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Thread: Owner/Stripper Club Pro Forma

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    Veteran Member mark45y's Avatar
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    Default Owner/Stripper Club Pro Forma

    I am posting this so it can be critiqued. It is based on a few assumptions that are not common in the industry. 5 dollar cover, 10 dollar pvt dance, no hustle to dance since the pvt dance revenue is shared. There a lot of premises that I have not mentioned, like the corporate tax structure and financial details of the tax and legal situation. I also did not detail a big chunk of misc. But I think you can get the general idea.

    Pro forma Per Night Owner Operated SC based on 100 customers per evening.

    Each of the employees is an owner of the club. All the earnings to include Pvt dancer earnings are banked and split at the end of the month.

    Private dances and VIP are paid for at the bar and the only tipped income is what is tipped in the VIP room.

    Owner/Employees

    Ten dancers

    Two General Managers

    Two security/Assistant Mgrs.

    Two bartenders/Assistant Mgrs.

    Cover $5.00 - $500.00

    Drinks Juice [email protected] $3.00 $600.00

    VIP Room Charge $10.00 $2000.00

    Pvt Dance revenue 6 dances each custy at $10.00 - $6000.00

    Total revenue per night

    $9100.00

    Costs Per Day

    Lease $200.00

    Utilities, phone etc. $100.00

    Drinks etc. $100.00

    Insurance $50.00

    Legal fees $50.00

    Maint $20.00

    Misc $480.00

    Total costs to include DJ $1000.00

    Total income $8100.00 per night

    Divided by 16 owner/employees $506.25

    Times 5 days a week $2531.25 per week or 50 weeks per year $125,562. Per year. After taxes 70 or 80 a year.

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    Banned Katrine's Avatar
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    Default Re: Owner/Stripper Club Pro Forma

    You're initial investment and startup costs are going to drag down your EBIT even further.

    So you want to create a co-op structure? Are you really willing to accept making the same amount of money as all of your employees? Are the dancers going to be considered employees? I have never worked in a single strip club where management did not consider themselves superior to dancers and bouncers, and paid themselves accordingly. Greed takes over.

    Do you really think that the dancers are going to allow you to hold all of their earnings for a weekly paycheck? Remember, this is a fast cash business.

    How did you tabulate 100 customers per night? Have you looked at traffic for other strip clubs in the area where you plan to start?

    Also, your maintenance, legal, and insurance cost projections are on the low side.

    Nice start, but you have much work to do. If you want to send me your proforma in excel format, I can play with the numbers a bit more and add some accounting detail that you need to consider.

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    Default Re: Owner/Stripper Club Pro Forma

    There's also the issue of dictating an equal share of VIP room profits to all dancers. This in effect would serve as a dis-incentive for very beautiful hard hustling dancers (just the kind of girls needed to build a reputation for your club), and also provide an unwarranted subsidy for less beautiful less motivated dancers. Given the Independent Contractor history of upscale dance clubs, and the fact that many of the very beautiful hard hustling dancers are capable of earning significantly more than $500 a night in clubs with a different business model, and given the fact that your own business model could fall apart if all 10 of your dancers wind up being mediocre in appearance and unmotivated in regard to hustling private dances, I would seriously reconsider your equal share proposal.

    As an alternative I would propose that you be satisfied with the $10 a dance or 50% club share of the VIP/private dance revenue towards the equal share pool, and that you allow individual dancers to directly keep the other $10 a dance or 50% as a "sales commission" i.e. $60 per night the average. However, for the very beautiful hard hustling dancers who are selling 2 or 3 times the average number of dances, their extra customer appeal and resulting extra revenue contribution will be financially rewarded to some degree.

    Yes this would also mean that bouncers and bartenders would receive on the average $60 less per night than dancers do, however when you consider the relative contributions of dancers, bouncers and bartenders to overall club revenues, and the relative earnings potential of dancers, bouncers and bartenders under your business model versus clubs with a more conventional business model, dancers being able to earn more money than bouncers or bartenders is clearly justified. This would not apply however if you plan to hire an ex-penthouse pet as the bartender and an ex WWE diva as the bouncer, as they would then be actively contributing to the club's image thus customer appeal thus revenue !

    I would also comment based on experience that in a one shift 10 dancer 100 customer a night club that the actual need for two managers plus two bouncers plus two bartenders is probably not justified either.
    Last edited by Melonie; 02-15-2005 at 03:35 PM.

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    Veteran Member mark45y's Avatar
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    Default Re: Owner/Stripper Club Pro Forma

    I wrote a text on Hospitality management a few years ago (actually 20 years ago) when I was teaching. The first chapter was entitled treat your dishwasher well. I paid my dishwashers 4 dollars more than any other restaurant in town. I bought their meals and provided uniforms, health insurance and no skid shoes. I could explain the whole process but for those who know if the dishwasher is unhappy or not there the whole restaurant goes to hell. Kind of the same thing for dancers. The dancers are the club. The dancers are the heart and soul of the business. The dancers are the primitives and modern reason men even choose to exist at all. I would have given up my life, my business and all the things that I own or hold dear if it were not for a woman, be that woman dancer, mother, lover or whatever.

    Personally I don’t think of myself as superior to my employees now. I do some different things than my employees do. I do some brainwork and they do some muscle work. It is all work. Besides, I can teach someone to be a manager, great dancers are born. Experience and training help but there has to be some innate thing in a dancers soul that makes them super alluring. So, to answer a question, I think the dancers should make more than the managers or bouncers or bartenders. They have to work harder, think more and in general should get paid more.

    Do you really think dancers will allow you to hold earnings for a week? Yes I do. The reason I do is because all the dancers will be equal business partners in the venture. This is not a fly by night illegal operation. It is a sound legal business venture. All the money would be held in an escrow account until disbursement at the end of the week. I.e. no one else except the specific dancer would be able to draw on that account.

    The hundred customers a night was in the lower 25% of the clubs that I surveyed in the area.

    The legal fee of $50.00 per day is a retainer. The other legal contingency fees are in Misc.

    The initial cost of buying an existing club is in the 2 million range. The cost of opening a club in a building not currently used for entertainment is around $200,000.00. Yes I am aware of the zoning and use permits necessary. There is a way around these things.
    Last edited by mark45y; 02-15-2005 at 03:43 PM. Reason: spelling

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    Default Re: Owner/Stripper Club Pro Forma

    Melonie and Kat, you work your tails off, and I'll slack a bit and be happy when your extra revenue is redistributed to subsidize my check.

    What is meant by "no hustle"? No one's going to try to persuade customers to buy? Or an ambiance devoid of high pressure tactics?

    Are there no waitresses?

    I'm forced to dance five days a week? (If so, Kat & Melonie, get busy, I need to pace myself on my days four and five. )

    Are you going to be open five, six or seven days a week with that staff level?

    I'm thinking $10 a dance is too low and diminishes the perceived value of the service. Besides, my back and feet are hurting just thinking about that price.

    -Ev

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    Default Re: Owner/Stripper Club Pro Forma

    I'm thinking $10 a dance is too low and diminishes the perceived value of the service. Besides, my back and feet are hurting just thinking about that price
    Actually, if you read between the lines, I believe the actual cost to the customer for a private dance would be $20. Of that $20, $10 would go to the club as a 'VIP room charge' and the other $10 would go to the shared revenue pool as the actual cost of the private dance. Mark wasn't exactly clear as to how this two part charge would apply in situations where the same customer wished to buy several private dances in a row. Would each additional private dance carry another $10 VIP room charge i.e. 3 dances cost the customer $60, or would the $10 VIP room charge only factor in for the first dance sold i.e. 3 dances cost the customer $40 ? Mark's 'Preparation H' pro-forma numbers would tend to indicate the latter.

    I'm forced to dance five days a week? (If so, Kat & Melonie, get busy, I need to pace myself on my days four and five. )

    Are you going to be open five, six or seven days a week with that staff level?
    This broaches upon an entirely new subject area i.e. how to deal with the fact that clubs usually have differing numbers of customers versus particular night of the week, and the fact that very beautiful hard hustling dancers usually won't/can't sign on for a 40 hour punch the clock style time and energy commitment. For a practical business model, a variable dancing staff level versus particular night of the week, and some sort of hours worked based proportional profit sharing plan would need to be devised. This would also be problematic if ALL shared earnings and private dance 'commission' payments were made only once per week. In the way of a practical business model, most dancers would tolerate their shared earnings being held and paid out weekly as long as they received their private dance 'commission' payments on a nightly basis.

    Melonie and Kat, you work your tails off, and I'll slack a bit and be happy when your extra revenue is redistributed to subsidize my check.
    I know that you're joking, but for a fact I have worked in a few clubs where dancers received base pay plus tip sharing plus a small percentage commission on private dances sold. In the dressing room you would always hear the very beautiful hard hustling girls bitching about busting their asses on the floor with customers and in the private dance room while some other (average looking, out of shape) dancers were content to sit at the bar and do nothing except eat pizza, talk with each other, and collect their checks and shared tips. If I stuck around for more than a few days, some of the very beautiful hard hustling girls were usually gone (i.e. moved on to greener pastures) before I was ! If it weren't for a constant influx of new (and uninformed) very beautiful hard hustling out of town dancers, the club would have degenerated into a bargain basement earnings potential 'neighborhood' club where all of the girls were less than stunning, less than motivated, and more than their ideal weight. However, in today's connected world with strip club BBS's and club review websites, very beautiful hard hustling out of town dancers are seldom as uninformed in regard to a 'new' club earnings potential and business conditions as they would have been several years ago !
    Last edited by Melonie; 02-15-2005 at 04:16 PM.

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    Default Re: Owner/Stripper Club Pro Forma

    Reply to Melonie.

    Quote "There's also the issue of dictating an equal share of VIP room profits to all dancers. This in effect would serve as a dis-incentive for very beautiful hard hustling dancers (just the kind of girls needed to build a reputation for your club), and also provide an unwarranted subsidy for less beautiful less motivated dancers. Given the Independent Contractor history of upscale dance clubs, and the fact that many of the very beautiful hard hustling dancers are capable of earning significantly more than $500 a night in clubs with a different business model, and given the fact that your own business model could fall apart if all 10 of your dancers wind up being mediocre in appearance and unmotivated in regard to hustling private dances, I would seriously reconsider your equal share proposal."

    This is a fascinating topic and one I have given much thought to. 1. There is the tip incentive while giving the private dance. 2. There is the hiring process. 3. A core group of three or four dancers/managers will do the hiring. 4. There are stage dancers and private dancers, both are important to the ambiance of the club. It is a judgement call as to the importance. 5. I would suggest a committee meeting monthly to evaluate dancers and advise each one as to the feelings of the others. 6. Also I think one has to realize that this venture is a model. Everyone who works in it will become a mentor of other clubs opened along the same lines. I would envision 10 clubs in ten years. I think the employee/owners will recognize this and try a little harder.

    Quote, "As an alternative I would propose that you be satisfied with the $10 a dance or 50% club share of the VIP/private dance revenue towards the equal share pool, and that you allow individual dancers to directly keep the other $10 a dance or 50% as a "sales commission" i.e. $60 per night the average. However, for the very beautiful hard hustling dancers who are selling 2 or 3 times the average number of dances, their extra customer appeal and resulting extra revenue contribution will be financially rewarded to some degree."

    I would not have a problem with the above idea. Although I suggested the dance price was $10.00 per dance.

    Quote "I would also comment based on experience that in a one shift 10 dancer 100 customer a night club that the actual need for two managers plus two bouncers plus two bartenders is probably not justified either"

    The total number of managers, bouncers and bartenders takes into consideration a five-day workweek for everyone and two week vacations.

    Last edited by mark45y; 02-15-2005 at 04:20 PM. Reason: font

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    Default Re: Owner/Stripper Club Pro Forma

    Reply to Evan,

    No hustle policy.

    At $10.00 per dance I would not envision the dancers having to hustle. I would think the custys would line up wanting dances.

    No waitresses?

    No waitresses, the custy’s get the drinks at the bar or bars or the managers or bouncers or dancers not dancing get the drinks. WTF is a manager supposed to do all night anyway? Walk around and look important or scary? I own a restaurant and every night I cook food, wait tables and wash dishes. So? I should stop doing this? I can’t dance so I might as well serve drinks.

    The ten dollars a dance price will get the dancers the highest net profit based on the curve of diminishing returns statistically in the Tampa market. That is the old economic model of burgers priced from one cent to 100 dollars. If anyone would like to see the math I have done it but it is boring.

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    Default Re: Owner/Stripper Club Pro Forma

    There is the tip incentive while giving the private dance
    Well, in a way, that's what I'm afraid of. When you limit a dancer's ability to earn money by collecting and redistributing a significant part of her private dance sales, leaving VIP room tips as her only 100% retained earnings, you are creating a very big incentive for dancers to do things in the VIP rooms which will result in MAJOR tips. Yes I'm talking about HJ's BJ's etc. Given that you have now stated that you are located in Tampa there is ample precedent to support this conclusion !

    I would not have a problem with the above idea. Although I suggested the dance price was $10.00 per dance.
    The way I read your pro-forma it appeared that the actual private dance price to the customer was $20, consisting of a $10 charge for use of the VIP room plus a $10 charge for the private dance itself. It wasn't clear whether or not the same customer buying consecutive private dances would result in additional VIP room charges versus only additional private dance charges. There is also ample precedent in such cities as Toronto where a 'private dance war' reduced the going price for private dances to $10. This promptly chased the most beautiful hardest hustling dancers to greener pastures because, no arrogance intended, the amount of effort required to peddle private dances in large quantities in order to achieve an 'acceptable' dancer earnings level simply wasn't justified compared to opportunities at clubs in other cities. Among the dancers who remained, many quickly resorted to 'extraordinary means' in order to increase VIP room tip earnings i.e. HJ's & BJ's (after all Toronto was never known for strict laws or strict law enforcement).

    No waitresses?
    I suggest you take a lesson from 'Coyote Ugly' - beautiful waitresses in sexy costumes who can also mix drinks attract lots more customers (and thus generate more revenue) than male bartenders.
    Last edited by Melonie; 02-15-2005 at 04:39 PM.

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    Default Re: Owner/Stripper Club Pro Forma

    Quote, Actually, if you read between the lines, I believe the actual cost to the customer for a private dance would be $20. Of that $20, $10 would go to the club as a 'VIP room charge' and the other $10 would go to the shared revenue pool as the actual cost of the private dance. Mark wasn't exactly clear as to how this two-part charge would apply in situations where the same customer wished to buy several private dances in a row. Would each additional private dance carry another $10 VIP room charge i.e. 3 dances cost the customer $60, or would the $10 VIP room charge only factor in for the first dance sold i.e. 3 dances cost the customer $40? Mark's 'Preparation H' pro-forma numbers would tend to indicate the latter.

    Answer $10. To get into the VIP room and enjoy as many dances as he can handle at 10 dollars per dance but not another $10 VIP cover.

    So for 3 dances the total custy charge without tip would be $40.00.

    Quote “This broaches upon an entirely new subject area i.e. how to deal with the fact that clubs usually have differing numbers of customers versus particular night of the week, and the fact that very beautiful hard hustling dancers usually won't/can't sign on for a 40 hour punch the clock style time and energy commitment. For a practical business model, a variable dancing staff level versus particular night of the week, and some sort of hours worked based proportional profit sharing plan would need to be devised. This would also be problematic if ALL shared earnings and private dance 'commission' payments were made only once per week. In the way of a practical business model, most dancers would tolerate their shared earnings being held and paid out weekly as long as they received their private dance 'commission' payments on a nightly basis.”

    Suggestion: After it became obvious which days and which shifts were more lucrative it would be easy to assign a number value to each shift from good to bad and then split up the shifts so each dancer worked a particular numerical average i.e. 3 good 1 med and 1 bad or 2 good and 3 med and so on.

    The reason I don’t like paying commissions on a nightly basis is the paperwork hassle every night and the fact that it is hard to work a profit and loss statement daily. Weekly is no problem.

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    Default Re: Owner/Stripper Club Pro Forma

    Quote, “I suggest you take a lesson from 'Coyote Ugly' - beautiful waitresses in sexy costumes who can also mix drinks attract lots more customers (and thus generate more revenue) than male bartenders.”

    Answer, I agree but I envision this operation to be juice bar. The reason is the problems with obtaining and keeping a liquor license. With a juice bar the bartender becomes less important and less active than liquor bar. Plus I don’t like drunken customers or employees.

    Quote “'acceptable' dancer earnings level simply wasn't justified compared to opportunities at clubs in other cities”

    Answer, Acceptable dancer earnings in my mind are $120,000.00 per year gross. I know more is possible I have done the math and done the scouting. According to my estimates there are 35 dancers in Tampa making $200.000.00 per year plus. So I know what is possible. The difference is, in my pro forma; everyone in the club makes at least $120,000.00. I think it is better for the long term to have 10 good performers rather than 2 superstars and 8 also rans.

    I appreciate and understand your concern about extras from a loss of cash standpoint and from a legal standpoint. I have a sure fire, tried and true, 100% effective solution for that but I am hesitant to share that at this point in time and in print. I am sure you can understand my feelings on the issue.

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    Default Re: Owner/Stripper Club Pro Forma

    Mark,
    I appreciate you sharing your business model with the site, as an MBA with her own business, I am enoying playing with your projections. Unfortunately, as a veteran dancer, I know that you would want girls like me working for you, ie good looking and hard working. Sadly, I would not work for a club with a socialistic earnings model for the reasons Melonie described above.

    Also, if the dancer only gets $10 per dance on the floor OR in VIP, what is her incentive to go to VIP where it is more private and the customers are very likely to be grabby and pressure for extras. Sober customers are equal perpetrators in this act.

    Perhaps this model would be better applied to another industry.

    PS-I've been the dishwasher and I want to thank you for your practice of paying well........

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    Default Re: Owner/Stripper Club Pro Forma

    Katrine,

    You are right about a lot of things and I appreciate your expertise with the MBA and all. I must admit I don’t have an MBA. I have a BS in Econ and a Masters in Education from Michigan State University. So, no MBA here.

    You are right about I would not want you working with me. I like the beautiful and hard working part but I really am not looking for dancers with MBA’s.

    My hackles rose a little when you refer to my model as socialistic. There are numerous examples of employee owned corporations in the US.

    The following is the Employee Ownership Act of 2001'

    To amend the Internal Revenue Code of 1986 to provide incentives for the ownership and control of corporations by employees.
    IN THE HOUSE OF REPRESENTATIVES

    June 28, 2001
    Mr. ROHRABACHER (for himself, Mrs. BONO, Ms. MCKINNEY, Mr. CALVERT, Mr. EVANS, Mr. WELDON of Florida, Mr. PAUL, Ms. HART, Mr. COX, Mr. HORN, Mr. CONDIT, Ms. KAPTUR, Mr. ROYCE, Mr. SOUDER, and Mr. SANDERS) introduced the following bill; which was referred to the Committee on Ways and Means

    A BILL
    To amend the Internal Revenue Code of 1986 to provide incentives for the ownership and control of corporations by employees.

    Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

    SECTION 1. SHORT TITLE.

    This Act may be cited as the `Employee Ownership Act of 2001'.

    SEC. 2. OWNERSHIP POLICY FOR THE UNITED STATES.

    (a) FINDINGS- The Congress finds that--

    (1) there is considerable evidence that employee-owned and employee-controlled corporations are more productive and provide more wealth to their employees than corporations not so owned, and

    (2) the workplace experience of employee-owned and employee-controlled corporations is proven to foster greater appreciation of the economic system of the United States that relies on ownership of private property and capitalism.

    (b) POLICY- It is the policy of the United States that by the year 2010, 30 percent of all United States corporations are owned and controlled by employees of the corporations.

    I think there is a healthy precedent of employee owned companies in the US and I am all for furthering that movement. I think our corporate leadership especially of late has failed miserably to conduct business ethically.

    Lets examine a little more closely what you call my lack of incentives in table dancing.
    1. No floor dancing.

    2. Dancing only on the stage or in a private VIP area.

    3. Note that I said that the $10.00 fee for the VIP area and the $10.00 dance fee goes to the house to be split up at the end of the week.

    Your question What incentive would a dancer have to go to a VIP room and get groped if the dances were only $10.00 per dance.

    I know the answer but I would like some dancer input as well.

    Here is the scene in club A (not an employee owned club) Dancer takes a new (notice I did not say a regular customer) custy in VIP room, pays the door 10 and custy pays the dancer 50 for three dances. Lets be real here or at least real in Florida. Custy gets a high contact dance grinding without any extra money changing hands and gives the dancer a $50.00 tip. Total dancer take 100 for 3 dances.

    Club B (employee owned) Dancer takes customer in VIP room pays the door 10 and the dancer 50 for five dances and gives the dancer 50 dollar tip. Total dancer take 100 for 5 dances.

    Here is where the curve of diminishing returns comes into play.

    A. At five dollars a dance every customer gets 5 dances & 50 tip

    B. At ten dollars every customer gets 5 dances & 50 tip.

    C. At twenty dollars every customer gets 2 dances & 50 tip.

    D. At thirty dollars every customer gets 1 dance & 50 tip.

    (there is a lot more meaningful communication going on with five dances than with 3 as a little of the time pressure is off and the tips are usually better)

    Yes I have tested this formula and it seems to work.

    So from an owner standpoint where do you want to be?

    Given the 100 customers.

    A. produces 75 dollars

    B. produces 100 dollar

    C. produces 90 dollars

    D. produces 80 dollars

    Your next question about incentives for private dancing why would one dancer hustle and the others not hustle?

    Pretty simple answer. If you don’t hustle you get fired!!!!!

    The hard working dancers who want the most money at the end of the week fire the dancers that sit on their ass and eat pizza. Trust me this is easy to determine, you look for the tomato sauce stains on the pasties.

    I was first exposed to this concept by tip sharing waiters and waitresses. They had a committee who fired anyone who was not pulling their weight. Sometimes personalities came into it but not as much as one might expect.

    Remember it is my goal to maximize profit for all employees including myself. I am not going to let anyone work who is not pulling their weight and the dancers have always backed me in the other establishments that I have tried this in.

    As a general statement I really appreciate the input. I am going to sell this idea to 10 dancers and open a club very much like the one I am describing. The objections you are raising are all valid ones and cause me to define my position on all of them. Also I may have to change my mind about the private dance payout and do that nightly to assuage the fears of good dancers who have all brought up objections like yours in the above post.

    The only problem with doing that is it cuts the pay of the non dancing employees and there would have to be some kind of sliding percentage scale for wages of managers to bring them up to the dancers pay.

    It was my hope to pay everyone equally to cut down on the paperwork and there are some legal issues that make profit sharing work better if there is an even split.

    Again thank you for disagreeing with me.




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    Default Re: Owner/Stripper Club Pro Forma

    1. You would not accept a dancer with an MBA? I believe that is called discrimination. Besides, I never tell any club I work for that I have an MBA anyway, but that is irrelevant. Almost all of the dancers I have become friends with in 7 years have a degree and/or a speciality that is not stripping, such dog training, professional ballet dancer, etc.. Would you not hire these girls either? Please explain.

    2. Ok, cooperative would have been a better description for your company rather than "socialistic." I've looked at the Lusty Lady's model before. It would work well for you if exotic dancing was considered a respectable profession with a long-term earnings future. However, dancers are limited in how long we can dance do to physical constraints, so 99% of dancers are in it for immediate profit maximization. As well, we like to be independant contractors so that we can keep our cash and come and go as we please. Believe me, you do want to hire dancers such as myself, educated or not. If you don't the place will just end up becoming a hang out joint with few sales. Customers these days are jaded and used to letting the dancer do all of the sales pitching.

    BTW, what level of contact do you plan to allow? I know that in Tampa the contact is high and the dancers are VERY aggressive. That is going to be the pool that you choose from.

    3. There is NO way you can assume that the average customer is going to leave a $50 tip for 1-5 dances. This changes with the region, but most customers do not tip. I know that tipping is more common in Florida and the East coast, but your tip projections are unreasonably high.

    4. Finally, you only plan to hire 10 dancers total? And you will be open during the day? So how many dancers do you plan on having per shift? What happens if a couple of dancers are ill or can't find childcare, you might lose half of your staff in a night? How do you plan to overcome this obstacle?

    "Have you ever been to American wedding? Where is the vodka, where's marinated herring?" - GB
    "And do the cats give a shit? No, they do not. Why? Because they're cats."-from The Onion

    Quote Originally Posted by Mia M
    If a cupcake was tossed at me... well, I'd only be upset if it missed my mouth

  15. #15
    tampafldancer
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    Default Re: Owner/Stripper Club Pro Forma

    Yea, i wouldnt work for you either.. (NOT THAT YOU WANT ME, LMFAO)

    just because there is no incentive to hussle... I couldnt put more in to get more.. you know!

  16. #16
    Banned Katrine's Avatar
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    Default Re: Owner/Stripper Club Pro Forma

    Also, do the dancers get to keep their stage tips, or does that go into the pot as well? Some dancer put on a much better show than others and will get tipped more.

    "Have you ever been to American wedding? Where is the vodka, where's marinated herring?" - GB
    "And do the cats give a shit? No, they do not. Why? Because they're cats."-from The Onion

    Quote Originally Posted by Mia M
    If a cupcake was tossed at me... well, I'd only be upset if it missed my mouth

  17. #17
    Banned Melonie's Avatar
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    Default Re: Owner/Stripper Club Pro Forma

    Given the 100 customers.

    A. produces 75 dollars

    B. produces 100 dollar

    C. produces 90 dollars

    D. produces 80 dollars
    From the dancer's point of view comparing B. and C., performing more than twice as much hard physical labor produces 10% extra income !

    No offense intended, but the more one considers the nuances of this proposed business model the more it resembles WalMart, attempting to sell high volumes at low prices to customers and expecting the 'employees' that are actually working 'in the trenches' to perform a large amount of physical work for a comparatively low amount of "guaranteed" pay.

  18. #18
    Featured Member GnBeret's Avatar
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    Default Re: Owner/Stripper Club Pro Forma

    Considering the turnover rate of the dancers and the nature of the legal rights of ownership, the "all dancers are owners" concept is a prescription for disaster... regardless of how much time and money you're willing to pour into legal fees in an attempt to construct the only kind of operating agreement that would give you a realistic chance at succeeding, i.e., the lengthy, complicated and expensive-to-prepare kind, I suspect you'll soon find yourself being eaten alive by your legal, accounting, and administrative overhead costs... and that's before you get hit with what will likely be the first of many lawsuits by disgruntled and/or former dancers who, thanks to their co-owner status, now enjoy X-times the number of possible causes of action that can be brought against you than they had before.
    "That's your answer Old Man? I guess you're a Hard Case too...."
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  19. #19
    Banned Melonie's Avatar
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    Default Re: Owner/Stripper Club Pro Forma

    To really try and glean some insight into PROFITABLE strip clubs, you really need to abandon the 'piece work employee' mindset and adopt a business model more like the NBA or NFL.

    - like pro sports players, dancers are interested in maximizing their earnings potential within a short time window
    - like pro sports players, dancers realize that this business is a 'young girl's game', with few continuing past age 30 and with many dropping out of dancing at age 25 or younger
    - like pro sports players, most dancers realize that life after dancing (i.e. beyond age 25 or 30) does not want to include a continuing linkage to the business
    - like pro sports players, dancers expect pay rates in the 'major leagues' to be significantly higher than pay rates in the 'minor leagues'
    - like pro sports players, dancers with extraordinary attributes/talent/customer appeal expect to be paid proportionately, not at the same rate as 2nd or 3rd string players or the team trainer or the water boy.

    Green Beret, I don't think he'll have to worry much about potential lawsuits, because bringing lawsuits implies the existance of profits. I truly feel that this business model he has proposed will quickly descend to the lowest common denominator i.e. a club staffed with unmotivated 3rd string dancers, with ensuing effects on profitability.

  20. #20
    Veteran Member mark45y's Avatar
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    Default Re: Owner/Stripper Club Pro Forma

    Response to GNBeret,

    I worked most of my life in Full service fine dining restaurants and hotels as a general manager and food and beverage director. After ten years of that I decided to become a fast food franchisee and entered into a partnership with two other individuals and we built and operated 10 Wendy’s restaurants. We did well and one of the Wendys we built was in an unusual location that by far surpassed all of our expectations for sales and profit. There was a large steakhouse also located in that area that was owned by Golden Corral and I acquired an interest in it under the Golden Corral Partner/Manager program.

    The Golden Corral partner manager program was an offshoot of the Sambo’s fraction of the action program. There were legal problems with the SEC in Sambo’s case. There is also a wealth of things to be learned from a number of restaurant chains that pay their managers and assistant managers in excess of 100,000 per year under partner manager arrangements.

    As a result of my experiences with Golden Corral and Wendy’s I was hired to design a program for another restaurant chain that was implementing an owner/manager concept.

    I am quite familiar with structuring a situation where the employees are the owners of the company and have had no legal problems with the concept.

    Turnover rate of dancers? That is a giant issue and I am glad you brought it up.

    The turnover rate of the average hospitality employee (to include dancers) is around 200% a year.

    The turnover rate of companies that include a manager/owner concept is less than 25% a year.

    Hiring is crucial to make an employee/owner concept work.

    There are certain keys to hiring hospitality employees that can give one a leg up on finding dependable long-term employees. But having hired them it is also imperative to provide a working environment that will retain them.

    It has been my experience that in most restaurants and clubs that the management is the major factor in employee turnover.

    Reading the posts on this board I think it is safe to assume that about 90% of the posters think the management of the clubs they work for is lacking in one or more major areas.

    I feel confident that an employee owned operation with everyone having an equal financial stake in the business is key to eliminating employee turnover.
    Last edited by mark45y; 02-16-2005 at 09:14 AM. Reason: type size

  21. #21
    Veteran Member mark45y's Avatar
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    Default Re: Owner/Stripper Club Pro Forma

    Response to Melonie,

    Maximizing earning is the short term, say 10 years.

    A little story if you will bear with me for a bit.

    I arrived in New Orleans for a vacation shortly after I had graduated from college. I wanted to dine at Brennan’s there but at the time there was a two-week wait for a reservation.

    Not to be denied the experience I went to the back door and applied for a job as a bus boy.

    I got the job and also got employee meals free and managed to also learn about how they cooked their specialties and actually bought a few every night for my culinary pleasure.

    What impressed me at the time was how the operation worked because it was different from any restaurant I had experienced before. (It is an old concept but not used much in American restaurants).

    Each waiter owned his station. The waiters bought the food from a cashier that was located at the ,kitchen/dining room, door before they entered the floor of the dining room. The restaurant had no cash contact with the customers that was a waiter function.

    Also each waiter purchased his station and sold it when he left.

    For example a waiter would pay 10,000 for a station in 1950 and sell it for 20,000 in 1960.

    Each of the employee/owners of my proposed club would be able to sell their interest in the operation upon leaving. The minimum price would be determined by contract at the beginning of the employment and the actual money received would depend on that figure and what the market was like when they actually sold.

    In addition there would be options for all employees to purchase an interest in any future operations. The first club being 100% owner operated the second 90% and so on. The rational behind this is: it will be easier to sell the second club to employees because of the track record of the first and the employees of the first club should be rewarded for taking a chance on a new concept.

    As far as looking at successful clubs to model an operation on or to glean insight for profitability I have tried that.

    The most successful club I looked at in detail was "Rick’s Cabaret International". I looked at Rick’s because I they have financials readily available and from personal and inside experience I believe they are well managed or at least were when I was looking.

    I found it interesting to look at their financials. But they are too big for me to copy operating systems and club décor and locations.
    Last edited by mark45y; 02-16-2005 at 10:29 AM. Reason: font

  22. #22
    Banned Melonie's Avatar
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    Default Re: Owner/Stripper Club Pro Forma

    Turnover rate of dancers? That is a giant issue and I am glad you brought it up.

    The turnover rate of the average hospitality employee (to include dancers) is around 200% a year.

    The turnover rate of companies that include a manager/owner concept is less than 25% a year.
    keep in mind that strip club customers WANT a high dancer turnover rate ... i.e. 'fresh meat' , or to use your food industry example 'new items on the menu' !

    Also, at a strategic level, club management will also want a reasonably high dancer turnover rate to avoid developing an ever increasing percentage of complacent dancers who continue to get older and wider !

    In all of your food industry related examples, the FOOD is the product which attracts the customers, and the service employees are an adjunct. However, in the exotic dancing industry, the dancers themselves are the 'product', with bouncers, bartenders etc. as an adjunct.
    Last edited by Melonie; 02-16-2005 at 10:34 AM.

  23. #23
    Featured Member amylynnej's Avatar
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    Default Re: Owner/Stripper Club Pro Forma

    dancers bring the money and customers in. the cocktailers and bartenders are there to serve, nothing more and Ive done both of those when Ive taken breaks from the stage. The only person worthy of being on the dancers level is a great not even average DJ.

    Its our world why would we want to let anyone in on our tips and revenue.
    AmyLynne

  24. #24
    Veteran Member mark45y's Avatar
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    Default Re: Owner/Stripper Club Pro Forma

    Quote "keep in mind that strip club customers WANT a high dancer turnover rate ... i.e. 'fresh meat' , or to use your food industry example 'new items on the menu' !

    Also, at a strategic level, club management will also want a reasonably high dancer turnover rate to avoid developing an ever increasing percentage of complacent dancers who continue to get older and wider !"

    I have a couple of answers 1. My ex wife worked for a plastic surgeon. He is an excellent board certified plastic surgeon. He maintained a little at a time each year would keep you looking great forever. Which is what my ex wife did and this year she married Mr. Nice guy, who also happens to own half of the county where I live.
    1. I think a lot of dancers would maintain that one can dance effectively after 25.
    2. I think the name of the game for long term customers (within reason) is establishing some kind of relationship while in the club.
    Last edited by mark45y; 02-16-2005 at 12:00 PM. Reason: font

  25. #25
    Veteran Member mark45y's Avatar
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    Default Re: Owner/Stripper Club Pro Forma

    Response to Amylyn,

    Your question why would you share your tips with cw and bartenders etc.

    Answer. Without them you can’t function, like a dishwasher to a manager.
    1. A motivated loyal server, cw or bartender or bouncer is worth his or her weight in gold.
    2. At a good club with high tip out they are making almost as much as the average dancer anyway, might as well get them on board to help row the boat.

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