How much cash to start a nightclub?

February 2, 2007 by mrbizplan.

Anonymous Asks:

I want to start a nightclub.  If i have a well written business plan and perfect credit would the bank give me a big enough loan to start one?
 

Mr BizPlan Answers:

At DIYBizPlan.com we have an article that discusses Commercial Financing. The article mentions a 10% minimum equity investment (down payment) but, for night clubs/liquor establishments the amount of equity required from the owner is typicall higher (20%-35%) becuase the inventory is of low collateral value and is paid for with cash (usually liquor / beer distributors will not offer trade credit). That being said if you need $500,000 to get started you will need to put up $100,000-$175,000 of your own capital. This is not a hard and fast rule…the less collatereral you have the higher your equity requirement will be as a percent of the total project costs.

Here is another article that explains what equity capital is, how much you need and why it is important.

Investors are a good place to start if you don’t have that much coin just laying around.

I hope this helps

Mr BizPlan

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