Things To Consider Before Opening A Karaoke Bar Business

Karaoke Bar

What makes a karaoke bar popular is it’s very own patron guests, they can be pop stars for a night or they can be the willing fans. Karaoke caters to both open mic sessions where any guests from the bar can sing and participate or smaller rooms where friends and family may sing in private.  Regardless of preference, karaoke bars can make any guests sing because of the easy to sing-along lyrics displayed on a screen. 

Why karaoke bars still exist in 2019? 


While Karaoke has been providing wholesome entertainment since the 70s, odds are high that it will still continue to be even in the years to come. This is primarily because most people like to sing, share a  laugh, and socialize. 

Is the karaoke bar a good business idea?


The answer is a definite yes. Especially If you find singing as a fun activity, starting a karaoke business can be enjoyable and rewarding. Collection of classic hits that never goes out of style plus the latest tunes are crucial to the karaoke bar business. Karaoke bars are no longer just venues for typical night outs, they now serve events such as family parties, weddings, birthdays, proms, and others. 


Okay, so where do I start with my Karaoke bar business?


Since you now have some basic ideas about the Karaoke bar business, the next step is planning. Now, there are two major considerations that you should focus on to ensure that you can start your Karaoke business without much worry. The first one is the business side of things, and the second one is legal compliance. 


Here’s our guide on matters that you will be dealing with when starting Karaoke business

  1. Planning the business  - a Karaoke business, or any ventures for that matter, need a thorough and definite plan. Good planning can determine the small details as well as explore new things. When planning, you may consider asking these following questions :

Who will be my target market?

Karaoke bar is a wholesome form of entertainment, thus you’ll have customers

mostly from the brackets of young adults, and ages 30 to late 40s. This age group usually go to Karaoke bars to socialize, meet new people, have fun with

friends and relatives, as well as dates with partners. 


What will be my business name?


A proper and catchy name is also essential for the success of your Karaoke

business. Stay away from names that are contradicting, not related or don’t 

sound good or proper when attached with “Karaoke Bar.” Make sure that the

name is available as well by due research.


What will be my startup capital, and operating costs?

The start-up capital you need when launching a karaoke bar will depend on many factors such as renting a place or buying a property. If you decide to go for the latter without an existing building, you should prepare around $180,000 to $900,000  

If you are assuming an existing Karaoke bar business, you’ll only have to shell out as low as $30,000. The big gap in the start-up costs between these two options need careful consideration. While starting from scratch may sound fine if you have the budget, an existing Karaoke business with some improvements is practical. Check out  Karaoke Bananza for the guide on the equipment you may need for your karaoke business.


 What is the average period to recover my expenses?


The income of a Karaoke business mainly comes from drinks. Some charge at

the entrance as additional income, but it’s not usually a practice. Karaoke bars

can also get income from private room rentals for special functions or group parties. 

When it comes to average profit, it will still depend on different aspects. According to this research, average Karaoke bars can have a net income of between $112,585  to $164,129 in its first three years of operation. That is around $9,000 to $14,000 per month. 

Considering the numbers above, a karaoke bar business has a return of investment only in a few year’s time.

Registering, and getting licenses for the business 

Permits and licenses are required to start and run your business. Not doing so can result in penalties, fines, or business closure. 

Usually, states require a bar operating license. And some states have specific permits for a karaoke bar business. Inquire with your city’s business section so that you can be aware of these requirements. 

Licensing the music


Playing music for public consumption or business requires specific sets of 

Requirements that only the recording company or license holder can provide. There are also blanket or package licenses that have a collection of tracks from artists and recording companies. 

Marketing and promoting your Karaoke business


Nowadays, there are a lot of available channels to market and promote your business. The Internet and online music platforms are one of the most widely used tools to advertise your Karaoke bar. Since this is music-related, radio is still one of the most basic yet effective media for promotions. 

Social media and online ads are also at the top of the list for Karaoke bar business marketing. 


Sales and accounting 


Set up a computer or electronic-based sales system for your Karaoke bar business. This way, you can monitor real-time your expenses, sales, and inventory. This is a helpful tool to help you decide on strategizing the operating costs of your Karaoke bar. 

Implement a systematic accounting program for the healthier financial performance of your Karaoke bar. 

Will I know if a Karaoke bar business is right for me?


Do you love music, hosting, and having a good time with people? If your answer is yes, then you’re in for a good start.  The customers go to Karaoke bars to have a good time, and if it makes you happy to give it, then maybe, this business is for you. 

You must also have extensive knowledge of the trends in music and technical skills in the Karaoke system, these will be an edge over other competitors in this type of business. 



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