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Thread: So, You Want To Own A Jazz Club

  1. #1
    Martin Eagle
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    So, You Want To Own A Jazz Club

    Hi,

    I'm in the process of opening a jazz club in Durham, NC. I have a great location, a beautiful design and a complete business plan available for serious investors. I need to raise an additional $450K, with a minimum buy in of $50k.

    You can hear my latest CD and find some bio material at www.cdbaby.com/martineagle trio.

    If interested, please contact me at mail@martin-eagle.com

  2. #2
    Banned User
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    What is the market in Durham for jazz?

    What is the exit strategy for investors?

  3. #3
    AAJ's Spammer Exterminator Tenorman's Avatar
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    Birth Controller to the Jazz Community. (click on the underlined text for more information)

  4. #4
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    EXIT STRATEGY? Good title for a CD!!!!!

  5. #5
    Banned User
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    Well, if you want investors, you need to provide them a means of getting their money back. That is called an exit strategy. There are two usual exit strategies: a business gets bought, or a business goes IPO. No one is going to invest $50k without an understanding of how they get their money back. In a typical deal, you figure out a value of the enterprise, which is usually a negotiation. That sets the value of the investment for investors and they can figure out how much of the business they own. As an example. Let's say you value the business at $450k. You are asking for $450k. That means the business is worth (post investment) now $900k (the $450k it was worth before plus the $450k investment) which means the investors own 50% of the business. When you sell the business, the investors get their $450k back, plus interest, plus half the deal. So if the business sells for $1million 5 years from now, investors get $450, plus interest and half of what is left over, approximately $250k. Investors get a total $700k, anyone left over (like the original owner ) gets what's left, minus legal fees so about about $200k.

    That is how it works.

    Unless you are looking for a lifestyle business. A lifestyle business is one where you open a club, with the idea that you will make your living from the profits of the business. There is no intention of ever selling the business.

    The problem with a lifestyle business is that no one is going to invest in a lifestyle business. No one. Your only option is a loan, in which case you need to have more than the loan amount in assets, like a house. You mortgage your house against a line of credit on your equity, and you finance the business that way.

    Those are pretty much the options. There is no one in their right mind that is going to invest any amount of money without an exit strategy.

  6. #6
    trumpet tpt1's Avatar
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    ^ Great post, Bill. It's not many trumpet players that know all that! Excellent information.

    I like the Raleigh-Durham area. It's a great place to live, I think, based on the many times I have visited the area. I hope there is room for a great jazz club -- and the people to invest in it.

    Best of luck, mle01!

  7. #7
    Banned User
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    "It's not many trumpet players that know all that! Excellent information."

    Yeah, well, my real job is a serial entrepreneur, so I learned all this stuff the hard way. I'm currently on my 4th business.

  8. #8
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    I don't want to rain on anyone's parade -, but a good friend (jazz musician) told me if you want to end up with 1 million $ in the jazz business start out with 3 million $.
    I have some experience booking jazz groups here in Santa Fe, & while we break even, make a few $$ or get the occasional donation from a jazz friend (we operate as a non-profit), I'm glad I don't have to make a living doing it. Not to be altruistic, but we do it for the love of the music & to "educate" our constituents.
    Larry

  9. #9
    Banned User
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    Well, since this guy has only posted 3 times and the last time was 2 years ago with the exact same subject line (and he hasn't responded to any of the follow up posts), I think we can assume that no one is going be losing any money with this venture. But Durham won't be getting a new jazz club either.

  10. #10
    AAJ's Spammer Exterminator Tenorman's Avatar
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    Quote Originally Posted by jlhoots View Post
    I don't want to rain on anyone's parade -, but a good friend (jazz musician) told me if you want to end up with 1 million $ in the jazz business start out with 3 million $.
    I have some experience booking jazz groups here in Santa Fe, & while we break even, make a few $$ or get the occasional donation from a jazz friend (we operate as a non-profit), I'm glad I don't have to make a living doing it. Not to be altruistic, but we do it for the love of the music & to "educate" our constituents.
    They used to say that if you want to make money out of Jazz make band uniforms -- now even that source of income has gone

    Birth Controller to the Jazz Community. (click on the underlined text for more information)

  11. #11
    Registered User Jazzclub's Avatar
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    These days, if you want to make money out of jazz, you should be called Jamey Aebersold!

  12. #12
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    You can make money from a Jazz Club, certainly a number in New York do.

    But that is New York.

    And it is a lifestyle business.

    And even in New York, a number of good clubs have closed.

    Key to it all is knowing how to run a bar and restaurant.

    Someone offered to set Eddie Condon up with his own club, and Eddie refused saying that he didn't know how buy a side of beef. Years later, someone with a lot of experience "buying beef" for a restaraunt/club offered to set him up and he agreed: Condons ran in Successfully in New York for nearly 30 years, showcasing jazz every night.

    The moral: don't start a jazz club because you know jazz. Start a jazz club because you know how to run a successful bar and restaurant.

  13. #13
    Registered User
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    I've dreamed of owning and running a jazz/blues nightclub.

    If I were to win the lottery, that'd be one of the first things I would do.
    "When I die I want them to play The Black and Crazy Blues, I want to be cremated, put in a bag of pot and I want beautiful people to smoke me and hope they get something out of it." - Roland Kirk

  14. #14
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    Jamey Aebersold is one of the most generous, caring people on planet Earth...He has given more money to jazz education than anyone I know. I am proud to say that he is my friend and a true friend to jazz..

  15. #15
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    Quote Originally Posted by Vic J View Post
    Jamey Aebersold is one of the most generous, caring people on planet Earth...He has given more money to jazz education than anyone I know. I am proud to say that he is my friend and a true friend to jazz..
    and he always wants to jam!

    cant say the same about my fellow music school students!

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