A comedy club is a location where various entertainers perform hilarious acts for consumers. These routines may be diverse and unique, but they are usually stand-up or improv. A good comedy club is really many companies bundled into one. You should provide food and beverages in addition to live comedy to entice clients to spend longer time in your club. In truth, the atmosphere of a comedy club and a nightclub is often similar.
Table of Contents
Follow these ten steps to start a comedy club:
Prepare your Comedy Club
Create a legal entity for your comedy club.
Register your Comedy Club with the IRS.
Create a Business Bank Account and a Credit Card
Create an accounting system for your comedy club.
Obtain the Required Permits and Licenses for Your Comedy Club
Purchase Comedy Club Insurance
Create a Comedy Club Brand
Make a website for your Comedy Club.
Configure your Business Phone System
Starting a company entails more than just registering it with the state. We’ve put up this easy-to-follow guide on launching your own comedy club. These stages will guarantee that your new company is well-planned, correctly registered, and legally compliant.
STEP 1: Make a business plan.
A well-thought-out strategy is vital for entrepreneur success. It will assist you in mapping out the intricacies of your organisation and uncovering some unknowns. Consider the following crucial topics:
What are the initial and continuing expenses?
Who is your intended audience?
How much money may you charge your customers?
Fortunately, we have done a lot of the legwork for you.
What are the expenses of starting a comedy club?
Start-up expenditures might range from $100,000 to $1 million, depending on the size of the premises leased and its particular location. This comprises about $30,000 for kitchen and bar equipment (including initial stock), $50,000 for a new building built to your requirements, $25,000 for land acquisition, and $5,000 for applicable licences. The prices for everything (mainly building and land) may be significantly higher in competitive urban regions. Leasing an adequate place rather than building a new one is one option to lower some of these initial expenditures. You may still need to restore (often considerably) the inside, but this may decrease opening expenses in half, and sometimes even lower.
What are the continuing costs of running a comedy club?
The acts themselves are one of the most significant continuing expenditures; although the fees for each talent may vary, some estimates suggest that you may spend up to 40% of your budget on hiring performers. Another 20% goes into maintaining your food and drinks supplied, and 15% is a decent estimate for your employees’ salary. Ten percent of your spending will most likely go toward rent and licencing obligations, with the remaining five percent going toward different office expenses. While your specific expenditures may vary, a good night at a venue with 300 seats might bring in over $7,500 in cover charges alone. However, it’s more feasible to anticipate this to net you between $750 and $1,125 in profit.
Who is the intended audience?
While a comedy club may attract people of various ages, your ideal clientele will be young couples. This demographic is more likely to make your club a regular stop on their date evenings together, and younger couples are more likely to go out. These couples are also more likely to take advantage of the meals and beverages you provide, which means they will help you make profit on three fronts.
How can a comedy club generate revenue?
The comedy club business strategy is straightforward: patrons pay a fee to enter the club. Unless you are advertising a package deal, clients will usually pay extra for food and drink. Similar to nightclubs, consider charging consumers under the age of twenty-one an extra fee to compensate for the fact that they will not be buying alcoholic drinks.
How much money may you charge your customers?
The fee you charge your customers is meant to fluctuate depending on whatever comedian(s) you have engaged for that night. For example, you may charge $15-$20 to see a local comic who is just starting out in his or her career. Prices may be closer to $100 if you have a significant celebrity coming in (such as Jerry Seinfield or Louis C.K.), and will be mostly decided by the renowned comedians themselves. Keep in mind that the talent will get a substantial portion of each ticket sold: this is why, similar to a movie theatre, it’s critical for you to earn a profit on food and drink.
What kind of profit can a comedy club make?
As the estimates above show, your profit is mostly determined by the number of nights you run and the number of those evenings you can fill the club to capacity (or close to it). Even on the low end, if you just run your club four nights a week and generate an average profit of $750 each night, you may make $12,000 per month after all other expenditures are covered. In the end, your first year or years may not be nearly as successful, but after you’ve established yourself in your neighbourhood and among comedians, the profit margin on a comedy club will be enough to make you grin every year!
How can you increase the profitability of your company?
Add “local evenings” where amateur comedians may develop their skill to make your club more profitable: this generates local passion and improves your community. Depending on where you live, you may host cheap college nights when anybody with a student ID gets in for free, which helps spread the word about your club. As previously said, you may experiment with serving lunch at the club when no shows are scheduled, allowing the restaurant component of your company to become more successful. Finally, ensure that you have completely embraced internet marketing: most comedians now have portions of their sets available online in different types of media, so you can create a nice synergy between comedians and clubs by promoting their content, connecting to their CDs, web sites, and so on. This improves revenues for everyone if done correctly!
STEP 2: Establish a legal entity
Sole proprietorship, partnership, limited liability company (LLC), and corporation are the most frequent business structure forms.
If your comedy club is sued, becoming a legitimate business organisation, such as an LLC or corporation, prevents you from being held personally accountable.
STEP 3: File your taxes
Before you can begin for business, you must register for a number of state and federal taxes.
To register for taxes, you will need to get an EIN. It’s really simple and completely free!
Taxes on Small Businesses
Depending on the business form you choose, you may have multiple choices for how your company is taxed. Some LLCs, for example, may benefit from being taxed as a S company (S corp).
These guides will teach you more about small company taxes:
Taxes on LLCs
LLC vs. sole proprietorship
Corporation vs. LLC
S Corp vs. LLC
How to Form a S Corporation
S Corporation vs. C Corporation
There may be state taxes that apply to your company. In our state sales tax guides, you may learn more about state sales taxes and franchise taxes.
STEP 4: Establish a company bank account and credit card
Personal asset protection requires the use of distinct business banking and credit accounts.
When you combine your personal and business accounts, your personal assets (your house, vehicle, and other possessions) are at danger if your company is sued. This is known as penetrating your company veil in business law.
Furthermore, understanding how to develop corporate credit may help you get credit cards and other financing in your company’s name (rather than your own), lower interest rates, larger lines of credit, and other benefits.
Establish a business bank account.
Opening a business bank account is not only required when asking for business financing, but it also:
Separates your personal assets from the assets of your firm, which is required for personal asset protection.
It simplifies bookkeeping and tax reporting.
Create a net 30 account.
Net 30 accounts are used to develop and grow company credit while also increasing cash flow. Businesses use a net 30 account to purchase items and refund the whole debt within a 30-day period.
Many net 30 credit suppliers submit information to the main business credit agencies (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how firms establish business credit in order to get approved for credit cards and other lines of credit.
Apply for a business credit card.
Obtaining a business credit card benefits you in the following ways:
Put all of your company’s costs in one location to separate personal and business spending.
Build your company’s credit history, which will be important for raising funds in the future.
STEP 5: Establish business accounting
Recording your numerous costs and sources of revenue is crucial to assessing your company’s financial status. Keeping precise and thorough accounting also makes yearly tax filing much easier.
STEP 6: Obtain all required permissions and licences
Failure to get appropriate permissions and licences may result in significant penalties or possibly the closure of your firm.
Requirements for State and Local Business Licensing
To operate a comedy club in most states, you must first secure a licence. Certain state permissions and licences may be required to run a comedy club. Visit the SBA’s reference to state licences and permits to learn more about licencing requirements in your state.
Furthermore, local licencing or regulatory restrictions may apply.
If you want to provide free alcohol at your comedy club, you’ll need a liquor licence, the specifics of which vary by location.
If you want to offer food at your comedy club, you will need to get a permit from your local health authority. All food-serving enterprises must pass a health inspection. Here are some pointers for passing a health inspection.
For additional information on local licences and permissions, please visit:
Check with the clerk’s office in your town, city, or county.
Contact one of the local organisations mentioned in the US Small Business Associations database of local business resources for help.
Regulations Concerning Food
When selling food, you must get a licence from your local health authority; all enterprises serving food must pass a health inspection. Tips for Passing a Health Inspection
Federal laws govern what may and cannot be added to, marketed as, or processed with food. A Food and Drug Administration resource on the procedure of opening a food company is attached: How to Launch a Food Business
Liquor Regulation
Businesses that sell alcoholic drinks must get a liquor licence from the proper state or municipal body. The Alcohol and Tobacco Tax and Trade Bureau has compiled a thorough list of legislation by state (including required licences, zoning rules, and so forth).
Licensing of Music
Permission from the composer or licence holder is required to play music in a commercial environment. Typically, a “blanket” licence permitting a company to play music held by a vast library of artists and recording studios is available. Performance Rights Organizations, such as ASCAP or BMI, may provide such rights.
Occupancy Certificate
A comedy club is often operated from a storefront. A Certificate of Occupancy is often required for businesses that operate from a physical site (CO). A certificate of occupancy certifies that all building rules, zoning laws, and government requirements have been satisfied.
If you intend to rent office space:
In most cases, it is the landlord’s obligation to get a CO.
Before leasing, ensure that your landlord has or can get a valid CO for a comedy club.
A new CO is often required after a big remodelling. If your location will be refurbished before opening, incorporate wording in your leasing agreement saying that lease payments would not begin until a valid CO is given.
If you want to buy or construct office space:
It is your responsibility to secure a valid CO from a local government entity.
Examine all building regulations and zoning standards for the location of your company to verify that your comedy club will be in compliance and able to receive a CO.
STEP 7: Obtain commercial insurance.
Insurance, like licences and permits, is required for your company to operate safely and legally. In the case of a covered loss, business insurance protects your company’s financial well-being.
There are several sorts of insurance plans designed for various types of companies with varying risks. If you are unaware about the hazards that your company may encounter, start with General Liability Insurance. This is the most popular coverage required by small companies, so it’s a good place to start for yours.
Workers’ Compensation Insurance is another important insurance product that many companies need. If your company will have workers, your state may require you to purchase Workers’ Compensation insurance.
STEP 8: Establish your brand
Your company’s brand is what it stands for, as well as how the public perceives it. A strong brand will help your company stand out from the crowd.
How to Market and Promote a Comedy Club
Traditional marketing is difficult to go wrong with: for your big opening, be sure to promote in the newspaper and on the radio. It’s critical that you have a professional-looking website with relevant information for clients, and that you market widely on social media. You may be only a smartphone touch away from prospective clients thanks to social media. If you have the funds, use some of your rising comedians in TV commercials for your club. This may help comedians gain name recognition while also giving clients a taste of the experience they might enjoy at your club.
How to Keep Customers Returning
In addition to the concepts mentioned above, complimentary tickets are a proven and tested means of attracting clients. Make certain that local companies with which you have a solid connection give a limited quantity of complimentary tickets to clients. However, the tickets should compel clients to buy a meal or a set amount of drinks, so you don’t lose out totally. If they had a nice time, they will want to return and will be prepared to pay; even better, they will function as excellent word-of-mouth advocates, converting delighted consumers into free advertising for you. To keep returning customers satisfied, attempt to experiment with various comedians, foods, and beverages whenever possible. All of this creates excitement among clients who are eager to see what you will do next!
STEP 9: Create your company’s website.
After you’ve defined your brand and designed your logo, the next step is to build a website for your company.
While developing a website is an important step, some may be concerned that it is out of their grasp due to a lack of website-building skills. While this was a fair concern in 2015, online technology has made significant advances in recent years, making the lives of small company owners considerably easier.
The following are the primary reasons why you should not put off developing your website:
Every genuine company has a website, period. When it comes to bringing your company online, it doesn’t matter what size or sector it is.
Social media accounts, such as Facebook pages or LinkedIn company profiles, are not a substitute for your own business website.
STEP 10: Install your company phone system.
Getting a phone for your company is one of the finest methods to keep your personal and professional lives distinct and private. That isn’t the only advantage; it also helps you automate your company, provides it legitimacy, and makes it simpler for prospective clients to identify and contact you.