You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your dinner theatre. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a dinner theatre?
You are most likely going to have to build this facility from the ground up. It may be possible to retrofit an empty movie theater, but it will still take a massive renovation to bring in the restaurant. a full-size restaurant/stage building can run from $500,000 to $30 million without blinking, depending on the number of seats, complexity of staging, sound systems, and lighting. Your kitchen will run around $200,000 minimum. Once you have a building, you can anticipate spending a minimum of $30,000 for each 10-week stage production for the actors, licenses, directors, staff and staging. Costs for production can easily skyrocket into the millions if you are attempting a Broadway scale show.
What are the ongoing expenses for a dinner theatre?
Every show must pay licensing fees for every performance--which can be as little as $50. Directors, musicians, stage talent, and stage hands are also on the payroll. Then you have the regular operational expenses of running a restaurant business.
Who is the target market?
The theatre crowd continues to evolve and you must carefully target your show to match your intended market. Adults over the age of 50 enjoy dramas, traditional musicals and revivals, and many will make attending a show an annual event. The younger generation demands entertainment that connects with the digital age, but are equally ready to pay for a ticket to the latest and greatest experience.
How does a dinner theatre make money?
Tickets sold to hungry patrons looking for entertainment will cover the cost of the meals, staff and talent wages, and operating costs. By situating your dinner theatre in a high-traffic area such as an amusement park or other tourist attraction you will be able to draw in new customers who have not yest seen this season's show.
How much can you charge customers?
Local dinner theatres charge between $40 and $70 for a ticket. A Las Vegas sized show can and will charge $80 to $100 per ticket with add ons such as alcohol, dessert, and T-shirts to increase per person revenue.
How much profit can a dinner theatre make?
For most small theatres, there is no actual profit made out of the stage show. That is the attraction that fills the seats. By controlling food expenses through offering a limited, but delicious menu, you are able to generate profit from each ticket sold. Most local stage-only theatres run on a non-profit basis. Dinner theatre does not allow for this structure to work due to the sale of food and alcohol.
How can you make your business more profitable?
A successful dinner theatre often includes a premium bar and lounge as part of the experience. Alcohol raises your profit margin significantly. Running shows for six months at a time lowers the average production cost, but unless you are operating in a high-turnover tourist area, this can negatively impact attendance.
What will you name your business?
Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your dinner theatre is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
Federal Business Licensing Requirements
There are federal regulations regarding what can and cannot be added to, sold as, and processed with food. Attached is a resource from the Food and Drug Administration detailing the process of starting a food business: How to Start a Food Business
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a dinner theatre business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Certificate of Occupancy
A dinner theatre business is generally run out of a building. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a dinner theatre business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your dinner theatre business will be in compliance and able to obtain a CO.
When selling food, you will need licensing from a local health department; all establishments serving food are required to pass a health inspection. Tips for faring well on a health inspections
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a dinner theatre
Video will draw eager theatre attendees' attention to your show. Utilize traditional television ads and create viral content ready to be distributed across all social media networks to announce your arrival on the scene. Ongoing promotion will be required to announce each new show and menu.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
Your first customers will come during the media onslaught of the grand opening out of curiosity. They will return if your show is completely original and awesome or when you change out the production, but only if their dinner stood up to the production quality on stage.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Dinner Theatre In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
For the multi-talented entrepreneur, a dinner theater business feeds your desire to work in a constantly changing landscape as you swap out menus and productions every few months. Your business will serve customers from every walk of life even as you work to bring together stage talent and service staff equally motivated to excel in this unique workplace. However, you should expect to keep a hectic schedule. If you value your nights, weekends, and holidays, this may not be the job for you.
What happens during a typical day at a dinner theatre?
Your dinner theatre business will always be a mix of predictability and surprise. On any given day you and employees of your business will:
- Hold rehearsals for the upcoming show with actors, musicians, directors and stagehands
- Prepare a delicious dinner that serves several hundred people at the same time
- Clean the kitchen, restrooms, dining room/stage and parking lot
- Source new shows for future production
- Provide excellent service to all your customers from the moment they arrive to their departure four hours later
- Maintain a schedule that delivers food on time without interrupting the show
- Market your theatre to draw new patrons in from surrounding area
What are some skills and experiences that will help you build a successful dinner theatre?
While theatre is a huge part of this endeavor, you must always remember it is a business and keep your eye on the bottom line.
- Experience performing or participating in live theatre presentations--production experience is especially valuable
- Knowledge of the restaurant industry and its standards and practices
- Experience as a hostess or server in a busy high-traffic environment
- Good business skills
- Current knowledge of trends in popular entertainment
- The ability to roll with the punches--due to its unique nature, this is an extremely challening line of business
- A commitment to delivering a positive and memorable experience to your customers with every single performance
- Building management skills
What is the growth potential for a dinner theatre?
The ability to expand into multiple locations relies heavily upon delivering a new and exciting theatre offering that your customers want to see repeatedly while bringing their friends along. Themes, dazzling special effects, and a high-energy production offer the most hope for success in this area.
TRUiC's YouTube Channel
For fun informative videos about starting a busines visit the TRUiC YouTube Channel or subscribe below to view later.
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
What are some insider tips for jump starting a dinner theatre?
You need to look ahead two years at the kind of entertainment you wish to offer for opening night in order to kick off this endeavor with a bang. A high visibility location featuring a loud and dazzling production will attract the most attention and boost initial ticket sales. Hiring known stage talent helps to turn a night of dinner and a show into a celebrity event.
How and when to build a team
You most likely will need a development team from the moment of conception, which may be a far as two to five years in advance of opening. You need a show which either requires a production company for the big time or a single producer who will curate shows for you. Building and restaurant management can be brought on board a couple months before opening. Serving staff and talent are hired when the show is ready to enter into rehearsals.