Private Clubs Work in Towns of Many Sizes
Why does Boston have a Harvard Club and New York have a Princeton Club, but your medium-sized town, doesn’t have a university club at all?
Ever thought about starting a social organization in your own hometown? You don’t need a golf course and the social club does not have to function like your typical 7-day a week dinner restaurant (you can use catering if you have to).
All you need is a nice venue and something to organize your membership around. This could be alumni of a particular college or colleges, it could be people interested in something in particular like sailing or hunting, or it could even just be open to people that want to be in a private, limited club that need to pass the screening of a membership committee.
Any decent-sized city offers hundreds of dining options, not to mention gyms and parks. Your goal is not to compete with these places. Your goal is to offer something they don’t: status, prestige, and exclusivity.
A typical night out at Outback Steakhouse involves you sitting in a restaurant where you don’t really know anyone. A typical evening at the Fort Worth Club involves sitting in a restaurant where you know a lot of people, many of them quite accomplished in life.
Try to Offer Reciprocity with Other Great Clubs
A few clubs also offer reciprocity; basically a ticket to get into other clubs around the nation, many of which may be more prestigious and exclusive, and with better amenities than your hometown club. So your club in Anytown USA might get you on the golf course at Riviera Country Club when visiting Los Angeles or have you working out at the Western Athletic Club in Seattle as you prepare for an Alaska cruise.
Very few private social clubs are for-profit, although, a few are out there, such as the country clubs run by ClubCorp. Most are non-profit, and thus raises the question, how is starting a private social club an investment opportunity?
How Do You Make Money?
The most obvious way is if you own the real estate that the club leases and uses. Let’s say you own a building that has had various restaurant tenants over the year, along with a great back yard area backing to a city trail.
You are tired of dealing with the latest trendy concept coming in and going out of business every couple years (followed by vacancies), and the yard is not really being used to its full potential. A private social club where people pay to join, and are encouraged to bring their kids, might be the tenant that finally sticks. (Side note: people love spending money on their kids) You could even do a lease-option to the non-profit club in order to eventually sell the building and move on.
Another way that people could make money by starting a private social club is using one’s preferred insider status as a member/founder to sell products or services to the club itself. It is not going to make you rich, but if you sell commercial insurance for a living, you own a landscaping company, you own a catering business (for a club without its own full-time kitchen staff), or you own a microbrewery, for instance, the club should at least give you a chance to bid or providing that product or service to the club.
Another way to not necessarily make money for yourself but to help out others that are important to you would be through, for the lack of a better word, nepotism. Being an insider might give you the ability to help a relative or close friend secure a job that would otherwise not be available to them if the club did not exist.