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Experience in Starting a New Karaoke Business
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Author:  quanghoc [ Tue Sep 11, 2007 11:30 pm ]
Post subject:  Experience in Starting a New Karaoke Business
I plan to start a karaoke place without serving alcohol. Can someone give me their experiences?

What I really want to know is the monthly revenue? When do you recover you investment in equipments and other stuffs? I plan to have 10 rooms.

What else should I pay attention to?

Thanks
Author:  Lonman [ Wed Sep 12, 2007 1:27 am ]
Post subject:  Re: Experience in Starting a New Karaoke Business
I have worked a couple non-alcohol venues & from my personal experience, they haven't worked.  I know a couple others in my area that have worked similar venues & they haven't made it work - good luck to you, but karaoke & alcohol seem to go hand in hand.  I know a coffee house that works 'ok', but they do kids karaoke & eventually got a beer/wine license to compensate.
Author:  quanghoc [ Wed Sep 12, 2007 2:06 am ]
Post subject:  Re: Experience in Starting a New Karaoke Business
what is the location ?

I saw many in San jose, ca and they are quite crowded...
Author:  Babs [ Wed Sep 12, 2007 4:31 am ]
Post subject:  Re: Experience in Starting a New Karaoke Business
I would say make sure you are selling more than just karaoke. Have a gimic name for the place so you can sell cool novelty items - t-shirts etc...  A coffee bar with a section for your karaoke addicts to discuss their passion and monthly events to bring people in. Other good promotional ideas like a monthly letter with pictures of regulars and your events.

Remember most small business don't make any money for at least 2 to 3 yrs.

Good Luck!
Author:  Jian [ Wed Sep 12, 2007 4:53 am ]
Post subject:  Re: Experience in Starting a New Karaoke Business
Quote:
I plan to have 10 rooms.


This means that you are charging people to sing; a different business model. Not the kind that most people in this forum are used to.
Author:  quanghoc [ Wed Sep 12, 2007 5:59 am ]
Post subject:  Re: Experience in Starting a New Karaoke Business
Yes, this is different. Each room will be a karaoke system. There are 3 types: large, mid, small rooms. The prices are different. I follow the Japanese karaoke business model. Anyone did or knew something similar?

Thanks
Author:  Jian [ Wed Sep 12, 2007 6:11 am ]
Post subject:  Re: Experience in Starting a New Karaoke Business
I am from the East. Those kind of set up are common here. but without alcohol? Why?

Since those are private rooms, you can give the customers the choice. A group drinking in one room will not affect the people in the other room. You will already have one less source of revenue.
Author:  eben [ Wed Sep 12, 2007 10:59 am ]
Post subject:  Re: Experience in Starting a New Karaoke Business
I live in San Jose and have been to some of those places and I can tell you, you don't make money from renting the room. You make money from selling food and drinks. If you don't have alcohol, you better have some great food and wide variety of drinks to serve to build a reputation as such. Having some peanuts and cola just won't cut it. Even then, it may not be enough.

Half the time, these rooms are used in business or social occasion. That means that people want to loosen up and enjoy themselves in a privacy of a room. Usually, you will hear people say, I won't sing unless I had a few drinks to muster up some courage. Alcohol is the factor that makes the event "fun".

If you want to attract just people singing crowd, then you got the wrong demographics. Those people want to be on stage and seen by people when they sing. They would not pay to rent a private room, they would go to free Karaoke and sing in front of a large crowd (provided of course they buy drinks at the bar, etc.)
Author:  quanghoc [ Wed Sep 12, 2007 8:09 pm ]
Post subject:  Re: Experience in Starting a New Karaoke Business
There are some businesses like this in San jose and they don't serve alcohol. I saw them doing fine. So I am not sure if there is a risk in this business model. Obviously there are ppl out there who like to sing in private room and alcohol is not a factor. But your points are very valid too and I am looking into that. Simply, alcohol is too much trouble for all the fighting and stuffs... Selling food/drinks may work fine. But I am not sure why a room $35 - $60 would not be profitable??!
Author:  Re Invention [ Wed Sep 12, 2007 10:50 pm ]
Post subject:  Re: Experience in Starting a New Karaoke Business
You need to do a full business plan, not just ask questions on a message board.  It sounds to me like you don't really have anything other than an idea.  What experience do you have?  Where are you going to get the funding?  What's the competition like?  What's your marketing plan?  You need to have solid answers to these, and 1000 other questions before you do anything.
Author:  Re Invention [ Wed Sep 12, 2007 10:55 pm ]
Post subject:  Re: Experience in Starting a New Karaoke Business
quanghoc @ Tue Sep 11, 2007 11:30 pm wrote:

What I really want to know is the monthly revenue? When do you recover you investment in equipments and other stuffs? I plan to have 10 rooms.

Thanks


Bad form to follow up my own post, but this ix exactly what I'm referring to.  You shouldn't have to ask what the monthly revenue is or how long it will take to recoup your investment.  A business plan will give you those projections which will be accurate (hopefully) for YOUR situation.  Which may be completely different than somebody else's situation.
Author:  Lonman [ Thu Sep 13, 2007 12:39 am ]
Post subject:  Re: Experience in Starting a New Karaoke Business
You may get some interest, but personally as a singer, I would not pay to rent one of these rooms, that probably has less selection than I have in my personal stash & chances are a chincy sounding sound system.  I would more than likely have a home karaoke party where I know I have a pro grade sound system, great selection & where people would be able to drink as well.

But I agree with RE, if you have to ask when you will recoup, chances are you aren't ready for this type of business - many MANY factors will be a consideration, the box type rooms aren't as popular in the states (except in the asian sections of your towns) as they are in other countries simply because there is no 'glory' so to speak, people love to sing in front of an audience.  As a rule, most businesses will lose money the first couple years mainly recouping on the initial investments, then you may see some marginal profits that will go back into the business for upgrades & what not.
Author:  Steven Kaplan [ Thu Sep 13, 2007 1:27 am ]
Post subject:  Re: Experience in Starting a New Karaoke Business
I'm wondering why a person without having done a market or business analysis in a given geographic location would "plan on having 10 rooms" ?    How does he know that there will be a break even point on one or two rooms ?
Author:  quanghoc [ Thu Sep 13, 2007 6:16 am ]
Post subject:  Re: Experience in Starting a New Karaoke Business
Steven Kaplan @ Thu Sep 13, 2007 1:27 am wrote:
I'm wondering why a person without having done a market or business analysis in a given geographic location would "plan on having 10 rooms" ?    How does he know that there will be a break even point on one or two rooms ?


I haven't looked at the occupied rate for rooms from my potential competitors in the area so I just ask here to get an idea. Yes, those are silly questions but any opinion is great to have. One or two rooms is not enough because the business model must allow many people to sing in their own space. San Jose is a great place with large Asian community and potential competitors are doing well. But I have few ideas to differentiate myself such as larger collection of music, room decoration and sound quality. I didn't pull "10 rooms" out from the air but it is the average number from at least 3 other places.

I'd love to hear more stories from people who know or have done a business like this...


Thanks
Author:  mckyj57 [ Thu Sep 13, 2007 6:28 am ]
Post subject:  Re: Experience in Starting a New Karaoke Business
Lonman @ Thu Sep 13, 2007 3:39 am wrote:
You may get some interest, but personally as a singer, I would not pay to rent one of these rooms, that probably has less selection than I have in my personal stash & chances are a chincy sounding sound system.  I would more than likely have a home karaoke party where I know I have a pro grade sound system, great selection & where people would be able to drink as well.

But I agree with RE, if you have to ask when you will recoup, chances are you aren't ready for this type of business - many MANY factors will be a consideration, the box type rooms aren't as popular in the states (except in the asian sections of your towns) as they are in other countries simply because there is no 'glory' so to speak, people love to sing in front of an audience.  As a rule, most businesses will lose money the first couple years mainly recouping on the initial investments, then you may see some marginal profits that will go back into the business for upgrades & what not.

Another reason they are not popular here is the great amount of personal space we have in the U.S. compared to the average in Asia. You can't do karaoke without annoying your neighbors there -- many people in the U.S. have homes which are large enough on enough land so it is easy to have home parties and to practice. I practice daily at a pretty good volume, which would have the cops in my lap constantly if I lived in an apartment. On my three acres, no problem. 8-)

Also, karaoke box dating is part of the culture there and we don't have that.

Personally, I would love to open a non-alcoholic karaoke club as I don't drink and I have lots of friends who don't drink. And I could do it pretty easily, too. But I can't figure out how to make it pay, sad to say. So instead I host non-profit events at picnics, state parks, and church festivals.
Author:  ml_texas [ Thu Sep 13, 2007 8:14 am ]
Post subject:  Re: Experience in Starting a New Karaoke Business
It has been a long time since I have been in here to sub a song or to comment. I have had a little time to just slip in and read some of the forums from time to time and today, I decided to take a minute to add something to this thread. I have a good friend who does a show here in Texas.  She draws a pretty consistant crowd of over a hundred every show, there is no alcohol served, as a matter of a fact if someone wants something to drink, they have to go to a vending machine. The talent is always really good, people come there to meet with friends and sing or listen to others sing just because they enjoy entertainment and karaoke can be a  real form of entertainment if done right. Apparently, this friend of mine is doing something right.  The show is held out in the middle of the local mall where shoppers go by and often stop to sing or stop to listen. The chairs stay full and people literally bring lawn chairs into the mall to have a place to sit and be a part of this show.  The mall pays her for doing the show as a form of entertainment to entice customers to come to the mall to shop! As a matter of a fact, they pay performers to sing and play at the mall all day long. They schedule at least 3 shows a day and the talent is always really good.  Maybe, someone could sell the idea of doing a non- alcoholic show in a mall to bring more people in to shop.  At least it is a good idea, and our mall has seen the benefit of bringing in not only karaoke, but other performers to provide entertainment for shoppers and to keep people in the mall from opening to closing! Just thought I would throw my 2 cents in while I had 2 minutes to do it! I would sure like time to be here more often! I miss everyone!--Mike
Author:  Babs [ Thu Sep 13, 2007 8:18 am ]
Post subject:  Re: Experience in Starting a New Karaoke Business
What if you did a karaoke bar where you had karaoke in an open area for everyone and then the option to rent private rooms on the side by the half hour or more. People would use the smaller private rooms not just as private party rooms, but as practice rooms before they hit the main stage outside. I could see a lot of people spending money to practice songs by themselves before wanting to brave the big stage.  :D
Author:  ml_texas [ Thu Sep 13, 2007 8:40 am ]
Post subject:  Re: Experience in Starting a New Karaoke Business
That sounds good Babs! by the way, Hi! It has been a long time!  I do know that my friend who does the show at the mall is doing really well. That is her only show and her only job. The mall takes good care of her in that respect. She does not have to charge people for anything. She constantly tells people passing by that it is free to sing and that everyone is welcome. She gets a huge crowd of adults, which some would find very interesting considering it has been said that karaoke and alcohol go together. No one would deny that statement, but it is really amazing that she gets such a huge crowd of adults that just want to sing.  I think it is true, here in the U.S., people want their 3 minutes of fame and love to get on a stage in front of a crowd, even if they are not a very good singer!  Karaoke makes a lot of dreams come true for a lot of people!  My friend's show is doing really well.  I had a few more minutes to drop back in! It is great to see everyone again!--Mike
Author:  Babs [ Thu Sep 13, 2007 9:08 am ]
Post subject:  Re: Experience in Starting a New Karaoke Business
Wow Hi Mike - good to hear from you. :hi5:

Mike and others have brought up great points that in the US private rooms are hard to make money on unless you have a twist to your idea. I would possible rethink your design. :D
Author:  Lonman [ Thu Sep 13, 2007 9:27 am ]
Post subject:  Re: Experience in Starting a New Karaoke Business
Babs @ Thu Sep 13, 2007 8:18 am wrote:
What if you did a karaoke bar where you had karaoke in an open area for everyone and then the option to rent private rooms on the side by the half hour or more.  :D



Yep I want to rent that room over there for about an hour for me & my date I just met can go 'SING'  :dancin:
That's another problem i've heard about the private box rooms.
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