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.
Frequently Asked Questions
How Do You Start A Hookah Lounge?
- Conduct your market survey and feasibility studies
- Learn everything you need to learn about owning and operating a vape shop
- Choose a name and register the business (vape shop)
- Draft a detailed Business Plan
- Secure the needed licenses and permits
- Apply for an EIN (Employer Identification Number)/Federal Tax ID Number.
- Open a corporate bank account
- Lease, equip and furnish your vape shop
- Hire employees
- Stock your hookah lounge with (traditional shisha, herbal shisha, assorted tobaccos, assorted cigars and alcoholic drinks and non-alcoholic drinks)
- Market and promote your hookah lounge
What Should You Look For In A Venue For A Hookah Lounge?
When you visit a hookah lounge, you should look out for proper ventilation of the lounge, the serenity and coziness of the environment, security and safety measures put in place and of course the caliber of people that patronize the hookah lounge.
What Is The Growth Potential For A Hookah Lounge?
The hookah lounge industry is growing positively and as a matter of fact, the global Hookah market was valued at USD 72 million in 2019 and is expected to reach USD 84 million by the end of 2026, growing at a CAGR of 2.3% during 2022-2026.
What Are The Documents Required To Open A Hookah Lounge?
Here are some of the documents you would need to open a hookah lounge;
- Business license
- Zoning permit and facility license (Planning Permission)
- Insurance cover
- Liquor License
- Health and Safety Inspection Clearance Document (a Valid Fire Safety Certificate)
What Are The Costs Involved In Opening A Hookah Lounge?
- The total fee for registering the business
- Legal expenses for obtaining licenses and permits as well as the accounting services
- Marketing promotion expenses
- The cost for hiring business consultant
- The cost of accounting software, CRM software and Payroll Software
- The cost for payment of rent
- The cost for shop / facility remodeling
- Other start-up expenses including stationery
- Phone and utility deposits
- Operational cost for the first 3 months (salaries of employees, payments of bills et al)
- The cost for start-up inventory
- Storage hardware (bins, utensil rack, shelves, glasses case)
- The cost for counter area equipment
- The cost for serving area equipment (glasses, flatware)
- The cost for store equipment (cash register, security, ventilation, signage)
- Office equipment and furniture
- The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al)
- The cost of launching a website
How Much Profit Can A Hookah Lounge Make?
Well, the profit you can make owning a hookah lounge will depend on a lot of factors, such as size, location and business model et al. But on the average, a hookah lounge can make quite a lot of money, and the average profits are about $150,000 per annum.
How Much Capital Do You Need To Open A Hookah Lounge In The Bay Area?
The exact amount needed to open a hookah lounge will depend on some factors, but trust me, it can cost anywhere between $110,000 to $550,000 to start a lounge or bar that leases its location. If you plan to buy a place and pay a mortgage, the average startup costs increase to around $175,000 to $850,000.
What Industry Is A Hookah Lounge In?
The Hookah Bars cum Cigar Lounges industry.
Do Hookah Lounges Have An ID?
What Are The Ongoing Expenses For A Hookah Lounge?
The ongoing expenses for a hookah lounge are few and manageable. They include employees’ wages, lease and utility payments, phone bills, internet subscriptions and inventory expenses et al.
Do You Need An LLC To Open A Hookah Lounge?
Well, this will depend on your choice, but it is recommended that most businesses form an LLC, though each business is different. Hookah lounges, also called shisha bars, are a popular alternative to typical bars or restaurants and most of the businesses in this category usually form an LLC.
What Happens During A Typical Day At A Hookah Lounge?
- The hookah lounge is opened, cleaned and arranged
- The products are properly cleaned and arranged or displayed
- The hookah lounge is then opened for business
- When customers walk-in they are attended to and the products they are looking for are sold to them.
- The hookah lounge is closed for the day and account are balanced and the workers go home hoping to resume the next day.
How Much Money Does It Take To Start A Hookah Lounge?
A hookah lounge costs about $40,000 to start. This price includes having a nice retail space to fund. It also includes licensing and insurance. The other costs include sourcing useable hookahs and shisha.
What Are Some Insider Tips For Jump Starting A Hookah Lounge?
- Choose a good location and shop facility to launch the business
- Make sure your lounge is well stocked with different brands and types of shisha/hookahs
- Throw an open house grand party before officially opening the hookah lounge
- Be deliberate with your marketing sales approach
- Encourage the use of work of mouth to promote your hookah lounge
- Leverage on all available online and offline platforms to promote your hookah lounge
Can You Smoke Hookah And Drink Alcohol?
Yes, and as a matter of fact, many (41%) indicated that they preferred to smoke hookah while also drinking alcohol; of these, 62.5% reported getting a stronger buzz/high, 50% reported feeling more relaxed, and 68.8% reported having a more fun experience when they combined hookah and alcohol use.
How Do You Get A Hookah License?
To obtain such a license, an application has to be made to police commissioner. The commissioner may grant the permission subject to conditions that- teenagers should not be allowed.
How Much Does A Hookah Set Cost?
There are hookahs that go for $50-$100, and they are all pretty decent and provide satisfying sessions.
How Do I Start A Hookah Lounge With No Money?
Crowdfunding is one of the ways that people are able to open hookah lounge without any money. They use services like GoFundMe, FoodStart, Kickstarter, and AngelList.
What Are Some Skills And Experiences That Will Help You Build A Successful Hookah Lounge?
- Customer services skills
- Interpersonal skill
- Accounting and bookkeeping skills
- Business management skills
- Bargaining skill
- Business management skills
- Basic computer skills
What Are Some Highly Rated Hookah Bars In Los Angeles, CA?
These are some highly rated Hookah Bars in Los Angeles, CA:
- S & J hookah lounge (5/5)
- GQ Lounge (5/5)
- T-One Hookah Lounge (5/5)
- Level Cafe & Hookah Lounge (5/5)
- Samba Hookah Lounge (5/5)
Why Are Hookah Bars So Popular?
Experts say the unique features of hookah may have aided its popularity among young adults. Unlike cigarette tobacco, hookah tobacco can be sold in candy and fruit flavors, which appeals to younger audiences. They also produce smooth, aromatic smoke that’s easier and more pleasant to inhale than tobacco smoke.
What Does Hookah Bar Mean?
Hookah bars are commercial establishments where people gather to smoke flavored tobacco from a hookah pipe. Other names for a hookah bar includes hookah lounge, hookah cafe, hookah den, and shisha bar.
How Much Do Bar Owners Make A Year?
While the amount a bar can earn depends on size, location, and other factors, some estimates show that an average bar makes between $25,000 and $30,000 per week.
Why Do Bars Fail?
Spreading your resources too thin creates major pitfalls and causes many bars to fail. The most common and obvious culprit is financing: You don’t start with enough capital, you spend it on the wrong things, or you pay too much for equipment. Often, bar owners overwork their employees to the point of exhaustion.
25. What Are The Best Hookahs To Buy?
- Fumo Pod 10-inch Hookah.
- Khalil Mamoon Black Shareef Hookah.
- AEON Hookah Edition 4.
- Lit Handmade Glass Hookah.
- Starbuzz Carbine 2.0 Hookah.
- Trilogy High-End Hookah.
- B2 Reaper Hookah – Best Hookah For Traveling.
- Oduman N5 Hookah.