Thinking of starting a SC in the Southern California Area

First time poster but I am absolutely certain, without any doubt, that this is, in no way, a troll of any sort. It is 100% genuine. Guaranteed.

Hi Mark

Not a troll my friend, i am doing a lot of research right now and I have been on this site before reading some articles that definitely help .. so I thought I sign up and ask you guys if you have some advise on location, Thank you for the help

Only real, typical, guys think opening a sc is a novel idea.

Existing strip clubs exist where they are either because of zoning laws or grandfather clauses.You aren't going to be able to put a new club just anywhere you want.

@mjx01 I know I can't put it anywhere I want, I am trying to think between the places that the zoning allows which is a better location, Downtown Los Angeles definitely gets more people on a typical Thursday Friday Saturday but they also have way more clubs then say City of Industry .. So I wanted to get some advice from someone who maybe knows the industry very well that can help shed some light to the question

Check out strip clubs for sale on the internet. For example:

us.businessesforsale.com

@mark94, ROFL

Assuming the OP is real, I would say that I absolutely agree with shadowcat. If you have the money to start a strip club, just invest a little extra and purchase an existing one. Makes it less likely that you'll lose your shirt. Owning a strip club is every man's fantasy. But the reality is probably a clusterfuck of epic proportions, on a nightly or semi-nightly basis. So much shit that can go wrong.

@burlingtonhofactory .. thank you for the comment , honestly there isn't much for sale here there's only one I saw and it seems a bit shady.. so if you can help me out . . What are some of the clusterfucks that you think can go wrong nightly , just so I can get a better understanding if I missed anything .. thank you for your help and yes this is a serious idea I have always wanted to and now that I can money wise I wanted to get serious about the idea .. Thanks again

@GLitty,

Well, for starters, the municipal council will want to find ways to shut you down. You'll be subject to endless harassment from local politicians whose elderly constituents do not approve of your business model. In my area, a local politician ran for higher office and one of the achievements he claimed he was most proud of was successfully preventing an adult bookstore from opening. He actually bragged about that in his campaign mailers. And he won in a landslide.

Then there's organized crime activity. They're always on the lookout for an all-cash business that they can muscle in on. Since local politicians and law enforcement don't like you anyway, you can't always count on them protecting you.

But that's just the big stuff. Then there's the nightly shit you'll have to deal with from the girls. One has her period. Two of them are fighting. Another is crying for some reason. Some of them don't show up for their shifts, or they don't show up on time. There'll be arguments about missing shoes, stolen customers, spilled drinks, etc. And at any given time, many of them will be on drugs. Some may try to sell drugs in your club. And if they don't, someone else will. These are, hands down, the flakiest, flightiest, most irresponsible women on the planet. They're great, don't get me wrong, but we all know it's true.

And don't even get me started on the customers. There will be fights. There will be drunks. Bouncers will have to eject people from time to time. Eventually, you will be party to a lawsuit. It's inevitable.

Plus the sound system or the light system can break down at any time. Finding someone who knows how to repair those things can't be easy. Also, you could lose your lease if the property owner passes away and his or her children inherit the building and decide that they don't approve of the sex trade. This shit is endless. If I didn't have to go to sleep eventually, I could literally sit here all night and list the things that can go wrong.

Look, assuming you're real, I understand why you would want to have a club. Honestly, I just don't have the balls to start a strip club myself. My serious recommendation to you is to go hang out at a club and just quietly observe the goings on for a while. Befriend a dancer and ask her about the drama that she's seen. I've personally seen lots of this stuff. And I don't even live in a redneck white-trash state. I mean, you could open the club in Beverly Hills and you'd probably still have to deal with most of this stuff. Drama seems to follow the sex business around wherever it goes.

@BurlingtonHoFactory - you've given some great insight to this poster. I strongly doubt the validity of his post, but you've given him some very useful insight.

There are folks who will always fantasize about owning strip clubs, and it's probably best left as a fantasy. Most fantasizers don't have the abilityto get a job and get out of their parents basement...

First, ask yourself, "Do I know anything about running a normal club?". There are enough potential money pits just running a normal club, much less throwing strippers and strip club customers into the mix.

If you are not an experienced club owner/operator, your first task is to find a good General Manager. This GM needs to know the area you are targeting. You need to have enough startup funding to be able to pay this GM's salary for at least a year before the club even opens up, since the GM will be instrumental in picking the location, arranging your food, drink, and alcohol vendors, overseeing construction, hiring staff, getting licenses, etc.

If you have owned/operated other clubs (or maybe a restaurant), then you can probably handle a lot of that yourself, and could probably look for a "Floor Manager" that could help you run the strip club operations. Perhaps you'd only have to pay for some consulting time during the year long build up to opening (location scouting, interior layout, decor, lighting, sound, etc) prior to putting on full time salary 2-3 months before opening.

Oh yeah, another expense you will need to account for in your startup budget: find a strip club friendly law firm and put them on retainer. You will need them to review all your leases and contracts, and to help file all your permit applications.

@Cashman1234, thanks man. Once in a while someone shows up saying he wants to open a club. They usually have zero reviews or highly suspect reviews, and are probably trolls of some sort. But for all I know, some of them might be real, so I give the benefit of the doubt. After all, if you really did want to open a club and you needed advice, where else would you go to ask? You'd come here first.

Personally I fantasize about having a club from time to time, just like everyone else here probably does, but the risk is just too high for me personally. Buying an existing club is just too expensive for me, and starting a new club from scratch probably has only a 5 or 10 percent chance of success.

Open a strip club In McAllen tx it's only one there and it sucks and there's like a million ppl that live In thee area

@joc13 really good advice thank you, I have not ran a restaurant of club before I have family who has a restaurant so im sure he will help on request but I don't plan on having any food maybe just finger foods like chips nuts and sandwiches pre-made .. as far as the interior décor I was thinking I can go around to different clubs and get an idea of what works and try to come up with my own style , I don't know if getting a GM to do all those things is worth it I think most of those things I can do myself I would just need a really good floor manager to help with management mostly

@KJ702,

I don't know the area but if there's that many people and only one club, there must be a reason why.

@BurlingtonHoFactory - you make another excellent point about this being one of the few places to ask for advice on owning a strip club. There most likely aren't many places for club owners to share ideas.

With regard to the fantasy of owning a club - that is something I don't have. The reason I say that is because the fantasy could easily become a nightmare - with local officials trying to shut the club down - greasing the palms of many unsavory folks - and then dealing with a massive amount of SS - there would be little time to actually enjoy the club.

The few insights that I have into the inner workings of strip clubs have led me to strongly believe that I never want to own or manage a strip club.

Be careful about turning an activity you enjoy into a job.

Here's some serious advice for anyone who wants to open a strip club. First go and get yourself laid with the hottest stripper or P4P girl you can find. Bareback. Seriously, it has to be bareback, nothing else will ever work. I know it sounds nuts, but go with it. After you finish, for about 45 minutes, you'll be thinking clearly probably for the only time in your life since puberty. Then, during that brief 45 minutes, if you still want to have a strip club, you'll know the ambition is for real and you should begin researching it. Lawyer, consultant, business broker, vendors, etc. But you may just find that bareback pussy cured you of your fantasy, and that now you just want to put your money into a short term CD or something. You can thank me later.

Other than that, the only advice I can think of is to do whatever you can to get a job in a club yourself. Bouncer, manager, whatever you can find. Work for free if you have to. Do it for at least a year. Learn everything about the business that you possibly can. Again, you'll thank me later.

Good points, a PL that really wants to learn the business side can find a club in need of updating and pitch in... Offer to buy some better chairs, stand outside to valet and check ID's. Much cheaper education and I bet the management will tell you more about the gory details of running one.

There are professionals that run strip clubs for guys that own them but to open one you need a minimum of 1M investable in the area you are looking at and if you don't use professional service to set up you will burn through your money at a major rate before you can even get the approvals you need just to open the doors on day one. My suggestion is buy one that is open and running profitably you'll increase your odd by one thousand percent. Other than that good luck I speak from experience.

@twentyfive,

A million dollars to open a club even if you're starting from scratch? Wow, that's a lot higher than even my own pessimistic estimate. As for buying an existing club, I told him in a PM that a multiple of five is a good price to pay, as in five times profits before interest, taxes, and depreciation. But a lower multiple if the economy is in a downturn at the time of investment, obviously. Have you done this before? What would you say is a good multiple for him to pay? I'm really curious myself.

@BHF it probably isn't enough these types of businesses are typically cash operations if you aren't a corporate operator it is generally assumed that you need to wash money that's why strip clubs are referred to by folks in the know as laundromats, truthfully untill you get started, you won't know the final cost of opening the doors untill you finally get them open. BTW I would never pay more than two years provable income as a purchase price, EBTTDA is fine in a corporate setting, but you talk to most guys operating a small business they like me will tell you theory is great but where the rubber hits the road is much more important.

Yep, $1M is about what I was thinking for starting from scratch in an area like Southern California. It took $250K just to get a medium sized bar opened in a medium sized Mississippi town.

A lot of info here

reddit.com

I remember the story of how a club opened, the owner took his time... He opened a restaurant by the airport, and the city was glad to see development out there. Then a year later got a drink permit. Then got a permit for dancing and live acts. Then he started hosting occasional adult events... Bachelor's parties, traveling reviews, new year's galores. When the club was topless every weekend, residents began to whine. But by then all the permits had been acquired, so the owner said FU and the place went daily.

@twentyfive, yeah, that's what I told him in PM. Lots of money laundering. But I don't get it, the only real difference between EBITDA and income is interest, taxes, depreciation, and amortization. One person's taxes and interest expense may be different than another's; so are you saying that the OP should estimate what his own taxes and carrying costs will be, subtract those from the EBITDA figures that the seller provides, and then pay no more than two times that amount? I mean, that's a low price. With a metric that low, I bet lots of clubs would be worth $300K or less.

The thing is, there are lots of horny guys out there who fantasize about owning a club. No offense to the OP, who may or may not be for real, but it's true. One would think that just the very existence of all those ill-informed purchasers and amateurs would lead to multiple expansion in the SC business. I wouldn't be surprised if ten times EBITDA were the norm.

One more point to give you and this is easily obtainable info it costs between 1 & 1.5M just to open an Applebees or a Fridays or Hooters or any chain type restaurant in most major markets in the US, it is easier to open when there is a formula and even then, sometimes they fail. So how would an individual with no real experience expect to open a strip club in So Cal with less than that.

@BHF if you think people are opening clubs that don't gross 750k to 5m a year than you really don't have much experience operating a small business. With the amount of work and problems associated with operating that kind of a business if there isn't an owners benefit of if 4-500k minimum it ain't worth it.

@twentyfive, that's true, I don't have any experience operating a small business, whatsoever. But I do know that Gross and Net are two different things. A club can gross 750K and still leave the owner with 1/10th that amount, or less, at the end of the year.

I was taught that EBITDA was used as an approximation for cash flow when analyzing public corporations. It seems like there is an easier way to measure cash flow in a small, private business.

@mark94, you're probably right. And he's right, too. Like I said, I'm no expert, not at small business nor at titty bars. BTW, I'm reading the Reddit link you posted. Some of it's pretty funny stuff :)

If the net isn't worth 35-40% I wouldn't even consider it.

BurlingtonHoFactory has some great comments in this thread. And BurlingtonHoFactory would be a great name for a strip club. Coincidence?

@jackslash, LOL, thanks Jack. I try. I chose the name because I'm a fan of the Playhouse Lounge in Burlington Township, NJ. Burlington Township is also the home of the corporate headquarters of the Burlington Coat Factory (now known simply as 'Burlington'), and their slogan used to be "We're More Than Just Coats." This would also be an appropriate slogan for the aforementioned club: "We're More Than Just Hoes"... which is true, because they are more than just hoes... they also have sluts, slags, etc. But they're all very nice girls. No disrespect intended :)

Your insights are excellent - and your name and slogan for a club are also excellent! I'm in northern nj and I'd make a trip down the turnpike to enjoy your "more than just ho's" establishment!

@Cashman1234, hey thanks brother. Read my reviews of the place, I think you may like it. It ain't Detroit or Atlanta or Phoenix, or any of these other places the guys here would put in the running for Strip Club Capital of America. Hell, it ain't even Irvington. But we like our little club :)

honestly... don't bother. hk is just 2-3 hours away.

@BurlingtonHoFactory - I read your reviews - and some other reviews of that club. It sounds like a good place - with reliable girls - and a relaxed vibe. Next time I'm on the NJ side of Philly - I'll give it a try.

Keep in mind anywhere there is a good strip club area, the competition is fierce and extremely cutthroat. It's the reason why extras start, to bring value over other clubs. Try starting an extras club from scratch, see how far u get.