By on Jul 09, 2010 with Comments 1
Aaahhh. One of the most popular requests we get is about night club investors. But like everything else we described in the night club business, it’s not as easy as it sounds.
I mean, you want someone else’s money!! What if someone wanted your money? How easily would you give it up? See what I mean. And this subject is really no different then any other subject we have covered. As I have been telling you, it’s not any one thing. It’s when every part is done right, it oozes success.
Whether you need a night club investor, a partner, a banker, angel investor, venture capital financing, or a stock holder, you want to part money from them. And you want to do it in one of the riskiest industries out there. Food and beverage. And you think what? They don’t know that? Believe me, it’s not a secret that the risk is there.
We just got to get the money from them!
First, let me talk to you about the ramifications of this decision. I want you to really understand this. I want you to eat it, roll it around your mouth a bit, and then swallow it. Here goes.
Having a partner of any sort, is generally a very bad idea.
No I mean a real bad idea. Turn that light bulb off! I have seen it all. People going in partners with, borrowing from, selling stock to, family members, friends, relatives, businessmen, and whom ever else that would part with their money.
And, although sometimes it works, it generally doesn’t! So let’s go over some of these things. Hold on, I have to get a cup of coffee.
A related subject of night club investors is starting a night club.
Be sure to stop by here a read this.
Ok, I’m back. Where were we? Oh ya.
Parting with the money. Well, it would probably be easier to ask for a kidney, rather then money from people. Think about it, people in this world of ours lie, cheat, steal, and kill for money. So I want you to know what you are asking. OK.
If you have done your homework, stay within your budget, open your night club, and are making money, you still are faced with problems. Here’s why. Normally you will hear partners say that everything is great. That normally is right when things are going well. Even if a partner, or investor, etc. is getting a return on their investment, no one bitches too much.
But then greed rears its ugly head. So generally things are going well, but then someone will make a remark about “we would even make more money if we don’t do this promotion”. Or an comment like that. If there are more profits, there is more to split. And who don’t want more??????
Well, the old saying goes “opinions are like assholes, everyone has one”. There are no truer words. We are all
different people. And we all look at things in a different way. It may not of been wrong to ask any questions or comment on anything, put investors turn into mad men when you are talking about their money.
Now generally, in any agreement of investment, a lawyer will draw up papers to determine who will managing, the degree of ownership, and what “say so” they have. And even if is done well, someone is going to bitch. Depending on who is your night club investors, that could be a problem. A brother, sister, mother, father, best fried, cousin, etc.
Do you see where this is going. I have seen the best of friends and family members become hateful, and strangers. See what I mean. And don’t you dare say “this won’t happen to me”! Your kidding yourself. Unless Christ comes down from the cross, you are not going to change human nature!
Now the best case scenario here is for you to have a majority stake in the business. This means you need to own at a minimum of fifty one percent of the operation. This way you always win. Then, if you include legal language in you agreement, that says that the night club investors money is strictly an investment, and have no “say so” in the operation of the business, that’s the cats meow.
Now I’m not going to say there still won’t be words, but you will be legally protected. Always see your lawyer prior to any agreements you want to talk about with potential night club investors. They’ll give you some guidance and some suggestions that will help you make the right decision.
For those of you that are looking for strictly night club investors, that’s it. A new set of problems arise that you may not be able to conquer. That is, experience. Without ever doing anything like this before, and no track record, it will be next to impossible. On top of that, without years of successful experience in night club management, you have to ask yourself the question you didn’t want to ask yourself. “Why would a night club investor, invest money in me?” I think maybe you can answer that one yourself.
As you’re finding out, not an easy thing to do getting night club investors.
Now we get to desperation or you could call it stupidity. The old saying goes “desperate people do desperate things.” If a bank refuses you the loan, and your only choice is in an investor, they may very well take the collateral that you were going to give the bank. I mean the title to your car, your home, and everything inside your night club.
So, is it worth it? Only you can answer that!
I have given you some things to think about. Many negative ones. Is there a good part to this. Yes. Investors can make your dream come true. And if put together well, you may not experience anything bad at all. And if it works out well for you, you have made a good business partner that can also help you out in the future.
I know, I know, the question you have been wanting me to answer for fifteen minutes now. Where do you find a night club investor? Well, it’s not like they are in the yellow pages under night club investors. They’re not. Investors are investors. They are people with means. The invest in many things. Real estate, businesses, stocks, etc.
Ask around. Talk to your banker, a real estate agent, friends or family. You will be surprised who knows who. Once you get a name or two, try and get an appointment to see them. Not always, but generally these are smart people. So, do your homework and make a great presentation. Best of luck.
As I try and address a variety of topics, I would like to hear from you. I have set up a survey form that would only take a minute to fill out. There are no personal questions or information requested. Let me know what topics you would like to learn about.
Sorry, this content is for members only.
Already a member? Login below…
About the Author: