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Hey, I am looking for some opinons on this business model.

Recently, a 3,000 SF commercial space has opened up right across the street from my alma mater. The property sits steps from the university dorms and next to three other very busy bars.

I have always wanted to open up a BYOB night club. During my college years (graduated in May haha), I threw weekend parties and managed to bring atleast 200 people a night to the parties. The biggest party I threw reached 1300 people and I made 5 grand off of it in one night. The money coming in from these parties got me thinking about a BYOB night club.

My idea is to have one area of the club be a 'chic' dance/night club and the other part an area of conversation / pool tables etc and customers would pay $10 - $15 dollars at the door and could bring any alcohol they would like (grey goose, or natty) and we would hold the alcohol at our refridgerated 'bar' where they could pick up the alcohol from our 'bartender' whenever they need a new drink. We would sell individual red bulls, soda, w/e to mix and would supply glasses.

Basically, you pay $10 - $15 to get in and unless you want mixers nothing else and you can enjoy the atmosphere / night for cheap.

The club would only be open Wed - Sat (biggest going out nights) from 10 PM to 3 AM.

Expenses would not be much as all I would need would be bouncers, rent, utilities, ins., product (red bull, etc), initial start up costs, and misc (cleaning, repairs).

I wouldnt have alcohol license, food service, machinery, alcohol inventory, cable bills, etc that go with typical bars or night clubs.

Is this idea stupid, or would you guys think it could peak a lot of college age kids interest?

Comments (33)

  • SHORTmyCDO's picture

    Your going to have a lot of liability issues with the BYOB. You may still need a liquor license to have people drink there. I know restaurants that allow you to brig your own wine need to have a license. You also have to factor in the cost of insurance, it's not going to be cheap. I don't think this is as easy as you make it out to be at all, but good luck.

  • Nobama88's picture

    Thanks,

    Yeah I have not looked into the legality of it in depth yet. Just in the thinking stages right now. Curious what peoples first impressions are.

  • SAC's picture

    I don't like the BYOB idea. Its just too much of a hassle for a night out.

    People don't mind taking their own bottles of wine to a restaurant or whatever, but expecting college kids to bring booze with them to a club is not the best way to bring in the crowds.

  • GoodBread's picture

    A couple questions come to mind:

    -How do you convince people that BYOB can be 'chic?'

    -How do you ensure customers have access to their own bottles and not others? Can this be done without a considerable hassle?

  • ibintx's picture

    Hmm, I think it's a solid idea, especially bc of the location. (I'm assuming your alma mater is large enough and parties enough) I think there are two potential problems with what you described.

    1. What Short said. You may still need a license. But-If you need a license you might as well keep a small alcohol inventory around and mark it up for those who run out of what they brought or want something else. I don't think liability could be any worse than a normal bar (except probably have to be 21+), but the license is worth checking out.

    2. How would you keep everyone's alcohol behind the bar for them? Assuming 200 (even 100) people bring a case of beer or equivalent, there are 3 issues: Space (where are you going to put it all), Time (there will constantly be huge lines for more alcohol) and "Tracking" (for lack of better word-by tracking I mean keeping up with what is whose, making sure not to give away stuff to the wrong people, etc). If you were to do this, it would require tons of space and a huge staff.

  • In reply to SAC
    Nobama88's picture

    <a href="http://www.wallstreetoasis.com/company/sac-capital" rel="nofollow">SAC</a> wrote:
    I don't like the BYOB idea. Its just too much of a hassle for a night out.

    People don't mind taking their own bottles of wine to a restaurant or whatever, but expecting college kids to bring booze with them to a club is not the best way to bring in the crowds.

    Thanks for the response SAC.

    I am not sure how it is at other schools, but bringing your own alcohol out is pretty normal for my school (hopping party to party or w/e on campus even when they are keggers), and the bars / clubs here are only a stones throw away from most the dorm rooms so its not like you are carrying alcohol far or in a taxi etc.

  • In reply to GoodBread
    Nobama88's picture

    GoodBread wrote:
    A couple questions come to mind:

    -How do you convince people that BYOB can be 'chic?'

    -How do you ensure customers have access to their own bottles and not others? Can this be done without a considerable hassle?

    "Chic" i think is way different to college students then to a 28 year old professional. Some place nice, cool *insert adj here* for people to drink, dance, socialize without dropping $100 at the bar down the street for the same experience I think would win out.

    I have thought about the accessing the bottles a bit and I have some ideas I have thrown around. I do not think this will be a huge hassle for anyone once I the system I want down (Only a employee would have access to the alcohol, so someone couldnt just steal your alcohol).

  • Midas Mulligan Magoo's picture

    BYOB=a lot of potential shit, that will automatically get shoved down your throat if anything goes wrong...approach with extreme caution.

  • In reply to ibintx
    Nobama88's picture

    ibintx wrote:
    Hmm, I think it's a solid idea, especially bc of the location. (I'm assuming your alma mater is large enough and parties enough) I think there are two potential problems with what you described.

    1. What Short said. You may still need a license. But-If you need a license you might as well keep a small alcohol inventory around and mark it up for those who run out of what they brought or want something else. I don't think liability could be any worse than a normal bar (except probably have to be 21+), but the license is worth checking out.
    .

    Yah.. My GF's dad owns two night clubs in the city and he told me a license only costs $2K + 51% of business/people in a 150 FT radius must approve. So, the license would not be terrible, but I am not positive on the specifics of it all. If I had to get a license we would def keep extra alcohol.

    My alma matre is only about 12,000 and we have no frat houses. So, finding a place to drink other then the expensive bars and same old campus apt parties can be tough.

  • happypantsmcgee's picture

    Beyond the issues with BYOB, you would have some serious potential for renting this place out to school organizations. Since you have no frat houses or anything (assuming you still have frats, sororities, etc.) this would be a great place for them to use for formals and stuff. Something else to consider.

    If I had asked people what they wanted, they would have said faster horses - Henry Ford

  • soccerz30's picture

    One problem I can see is when people don't bring enough and run out.......basically your saying I would have to leave the party and find a liquor store and bring it back?

  • craigmcdermott's picture

    Your insurance would be astronomical and the neighborhood committee would probably not vote in favor of your license. If the school has an ANC rep, which it probably does, that rep will certainly vote against your club. Additionally, you'll need 2 or 3 times as many bouncers as you think you do. Also, unlike a normal bar, you'll have to pay your bartenders quite a bit since there won't be much tipping. The economics just don't seem to be there. The closest I've seen to this was a BYOB strip club but the vast majority of their revenue came from the girls so it doesn't really apply to your idea.

  • In reply to craigmcdermott
    happypantsmcgee's picture

    craigmcdermott wrote:
    Your insurance would be astronomical and the neighborhood committee would probably not vote in favor of your license. If the school has an ANC rep, which it probably does, that rep will certainly vote against your club. Additionally, you'll need 2 or 3 times as many bouncers as you think you do. Also, unlike a normal bar, you'll have to pay your bartenders quite a bit since there won't be much tipping. The economics just don't seem to be there. The closest I've seen to this was a BYOB strip club but the vast majority of their revenue came from the girls so it doesn't really apply to your idea.

    Guess you'll just have to have strippers...enjoy the interviews

    If I had asked people what they wanted, they would have said faster horses - Henry Ford

  • In reply to Nobama88
    SAC's picture

    Nobama88 wrote:
    <a href="http://www.wallstreetoasis.com/company/sac-capital" rel="nofollow">SAC</a> wrote:
    I don't like the BYOB idea. Its just too much of a hassle for a night out.

    People don't mind taking their own bottles of wine to a restaurant or whatever, but expecting college kids to bring booze with them to a club is not the best way to bring in the crowds.

    Thanks for the response SAC.

    I am not sure how it is at other schools, but bringing your own alcohol out is pretty normal for my school (hopping party to party or w/e on campus even when they are keggers), and the bars / clubs here are only a stones throw away from most the dorm rooms so its not like you are carrying alcohol far or in a taxi etc.

    I think you know best but I think a more open, casual atmosphere would be better suited to a BYOB place rather than a club type place with a dance floor. You also have to look at what would happen if your competitors in the neighborhood also decided to allow BYOB on some nights, how would you differentiate ?

  • no homo's picture

    I would prefer my Grey Goose at $40-$50 from the package store to $400-$500 at a bottle service club, but logistics seem like they would be really hard.

    I think you'd also end up with a massive mess if people handle their own bottles for a decent portion of each night.

    I don't know a ton about club revenue streams and operating costs, but in lieu of your idea or in addition to it, I'd consider trying to undercut the local alcohol prices. If club visitors can get a bottle of Goose or something for $80-100, beers for closer to $5 than $7, cover for $10, etc., they'd be far more inclined to come to your place than others. You'd then have to consider whether that type of revenue can adequately offset the real estate, design, staff and inventory costs.

  • ke18sb's picture

    Sorry man but this is a pretty bad idea, it's not even really worth getting into why it's bad other than it doesn't make sense logistically or economically. Save you time and money.

  • Nobama88's picture

    I would like an open air bar, but unfortunately this property does not allow for it.

    I have been reading up on BYOB vs a normal bar. Why does it seem the laws etc are so much stricter toward BYOB then a regular bar? Other then you are bringing your own alcohol and paying much less for it, what is the difference between the two that makes BYOB seem more severe?

  • In reply to Nobama88
    happypantsmcgee's picture

    Nobama88 wrote:
    I would like an open air bar, but unfortunately this property does not allow for it.

    I have been reading up on BYOB vs a normal bar. Why does it seem the laws etc are so much stricter toward BYOB then a regular bar? Other then you are bringing your own alcohol and paying much less for it, what is the difference between the two that makes BYOB seem more severe?

    I would assume that its less control over the supply as far as preventing underage people from drinking, controlling the amount consumed etc.

    If I had asked people what they wanted, they would have said faster horses - Henry Ford

  • In reply to ke18sb
    Nobama88's picture

    ke18sb wrote:
    Sorry man but this is a pretty bad idea, it's not even really worth getting into why it's bad other than it doesn't make sense logistically or economically. Save you time and money.

    Curious why you think so? I was able to get 1200 people to one of my parties with little more then sending out FB invitations - I averaged 200 people each Friday and Saturday. The bars around here average 500 people a night wed - sat.

    Say If I only get 200 a night on average at $10 per person that is $8000 a weekend, or $32,000 a month less expenses.

    There are some logistics to work out with BYOB and what not, but I think it is something a college budget kid would def be interested in. I know I drop $100 - $200 on a weekend bar run here and we have to pre game a ton before heading to any bar so we dont spend so much. I am interested in why you think its horrible (before I waste more time on this lol).

    Also, wouldn't we be able to control the alcohol (when they check the liquor into our 'bar') of our patrons? Have a policy that we can stop them from getting more alcohol at any time if we deem them to intoxicated, etc?

  • International Pymp's picture

    you're not going to make any money with 10-15 dollars at the door. It would have to be a lot more expensive, and then no one would come because you might as well buy your drinks.

    it's in no way a stupid idea, as it could be a new/interesting concept to market, etc... but i don't see it being that profitable.

    just my opinion.

  • ThaVanBurenBoyz's picture

    People go to house parties and public bars for different reasons. Your successful house parties had nothing to do with BYOB. It had to do with the perception of house parties vs. bars. People go to house parties, because there's a perceived connection for those invited. Everyone has some sort of connection to the hosts (direct FB friends, friends of friends, etc.); it's a less intimidating atmosphere. People go to bars to be around complete strangers, and usually have a different attitude towards socializing here.

    Your BYOB bar would not have success in the same way your house parties did. When roommates sit around in the afternoon, figuring out if they want to go out to the bars or a chill house party, their decision is one of environment, not cost (more often than not). Your venue is just another public venue, with a differentiating characteristic. You're better off leveraging the location for just another bar (perhaps a franchise that has not hit your campus yet -- http://www.brothersbar.com/).

  • cphbravo96's picture

    Sounds like an interesting idea but I feel like it would be tough to pull off. These types of clubs do exist but they are usually known as private clubs/after hours clubs, etc. so the laws don't apply to them in the same manner.

    I personally think the whole checking in the drinks thing would be a mess. You would have to go to the same bar and same bartender so they could access your drinks and not somebody else. I also see an issue with you telling someone they can't have anymore of the liquor they brought because they are too drunk. There is increased liability because people are probably more likely (or would seem more likely) to get hammered, so that could impact insurance costs.

    I would stick with the club idea as a whole and see what you can do in more of the mainstream club/bar aspect that could get you up and running and then you can experiment with a BYOB night to see how that works.

    I think the concept is good from a demand standpoint given the location and college clientele but I don't know if the logistics would work out. I don't chic would be the ideal way of describing a concept like BYOB but having the different areas sounds like a good idea.

    Also think about (check the legality) a BYOB place where a person is allowed to bring a cooler (these places do exist already) and their own mixers, etc and you have minimal bar staff to supplement the things that someone forgot to bring or decided they wanted once they are there. Good luck.

    Regards

    "The trouble with our liberal friends is not that they're ignorant, it's just that they know so much that isn't so."
    - Ronald Reagan

  • spartahill's picture

    Just some questions off the top of my head,

    If I have to BYOB, why would I go to your club instead of just going over to my friend's house or a frat house or a different bar?

    What if I finish my "beverages"? Where/how do I get more? Say if I have a group of friends and we are sharing a bottle of ___, we finish it, where do we get more alcohol?

    Will there be music/food at your bar/club?

    How exactly will I get access to my alcohol? Do I have to ask for it every time I want some? What if I want to get someone else a shot? Is there a way for me to track how much alcohol I have left?

    The only way I can imagine this work is if it is a high end club with private rooms but obviously that doesn't apply here.

  • ke18sb's picture

    At a high level you are saying, hey I'm gonna take an exiting business, maintain very similar overhead and eliminate the highest source of revenue of said business. It's illogical.

    Random things to consider.

    * You'd probably have to invest some serious cash to get this off the ground. You need TVs, sound equipment, lighting, seating, the bar, dance area, and it has to be designed cool and hip. People aren't gonna wanna pay to go to a club if it looks and feels like shit.

    * Legality/license will probably be pretty hard to obtain. This will probably add to lawyer feels. Who even knows if the concept is even legal.

    * Liability, you would be talking on a huge liability, probably more so than a normal bar, and would therefore have a pretty expensive insurance policy.

    * Building lease will probably lock you down to a decent commitment and make you pay a sizable down payment. This will add to your up front costs as well as risk if it doesn't work out. That's even assuming the building owner would want to rent to you in the first place, which is a big assumption.

    * While it's easier sell for guys I'm not how sure how much girls would want to be hitting up the old BYOB club. It's tacky and girls don't really pay for drinks anyway nor do they pay covers.

    * You are probably significantly under estimating the monthly overhead. Rent, taxes and utilities, outsourced cleaning crews, insurance (which will be through the roof), staff of at a minimum 12 people that you will have to pay well since they aren't being tipped (also don't forget all the SS and WC taxes bump your expenses up by 30%), maintenance, promotional materials, etc. Its not that lean of a business. You overhead would be similar to that of a normal bar yet you aren't making all the margins off the drinks.

    * Filling an party via facebook at an apt every once in a while is a lot different than consistently filling a night club, especially when college parties are composed mostly of underage kids and where in a bar you are legally obligated to have 21 and up.

    * Not sure about your state, but for example in California, I don't think you can just have a bar you have to sell food and the food reciepts need to be greater than the alcohol, if this is the case where you live you would in fact need a kitchen and all the expenses that go with that.

    * It will be super confusing and annoying to be checking in and out your alcohol.

    * While it could have an initial interest it will be very hard to sustain several nights a week over a long time line.

    * As stated above, people go to bars to meet new people, this environment is more conducive to just being with your buddies.

    * You will be effected by seasonality, and since you'd probably be running thin margins this would hurt you even more.

    The list could go on and on.

    Maybe if you had a normal bar where you could bring your own alcohol with a corking fee would be an interesting idea but that isn't a sure bet either.

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  • rbkchoi's picture

    It's what you put into it

  • aschille's picture