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Writing a Business Plan
While it may be tempting to put off, creating a business plan is an essential part of starting your own business. Plans and proposals should be put in a clear format making it easy for potential investors to understand. Because every company has a different goal and product or service to offer, there are business plan templates readily available to help you get on the right track. Many of these templates can be adapted for any company. In general, a business plan writing guide will recommend that the following sections be incorporated into your plan.
Executive Summary
The executive summary is the first section that business plans open with, but is often the last section to actually be written as it’s the most difficult to write. The executive summary is a summary of the overall plan that highlights the key points and gives the reader an idea of what lies ahead in the document. It should include areas such as the business opportunity, target market, marketing and sales strategy, competition, the summary of the financial plan, staff members and a summary of how the plan will be implemented. This section needs to be extremely clear, concise and engaging as you don’t want the reader to push your hard work aside.
Company Description
The company description follows the executive summary and should cover all the details about the company itself. For example, if you are writing a business plan for an internet café, you would want to include the name of the company, where the café would be located, who the main team members involved are and why, how large the company is, who the target market for the internet cafe is, what type of business structure the café is, such as LLC, sole proprietorship, partnership, or corporation, what the internet café business mission and vision statements are, and what the business’s short-term objectives are.
Services and Products
This is the exciting part of the plan where you get to explain what new and improved services or products you are offering. On top of describing the product or service itself, include in the plan what is currently in the market in this area, what problems there are in this area and how your product is the solution. For example, in a business plan for a food truck, perhaps there are numerous other food trucks in the area, but they are all fast –food style and unhealthy so, you want to introduce fast food that serves only organic and fresh ingredients every day. This is where you can also list your price points and future products or services you anticipate.
Market Analysis
The market analysis section will take time to write and research as a lot of effort and research need to go into it. Here is where you have the opportunity to describe what trends are showing up, what the growth rate in this sector looks like, what the current size of this industry is and who your target audience is. A cleaning business plan, for example, may include how this sector has been growing by 10% every year due to an increase in large businesses being built in the city.
Organization and Management
Marketing and sales are the part of the business plan where you explain how you will attract and retain clients. How are you reaching your target customers and what incentives do you offer that will keep them coming back? For a dry cleaner business plan, perhaps if they refer customers, they will get 10% off their next visit. In addition, you may want to explain what needs to be done in order for the business to be profitable. This is a great way of showing that you are conscious about what clear steps need to be taken to make a business successful.
Financial Projections & Appendix
The financial business plan section can be a tricky one to write as it is based on projections. Usually what is included is the short-term projection, which is a year broken down by month and should include start-up permits, equipment, and licenses that are required. This is followed by a three-year projection broken down by year and many often write a five-year projection, but this does not need to be included in the business plan.
The appendix is the last section and contains all the supporting documents and/or required material. This often includes resumes of those involved in the company, letters of reference, product pictures and credit histories. Keep in mind that your business plan is always in development and should be adjusted regularly as your business grows and changes.
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Hookah Bar Business Plan
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Arz al-Lubnan Hookah Bar
Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">.
Arz al-Lubnan Hookah Bar (Cedars of Lebanon) is a new hookah bar concept which will focus on a combination of Middle Eastern customers and customers over 22 years in age to offer a more adult alternative to hookah bars frequented by college-age customers. The first bar will be established in Trendytown, and managed by the business founders, Sayed and Yasmine Batroun. The business will generate revenues through the sale of flavored tobaccos, non-alcoholic drinks, and appetizers. The business seeks angel investor funding to launch its first bar.
The business projects to become profitable in its first year with good profit from strong sales in the first year. Sales will triple by the third year of operation. Net profit of sales will be respectable due to the high margin on the products sold. Exit for investors is possible from sale of the franchise to a chain of bars looking to expand their market.
Arz al-Lubnan Hookah Bar seeks to achieve the following objectives with the launch of its first hookah lounge:
- To establish a franchisable model for hookah bars and initiate fundraising and planning for franchising by its fifth year of operation.
The mission of Arz al-Lubnan Hookah Bar is to provide a comfortable environment, sometimes relaxing and sometimes energetic and stimulating, around which those who love hookah smoking, as well as new converts, can come together. The environment will draw on elements of Middle Eastern culture as well as the culture of the local environment.
Keys to Success
The keys to success for Arz al-Lubnan Hookah Bar are:
- Energize the customer base to generate their own culture and events at Arz al-Lubnan Hookah Bar
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How to Start a Hookah Lounge
Starting a hookah lounge can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful hookah lounge.
Importantly, a critical step in starting a hookah lounge is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here .
Download our Ultimate Business Plan Template here
14 Steps To Start a Hookah Lounge :
- Choose the Name for Your Hookah Lounge
- Develop Your Hookah Lounge Business Plan
- Choose the Legal Structure for Your Hookah Lounge
- Secure Startup Funding for Your Hookah Lounge (If Needed)
- Secure a Location for Your Business
- Register Your Hookah Lounge with the IRS
- Open a Business Bank Account
- Get a Business Credit Card
- Get the Required Business Licenses and Permits
- Get Business Insurance for Your Hookah Lounge
- Buy or Lease the Right Hookah Lounge Equipment
- Develop Your Hookah Lounge Marketing Materials
- Purchase and Setup the Software Needed to Run Your Hookah Lounge
- Open for Business
1. Choose the Name for Your Hookah Lounge
The first step to starting a hookah lounge is to choose your business’ name.
This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your hookah lounge:
- Make sure the name is available . Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
- Keep it simple . The best names are usually ones that are easy to remember, pronounce and spell.
- Think about marketing . Come up with a name that reflects the desired brand and/or focus of your hookah lounge.
2. Develop Your Hookah Lounge Business Plan
One of the most important steps in starting a hookah lounge is to develop a detailed business plan. The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.
Your business plan should include the following sections:
- Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your hookah lounge.
- Company Overview – this section tells the reader about the history of your hookah lounge and what type of hookah lounge you operate. For example, are you a traditional hookah lounge, cafe hookah lounge, or a bar hookah lounge?
- Industry Analysis – here you will document key information about the hookah lounge industry. Conduct market research and document how big the industry is and what trends are affecting it.
- Customer Analysis – in this section, you will document who your ideal or target market are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing products or services like the ones you will offer?
- Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
- Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
- Product : Determine and document what products/services you will offer
- Prices : Document the prices of your products/services
- Place : Where will your business be located and how will that location help you increase sales?
- Promotions : What promotional methods will you use to attract customers to your hookah lounge? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
- Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
- Management Team – this section details the background of your company’s management team.
- Financial Plan – finally, the financial plan answers questions including the following:
- What startup costs will you incur?
- How will your hookah lounge make money?
- What are your projected sales and expenses for the next five years?
- Do you need to raise funding to launch your business?
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3. choose the legal structure for your hookah lounge.
Next you need to choose a legal structure for your hookah lounge and register it and your business name with the Secretary of State in each state where you operate your business.
Below are the five most common legal structures:
1) Sole proprietorship
A sole proprietorship is a business entity in which the hookah lounge owner and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.
2) Partnerships
A partnership is a legal structure that is popular among small business owners. It is an agreement between two or more people who want to start a hookah lounge together. The partners share in the profits and losses of the business.
The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.
3) Limited Liability Company (LLC)
A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a hookah lounge include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.
4) C Corporation
A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a hookah lounge is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.
5) S Corporation
An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.
Once you register your hookah lounge, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.
4. Secure Startup Funding for Your Hookah Lounge (If Needed)
In developing your hookah lounge business plan , you might have determined that you need to raise funding to launch your business.
If so, the main sources of funding for a hookah bar to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage hookah businesses. Angel investors typically will invest in a hookah lounge that they believe has high potential for growth.
5. Secure a Location for Your Business
There are a few things to consider when looking for a location for your hookah lounge or hookah cafe. First, you’ll want to make sure that the space is big enough to accommodate your guests. Find a place that is quiet and has a relaxing atmosphere. You’ll also need to find a business location that is allowed to host smoking lounges.
Another thing to keep in mind for your hookah den is the availability of parking. You’ll want to make sure there is plenty of parking available for your guests. Finally, you’ll want to find a space that is close to public transportation, as this will make it easier for your guests to get to your lounge.
6. Register Your Hookah Lounge with the IRS
Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).
Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.
Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.
7. Open a Business Bank Account
It is important to establish a bank account in your hookah lounge’s name. This process is fairly simple and involves the following steps:
- Identify and contact the bank you want to use
- Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
- Complete the bank’s application form and provide all relevant information
- Meet with a banker to discuss your business needs and establish a relationship with them
8. Get a Business Credit Card
You should get a business credit card for your own hookah lounge to help you separate personal and business expenses.
You can either apply for a business credit card through your bank or apply for one through a credit card company.
When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.
Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.
9. Get the Required Business Licenses and Permits
The licenses and permits you need to start a hookah lounge depend on your location. You may need a business license, a tobacco license, and a permit to sell tobacco products. Local laws may require that your hookah lounge be smoke free or allow smoking shisha. You should contact the local government to find out what licenses and permits you’ll need.
10. Get Business Insurance for Your Hookah Lounge
The type of insurance you need to operate a hookah lounge will depend on the state in which you reside.
Business insurance policies you should consider for your hookah lounge include:
- General liability insurance : This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
- Workers’ compensation insurance : If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
- Commercial property insurance : This covers damage to your property caused by fire, theft, or vandalism.
- Business interruption insurance : This covers lost income and expenses if your business is forced to close due to a covered event.
- Professional liability insurance : This protects your business against claims of professional negligence.
Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.
11. Buy or Lease the Right Hookah Lounge Equipment
You will need a few pieces of equipment to run your hookah lounge. Some of the essentials include hookah pipes, coals, and tobacco. You will also need space to set up your lounge, tables, chairs, and ashtrays.
12. Develop Your Hookah Lounge Marketing Materials
Marketing materials will be required to attract and retain customers to your hookah lounge.
The key marketing materials you will need are as follows:
- Logo : Spend some time developing a good logo for your hookah lounge. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
- Website : Likewise, a professional hookah lounge website provides potential customers with information about the products and/or services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
- Social Media Accounts : establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your hookah lounge.
13. Purchase and Setup the Software Needed to Run Your Hookah Lounge
You will need a point-of-sale (POS) system to run a hookah lounge. This software will help you keep track of your inventory, sales, finances, and reservations. You will also need software that can handle administrative aspects of the business and track customer data.
14. Open for Business
You are now ready to open your hookah lounge. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.
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How to Start a Hookah Lounge FAQs
Is it hard to start a hookah lounge.
No, it's not hard to start a hookah lounge or a shisha bar . In fact, it's a fairly simple process. You'll need to find a location for your lounge, obtain the necessary permits, and stock your lounge with hookahs and other supplies. You may also want to create a marketing plan to attract customers to your lounge.
How can I start a hookah lounge with no experience?
If you're looking to start a hookah lounge with no experience, the best way to do so is by doing your research. Learn about the global hookah market , what's popular in terms of flavors and styles, and what kind of atmosphere you want to create. You may also want to speak with experienced hookah lounge owners for advice.
What type of hookah lounge is most profitable?
According to sales figures from hookah suppliers, cafe style lounges are the most profitable. Cafe style lounges combine the relaxing atmosphere of a coffee shop with the socializing aspects of a bar. The soothing ambiance created by dim lights and background music allows customers to unwind after a stressful day.
How much does it cost to start a hookah lounge?
Opening a hookah lounge costs anywhere from $10,000 to $50,000. This will cover the costs of things such as the construction of the lounge, the purchase of hookahs and tobacco, and the hiring of employees.
What are the ongoing expenses for a hookah lounge?
The ongoing expenses for a hookah bar business can include the cost of rent, employee salaries, inventory, and other miscellaneous costs. Depending on what state you are located in, there can be additional expenses related to licensing and taxes.
How does a hookah lounge make money?
There are many ways hookah bars make money. Some of the most common are by selling food and drinks, charging an admission fee, and selling hookah products. They can also rent out rooms for private parties.
Is owning a hookah lounge profitable?
To open a hookah lounge, the cost of starting and operating the business is relatively low. Thus, if planned and managed well, it can be profitable. Additionally, a hookah lounge is a unique business that may be new to many people. Since it is not a common business, people may be intrigued and want to visit the lounge.
Why do hookah lounges fail?
Many hookah lounges and shisha bars fail for a variety of reasons that can generally be grouped into seven categories:
- Unreasonable pricing for the clientele.
- Unreasonable expectations from customers and employees.
- Inability to keep up with competition.
- Lack of training, skills, and experience in management.
- Inadequate financial resources.
- Inappropriate marketing strategies.
- Underestimating running costs or overstating profits.
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You've visited lounges, you love hookah, and you think it would be amazing to have your very own Hookah Lounge. I was in your shoes a few years back and through hard work turned that dream into a reality. Here are a few things I learned in my journey that I hope can help you along the way.
So You Want To Open A Hookah Lounge?
Seems simple enough. Hookahs, Shisha, a few couches, some nice decor and presto! Success! If only it were that easy. Opening a hookah lounge takes planning, organization, not to mention more money than expected. That is the first major hurdle. How to pay to get things going? The truth is it takes cash, and a lot of it. Banks don't look to fondly when it comes to loans for a hookah lounge, it's not a business with decades of proven success here in the states, so don't be surprised if the bank staff ask you what a hookah is. They probably don't know or understand the business, so it's a risky investment for most traditional institutions. That means you'll need to come up with a good amount of money or get that savings account going strong. Once that is out of the way you just need to free up all your time to get things going.
Creating a Hookah Business Plan - Fail to plan then plan to fail
Business plans can come in a variety of formats and styles, so don't get hung up on the perfect business plan template that will impress a bank, investor or just your parents. What matters is the information inside. If you open your lounge without considering your monthly costs against your projected revenue, you might find out you opened a business that is impossible to sustain. Here is quick version of the math involved to make sure your new venture is even feasible.
First - How much money do you want to make? Opening a business with the blind hopes of making a profit is bad. Since your paycheck is the profit, find a profit number you are happy with and start planning from there. Here is a very brief and basic example of how to start planning with the financials in mind.
Profit - The money left over after all your expenses are paid, so to make $4000 a month, let's look at this example:
Revenue - The money you collect from people
Fixed Costs / Overhead - The bills you pay every month regardless of how much money you bring in, such as rent, insurance, utilities and labor
Variable Costs - The costs of the products and taxes you sell that will increase when you are busy and be lower when you are less busy
Here is very simplified version of the financial planningof a fictional lounge that hopefully helps you get started.
$14,000 Revenue
Then Subtract:
$7500 (Fixed Costs - Rent, Labor, utilities, etc)
$2500 (Variable costs - Your shisha, replacement hookahs, mouth tips, sales tax, etc)
$4000 - Boom! Now you know how much money you need to bring in to make the profit you want to make.
Now I go back and look at the revenue.
$14000 divided by $20 hookah rentals = 700 rentals
700 Rentals divided by 26 days a month (Trust me, you should close at least 1 day a week until you are rock solid and can pay more staff to keep it open 7 days a week. Don't burn yourself out!)
You need to average 27 hookahs per night. Now your job is to find a viable location that you can lease, staff, heat and insure for $7500
Finding a Location
One of the hardest parts of the process is finding a location. It took me 3 months to finally settle on a spot. Hookah is a lot of times an after thought for people so you need to be somewhere that will be seen. Check areas near other night businesses like bars and nightclubs or the popular areas near college campuses and even military bases can provide a good source of customers. Many landlords will be reluctant to lease to you as unfortunately a lot of Hookah Lounges that are hastily opened can fail. Plus many landlords fear the fire risk, don't want a tobacco based business, or just don't like the sound of it. You will then need to make sure the city will allow the business and the laws there will allow indoor smoking.
Getting the Proper Licenses and Permits
You need to check with the city for any permits you might need. Some municipalities have special taxes, after hours permits, tobacco permits, construction permits, and other restrictions you might need to get approved. The state also has it's own list of permits and requirements as well. Do your homework, because the last thing you want is a government official showing up and asking for the permits you never applied for. Short cuts may be tempting but in the long run they can sabotage your business.
Building Out Your Location to Make It Your Own
So you finally have the money and a killer location. Time to get to work! This will probably be your biggest up front expense, depending on the level of customization. You can go cheap here and use an existing layout, but a custom built lounge will look and feel much more exciting which gives you the leverage to charge more for your hookah rentals. Find the balance that is right for your budget and business plan. Flooring, Lighting, layout, and design are just a few of the things that will need to happen. Personally I did most of the build out myself with the help of some fantastic friends, but even working 15 hours a day 7 days a week it took me over a month to get it ready. Be prepared for roadblocks. Whether it be from construction delays to building inspectors dragging their feet, always assume it will happen.
Furniture and Decor - Don't Cheap out Now, Your Almost There
Now is the time to fill the place with seating. You're going to want something comfortable that fits whatever theme you're looking for. One important thing to keep in mind is that you will probably have to replace pieces periodically. ( Coals burn things and accidents do happen ) try getting furniture that will be available in the event you need to replace. If your lounge looks professionally decorated you can charge more for the experience and you will attract higher end clientele than if your lounge looks like you added hookahs to someone's craigslist ad.
Hookahs and Supplies:
This is pretty much the last step apart from staffing. Here is where many people make a mistake. Many people get stuck on finding the perfect hookahs and want to test the flavors before they do anything. The hookahs are the easiest, cheapest and fastest part of the whole business. We can help you find the perfect hookah set ups to meet any need you have and have them there ready to smoke in a matter of days. Picking a menu is fun as well, you want to carry the standards that all hookah smokers will know and love but don't overlook bringing in new and unique brands to help set you apart from the rest. We can help you build out the right menu for your location, but please, please, please don't try to set up a lounge with over 100 flavors. You will have 75 flavors that no one smokes and you will get stuck with all that slow moving inventory!
We look forward to helping you in this great new adventure!
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Hookah Lounge Business Plan Sample
JUL.27, 2018
Hookah lounge business plan for your own bar business
Do you want to start a hookah bar business? A hookah bar business is undoubtedly one of the most profitable startups, yielding the greatest rate of return as compared to other businesses. A hookah bar is a place where people can come freely and enjoy different flavors of hookahs, drinks, e-liquids, appetizers, cigars and sometimes alcoholic drinks too. Opening a hookah bar will prove a rewarding and profitable business for you, as smoking is banned in public places in many countries.
Before starting it, you need to have a well-structured shisha bar business plan covering even the tiniest bit of details. To help you avoid all the trouble of thinking and making a plan yourself, we are providing a detailed sample hookah lounge business plan for the startup ‘Aladdin Hookah Bar’.
Executive Summary
2.1 the hookah lounge business.
Aladdin Hookah Bar will be a registered hookah bar in Miami at a 10 minutes’ walk from the Bayside Marketplace. Miami is a highly advanced and ordered city; a hookah bar strategically located in the main commercial zone of this populated city will business a lot, as most people and tourists search for a serene place for smoking and relaxing.
The business will be owned and operated by Stephen Gerrard who is well-known in Miami for his reputable catering services operating for the last 15 years.
2.2 Management of Hookah Lounge
Gerrard aims at achieving perfection in hookah bar business by providing an exotic environment and fresh hookah drinks. The business will be managed by Gerrard himself initially and he’ll hire a small team for different tasks.
2.3 Customers of Hookah Bar
Aladdin Hookah Bar will provide fresh fruit hookahs and different types of coffees in a well-designed seductive environment to both permanent and temporary residents of Miami aged 22 and above.
2.4 Target of the Company
If you have decided to open a hookah bar, you must include your targets in your hookah bar business plan to improvise your business at a large scale. Mr. Gerrard’s target is to make his hookah bar’s environment homey and unique by providing a large number of drinks, hookahs, coffees, and teas.
Company Summary
3.1 company owner.
Gerrard is famous in Miami for his reputable and distinguished catering service operating for the last 15 years. Due to the individuality of his ideas, he is considered the esteemed choice for managing caterings in events. This year, he wants to start a side business of a hookah bar and is willing to invest both time and money in it.
3.2 Why the Hookah Lounge Business is being started
Due to the policy of WHO to protect non-smokers from passive smoking, smoking is forbidden in public places, and people search for a hookah lounge to smoke. Gerrard is going to launch a hookah bar as he best knows how to open a hookah bar and how to run a hookah lounge successfully. In addition to that, he also aims to generate profit from his comfortable and legal smoking place in Miami.
3.3 How the Hookah Bar Business will be started
After analyzing various aspects of this business, Gerard has decided to manage the bar himself, yet he will hire a team for his assistance and for preparing the menu. The startup costs are as follows:
The detailed start-up requirements, expenses, total assets, total funding required as forecasted by the company’s analysts are given below:
Services for customers
Before starting a hookah bar, you must be clear about the services you are going to provide to your customers as it will help you to estimate opening a hookah bar cost .
Gerrard has exclusive hookah bar ideas , he aims to make a perfect place for spending a quiet afternoon alone or with friends by adorning the big lounge by dim lights and brick walls combined with comfortable sofas and pillows.
Aladdin Hookah Bar will provide all sort of hookah drinks and coffees to its esteemed customers above age 22. Each one of our offerings will be prepared by maintaining strict health and quality measures.
Besides providing simple drinks, wines, and cigars, our major products will include:
- Hookah Drinks: We’ll provide fresh hookah drinks of the following flavors, Grape, Lemon, Peach, Cola, Mint, Black Mint, Strawberry, Cherry, Apple Doppio, Mango, Orange, Banana, Pistachio, Vanilla, and Rose. Besides these usual flavors, we’ll introduce a new flavor, Code Blue, which will be a mixture of creamy blueberry with red grape soda and black mint.
- Teas & Coffees: We’ll provide a wide range of coffees and teas including flat white, espresso, long black, macchiato, Vienna and Irish coffee.
- Soft Drinks: We will also provide various kinds of soft drinks.
- Salads : We’ll also provide fresh vegetable cheese salads, bean salads, and fruit salads.
Aladdin Hookah Bar will be open twenty-four hours a day.
Before starting a hookah bar, you must be clear about the services you are going to provide to your customers as it will help you to estimate opening a hookah bar cost.
Market Analysis Summary
The first thing to do before starting a hookah bar is to research about how to start a hookah bar business in your state since there are a lot of concerning health regulations in practice. After that, carry out an accurate marketing analysis which will help you to decide the company’s strategies over the next years. It must be incorporated in the initial business plan and all subsequent things must be planned according to it.
Considering its importance, Mr. Gerrard obtained the services of marketing experts to help him develop a hookah bar business plan taking into account the current marketing demands.
5.1 Marketing Trends
If you want to know how much is hookah bar business profitable, you will be glad to know that there are more than 7000 legally registered hookah bars in the US and the number of hookah bars is increasing significantly. According to an IBISWorld report, hookah bars have generated a revenue of more than 900 million dollars in the past few years.
But remember, the success and failure of any business depend upon how keenly you focus on your target customers. A successful marketing strategy can only be developed after knowing the target audience and potential customers.
This sample business plan will help you in defining your target audience, you can take help from this sample business plan even if you don’t know how to start a hookah lounge , In this business plan we have explained how to open up a hookah bar and run it successfully.
5.2 Marketing Segmentation
The following type of target audience will become the future customers of Aladdin Hookah Bar.
5.2.1 General Traffic: The top category of our target customers will be the general traffic i.e. the people who happen to be near our hookah bar and decides to relax and smoke for some time in the hookah bar. We will be benefited a lot as Aladdin Hookah Bar is situated near the main market of Miami, which is visited by thousands of people daily. The exclusive entrance and dim-light theme of Aladdin Hookah Bar will attract the people who search for a place to sit calmly to smoke or to drink hookah.
5.2.2 Companies and Businesses: This category includes all employees working in the various office, companies, and businesses situated near us. As smoking is not allowed in offices, so the workers who want to drink hookah or cigars in their break time will rush towards. The employees of these companies and businesses will buy hookah drinks, coffees and salads from us on a daily basis.
5.2.3 Local Residents: We also aim to target the local residents residing in nearby areas. We are sure that they will be surely addicted to the solace environment we’ll provide, and whenever they want to have a hookah drink, they’ll approach us.
The detailed market analysis of our potential customers is given in the following table:
5.3 Business Target
Our target is to become the best hookah bar in Miami within the first year of launch. We also aim to recover our initial capital within 3 years of our launch and grow our sales by 30% each year. We’ll achieve our target by providing the best quality drinks and environment and by valuing our customers.
5.4 Product Pricing
Product pricing is the most important factor affecting the sales of a new business. We have priced our items and drinks in the same range as our competitors in the market. But the products which are only provided by us such as Code Blue Hookah will be a little costlier as more effort will be required for its preparation.
After you have understood how to open up a hookah bar you must plan your business strategy , you can take help from this sample business plan on how to open up a hookah lounge .
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6.1 Competitive Analysis
Aladdin Hookah Bar will have a tough competition because there are thousands of already established hookah lounges in Miami. Moreover, people are always hesitant to try a restaurant business plan that’s why Gerrard has decided that Aladdin Hookah Bar will be decorated in a unique manner, to attract the customers for the first time.
Our biggest competitive edge is our location and the wide parking space for our customers. Lastly, we will provide our customers with the best standard and quality products in a healthy environment where we’ll do proper aeration system to purify the air from the smoke.
6.2 Sales Strategy
For attracting the majority of people in the startup of a business, Gerrard has planned some types of advertisements.
- We’ll give free hookah drinks and salads till the third day of launch.
- We’ll ensure that we have a wide range of hookah drinks, cigars, tobaccos, wines, non-alcoholic drinks and salads at all times.
- We’ll provide an online table reservation facility for those who want to come in the form of a group with friends.
- We’ll advertise our lounge and menu through our website and social media.
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
Personnel plan
After a great research on how to start a hookah bar business , Gerrard has devised his personnel plan, which is given here for your help.
7.1 Company Staff
Stephen Gerrard will himself act as the Aladdin Hookah Bar Manager and will be responsible for the daily activities. The company will initially hire the following people:
- 12 Bartenders for arranging glasses and bottles for attractive display and for mixing and serving drinks
- 2 Cashiers to receive cash from the people
- 1 Marketing Executive responsible for the marketing and advertising of the restaurant
- 2 Chefs for making salads
- 8 Cleaners to clean the dishes and other facilities at the restaurant
- 2 Security Officers
To ensure the best quality service, all employees will be selected through vigorous testing and will be kept in check for their dealing with clients.
7.2 Average Salary of Employees
The following table shows the forecasted data about employees and their salaries for the next three years.
Financial Plan
You can never estimate how much is a hookah bar business profitable unless you devise its financial plan. As the last step of your business plan, you must prepare a financial plan, to manage your investments and profits.
Aladdin Hookah Bar will be solely financed by Mr. Gerrard and no equity funding or outside loan will be required unless the business expands faster than forecasted.
8.1 Important Assumptions
8.2 brake-even analysis.
8.3 Projected Profit and Loss
8.3.1 profit monthly.
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
8.5 Projected Balance Sheet
8.6 business ratios.
Download Hookah Lounge Business Plan Sample in pdf
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How to Start A Hookah Lounge Business in 10 Steps
Do you want to start a hookah lounge business? Here is the stepwise business guide to launching a hookah bar covering aspects like legal formalities, cost, setup, and much more.
The hookah is actually a water pipe, a kind of smoking apparatus. And it is used to smoke flavored snuffs. The demand for hookah bars nowadays is high globally. In addition, the market is not saturated. Hookah bars are a great destination not only for shisha smokers but also for anyone looking to relax in a laid-back environment.
Hookah Lounge Business Plan Guide for Beginners
To start a profitable hookah lounge business, it is extremely important to follow the following essential steps.
1. Create a Hookah Lounge Business Plan
Create a business plan and include aspects like start-up capital, ownership pattern, location, mission statement, and objectives. A detailed business plan will make you confident in achieving short-term goals and in building a smooth day-to-day operation module.
Here are the topics you must address in your business plan:
- What are the startup and recurring costs of starting a hookah lounge in your city?
- Your target customers
- Pricing Strategy
- How do you plan to acquire customers?
2. Name Your Hookah Lounge Business
A proper business name is a critical part of the process of creating a brand. Brainstorm different names and select the one which aptly manifests your hookah business. you can check our guide on how to name a business .
Following are the popular hookah lounge business names:
- Tarboosh Cafe
- Smoke n Stuff
- Pure Lounge
- Pharaoh Hookah
- Sinbad Cafe
3. Licenses & Permits
First of all, check what licenses and permits you must acquire to run a hookah bar in your locality. Ingredients used in hookah should be permissible and not against the anti-weed law. And further smoking zone should be separate from the restaurant area if the restaurant is also being run on the same premises.
However, the laws vary depending on the location. In addition, choose a business structure under which you are going to run a hookah bar business.
4. Select a Proper Location
Selecting the right location is extremely critical for the success of the hookah bar business. The location should not be far from the city. You need to provide a disturbance-free atmosphere for your customers.
5. Make the Right Set-Up
A great location and space are very important for a hookah bar lounge business. You will need to delicately balance between a low-key restaurant and a social bar atmosphere. Smoking hookah is a very relaxing kind of social activity and you need to concentrate on décor.
A comfortable ambiance and relaxing atmosphere will encourage your client to sit and chill longer. To increase customer satisfaction and longer stays music is important and jukeboxes are the most classic component in the sector.
6. Cost of Starting a Hookah Lounge
A proper estimation of starting and running a hookah bar is a must. The startup cost is largely required for retail space, licenses, insurance, and hookah. For example, the cost of starting a hookah lounge in Las Vegas will be a minimum of $30,000.
Then there is a recurring cost of a shisha that you need to buy in containers. The amount will depend on the number of hookahs you provide to customers.
7. Set Your Profit Margin
The right Pricing strategy is extremely critical to the profitability of the business. Generally, more than two people share one hookah. You can charge by the hour, or by the amount.
Successful hookah bars make a huge amount of profit. They make to the tune of $2,00,000 yearly.
8. Supplies For Hookah Lounge Business
You will need to find suppliers for the restaurant setup. You need to source raw materials for the preparation of hookah smoke and bowls, hoses, disposable hookah, and different flavors of shisha smoke. Make sure your hookah bar lounge business offers an extensive menu of smoking options from fruits to mints to floral.
9. Hiring Manpower
Like any other service industry, the most important investment in Hookah Bar Lounge Business is your employees. In a hookah bar lounge business, staffs require special skills. It is absolutely crucial to hire attentive, knowledgeable, friendly personnel.
The success of a Hookah Bar Lounge business largely depends on repeat customers. It is important to have well-trained manpower having skills in establishing a positive rapport.
Related: How To Effectively Manage Manpower
10. Promote Your Hookah Lounge Business
You must go for a grand opening with some entertaining events. You can give some promotional discounts on some specific flavors and foods.
A happy hour discount promotion may also encourage your clients to come chill with their friends – a great trick to reach new customers. Create a website with some inside clippings. Ask satisfied customers to give feedback there. Use social media carefully to get clients.
About the Author: 99businessideas.com led by Rupak Chakrabarty is committed to helping beginners, entrepreneurs, and small business owners in starting, managing, and growing their business. Our aim is to educate the entrepreneur on the various stages of entrepreneurship.
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Home » Business ideas » Food Industry » Hookah Bar & Lounge
How to Write a Hookah Bar & Lounge Business Plan [Sample Template]
Are you about starting a hookah bar & lounge? If YES, here is a complete sample hookah bar business plan template & feasibility report you can use for FREE . The truth is that, if you choose to start a business just for the sake of making money, you are likely going to struggle to grow the business.
When the going gets tough as expected, you are likely going to pull out. One business that falls under this category is a hookah bar; you cannot successfully run a hookah bar business if you aren’t a smoker yourself.
The fact that The World Health Organization (WHO), in conjunction with Governments of various Countries are clamping down on smoking in public places just in a bid to protect non- smokers from the harmful effect of smoking makes hookah bar welcome loads of clients who usually love to share their experience with friends ( smoking tobacco with friends ) in a cozy environment.
Right there in the Airports, Cinemas, Shopping Malls and Public places in general, you might have noticed the “ Smoking Not Allowed ” signs hung at various spots informing the general public that the area is a no smoking zone. However, if you took your time to make enquiry, you would find that there are hookah bars and cigar lounges just around the corner.
Banning smoking in public places is actually a blessing in disguise for people with the intention of starting a hookah bar or a cigar lounge. Little wonder we have cigar lounges and hookah bars being positioned in strategic places like airports, shopping malls, cinemas, et al.
Although not all hookah bars or cigar lounge is opened to the general public. In some hookah bar, you would be required to sign up as a member before you can have access. Below is a sample Hookah Bar business plan template that can help you to successfully write your own with little or no difficulty.
A Sample Hookah Bar Business Plan Template
Table of Content
1. Industry Overview
3. our products and services, 4. our mission and vision statement, 5. job roles and responsibilities, 6. swot analysis, 8. our target market, 9. sales and marketing strategy, 10. sales forecast, 11. publicity and advertising strategy, 12. our pricing strategy, 14. sustainability and expansion strategy.
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 the fear of breaking the law of a country or city. Businesses in this industry usually provide limited food and alcohol services as a means of increasing their revenue generation.
According to the American Cancer Society – ACS, hookah basically a flavored tobacco and it is smoked out of a ‘hookah’ water pipe. The tobacco is often called shisha which is a higher grade hookah with only molasses and flavoring added. It is a centuries old practice and most likely originated from india.
Hookah bars are mostly found in college towns and urban areas and are regarded by some as a trendy way to socialize and embrace multiculturalism. Some people of Middle Eastern or South Asian extraction consider them a continuation of their own cultural traditions.
Some hookah bars have well-equipped kitchens and are more similar to wine bars. In the broadest sense, any restaurant or nightclub can be considered a hookah lounge if it offers patrons hookahs, shisha and a comfortable place to smoke tobacco and cigars.
Because of several state anti-tobacco laws, most Hookah bars have made the transition from smoking traditional shisha to smoking herbal shisha because it contains no tobacco or nicotine and is legal indoors in areas specific to the prohibition of tobacco and cigar smoking. Besides, herbs do produce tar when they burn.
In recent time, the Hookah bars cum Cigar Lounges industry has made a strong comeback in the united states over the last five years as a large increase in tobacco consumption has boosted the demand for tobacco related products. In the face of regulatory hurdles in obtaining exemption from state indoor smoking bans, both industry participation and revenue have grown at rapid rates since 2010.
No doubt, as the economy continues to grow and improve over the next five years, more consumers will likely indulge in premium cigars and tobaccos at high-end hookah bars or cigar lounges, helping the industry sustain its growth and widen profit margins. So also, with the United States recent steps toward normalization of relations with Cuba will definitely expand access to the country’s high-end cigars and tobaccos, providing an opportunity for the industry to maximize profits.
The Hookah Bars cum Cigar Lounges industry is indeed a thriving industry in the United States, Canada and in most countries in Europe, Statistics has it that the Cigar Lounges and Hookah Bars industry in the United States of America, is worth $2 billion, with an estimated growth rate of 11.0 percent.
There are about 7,684 legally registered and licensed cigar lounges / Hookah bars businesses scattered across the United States of America and they are responsible for employing about 17,980 people. The industry is an open industry hence a low level of market share concentration.
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 hookah bar for the first time, it is important you conduct a thorough research so that you can be well informed and guided when making the choices of what you want from the array of options that are available to you.
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 to help you garner the needed information.
Any entrepreneur who wants to start a hookah bar business in the US would definitely be confronted with tough competition out there. 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 options such as wine bars, night clubs, restaurants, casinos et al where cigars and tobacco et al are retailed and can be freely smoked.
For instance, people go to bars to drink, smoke and socialize and they tend to get more when they go to night clubs or other entertainment hub. In night clubs, people do not only drink, smoke and socialize, but they also dance if they choose to and get entertained.
2. Executive Summary
Purple & Blue Hookah Bar®, LLC is a neighborhood hookah bar cum cigar lounge that will be located on the ground floor of one of the busiest campus communities with a robust international in the United States of America – The University of California – Los Angeles. We have been able to secure a one-year lease of a vacant shop within the campus facility. We are fortunate to secure a facility with an option of renewal for 5 years at an agreed rate that is favorable to us.
We are going to be involved in the sale of traditional shisha, sale of herbal shisha sale of cigars, sale of tobacco-related accessories, sale of other tobacco products, sale of food and drink, mass marketing cigars and cigarillos, sale of premium cigars, providing a cigar-friendly smoking environment, sale of assorted red and white wines, sale of beer and liquor, sale of distilled spirits, martinis and tobacco et al to campus students and visitors in a conducive environment that is specifically designed for socializing and networking and free from all forms of violence.
Purple & Blue Hookah Bar®, LLC is designed and constructed to meet both the health and safety standard as 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. This will be played at the background to create the ambience 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 shisha, assorted cigars, tobaccos and drinks that are manufactured both in the United States of America and overseas.
Purple & Blue Hookah Bar®, LLC will go all the way to make available in our hookah bar most of the shisha, tobacco and cigar brands produced in the United States of America and in other parts of the world especially in countries like Cuba, India and Italy.
We aware that hookah bars easily attract intellectuals and business people and we know that the campus community is one of the places where we can easily tie down these people especially when they have to socialize.
We will ensure that all our employees are selected from a pool of qualified and customer centric people in and around Los Angeles – California and also from any part of the United States. 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 and to compete with other players in the United States and throughout the globe.
Purple & Blue Hookah Bar®, LLC is owned by Clarence Williams and his immediate family members. Clarence Williams has managed several cigar lounges, smoke shops, bars and night clubs in Los Angeles and Las Vegas prior to opening his own hookah bar. He has the magic wand to attract people who go to cigar lounges and hookah bars on a regular basis.
Purple & Blue Hookah Bar®, LLC is going to operate a standard and health compliance hookah bar in University of California – Los Angeles that will make available shisha, most of the cigar products and accessories that can be found in a standard cigar lounge or hookah bar in the United States.
We will also ensure that we go all the way to make available assorted wines and alcoholic drinks in our smoke hookah bar. These are some of our product and service offerings;
- Sales of traditional shisha and herbal shisha
- Sales of cigars
- Sales of tobacco-related accessories
- Sales of other tobacco products
- Sales of food and drink
- Mass market cigars and cigarillos
- Premium cigars
- Providing a cigar-friendly smoking environment
- Assorted red and white wines
- Beer and liquor
- Distilled spirits
- Sale of E – Cigars
- Our vision is to establish a standard, health compliance and secured hookah bar in Los Angeles – California that will be the melting pot of all lovers of shisha, cigars, tobaccos, wine, alcoholic and non – alcoholic drinks.
- Our mission is to establish a hookah bar business that will make available all the brands of shisha, cigars, tobaccos, 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
Purple & Blue Hookah Bar®, LLC is a business that is established to be a pacesetter when it comes to how standard hookah bar should be run in Los Angeles 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 smokers and socialites in Los Angeles.
In view of the above, we have been able to follow suits on what is obtainable in standard hookah bars and cigar lounges in the United States and perhaps improve on the structure with time when the need arises. We will work hard to ensure that we only attract people with the right mindset to help us achieve our business goals and objectives in record time.
Below is the business structure that we will build Purple & Blue Hookah Bar®, LLC;
- Chief Executive Officer (Owner)
- Hookah Bar Manager
- Bartender / Baristas
- Accountants / Cashiers
- Procurement Officer
Greeters / Customer Service Agent / Table Attendant
Security Officers
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; developing incentives; developing a climate for offering information and opinions; providing educational opportunities.
- Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- Responsible for fixing prices and signing business deals
- Responsible for providing direction for the business
- Responsible for signing checks and documents on behalf of the company
- Evaluates the success of the organization
- Carries out staff induction for new team members
Hookah bar Manager:
- Responsible for managing the daily activities in the hookah lounge
- Ensures that the facility is in tip top shape and conducive enough to welcome customers
- Interfaces with vendors
- Reports to the Chief Executive Officer
- Attends to Customers complains and enquiries
- Prepares budget and reports for the organization
- Responsible for Training and Development in the organization
- Responsible for procuring of supplies and equipment
- Handles any other duty as assigned by the CEO
Bartender / Baristas:
- Makes lists of supplies in conjunction with the hookah bar manager / management
- Assess customers’ needs and preferences and make recommendations
- Arranges bottles and glasses to make attractive displays .
- Serves wine and beer to guests.
- Prepares alcohol or non-alcohol beverages.
- Mixes drinks, cocktails and other bar beverages as ordered and in compliance with standard drink recipes.
- Mixes ingredients to prepare cocktails and other drinks.
- Checks identification of the guest to make sure they meet age requirements for purchase of alcohol and tobacco products.
- Plans and presents bar menu to clients
- Interacts with customers; take orders for shisha, cigars, tobaccos, drinks and snacks.
- Prepares inventory or purchase requisitions as needed to replenish supplies.
- Ensures that the assigned bar area is fully equipped with tools and products needed for mixing beverages and serving guests.
Accountant / Cashier:
- Responsible for preparing financial reports, budgets, and financial statements for the organization
- Provides managements with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
- 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
- Ensures 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 hookah bar
- In charge of music collections
- Provides music at events.
- Responsible for developing music playlists.
- Interacts with public at parties.
- Responsible for mixing music tracks.
- Opens door and welcome customers
- Ensures that customers feel relaxed and at home
- Handles customers enquiries
- Assesses customers’ needs and preferences and make recommendations
- Ability to sell or influence others for up selling and suggestive selling.
- Provides recommendations and suggestions to guest for choosing Drinks and Snacks.
- Serves customers in a friendly and helpful manner.
- Determines when a customer has had too much shisha, cigar and alcohol and if required refusing any further serving on a polite way.
- Demonstrates a thorough knowledge of shisha, cigar and alcoholic products, menus and Promotions
- Handles any other duty as assigned by the smoke shop manager
- Handles and moves objects, such as hookahs, glasses and bottles, using hands and arms.
- Cleans up after customers and clean work area.
- Clears ashtrays as and when required.
- Washes glassware and utensils after each use.
- Maintains a clean working area by sweeping, vacuuming, dusting, cleaning of glass doors and windows, etc. if required.
- Ensures that toiletries and supplies don’t run out of stock
- Handles any other duty as assigned by the hookah bar manager.
- Ensures that the hookah bar facility is secured at all time
- Controls traffic and organize parking
- Gives security tips to staff members from time to time
- Patrols around the building on a 24 hours basis
- Submits security reports weekly
- Any other duty as assigned by the smoke shop manager
Purple & Blue Hookah Bar®, LLC is established with the aim of becoming the melting point for smokers and socialites in Los Angles which is why we have taken our time to critically analyze and 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, Purple & Blue Hookah Bar®, LLC hired a business and 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 a wide range of assorted shisha, cigars, tobaccos, and alcoholic drinks both from the United States and other parts of the world. Excellent facility, excellent ambience and perfect location for a hookah lounge in metropolitan city like Los Angles.
Our perceived weakness could be that we are new business, and we may not have the financial muscle to sustain the kind of publicity we want to give our business.
- Opportunities:
There are unlimited business opportunities available to hookah bar businesses in busy communities like University of California – Los Angeles; Los Angeles is one of the cities in the world where social life is at its peak. Besides the campus facility where our hookah lounge is located is one of the busiest in the United States and it is open to loads of opportunities due to the influx of international students especially from India and other Asia countries.
Another opportunity that we stand to leverage on is the fact that we can easily order any brand of shisha, cigar, tobacco, wine and drinks directly from the manufacturer with little or no stress.
Just like any other business, one of the major threats that we are likely going to face is economic downturn. It is a fact that economic downturn affects purchasing / spending power. Another threat that may likely confront us is the arrival of a new hookah bar, cigar lounge or wine bar in same facility or within same location where our target market exist and who may want to adopt same Business model like us.
7. MARKET ANALYSIS
- Market Trends
Despite the fact that the hookah bars cum cigar lounges industry has long existed in the United States, it is starting to fall back into fashion. Innovative flavors and different varieties of shisha and cigars have increased demand over the last five years.
Recent data from the Centers for Disease Control and Prevention (CDC) clearly indicated that 40.0 percent of people who try smoking try flavored cigarettes or cigarillos. Consequently, this industry has jumped back into a growth phase.
A close observation of the trends in the industry shows that hookah use has increased dramatically among American and European youth in recent years because of the social atmosphere it creates, and because many young adults believe hookah is a safer alternative to cigarette smoking, for that reason they do not fully understand the health effects that come along with it. In order to remain open, many hookah lounges cannot sell food or beverages. Roughly 90 percent of the cities that have put a ban on smoking in public places have exemptions for hookah bars.
Most hookah bars in the United States have chic or ultramodern elements such as glass tables, plasma televisions, and oxygen bars et al. Most bars in the U.S. require patrons to be at least 18 years of age to smoke shisha and 18 years of age to purchase ( exceptions are Utah, Arizona, Alabama, and New Jersey: 19 years of age to smoke ).
However the laws in some other states require the patron to only be 18 years of age to purchase or possess tobacco, which in a hookah bar, the patron is doing none of these, for that reason one is likely going to find under age teenagers in many hookah bars in the United States
No doubt, the Hookah Bars cum Cigar Lounges industry will continue to improvise on ways to increase sales. They seek to remove the association of shisha, tobacco and cigar with high – end clientele and overwhelming cigar lists and replace it with a more casual and relaxing atmosphere.
Many of these hookah lounges are furnished with nooks and cozy booths encased in rich colors and plush surroundings in hopes their guests will linger. Hookah lounges look to embrace the intellectual stimulation linked to shisha, cigar and tobacco and offer an alternative to the hookah bar scene. The phlegmatic environment lends itself to a good socializing setting with a less crowded feel and more intimate appeal.
In recent time, hookah lounges have begun to incorporate a larger variety of alcoholic drinks and food choices as part of their product offerings. It is obvious that adding these product offerings help in creating alternate source of generating sales and increasing their overall income even if they struggle to sell their shishas, cigars and tobaccos.
Before starting our hookah lounge business in Los Angeles – California, we conducted a market survey and feasibility studies and we are certain that there is a wide range of people who would patronize our hookah lounge on a regular basis.
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 customer. Below are our target markets;
- Corporate Executives
- Politicians
- Celebrities
- Taxi Drivers
- Business People
- Sports Men and Women
- Government Officials
- College Students
Our competitive advantage
We are mindful of the fact that there are stiffer competitions in the hookah bars cum cigar lounges industry in the United States of America; hence we have been able to hire some of the best business developer to handle our sales and marketing.
Part of what is going to be our selling point is the fact that we operate a standard and health compliance hookah bar, in a perfect location (one of the busiest campus facilities in University of California – Los Angeles, the United States) for the kind of business that we run and also the fact that our hookah lounge facility is highly secured.
Another factor that will give Purple & Blue Hookah Bar®, LLC competitive edge is that we have enough parking space to accommodate the numbers of customers our hookah lounge 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 whenever the patronize our hookah lounge.
We are not ignoring the fact that we are among the few neighborhood hookah lounge in Los Angeles that sells almost all the brands of shisha, cigar, tobacco, and alcoholic drinks available in the United States of America, crafted beers, distilled spirits, liquors et al and obviously, that will surely count towards our advantage in the market place and also the robust experience of our CEO and the hookah bar manager is also a positive for Purple & Blue Hookah Bar®, LLC.
Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category ( startups hookah lounges, wine bars and night club businesses in the United States ) in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives.
- Sources of Income
Purple & Blue Hookah Bar®, LLC is established with the aim of maximizing profits in the hookah bars cum cigar lounges industry and we are going to go all the way to ensure that we do all it takes to attract our target market. The sources of income for Purple & Blue Hookah Bar®, LLC are stated below;
One thing is certain when it comes to hookah lounge business, if your hookah lounge 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 Los Angeles California and we are quite optimistic that we will meet our set target of generating enough income / profits from the first six month of operations and grow the business and our clientele base.
We have been able to critically examine the hookah lounge market and we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions that are peculiar to similar startups in Los Angeles – CA.
Below are the sales projections for Purple & Blue Hookah Bar®, LLC, it is based on the location of our business and other factors as it relates to hookah bars start – ups in the United States;
- First Fiscal Year-: $120,000
- Second Fiscal Year-: $350,000
- Third Fiscal Year-: $750,000
N.B : This projection is 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
Top of the list on our marketing and sale strategy document is generating a buzz for our hookah lounge via word-of-mouth and leveraging on road show around UCL campus community.
Despite the fact that our first outlet is located inside University of California Los Angeles, the model of hookah lounge we intend running is a neighborhood bar 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 stations, local radio stations or even local newspaper but we will sure maximize every other available means to promote our business. Our unique selling proposition is that we have a collections of almost all the brand shishas, cigars and tobaccos produced in The United States in our hookah lounge, we also have assorted alcoholic drinks et al.
In view of that, we are going to adopt the following marketing strategies to ensure that we do not only attract customers but generate repeated sales from them. Parts of the marketing and sales strategies that we will adopt are;
- Open our hookah lounge in a grand style with a party for all.
- Introduce our hookah lounge by sending introductory letters alongside our brochure to organizations, households and key stake holders in Los Angeles – California
- Ensure that we have a wide range of shishas, cigars, tobaccos, wines, beers, liquors, distilled spirits, martinis and non-alcoholic drinks at all times.
- Make use of attractive hand bills to create awareness and also to give direction to our hookah lounge
- Position our signage / flexi banners at strategic places all around Los Angeles
- Position our greeters to welcome and direct potential customers
- Create a loyalty plan that will enable us reward our regular customers
- Engage on road shows within our neighborhood to create awareness for our hookah lounge.
Purple & Blue Hookah Bar®, LLC is a campus hookah bar 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 hookah lounge 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 Purple & Blue Hookah Bar®, 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, Badoo, Google+ and other platforms (music online forums) to promote our business.
- Ensure that our we position our banners and billboards in strategic positions all around Los Angeles – CA
- Distribute our fliers and handbills in target areas in and around our neighborhood
- Contact corporate organizations, college students, business people, households, landlord associations and political parties by calling them up and informing them of Purple & Blue Hookah Bar®, LLC and the products we sell
- Advertise our cigar lounge 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 wears our branded shirt or cap at regular intervals.
The prices of our shishas, cigars, tobaccos, 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 in place to discount our products once in a while and also to reward our loyal customers.
- Payment Options
The payment policy adopted by Purple & Blue Hookah Bar®, 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 Purple & Blue Hookah Bar®, LLC will make available to her clients;
- Payment via bank transfer
- Payment with cash
- Payment via credit cards / Point of Sale Machines (POS Machines)
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
- Payment via bank draft
In view of the above, we have chosen banking platforms that will enable our client make payment for farm produces purchase without any stress on their part. Our bank account numbers will be made available on our website and promotional materials to clients who may want to deposit cash or make online transfer for our products.
13. Startup Expenditure (Budget)
In setting up any business, the amount or cost will depend on the approach and scale you want to undertake. If you intend to go big by renting a place, then you would need a good amount of capital as you would need to ensure that your employees are well taken care of, and that your facility is conducive enough for workers to be creative and productive.
This means that the start-up can either be low or high depending on your goals, vision and aspirations for your business.
The tools and equipment that will be used are nearly the same cost everywhere, and any difference in prices would be minimal and can be overlooked. As for the detailed cost analysis for starting a hookah lounge business; it might differ in other countries due to the value of their money.
This is what it would cost us to start Purple & Blue Hookah Bar®, LLC in the United of America;
- The Total Fee for Registering the Business in Los Angeles, CA – $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 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
- Cost for payment of rent for 12 month at $1.76 per square feet in the total amount of – $105,600.
- The cost for 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 (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.) – $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 hookah lounge in downtown Los Angeles, CA. This amount includes the salary of all employees and the CEO (Owner) for 3 months.
Generating Funds/ Startup Capital for Purple & Blue Hookah Bar®, LLC
Purple & Blue Hookah Bar®, LLC is a private business that is owned by Clarence Williams and his immediate family members and they intend to finance the business alone. Although they have plans to make the hookah bar manager part owner of the business after 5 or 7 years of services, but that does not stop him from reserving well 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 start – up capital for the business;
- Generate part of the start – up capital from his personal savings and sale of his stocks
- Source for soft loans from family members and friends
- Apply for loan from my Banks
N.B: Mr. Sleek Davenport 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.
The future of a business lies in the numbers of loyal customers that they have the capacity and competence of the 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 close shop.
One of our major goals of starting Purple & Blue Hookah Bar®, LLC is to build a business that will survive off its own cash flow without the need for 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 hookah lounge, ensure adequate security, availability of various brand of shishas, cigars, tobaccos, alcoholic drinks and excellent customer service et al.
Purple & Blue Hookah Bar®, 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 re – training 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.
Check List / Milestone
- 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
- Graphic Designs and Printing of Packaging Marketing / Promotional Materials: In Progress
- Recruitment of employees: In Progress
- Purchase of the Needed furniture, electronic appliances, office appliances and bar 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 shishas, cigars, wine, alcoholic and non – alcoholic drinks, tobacco and small chops et al: In Progress
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Shisha Cafe
Executive Summary:
Shisha Cafe is a new hookah bar that will primarily focus on the historical background and the traditional style of hookah smoking while intertwining the newer style of smoking hookah. We will focus on providing the highest quality hookah smoke at minimal prices for the 21st century.
Hookah bars have been on the rise the last twenty years and have no decline in sight in the new future. They have quickly become popular amongst college students, however, the adult culture in the hookah world is still exceptionally large. For legal reasons, anybody below the age of 18 will be allowed inside of the establishment and will be refused service.
Shisha Cafe will be providing a wide range of hookah smoking, from the classic, traditional smoke, all the way to the new style of smoking. The more classic, traditional way of smoking consists of a one hose hookah, tap water in the base, a simple flavor, a clay bowl for the shisha and natural coconut charcoal. The newer style of smoking consists of a one hose hookah with a purge valve, a diffuser on the end of the stem, a carved fruit for the bowl, exotic flavors, any liquid in the base, ice tips to cool the smoke, and natural coconut coals. The Shisha Cafe will also be a full service restaurant.
The management at Shisha Cafe would see that everything goes over smoothly and that everybody works as a team. There would be four different managers. The first manager would make sure everything is thoroughly clean. Cleanliness is the key to a quality smoking session. The second manager would be in charge of the bowls. Packing a bowl of shisha is such a simple task, but it also takes lots of experience and skill to do. The third manager would make sure that the firepower is perfect for each hookah, also known as “heat management”. The last manager would oversee everything that has to do with the restaurant, and food and drink.
Competition will not be a major issue to this hookah bar. Shisha cafe will beat out any other hookah bar in comparison to the smoking session. The most important competition killer is to get the people into the Shisha Cafe. After coming to our bar, they will not want to go to any other hookah bar ever again.
The financial objectives of the Shisha Cafe are to make money. However, finding the right price for each hookah could be the hardest part. Making sure that each customer is satisfied with the price of the hookah is the most important thing, and this can be solved in a simple way. The prices will vary depending on how much the brand of tobacco would cost the Shisha Cafe, the cost of the coals, and the cost of the hookah. Shisha can range from $10 to $25 for the regular 250 gram tin. The charcoal that will be used will be uniform and the hookahs that will be used will be the highest grade Khalil Mamoon, Starbuzz, and Glass hookahs on the market. Taking all this into account, we will be able to find just the right price for our customers that allows them to have a memorable time at our bar, as well as satisfying the owner’s financial needs.
Company/Business Background:
The mission of the Shisha Cafe is to be able to provide the highest quality hookah session in a relaxing environment as well as an energetic environment. This includes but is not limited to; the amount of smoke, the longevity of the session, the amount of flavor, the separation of relaxation rooms and party rooms, cleanliness of the smoke, the hose, the bowl, the grommets, the hookah itself, and the purge valve. What really draws people into hookah and sets it aside from the other ways of smoking tobacco is the amount of smoke that is received as well as the unique and exotic flavors. People love to do smoke tricks such as rings, french inhales, ghosts, and bull rings. This is all possible through a large quantity of smoke. However, even if the hookah gives off the biggest clouds known to man, it will not matter if the correct flavor isn’t provided. For this, Shisha Cafe will provide the world’s best brands of tobacco such as Starbuzz, Tangiers, Nakhla, Al Fakher, Fumari, and Romman.
The legality of the Shisha Cafe will be to provide the services of hookah, alcohol, and food to anybody above the age of 18 years old (21 years old for alcohol services) with a valid state ID. If anyone cannot provide this, they will not be served. A liability of the hookah bar is the heat and smoke. The heat will be managed properly with a coal tray and tongs, and there will be air ventilation systems throughout the entire establishment.
The owner and permittee of the Shisha Cafe (hookah bar and restaurant) will be Nicholas J. Ochs. The company will be under the leadership of Nicholas J. Ochs, Kenneth A. Ochs Jr., Kenneth A. Ochs Sr., Ryan A. Del Monaco, and Nicholas J. Bragaia.
The Shisha Cafe will be located in Manhattan. It will be near Fordham University (Lincoln Center) and NYU. This gives everybody, from college students to businessmen and women of all ages a chance to come into the Shisha Cafe and have a smoke.
Owner/Management Background:
As stated before, the management team consists of Ochs, Ochs Jr., Del Monaco and Bragaia. Nicholas Ochs will oversee everything, Kenneth Jr. will oversee the cleanliness, Ryan will oversee the bowls, and Nicholas Bragaia will be in charge of heat management. Lastly, Kenneth Sr. will be in charge of the restaurant part of the Shisha Cafe.
Kenneth Sr. has been in the restaurant business for over 35 years. He has owned several restaurants in the past and has been the executive chef at three restaurants. He graduated from Johnson & Whales University Culinary Program.
All of the men listed above have come from experience. Nicholas Ochs has been smoking hookah for five years, Kenneth for eight years, Ryan for three years and Nicholas Bragaia for two years. While nobody has had over ten years of experience, everybody has perfected their own smoking methods to combine into the ultimate smoking experience.
Market Analysis:
The market that the Shisha Cafe will be included in would be the smokers market. This is a broad market of people, men and women included, as well as everybody above the age of 18. The social aspect of hookah smoking will only continue to grow and help the market. Most teenagers want to try it, and eventually, most of them do. The Shisha Cafe wants to give them their first smoke and have it be their best smoke as well.
The hookah smoking industry is a fairly large one, with it being a worldwide hobby. Hookah is particularly popular in the middle east, and some of the best hookahs in the world come handmade from Egypt. Most of the tobacco is Virginia grown, and most of it is washed and processed into shisha here in the United States.
The Shisha Cafe’s primary customers would be college students. The appeal of hookah smoking to these customers is a social thing, as well as a pastime for them. College students typically use social media, which is promoted by the Shisha Cafe, and is free advertisement for us. However, our target market will not be limited to college students. We would like to appeal to the hookah smokers that have been smoking for the majority of their life, and we would like to make their experience an even better one, because we know that we can by providing the highest quality hookahs with the cleanest smoke.
Our market growth will drastically rise over the first five years of business. Hookah smoking is the least addictive smoke (nicotine wise) a person can smoke, which may seem like a problem, but the appeal of smoking hookah will grasp the customer even more. Chances are, the customer would have already been to a hookah bar nearby, and just by a quick comparison, the customer will automatically and subconsciously note our cleanliness and our high quality smoke. Not only will they notice that, but the money that they will save based on longevity and overall flavor, will continue to draw them back into the Shisha Cafe.
Product/Service Offering:
The general visualization of hookah smoking is large amounts of smoke and flavor. The hookah that will be provided at the Shisha Cafe will be the highest quality. After the customer comes in and their valid state ID is verified, they will be seated and given menus. The menu will have a variety of brands for hookah tobacco flavors, with 15 different flavors ranging from fruit to mint. After that, a server will take their order and put in through a computer. Now the hookah will be prepared.
First off, the hookah should already be clean from the session before, so once everything is clean, the preparation of the hookah can be started. Second, the water should be filled in the base up to one inch past the stem of the pipe. Third, attach the base to the stem by a grommet. The seal should be air tight. Fourth, pack the bowl. The bowl packing can be done in a number of different ways. There are four different types of bowls. Egyptian, vortex, phunnel, and alien. They all vary, and the best one for the Shisha Cafe would be the phunnel. So, once we have the bowl, depending on what brand of shisha is being packed, the packing methods vary. Starbuzz, Romman, Al Fakher, and Fumari are all packed relatively the same, which would be called the fluff pack. This means that the shisha needs to breathe, so gently sprinkle the Shisha into the bowl all around, making sure that it is evenly spread out. The shisha needs to be just slightly above the bowl/char line, which is the top of the bowl. Roughly 15-30 grams of shisha is used in each bowl pack, depending on what brand. Now, if either Naklha or Tangiers is being packed in the bowl, the packer needs to use the dense pack method. The dense pack is simply putting the shisha into the bowl, and once it is full, push it down and repeat. The bowl is packed when the shisha is flat/flush with the top of the bowl. Fifth, assemble the bowl to the top of the hookah with a grommet and put the Kaloud Lotus Heat Management System on top of the bowl. Sixth, place two or three coals into the lotus, again, depending on the shisha, and close the lid to the lotus. Be sure to blow on the coals before they go into the lotus to achieve maximum potential from the coals. Seventh, attach the hose to the hookah with a grommet, and wait roughly 3-5 minutes before pulling from the hookah, which will allow it to heat the shisha up. If somebody pulls too early from the hookah, it could ruin the session. The most important thing to remember is the shisha needs to be heated/cooked, not burned. When the smoke becomes noticeably lower in quantity, swap out the old coals for new fresh coals. Lastly, the hookah needs to be cleaned. Allow for the hookah bowl to cool down, then simply remove the lotus, scrape off the charred tobacco, empty the bowl, wash the bowl with warm water, empty the water from the base, wash it with warm water, run warm water down the stem and let is all air dry out. The hookah is now ready for the next session.
What separates the Shisha Cafe from the rest of the hookah bars is the cleanliness, the coals, the air tight seals, the bowl packing, and the Kaloud Lotus. The coals that we will use are Starbuzz CocoBuzz 2.0. These coals allow for longer sessions, but also, they are made from all natural products. These coals are actually coconut shells that are broken down into tiny pieces then compressed into a cube shaped form. These coals have no additive chemicals to them. Most hookah bars use chemical filled coals that are lit with a lighter, which makes the coal absorb all the butane. Also, the chemical coals ruin the taste of the shisha, they do not last as long, and they do not burn as hot. Surprisingly, they are also more expensive. The air tight seals that we achieve through the proper grommets allow for a better smoke, which means more clouds and more flavor. The bowl packing method is something that nobody else has because Nicholas, Ken, Ryan, and Nick have made it themselves. Through countless trial and errors over the years their bowl packing methods allow for the thickest clouds, strongest flavor, and longest sessions. Lastly, the Kaloud Lotus sets the Shisha Cafe apart from the other hookah bars. All hookah bars use tin foil over top of a Egyptian bowl with small tiny holes poked in the tin foil. This is an inconsistent method that can be easily messed up. This is also a lot harsher on your lungs than the lotus. With tin foil, the coals are directly touching the shisha through the holes and tin foil, but with the Kaloud Lotus, the coals stay in the Lotus itself and does not touch the tobacco, it simply heats the bowl, not burn it out. Our competition simply does not have the knowledge to set up hookah the way we do.
Marketing Plan:
The message that the Shisha Cafe would like to portray to its customers is that you can always come to the Shisha Cafe either for a nice relaxing dinner with a hookah by your side, or for a party room with music, lights, a DJ, and hookahs all around. The advertisement would start before the business would even open, and on opening night, we would make sure, especially on that night, that everything went perfect, and each customer would gain a loyalty card. By their 10th visit, they would receive one hookah free. The Shisha Cafe would portray itself and promote that it is the cleanest smoke a hookah can produce.
Financial Plan and Analysis:
First off, we will need the building itself, the equipment, and the money for all of this. The building would be rented or bought, and the equipment will be bought from wholesale. We will need 30 Khalil Mamoon Hookahs, 10 Starbuzz Challenger Hookahs, 10 Glass Art Hookahs, 60 Narbish Hoses, 60 Phunnel Bowls, 40 Universal Bases, 40 base grommets, 40 hose grommets, 40 bowl grommets, 5 lounge sets of coals, and 3,000 grams of each of the following flavors: Blue Mist, Pirates Cave, Mint, Double Apple, Wildberry, Orange, Tropical Punch, White Gummi Bear, Red Gummi Bear, Lime, Peach Iced Tea, I.L.T.O.B.C., Ice Apple, Ice Raspberry, and Lemon Lime. For the hookah bar aspect, we will need tables and couches, depending on how big the space is.
Starbuzz flavors will cost $12, Nakhla flavors will cost $8, Tangiers flavors will cost $11, Fumari flavors will cost $10, and Al Fakher flavors will cost $11. These prices are considerably low compared to other hookah bars. Most hookah bars cost $15-$30 per hookah.
Over time, like anything, things will become boring. However, the Shisha Cafe will have seasonal flavors such as Holiday Mix, Pumpkin Pie, White Mint, etc. depending on what time of the year it is. Another thing the Shisha Cafe will do is provide fruit bowl heads, ice tips, and diffusers for only $4 extra. We will also have happy hour from 5-8 on weekdays, where all flavors are only $8.
Cash flow will be provided by the owner and four other managers.
The Shisha Cafe plans to be profitable within the first year of business, and we will have hoped to doubled our business in each upcoming year.
"How to Load a Hookah Bowl." N.p., November 16, 2014 Web
Del Monaco, Ryan A.. Personal Interview, 19 November 2014
Bragaia, Nicholas J.. Personal Interview, 19 November 2014
Ochs Jr., Kenneth A.. Personal Interview, 18 November 2014
Collier, Shawn.. Personal Interview, 1 December 2014
Naddour, John. Personal Interview, 1 December 2014
Jacobson, Jake. Personal Interview, 1 December 2014
Jacobson, Jake. “How to Pack a Bowl.” HookahRev N.p., n.d.. Web. 30 November 2014
How to open a shisha bar
Do you find yourself drawn in by the enticing aromas and laid-back atmosphere of shisha bars? If you know a thing or two about flavoured tobacco and have a head for business, you might even be planning to open your very own shisha bar.
There's no doubt that open up a shisha bar requires a lot of work, but with expert planning, you'll be well on your way to creating a successful business.
If you’re not sure how to open a shisha bar, then you’ve come to the right place - as this guide will give you a low down on all the major steps involved, from practical advice on how to conduct market research to drafting up a stellar business plan.
Carrying out market research on the shisha bar market
The very first step in opening a shisha bar is to carry out market research. Doing so will not only enable you to verify whether there's enough demand for you to successfully open your shisha bar in your target area, but also help you develop the best strategy for providing your service.
Market research will not be complete without an in-depth analysis of three key factors:
- current industry trends
- who your potential customers are and what they're looking for in a shisha bar
- who your competitors are and how they're doing
The shisha bar market
Originated in the Middle East, South East Asia and Northern Africa , shisha is tobacco that is smoked communally in a water pipe known as a hookah or narghile. In recent years, shisha bars have become increasingly popular in the UK - with a 2019 survey by ash finding that 11% of Brits have tried it at one point or another.
Often taking place in a cafe or restaurant setting and smoked in a group of people, shisha is considered a social activity in which people can catch up with family and friends.
Shisha smoking is most popular amongst young people, with a 2013 study indicating that shisha smoking was taken up by between 11% - 18% of all university students.
The sweet and fruity taste of shisha tends to mask its potential dangers. While shisha smoke is no more toxic than tobacco, its users inhale much more, with a 2015 World Health Organization study suggesting that during one 20-80 minute shisha session, a person can inhale as much smoke as they would have had they consumed around 100 cigarettes.
Many shisha consumers appear to be unaware of the harms, with around 15% of people aged 25 - 35 (the most common users) believing shisha poses no health risks at all, and 44% considering it less dangerous than cigarettes.
The rules and regulations when opening a shisha bar
Open a shisha bar means entering a highly regulated sector, as you'll have to ensure your business complies with the legal requirements under the Health Act 2006 and the Smoke-free (Premises and Enforcement) Regulations 2006 .
Before opening your shisha premises, you'll likely need planning permission from your local council. For approval, you'll have to ensure that your proposed smoking area is not "substantially enclosed" (meaning that more than 50% of the walls are present).
There are also several requirements you'll need to satisfy around healthy and safety, fire and environmental regulations. Before opening your shisha bar, you'll have to register the premises with your local authority's environmental health service at least 28 days before you start trading.
It's important to note that this process doesn't cost any money. It simply involves allowing a local official to visit your premises to check out the space to ensure it's safe and hygienic. Click here to register for a visit from your local authority.
When it comes to trading, you should also be aware that it's illegal to sell tobacco products to anyone under the age of 18 and ensure your business takes steps to prevent this from happening - by putting suitable signage in place and refusing minors where necessary. Any products containing tobacco must also be clearly labelled as such.
Finally, if you wish to sell alcohol, you'll need to apply for a premises license when opening your shisha bar. This will also enable you to play live and recorded music and serve hot food and drinks after 11 pm. For more information on how to obtain the licenses above, you can visit the Gov.uk license finder .
In the US, you will be required to register for a business license. You can visit the SBA website for more details on how to obtain this.
You will also need a liquor license for serving alcohol. Each state has its own Alcohol Beverage Control Board that regulates the serving of alcohol. To obtain a liquor license, you must contact your state's ABC board. You can find a national directory of ABC boards here .
Scoping out the perfect location to open a shisha bar
Once the market research stage is completed, you need to pick a location to open your shisha bar. Where it's based will have a considerable influence on how many customers it attracts, and consequently, its turnover and profitability - so this decision is crucial.
We recommend choosing a location regularly frequented by your target market. If you'd like to attract students, for example, you'd be best placed to open within walking distance of a university. If you're visualising a broader customer base, setting up in a lively, downtown street is always an option worth looking into.
Finally, you can also choose to take over an existing shisha bar. This will allow you to benefit from an already established base and an existing flow of loyal customers.
Choosing the legal structure of your shisha bar
To open a shisha bar is also to give life to a new company with a legal entity.
You must really focus when choosing the best legal status for your shisha bar because, among other things, it will impact:
- How much your business is taxed
- Your taxation at a personal level
- Your responsibility for the company's debts in the event of bankruptcy
To help you make your choice, you can find more detailed information on the different legal forms available to you on the gov.uk guide for UK business owners and SBA guide for those of you based in the US.
The equipment and staffing requirements of a shisha bar
Once you have chosen the concept to open your shisha bar, settled on a location, and figured out its legal structure, it's time to look at the financial forecast of your business.
The first step will be to kit out your premises while respecting the health and safety regulations in force. The main investment here will be furniture, alongside the hookahs, stock of products (such as tobacco, teas, coffees and snacks) and all the resources required for the smooth management of your shisha bar, including accounting and payroll management software.
Also think about marketing investments (including your menus, restaurant sign and website) and legal investments such as employment contracts and licensing costs.
Staff recruitment is not neglected either: the atmosphere of your shisha bar strongly depends on your employees' ability to make guests feel welcome. When drawing up your recruitment plan, estimate the number of people you'll need for each position, whether it be front-of-house or bar staff, and then recruit enthusiastic, friendly people with the right qualifications.
Opening a shisha bar also requires you to take out insurance to make sure you're covered in the event of any on-site incidents. Depending on the size of your bar, you may also want to enlist help from specialists such as a chartered accountant or marketing agency, so make sure you factor these costs into your financial forecast, too.
Setting out the marketing plan for a shisha bar
The next step in our guide on how to open a shisha bar is to put an effective marketing strategy in place to help you attract and retain customers. Many means of communication are at your disposal, so it's up to you to identify the most relevant to your business.
Taking to the streets to hand out flyers and advertising in your local newspaper is a surefire way to make yourself known to any potential customers living nearby.
Schemes and promotions (such as a 5 pm - 7 pm happy hour) can be also used as a lever to build customer loyalty.
Finally, you should seriously consider setting up a website when opening a shisha bar, or, at the very least, using social media platforms such as Instagram and Facebook to keep your customers up to date with how the business is running. You might also want to make sure that you've been added as a point of reference on Google Maps.
Writing the business plan of a shisha bar
Before the very last step, you need to develop the business plan for your shisha bar.
The business plan is the document with which you will present your business idea and try to secure financing from your bank or potential investors, so you need to make it impeccable.
If you are not used to writing business plans, a good solution would be to use online business plan software .
There are several advantages to using specialized software:
- You are guided through the writing process by detailed instructions and examples for each part of the plan.
- You can be inspired by already written business plan templates
- You can easily make your financial forecast by letting the software take care of the financial aspects for you.
- You get a professional document, formatted and ready to be sent to your bank.
If you are interested in this type of solution, you can try our software for free by signing up here .
Securing funding to open a shisha bar
Once your shisha bar business plan has been written, you can start looking for financing.
The amount of investment required will depend on the size of your premises, the renovation work to be done and the furniture to be purchased.
There are many ways to raise the capital required to launch your dream shisha bar.
First of all, it's highly recommended that you make a personal contribution to the company's equity, by dipping into your savings.
You can then turn to banks and credit institutions to obtain a loan to finance part of the start-up costs.
Finally, also think about state aid for business creators. This may enable you to benefit from a low-interest or interest-free loan, for example.
Now you know everything there is to know about how to open a shisha bar. We hope you found this article useful. If you have any questions or queries at all please do not hesitate to contact our team.
See also on The Business Plan Shop:
- How to open a tapas bar
- Business plan template for a bar
- How to open a salad bar
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