FUNCTION ROOM business....good or bad idea?

[esco]

I recently went to a wedding and a function room holding 200 people was used for the party. The bar was ridiculously busy, there was food too of course..........which got me thinking..........someone could be making a small fortune from this.

Obv weddings are seasonal, but function rooms could cater for b'days, parties, work do's, meetings......etc etc maybe even having bingo nights and such. If the place could hold 200 people and was at full capacity, and on average everyone spent £30 per head, well these numbers speak for themselves. If the owner could make at least £1k+ from this, that's good enough for me.

If a function room was opened by or close to some work offices, regular quiz nights or work do events would be ideal, as most bars/pubs not big enough. This could perhaps be the bread and butter of the business and over a period of time a strong business relationship could be built, with a fairly regular guaranteed money maker......

Location seems to be primary for this type of venture (I will be looking to open in Birmingham, West Mids area), and the food and customer service also have major roles to play to ensure people keep coming back.

I have about £60k I can put towards this venture. Would that be enough? I am exploring the idea of having JUST a function room at the moment, i.e not attached to a hotel, or restaurant etc etc.
Does anyone have any experience in this field? What are there thoughts?

 

[Richie N]

We have a meeting / function room as well as our restaurant

 

[esco]

We have a meeting / function room as well as our restaurant

Is it very profitable?

How often is it in use, on average?

 

[Draugen]

We have a meeting / function room as well as our restaurant

I think this is the key. All the function rooms I can think of, off the top of my head, are attached to a restaurant, pub, hotel or bar. With the exception of the big convention centres, hotels etc, it seems to be very much a complimentary business. Surely it is also hugely competitive? Sitting at home right now, if I were to plan an impromptu party, I can already think of two-dozen potential venues within a five minute drive!

That said, I have noticed purpose built function venues in America and Australia offering nothing more than a variety of function rooms and associated services. I don't recall seeing anything on a "non-corporate" scale in the UK though.

There are a few "stand-alone" event spaces locally I'm aware of that do good trade in the Muslim community. There's quite a high demand in some areas especially for weddings, but also other religious and community events. These tend to have an affiliation with a local mosque however, and I suspect don't rely on a licensed bar to make their money!

 

[Richie N]

Is it very profitable?

How often is it in use, on average?

To be honest, we have only been open 6 weeks and this room is still in the process of getting refurbished but we are getting loads of enquiries about it....

I would say you are better having a function room attached to a restaurant, hotel or pub etc rather than a stand alone thing.
Although if you are looking for function rooms alone, then you might need to aim for a niche market or culture.

 

[esco]

To be honest, we have only been open 6 weeks and this room is still in the process of getting refurbished but we are getting loads of enquiries about it....

I would say you are better having a function room attached to a restaurant, hotel or pub etc rather than a stand alone thing.
Although if you are looking for function rooms alone, then you might need to aim for a niche market or culture.

Have you thought about prices, costs for the function room once it's finished?

And how much you spending on doing it up?

 

[Richie N]

Have you thought about prices, costs for the function room once it's finished?

And how much you spending on doing it up?

We are in the process of putting together menus for this. Would rather incorporate food if we can.

As for the costs involved, it's cost a lot more than I thought it would

 

[tony84]

I used to live in a pub, we had a function room that held about 100-120 people.
Its not all its made out to be. 18ths you will get underage drinking, 21sts you get fighting.

30ths/40ths were good money spinners but its not very often you will have a night that goes issue free and you will earn anywhere near what the potential is.

 

[Richie N]

I used to live in a pub, we had a function room that held about 100-120 people.
Its not all its made out to be. 18ths you will get underage drinking, 21sts you get fighting.

30ths/40ths were good money spinners but its not very often you will have a night that goes issue free and you will earn anywhere near what the potential is.

yeah I agree, ours is more for corporate meetings and lunches, rather than parties.

 

[esco]

I used to live in a pub, we had a function room that held about 100-120 people.
Its not all its made out to be. 18ths you will get underage drinking, 21sts you get fighting.

30ths/40ths were good money spinners but its not very often you will have a night that goes issue free and you will earn anywhere near what the potential is.

Did you never consider getting security in?
I'm sure for a few hundred a couple of wise guys could have been hired

Seriously though, I'm sure they would have helped the situation.

 

[tony84]

We used to charge £100 for the room on a friday £200 on a saturday.

If you think about all of the electric, bar staff, cleaner, heating/air conditioning etc etc by the time you take all of that out, there is not a lot of profit in the money for the room. If your paying for bouncers (they now have to be certified your looking at a couple of hundred alone). a family do, 2 people kicking off, 2 bouncers go in to kick them out - what will the rest of the family do? If theyre happy to fight with eachother, they would be more than happy to turn on 2 bouncers.

The worst we ever had was the room went up, it calmed down a bit and the birthday girl just started shouting and screaming how they had ruined her birthday....when she stopped...the fighting started again. People were throwing chairs and their was a pregnant woman in there. Dont get me wrong that was the exception more than the rule, but something to be aware of.

Another thing is people ALWAYS ALWAYS ALWAYS over exaggerate. Our room help 100-120 people, there was never a time people didnt say oh it might not be big enough or we will easily fill that etc.... i cant tell you how many times there was a room with 50-60 people.

200 is a big room to fill.

 

[patientlady]

Oh dear
There are hundreds of function rooms, small/med/large ones, up and down the country not being utilised. Village halls, hotel conference rooms, pub back rooms, British Legion Clubs, Conservative clubs, converted barns not used.
To spend your cash on doing this building up on a premise based on these figures, with out experience seems perhaps a bit scary
Good luck anyway

Incidentally I do not think this is the wrong time to start a new business, just think it needs to be the right one

 

[Draugen]

Oh dear
There are hundreds of function rooms, small/med/large ones, up and down the country not being utilised. Village halls, hotel conference rooms, pub back rooms, British Legion Clubs, Conservative clubs, converted barns not used.
To spend your cash on doing this building up on a premise based on these figures, with out experience seems perhaps a bit scary

Glad someone agrees with me!

As no one has commented on my advice, I shall digest, it seems bloody crazy!

 

[esco]

We used to charge £100 for the room on a friday £200 on a saturday.

If you think about all of the electric, bar staff, cleaner, heating/air conditioning etc etc by the time you take all of that out, there is not a lot of profit in the money for the room. If your paying for bouncers (they now have to be certified your looking at a couple of hundred alone). a family do, 2 people kicking off, 2 bouncers go in to kick them out - what will the rest of the family do? If theyre happy to fight with eachother, they would be more than happy to turn on 2 bouncers.

The worst we ever had was the room went up, it calmed down a bit and the birthday girl just started shouting and screaming how they had ruined her birthday....when she stopped...the fighting started again. People were throwing chairs and their was a pregnant woman in there. Dont get me wrong that was the exception more than the rule, but something to be aware of.

Another thing is people ALWAYS ALWAYS ALWAYS over exaggerate. Our room help 100-120 people, there was never a time people didnt say oh it might not be big enough or we will easily fill that etc.... i cant tell you how many times there was a room with 50-60 people.

200 is a big room to fill.

I'll just hire more bouncers than.

Seriously though, what about quiz nights? bingo? work team building outings?
These events would be easier to run with less hassle than a rowdy party.
And I agree the venue won't be full most of the time, but if the location was good.......close to some offices......than could do quite well with office staff, eg weekly quiz nights and such.

 

[dev99]

You ask whether it's a good idea or bad?

I am actually involved in one, it's proved to be a very good idea, but for the previous operator it was a very bad idea.

It really depends whether you are cut out for the job/business.

This is very much a destination business therefore location is secondary, (to a certain extent).

Parking is a must.

It will probably take a couple of years before you start seeing some decent returns.

Try and keep your overheads down, don't employ permanent staff, instead get staff on demand.

Offer a complete package, our motto is very much bring your guests and will will do the rest.

Feel free to ask specific questions and I will help out.

 

[esco]

Oh dear
There are hundreds of function rooms, small/med/large ones, up and down the country not being utilised. Village halls, hotel conference rooms, pub back rooms, British Legion Clubs, Conservative clubs, converted barns not used.
To spend your cash on doing this building up on a premise based on these figures, with out experience seems perhaps a bit scary
Good luck anyway

Incidentally I do not think this is the wrong time to start a new business, just think it needs to be the right one

I wonder how many of these unused function rooms are unused due to the owners not having the time to properly utilise them.

I've not completely given up on this idea yet.

 

[esco]

You ask whether it's a good idea or bad?

I am actually involved in one, it's proved to be a very good idea, but for the previous operator it was a very bad idea.

It really depends whether you are cut out for the job/business.

This is very much a destination business therefore location is secondary, (to a certain extent).

Parking is a must.

It will probably take a couple of years before you start seeing some decent returns.

Try and keep your overheads down, don't employ permanent staff, instead get staff on demand.

Offer a complete package, our motto is very much bring your guests and will will do the rest.

Feel free to ask specific questions and I will help out.

Thanks for the reply.
Are you involved in a function room alone? or is the function room attached to a pub or hotel etc.
What were the set up costs? I have £60k aprox. Would i need much more to start up?

What kind of profits are you making? What events do you hold? Parties, quiz nights....etc etc???? Which are most popular?
I have many questions, but don't want to bombard you with them all at once .

 

[dev99]

I wonder how many of these unused function rooms are unused due to the owners not having the time to properly utilise them.
.

considerable number.

17 years ago I used to own a very large venue, I mean large like 220 bedrooms, 180,000 sq.ft of exhibition/function space. I was in the property business and didn't have a clue about the wedding conference business, sold it for a song.

 

[dev99]

Thanks for the reply.
Are you involved in a function room alone? or is the function room attached to a pub or hotel etc.
What were the set up costs? I have £60k aprox. Would i need much more to start up?

What kind of profits are you making? What events do you hold? Parties, quiz nights....etc etc???? Which are most popular?
I have many questions, but don't want to bombard you with them all at once .

This is a stand alone function room.

If you plan to cater for 150-200 guests the 60k would be sufficient, although I know of a few that have spent around 250K.

Weddings are by far the most profitable.

Google Leicester wedding venues and click on the link before the Walker Stadium, give you an idea what we do.

 

[esco]

This is a stand alone function room.

If you plan to cater for 150-200 guests the 60k would be sufficient, although I know of a few that have spent around 250K.

Weddings are by far the most profitable.

Google Leicester wedding venues and click on the link before the Walker Stadium, give you an idea what we do.

I think 200 guests would be sufficient.
How many does yours cater for?

Have you got any pics or links to your function room? The one's on the site you mentioned look very expensive . (Very nice though). How much did your function room cost? You spend much to do it up?
What net profits did you make in the last year? guideline figures would be fine.

 

[dev99]

I think 200 guests would be sufficient.
How many does yours cater for?

Have you got any pics or links to your function room? The one's on the site you mentioned look very expensive . (Very nice though). How much did your function room cost? You spend much to do it up?
What net profits did you make in the last year? guideline figures would be fine.

That is our venue. (Kapital)

the questions in relation to profits are confidential.

More appropriate would be how much do you want to make realistically and I will tell you whether that is possible and if so how.

 

[esco]

That is our venue. (Kapital)

the questions in relation to profits are confidential.

More appropriate would be how much do you want to make realistically and I will tell you whether that is possible and if so how.

No problem.

I'm not sure what to expect to make. £20k+ a year would be great.......but not sure if this is feasible in my first year.

 

[dev99]

I'm not sure what to expect to make. £20k+ a year would be great.......but not sure if this is feasible in my first year.

Very easily done.

 

[esco]

Very easily done.

With a function room costing no more than £60k???

and if so how?
(you said in prev post you would say how if it was feasible)

 

[dev99]

With a function room costing no more than £60k???

Yep, .........

 

[esco]

Yep, .........

if so how?
(you said in prev post you would say how if it was feasible)

 

[dev99]

if so how?
(you said in prev post you would say how if it was feasible)

before I say how, I need some information from you, it's not something that can be done over a few posts.

You would ideally be looking at a property with reasonable rent and rates to start off with.

I will try and put a list of question in the next day or two.

 

[esco]

before I say how, I need some information from you, it's not something that can be done over a few posts.

You would ideally be looking at a property with reasonable rent and rates to start off with.

I will try and put a list of question in the next day or two.

Any help would be much appreciated.

 

[esco]

any1 else got any thoughts or experiences with a function room business???

 

[esco]

no1 else got any thoughts on a function room business?

 

[gibby]

If you do it right it can be a good business.
During the day you can use for community groups & you can provide tea & coffee etc or have is as a nice Cafe all day. Don't forget mother & toddler groups, yoga, dance etc

there do seem to be lots of little groups who struggle to get rooms at affordable prices. A frind of mine found one & runs it as a dance school & they are doing very well
There are plenty more things you can do with it if you use your head

In the evening you could use it for weddings. Its a big market with lots of competition. Lots of ppl cant afford hotel prices & you can make a killing on the bar.
There is a lotto do on this side if you your serving big meals its a nightmare getting regular staff but it can be done & can be very lucrative

yes there is competition but that just shows there is a market.

Do some serious research & don't run it as the cheapest option.
Do look at community centres near you as some of these are really well run.
Ours is always busy but its run by local residents just to keep the building in good state, with no wages.
Sadly its difficult to book as it has lots of things going on & the prices are rather high.

G

 

[esco]

If you do it right it can be a good business.
During the day you can use for community groups & you can provide tea & coffee etc or have is as a nice Cafe all day. Don't forget mother & toddler groups, yoga, dance etc

there do seem to be lots of little groups who struggle to get rooms at affordable prices. A frind of mine found one & runs it as a dance school & they are doing very well
There are plenty more things you can do with it if you use your head

In the evening you could use it for weddings. Its a big market with lots of competition. Lots of ppl cant afford hotel prices & you can make a killing on the bar.
There is a lotto do on this side if you your serving big meals its a nightmare getting regular staff but it can be done & can be very lucrative

yes there is competition but that just shows there is a market.

Do some serious research & don't run it as the cheapest option.
Do look at community centres near you as some of these are really well run.
Ours is always busy but its run by local residents just to keep the building in good state, with no wages.
Sadly its difficult to book as it has lots of things going on & the prices are rather high.

G

Does your friend run it solely as a dance club?

 

[gibby]

Its mainly a dance club/school. They now have their own school but they also hire it out to other dance schools too.
They make alot of money from the bar as when the kids are in they sell alot of pop & sweets & crisps.
They seem to do this mostly during the week for adults but the kids lessons happen in the evenings & at weekends.

They also hire out the room & make money on the bar as a function room on a Friday & Sat eve. They do very basic food such as sandwiches & toasted sandwiches but for bigger events they pass it onto outside caterers.

Really its become like a social centre for dance, a function room for weddings & other groups use it too. They keep the prices reasonable & its always busy.

hope that helps

G

 

[esco]

Its mainly a dance club/school. They now have their own school but they also hire it out to other dance schools too.
They make alot of money from the bar as when the kids are in they sell alot of pop & sweets & crisps.
They seem to do this mostly during the week for adults but the kids lessons happen in the evenings & at weekends.

They also hire out the room & make money on the bar as a function room on a Friday & Sat eve. They do very basic food such as sandwiches & toasted sandwiches but for bigger events they pass it onto outside caterers.

Really its become like a social centre for dance, a function room for weddings & other groups use it too. They keep the prices reasonable & its always busy.

hope that helps

G

Sounds good.
Do you have an idea of how much they invested into the business? The start up costs etc.

 

[marioncritard]

Lots of pubs pay to have people in their function rooms on non-busy nights. Lots of comedy clubs charge the owners to get bums on seats. Use this model.

 

[esco]

Lots of comedy clubs charge the owners to get bums on seats. Use this model.

Sorry you've lost me abit here, what is the model? Comedy clubs charge function room owners to get bums on seats???

:|

 

[gibby]

Sounds good.
Do you have an idea of how much they invested into the business? The start up costs etc.

Sorry I don't. They were already into teaching dancing & using other rooms which must have helped. I do know other dance teachers who run these sorts of mobile dance schools using different rooms around the region.

You may want to do some research & contact these sort of businesses. See if they would be interested & what sort of prices they are being charged now.

What you need to understand though is that regular business like dance schools, toddler groups etc is good & you need to price it to pay your expenses/wages etc.
Wedding business can be very profitable too but will usually be once a week & alot of work & the need to find staff willing to help.
Then xmas roles around & you can make more money in one month than the rest of the year, but you may need to stop your regular bookings to handle the big money trade.
Getting the balance right can be difficult.


For setting some thing up like this you will need to go out & find groups, clubs etc who will use the room, rather than letting them come to you.
For weddings you can go to wedding fairs, buy lists of ppl getting married or even run your own wedding fair, which is a great way of letting ppl see your room.

For xmas parties you need to be working 6 months in advance, approaching local firms, getting deposits etc.

Don't forget kids birthdays. If you can take the hard work out of them parents will pay good money. A local church hall has 2 kids parties every sat & sunday as they bought a projector, do lots of Wii games, traditional games too & even have local catering. They also do a youth club type thing, show movies, host scouts, brownies etc

There is such a big market you really need to decide which bit you want to go for & then sort your marketing

hope it helps

G

 

[esco]

Sorry I don't. They were already into teaching dancing & using other rooms which must have helped. I do know other dance teachers who run these sorts of mobile dance schools using different rooms around the region.

You may want to do some research & contact these sort of businesses. See if they would be interested & what sort of prices they are being charged now.

What you need to understand though is that regular business like dance schools, toddler groups etc is good & you need to price it to pay your expenses/wages etc.
Wedding business can be very profitable too but will usually be once a week & alot of work & the need to find staff willing to help.
Then xmas roles around & you can make more money in one month than the rest of the year, but you may need to stop your regular bookings to handle the big money trade.
Getting the balance right can be difficult.


For setting some thing up like this you will need to go out & find groups, clubs etc who will use the room, rather than letting them come to you.
For weddings you can go to wedding fairs, buy lists of ppl getting married or even run your own wedding fair, which is a great way of letting ppl see your room.

For xmas parties you need to be working 6 months in advance, approaching local firms, getting deposits etc.

Don't forget kids birthdays. If you can take the hard work out of them parents will pay good money. A local church hall has 2 kids parties every sat & sunday as they bought a projector, do lots of Wii games, traditional games too & even have local catering. They also do a youth club type thing, show movies, host scouts, brownies etc

There is such a big market you really need to decide which bit you want to go for & then sort your marketing

hope it helps

G

Thanks.
re the market I am looking to cater for, well I am trying to remain as flexible as possible and cater for as many diff markets as I can.....and once established maybe focus on the more profitable events/do's.

That is one of the reasons a function room appeals to me, as it can cater for so many diff sectors or markets.

I've been looking at function rooms available on the market in the birmingham area, but almost all have a pub etc attached to them, and sellers aren't willing to sell/lease the function room alone. The one's I have seen so far seem too small too, for what I am looking for, as I want a room that can hold 200 people.
I have about £60k to invest......so need to bear that in mind when I do make my move and invest in a function room.

 

[gibby]

I don't know Birmingham at all but local to me we have alot of empty pubs, restaurants & social clubs.
These can be ideal as they should have the right permissions of use from the council.

Many pubs are really struggling but the trick is finding the ones that are not looking for silly rents or tied to a brewery

Keep looking & hopefully you will find the right place.

G

 

[patientlady]

I wonder how many of these unused function rooms are unused due to the owners not having the time to properly utilise them.

I've not completely given up on this idea yet.

The problem with function rooms are that they tend to be minimal/modern or dingy and run down - with no character! A friend of mine has her own events company and just out of curiosity explained your idea to her. She explained that she rarely uses the same venue twice. Her reason is that every event she runs is completely different to the next, in numbers and in style.
What worries me is that you are thinking of investing £60K on someone elses property, in an area that is struggling big time.