Should I open a music club, music store or a coworking space?

[Fru-Gal]

I've fantasized about opening a music club. I am good at business and have a nose for successful music ventures and profitable music gear (instruments and equipment). Also good at real estate/carpentry/remodeling. Definitely think location is key concern for any of the ideas below, since I have seen many clubs fail, and bad location (out of the way or too scary) is a prime one. All my musician friends say a club is a terrible idea (but they aren't so good with money to begin with). OTOH I know of a high rent, prime location club that has been empty for over a decade that sometimes I wonder if I or a coalition could revive (it used to be stellar, and well-sited in tourist area).

Of all the ideas below, what might be break-even or profitable? I am not drawn to do an educational component, but that seems to be the most common route fellow musicians have taken. Some have also had success with tiny non-profit spaces.

Probably the only way to make $$ with night music is via liquor sales, which requires a license. You also have to have security. That's why I thought it could be interesting to go in a different direction, toward the coworking market, where there's disposable income, a desire for community, daytime events and less need for liquor.

Ideas:
- jazz club (most think there isn't enough audience)
- social/hobby/culture club/salon (what does this mean?)
- music club
- music and dance club
- live webcasting music studio
- acoustic music club (less need for security, quieter, similar to jazz club)
- coworking space with music & other events
- music store with music & other events (love music stores, and have insights into the instrument business)
- coworking space with music gear store plus live music & other events (gear would need to be locked up to prevent loss)
- just a coworking space (is this even potentially profitable or is that a bad assumption to make?) and later build in events/webcasting

Having written all this out I think it all seems like too much work...

I do like creating gardens and artistic spaces. Maybe I shouldn't combine that with live music...

[SwordGuy]

Income has to be > expenses.    Pretty much all the other problems can be solved if you get that one right. :)

I would suggest breaking it into many smaller projects rather than get on the hook for an expensive lease.

Find a way to build the community you would need in order to make the bigger project work.

Do concerts for charity or just parties in the park for money.  Do them smaller at first.  Work with the other parties involved to make them cool and fun.   Find ways to include other parties so they win from participating also.

Then you'll have some favors and contacts you can draw on for the larger project.   

And find ways to do it for free or at very low cost.   Embrace the poor man's approach and make it part of the charm the audience is paying for.

Some suggested resources:

https://www.popupbusinessschool.co.uk/  The pop-up business school provides info on how to think the right way -- how to do things for free or inexpensively.  Google them for video interviews.  Lots of good ideas and they are free.

https://www.amazon.com/Initiative-Proven-Method-Bring-Passions/dp/1733039902/ref=sr_1_1?keywords=initiative&qid=1559013299&s=gateway&sr=8-1    I'm partway thru this book on Initiative and it's looking top notch.  It gives you exercises to do in order to transform a nebulous idea or interest in a topic into a workable project and get it going.   I think it would be very helpful if you like the ideas I presented above.

[Fru-Gal]

Thanks for the reply. Will check out the books. The gist of the question is around creating a venue. However, your comment reminded me that an alternate path I've wondered about is starting a music festival, which is another very major undertaking but I do know some who have been quite successful with it, both at macro and micro levels.

[sfsellin]

Coworking space with coffee bar and mid-century modern furniture. Ex: https://www.hellocovo.com/ -- absolutely crushing it. Coffee margins are great.

[Telecaster]

Have you considered band rehearsal space?   It is tough to find and expensive.   Around here, anyway.    There is a local place that rents month rooms, hourly rooms with equipment, and then has a performance space with a bar.   

[Dollar Slice]

Where are you located? Live music's profitability varies widely based on location/real estate costs/etc. I love live music and have fantasized about owning a venue, but here in NYC it's terrifically difficult to make money this way. But I've got friends who live in rural areas who are able to make decent money because there's very little competition and very low overhead.

[Fru-Gal]

I'm not one of the big music towns (LA, NYC, Nashville, Atlanta) but a close 2nd.

From personal experience I feel like rehearsal studios are yucky and attract crime/drugs. At least in my town they do. But perhaps you can have an "upscale" one or just "for grownups" or maybe make it acoustic only. Guitar Center opened their rehearsal spaces a few years ago -- I felt like they did it really well, adding value to a music gear store.

So coffee margin is high? That's what I was wondering about. Most music clubs make money off liquor AFAIK, but then only a certain type of audience gets really drunk on liquor/beer/wine, while most fans of the type of music I like *don't* spend on drinks, according to venue owners I've talked to. I've heard owners bemoan having a venue where fans only buy tea.

[BicycleB]

No.

I suspect the ventures you're looking at, when tinged with artistry, are mostly labors of love. A few make money, most don't. Especially the music places.

If you're FIRE and looking for a fun project, find ways to access and fix up a space for low investment and receive part of the profits. If you're looking to make money and you're far from FIRE, think of yourself as gambling in a high risk casino where losing means being farther from FIRE than ever.

Best tactic: Get a partner to put up the money, but make them sign a contract where you own a % of everything in exchange for your creativity and work. Then you get all the adventure, while limiting your risk to the money you'd make doing something else.

PS. I'm not an expert in any of this, just someone who's been watching/listening to cases in an artsy city for 25 years. My friend went broke trying to revive a defunct venue in a nearby town's downtown.

For practice, consider working in existing places similar to what you want. You should know the answers to your questions better before you actually become an owner. Learn the work, and take the time to study the finances of multiple venues.

[calimom]

If you"re rich, or at least solidly FI, and you want a cool place to hang out every day, why not?

If you're in the debt or accumulation phase, and need some sort of solid business that provides real returns, then a hard no. Most real moneymaking ventures require hard work and a willingness to do some boring things at some level. It sounds like none of these options would really deliver that.

Any other thoughts?