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Idea Overview:
Flexible payment options have started to dominate many markets but are not yet being used for the leisure and entertainment and specifically the nightclub industry, I would like to open a nightclub that is open to the public but that also allows those who become members and are eligible to opt for flexible payments such as 'drink now pay later', pay in installments, or pay in advance to control how much one spends or drinks on a nightout. I would also like to use biometric fingerprint readers to identify members on the premises, and have a 'to the person' drink delivery service that allows people to order drinks through the app and have them delivered to them on the dancefloor. The business will be strongly ethically motivated and will refuse to offer credit to customers with bad credit or to those that are eligible but that are not in control of their money (an informal assessment will be conducted as part of the application to determine whether the customer's attitude to money is positive or renders them vulnerable to debt escalation).
Who might use it/where it might be used?:
The typical user of the nightclub in the UK is a young student or professional in the age range 18-30. Typically these individuals have limited financial resources and limited savings, meaning that they will have to renounce to a night out, at times, because of lack of funds. Extremely responsibly-provided credit could constitute a solutions for those people to go out before payday has arrived. Other options will attract the customer to a membership, including fast-track queueing, biometric fingerprint readers, drinks delivered to the person, increased fidelity discounts, the possibility of splitting bills amongst friends through the app, safety features such as notifications when all friends have arrived home safe and anti-spiking drink covers, the possibility to propose songs, or up/downvote songs to inform the DJ of the clientele's taste.
The Market (B2B, B2C or Both):
Business to Consumers (B2C)
Sector the idea belongs to:
Media and entertainment
Is there a similar idea to be found?:
While the nightclub experience has been part of the UK culture for a very long time with unperturbed popularity, flexible payment options are a much more recent innovation that, nonetheless, acquired exponential interest with the public. However, these options have never been applied, as far as I am aware, to the nightclub industry and no public nightclub offers this possibility. Both elements have their challenges: the covid-19 pandemic, rising inflation and rising cost of energy exert a pressure on the public's finances and reduces their capacity to spend for leisure (an argument in favor, not against, the flexible payment options), whilst offering credit can be seen as an unethical activity that induces people to fall into debt (hence why it is essential to do so responsibly and ethically, i.e. by discouraging credit to those customers who are not well in control of their money).
Why you think there is a demand for your idea?:
It has become apparent that the UK public has an interest in having several options regarding payment, and they would like to make expenses (sometimes necessary ones as well) even when they are most struggling with money. Most recently, some airlines have begun offering credit to customers by allowing them to pay for flight tickets in installments within a set period of time. These options have also dominated other markets in the past few years, first and foremost that of online retail, both non-tech (clothes, furniture, appliances) and tech (TVs, laptops, phones, headphones, ....). Additionally, people concerned about how much they drink and younger people with less capacity to control their budgets will be able to pay in advance, before their night out when they are not inebriated, and thus set a limit to their drinking or spending.
Who would be the ideal customers?:
In general, nightclubs are mostly frequented by young individuals of both genders within the age range 18-29. These people (especially in the lowest part of the spectrum) are those that are statistically most likely to have more limited resources and less capacity to save and budget, and are therefore those that could benefit the most of the ability to spread the costs of a night out over weeks or months.
What ideas do you have to reach these customers?:
Once operational, I would envisage young people would be reached through social media advertising and through posters and fliers strategically distributed in bars, cafes, universities.
How far have you developed this idea?:
I have informally gathered the idea of some poeple, mostly close to me emotionally. In order to obtain a less biased opinion, I have just created a survey of 15 questions that explores exactly the type of clientele, their spending habits, their opinions on flexible options, their salaries, etc. I would foresee that I could obtain very useful information about the interest of the public in this project before proceeding any further. I have spoken to a friend of mine who works as a marketing consultant and with whom I decided to register the company.
What – if any – feedback have you had for this idea so far?:
The feedback that I received was overwhelmingly positive as it was recognized that this type of business is not yet being conducted, at least in the UK as far as everybody I spoke to was aware. Although the idea is probably positive, the most critical feedback came from myself, as I recognize the tremendously significant challenges involved in the process: finding enough money to purchase the premises, dedicating time to the project whilst studying for a master's degree and having other two start-ups, applying for the months-long request to obtain the authorization from the Financial Conduct Authority to offer credit to customers, the costs of premises and alcohol licenses, the legal risks involving bad debts or delayed payments, the ethical problems involved in the creation of debts.
What supporting material – if any - would you like to add to your proposal?:
I am developing a website (I would say I have completed 60% of it so far) that would form one of the five components of a package I am preparing for investors (1. website, 2. mobile app, 3. business plan, 4. financial forecas, 5. survey results). I am creating it using Wix website builder.
3 comments to “The Ministry”
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Simon Krystman - October 5, 2022 at 1:29 pm
Why do you need to open a new nightclub for this flexible payment option? Can’t you licence it to an existing nightclub?
Mark Cardwell - October 29, 2022 at 2:00 pm
I agree with Simon – if there’s demand for flexible payment, build a product to sell to multiple nightclubs. You won’t get enough payback from just one.
Mark Cardwell - October 29, 2022 at 2:12 pm
You might not need the FCA piece, at least for initial experimentation. I think something like Klarna could cover a chunk of your requirement. (You can’t use Klarna to sell alcohol though.)