Goals of a Nightclub Business
A nightclub is similar to a bar or restaurant except that it usually opens in the early evening and stays open late -- past midnight. A nightclub offers entertainment such as music and dancing in addition to serving drinks and food. Each year nightclub owners and their management teams should prepare business plans that specify the strategies that they will employ to build revenues and stay ahead of competitors. Part of the planning is the setting of goals.
One reason a nightclub is popular is because it has a unique identity that sets it apart from competitors. The identity is built through a combination of factors, including the decor, the atmosphere or energy, the music or entertainment offered and customer service provided by the wait staff. A primary goal when starting a nightclub is to define how you want customers to view your establishment and why they will want to come back again and again and tell their friends about the nightclub.
Your gross-margin is sales minus the cost of food and beverage. Food cost should be around 29 to 32 percent of food sales and beverage cost around 21 percent of beverage sales, according to Night Club and Bar magazine. Monitor these numbers each month. Slippage in your margins could be a symptom of unsatisfactory portion control -- food preparers and bartenders serving more per portion or per drink than your guidelines. It could also be a symptom that you have a problem with employee theft or with bartenders giving free drinks. Set a goal of improving gross-margin percentage each year.
Set goals for key performance indicators, which are metrics that help you monitor the growth of the business. Number of customers served and dollars spent per customer are two KPIs you should set goals for. Also set goals for total revenue. Break this goal down by category such as cover charges, bar sales, food sales and merchandise sales.
Having repeat guests, or regulars, helps build your profit margin because there is no incremental advertising or marketing expense to bring them in. Additionally, they can provide valuable word-of-mouth advertising. Ask customers to sign up for an email newsletter that announces special events at the nightclub. Send them discount coupons with each edition of the newsletter and track how many of these are redeemed. Set goals for the number of newsletter subscribers and the percentage that redeem the coupons.
Keep customers coming back by adding new experiences. Set a goal of enhancing your nightclub's experience at least once per month. Add new elements such as live entertainment, change the styles of musical performers or add visually interesting elements such as tanks of exotic tropical fish. Changing the colors of the exterior lighting, for another example, causes people driving by to notice that something looks different.
A nightclub must have a security plan in place to prevent conflict between patrons that could escalate into violence. Not only do such incidents expose the nightclub to litigation but if it gets the reputation of being unsafe, it may lose customers and revenue. You must train staff members assigned to security to be alert for the onset of trouble and prepared to defuse the situation. Document every incident that requires staff intervention -- such as removing an unruly patron. Set a goal to reduce the number of these incidents year over year.