Do you want to start a smoke shop business and want to know the cost? If YES, here is a cost breakdown to open a smoke shop and the profit margin/ROI.

The Cigar Lounges (Smoke Shop) industry comprises of businesses known as smoke shops, cigar bars or lounges, where patrons can purchase and smoke 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 smoke shop business in the US would definitely be confronted with tough competition out there. The truth is that, you will not only compete with 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 cigars are retailed and can be freely smoked.

The Estimated Cost Breakdown to Open a Smoke Shop

One of the major areas you should mindful of when considering starting a smoke shop is the total cost for setting up the business. Starting up a smoke shop not only requires 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 on opening a standard stop smoke shop 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 smoke shop 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 (a wide range of cigars, tobacco-related accessories, tobacco products, food and drink, cigars and cigarillos, premium cigars, assorted red and white wines, beer and liquor, distilled spirits, and martinis et al) – $12,500
  • Storage hardware (bins, utensil rack, ash trays, 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 – three thousand USD ($143,000) to establish a medium – scale but standard smoke shop business in any city in the United States of America.

In Conclusion,

Please note that this is a rough estimate and we usually advise our readers who are interested in opening a smoke shop 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.

Solomon. O'Chucks