Monday, January 9, 2012

So You Want to Own a Jazz Club

It can be done. I’ve done the research. I’ve written the business plan. I’ve prepared a five year budget showing annual profits while projecting less business than experienced consultants said it would draw, because I wouldn’t invest my own money unless the numbers worked with a cushion.

So I know it can be done.

1911 Main started as a jazz club and was gone in a proverbial flash. Jardine’s has been buried in high profile turmoil for most of the last month-and-a-half. That’s it. What more proof do you need that a jazz club cannot survive today in Kansas City? You want to own a jazz club? It would be easier to just throw your cash into a bonfire.

Bull. I know it can be done.

It takes a knowledgeable operator, the right location, solid marketing, sufficient operating capital, and a tight business plan.

I wrote a business plan to open a new jazz club in Kansas City over two years ago. I retained consultants who own and operate successful restaurants and clubs in Kansas City and other markets.

Research revealed two basic operating models for a successful jazz club: Turn the room twice a night with a high cover charge (used by clubs in New York and Seattle, and by Jardine’s on weekends) or open for lunch, not just at night, to generate sufficient revenue.

I found an ideal location within the downtown loop. Four other businesses on the street open for lunch, suggesting meaningful foot traffic. Research identified over 20,000 workers in walking-distance offices. And it was adjacent to two residential areas.

The space could be adapted to the character of a classic jazz club. The address was simple and memorable. Supported by professional operation and marketing, this location could draw music fans for dinner and drink at night and turn a profitable lunch operation during the day. The consultants saw enough potential that they offered to reduce their fees in return for an ownership stake.

Now consider 1911 Main.

I looked at that location. I saw a space that, with some tweaking, could become an ideal jazz club. But minimal weekday foot traffic in an area with less densely-packed offices limited its opportunities. True, other nearby restaurants have established solid daytime business (Grinder’s and the Cashew), but I was concerned it would take an establishment building an identity as a jazz destination too long to match their lunchtime success. More importantly, rent was nearly half again as much as the downtown locale.

I ran the numbers. 1911 Main would have been relatively inexpensive to move into, and that was attractive. But cold analysis said that once open, I could not project sufficient business to support a profitable jazz club there.

1911 Main Restaurant and Lounge, during its short jazz club life, eschewed cover charges and opened for lunch. Its choice of business model was clear. But I'd projected more than two years ago that at that location, that business model would not work.

Add to their woes poor marketing (ads in The Pitch, except during First Friday events, reached the wrong demographic) and start-up pains (twice when dining there I returned silverware covered with water stains) which discouraged business.

Success takes a knowledgeable operator, the right location, solid marketing, sufficient operating capital, and a tight business plan.

The Blue Room was recently recognized as one of the premiere jazz clubs in the country, and deservedly so. Jardines, if rumors are to be believed, will rise again. The Majestic showcases jazz in a space that was once a speakeasy. Take Five is pushing jazz to conquer the suburbs. The Phoenix has morphed into more of a blues bar, but still highlights nights of jazz.

Yet this area will support another jazz club. I’m certain of it.

The right location is one research says will support noontime business. The right operator is one experienced in the service industry, or one who employs operators with never-a-water-stain-on-the-silverware experience (the role my consultants would have fulfilled). The owner will have the capital to operate at least ninety days as he or she builds the business. And that business will be built through word of mouth, sustained with astute marketing, including strategically placed ads and a day-one online and social media presence.

The consultants told me, based on their operational experience, the business my jazz club would do in year one. I reduced their projections by $100,000 and still showed a profit. I then projected four to four-and-a-half percent annual growth and showed investors earning an eighteen percent return on their investment after five years.

Sadly, the recession bit a key investor and the club never happened. The space I targeted is no longer available. I’ve since resumed a career in advertising.

Any new business involves risk. But starting another jazz club in Kansas City, done right, need be no money bonfire. I have a business plan which says so. Other ideal locations exist.

I know it can be done.

7 comments:

  1. JazzLark,

    thank you for this. You have made me very interested and hyper-thinking. All of a sudden I am trying to perceive the mechanisms I don't normally think about at play. Expect me to be in contact with you please. I'd like to share an idea if you don't mind.

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  3. I would like to open a jazz club in Toronto within 5 years..
    How can I get your business plan?

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  5. I'm looking to open a jazz club in Newark nj they are rebuilding the downtown area I want to bring jazz back to Jersey

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  6. Thanks for the wonderful wisdom and knowledge about owning and operating a Jazz Club!

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  7. love it! we have thought about opening a jazz club in Columbus ohio. would it be too much to ask to get a copy of your business plan?

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Comments are welcome. If you prefer, you can reach me directly at kcjazzlark(at)gmail(dot)com.