location

Getting a venue in the first place can be tricky. City centre locations are expensive and you'll be going head-to-head with big leisure chains, casinos and property developers.

Councils have total discretionary power to grant or refuse entertainment licences as they see fit. Some will refuse licences on the grounds of there being too many nightclubs already, or simply to protect the character of the area.

If you manage to get a licence to operate in a town with a stringent application process and a dearth of venues, you could make a killing.

Setting up a club is not cheap. Sound systems, lighting equipment and fridges for the bar are very expensive, and even if it's a small club it's still likely to be a sizeable space to decorate and furnish.

And then there's the smoking ban. Nightclubs have found the ban even more problematic than pubs, as fewer have outdoor spaces with seating and very few can offset a dip in beer sales by attracting non-smoking diners (for most nightclubs serving food is neither practical nor desirable).

If you do wish to start or buy a club, an outdoor area - or at least the capacity to create one -would be a boon.

Nightclubs are among the most glamorous businesses on the high street. If you're an avid music fan, then what better job could there be than organising DJ or band line-ups?

You could use your experience as a punter and work on ways to eradicate those aspects of clubs that have hampered your nights in the past, whether it was when they let too many people in, when there wasn't enough bar space, or when the speakers were too loud, quiet or tinny.

Experience in event management would help you run a smooth operation. Although competition in this industry is fierce, this is a reflection of a dynamic market which allows you to be creative and rewards innovation.

Read about Tony Wilson, owner of one of the most famous nightclubs of all time, the Hacienda, which, perversely, actually flopped in commercial terms because its clientele preferred buying illegal drugs to alcohol.

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