Thinking of starting a SC in the Southern California Area
This business has been on my mind for some time now and now that i can afford to start one I have really been exploring some questions i had regarding it .. well one of the questions i have and hopefully some of you can help with is this .. Which part of Southern California is best to start it ? i noticed only a handful of places that have strips clubs and they seem to be crowded?
for instants City of industry has about 6 just on one street Valley .. then downtown Los Angeles which has a bunch .. oh and BTW i want to start a SC with alcohol so it won't be full nude .. Basically i wanted to know which areas is worth looking into?
Orange County is ok as well i don't mind the OC ... so can anyone help give some ideas on where would be best to look into?
Thank you all !!!
for instants City of industry has about 6 just on one street Valley .. then downtown Los Angeles which has a bunch .. oh and BTW i want to start a SC with alcohol so it won't be full nude .. Basically i wanted to know which areas is worth looking into?
Orange County is ok as well i don't mind the OC ... so can anyone help give some ideas on where would be best to look into?
Thank you all !!!
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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
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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.
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...
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.
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.
I don't know the area but if there's that many people and only one club, there must be a reason why.
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.
Be careful about turning an activity you enjoy into a job.
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.
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.
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.
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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.
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.