Do you want to start a hookah bar business and want to know the cost? If YES, here is a cost breakdown to open a hookah lounge and the profit margin / ROI.
The hookah bar/lounge which is also known as a shisha bar or den, especially in United Kingdom and some parts of Canada is an establishment where patrons share shisha from a communal hookah or nargile which is placed at each table.
This is a location where tobacco smokers can purchase and smoke tobacco and cigars freely without fear of breaking the law. Businesses in this industry usually provide limited food and alcohol services as a means of increasing their revenue generation.
Any entrepreneur who wants to start a hookah bar business in the US would definitely be confronted with tough competition. The truth is that you will not only compete with hookah bars/smoke shops/cigar lounges in your location or city, but you would be competing with every other entertainment option such as wine bars, night clubs, restaurants, casinos et al where tobacco is retailed and can be freely smoked.
The Estimated Cost Breakdown to Open a Hookah Bar
One of the major areas you should mindful of when considering starting a hookah bar is the total cost for setting up the business. However, starting up a hookah bar business may not require pretty huge startup capital, it also needs a significant investment capital, solid planning, and attention to detail in order to keep your business profitable.
From our market survey and feasibility studies, we have been able to come up with a detailed budget of opening a standard and one stop hookah bar in the united states of America and here are the key areas where you are expected to spend your startup capital on;
- The total fee for registering the business in the United States of America – $750.
- Legal expenses for obtaining licenses and permits as well as the accounting services totaling – $1,200.
- Marketing promotion expenses for the grand opening of the dance studio in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
- The cost for hiring business consultant – $2,500.
- Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
- The cost of accounting software, CRM software and Payroll Software – $1,500
- The cost for payment of rent for 12 months at $1.76 per square feet in the total amount of – $35,600.
- The cost for shop / facility remodeling – $25,000.
- Other start-up expenses including stationery – $500
- Phone and utility deposits – ($2,500)
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $30,000
- The cost for start-up inventory (traditional shisha, herbal shisha, assorted tobaccos, assorted cigars and alcoholic drinks and non-alcoholic drinks) – $16,027
- Storage hardware (bins, utensil rack, shelves, glasses case) – $3,720
- The cost for counter area equipment (counter top, sink, ice machine, etc.) – $6,000
- The cost for serving area equipment (glasses, flatware) – $3,000
- The cost for store equipment (cash register, security, ventilation, signage) – $3,150
- The cost for the purchase of office furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al) – $8,000.
- The cost of launching a website – $600
- The cost for our grand opening party – $3,000
- Miscellaneous – $2,500
From the rough estimate as listed above, you would need a minimum of one hundred and forty – six thousand five hundred USD ($146,500) to establish a medium – scale but standard hookah bar business in any city in the United States of America.
Please note that this is a rough estimate and we usually advise our readers who are interested in opening a hookah bar to go to the market or directly contact sellers of the items they would need to get the real time prices of these items. The truth is that if you are a good bargainer, you can get a better deal that will help you beat down the estimated price as listed above.