Bars and night clubs in Africa are a significant business opportunity.
Across the world, bars and night clubs are symbolic features of every city’s social life. With one of the world’s fastest rising urbanization rates, Africa’s cities are becoming hotspots for single professionals, young adults, tourists, and business travelers who want to connect and have a great time over drinks, food and music.
The growing spending power on the continent, its overwhelmingly young population and huge appetite for fun and partying makes the nightclub business an attractive prospect for entrepreneurs and investors.
While owning this kind of business will be great for your pocket and social status, it’s a tough one to operate.
Let’s explore the bar and nightclub business idea and see if it’s something you would want to give a try…
Why are Africa’s social and night life businesses booming?
According to a recent McKinsey research, Africa has the world’s youngest population – more than 50 percent of its people are under 20 years old, compared with only 28 percent in China. The 16 to 34 age bracket now accounts for roughly 55 percent of income.
These young people have more money to spend. They are also aware of, and strongly influenced by, the latest fashions in clothes, music, dance, drinks and style.
Many of them are working class and single professionals who make up Africa’s rapidly expanding middle class. Their numbers are expected to reach 1.1 million in less than 20 years. (photo credit: nsw.gov.au)
Nigeria makes a great example to drive home this point. With the largest population in Africa, Nigeria’s overwhelmingly young and brand-conscious youth has contributed to the country’s rising profile as one of the world’s largest consumers of champagne.
In 2011 alone, Nigeria consumed more than $40 million worth of champagne to become the second largest consumer of the product in the world ahead of rapid growth and established markets like Brazil, China, USA and Australia. Nigeria’s champagne consumption is projected to exceed $100 million in less than five years (2017).
Another reason for the explosion in Africa’s social night life is the rapid growth in the number and population of Africa’s cities.
Africa, with a 38 percent urban population, is now more urbanized than India (30 percent) and nearly as China (45 percent). Currently, 52 African cities have a population of more than one million people. By 2016, over 500 million Africans will become city people and the number of cities with more than one million people will reach 65.
Economic growth and prosperity is mainly responsible for the expansion of Africa’s cities. The continent is home to six of the top ten fastest growing economies in the world (over the last five years).
More people from within and outside Africa are migrating to cities in search of jobs, a brighter future, business, investment and leisure. As a result, many African cities have become a melting pot of different cultures, tastes and lifestyle.
This metropolitan status is driving the demand for a high-energy, youthful and active social lifestyle in many of Africa’s leading cities such as Lagos (Nigeria), Johannesburg (South Africa), Cairo (Egypt) and several others.
A quick introduction to the business of bars and night clubs in Africa…
The bar and night club business can be an exciting experience and may appear to be the perfect idea for many entrepreneurs and investors. However, success in this business requires a deep understanding of the market you intend to target, their tastes and needs.
In addition, anyone interested in this business must be in the spirit of the times and closely follow trends in fashion, music, entertainment, food and drink. A good place to start would be to explore the different opportunities to serve the huge relaxation and partying market in Africa.
We shall look at the various types of bars and clubs entrepreneurs can consider…
(1) Beer bars and parlours
While wine, champagne and exotic spirits are the preserve of Africa’s elite, beer has become the most widely consumed beverage in all of Africa (apart from locally brewed gins and spirits).
Beer appeals to all sections of African society and is the cheapest and most affordable of all brewed and distilled alcoholic drinks. Beer bars are very common across Africa and can be found along highways and places around both low-income and upscale communities.
These bars have become very popular because most people (rich and poor) like to relax alone or with friends at a bar during weekends or after a hard day’s work. (photo credit: Shangri-La hotel, Accra)
Beer bars/parlours have increasingly become the top recreation destination for single and married adults, business people and tourists.
The huge popularity of sports like football in many parts of Africa attracts a lot of people to these bars. As a result, many bar owners have adopted a common tactic of having big-size TV sets on the premises to attract customers. Sometimes, live bands are hired to provide entertainment.
A beer parlour is the easiest and cheapest route to enter the evening/night life entertainment market in Africa. It requires much less capital and sophistication compared to night clubs and specialty bars.
A good location in an very populated and accessible part of town, competitive prices and excellent customer service is often enough to achieve success in this segment of the market.
(2) Night clubs
While anyone can afford a decent bottle of beer at a regular parlour or bar, most night clubs target a much richer and luxurious market. Drinks in clubs (depending on their location and sophistication) can sell for up to 10 times their regular price in bars.
In the upscale parts of Lagos (Nigeria) for example, night clubs make a killing from major wine and champagne brands like Cristal, Dom Pérignon, Moet et Chandon, Veuve Clicquot etc. Prices at these clubs can vary widely, with a standard bottle of Moet & Chandon sold at $120, while bottles of Cristal go for as high as $1,000 or more. And many bottles of these expensive bubbly are sold on most club nights.
While clubs can make an entrepreneur a lot of money in a short time if managed properly, it usually requires a lot of money to start up and promote.
A lot of investment will be needed to get a prime location in a part of the city that attracts the kind of customers you’re looking for.
Other capital intensive areas include putting the interior design and architecture together, quality sound systems, a great DJ and well trained staff.
The nightclub business is a high-risk and short lifespan business. What is trendy, hip and hot today may be gone two years from now. Most night clubs go out of business within their first year of operation while others stay open but consistently operate at a loss. The nightclub business is too risky to learn by trial-and error and interested entrepreneurs have to do all they can to get it right the first time.
We had to get this warning out there to help you measure your expectations realistically. While there are several successful clubs which have remained consistently profitable, the odds in this business do not favour the startup entrepreneur. You will need careful planning, market research and professional management to keep you successful in this business.
How to get started in the business of bars and night clubs in Africa – Some important things you need to consider…
During our research for this article, we found some key elements of a bar and nightclub every entrepreneur needs to consider before diving into this business.
Here they are…
Location is extremely crucial to the success of a nightclub; and can mean the difference between success and failure.
Your preferred location should be in an area with huge potential for customer traffic – such as densely populated middle- to high-income communities.
A nightclub or bar located beside a church may attract a smaller clientele than one located beside a shopping mall or residential area. This should be pretty obvious, I guess.
Also check out the presence of competition in the area, and whether the location may be able to absorb more bars or nightclubs who may want to come in after you’ve started. Never underestimate the power of new competition to easily put you out of this business!
(b) Entertainment and Fun
Most people who visit bars and night clubs want to have fun, relax and be entertained. What’s your plan to keep them satisfied and loyal to your bar?
Depending on the environment and the tastes of your market, popular forms of providing entertainment include live bands and performances, DJs, Emcees, Comedians, sports and games on TV, theme-based parties (like masks and costumes), and gaming facilities such as pool tables, darts, video games or pinball machines.
Some nightclubs, particularly in Asian countries, even provide special rooms for karaoke singing. Find out what works (or will work) in your location and use it to your advantage!
(c) Layout of the bar/club
A growing number of bars and nightclubs are targeting various audiences, which requires different rooms and layout in the club.
A nightclub can have an elaborate dance floor in the center with a DJ booth. Spectator seating can be provided to accommodate anywhere from 30 to 500 guests depending on the size of the club. Many clubs also offer private party seating such as cordoned-off VIP areas or private rooms intended for special events.
Some nightclubs also have bars and dining room areas for those who prefer a more relaxing atmosphere.
(d) Distinctive design features
The right decor can often spell the difference between a filled-to-the-brim nightspot and an empty one.
The decor embodies the concept of the nightclub. It will set the tone for the type of the club you are and the kind of customers you want to attract.
A mahogany and leather designed club may be targeted at upper class patrons, while a mirror-and-smoke designed club will attract the young, hip and dance aficionados. Many clubs are also going for the high-tech look with video screens, as well as state-of-the-art lighting and lasers.
(e) Exceptional service
Quality of service is a critical success ingredient of every bar and nightclub. Customers demand attention and friendly service, while feeling safe and protected inside your premises.
If you want your bar or nightclub to be known for the quality of its service, you need to have an adequate-to-high ratio of service personnel to customers (one service personnel to every 15 customers, or even better). You must also provide continuous training to your staff with regards to customer management and relationships.
(f) Quality food and drinks
Quality is also essential to the success of a bar/nightclub that serves food. You can offer a simple menu with traditional bar appetizers while customers drink, dance and enjoy themselves. Some nightclubs even go as far as offering food similar to that found in conventional dining restaurants.
Bars and Night clubs in Africa remain an interesting business opportunity
As you look forward to running an exciting bar or night club business, you will have to consider the huge commitment and long hours of work that come with this venture. You many never be able to spend your own holidays or weekends with friends and family due to the high volume of business during these periods.
While this may be no problem to some people, entrepreneurs who have a family (or are planning to have one) need to consider the impact of operating this kind of business which often involves very late night activity (night clubs) and sexual temptations. This can often take its toll on relationships with your family and friends.
Unless you can hire experienced and professional management from the outset, it’s often good sense to be involved in the early stages of running the bar/night club so you can become familiar with the business. When things start to settle, you could gradually allow trained staff and management to take over the day-to-day running of the bar/club.
If you believe this type of business could cause problems for you or your family, it’s wise to pass up this idea and choose from many other amazing business ideas in the Business ideas section of this website.
In the course of our research for this article, we came across a number of interesting resources that will provide you with further detailed information about starting your own bar or restaurant.
How to Start a Nightclub Business sheds more light on the subject and things you need to look out for.
Nightclub Business Plan is a full sample business plan for setting up a nightclub, just in case you plan to pitch to investors.
We would love to hear from you about your successes, challenges, advice and questions. Do not forget to leave a comment in the section below and share this opportunity with your friends using the Facebook, Twitter and Google+ buttons below.
To your success!