The Costs to Open a Dance Club

Dance clubs offer people a place to come together and let loose after hours. Understanding the costs to open a dance club can guide you in your business planning, ensuring that you have the funds you need for success before opening your doors. Most dance clubs include full bar service, while others are geared toward younger crowds. Dance club owners incur a range of costs when opening a new club, ranging from basic administrative costs and licensing fees to labor costs.

Licensing and Regulation Costs

Like all businesses, dance clubs must be registered in their state. Different registration requirements apply for different business types; dance clubs can be organized as sole proprietorships, partnerships or LLCs, all of which require an administrative filing fee. Fees for sole proprietorship and partnership filings are generally under $100, while filings for LLCs are generally under $500.

Dance clubs incur a range of unusual legal costs, as well, such as liquor licenses and live entertainment permits. Liquor license costs vary greatly by state and city.

Dance club owners must handle the costs of making improvements to their facilities in accordance with fire inspectors' reports and food safety inspectors if the club includes a kitchen. According to, dance club facilities can require anywhere from $18,000 to $65,000 in initial leasehold improvements.

Facilities and Utilities

Dance clubs are 100 percent brick-and-mortar businesses, meaning a lease or mortgage is almost always a part of a club's expenses. Lease costs or property prices vary according to the size of a building and, more importantly, the location.

Club owners may have to put down large security deposits for utilities, including basics like water and electric, in addition to things like cable television and Internet service. Utilities costs tend to level off over time, but the first month's expenses can be significantly higher.

Sound and Lighting Equipment Costs

State-of-the-art sound and lighting equipment can provide competitive advantages for dance clubs. but they can be one of the largest start-up expenses. Sound equipment needs include speakers, mixing boards, cabling, power outlets and rack-mount amplifiers. Lighting equipment needs include bulbs, lighting mounts, flash pots, laser lights, smoke machines and control boards.

Your total expenses for sound and lighting equipment will vary greatly based on the size of your facility, including the number of rooms, and the type of entertainment experience you wish to offer your patrons. Professional sound and lighting setups can range anywhere from $35,000 for small, basic systems to well over $125,000 for large clubs with state-of-the-art setups.

Technical and Administrative Employees

Although labor costs are a continual expense, like utilities, dance club owners need to have enough cash available to cover employees' first few days of work until the club is operating and bringing in revenue.

Dance clubs need at least one experienced technician to maintain the sound and lighting equipment, monitor the sound board and assist DJs in setting up their equipment. Sound and lighting technicians are generally paid between $60,000 and $120,000 per year, according to Total compensation for all employees will greatly depend on how often your club is open and how many hours each employee works.

Clubs also require at least one security employee. Security personnel will cost an average of $11.07 per hour, according to However, club owners can turn to third-party security service companies to keep payrolls lean.

Clubs also need at least one office assistant as business ramps up, who will likely cost an average of $12.80 per hour. Clubs can also benefit from employing a small "street team" – a group of marketing employees tasked with spreading flyers, posters and hype about club events around the community. Savvy club owners recruit marketing students as unpaid interns to form a street team; full-time street team members are likely to cost around minimum wage.