How Much Does It Cost to Open a Strip Club Business? (Sales Forecast and Breakeven Analysis Included)

You need a minimum of $318,900 to open a medium-scale strip club business in any city in the United States of America.

It is important to note that businesses in the strip club industry operate adult entertainment venues in which striptease or other erotic or exotic dance is regularly performed for males, females or a mixed audience. Most of them may also serve food and beverages or give their patrons the chance to bring their own beverages.

It has been analyzed that the Strip Clubs industry is in a mature stage of its economic life cycle. Another factor to consider when starting your strip club is the location where the strip club will be located in.

Even though it isn’t compulsory that your strip club be located in a highbrow area; however most successful strip clubs are those that are located in highbrow areas where social life is at its peak, and properties in these areas can be expensive. Your location should pass security and fire code before you open to the public.

Estimated Cost Breakdown for Opening a Strip Club Business

When it comes to starting a strip club business, the major areas that you look towards spending the bulk of your cash is in of course renting or leasing a standard facility and converting it into a strip club and equipping the strip club with the needed gadgets and furniture.

Aside from that, you are expected to pay your employees, pay utility bills and stock up with inventory. These are the key areas where you are expected to spend your startup capital on;

1. The total fee for registering the business in the United States of America – $750.
2. Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $3,300.
3. Marketing promotion expenses for the grand opening of the strip club in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
4. The total cost for hiring a business consultant including writing a business plan – $2,500.
5. The total cost for the purchase of insurance (general liability, workers’ compensation and property casualty) coverage at a total premium (initial / first premium) – $2,400.
6. The cost for renting or leasing a space or warehouse that will be converted into the strip club and that can accommodate the number of customers that will come to watch live performance of strippers and to purchase drinks and food for at least 12 months (Re – construction of the facility inclusive) will cost – $180,000.
7. Other start-up expenses including, commercial satellite TV subscriptions, stationery ($500) and phone and utility deposits ($2,800).
8. Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $40,000
9. The cost for Start-up inventory (stocking with a wide range of liquors, wines, beers, tobaccos and small chops et al) – $15,000
10. The cost for the purchase of storage hardware (bins, rack, shelves, food case) – $3,720
11. The cost for counter area equipment (counter top, sink, ice machine, etc.) – $9,500
12. The cost for serving area equipment (plates, ash trays, glasses, flatware) – $3,000
13. The cost for store equipment (cash register, security, ventilation, signage) – $4,750
14. The cost of purchase and installation of CCTVs: $2,000
15. Equipping the strip club (Flat Screen TVs, sound system, DVD players, Pianos, Satellite dish and decoder, furniture (table, stools and sofas), telephones, filing cabinets) will cost – $40,000
16. The cost of launching a website: $600
17. The cost for our opening party: $3,000
18. Miscellaneous: $2,000

From the rough estimate as listed above, you would need a minimum of $318,900 (three hundred and eighteen thousand nine hundred USD) to establish a medium – scale but standard strip club business in any city in the United States of America. Please note that this amount includes the salaries of all staff for the first three months of operation.

3-Year Sales Forecast

Year 1:

Revenue Streams:

• Entry fees: $50,000
• Dances: $100,000
• Drink sales: $75,000
• Event hosting: $25,000

Total Revenue: $250,000

Operating Costs: $200,000 (80% of revenue, common for startups)

Net Profit: $50,000

Year 2:

• Assume a 20% growth in revenue streams due to marketing and reputation development.

Total Revenue: $300,000

Operating Costs: $210,000 (reduced to 70% of revenue due to economies of scale)

Net Profit: $90,000

Year 3:

• Assume a further 15% growth in revenue streams as the business stabilizes.

Total Revenue: $345,000

Operating Costs: $220,500 (reduced to 65% of revenue as operations become more efficient)

Net Profit: $124,500

Breakeven Point

Breakeven Revenue = Startup Costs + Year 1 Operating Costs

Given that we estimated Year 1 Operating Costs at $200,000 and considering the Startup Costs of $318,900:

Breakeven Revenue = $318,900 + $200,000

The break-even revenue for the first year is $518,900. This means that to cover both the initial startup costs and the first year’s operating costs without making a profit or loss, your strip club would need to generate $518,900 in revenue.

If you are considering opening a strip club in the United States of America, it is important to point out that there are several factors that can determine the actual cost of launching this type of business.

The truth is that some of the factors may not apply to you because the business model and the kind of business you want to build would also affect the overall cost of the business.

Having said that, here are some of the factors that will influence the cost of opening a strip club in the United States of America.

Factors That Determine the Cost of Opening a Strip Club

1. The Type of Strip Club

A major factor that will determine the overall cost of opening a strip club in the United States of America is the type of strip club you want to build. Strip clubs vary and the difference is based on what the owner of the club wants.

It could be just a strip club or a business operating as a strip club and bar/night club or even a fully functional hotel with a strip club.

Strip clubs typically adopt a nightclub or bar style, and can also adopt a theater or cabaret-style. Upscale full-service strip clubs often provide a wide array of guest services and on-site facilities.

Commonly found amenities may include: on-site food and beverage (room service and restaurants), meeting and conference services and facilities, fitness center and business center. This classification is based upon the quality of facilities and amenities offered by the strip club.

2. The Choice of Location

Another major factor that will determine the cost of opening a strip club in the United States of America is the location of the strip club. In business, location is a key part of what determines the success of the business.

As a matter of fact, there are business consultants who are specialized in helping people choose an ideal location for their business; a location that will guarantee them profitability and to breakeven within the shortest possible time frame.

For example, renting or leasing a strip club facility in a location that is off the city center or off a major road will be less expensive when compared to renting or leasing a strip club facility in a highbrow area; a location along a major road with high vehicular and human traffic, a location in a metropolitan city with the right demographic composition of people (mostly upwardly mobile young adults).

3. The Required Licenses and Permits

In the United States of America, you cannot open a strip club without first applying for the mandatory licenses and permits. You would need food and drinks handling license, building license, zonal permits, and kitchen permits amongst others.

These license and permits cost money and it will influence the overall cost of opening a strip club in the United States of America. Please note that there may be several inspections you must pass before you can be issued your licenses and permits and this will also cost you money.

In order to get the overall cost of the licensing and permits associated with opening a new strip club in the United States, we will advise that you reach out to your city local council or the state government office to find out what you need for your strip club. You also need to consider state and federal requirements.

4. The Type of Facility

The type of facility you want to run your strip club business in is also a major factor that will determine the overall cost of opening a strip club business in the United States of America. Most strip clubs are located in buildings that are converted bars, restaurants, or warehouses, or had industrial uses.

The original layout of the building will affect the physical layout of a club. The more money that has been invested in a facility, the more it resembles a dedicated club. Regardless of the floorplan, as an interactive theater, there are features every strip club will have.

They include performers (strippers), a floor area where the customers will congregate, and some form of staging for striptease performance. Higher-end gentlemen’s clubs have features that cost millions of dollars to install and maintain.

You have the options of renting, leasing, or designing and constructing your own strip club facility from the scratch. As regards renting and leasing a facility, you might just have to spend extra to modify the facility to fit into the picture of what you have in mind, but there is a limit to how far you can go and it will be dependent on what the landlord of the facility wants.

Let us assume that you want to construct your strip club from the scratch. It means that you will buy the land or a property, bring up your design and of course construct and equip the facility to fit into what you have in mind.

With that, you will agree that you are going to spend way more when compared to people that rent or lease a facility. This indeed will greatly influence the overall cost of opening your strip.

5. Menu and Additional Service Offerings

A strip club is a venue where strippers provide adult entertainment, predominantly in the form of erotic or exotic dances. Strip clubs typically adopt a nightclub or bar style, and can also adopt a theatre or cabaret-style.

Another key factor that will determine the cost of opening and operating a strip club in the United States of America is the menu and service offerings of the strip club. The fact that there are different types of strip clubs means that these strip clubs serve different menus and offer different services.

For example, theatre or cabaret-style strip clubs offer a very limited number of on-site amenities and often only offer no accommodation and with little to no services, these facilities normally only cater to a specific demographic of travelers, such as the budget-minded traveler seeking a “no frills” fun. Nightclub or bar style strip clubs offer limited complimentary food and beverage and alcoholic drinks et al.

6. The Number of Halls and Rooms Available in the Club

Another very important factor that determines the cost of opening a strip club in the United States of America is the number of halls and rooms available in the club. No doubt, the budget for opening a 3 hall and 20-room strip club facility will be far above the budget for opening a single hall and 10-room strip club facility.

Aside from the cost of constructing these halls and rooms, it will also cost you more to furnish and equip the halls and rooms, and the more the number of rooms, the more you are expected to spend.

7. The Cost of Hiring and Paying a Business Consultant and Attorney

As expected, if you want to get your business started on the right foundation, it will be a wise decision to hire the services of a competent business consultant and perhaps an attorney.

A business consultant will help with drafting a workable business plan document for the strip club, a marketing plan and strategy, a comprehensive SWOT analysis for the business, and other advisory services that will help with opening the business.

So also, an attorney will help you with registering the business, drafting contract documents, and offering you all the legal expertise that will help you start the business on the right foundation. Of course, you will agree that these services will cost you money and it will indeed influence the overall cost of opening a strip club in the United States of America.

8. The Cost for Branding, Promotion, and Marketing the Strip Club

Strip clubs are profit-oriented businesses like restaurants and other retail establishments. Performers and staff are the primary customer service representatives in the club environment.

Strippers are their primary vehicle to entice customers to spend time and money in the establishment, that is why it is important to spend money on branding, promotion and marketing of the strip club. This means that the cost of branding, promoting, and marketing is yet another key factor that will determine the overall cost of opening a strip club in the United States of America.

Trust me, if you need massive results as it relates to competing and winning a fair share of the available market in your city, then you must be willing to pay for effective branding, promotion, and marketing.

It is not cheap to come by a marketing expert that will help you compete with brands that are already determining the market direction in the adult entertainment industry in your city. So, if you add the cost of paying a branding and marketing expert, it will surely increase the cost of opening your strip club.

9. The Cost for Furnishing and Equipping the Club

Another factor that will determine the cost of opening a strip club is the cost of furnishing and equipping the facility. Trust me the cost of furnishing and equipping a strip club is huge. Aside from the basic facilities that are expected to be found in a strip club, an investor that wants to open a strip club may decide to spend more to make the place look unique.

Before you can open a strip club, you should budget for chairs and dining tables, gas cookers, deep fryers, fridge, deep freezer, microwave oven, storage hardware (bins, rack, shelves, food case), counter area equipment (counter top, sink, ice machine, etc.),

(Flat Screen TVs, sound system, DVD players, Satellite dish and decoder, furniture (table, stools, and sofas), telephones, filing cabinets), store equipment (cash register, security, CCTV, ventilation, signage), serving utensils (plates, ashtrays, glasses, flatware) and fancy lightening amongst others. All these will cost money and it will influence the overall cost of opening a strip club in the United States of America.

10. The Cost of Insurance

The cost of paying for insurance policy cover is yet another important factor that will determine the overall cost of opening a strip club in the United States of America. Interestingly, in the United States, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from.

Thus, it is imperative to create a budget for insurance policy cover and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your strip club business.

11. The Cost for Registering the Business

The cost for registering the strip club business is yet another cost that will influence the overall cost of opening a strip club in the United States of America.

As a matter of fact, you cannot legally operate any business in the United States without registering the business with the government. Although, the cost of registering the business is affordable, it will no doubt add to the overall cost of opening a strip club in the United States of America.

12. Cost of Recruiting and Training Your Staff

The fact that you are opening your strip club as a new business means that you are expected to recruit and train your staff to conform to the kind of strip club you want to operate. The training will help you sell the corporate culture of your organization to the new employees.

As expected, it will cost you money to hire an expert trainer that will help you train and bring your new hires up to speed and that will add to the overall cost of opening a strip club business.

13. The Cost for the Purchase and Customizing of Uniforms

Another factor that will determine the overall cost of opening a strip club in the United States is the cost of the purchase and customizing of uniforms, towels, napkins, table ad chair covers amongst others. Staff of the establishment are required to wear uniforms when they are on duty.

All these uniforms will cost you money which is why it must be part of your budget if you are looking towards opening a strip club in the United States of America.

14. The Cost for Grand Opening of the Club

No strip club opens its door for business without first organizing an opening party to officially launch the business. This means that the cost of the grand opening of a strip club is part of the factors that will determine the overall cost of opening a strip club in the United States of America.

You can choose to do a soft opening if you are operating on a low budget or you can choose to go for a grand opening party. This is a cost that must be part of your budget and this cost will influence the overall cost of opening the strip club.

In Conclusion,

Please note that this is a rough estimate and we usually advise our readers who are interested in opening a strip club to go to the market or directly contact wholesalers and suppliers of the types of flat screen TVs, sound system and satellite decoders they want to have in their strip club in order to get real time prices of these items.

The truth is that if you are a good bargainer, you can get a better deal that will help you beat down the estimated price as listed above.

Frequently Asked Questions

1. What is an online strip club and how can it modernize the ancient strip club models?

Technology has completely changed the modus operandi of traditional strip clubs. In addition, the recent growth of the webcam modelling industry is a clear insignia that millennial are changing their preferences. Webcam platforms are coming as the new strip clubs of the modern world, and this is referred to as an Online Strip Club.

The webcam industry has grown to become one of the biggest segments of the adult industry and it is attracting both models and strip show lovers at the same time. Note that when models can work right from their home and earn better money, it is nearly possible to prefer working in brick and mortar clubs.

And even though the classic love for strip clubs is still alive, it is certain that strip clubs need to expand their presence beyond the wall and to the web world. It is no more about how to open a strip bar but an online strip club.

2. What makes starting a strip club different from starting any other business?

Zoning laws, alcohol restrictions, and other regulations unique to strip clubs makes it quite different from starting any other business. For instance, local strip club laws more or less prohibit such businesses from locating near schools or churches, while some ban complete nudity or the sale of alcohol.

Since they vary so much from one city or county to the next, make sure you research local adult entertainment laws before starting that type of business.

3. Should I start a big club or a small club?

The answer will depend on your business capital and level of popularity. However, a typical smaller club will make its owner $1,000 to $5,000 per week ($50,000 to $250,000 per year). A large metropolitan club can make $50,000 profit in a single night.

4. How much does it cost to open a strip club business profitably in an online environment?

You will need around $100,000 for the fixtures, supplies, and equipment to open a strip club business profitably in an online environment. You will need to consider the following;

• Registration

You can start with considering the Limited Liability Company model aka LLC, or gain a sole proprietorship.

• Documentation

It is an important step and you must complete it before launching your business in the market.

• Manpower Recruitment

A good website, a small team of web-tech experts and a few webcam models are enough to kick start your business.

• Insurance

It is compulsory to have at least a basic insurance policy for your business.

• Intellectual property and trademark

If you are thinking about expanding into an online strip club business with webcam modelling, it is always wise to get some protection and trademarks.

5. Why are many nightclub and strip club owners considered dangerous guys?

Although this might simply be a stereotype, but nightclub and strip club owners are considered dangerous probably due to what many think may be going on in those places, with reference to illegal activities such as drug dealing or prostitution. These of course are just mere speculations.

6. How much do the expensive nightclubs make per month?

Expensive clubs in Vegas, LA and Miami for instance, are known generate revenue of anywhere from $25,000, upwards to $80,000 or more nightly. These companies boost of an average net profit margin of 10 to 15 percent.

With a good manager who understands how to handle customers, coupled with happy and hard working staff, a solid marketing, great ambience, and superb dancers, an expensive Nightclub can make from $100,000, upwards to $320,000 per month.

7. Will the SBA allow clubs that have not won a court order to participate?

No, the SBA’s main small business funding program, known as 7(a), restricts a number of organizations, including churches and strip clubs. Under the PPP, the houses of worship received an exemption from the normal rules, but the business of bare skin is still not allowed.