Getting SO tempted to open a venue

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rickryan.com

rickryan.com

Mac Daddy DJ
ODJT Supporter
Dec 9, 2009
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Hendersonville, TN
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I went to a brand new wedding venue yesterday for a site survey. Nice, but not fancy. A working farm where they built out an enclosed barn that will hold about 125-150. Asked the bride how much they're paying and she says "$3500". I've been thinking about this for a while now and am getting ever closer to taking some action. $100k for land, $75k for a basic structure, then make improvements over time. A $200k outlay, financed for 20 years at 4% interest totals out to $1200/month. If I worked this right and offered packages that are turnkey and include DJ/lighting, I could easily see $3k-$5k per gig or $10k-$20k per month gross revs. Man, this is getting tempting.
 
rickryan.com said:
I went to a brand new wedding venue yesterday for a site survey. Nice, but not fancy. A working farm where they built out an enclosed barn that will hold about 125-150. Asked the bride how much they're paying and she says "$3500". I've been thinking about this for a while now and am getting ever closer to taking some action. $100k for land, $75k for a basic structure, then make improvements over time. A $200k outlay, financed for 20 years at 4% interest totals out to $1200/month. If I worked this right and offered packages that are turnkey and include DJ/lighting, I could easily see $3k-$5k per gig or $10k-$20k per month gross revs. Man, this is getting tempting.
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I think $75K builds a garage around here, so "basic" would be key. I would suspect that a venue built to code for 150 people will run in the $500K range with bathrooms, prep area, AC/Heat, etc. Heck, paving the parking lot is probably $50K.
 
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Insurance costs is what will kill you. If you want to serve liquor you would need to be licensed which is another big expense here but not sure what it is there. Even if it is BYOB the insurance would still be high. Agian not sure how it is where you live but then the local licenses that are needed to operate a venue are very costly at least here.
 
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Opening and operating a Venue is not as easy as you think. High Startup Costs, permits and Licenses. Don't forget the ASCAP, BMI etc Licenses, City Fire Permits, Dance Permits, Dept of Health Permits etc. Some may apply where you are and there may even be some new ones. Go to your Chamber of Commerce and if there is a local S.C.O.R.E. in your locality, they can give you free info and guidance as to what you will need. http://www.sba.gov/content/what-score

I am going though a somewhat related matter right now and I am amazed to discover how many different permits there are. Not having the right Permits and Licenses can also void the Insurance Coverage and taking such a big step means Incorporating if you want to shield your personal assets from litigation.
Here is another helpful link to get questions answered. http://www.sba.gov/local-assistance?ms=nid8199
 
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In somewhat upstate NY, you would be looking at a million or two just to get started up. You have to grease a lot of palms to get all your licenses, Liquor license alone is roughly $75,000. Then you have to pay the staff (usually union workers), insurance as mentioned, food costs, buy lots of tables and chairs, attend town meetings with your attorney at roughly $400 per hour.

Maybe you can get away with it in one of the hollers for the moment, but that will change...

I wouldn't do it unless I had about 5 mil in extra cash set aside, and it would take at least a year to get up and running.


It's far more profitable to grow weed, or make shine. ;)
 
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Personally, I would not spend over a few hundred to rent a pavilion. I've played under all types of pavilions and I hate most all of them. They allow no control of the elements (weather). No easy way to load in/out. Etc etc.
 
It's very tempting. We see the revenues, but usually don't know the costs or time commitments needed.

Thats why venues try to offer sound equipment and lights. They want to add more revenue, but don't have someone managing it.

It's not that it can't be done,but don't plan on making money for a while. Also don't plan on being able to manage the dj business AND manage the venue. You'll drive yourself crazy trying to manage both. You'll need employees, which will eat at the profits.

If you have the drive, the time, and the financial resources to be able to lose significant money for a year or two, or more, it can work. But if you are looking to add income in the near future, run very fast
 
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Rick Ryan,
This piece of advice may be surprising to you. When asked for advice on a risky venture, most friends and family will come up with all kinds of reasons why you should ditch the idea. Why? Because it is the safe thing to do. For example, you heard the bare bones facts about some of the roadblocks right here. I know you have the drive and passion to do entrepreneurial projects, that is one of the components of a successful business/venture. You can start small and then grow. Solicit the help of others who by helping you achieve your goal can make a buck or two along the way. Commercial Real Estate Brokers can lead you to good but cheap properties = savings. Buddy up with a contractor who can help you with a buildout. An auctioneer or resale shop where you can get used tables. Furniture etc. (I know some places in Houston where the Client is responsible for bringing in everything. All they get is an empty space with running water and electricity). Allow only Private Events where you won't need Music Licenses etc. Have outside caterers come in where you can charge them for use of any appliances you may have otherwise they need to rent and bring their own.

I can list a whole lot more ways you can start from scratch and replace or add each service with your own until it is all finished. Total outlay when it is all done after a couple of years will be the same but since it is spread out you won't feel it as much and won't have to be in too much debt. Talk to the people at S.C.O.R.E. It is a free resource. Those guys will mentor and guide you. They will get a big kick out of seeing you succeed. That space can be rented for all kinds of things. Workshops, Artists Showings, Small Business Training etc etc. You won't know if you can do it until you have all the answers and know what your resources are.
 
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ahoustondj said:
Rick Ryan,
This piece of advice may be surprising to you. When asked for advice on a risky venture, most friends and family will come up with all kinds of reasons why you should ditch the idea. Why? Because it is the safe thing to do. For example, you heard the bare bones facts about some of the roadblocks right here. I know you have the drive and passion to do entrepreneurial projects, that is one of the components of a successful business/venture. You can start small and then grow. Solicit the help of others who by helping you achieve your goal can make a buck or two along the way. Commercial Real Estate Brokers can lead you to good but cheap properties = savings. Buddy up with a contractor who can help you with a buildout. An auctioneer or resale shop where you can get used tables. Furniture etc. (I know some places in Houston where the Client is responsible for bringing in everything. All they get is an empty space with running water and electricity). Allow only Private Events where you won't need Music Licenses etc. Have outside caterers come in where you can charge them for use of any appliances you may have otherwise they need to rent and bring their own.

I can list a whole lot more ways you can start from scratch and replace or add each service with your own until it is all finished. Total outlay when it is all done after a couple of years will be the same but since it is spread out you won't feel it as much and won't have to be in too much debt. Talk to the people at S.C.O.R.E. It is a free resource. Those guys will mentor and guide you. They will get a big kick out of seeing you succeed. That space can be rented for all kinds of things. Workshops, Artists Showings, Small Business Training etc etc. You won't know if you can do it until you have all the answers and know what your resources are.
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Thanks Canute. This idea has been rolling around for a while now but hearing that figure, and for a barn that will only host 125-150 really hit me between the eyes. I'm thinking more of a barn structure with possible open sides at first (can close it in with plastic during cold times) then, wall it in as cash flow is stronger. My thought is to offer an all-inclusive package with venue, DJ & Lighting (give them a very small break if they want their own DJ) then add other services as time goes by. I already have good connections with great catering, photog and video people. Thanks for indulging me, fellows.
 
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rickryan.com said:
Thanks Canute. This idea has been rolling around for a while now but hearing that figure, and for a barn that will only host 125-150 really hit me between the eyes. I'm thinking more of a barn structure with possible open sides at first (can close it in with plastic during cold times) then, wall it in as cash flow is stronger. My thought is to offer an all-inclusive package with venue, DJ & Lighting (give them a very small break if they want their own DJ) then add other services as time goes by. I already have good connections with great catering, photog and video people. Thanks for indulging me, fellows.
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Are you thinking about a barn or a pavilion? I know around here and I would suspect where you are, a roof with posts and plastic walls would be a hard sell, especially if you're going up against actual barns.

We do a ton of work at our local orchard, both DJ and as friends of the owners and here's what we've found. Now this is a bit different because the barn was built in the mid 1860s. People choose the orchard for their reception because of the history, location and the fact that it's a real barn (not a roof with posts and plastic walls). By real barn I mean wood walls, the beams inside are made from Oak that was 200 years old when it was cut down and the axe marks can be seen and felt. Antique John Deere tractors to take folks around.

Basically if this new venue is an actual barn then yea, they can command that kind of price, because it's the real deal. No offense, but to even think about a venue like this, maybe you should go tour a good deal of barns that are venues.
 
DJ J Mac said:
Are you thinking about a barn or a pavilion? I know around here and I would suspect where you are, a roof with posts and plastic walls would be a hard sell, especially if you're going up against actual barns.

We do a ton of work at our local orchard, both DJ and as friends of the owners and here's what we've found. Now this is a bit different because the barn was built in the mid 1860s. People choose the orchard for their reception because of the history, location and the fact that it's a real barn (not a roof with posts and plastic walls). By real barn I mean wood walls, the beams inside are made from Oak that was 200 years old when it was cut down and the axe marks can be seen and felt. Antique John Deere tractors to take folks around.

Basically if this new venue is an actual barn then yea, they can command that kind of price, because it's the real deal. No offense, but to even think about a venue like this, maybe you should go tour a good deal of barns that are venues.
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I'm talking a real wood barn. Something like this:

traditional-garage-and-shed.jpg

There are several venues in this area that I've worked at like this. I could package it for destinations and do the full-tilt "hillbilly ambiance" and am certain I could book the crap out of it. I'm looking at 10-25 acre parcels which are no more than 30 mins outside of Nashville. The notion is to pickup the land, build the basic barn structure then eventually we'd build our private residence on the property. You may remember, we just moved this past year and got a screaming deal on the place. I think if we hold it just a few years we're looking at a 70k-100k gain. The barn could be built out as an open pavilion to start. There's a venue called Front Porch Farms that has pretty much done what I'm talking about, except they're 45 mins outside of town. In just a few years of operation they're already cranking and expanding their setup. If we could use this to fuel a move back out into a rural area (my wife and I both grew up in the sticks) it'd be perfect.

BTW, when I mentioned plastic, I'm talking clear plastic sidewalls as in a tent setup. There are several venues in the area that close their open-air structures in with clear plastic during the winter months.
 
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Your key words are barn structure, not a pavilion. Stick with that and you'll have a much better shot at booking the venue. Plastic walls just scream "hey, I'm no better than a tent."
 
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I still believe a structure like that .. even with just the supported roof .. will run $200,000.
 
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steve149 said:
I still believe a structure like that .. even with just the supported roof .. will run $200,000.
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You're probably right. I have to be honest, my first thoughts were a metal structure and I've priced those out at $60k for an un-sided pavilion. On 2nd thought, it would be miles better to build out a barn and play up the country wedding schtick. There are some venues around here who are really playing that up and fetching some high-end events in the process.
 
rickryan.com said:
You're probably right. I have to be honest, my first thoughts were a metal structure and I've priced those out at $60k for an un-sided pavilion. On 2nd thought, it would be miles better to build out a barn and play up the country wedding schtick. There are some venues around here who are really playing that up and fetching some high-end events in the process.
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I don't think anyone here is trying to dissuade you .. it may be a great idea. Just need to be pragmatic about the real costs and make the decisions on those.

Maybe there is someone (or ones) to go in together with and do it right out of the gate.
 
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steve149 said:
I don't think anyone here is trying to dissuade you .. it may be a great idea. Just need to be pragmatic about the real costs and make the decisions on those.

Maybe there is someone (or ones) to go in together with and do it right out of the gate.
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Yeah, I was taking it that way and appreciate the input. Did some googling and for pole barns it's saying $45k is average for a 1200 sq ft structure and I believe that's for a fully enclosed structure. My initial thoughts are for a 2400 sq ft structure, or about $90k, assuming the cost per foot is the same. I'm still thinking I can probably get this operational for around $200k with a first year rental fee somewhere around $2500/night. Of course, there's also the possibility of finding some acreage that already has a decent-sized barn on it. It'd be a lot cheaper to run wiring and pour a floor on an existing structure. I'd also probably immediately start putting together some non-Saturday events; school dances, concerts, etc. The possibilities are endless.
 
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