Are you about starting a vape shop and need to write a plan? If YES, here is a detailed sample vape shop business plan template & FREE feasibility report.
If you are looking towards launching a smoking lounge related business, one of your best bets is to launch a vape shop. The right time to start such business is now because smokers are switching to vaping and the business is presently at its growing stage.
A vape shop business could be a fun, profitable and an interesting business for someone who is skilled in the trade. With the right location, the right merchandize, top-notch service and good marketing skills, you can serve varieties of customers that cut across individuals, corporate clients, celebrities etc.
Starting up a vape shop business may not require pretty huge startup capital, but it needs a significant investment capital, solid planning, and attention to detail in order to keep the business profitable.
If you are diligent enough and if you have good business/marketing strategies, you can build the business from just one outlet to numerous outlets across different cities in the united states of America from the sale of franchise. Below is a sample vape shop business plan template that will help you write yours within record time.
A Sample Vape Shop Business Plan Template
1. Industry Overview
A vape shop is a retail outlet that is into the selling of electronic cigarette products. There are also online vape shops. The majority of vape shops do not sell e-cigarette products that are from “Big Tobacco” companies. In 2013, online searches on vape shops surpassed searches on e-cigarettes.
Around a third of all sales of e-cigarette products take place in vape shops. Big Tobacco believes the independent e-cigarette market is a threat to their interests.
An ideal vape shop offers a range of e-cigarette products. They do not customarily sell tobacco products. Vape shops generally have an unfriendly relationship with the tobacco industry. The majority of vape shops do not sell e-cigarette products that are from “Big Tobacco” companies.
There are numerous vape shops that are not affiliated with the tobacco industry. Big Tobacco believes the independent e-cigarette market is a threat to their interests.
In recent time, retailers specializing in tobacco such as vape shops and head shops have started selling an assortment of vaping products along with their regular products. These vendors such as vape shops and head shops are generally opposed by vaping purists and advocacy groups.
Brands owned by tobacco companies offered a limited range of e-cigarette products, whereas brands owned by vape shops emphasized a panoply of flavor and nicotine options.
By 2014, all the major multinational tobacco companies had entered the e-cigarette market. They did so either by buying existing e-cigarette companies (including Ruyan, the original Chinese e-cigarette company, which was bought by Imperial Tobacco) or by developing their own products.
Although there continue to be independently owned vape shops, from economic and political perspectives the e-cigarette business is now part of the traditional tobacco industry. The smaller operators, who are independent sellers of e-cigarettes (so-called vape shops), are losing market share to the large tobacco companies.
In order to invest wisely, you need to carry out a research on the industry or line of business you intend investing in. If you are opening a vape shop for the first time, it is important that you conduct a thorough research so that you can be well informed and guided when making your choices.
Researching will open you up to the various opportunities you can leverage on and how you can access them. It’s not compulsory that you must be the one to carry out the research; you can pay professionals for that service.
Any entrepreneur who wants to start a vape shop business in the US would definitely be confronted with tough competition.
The truth is that you will not only compete with vape shops 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.
Lastly, the business is open to all and sundry because vape shops are mainly small, independent businesses. They are started by owners of tobacco retailers and small bands of investors. There are also regional chains. The majority of vape shops are owned by individuals who vape.
2. Executive Summary
Andy Perry® Vape Shop, LLC is a neighborhood vape shop that will be located in a fast – growing community in San Antonio, Texas. We have been able to secure a one-year lease of a vacant shop within the city’s largest shopping mall. We are fortunate to secure a facility with an option of renewal for 5 years at a rate that is favorable to us.
We are going to be involved in the sale of electronic cigarette products, electronic cigarette accessories, and providing a vaping – friendly environment, sale of assorted red and white wines, beer and liquor, distilled spirits, martinis and tobacco et al to the people, in a conducive environment that is specifically designed for socializing and networking.
Andy Perry® Vape Shop, LLC is designed to meet both the health and safety standards recommended by the local authority.
Our customers are going to be treated with good music at all times. We have made provision for live band, karaoke, country side music and jazz et al, which will be played at the background to create the ambiance that our customers will cherish.
We are in business to make profits at the same to give our customers value for their money; we want to give people the opportunity to choose from the wide range of assorted electronic cigarettes, accessories and drinks that are manufactured both in the United States of America and overseas.
Andy Perry Vape Shop, LLC will make available in our vape shop most of the cigar brands produced in the United States of America and in other parts of the world especially in countries like Cuba and Italy.
We are aware that vape shops easily attract intellectuals and business people and we know that the airport is one of the places where we can easily tie down these people especially when they have to wait for their flights, that is the reason why we have decided to start the first outlet of our vape shop in San Antonio International Airport.
We will ensure that all our employees are selected from a pool of qualified and customer centric people in and around San Antonio – Texas. We will make sure that we take all the members of our workforce through the required trainings that will position them to meet the expectation of the company.
Andy Perry® Vape Shop, LLC is owned by Andy Perry and his family. Andy Perry has managed several vape shops, smoke shops, bars and nightclubs in San Antonio and Las Vegas prior to opening his own vape shop.
3. Our Products and Services
Andy Perry® Vape Shop, LLC is going to operate a standard vape shop that will make available most of the electronic cigarette products and accessories that can be found in a standard vape shop in the United States. We will also ensure that we make available assorted wines and alcoholic drinks in our shop.
These are some of our product and service offerings;
- Sales of e-cigarette – related products (vaping equipment, e-liquids, and hobby – related items such as t-shirts and magazines).
- Sales of alcoholic and non – alcoholic drinks
4. Our Mission and Vision Statement
- Our vision is to establish a standard and secured vape shop in San Antonio, Texas that will be the melting pot of all lovers of electronic cigarette, wine, alcoholic and non – alcoholic drinks.
- Our mission is to establish a vape shop business that will make available all the brands of electronic cigarettes, accessories, wine, and alcoholic drinks in the United States and other parts of the world at every given time to our highly esteemed customers and a place where people can network and socialize.
Our Business Structure
Andy Perry® Vape Shop, LLC is established to be a pacesetter when it comes to how standard vape shops should be run in San Antonio – Texas and even in the United States of America.
We have the goal of assembling a team of dedicated workforce who will give our customers excellent customer service at all times, a team that will ensure that we will continue to have repeated customers and a team that will indeed make us the melting pot for vapers and socialites in San Antonio.
Below is the business structure that we will build Andy Perry® Vape Shop, LLC;
- Chief Executive Officer (Owner)
- Vape shop Manager
- Procurement Officer
- Greeters/Customer Service Agent/Table Attendant
- Security Officers
5. Job Roles and Responsibilities
Chief Executive Officer – CEO:
- Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results
- Responsible for providing direction for the business
- Creating, communicating, and implementing the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy
- Defining job positions for recruitment and managing interviewing process
- Carrying out induction for new team members
- Responsible for training, evaluation and assessment of employees
- Responsible for signing checks and documents on behalf of the company
- Evaluates the success of the organization
Vape Shop Manager:
- Responsible for managing the daily activities in the vape shop
- Ensure that the facility is in tip top shape and conducive enough to welcome customers
- Interfaces with vendors
- Attends to Customers complaints and enquiries
- Responsible for Training and Development in the organization
- Responsible for procuring of supplies and equipment
- Handle any other duty as assigned by the CEO
- Interact with customers, take orders for e-cigarette, drinks and snacks.
- Plan and present bar menu to clients
- Check identification of the guest to make sure they meet age requirements for purchase of alcohol and electronic cigarette products.
- Mix drinks, cocktails and other bar beverages as ordered and in compliance with standard drink recipes.
- Prepare alcohol or non-alcohol beverages.
- Arrange electronic cigarettes and accessories, bottles and glasses to make attractive displays.
- Assess customers’ needs and preferences and make recommendations
- Make lists of supplies in conjunction with the vape shop manager/management
- Prepare inventory or purchase requisitions as needed to replenish supplies.
- Ensure that the assigned bar area is fully equipped with tools and products needed for Mixing beverages and serving guests.
- Responsible for preparing financial reports, budgets, and financial statements for the organization
- Provides managements with financial analyses, development budgets, and accounting reports
- Responsible for financial forecasting and risks analysis.
- Performs cash management, general ledger accounting, and financial reporting for one or more properties.
- Responsible for developing and managing financial systems and policies
- Responsible for administering payrolls
- Ensuring compliance with taxation legislation
- Handles all financial transactions for the company
- Serves as internal auditor for the company
Disc Jockey (DJ)
- Ensures that customers are entertained with the best of music per time
- Manages the sound system for the bar
- In charge of music collections
- Responsible for developing music playlists.
Greeters/Customer Service Agent/Table Attendant
- Open door and welcome customers
- Ensures that customers feel relaxed and at home
- Handle customers enquiries
- Assess customers’ needs and preferences and make recommendations
- Provide recommendations and suggestions to guest for choosing electronic cigarettes, and alcoholic drinks.
- Serve customers in a friendly and helpful manner
- Demonstrate a thorough knowledge of electronic cigarettes and alcoholic products, menus and Promotions
- Handle any other duty as assigned by the vape shop manager
- Clean up after customers and clean work area.
- Wash glassware and utensils after each use.
- Maintain a clean working area by sweeping, vacuuming, dusting, cleaning of glass doors and windows, etc. if required.
- Ensure that toiletries and supplies don’t run out of stock
- Handle any other duty as assigned by the vape shop manager.
- Ensure that the facility is secured at all time
- Control traffic and organize parking
- Patrols around the building on a 24 hours basis
- Any other duty as assigned by the vape shop manager
6. SWOT Analysis
Andy Perry® Vape Shop, LLC is established with the aim of becoming the melting point for vapers in Los Angles which is why we have taken our time to conduct SWOT analysis to be able to identify areas we need to work on if indeed we want to achieve our business goal.
No investor would want to invest his or hard – earned money without assessing the risks involved in the venture and also his or her capability to deliver and make profits from the business. The ability to make profits from any business and to favorably compete with competitors in the industry starts with the result you get from your SWOT analysis.
In view of that, Andy Perry® Vape Shop, LLC hired a business an HR specialist to help her conduct SWOT analysis for the business and below is a summary of the result that was generated;
Our strength as a company are; excellent and detailed customer service, wide range of electronics cigarettes and accessories, alcoholic drinks both from the United States and other parts of the world. Excellent facility, excellent ambience and perfect location for a vape shop.
A major weakness that is obvious to us is the lack of economies of scale which may slightly affect the prices of our products.
There are unlimited business opportunities available to vape shop businesses in busy cities like San Antonio; San Antonio is one of the cities in the world where social life is at its peak.
Besides the shopping mall where our vape shop is located is one of the busiest in the United States and it is open to loads of opportunities due to the influx of shoppers. As the tobacco epidemic has increased to include wider use of e-cigarettes, it will give room and publicity for vape shops.
The fact that E-cigarettes products are mainly available online or in dedicated “vape” storefronts, grocery stores, coffee shops, conventional retailers, mass merchandisers, mass retailers, tobacco retailers, convenience stores, gas stations, dollar stores, pharmacies drug stores, liquor stores, shopping malls, and at small kiosks in shopping malls means that they will compete for customers with us.
7. MARKET ANALYSIS
- Market Trends
A recent trend in the United States shows that vape shops are becoming increasingly popular. Over the few years leading up to 2018, vape shops have proliferated in a number of countries such as the US, at retail locations, as well as online.
Over the few years leading up to 2015, vape shops have increased in a number of countries. In 2013, online searches on vape shops surpassed searches on e-cigarettes. The markup of e-cigarettes as high as 200 – 400% may play a role in the prevalence of vape shops.
Worldwide, retailers have sold millions of devices. Around a third of all sales of e-cigarette products take place in vape shops. In 2017, vape shops were believed to produce the highest sales for the e-cigarette market.
Vape shops in the US have emerged in large cities, and additionally in smaller metropolitan places. In 2014, the Smoke-Free Alternatives Trade Association estimated that there were 35,000 vape shops in the US, more than triple the number a year earlier.
In 2016 data provided from Yelp showed that the western states are the hub of the e-cigarette business. The availability of vaping products in US stores is increasing, especially in places with low taxes and smoking bans.
As of 2017, new vape shops are opening, in some cases close to schools. Vape shops in the US are more frequently to be located close to private universities and colleges in cities rather than rural places. In the US, e-cigarettes sold at retailers are more likely available in places with a higher median family income.
Vape shops in southern Texas are found in places with a higher percentage of the Hispanic population, a 2018 report suggests.
E-cigarettes sold at retailers is greater in US states with minimal clean indoor air policies and in areas with low cigarette taxes. Vape shops in the US are frequently located in census tracts where retailing of tobacco is strong, and where less racial minorities reside.
Lastly, a notable trend shows that vape shops vary in design and product selection. There are shops that look a bit similar to bars. There are shops that have a lounge where people can drink a beverage as they vape. Vape shops sometimes include a café or other elements that promote socializing, essentially making such places like a lounge.
A vape shop in Anderson, CA also sells vaping products via drive-through. A vape shop in Elkton, Maryland also sells beer and food. A vape shop in Ottawa, Illinois provides a socializing area with a sofa and television.
There are shops that have a vape bar where patrons can test out different e-liquids and socialize. Vape shops having lounge areas, food and beverage amenities, and entertainment may furnish a social setting for vaping that may entice newbie e-cigarette users and non-smokers alike.
Hardly does any vape shops have a photo booth. A small number of vape shops offer patrons the opportunity to vape via a hookah. A few vape shops double as art galleries. Vape shop tenants are usually interested in a location between 1,200 and 1,500 square feet.
8. Our Target Market
Most vape shop customers are people who are interested in reducing or quitting smoking. Some are long-term e-cigarette users. The average customer age is from 40-45. Customers visit their local vape shop for personalized e-cigarette advice.
Vape shop retail workers may show potential customers how to use different e-cigarettes and how to fill their devices. In view of that, we have created strategies that will enable us reach out to various groups of people who are likely going to become our loyal customers. Below are our target market;
- Corporate Executives
- Taxi Drivers
- Business People
- Sports Men and Women
- College Students
Our Competitive Advantage
We are mindful of the fact that there are competitions in the vape shops industry in the United States of America, hence we have been able to hire some of the best business developers to handle our sales and marketing. Part of what is going to be our selling point in San Antonio is the fact that we operate a standard vape shop, in a perfect location.
Another factor that will give Andy Perry® Vape Shop, LLC competitive edge is that we have enough packing space to accommodate the number of customers our shop can contain per time. We are not ruling out the fact that we have a dedicated and customer centric workforce that are willing to go the extra mile to give our customers full value for their money and time.
We are not ignoring the fact that we are among the few neighborhood vape shops in downtown San Antonio that sells almost all the brands of electronic cigarettes and accessories in the United States of America, and obviously that will surely count towards our advantage in the marketplace.
Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and objectives.
9. SALES AND MARKETING STRATEGY
- Sources of Income
Andy Perry® Vape Shop, LLC is established with the aim of maximizing profits in the industry and we are going to ensure that we do all it takes to attract our target market. The sources of income for Andy Perry® Vape Shop, LLC are stated below;
- Sales of e-cigarette – related products
- Sales of alcoholic and non – alcoholic drinks
10. Sales Forecast
One thing is certain when it comes to vape shop business, if your shop is cozy, relaxing, well stocked and centrally positioned, you will always attract customers cum sales and that will sure translate to increase in revenue generation for the business.
We are well positioned to take on the available market in San Antonio, Texas and we are quite optimistic that we will meet our set target of generating enough income/profits from the first six months of operation and grow the business and our clientele base.
We have been able to examine the vape shop market, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. Below are the sales projection for Andy Perry® Vape Shop, LLC, it is based on the location of our business and other factors as it relates to vape shop startups in the United States;
- First Fiscal Year (FY1): $180,000
- Second Fiscal Year (FY2): $320,000
- Third Fiscal Year (FY3): $500,000
N.B: This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor offering same products and customer care services as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.
- Marketing Strategy and Sales Strategy
Despite the fact that our first outlet is located inside San Antonio shopping mall, the model of vape shop we intend running is a neighborhood vape shop hence we are not going to rely only on the conventional ways of marketing. We don’t have the plans to run paid adverts on local TV and radio stations or even local newspapers but we will sure maximize every other available means to promote our business.
In view of that, we are going to adopt the following marketing strategies to ensure that we do not only attract customers but also generate repeated sales from them;
- Open our vape shop in a grand style with a party for all.
- Ensure that we have a wide range of electronic cigarettes and accessories, wines, beers, liquors, distilled spirits, martinis and non-alcoholic drinks at all times.
- Make use of attractive handbills to create awareness and also to give direction to our vape shop
- Position our signage/flexi banners at strategic places all around San Antonio
- Position our greeters to welcome and direct potential customers
- Create a loyalty plan that will enable us reward our regular customers
11. Publicity and Advertising Strategy
Andy Perry® Vape Shop, LLC is a neighborhood vape shop and we will ensure that we create the buzz that will make people in our area know about us and what we do.
We are quite aware that one of the effective ways of promoting our vape shop is to create special internal promotions which in turn will help us achieve our aim of leveraging on word of mouth publicity. Here are the platforms we intend leveraging on to promote and advertise Andy Perry® Vape Shop, LLC;
- Encourage the use of word of mouth publicity from our loyal customers
- Leverage on the internet and social media platforms like; YouTube, Instagram, Facebook, Twitter, LinkedIn, Snapchat, Google+ and other platforms to promote our business.
- Ensure that our we position our banners and billboards in strategic positions all around San Antonio – Texas
- Distribute our fliers and handbills in target areas in and around our neighborhood
- Advertise our vape shop business in our official website and employ strategies that will help us pull traffic to the site
- Brand all our official cars and vans and ensure that all our staff members and management staff wear our branded shirt or cap at regular intervals.
12. Our Pricing Strategy
The prices of our e – cigarettes and accessories, wines, beers, and other alcoholic drinks et al will be what is obtainable in the market. In fact, we will try as much as we can to sell below the industry’s average so as to attract loads of customers. We also have plans to discount our products once in a while and also to reward our loyal customers.
- Payment Options
The payment policy adopted by Andy Perry® Vape Shop, LLC is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.
Here are the payment options that Andy Perry® Vape Shop, LLC will make available to her clients;
- Payment via bank transfer
- Payment with cash
- Payment via credit cards
- Payment via online bank transfer
- Payment via check
In view of the above, we have chosen banking platforms that will enable our client make payment for products purchase without any stress on their part.
13. Startup Expenditure (Budget)
From our market survey and feasibility studies, we have been able to come up with a detailed budget for establishing a standard vape shop in San Antonio, Texas and here are the key areas where we will spend our startup capital;
- The total fee for registering the business in San Antonio, Texas – $750.
- Legal expenses for obtaining licenses and permits as well as the accounting services totaling – $1,200.
- Marketing promotion expenses (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 – $15,000
- The cost for payment of rent for 12 months at $1.76 per square feet in the total amount of – $105,600.
- 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) – $60,000
- The cost for start-up inventory – $16,027
- Storage hardware (bins, utensil rack, shelves, glasses case) – $3,720
- The cost for counter area equipment (counter top, sink, ice machine, etc.) – $9,500
- The cost for serving area equipment (glasses, flatware) – $3,000
- The cost for store equipment (cash register, security, ventilation, signage) – $13,750
- Office equipment and furniture – $3,600
- The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al) – $4,000.
- The cost of launching a website – $600
- The cost for our grand opening party – $5,000
- Miscellaneous – $2,500
We would need an estimate of $250,000 to successfully launch our vape shop in downtown San Antonio, Texas.
Generating Funds/Startup Capital for Andy Perry® Vape Shop, LLC
Andy Perry® Vape Shop, LLC is a private business that is owned by Mr. Andy Perry and his immediate family and they intend to finance the business alone. Although they have plans to make the shop manager part owner of the business after 5 or 7 years of services, but that does not stop him from reserving over 80 percent stake of the business for himself and his family.
Since they are the sole financier of the business, they have decided to adopt the following means to generate startup capital for the business;
- Generate part of the startup capital from his personal savings and sale of his stocks
- Source for soft loans from family members and friends
- Apply for loan from banks
N.B: Mr. Andy Perry and his family have been able to generate $100,000. The breakdown shows that they generated $75,000 from their personal savings and sale of their stocks and they generated $25,000 soft loans from their family members and friends. The balance of $150,000 will be generated as loan facility from the bank.
14. Sustainability and Expansion Strategy
The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and the business structure. If all of these factors are missing from a business (company), then it won’t be too long before the business closes shop.
One of our major goals of starting Andy Perry® Vape Shop, LLC is to build a business that will survive off its own cash flow without injecting finance from external sources once the business is officially running.
We know that one of the ways of gaining approval and winning customers over is to properly position our vape shop, ensure adequate security, availability of various brand of e – cigarettes and accessories, alcoholic drinks at competitive prices and excellent customer service et al.
Andy Perry® Vape Shop, LLC will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.
As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of three years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
- Business Name Availability Check: Completed
- Business Registration: Completed
- Opening of Corporate Bank Accounts: Completed
- Securing Point of Sales (POS) Machines: Completed
- Opening Mobile Money Accounts: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Renting of facility and remodeling the facility: In Progress
- Conducting Feasibility Studies: Completed
- Generating capital from family members: Completed
- Applications for Loan from the bank: In Progress
- Writing of Business Plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents and other relevant Legal Documents: In Progress
- Design of The Company’s Logo: Completed
- Printing of Promotional Materials: In Progress
- Recruitment of employees: In Progress
- Purchase of the needed furniture, electronic appliances, office appliances and shop accessories: In progress
- Creating Official Website for the Company: Completed
- Creating Awareness for the business both online and in the neighborhood: In Progress
- Health and Safety and Fire Safety Arrangement (License): Secured
- Opening party/launching party planning: In Progress
- Establishing business relationship with vendors – suppliers of all our needed electronic cigarettes and accessories, wine, alcoholic and non – alcoholic drinks, and small chops et al: In Progress