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Thinking about opening a cigar lounge

This is a discussion on Thinking about opening a cigar lounge within the General Cigar Discussion forums, part of the The Cigar Lounges at Puff category; I have been contemplating for the last year if I am going to open a cigar lounge or not. I ...

  
  1. #1

    Connoisseur in Training Tonybone's Avatar


     

    Thinking about opening a cigar lounge

    I have been contemplating for the last year if I am going to open a cigar lounge or not. I have decided to go ahead and go forward with it and find out some info about costs and just general tips for getting this ball rolling. If there are any cigar shop owners out there that can share some pointers about how you guys went about gettin your business going, that would be grreeaat! Thanks.

  2. #2

    No longer a community member. Nickerson's Avatar


     

    Re: Thinking about opening a cigar lounge

    I'm sure it would cost quite a bit. Excluding the cost of the building. You will probably need to drop around $100,000+ on the insides for furniture, televisions, lockers, smoke eaters, etc.

    Would be a nice business to own though. Not sure how profitable they are.

  3. #3

    Steadiest hand The Waco Kid's Avatar


     

    Re: Thinking about opening a cigar lounge

    Tony,

    I don't run a cigar lounge - I'm just amazed that they can stay in business. I'm not trying to rain on your parade! But it seems like you'd have to sell a LOT of cigars to turn a profit.

    There are plenty of references on the Web to writing a business plan. I've started a couple of businesses, and I can tell you that you have a much better chance of success with a plan. At the worst, you'll know ahead of time what your cost of goods sold will be, what your fixed and variable costs will be, how much you can charge, and therefore what your volume has to be if you are to be profitable. You'll then have to decide how much work you'll have to put in to turn that level of sales. The few shop owners I've seen have a huge amount of expertise and put in a lot of time. You'll also need to figure out what you need to do to make people visit your shop instead of one of the other shops in Houston. You can do some research on that right here - ask folks 'what do you like about your current B&M and what do you really wish they had?".

    If this is a labor of love - that's very important but not quite sufficient. You also have to be smart about the plan - make sure you know how you are going to attract folks that already have a 'home' B&M. Or find an underserved area, there may not be any B&Ms in Pasadena or Clear Lake for instance. You also have to be willing to work much harder than you probably expect.

    Good luck to you! I don't spend much time in the B&M but I'll be sure to visit yours once you get it open!
    Gravity is a harsh mistress. - The Tick
    Kick, Pooh, KICK! - Charlotte 'Chuck' Charles

  4. #4

    Up on One ckay's Avatar


     

    Re: Thinking about opening a cigar lounge

    I think everyone who enjoys this hobby had at one point thought about this.

    Here is an excerpt from an older post elsewhere.

    I opened a cigar shop with lounge in missouri last sep. I can send you the business plan I used to get my SBA. Let me be clear. Making money takes time. At least a couple of years. I have 30k+ in ventelation and believe me you can never have to much. A stand alone building will be pricey. You will need to do 50k in sales per month probably if your rent is around 50k per year. That is hard to do. Also if you have a liquor license in most states it limits your ability to be open sundays. If you are serious about wanting more info PM me and I will be glad to set a time when we can talk on the phone. BTW stay away from Franchises they just complicate things and cost you money. IMHO

  5. #5

    Connoisseur in Training Tonybone's Avatar


     

    Re: Thinking about opening a cigar lounge

    I just got done reading an article about profits and expenses for owning a cigar/smoke shop. Melendi, a cigar shop owner in Manhattan says to open just a cigar shop, not a lounge that I had in mind that includes a members only bar in the back, should expect to spend $500,000+ on just the cigar shop(furniture, humidor, supplies, etc.). Melendi also suggests that you should have around $2 million in the bank just in case.... However after your first year or two and a stable clientele base, your ROI will beat least 15-20%. Profits will be nice once I get there....but as with any business, the first few years are always the toughest. Looks like I have a bit of saving up to do, but I still think it would be awesome to own a really exclusive cigar lounge.

  6. #6

    THE MAN WHO LOVES TWANG! TonyBrooklyn's Avatar


     

    Re: Thinking about opening a cigar lounge

    Quote Originally Posted by Lakeman View Post
    Tony,

    I don't run a cigar lounge - I'm just amazed that they can stay in business. I'm not trying to rain on your parade! But it seems like you'd have to sell a LOT of cigars to turn a profit.

    There are plenty of references on the Web to writing a business plan. I've started a couple of businesses, and I can tell you that you have a much better chance of success with a plan. At the worst, you'll know ahead of time what your cost of goods sold will be, what your fixed and variable costs will be, how much you can charge, and therefore what your volume has to be if you are to be profitable. You'll then have to decide how much work you'll have to put in to turn that level of sales. The few shop owners I've seen have a huge amount of expertise and put in a lot of time. You'll also need to figure out what you need to do to make people visit your shop instead of one of the other shops in Houston. You can do some research on that right here - ask folks 'what do you like about your current B&M and what do you really wish they had?".

    If this is a labor of love - that's very important but not quite sufficient. You also have to be smart about the plan - make sure you know how you are going to attract folks that already have a 'home' B&M. Or find an underserved area, there may not be any B&Ms in Pasadena or Clear Lake for instance. You also have to be willing to work much harder than you probably expect.

    Good luck to you! I don't spend much time in the B&M but I'll be sure to visit yours once you get it open!
    I must piggy back on what Lakeman has said here. Also consider the stricter requirements for opening such an establishment. Then there are internet sales how do you compete with that. Also with the economic climate being what it is today. I wish you much luck with your idea!
    “When the power of love overcomes the love of power, the world will know peace.”
    Jimi Hendrix



  7. #7

    Up on One ckay's Avatar


     

    Re: Thinking about opening a cigar lounge

    It's like this...you are passionate about something, you look for ways to make a living from it. We all day dream about it...whether it is owning a B&M, lounge, playing on the PGA Tour. The reality of it isn't so bright. A lot of sacrifice and the risk of failure will always be there.

    But at the end of the day, he who has the biggest balls prevails.

  8. #8

    Connoisseur in Training Tonybone's Avatar


     

    Re: Thinking about opening a cigar lounge

    I also think it will take a long time to get my sales to where I would like them to be. Being a business owner right now, I know what kind of time and energy is put into making your business a success. Although the labor of love thing is whats kind of drawing me towards this business idea, I also agree that from an investment standpoint, the ROI doesn't seem that great. I'm going outside to talk to H. Upmann about a Grande Maduro and see what he says lol...

  9. #9

    Full grown Puffer Fish Jordan303's Avatar


     

    Re: Thinking about opening a cigar lounge

    I was sitting ina cigar lounge a few months ago in miami and couldnt stop but think how they make money. Then I began thinking how I would have done it to turn a maximum profit. I think that cigars have a very niche market. That being said that market is a very loyal niche market. BUT the alchohol market is much much bigge. If it was marketed as either a cigar bar or a wine and cocktail cigar bar I think would turn a bigger profit just because more people drink than smoke, and when people drink they generally drink more than one. When peole smoke they generally only smoke one.

    Now I am not a buisness student I don't own a buisness, its not my trade. Just an opinion and an observation.

  10. #10

    !Going fast! TTHunter's Avatar


     

    Re: Thinking about opening a cigar lounge

    No smoking in public places in Houston. Not sure you would get around that. Though there are some shops currently but I wonder if they were grandfathered.

    Like any retail business - location, location, location. And even with everything done right you still have to compete with online sales. This would be a tough business to get into.

  11. #11

    Teh Kid thegoldenmackid's Avatar


     

    Re: Thinking about opening a cigar lounge

    I know competition is a good thing and Houston is a big city, but there are a decent amount of quality B&Ms in Houston...

    Amongst all the other issues.
    http://twitter.com/charlieminato
    editor, halfwheel.com

  12. #12

    Diver Turtle's Avatar


     

    Re: Thinking about opening a cigar lounge

    A few things to think about.

    First, here's a link from the forum going over some more costs, ideas, etc. Opening a B&M Tobacco Shop

    Second, the thought has been bandied about here locally with a group of 5 guys/investors. After years of tweaking plans, really the only way to make money that we have seen is to be located fairly centrally (downtown would be preferrable), you HAVE to have a lounge, and the lounge needs to be nice and welcoming. Alchohol is a must - this is where the profits come in. The rest, nice chairs, speakers, tv, etc will come or change how you need. But you need to have a welcoming atmosphere, and alchohol to pay the bills.

    Unfortunately easier said than done - that requires a license, and normally those are hard to come by/insanely expensive.

    Hope we can keep pointing you in the right direction.
    Remis Velisque

  13. #13

    Full grown Puffer Fish afilter's Avatar


     

    Re: Thinking about opening a cigar lounge

    Wish you the best with this. The few that still exist around here had to foght with the libs over the smoking ban....finally common sense prevailed and they grandfathered in the Cigar lounges who business model was based on smoking if the local community did not object.

    One nut job actually proclaimed that she was so glad for the smoking ban becuase she could not go and enjoy the nice leather furniture at one of the local cigar stores....DUH!! they are not there for you.

    Back on topic the ones that I see that are still in business tend to combine with other sales like alchol. One prominate one is a cigar and Wine store.

    Best of Luck!

  14. #14

    Full grown Puffer Fish GentlemanJester's Avatar


     

    Re: Thinking about opening a cigar lounge

    I think the scariest thing to me is where is the legislation going to be in 5 years? Open a shop, dump a lot of money into it, and then the government tells you to shut down? I hope it doesn't happen, but I think its the way we're headed.
    Be it a Opus X or a Swisher Sweet, if you like it, smoke it. Cause it's all about the ride!

  15. #15

    Newbie in the ocean


     

    Re: Thinking about opening a cigar lounge

    Please send me a copy of your business plan as I am interested in opening a lounge.

    Thanks,
    Dave



    Quote Originally Posted by ckay View Post
    I think everyone who enjoys this hobby had at one point thought about this.

    Here is an excerpt from an older post elsewhere.

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