by Louise M. Felsher, CMP, CMM | November 01, 2010

Strained economics have led many nonvenue businesses into reinventing their square-footage as an "event center" and/or thinking they can make a quick buck off their empty warehouse space by hanging a shingle as an event venue. Unfortunately, most are unaware of the infrastructure, permits, effort, labor and expertise required.

Running a legitimate event venue requires significant capital investment and adherence to numerous codes and regulations, and it is nearly impossible to be profitable unless you really know what you are doing. Therefore, if a suspicious venue emerges from an unlikely source and smells barnyardy, caveat emptor! Unless you want to take on some serious risk and time commitment, you should be cognizant of the following red flags.

HyperboleExtreme exaggeration in the publicity for the new space is a dead giveaway. Beware buzzwords such as first, biggest, best, only. This could simply be unfortunate amateur messaging, but more likely it is compensation for inadequacies and, regardless, it is almost always false.

Photo shopPhotos on a website or marketing materials might not be of the advertised venue but instead are stock photos, images of another facility or intentionally altered. Is that shiny new equipment featured on the landing page a figment of the supplier’s imagination?

Name gameCharlatans intentionally misrepresent themselves in the marketplace. They choose generic names suspiciously designed for search engine optimization or names and catch phrases that will capitalize on or attempt to leach the success and credibility of existing or nearby venues. They may even claim to be the other, real venue or give false information about connections to other businesses that they feel will help them win business.

Misinformed/inadequate staff
At a bogus venue, staff will not know what light or sound bleed is, or they will boast 1,000-person capacity at a facility lacking a fire-suppression system or appropriate parking. Also note: On-site labor should comprise a minimum of 1 per 25 people per group.

Minimal capital investmentBe particularly wary if the venue calls itself a conference center but does not own its own basic equipment, such as screens, A/V equipment, chairs and tables, or if it does not enable power, light and temperature control. If you must work around these shortcomings and bring everything in, expect to invest significant time and expense. Further, is the venue slapped together? Did they chose the least expensive materials for carpets, flooring and paint, and does it appear they rushed and took short cuts?

Everything to everyoneBeware if a venue’s list of offerings resembles an Applebees menu: conventions, bar mitzvahs, police lineups -- you name it. A wide range of pricing also should set off an alarm. Bona fide venues have core competencies and specific target markets.

GimmicksIf the facility has a gimmicky title or primary marketing messaging, e.g., the venue touts itself as an "event center and chocolate factory," look twice. Many legitimate and wonderful businesses have event space options, but their core business should be genuine and always take an obvious primary focus over events, no exceptions.

Misrepresentation of spaceSome less-than-kosher venues include unusable space in their square footage. For example "We have 25,000 square feet of meeting space," but in reality, one-quarter of that is taken up by obstructions, walls, furniture and equipment that cannot be moved.

A venue checklist• Is this a legal venue? Does it have all the right permits (fire marshal, ADA compliance, etc.)? Does the venue have permits for its primary business is (e.g., as a restaurant, winery, sports facility, etc.)?
• If alcohol will be served there, be sure every possible federal, state and local regulation is being adhered to.
• If a venue boasts of unlimited parking, don’t take their word for it -- find out for sure while on-site.
• Pursue references and testimonials besides the ones presented by the venue. Its easy to fabricate good PR and join every event group on the social networks as a "pro."
• Insist on current photos and diagrams of the actual usable space, including any obstructions.
• Does the facility have a back-up generator?
• Is the water source potable, or will you need to bring water in?
• Ask about any upcoming renovations and/or noise from nearby construction.
• Are the bathrooms adequate and scalable, or will you need to spend thousands (and get permission from neighbors and possibly permits) to bring in executive trailer restrooms?

If you must, some adviceIf you find a space you absolutely must use that has some of the red flags above, plan short-term events only, and have a back-up. Illegal venues can be shut down by authorities and/or disappear as fast as they appear. Bargain hard -- you should expect to pay significantly less than market, Know what you are getting yourself and your stakeholders into, as you will assume joint liability. Final note: Most industrial space leaks or gets very hot, so limit such use to late spring, and avoid cold, rainy months.