A reception hall business can be quite lucrative. You would rent out the reception hall for events, such as weddings, showers, graduations, birthdays and more. Any event where a large number of people will be gathering will need an event hall for the extra space and accommodations.
“All true friendliness begins with fire and food and drink,” wrote C.K. Chesterton. Starting a reception hall business means allowing people to come to you and congregate to mark huge events in their lives. Birthdays, retirements, graduations, weddings – all huge life events that mean people need a large space to rent, and so who better than you? Starting an event venue business allows you to be the consummate host.
Assess Your Geographic Market’s Needs
Thoroughly researching the area where you want to start an event center business is crucial. It’s the first step to assessing your entire approach. How many reception halls are available where you want to open? If there are too many then the market may be too competitive for a sustainable profit. What is the going rate for renting an event venue in your market? Do people rent reception halls by the hour or by a day rate, and if so what is the cost? It’s smart to actually visit or contact the venues in your area, either online or by phone, to gather what the going rate is. Find out the population of your market and the median age – if, for instance, there are lots of families then you know any event center you open will host a lot of children’s parties for things like birthdays and graduations, which can project how busy it will be. These are the sorts of numbers you need for your business plan.
Choose a Venue Depending on Needs
Many event venues allow for a temporary barrier to be erected between rooms. This allows for, say, a retirement party to go on at the same time as the bar mitzvah next to it. The size of venue you lease or rent can vary in size by thousands of square feet but it is best to find one that fits 400-to-500 guests, which means a venue of around 6,000 square feet is optimal. However, if the area where you want to open a reception hall isn’t as populated or from your research does not seem to host parties that large, then a venue of 4,000 square feet is fine. That size can fit 300 seated guests comfortably. If you wish to offer catering on-site, a fully functioning kitchen will take up 40 percent of your building’s square footage according to Total Food Service. Any kitchen needs to fit all the equipment like commercial dishwashing machines, a cooktop with multiple burners and at least two ovens. There also needs to be a room for storage of all cooking and baking supplies as well as a place to store presentation platters and all the utensils, dinnerware, cups and glasses. This is why many reception hall businesses opt to contract out to a professional kitchen – doing so decreases building costs and liability in many cases.
Write Your Business Plan
A business plan is a detailed outline of how you plan to run your business.This is where you draft a budget for your reception hall business in its entirety. Outline the monthly rent or mortgage, taxes, insurance, equipment purchases and maintenance, estimated monthly utilities and any other provisions. How many staff members will you employ? – that overhead should be accounted for in your plan. From here, you delve into how you plan to secure financing for your event venue. Unless you have enough cash on hand to underwrite your business for at least one year, then approaching banks for a loan is a solid idea. Writing your business plan is something financial institutions will need to see in order to qualify you not just for a loan, but for competitive interest rates.
Apply for the Right Permits and Licenses
Contact your Secretary of State, as well as the city, to find out exactly what types of permits and licenses you need. The reason you must contact your reception hall’s city and state officials is that the laws regarding what is required vary greatly from place-to-place and are subject to changes, so finding out what you need means you also find out how to stay up-to-date on regulation fluctuations. Every event venue must post an occupancy license. This number and certification are assigned by your local fire department and it states the maximum number of people allowed in your venue at any given time. This is to keep within the safety laws of your city’s fire code.
To start a venue rental business, you need to follow the laws and regulations, do thorough research regarding your city’s needs and most of all have a passion for people. Starting a reception hall business means you are willing and able to receive many people for pivotal moments in their lives, and in that way celebrate with them.