Behind the Scenes of a Hot Nightclub Business
The night club business is not an easy one to master. There are permits, licenses, and bureaucracy to manage. It takes a tremendous amount of attention to create a brand that sizzles with consumers. If you're lucky enough to succeed, then you have to worry about staying relevant and keeping your fingers on the pulse of what people want in the face of stiff competition.
"It's a really sexy business... but you're starting out with a very saturated competitive environment," says Matt Bendik, co-owner of a slew of upscale night clubs including AV Nightclub, an exclusive Hollywood venue he opened in May. Some people consider it to have the toughest door to get through and one frequented by the likes of Chris Brown, Leonardo DiCaprio, and Ne-Yo.
Even so, Bendik says the nightclub business, in particular, is highly lucrative if done properly. With a degree from Cornell Hotel School and years of living and working in hotels as well as experience opening dozens of venues, he says you need to nail six things to draw long lines at the door.
Hold Back the Supply
Bendik sees night clubs as a luxury good because they sell people expensive things that they don't necessarily need (bottle service at some of these places can set customers back thousands of dollars in one night). In fact, he likens it to the diamond industry, which holds back its supply so as to maintain a high price threshold.
"The same kind of philosophy applies to a night club. You can't open a night club seven days a week because you're going for exclusivity. To be successful you have to focus your efforts on one or two or maybe three nights," he says. "Open as few nights as possible and put as much effort as you can into those few nights that you're open. The more nights you're open, the less exclusive it is, the less reason people will want to go."
As an example, AV Nightclub opened only on Mondays for six weeks. Only later did it add Friday nights and even later, Saturdays.
Say "No" to the Wrong Demographic
There's power in saying "no," Bendik says.
"Part of hospitality is that the people are part of the product, so the better people you have inside the better the party," Bendik says. "Having a tough door and focusing on your target demographic will provide a better experience inside than just letting anyone come in."
Things to consider: A dress code, requiring customers to show up at a certain time, and letting in mixed gender groups.
"You don't want a group of 10 guys to roll in. You'd rather have a mixed group of six girls and four guys because that will allow a better population inside the party," he says.
Train Your Staff
Two things are crucial across the hospitality spectrum--excellent service and cleanliness. These things don't happen on their own.
"You have to have amazing service and staff and there are no shortcuts to that. You need to train your staff weeks and even months before you open. You need to hire the best, most gregarious people and you need to give them the tools to do the job right," Bendik says.
Know Your Concept
Bendik says night clubs come in a range of styles, from a subdued lounge to a high-energy club and everything in the middle. At AV Nightclub he makes sure to provide an interesting visual element around every corner--things like ballerinas rigged to the ceilings to dance over the heads of customers.
"By knowing your concept and staying true to your concept you can create a long-lasting business regardless of what the competition is doing," Bendik says. "With that being said, you still need to pay a lot of attention to the integrity of the concept and make sure you are constantly refreshing and maintaining it to keep it relevant."
Laser-focus on the Sound
The DJ is the new rock star, so it's worth investing in the right one playing the right music.
"At AV we've worked with some of the best artists in the world from Afrojack to Avicii to Kristina Kova. A good DJ can be very costly so being capitalized is also another important thing. Having the cash flow to be able to lock up a great artist when he's available is becoming more important," he says. "We also made a substantial investment in a Funktion One Sound System to set the stage for the world's best artists to feel comfortable playing our room."
Don't Sell Out High-Profile Customers
Bendik says he'll never let it slip that a celebrity is at one of his clubs.
"I keep it confidential and that's why we're able to have a playground where these people feel safe," he says. "[Respect] the privacy of your guests and that will help for your longevity."