While learning how to open a hookah bar, you need the first grasp what hookah is. Hookah lounges are becoming increasingly popular in the United States because they provide a calm place for individuals to socialize, smoke, and drink. Shisha bars, hookah dens, and hookah cafés are other names. These titles allude to a location where consumers may gather with their friends to smoke shisha.
Shisha is tobacco flavoured with fruit, mint, cola, molasses, or sugar and is breathed through a pipe and hose attached to a hookah. Because of the hookah, smoking shisha differs from smoking cigarettes. The shisha is placed in a bowl at the top of the hookah, coupled with heated coils, which causes the shisha to smoke.
Industry Summary Of Hookah Lounge Business
In 2017, around 2.6 million adults used hookah, more than double the number in previous years.
Hookah usage is most prevalent among college-aged young adults, with 22 per cent to 40 per cent using it in the previous year.
Hookah use is most prevalent in the Northeastern United States, where around 15% of adults aged 19-30 had smoked hookah in the previous year.
According to Hookah Wholesalers, the average gross profit of a 1-kilogram tub of shisha tobacco is $1045.95.
So, Here Is How To Open A Hookah Lounge
Step 1: Make a business plan.
The first stage is to create a detailed hookah lounge business plan to iron out the specifics and develop a strategy for the first year after operating. A Google search will yield a plethora of suitable business plan templates. Your system should answer the following questions:
- What is the target market’s age range?
- What items will you carry?
- How much money would the company require to get started?
- What will the hookah lounge’s interior and outdoor design concepts be?
- What kind of music will you be playing?
- What is your pricing going to be?
- What are all the ongoing costs of running a hookah lounge?
Opening a hookah lounge isn’t cheap: the start-up fees might reach $30,000 or more when everything is said and done. Here are some of the highest costs to consider.
A retail location is the most expensive aspect of operating a hookah club. Renting a strategically placed commercial area might cost between $3,000 and $5,000 per month.
Decorations, tables, and chairs – Choose comfy furniture: You want your hookah lounge to be where people can unwind and enjoy themselves for hours. Hookah lounges typically have a Middle Eastern or trendy, bohemian feel.
Hookahs and accessories: Hookahs range in price from $20 for a little pipe to $3000 for a vast, top-of-the-line line. However, quality pipes for your lounge would cost between $200 and $300—plan on purchasing 12 hookahs.
Shisha: You’ll need to buy shisha in quantity, and selling shisha is where you’ll make the most money. Make sure you provide a diverse menu with a variety of flavours.
Obtaining licenses and permits Check with your local municipal government for a complete list of certificates required to operate your business. You’ll almost certainly need a few.
Sound system: Music is essential for creating ambience in your hookah lounge. A good sound system may set you back at least $1000.
Snacks and beverages: While your establishment may not serve entire meals, clients will require modest snacks and drinks to keep them occupied while they enjoy the hookah. If you do not intend to offer alcohol, having a variety of exotic teas on hand is a fantastic alternative.
Step 2: Select a Business Structure
As a new business owner, you must select how to organize your company. Do you want to run your company as a sole proprietorship? Do you want to set up your company as an L.L.C. or a corporation? The legal entity you pick will have an impact on your taxes as well as your possible liability for business debts and losses.
You won’t have to submit any formation paperwork with the state if you run your hookah bar as a single proprietorship. Unless you use a D.B.A. name, your legal business name will be your name.
Step 3: Pick a good Name for Your Hookah Business
Choosing a business name is critical for a variety of reasons. You want a separate business name that distinguishes you from competitors. You should also ensure that your business name is accessible for use.
You should do a name search to see if the name you desire for your company is available for usage. This may entail looking through your state’s business records, fake business names, and trademark databases.
Some states do not allow you to register a business name that is already in use. Using a trademarked business name may potentially result in legal issues. It’s a good idea to make a list of many business names you like just in case you can’t utilize one of them.
Step 4: Choose a location
Because hookah smoking is popular with young people (those over 18), it’s a good idea to launch your company in areas where young, college-age individuals congregate. Furthermore, your hookah lounge may not be the only stop on a group’s nighttime itinerary, so locating the company near pubs, clubs, and other nightlife attractions is wise.
Step 5: Get Financed
Having a solid business concept and the expertise to operate it is one thing, but finding the finance to open a hookah club is another. To qualify for a loan, the borrower(s) must have acceptable credit and be able to contribute 15-25 per cent of the entire start-up expenditures.
A hookah bar generates most of its money by providing guests with hookahs to smoke. A hookah “session” is paid for either before or after it begins. Typically, one hookah is shared by two to four persons. Hookah lounges can either charge by the hour or by the size of the bowl. A hookah lounge’s pricing for a bowl is usually determined by how much shisha it can carry. A huge bowl, for example, may burn for a more extended period of time. As a result, smoking is more expensive.
Hookah lounges can also profit from selling shisha separately. They might also offer hookahs and hookah accessories. Coals, hoses, and vases are among the additions. Other hookah clubs may provide food or alcoholic beverages.
Step 6: Apply for Licenses and Permits for Your Business
Certain business licenses and permissions will be required for the proprietor of a hookah club. These permissions and licenses may differ depending on the state and town in which the business is located.
A hookah lounge may be needed to seek extra permissions from the municipality, county, or state, granting it authority to distribute and sell nicotine products, in addition to ordinary business permits. According to Verywell Mind, these lounges may need to secure indoor smoking licenses as well as a state tobacco license in order to operate. Tobacco is governed by the Food and Drug Administration (F.D.A.) and is governed by both federal and state legislation. Tobacco sales rules differ from one state to the next and, in certain situations, from one city to the next.
If a lounge offers food and beverages, the proprietor must have a food service license, which may require completing a food safety training certification course and clearance from the health department. If the establishment serves alcohol, it must get the necessary state liquor permits.
Step 7: Start Marketing Your Hookah Lounge
New clients might be attracted to your hookah bar through word of mouth. Ads and signs can help lure customers in. Make sure to budget for advertisements, posters, and your website. If you don’t feel comfortable developing your website, you may pay someone to do it for you. You should also set up one or more social media profiles for your company. With the click of a mouse, you may reach a large audience via social media.
You might charge by the bowl or hour for your hookah, but you could also consider providing a discount. If you give a promotion or a deal, be sure to incorporate it into your marketing strategy.
Who is the target market?
Customers that aren’t rowdy are the greatest. Hookah smoking culture may be tumultuous since hookah smokers must be at least 18 years old. Hookahs are delicate, and hookah lounge operators will suffer financial losses if their hookahs break. Every lost client affects the aggregate number of individuals who will purchase services. Quiet customers are ideal. They are also frequent visitors. Hookah bars make a lot of money from regulars and frequently provide special deals and discounts.
How to Market and Promote a Hookah Lounge?
Hookah lounge advertising, fortunately, takes care of itself. Usually, word of mouth will be sufficient. However, you may increase the exposure of your hookah club by promoting it at liquor shops, outside grocery stores, near college campuses, and in party zones. When a hookah club is “discovered,” it generally spreads rapidly.
As the owner of a hookah lounge, you should be prepared to answer inquiries regarding the health dangers of hookah from tenants, other shop owners, and the general public. Obtaining permission to open a lounge might be difficult, especially in a more conservative location, so be prepared with facts and data. Highlighting the cultural significance of hookah can also assist, but the public will question your company’s safety both when it first opens and once it is established.
Hookah and shisha will account for most sales, and a lounge will charge by the hour or by the bowl size. Consider giving extra alternatives, such as oxygen, food or snacks, and teas, to improve the client experience. This enhanced customer experience may encourage consumers to remain longer and raise per-customer revenues. The same is true for selling retail items such as shisha and hookah supplies that customers can take home with them. So, before opening a hookah lounge, make yourself much more particular about everything surrounding you and follow our tips.