Smoke shops have come a long way in the last several decades.
Once stigmatized and catering to the small segment of the population that ascribed to countercultural ideas, smoke shops are becoming much more mainstream and gaining customers in demographics they’ve never seen before.
With increasing legalization across the country and changing public perception around the industry, opening a smoke shop is a viable business opportunity.
Are you wondering how to open a smoke shop? Let’s take a look at what you need to do if you want to be a smoke shop owner.
1. Set a Budget and Write a Business Plan
Any businesses going to need funding and a budget. In order to acquire funding and understand how much your business will legitimately cost, you need to write a business plan.
Writing a business plan can sound intimidating, but it actually isn’t that bad. In a business plan, you’ll need to:
- Explain who you are
- Describe the types of products that you plan to sell in your shop
- Identify your target demographic
- Illustrate what makes you and your business stand out
- Explain the operational plan you have for your business
- Outline your smoke shop Branding and marketing strategies
- Anticipate future cash flow
Once you have a business plan it can help you set a budget and also look for funding if necessary.
2. Research the Licensing You’ll Need
Opening a smoke shop anywhere in the country is going to require a number of licenses and permits. This is a heavily regulated industry, so you will need to develop a thick skin dealing with this type of licensing and permitting process.
One of the licenses you will need to get is a retail tobacco license from the government of the state you’ll be operating in. This is your ticket that allows you to sell tobacco related items and tobacco products. He also be required to submit a one-time licensing the with your application.
An approved retail tobacco license is good for a year. However, if you have multiple locations of your smoke shop, you’ll need to acquire tobacco licenses for each location.
If it is a part of your business model to sell tobacco products outside of your state, then you will also need to get a tobacco wholesaler license from the states that you expect to sell your products in.
You need to display the required licenses in a prominent location at each of your business locations. It is also essential that you keep all of the invoices and receipts for the wholesale tobacco and cigarette products you thought during the past four years. If you do not do these things, you can get hit with fines from either your state or your city government.
3. Register For Taxes and Open a Business Bank Account
You have to determine which type of business your smoke shop is. You will likely register as one of four options, a sole proprietorship, a partnership, a limited liability company, or a corporation.
In all likelihood, you will register as an LLC. However, you will want to look into all the different options and determine what makes the most sense for you and your company.
Once you’ve determined which option is right, you will then need to register with both the federal government and the state.
4. Register Your Business Name
You want to make sure that the business name you have in mind is an already registered to someone else. You can check with your local government registry to find out.
It is common for small businesses to choose a “doing business as” name. What this means is that you will have your business name, but the actual business can be registered under your personal name. It’s important to understand that a “doing business as” name doesn’t protect you from other businesses using the same name for their business.
5. Get Insurance
Any type of retailer going to need business insurance. Owning a business comes with a lot of risks and it’s important that you are protected. If you are hiring employees, you also need to get workers’ compensation insurance.
6. Carefully Choose Your Location
Taking your location is extremely important when you’re opening a smoke shop. While it’s hard to know the precise number, might be as many as 30,000 smoke shop in the US alone.
You want to find a location that is overly saturated with smoke shops and is a convenient place for shoppers to show up. A location with heavy foot traffic can be a great choice.
7. Hire Awesome Employees
Your staff will be a major puzzle piece in the culture of your smoke shop. Hiring employees is not a place that you want to skimp. Find amazing people to hire and treat them well, and you’ll likely watch your business thrive.
8. Smoke Shop Branding: Go All Out
Smoke shop branding going to be essential to success. You’ll want to employ the standard digital marketing tactics such as having a website, blog, social media accounts, and be listed on search engine and review sites.
Another thing you can do to help your smoke shop stand out is to get custom rolling papers and other products with your branding on it. You could even consider giving these out as gifts to some of the first customers of your store.
9. Institute an Inventory Management System
One of the most important things you need to do when you are a smoke shop owner that have an inventory management system. You won’t want to run out of popular items so this is a system you want to set up right away.
How to Open a Smoke Shop: You Can Do It!
Now that you know how to open a smoke shop, what’s stoping you? Go out there and make your dream a reality!