Dance Club Cooperative

Dance Club Cooperative

Project: To buy a moderate sized dance club and to turn it into a cooperative owned by those who work it.

What: A moderate sized club with, say, 10 dancers and several other workers (manager, bouncers, bartenders). About 15 - 20 workers total. Each worker will eventually be an owner in the business. They will also be employees and union members. 

Financing: Example - Buy a club for $400,000. There are grants available for cooperatives (as well as technical resources) up to $50,000 or so. Would then require owner financing, an investor and/or a bank loan. 

Buying in: Each employee would be paid $15 per hour plus tips (or tip share). They will return all or a portion of their minimum wage to the club in order to buy into it (tips they keep with a fair split). If 15 employees rebate the entire $15 and work an average a 30 hour week, after one year they will have given back to the club $350,000 (total). Add that $350,000 to a grant for $50,000 and the $400,000 cost to buy the club is reached after only ONE YEAR (doesn't include operating expense, etc.). If they only gave back half their minimum wage, it still would only take 2 years.

Why would the employees do this?
They will get the opportunity to jointly own a club - probably at a fairly young age.
Once they have bought into the club, they will share in the decision making, chores, and profits.
When time for them to move on, they will be able to 'sell' their share to a new hire (who will then rebate their own hourly pay to buy in). Using the example above, a part-owner could hope for a payout of, say, $23,000 upon leaving and possibly quite a bit more if the place increases in value (as I suspect it will). Potentially, the club could increase greatly in value with a good reputation, steady customer stream and professional employees.
Workers would have a say on how they would dress, act and how to perform their work. 
Workers would not be subject to the whims and mood swings of a tyrannical boss.
As employees, they would get protections and benefits like unemployment, workers comp, sick days, parental leave time, holiday pay, medical, vacation pay and Social Security.
At first, it would be up to the founders to interview, investigate and hire employees. But after that they will be able to decide who they want to work with.
Could work with or join with a day care provider (and other services) for parents. As a group they could get better rates and treatment. 

How will this club be different?
It will be worker-owned and union. Employees will work harder toward making and keeping happy customers.
It will try to attract other union members as customers (union workers who have good, steady paychecks to spend).
It will treat their employees with respect. Women will not be abused or insulted. Sex trafficking, interior drug use, child molestation, prostitution, racism will not be tolerated.
The place will be kept up, kept safe and kept clean. Coop-owners will not allow dangerous conditions that could injure AND add substantially to the cost of running the club. They would probably see their own income increase along with the club's reputation as a safe and clean place for customers to spend some time. 
It might attract people who would not usually think of going to a place like this. Couples, for example.
The workers KNOW what customers want. If they want a French Maid or mermaid night, they'll get it. 
It will attract (or make) the BEST workers! Where else (after only a year or two of reduced income) could they get a deal like this?
The club, as a worker-cooperative, might get better treatment from local politicians and law enforcement. 

Decision-making: There would be corporate by-laws to follow. But most other things would be left to the club owners to decide. Maybe at weekly meetings on slow days or nights. Workers could include a manager who would fairly write up schedules, chores and more - but the manager(s) would be hired/fired/directed by the group.

Potential problems:
Financing: Bank loans would be tough. Grants, private investors and owner financing might cover.
Age: Dancers would age out at a point. So after a certain amount of years they would have to be timed out.
Personality conflicts: Would need to be handled by an impartial outsider, through the manager, through the by-laws or with group decisions.
Workers Comp will be very expensive for the first 3 years but might be reduced after that.
Liquor bar insurance is probably expensive.
Not actually owning the building could eventually be a problem as a landlord could unreasonably raise rents or deny needed repairs. I would hope that the building and land would be included in the original sale.
The initial, legal paperwork would be complex but I do think there are resources out there to assist.

Odd thoughts:
Could close down for a slow day and workers participate in cleaning and other chores. Perhaps combined with their weekly meeting.
People could fill in their regular work with chores like cleaning or advertising outreach (in order to make their weekly hours).
Memberships could be offered to customers. Only they might be allowed in on certain (normally slow) nights. They may get VIP seating or drink discounts or more personal treatment by employees. Members would probably also be protective of the club, acting like partners.
This club would set an example for how other clubs could run profitably.
The cheapest clubs to buy are ones that don't have a liquor license. By getting a liquor license the value of the club could be immediately and greatly increased. Getting a liquor license might be easier for a worker cooperative with a good reputation.
Employees would see an alternate and more equitable way of doing business.
If it does well dancers could be given clothing allowances and other help for expenses.