How to Open a Smoke Shop

Monday, July 22, 2013

How to Open a Smoke Shop

Despite growing health concerns related to smoking, many people in the United States still choose to smoke and consume other tobacco products. Opening a smoke shop to cater to tobacco customers can be a profitable business endeavor, as people who smoke may feel more comfortable and welcome buying their tobacco products in an environment that specializes in selling them. Opening a smoke shop is moderately challenging to do and will require not only carrying diverse inventory but also compliance with a variety of state and federal laws.

Step 1

Find a location for your smoke shop. The location is extremely important, as it can make or break your business. You will want your smoke shop to be easily accessible to customers and easy to see from nearby roads. Rent or purchase your store location from the owner.

Step 2

Research the licensing laws in your state regarding the sale of tobacco products. Most states require you to carry a specific license for selling tobacco products in addition to a business license. Apply for a retailer's cigarette and tobacco license if necessary.

Step 3

Create a name and logo for your smoke shop. The name of your shop should relate to the products you sell so that potential customers are not confused about what kind of business you own. Your logo may be a design or simply your store name with a font that you like. Apply for a business license and register your business name and logo through your city's chamber of commerce.

Step 4

Contact sign-making companies in your city and hire one to create and install a sign on your storefront that advertises your shop name and logo.

Step 5

Purchase all of the equipment necessary to run your smoke shop. This includes display counters, shelves, a cash register, humidors for cigars and a credit card machine. You may also consider purchasing chairs, end tables and ashtrays for customers if your state laws allow smoking inside. This will create a pleasant, welcoming environment that will make customers want to spend time in your shop.

Step 6

Purchase the inventory for your store. If you are opening a general smoke shop, purchase a wide variety of different types of cigarettes, cigars and other tobacco products. If you are opening a specialty smoke shop, such as a cigar shop, purchase a wide variety of different cigar types to cater to the clientele you want to attract. In addition to tobacco products, purchase tobacco accessories. Lighters, cigarette cases, ashtrays and tobacco pipes are a few tobacco accessories to consider carrying in your smoke shop. Also consider carrying hookahs, shisha, electronic cigarettes, chewing tobacco and other types of tobacco products to maximize your inventory so that your shop appeals to a wide range of customers.

Step 7

Create a written financial plan for your smoke shop to help you keep track of your shop's finances. Consider the costs of renting your location, utilities, store inventory and paying employees. This way you can figure out how much your store needs to make in order to turn a profit. It is also important to note that tobacco products are heavily taxed by the government. Include taxes in your financial plan and also be sure to deduct these taxes and turn them over accordingly as your business grows.

Step 8

Determine what days of the week and what times your store will be open for business. Create a sign advertising these hours to post in your store window.

Step 9

Set up your store for business. Inventory should be well organized to allow your customers to browse easily. Make sure that your store setup complies with fire safety regulations in your city.

Step 10

Hire employees to run your smoke shop. It is important to note that you must be 18 to sell tobacco products in the United States.

Things Needed

Business license
Tobacco license
Inventory

Tip

Advertise your business locally and online to attract customers.

Warning

Always ask for photo identification from customers, as it is illegal to sell tobacco products to anyone under the age of 18 in the United States. You could potentially lose your business license and be fined by law enforcement for breaking this law.

References (3)

About the Author

Based in Colorado, Bronwyn Timmons has been writing professionally since 2009. Her work has appeared on a variety of websites, covering topics such as career and education planning, wedding planning, home improvement, crafts and gardening. Timmons is pursuing her bachelor's degree in mortuary science.

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Easy Tips and Ideas to Start Business

Although anyone can start a business, many people fail because of a bad product or improper research. If you want to start your own business, you can improve your chances for success before you even begin. In order to make your business successful, start strong and make sure that your idea will hold out for the long haul.

Have a Good Product

Ensure that you plan to sell something useful. Although you may think that your product is important or special, that doesn't mean the general public will agree. Ask friends, family and strangers what they think of your product. If they don't seem that interested, ask them why. With their suggestions, you can either improve the product or scrap the idea completely. According to Brad Sugars of Entrepreneur magazine, most small businesses fail because they sold a product that didn't have an adequate market. This also applies to small businesses that provide a service. A lawn-care business might be useful for part of the year in a northern state, but it is in-demand year-round in the south. Consider whether people will actually want to use your service and get constructive advice from those not afraid to give their opinion.

Research Local Businesses

Research local companies before starting up your own business. This will not only give you an idea of the amount of competition you will have, but it will also help you price your product or service. If you're looking to start a wedding photography business, you may find during your research that the market is over-saturated in your area. If not over-saturated, you should contact each business and ask them for a price list. Alter your prices so you can stay competitive with the competition in town. Researching similar local businesses will also help you decide where to locate your business location. Try not to start up a store or office close to another business of your type. If your small business is located away from similar business types, this will cause locals to choose you over businesses that are farther away from where they live.

Get Professional Advice

You may know someone who has started their own successful business. Ask him for advice and listen to his stories of how he started his company. You may gain useful advice on the good and bad ways to start a business. Local entrepreneurs can also introduce you to local product providers or advertisers that you may not have met without their help. Accept any advice with open arms, especially if the advice is coming from someone successful in the area.

How to Calculate Business Start Up Costs

Starting a business in no easy endeavor. It takes a great deal of research, perseverance and hard work. While sweat equity will make your small business more successful, you will most likely need real capital to get the business started. Before you start raising capital and/or investing your own funds, the first thing you need to do is determine the total start-up costs.

Step 1

Determine your costs of sales. For most small businesses this means inventory, the cost of raw materials, manufacturing equipment, shipping, packaging, and warehousing. However, not all businesses sell products. In this case, the cost of sales is primarily the direct labor involved in making the sale. For example, to open a small shoe business entails purchasing enough inventory ($10,000) to stock the store.

Step 2

Determine professional fees. Planning your business structure, i.e., limited liability corporation or general partnership, means hiring an attorney. There may also be the need to pay an attorney for help with establishing trademarks, copyrights, and patents. In this scenario, that puts total professional fees at an estimated $20,000.

Step 3

Determine technology costs. Technology can greatly reduce the cost of labor for small business if used effectively. Most small businesses require computers, printers, cell phones, website development, Internet access, software applications, information security, data storage, and outsourced information technology (IT) consulting. If the cost of technology is $10,000 to start, add an additional $5,000 a year for maintenance (hint: maintenance is not included in start-up costs).

Step 4

Determine administrative costs. This varies with business types and may include items such as business insurance, office supplies, product packaging, parking, rent, express shipping, desks, chairs, fax machines, phones, or anything else necessary to operate the business daily. A good estimate for start-up administrative costs would be $5,000 for the first six months.

Step 5

Determine initial sales and marketing costs. Now that you have your product, you need to let folks know about it. Sales and marketing costs generally include marketing materials for presentations, printing stationery, business cards, advertising, trade show events, and public relations. These initial sales and marketing costs can add up to $3,000.

Step 6

Determine the wages and benefits needed to secure a staff. This includes employee salaries, benefits, workers compensation, and payroll taxes. Let's put the cost of wages and benefits estimated at $20,000 for the first three months of business.

Step 7

Add all costs associated with starting the business for a total. Be sure to only include business start-up costs that will be incurred in the first three to six months of operations. For this example, the calculation is: $10,000 + $20,000 + $10,000 + $5,000 + $3,000 + $20,000 = $68,000.

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Monday, July 22, 2013