Psychologists say that man is a creature with a huge inner world. Everyone is born with a lot of talent. Unfortunately, due to character or complexes, not everyone is able to pull their “I” out, to discover, for example, vocal abilities. But at least once in their life, everyone imagined themselves to be a real star on the world stage. Besides having fun, karaoke bar is a fairly profitable enterprise. It will be possible to turn a hobby into income by drawing up a business plan for a karaoke bar.
Choosing a room for a karaoke bar
The very first difficulty when opening your own karaoke bar is finding suitable premises. Moreover, it is “suitable” in many respects. First of all, this is the size of the room. A more or less normal bar can be opened on an area of 100 m2 and no less. The second important point is the acoustic capabilities of the room, how the music will sound in the establishment. The third criterion is the location of the bar. It is better if it is a busy area of the city, where a lot of young people hang out and there is good parking for cars. Sleeping areas are not very good places in this regard. Although the rent here is much lower.
There are not many places in cities that meet these criteria, and those that exist will be expensive. Rent of one square meter in “popular places” starts from 700 rubles. That is, a room with an area of 200 m2 will cost 140 - 200 thousand rubles monthly just for rent. But don’t be afraid - competent business organization more than pays for all costs.
Marketing plan
Karaoke bar promotion plan
If you open in the city center, then people will know about you, all you need is a bright sign and loud music from the hall. However, it wouldn’t hurt to further advertise your services to townspeople.
What kind of advertising is suitable for a karaoke bar:
- Distributing leaflets near the bar on the eve of the club's opening and in the first month of operation. Costs – from RUB 3,000 for 2,000 pieces.
- Advertising on city information sites or in print media - from RUB 15,000 for 1 month of publications.
- A good PR move is constant discounts for frequent guests, gifts for the best performers (for example, a bottle of champagne), holding bachelor parties, hen parties, etc.
For the whole city to know about you, it is enough to hold several noisy and fun parties and lure customers with affordable prices for alcohol and food. Soon, rumors about a cool new place to relax will spread throughout the city, and then there will be no end to customers.
Creation of an advertising campaign for the direction of banquets
If you haven’t read it yet, be sure to read the article on how to attract clients to a corporate event. Now let's see what an ad looks like for those looking for a banquet hall. Here we also make sure to include the keyword in the title. But be sure to indicate in the text that this is a karaoke bar and write an attractive offer
Depending on the request, the corresponding ad will be shown. The hottest clients come from search advertising. Next, let’s look at advertising on thematic websites; it allows you to show an offer to those who are likely to be interested in visiting a karaoke establishment.
Advertising a karaoke bar on thematic websites
For thematic advertising, ads in Google Display Network and YAN are configured. The same list of keywords was used to select sites. But in order to eliminate useless garbage crossings as much as possible, we make sure to carry out preparatory actions.
- Excluding the list of non-recommended sites
- Disable impressions in mobile applications
- Let's exclude YouTube. We will create a separate advertising campaign for it.
After a trial run, we look at the statistics and clean up sites that are not suitable for us.
Advertisement for a karaoke restaurant on YouTube
If you just set the YouTube site in the placements, there will be a lot of non-targeted transitions. Therefore, you need to clarify and narrow the audience. Advertising campaigns were created for two target audience segments
- Advertising on the voice channel
- Advertising on YouTube for those. who is nocturnal
For both advertising campaigns, we take an audience over 18 years old; to do this, we exclude impressions if the age is unknown and set it to over 18 years old.
Recommendations for advertising and promotion
In order for the return on investment to occur faster, it is necessary to advertise the establishment. To do this, use various tools: Internet marketing, outdoor advertising, media, “guerrilla marketing,” etc. The specific algorithm of actions depends on your financial capabilities and the characteristics of the locality. Where to begin:
- Place outdoor advertising (billboards, posters, etc.) about the imminent opening of a new establishment. It should be as bright and intriguing as possible;
- Actively promote your business on social networks - create a community in which sweepstakes will take place;
- Offer clients a discount or some kind of bonus (for example, a free cocktail) for joining the group;
- Give access to write reviews on popular services (Flamp, Reviewer, etc.). This will increase the credibility of your project. Don’t be afraid of criticism, respond to it promptly. Do not order paid laudatory reviews - they will create the opposite effect;
- Use audio and outdoor advertising in crowded places (entertainment complexes, business centers, etc.).
Minimalism in advertising is also effective. The main thing is to convey the necessary information to the reader.
It is better not to engage in advertising yourself - this will most likely lead to waste. A rational option is to hire a marketer. For a relatively small salary (40-50 rubles), he will optimize costs and achieve maximum returns.
How much money do you need to open a karaoke bar?
Next, we should mention the start-up costs, which depend on a number of factors, including: the size of the premises, its condition, the format of the establishment, and the cost of purchased equipment. In any case, it will not be possible to meet the amount of less than 800 - 1100 thousand rubles. Otherwise, the savings can dramatically hit the reputation of the newly opened bar.
The main part of the costs is the design and arrangement of the establishment. The business owner will have to decide a number of important issues: where the bar and bar counters will be located, where the karaoke room and VIP karaoke room, hookah lounge, dance floor and stage will be located. In addition, you should correctly arrange the seats around the hall and create a convenient wardrobe. You will have to invest heavily in furniture and sound equipment.
Approximate layout of a karaoke bar
Registration process
Where to start a business? Naturally, with paperwork. To do this, you will have to contact the tax service and submit an application to create an individual entrepreneur, joint-stock company or LLC. The first form is convenient only if you do not intend to sell alcohol and limit yourself to a small premises. But without selling alcoholic beverages, a karaoke club has almost no chance of success.
A more correct form of organization is considered to be JSC or LLC. At the same time, you can divide the starting investments among several people who will become co-founders. So, it will be easier to open a good and interesting establishment that will soon pay for itself and begin to generate high profits.
The OKVED activity code is indicated as follows:
- 40 – for bar work.
- 30 – restaurants and cafes, which also include a karaoke bar, which serves various snacks and desserts.
- 29 – responsible for the entertainment program and recreation of visitors.
Since the establishment will operate as a restaurant business and various drinks and food will be served to customers, the sanitary and epidemiological service has special requirements for the premises. To do this, you need to prepare it in accordance with SanPiN 2.3.6.1079-01. Only after a thorough check will you be given a permit.
You will also have to pay for a license to sell alcohol. These are the drinks that most karaoke bar visitors prefer, so without selling them it will be difficult to attract enough customers.
The fire inspectorate will monitor the safety of the premises and issue the necessary documents. To do this, the building must have emergency exits, a fire extinguisher, a fire alarm and an evacuation plan.
Don’t forget to visit the city administration, where you will be given another permit to conduct business and open a club in a certain location. Since the karaoke bar involves an entertainment program, for these purposes you will also need to familiarize yourself with documents such as GOST 30389 and 31985-2013.
Be prepared for the fact that the whole process will take quite a long time and will require certain financial investments to register a company. If you feel that you cannot handle everything or simply do not want to deal with paperwork, then hire a lawyer, an experienced professional who will take on most of the bureaucratic concerns.
Another way to make starting a business easier is to purchase a franchise. At the same time, you will have step-by-step instructions on how to open a successful karaoke bar, a recognizable brand, the help of experienced entrepreneurs and a set of everything necessary for setting up an establishment.
Recruitment
The next headache for the organizer is finding qualified personnel. Ads do not always give the desired effect, since you need professionals in their field who do not just “lye on the road.” We are not talking about waiters and bartenders, although they are also needed. Some of the main characters, so to speak, “lit up” the establishments are presenters, DJs and showmen. In addition, you will need to find a worker who will set up and monitor the operation of the karaoke system.
The average bill in such establishments is 800 – 1000 rubles. Karaoke bars are usually open from 19:00 to 05:00. At the same time, the main flow of visitors begins at 10 pm.
Each individual karaoke bar attracts visitors with a varied range of services, it all depends on the imagination and capabilities of the organizers. What a modern karaoke bar cannot be imagined without is: hookah, live music, Wi-Fi, dance floor and show program.
We count profits
Assessing the profitability of business activities is one of the most important points of a business plan.
The average payback period for a karaoke bar is a year and a half. During this time, the business generates the following income:
- During the first three months, the establishment’s revenue is in the range of 300-400 thousand rubles. During this period, you will work at a loss, since the revenue will not be enough to cover all costs. However, this will not always be the case.
- Subject to effective advertising promotion, over time, monthly revenue will reach 600,000 rubles. This will already indicate that the break-even point has been overcome and the business is gradually beginning to pay off.
- Approximately by the eighth month of operation of the establishment, its income reaches 800-900 thousand rubles. By this time, your business already has regular customers.
Naturally, the actual payback period of a karaoke club depends on many factors. This includes the location of the establishment, advertising costs, and the level of competition. There are many more nuances than it might seem at first glance, and all of them should be reflected in the business plan.
What equipment to choose to open a karaoke bar
A real karaoke bar differs from ordinary “cheap” establishments, first of all, by the presence of expensive, professional equipment. At the same time, the set of equipment for each karaoke bar is strictly individual. If in one karaoke bar the sound is heard so that it takes your breath away, this does not mean that in the next bar an identical set of equipment will create the same effect. Equipment configurations may vary by brand, price, and number of devices. And the playback process itself greatly depends on the size of the room, its structure, acoustics, whether it is a closed room or a terrace, etc.
The standard list of equipment that can be found in any karaoke bar includes:
- Karaoke system;
- Mixer;
- Acoustic system;
- Compressor;
- Voice compressors;
- Microphones.
It is worth considering that no matter how sophisticated the equipment is, if you add a cheap microphone and speakers to its list, it will be extremely difficult to achieve good sound.
The role of the musical “orchestra” in a karaoke bar is assigned to the karaoke system. This is the main brain of the establishment. The karaoke system stores musical compositions, searches, downloads and plays selected soundtracks. “A real karaoke machine must have a large database of phonograms,” says Alexey Kvasnyuk, co-founder. Therefore, a professional system must include a large hard drive. In addition, an important difference between a professional machine and a non-professional one is the regular updating of phonograms.
New format
There is another format for running a karaoke business, which is just opening in Russia - a free-format karaoke bar. The main idea of these establishments is the complete absence of a kitchen. The visitor pays only for entrance (400-500 rubles) and uses the karaoke bar for free. Visitors bring their own food and drinks. Tables and chairs in such establishments can be moved as desired.
From a business point of view, the main advantage of free-format karaoke bars is a lower threshold for entering the business, unlike traditional bars. After all, there is no need to equip a kitchen, hire a chef and kitchen workers, and there are no waiters required. The main employees of such establishments are creative people who make the atmosphere fun and festive. The client gets the opportunity to sing his favorite composition among his friends, smoke a hookah, sit on soft sofas, watch a show - and all this costs some 500-600 rubles. This may be why the popularity of such establishments in Russia is rapidly growing.
Financial plan
Depreciation expenses
A karaoke bar depends on working equipment. If the music system fails, the bar will lose a significant portion of its customers. Therefore, it is necessary to provide options for action in case of breakdowns. Buying replacement equipment is quite expensive, although this is the best solution to the problem. Part of the income should be put aside in the so-called “depreciation fund”, the funds of which in an unpleasant situation will help to quickly repair or purchase new equipment.
Salary expenses
Even a small bar requires a staff of 16-20 people. How much money will you have to spend to pay for their labor? The salary of waiters, hostesses, bartenders, operators rarely exceeds 25 thousand rubles, managers, cooks and technologists - 30 thousand. The average salary of an accountant is also about 30 thousand rubles. But if the LLC operates under the simplified tax system, an accountant on staff is not so needed. You can get by with outsourcing.
In any case, the monthly wage fund will be no less than 250 thousand rubles. To this number add taxes and mandatory insurance contributions. You shouldn't skimp on staff. With low salaries, the quality of work and service decreases, staff turnover begins, which adversely affects the work of the establishment.
Payback calculation
It is important to understand not only how to open a karaoke bar in a small town, but also how quickly the investment will pay off. The total opening costs will average 4 million rubles, including renting premises for 8-12 months, cosmetic repairs and purchase of equipment.
In the first months, the establishment should strive for daily revenue of 30 thousand rubles and an average check of 1000-1500 rubles. If there is alcohol on the menu, the bill will be even higher. Markups on alcoholic drinks can be 600-800%. So, let’s assume the establishment earns 30 thousand rubles every day. Then per month on average there will be 30,000 x 30 = 900,000 rubles.
To begin with, this will seem like a good result. But 250 thousand is the wage fund, about 80 thousand will go to utility costs, and at least 400 thousand will go to food and drinks. The net income in the most favorable outcome will be within 100 thousand rubles. Therefore, the establishment must constantly work to attract clients, including corporate ones. It will be useful to receive additional income through business lunches.
Calculation of cost of services
There are several options for paying for services in a karaoke bar:
- Songs separately, menu separately. In this case, clients pay separately for each song (on average 50 rubles) and menu (average bill - 1 thousand rubles).
- Unlimited songs, separate menu. Clients buy unlimited songs (approximately 500 rubles), and pay for food and drinks separately.
- Deposit. Clients make a deposit of 2-3 thousand rubles and receive unlimited songs and menus within this amount. All orders of drinks and food in excess of the deposit are paid separately. Most profitable for the establishment.
The main cash register for the karaoke bar will be made not by songs, but by food. Therefore, the arrangement of a restaurant should be given no less attention than musical equipment. Payback is possible in 18-24 months.
What documents are needed to open a business?
You can register a business by opening:
- Individual entrepreneur, which is ideal for a small establishment;
- LLC, which is suitable for a large-scale project. In such bars, people will not only be able to sing to their hearts content with friends, but also enjoy alcoholic drinks.
A package of documents, including a photocopy of the passport, an application and a receipt for payment of the state duty, is submitted to the tax office at the place of registration of the applicant. The registration procedure will not take more than 1 week.
Service list
- Karaoke with a wide range of songs.
- Bar service (wine list, beer, juice, cocktail, tea, coffee, light snacks).
- Kitchen work preparing hot dishes, salads, desserts to order (the menu is varied).
- An entertaining show with competitions and prizes.
Form of activity: LLC (limited liability company). It is possible to obtain a license for alcohol and tobacco products. The project will require serious investments. Personal funds of the founders and a loan from a bank are used.
Taxation: simplified (income minus expenses).
