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Last post 14 months ago by delta1. 37 replies replies.
Are shops with a dedicated smoking lounge popular?
Jnorman Offline
#1 Posted:
Joined: 07-15-2015
Posts: 75
Morning fellas,

So a buddy of mine told me I should look into starting up a local shop with a lounge. Are these popular? The closest lounge is about an hour away and there are two small shops about a half hour away from my town. Thoughts and ideas? Or would it be a mistake?

Thanks guys
Norm
KingoftheCove Offline
#2 Posted:
Joined: 10-08-2011
Posts: 7,603
Do you have a lot of money?
Do you have a lot of contacts in the industry?
Do you have a LOT of knowledge about the cigar business?
Do you know for certain that the demographic mix of your chosen market area will support a cigar shop with lounge?
Are you prepared to not make much, if any, profit for the first year or three?

If you answered yes to all of the above............well then, You might want to consider it.
Or, if you just have a ton of money, and want a fun hobby...............well that would be cool too!
Jnorman Offline
#3 Posted:
Joined: 07-15-2015
Posts: 75
King, what if I answered no to all of those questions, should I still consider it? I wish I could answer yes to all of those. It isn't a serious idea, we were just having a smoke and he threw out the idea. You raise mighty fine questions though.
Thunder.Gerbil Offline
#4 Posted:
Joined: 11-02-2006
Posts: 121,359
KingoftheCove wrote:
Do you have a lot of money?
Do you have a lot of contacts in the industry?
Do you have a LOT of knowledge about the cigar business?
Do you know for certain that the demographic mix of your chosen market area will support a cigar shop with lounge?
Are you prepared to not make much, if any, profit for the first year or three?

If you answered yes to all of the above............well then, You might want to consider it.
Or, if you just have a ton of money, and want a fun hobby...............well that would be cool too!



Does your dog bite?
TMCTLT Offline
#5 Posted:
Joined: 11-22-2007
Posts: 19,733


Add to KofC's list...in what state do you reside? As some have become downright unfriendly toward ANYTHING tobacco related. And it's NOT just the L and R coasts anymore....
KingoftheCove Offline
#6 Posted:
Joined: 10-08-2011
Posts: 7,603
Thunder.Gerbil wrote:
Does your dog bite?

Thet iz not ma dog.............
Speyside Offline
#7 Posted:
Joined: 03-16-2015
Posts: 13,106
To be profitable you would also want a liqueur licence.
TMCTLT Offline
#8 Posted:
Joined: 11-22-2007
Posts: 19,733
Speyside wrote:
To be profitable you would also want a liqueur licence.



Not necessarily Allen, until the state of MI. got so over bearing with taxes my friend in Midland did well without one as does a shop here on the N side of Indy. But it would be an added bonus Beer
opelmanta1900 Offline
#9 Posted:
Joined: 01-10-2012
Posts: 13,954
There are 3 lounges in Fresno with completely different approaches to business... One is in a crummy area, the humidor is poorly kept, and the lounge is basically a smoke filled collection of old couches and lazy boys... The clientele was once described by one of my customers as a "hodgepodge of hipsters and pederasses"...

The second is in a nice but very out of the way area... They struggle to make ends meet which usually means they try not to run the AC or heat even in extreme weather... They rely on open doors for ventilation... Although they have a nice selection and a cool group of customers, the temperature fluctuates a lot and the cigars suffer...

The third shop is successful to a degree... It's in a snooty party of Fresno, in the snootiest shopping center... The clientele are basically all snooty business men who look down on anyone not wearing a nice suit... The owner is independently wealthy and the cigar prices are greatly inflated... He does end up selling a lot of weird stuff - like expensive shaving kits - and I'm guessing that's to help with the cost of rent and temp control...

For my part, I looked into turning the local shop into a lounge... The cost of running AC during our 100+ summer temps combined with running constant smoke ventilation basically meant it would take 10 years to pay off the initial cost of the ventilation system... I'm what you could call "poor" so it was out of the question... The shop owner is considering opening a hookah/vape lounge instead... little to no ventilation necessary...
tailgater Offline
#10 Posted:
Joined: 06-01-2000
Posts: 26,185
Here in the Bay State, shpo's are closing faster than Chip Kelly's coaching career.

Meanwhile, Vape store's and "medical" mj paraphernalia shops are booming. Seems the great state of MA allows EBT cards to be used for this stuff.
One owner told me he opened the shop with a loan that was guaranteed BECAUSE of this fact.

So if we can get welfare to pay for my cigar habit, then I might open a shpo as well.
And I'll invite all you sorry azzes for FREE stuff.


TMCTLT Offline
#11 Posted:
Joined: 11-22-2007
Posts: 19,733
tailgater wrote:
Here in the Bay State, shpo's are closing faster than Chip Kelly's coaching career.

Meanwhile, Vape store's and "medical" mj paraphernalia shops are booming. Seems the great state of MA allows EBT cards to be used for this stuff.
One owner told me he opened the shop with a loan that was guaranteed BECAUSE of this fact.

So if we can get welfare to pay for my cigar habit, then I might open a shpo as well.
And I'll invite all you sorry azzes for FREE stuff.





Is that right????

must be more more of Obummers " job creation " stuff.
Jnorman Offline
#12 Posted:
Joined: 07-15-2015
Posts: 75
I reside in MN and you cannot sell alcohol and cigars in the same shop.. I was thinking like a coffee bar or something to compliment the smokes?
zerohourhero Offline
#13 Posted:
Joined: 06-22-2015
Posts: 1,308
Jnorman wrote:
I reside in MN and you cannot sell alcohol and cigars in the same shop.. I was thinking like a coffee bar or something to compliment the smokes?



Huh ... I would go to that shop. While Im only a social drinker, I'm a coffee fiend. I was a barista at a local coffee place in high school... loved that job.
Jnorman Offline
#14 Posted:
Joined: 07-15-2015
Posts: 75
So I can expect you Zero to help me make money??
99cobra2881 Offline
#15 Posted:
Joined: 11-19-2013
Posts: 2,472
Jnorman wrote:
I reside in MN and you cannot sell alcohol and cigars in the same shop.. I was thinking like a coffee bar or something to compliment the smokes?


We have the same dumb law here in Kansas too. I suggested to my local liquor store owner that she get a small display humidor and sell cigars. I even said I would help with inventory and purchases but she said she can't. Explains why my favorite shpo in Wichita sells cigars and tobacco products on one side and beer/liquor on the other side. Same building separate entrances.
tamapatom Offline
#16 Posted:
Joined: 03-19-2015
Posts: 7,381
Without a bar or some kind of entertainment, the lounge is not that great an idea. One local shpo has a smoking room that is likely to be converted to a vape showroom due to low use.......others with bars seem to be populated. Having a bare bones lounge is not likely to sell enough extra cigars to pay for itself IMO.
SMOKEYOU Offline
#17 Posted:
Joined: 10-14-2015
Posts: 2,275
I concur and drunk people spend money!
parodi joe Offline
#18 Posted:
Joined: 11-24-2015
Posts: 31
sell cigarettes, lottery tickets , news papers and cheap coffee (the extra money is good)

keep it low key inside plain , two or three round coffee tables , a couple two three sofas , maybe a recliner or two , and hang a few plasmas

make the regular guy feel welcome , the workin man

and have a kick ass selection of cigars anything from cheap to expensive

the word will get out and men will come to smoke
Abrignac Offline
#19 Posted:
Joined: 02-24-2012
Posts: 17,217
I used to patronize 3 different shpos. One was a small unit in a strip mall. It had a decent sized walkin humidor. The proprietor had 4 lazy boys and a couple of chairs squeezed into a small area between the cash register and the wall near the front door. I would stop by a few times a week for cigars and have a smoke. He probably sold a box or so worth of cigars a day. Once all his credit cards were tapped out buying inventory he sold his shares to his junior partner. He hired a blonde with big hooters to run the store while he went to school full time. The broad knew nothing about cigars, whined about her bad luck and watched soaps all day. The shop went under less than 6 months after the buyout.

Another shop I frequented was run by a husband and wife team. It was much larger. It shared a building with a Circle K and was about as big. They had a larger seating area with a couch and 4-5 easy chairs. She ran it during the week. Him on the weekend. There was always 3-5 guys hanging out smoking. They barely break even.

The other shop is in an upscale town center type shopping center. It's huge, probably over 4000 square feet. They have a well stocked humidor big enough to park a semi in. They have a large seating area with six couches and two big flatscreens. My guess is they gross at least 1/2 million or more a year.

Basically, unless you have very deep pockets so you can stock a humidor properly, have a great location and have patience; fuggitaboutit.
cacman Offline
#20 Posted:
Joined: 07-03-2010
Posts: 12,216
Considering checking into what your State's BYOB laws are. My old B&M had a "lounge" and allowed you to bring your own booze/6-pack. The shop had a couple Kuerigs for selling cups of coffee. Most successful coffee shops also sell food, which is a direct conflict with the requirements to allow smoking.
dstieger Offline
#21 Posted:
Joined: 06-22-2007
Posts: 10,889
Wasn't MN the lead state to go after its residents for back taxes if they'd bought interweb cigars from PA and OH? And...the same state with like 95% cigar tax? Good luck. I'm surprised there's any cigar smokers left in the state.
Jnorman Offline
#22 Posted:
Joined: 07-15-2015
Posts: 75
dstieger wrote:
Wasn't MN the lead state to go after its residents for back taxes if they'd bought interweb cigars from PA and OH? And...the same state with like 95% cigar tax? Good luck. I'm surprised there's any cigar smokers left in the state.


I may be the only one left.. and that is true about the 95% tax. Don't know about the back taxes
Herfosaurus Offline
#23 Posted:
Joined: 08-29-2012
Posts: 89
Run -- don't walk -- away from this idea. MN has 95% tax, capped at $3.50. Most of your boutique stuff, and a lot of non boutique stuff, will be taxed at the $3.50 rate. So your shelf prices will put you at a big disadvantage against the Internet retailers. In NY, the tax on pipe tobacco (tinned) is 75% ... it's impossible to compete with Internet sites and I don't know of many shops that sell very much tinned pipe tobacco (most of them do much better with bulk).

That's not the worst if it, though. What most non-retailers don't realize is what taxes do to cash flow. In NY, taxes are due the 20th of the month after the product arrives. So, if you get most of your product early in the month, you have about 40-45 days to sell enough product to recoup costs. How much is "enough product?" Well, it needs to be cost (usually about 50% of MSRP) plus taxes. In your state, that's going to be damn near 100% on most of your bread-and-butter ($7 MSRP) stuff. Obviously, it's less as MSRP increases, but bear in mind it'll usually take longer to sell a box of $15 cigars than a box of $7 cigars. Basically, it means that you need to stick to stuff that you can sell quickly, and hope to get enough volume that you can keep your head above water.

My point is that the MN tax structure looks like a prescription for Cash Flow Hell. And make no mistake, cash flow problems will sink your business like the Titanic. So, I don't see much future in trying to sell cigars in your state.

If your state laws would allow an admission-only or members-only smoking lounge (bring your own cigars), you might be able to build a viable business case. But that would rely on a fairly large captive audience of smokers, and you'd need regular events and promotions to keep the place full. Don't think you could do it as a part-time thing -- it's a full time job, and if you can't do it yourself, hiring a manager is a big salary hit.

Herfosaurus Offline
#24 Posted:
Joined: 08-29-2012
Posts: 89
Abrignac wrote:
I used to patronize 3 different shpos. One was a small unit in a strip mall. It had a decent sized walkin humidor. The proprietor had 4 lazy boys and a couple of chairs squeezed into a small area between the cash register and the wall near the front door. I would stop by a few times a week for cigars and have a smoke. He probably sold a box or so worth of cigars a day. Once all his credit cards were tapped out buying inventory he sold his shares to his junior partner. He hired a blonde with big hooters to run the store while he went to school full time. The broad knew nothing about cigars, whined about her bad luck and watched soaps all day. The shop went under less than 6 months after the buyout.

Another shop I frequented was run by a husband and wife team. It was much larger. It shared a building with a Circle K and was about as big. They had a larger seating area with a couch and 4-5 easy chairs. She ran it during the week. Him on the weekend. There was always 3-5 guys hanging out smoking. They barely break even.

The other shop is in an upscale town center type shopping center. It's huge, probably over 4000 square feet. They have a well stocked humidor big enough to park a semi in. They have a large seating area with six couches and two big flatscreens. My guess is they gross at least 1/2 million or more a year.

Basically, unless you have very deep pockets so you can stock a humidor properly, have a great location and have patience; fuggitaboutit.


Well said. The first outfit never stood a chance ... only question is what would kill him first -- lousy sales or lousy cash flow. He either goes broke fast or slow, depending on whether he could make rent and payroll. If he could, he'd hang in until he ran out of inventory and couldn't afford more. Otherwise the landlord (or tax bureau) would just padlock his shop for non payment.

The second guy is like a lot of shops ... the classic Mom and Pop model. Owner staffed, which holds down the payroll hours. Figure they're open 70 - 80 hours per week. The owners take the majority of that and maybe hire a part-timer or two. Rent isn't ridiculous and the store footprint is manageable. They get enough foot traffic to keep the cash flow healthy. Nobody is getting rich, but they do OK.

The third operation is high risk, high reward. Humidor and lounge are large footprint. Most stores like this are prestige outfits in big cities, or part of multi-store chains. The multi-site outfits leverage volume to get better pricing from manufacturers. They still need big volume and fast turnover on a lot of their humidor to cover slower-moving boutique stuff, but can absorb cost better than the little guys. They're also likely to have higher overhead (rent, environmentals, payroll, etc) than the little guys. That said, they often have more and better events and promotions, and will get first dibs on limited production stuff.

Anyway, you hit the nail on the head regarding cost of inventory. My back-of-the-envelope estimate is at least 5,000 cigars for a decently stocked humidor in major brands (General, Altadis, Fuente, Perdomo) and a couple second tier players (Alec Bradley, Rocky Pater, Drew Estate). Double that to be taken seriously, and that's with a smallish walk-in humidor. For a big humidor, you're going to be upwards of 20,000 cigars; neither the inventory nor the engineering is cheap.

That third shop you mentioned, with the big lounge? I don't know what the cost of square footage is where you are, but I wouldn't be surprised if they're looking at 300 - 500k a year in overhead alone. Figure on similar numbers for yearly cost of goods, and they need a seven-figure gross to stay in the black. Not hard to do, but it takes enough population, steady customer flow and loyal regulars.

dstieger Offline
#25 Posted:
Joined: 06-22-2007
Posts: 10,889
How much are you willing to risk losing? If its, say, five grand....I'd bet you could get Lowes to deliver and build you a shed; heat it and furnish it for less....voila...instant lounge in your backyard....AND, you can serve cigars AND alcohol to your friends and yourself
KingoftheCove Offline
#26 Posted:
Joined: 10-08-2011
Posts: 7,603
dstieger wrote:
How much are you willing to risk losing? If its, say, five grand....I'd bet you could get Lowes to deliver and build you a shed; heat it and furnish it for less....voila...instant lounge in your backyard....AND, you can serve cigars AND alcohol to your friends and yourself

Brilliant!
Order $2 cigars off the internet, and sell them for $5, and sell cans of Bud for $3...................instant cash cow!
Jnorman Offline
#27 Posted:
Joined: 07-15-2015
Posts: 75
The tax rate is a killer, and if I had "play-around" money and didn't care about it, then it would be fun. But like all of you said, this would be a total killer.. Thanks for the discussion guys!
danmdevries Offline
#28 Posted:
Joined: 02-11-2014
Posts: 17,124
dstieger wrote:
How much are you willing to risk losing? If its, say, five grand....I'd bet you could get Lowes to deliver and build you a shed; heat it and furnish it for less....voila...instant lounge in your backyard....AND, you can serve cigars AND alcohol to your friends and yourself


Often my go to argument when someone suggests turning a hobby to a business.

Telling me to open a brewery, gotta consider what loss I'd be willing to risk. Take that and put it into my home setup, much less stressful.
Palama Offline
#29 Posted:
Joined: 02-05-2013
Posts: 23,463
I would NEVER open up a cigar shop in Hawaii. High tobacco / cigar tax rate (50%) coupled with the challenge of finding competent workers as well as the cost of leasing / renovating / maintaining the store are hurdles too high to overcome. And, of course getting people to come in. “Build it and they will come”? I think not. Not talking
drglnc Offline
#30 Posted:
Joined: 04-01-2019
Posts: 680
Speyside wrote:
To be profitable you would also want a liqueur licence.


Lounge in my town has room for about 15 people and no License. they are BYOB and evenings/weekends are usually full. I'm not sure the license is a factor unless you are talking about a larger lounge or laws prevent BYOB.

Partnering with a bar/restaurant next door/with in walking distance could help with that as well. My local shop has events on the Patio of a restaurant/PUB across the street once a month in the warmer parts of the year and they always get 30-40 participants for those.
drglnc Offline
#31 Posted:
Joined: 04-01-2019
Posts: 680
Jnorman wrote:
Morning fellas,

So a buddy of mine told me I should look into starting up a local shop with a lounge. Are these popular? The closest lounge is about an hour away and there are two small shops about a half hour away from my town. Thoughts and ideas? Or would it be a mistake?

Thanks guys
Norm


Start going to the Barnsmokers, Tabacco and cigar industry events and make some contacts, talk to folks actually in the business rather then those of us that are the consumer.
research the relative laws/taxes for the area, county, state and make an informed decision. this would be a multi year planning issue prior to even thinking about taking the plunge.
DrMaddVibe Offline
#32 Posted:
Joined: 10-21-2000
Posts: 55,309
I'm really lucky. There's shpos in my area just like CVS and Wallgreens...McDonalds and Burger King...the skyline is littered with them.

The Chapel (which I've posted here about), Corona has lounges all over Central FL (Lake Mary, Downtown O-Town, Sand Lake Rd close to the parks and hotels and Tampa (the old Davidoff), then there's the ones that are scattered about in Ybor and to round out the places we have 2 Cigars International in the Tampa area.

Yes, you should go to the locals. Act like you belong there. Buy stuff from there like cigars and booze. Don't stumble in with coolers of your own stuff. They have to keep the lights on AND they bring in the reps that will bring in the newer products, discount them and give them away.

They're a place to hideaway and enjoy a good cigar with other BOTL's and to herf at. Each town has their premier spots, if you don't use them they won't be there.

You want to start up one? Go big or stay home. Think big lounge, Man Cave meets Pool Hall...couches, recliners...wide screen tv's and poker tables dart boards. If you can have beer/wine great...booze even better. Coffee/teas at the least. Get in good with the local reps and carry the big lines. Yeah, it's an investment but people will walk a path to get to you if you're the only playa in town. If you're not...you better be the best.
PapaWhiskey Offline
#33 Posted:
Joined: 01-01-2023
Posts: 728
Jnorman wrote:
King, what if I answered no to all of those questions, should I still consider it? I wish I could answer yes to all of those. It isn't a serious idea, we were just having a smoke and he threw out the idea. You raise mighty fine questions though.


If you feel it in your gut. Go for it. There will always be plenty of people ready to tell you why you shouldn't but if you feel you you have a chance go for it. No matter what happens you won't regret it. That said I've been to cigar shops with smoking lounges but the ones with liquor licenses seem to do best.
frankj1 Offline
#34 Posted:
Joined: 02-08-2007
Posts: 44,211
op was looking for feedback in 2016...
izonfire Offline
#35 Posted:
Joined: 12-09-2013
Posts: 8,642
frankj1 wrote:
op was looking for feedback in 2016...

And he got it in 2023.

I say he is blessed.
Some people never get what they’re looking for…
Sunoverbeach Offline
#36 Posted:
Joined: 08-11-2017
Posts: 14,588
That'll teach people to wander off
delta1 Offline
#37 Posted:
Joined: 11-23-2011
Posts: 28,754
huh? wud I miss?
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