This is our biggest venture idea yet. And it’s in a new area of business. Please help me poke holes and think from every angle!
A local restaurant near us is shut down and selling their space. It’s underpriced for the sq footage (5000 sq Ft inside and 10,000 sq Ft outside) it’s selling for $450,000. And the space is right on the river with about 115 feet of waterfront.
Our idea is to take the space and make it an event venue. Primarily focusing on weddings and receptions as well as other social events, baby/bridal showers, and corporate events.
The space has two inside bars, an outdoor bar, an outdoor stage. It has great bones. I think we could move in and start renting with little to no work - the biggest updates would be paint and decor.
Year one (hopefully summer 2024) would be just a rental where we help manage day of and start building wedding and event vendor relationships. No in house restaurant or anything.
Future years we would assess the ability to expand to event decor and chair rentals, expand into other in house food options, etc.
The question: please poke any holes you can or provide your experience if you’ve done something like this before!
If you’re in the venue industry, what am I not thinking of? What is a typical book rate for venues? Is every weekend booked? How long does it take to turn that around?
Financing: we would go through a bank. Do you have any best practices for buying buildings through the bank for local event spaces?
Have you prepared a highest and best use analysis?
Is the proposed use legally permissible?
For example, the subject property was approved as a restaurant. You are proposing to re-purpose the property for another type of use(s). Is the property suitable for this use or will you need to obtain conditional use variance (permitting).
Is the proposed use physically possible?
For example, you said maybe short of parking spaces. Here, zoning department might agree and not approve your re-purposing.
Is the proposed use commercially viable?
You are proposing to buy a distressed (bank owned?) income producing property in a low income area. Requires benefit/cost analysis.
Is proposed use maximally productive?
Does the proposed use provide the highest net return of alternative uses? This depends on commercial viability.
event venues are a big business and have the potential to be very profitable. But you would definitely want to expand into catering for such a thing as this.
Thanks! That’s a great insight. That would be the plan after a few months of getting comfortable with the basics.
Don’t know much about the event venue world, but my initial question (which sounds like you’re thinking of) is how frequently would this realistically be rented out for events? Need to understand the local market and demand.
Further to that, why would some pick you over any other event space besides being on the river? Does it fit the vibe for the events you’re talking about (eg wedding where people may be looking for something with good ambience and intimate feeling than corporate space feeling)? Is waterfront as big of an appeal / attraction as you think (not saying it isn’t bc I like the thought of looking out over a river, but not just for the sake of looking over water if the rest of the surroundings and vibe aren’t great).
In terms of your other comment, how do you know the prior business failed due to lack of marketing and not simply lack of demand for the space? I get the play on the development of a low income area, but that can be a very long term play and very well not play out as you think it could.
Is the place easily accessible for the type of clientele you’d want? Depending on the area and what people are accustomed to, they may not want to trek very far when there’s another good enough venue closer.
Do you have enough money to get by financially until you’re fully up and running with your own catering? Not only for the mortgage payment but utilities, insurance, etc. Think about what happens with only rental income for the space and no income from having an active bar or catering to supplement it? Does the sale include a liquor license for the location? What are event spaces going for in your area? How competitive would your rates be compared to them?