Las Vegas- The owners of System Dynamic, LLC met when they were working on a project together at a local topless club. They developed an idea for the next big thing.

System Dynamic created a program that tracks dancers and whether they’ve paid their club fees.

CEO Jon Evans had come from Texas to install point-of-sale (POS) systems in Southern Nevada. And he was doing that for the club. His business partner, Kyriacos Kalfas, was installing a computer network — the kind of work he had done for many businesses of all kinds around the valley.

After that chance meeting, they got the idea that gentlemen’s clubs and night clubs needed their own software to meet the specific needs of that industry. And so was born ClubTrax — the software package specifically designed for topless clubs and night clubs.

Before ClubTrax, says Evans, most adult entertainment establishments had to get by using software designed for restaurants. “But a generic system is a generic system,” he notes, “and it can’t deal with the specific parts of a gentlemen’s club.”

ClubTrax has four modules — entertainers, employees, cab and limo and POS.

“The dancers are all independent contractors,” explains Evans, “so you can’t use the employee system.”

The system allows the club to register all its dancers and identify them as they clock in and clock out. In Las Vegas, the clubs usually use the sheriff’s card to identify dancers and they also use a fingerprint sign-in. The system then keeps track of where they are and whether they have paid their fees to the club.

“You can even let them in and then record that they still haven’t paid that night’s fee,” says Evans demonstrating the system as he has for club owners across the country. The system also allows the DJ to see which entertainers are available to be called up onto the stage, according to Evans. It has VIP room and private room functions so that payments from the customer and dancer can be properly logged.

“And if she wants to pay the extra fee to stay off the stage, you can simply drag her into the VIP room,” explains Evans.

A major selling point for the system is that it allows clubs to sell tickets to credit card customers and ensure that none of the revenue is lost.

“There’s nothing the clubs can do about customers tipping the girls in cash,” says Evans, “but they were losing a lot of money because credit card customers couldn’t pay for dances.”

Some clubs, according to Evans, sold printed tickets, but they routinely disappeared because they were as good as cash. The “dancer dollars” that are part of ClubTrax are printed on watermark paper and have an etching that allows the entertainers to feel that they are being tipped with valid tickets. They are also the size of a dollar bill.

The security of these dollars is that they are not valid until they are bought with a credit card. And the club can charge $22 for every $20 ticket it issues. They can also charge the dancers to redeem them. The club can thus profit from the credit card tips to the tune of $4 for every $20 in “dancer dollars.”

The other modules are more traditional. They record the hours and wages of other employees and, of course, the bar takings and any food that a club sells. System Dynamic can also hook up a radio tag system that fits with the beer taps and liquor bottles so that the drink is automatically calculated by the software and rung up. All the server has to do is get the change out of the cash drawer.

Evans says the radio tags save a huge amount of time and are a great help when the bar gets really busy. The automatic register feature also ensures that bar staff are not handing out free drinks. He cites a club the company recently wired in New York which discovered that it had been giving away 500 to 600 drinks every night.

A more controversial feature, at least according to Evans, is the cab and limo driver module.

“Some clubs want it and others won’t even think about it,” he says. The module allows a club to register drivers and record its gross payout in tips to drivers delivering customers to the premises. It also allows clubs to check how much it is paying to every driver. “They can even give them 1099s [tax forms] if they want,” says Evans.

He says the module is controversial because the clubs in the valley are so dependent on cabs delivering customers that they often tip more than the cover charge to keep the drivers happy. “Sometimes they’re charging $20 and paying the cab $30,” he says. “They’re $10 in the hole before they even start.”

The software operates from a server and can be tailored to as many or as few terminals as any particular club needs. ClubTrax is already installed in Treasures and Sapphire in Las Vegas, but it has also been installed in smaller clubs in Houston, New York and will soon be going into Christie’s, a 19-club chain based in Phoenix. The system operates on Windows.

Senior Programmer Mark Garnica says that every place the system has been installed has either used a Windows-based system or some POS system, and he has never had any trouble installing the software.

Remarkably, the company has been funded entirely by the owners and has not sought venture capital. Evans says it has been a struggle at times, but he was so confident about the product that he refused to sell to would-be buyers. They did not want to invest.

“I said ‘no’ because I wasn’t going to let them pay me to work and they would end up owning the product that would be worth five times as much in a couple of years,” he says defiantly.

System Dynamic has managed to remain solvent despite the fact that it took a year to develop the product. So far they have been staying afloat from job to job, but he expects the big break out for the product will come at the end of the month at the Gentlement’s Club Expo at Mandalay Bay. System Dynamic is sponsoring a breakfast to make sure the owners of the 7,500 clubs across the country are aware of the product.

Already the company is working on a nightclub version which will allow clubs to not only track ticket and liquor revenue, but to sell their own tickets to concerts and other entertainment online. “They can be their own Ticketmaster if they want,” says Evans.

He remains very confident about the product because his company will customize it for each club and add other network or security features. And, of course, there’s all that extra revenue that won’t slip through the cracks.