Starting a Nightlife Business in SF
If you’re interested in starting a nightlife business, be sure to visit the San Francisco Business Portal, the ultimate resource for starting, running, and growing a business in the City. With comprehensive information and tailored tools, the portal helps you navigate the steps to start a business, quickly learn what it takes to be compliant, and obtain resources along the way.
A. Developing a Business Plan
As you begin the process of starting your nightlife business, you’ll need to have a clear understanding of the type of business you want to operate. Different considerations – and different regulatory constraints – will apply depending on whether your business will be considered a restaurant, a bar, a nightclub, or a live music venue. Having a well-defined idea of your business, and understanding how relevant regulatory agencies will view your type of business, will help you identify what steps you will need to take to get your establishment started.
The Small Business Assistance Center can help you understand the challenges you will face in starting your type of business. Getting a good sense of these considerations will help you create an effective business plan and a budget that includes sufficient financial support until you are able to meet your ongoing expenses. As you launch your business, you will want to make sure that you also have enough financing to cover your operational costs, including rent, payroll, supplies, and marketing. Consider that you may need to pay rent for a number of months as you wait to secure the permits required to open your business.
As you proceed, you should also have a clear idea of the type of business structure you will be using to operate your business. This page from the Small Business Assistance Center outlines different business structures that you may consider. You will be required to indicate the ownership structure of your business on a number of permit applications.
The Small Business Assistance Center can also connect you to local economic development organizations to provide technical assistance, training and loan packaging services for small businesses. Through these organizations, you can access classes and one-on-one assistance on a variety of topics, including business planning, financial management, marketing, human resources, and legal services.
Some nonprofit economic development organizations have program offerings that may be of particular interest to individuals seeking to start nightlife businesses. For example, the Small Business Development Center has developed a Restaurant Program that includes one-on-one consulting and a variety of affordable workshops for San Francisco restaurant owners. Additionally, La Cocina offers affordable commercial kitchen space, technical assistance and access to market opportunities to help women from communities of color and immigrant communities develop their food businesses. Finally, the Renaissance Entrepreneurship Center also offers a variety of classes in business planning.
B. Finding the Right Location
One of the most challenging and critically important aspects of launching a successful nightlife business is finding the right location.
At a minimum, a property must be appropriately zoned to have the type of nightlife business you want to occupy the premises. In addition to zoning, though, you’ll also want to take into account the property’s unique characteristics, and how they might impact the ability to successfully run a nightlife establishment. Finally, you should gather feedback from key neighborhood stakeholders and other nightlife business owners. This section discusses some of these important considerations.
Before You Sign a Lease
When you think you’ve found the right property, the Small Business Assistance Center has developed these tips on negotiating a commercial lease. Among other things, be sure to carefully review the terms of any proposed lease and make sure that you understand all of its clauses. You should also structure any lease agreement to make the agreement contingent upon obtaining all necessary permits and approvals – including, if required, conditional use approval – as well as a liquor license. These contingencies will protect you in the event that you are unable to secure all of the approvals needed to start your nightlife business. Additionally, consider negotiating for reduced or free rent until all necessary permits and approvals have been acquired. Finally, in order to protect your investment in your business against fire or other unexpected damage, you should get a quote for business insurance.
Depending on a neighborhood’s zoning rules, nightlife and entertainment uses may be permitted as of right, they may be conditionally permitted, or they may not be permitted. If your prospective use of a property is conditionally permitted, you will need to have a valid Conditional Use Authorization. The property you are moving into may already have a valid authorization for the use you are intending, although a valid conditional use expires after three years of inactivity.
If you do not have a valid Conditional Use Authorization, and your zoning requires conditional use approval, you will need to receive approval by the Planning Commission during a public hearing. To avoid the delays, challenges and potential costs that may be associated with this process, it is advisable to consider moving into a property that was previously occupied by a similar nightlife business. For more information on this process, consult the staff at the Planning Information Center and review the application packet for a Conditional Use Authorization. Business owners seeking conditional use approval for restaurants may be eligible for expedited review under the Small Business Priority Processing Pilot Program.
Even if your proposed use of a property is principally permitted, you may be required to conduct neighborhood notification – which is required for changes of use to bars, restaurants and entertainment venues in certain zoning districts. As discussed below, during the neighborhood notification process, a neighbor may file to require review of the project by the Planning Commission, which may delay your proposed project.
To answer your zoning questions, planners at the Planning Department’s Planning Information Center, located at 1660 Mission Street, are available for in-person meetings and via the telephone at 415-558-6377. The Small Business Assistance Center can also help you understand the City’s zoning restrictions and identify areas that are best suited for your business.
This zoning map shows the zoning districts across San Francisco. To access summaries of the use restrictions that apply in different districts, you may review these zoning use district summaries. The use summaries indicate whether a type of use is permitted (P), conditionally permitted (C), or not permitted (NP or blank).
If you’re interested in detailed information about a specific property, the San Francisco Property Information Map can provide you with the zoning of the property and the history of permits and complaints at a specific location.
2. Understand the Property
Finding the right location isn’t just about zoning, though. In order to evaluate the likely impact that your business will have on nearby residences, as well as the impact that those neighbors’ needs might have on your business, you will need to understand the locations of any nearby residences, as well as any plans to build new residences near your prospective premises. A good understanding of where these residences (or residential development projects) are located is critical to understanding whether your potential business operations might be adversely impacted by them.
In determining whether a property is the right fit for you, you should evaluate the amount of noise your business and your patrons may generate. Consider what the noise level generated by patrons will be while they are inside your premises, but also as they enter and leave the establishment, smoke outside the premises, or arrive or leave from any parking lot connected to the premises. In the operation of your business, consider the noise impact of kitchen fans and trash and recycling removal as well as music, machinery or other noise that might be generated inside or as a result of your business. To the extent possible, determine what steps might be taken to mitigate this noise.
In addition to noise, consider any other impact that your use might have on the property’s neighbors. If you are going to be serving food, is it likely that food or garbage odors would reach any neighbors’ property? If you anticipate having patrons line up in front of your property, would those lines interfere with your neighbors’ ability to access or enjoy their property? How would the introduction of your business impact parking near the premises?
You should also consider how well a particular property’s design may accommodate the use you are envisioning. If you will need a hood system for your kitchen, find out whether the building you are looking at allows for venting. Determine whether the property has sufficient utilities hook-ups and gas lines for your business, or whether additional hook-ups will need to be installed (and the cost of such a project).
In considering the impact of the property’s design on your business, you should consult with the Fire Department regarding the maximum occupancy capacity for the property in the use that you envision. Additionally, you should also consult the Department of Alcoholic Beverage Control and the Planning Department regarding whether the location you pick might impact your ability to acquire a liquor license and the conditions imposed upon your use of that license.
Finally, you will need to make sure you understand federal and state accessibility requirements, including the requirements of the Americans with Disabilities Act (ADA). If you are out of compliance with these laws, you are at risk of being sued. The Small Business Assistance Center has developed a very informative page on federal and state accessibility requirements and small businesses. The U.S. Department of Justice has developed a primer for small businesses on ADA compliance. The state Department of Rehabilitation also maintains information on compliance with state and federal disability access laws. The Department of Building Inspection’s What You Should Know About Disabled Access Requirements provides more information about these requirements and their impact on construction projects.
In response to the City’s small businesses facing ADA compliance lawsuits, the Office of Economic and Workforce Development launched the ADA CASp Small Business Assessment Program. Through this program, eligible businesses may receive a free ADA assessment from a Certified Access Specialist, who can survey your premises and identify barriers to access. Your insurance policy may also cover the hiring of a Certified Access Specialist or may cover legal fees connected to an accessibility-related lawsuit; if you are looking to purchase insurance, consider including this coverage in your policy.
3. Understand the Neighborhood
Even if you think you’ve found the right property for your nightlife business, you should engage with the community in order to understand how your business will be received in the neighborhood. Depending on your prospective business and the zoning of your property, engagement with potential neighbors may be required by the Planning Code. The Entertainment Commission now requires applicants for entertainment permits to reach out to neighborhood groups as well.
Even if outreach isn’t required, reaching out to your potential neighbors is strongly recommended. Proactive neighborhood outreach will demonstrate your interest in working with neighborhood stakeholders to avoid or address any challenges that might otherwise emerge during the permitting process or the eventual operation of your business.
Outreach will help you understand challenges that previous or existing nightlife businesses in the neighborhood have faced. It can also provide an opportunity for you to educate members of the community about your goals with your business and to learn about the needs of community stakeholders that you may be able to help address through your business.
In addition to reaching out to neighboring businesses and residences individually, you should consider contacting any local neighborhood association and merchants’ association, as well as the Police Department’s local district station. To find relevant neighborhood and merchant associations, consult your district supervisor, the Small Business Assistance Center, or this map of neighborhood organizations created by the Planning Department. It should also be useful to consult with existing nightlife business owners in the neighborhood you are considering.
Your property may be located in a Community Benefit District (CBD). A CBD is a partnership between the City and a local community to fund neighborhood improvements through a special assessment on local property owners. The funds are administered by a non-profit organization established by the neighborhood.
Additionally, the Invest in Neighborhoods Initiative provides focused, customized assistance in 25 neighborhood commercial districts. If you are looking to start your business in an Invest in Neighborhoods corridor, you should contact staff in the Office of Economic and Workforce Development. Find out more at InvestSF.org.