DON ‘T think you can just walk off the street and open a nightclub.It takes mucho moola,totally tuned-in time, focused attention and plenty of wealthy celebs to make it all happen.
Equally,not every funky space can equate to a happening place. The city strictly limits areas where people can dance and play so it is imperative that your dream location is a legal one,usually in a manufacturing area.
“We wanted something that had low ceilings,” said nightlife veteran Jamie Mulholland of the time he spent looking for his nightclub. “We wanted a small space for an exclusive crowd.There are thousands of locations in New York,but none of them were really what we were looking for.”
Steven Kamali,who specializes in city nightlife including clubs and restaurants,was the broker who finally uncovered a taxi garage on W.27th St.in Chelsea and helped Mulholland, who previously opened Lotus,PM,and Quo, turn it into Cain,a South African-themed,celebrity-packed lounge.
“It took four years to find Cain,” sighed Mulholland. “My wife and I beat the streets every day.”
Rather than starting from scratch,Kamali of Stevens &Co. suggests buying someone else ‘s spot.Then you can revive it with a new look so fickle crowds can lap it up.
To buy an existing nightclub, however,you must pay the club owner a fixture fee,or “key money.”
Clubs come and go almost on a yearly basis,so it might seem like an eternity to takeover or sign a lease with a term of at least eight years.
But if you rent for less than that, Kamali warns,you comprise the possible resale value of your venue down the road.
The only time a prospective tenant should try to renegotiate a lease is when there are fewer than six years left,Kamali advises.
“Renegotiating provides the building owner the opportunity to raise the rent,but will give you leverage to go back to the seller and reduce the key money,” Kamali explained.
The building ‘s owners will require a business plan,resume and background information on you and your partners,and a financial statement of net worth from the folks signing the lease and any and all guarantees.
“Clubs are known to be businesses that don ‘t last very long,” noted Mulholland.
While institutional banks don ‘t typically invest in nightclub deals, there are so-called “hard money lenders ” and private investors willing to bet their money on the next trendy nightspot. Most prospective club owners should have some experience in the industry.
For instance,while working as a manager or a bartender,you might get a good sense of how a club operates along with meeting potential backers.
“Typically investors are making ego driven decisions,and so long as they feel the night-club will become a trendy haven for celebrities and models,they will gladly cut a check,” said Kamali.. But just because you build it, doesn ‘t mean these A-list folks will come knocking on the doors.
“There must be a marketing strategy mapped out well before your doors are open,” advised Kamali. The strategy
includes the name of the club as well as its décor. “The construction period is an absolute nightmare,from electric to the HVAC,” said Mulholland
of the heating and air conditioning system. Because you have a finite amount of capital and a limited amount of time,Mulholland warns that the financial timing has to be perfect.
It can take two or three months to complete construction and during the entire time,you are paying for items.
“Before you open the doors you are at a loss,” he said.. Mulholland claims that finding the correct staff is also very critical to the success of the club.
“They should have the same mind set and good energy and – care about the work,” said Mulholland. “That ‘s hard in New York.It ‘s very hard to find people that they take their job seriously.” Believe it or not,it is also you who must decide the type of clientele that you want in your club. This will usually reflect your own personality and the kinds of people you enjoy being with when you go out.
Then you must figure out how to get them to come to your club. “Whether it’s the music,the décor,the drinks,the gorgeous women,or the celebrities,you must have a draw,something that defines you and sets you apart from the rest of the pack,” said Kamali.
He advises retaining a publicist,especially for the first six months. These professionals will work the press to get mentions in local and national newspapers and magazines. They will also help organize events,wrangle models and celebrities for the special parties,and help resolve any humiliating catastrophes that make it into print.The average agency will set you back between $3,000 and $5,000 per month.
You also should not depend on your own friends to fill your club. “If you do that you are destined to fail,because friends and family don ‘t spend money,” warned Kamali.
“The hours are long and quite draining,” noted Mulholland who spends time at Cain every night. Even if you have an ego,once your club is open,you are the one that has to suck up to VIP ‘s because they are the ones that will
spend the big bucks – when they don ‘t expect everything for free. The VIPs are also the folks that end up on Page Six the next morning – making everyone else wish they were there.
“You must pay them lots of attention,” said Kamali.. “You must make them feel important,and that their happiness means everything to you and you will do anything to make them feel special.”
Celebs often mentioned in the press as going to Cain time and time again include Tommy Lee, Eva Longoria,Star Jones,Pamela Anderson and Terri Hatcher. Clubs often provide VIPs a sectioned off table with their own personal security guard and of course, a free bottle of champagne.
Models provide wall candy for exclusive clubs where they enjoy can get to know globe trotting business men.To get models in tow,however,they have to be hired through legitimate agencies.Along with a pay check,they are typically provided tables with bottles of free liquor and champagne.
“We structure it so that the staffers are looking after all the customers,” said Mulholland..
“Cain ‘s really excelled in that when our clients come in,they are looked after.I ‘ve seen too many cases in other clubs where a customer spends $3,000 and no one remembers them.We get a lot of celebs and a lot of repeat business.”
