So, you want to own a cigar shop…
How to start a cigar business may seem pretty straightforward, but opening a cigar shop isn’t all smooth sailing. Selling cigars (legally) requires that you have a place, permits, and plans. The plans are the first step, so we compiled this short guide to help you get an idea of what you need to do.
Operating a cigar business is incredibly rewarding and allows you to interact with this community of genuine people like never before. Becoming a successful shop and/or lounge is a dream come true, but it all depends on you.
Let’s take a look at how to start a cigar business:
Research & Business Planning
Before you open up shop, there are plenty of details to straighten out. As with any successful business, this needs to be built on a solid strategy. Some choices apply to any business, and some only pertain to the cigar industry.
Location & Cigar Lounge
When it comes to your physical location, there are some big decisions to make. Namely, where are you setting up shop, and what are you putting in it?
Your location is an important factor. Leasing out a spot in a shopping center, for example, would give you more traffic at the expense of space and a lounge area. Leasing a separate building, on the other hand, puts you slightly off the beaten path (depending on the where) while giving you much more freedom in regard to your setup.
If you have the ability to add a lounge or bar area to your cigar shop, there are more options to consider. Picking comfortable seating, pleasant lighting, and muted color and decor can create the perfect ambiance that keeps customers around to relax. Picking a good selection of brews to offer will also go a long way.
Costs & Inventory
Running your numbers correctly is imperative to having a successful business. Regardless of how nice the lounge is or how rare the cigars are, you need to know where the money is coming and going.
Here are some basic costs to consider:
- Staff wages
- Building or lease costs
- Cigar and alcohol inventory
- Cigar humidor
- Marketing budget
These are all necessary for an effective business but will look different for each and every storefront. The amount of staff depends on your hours. The size of the store and the marketing budget will change as you grow. Likewise, your cigar and alcohol inventory depends on how big of a variety you are chasing, as well as any other accessories you choose.
Managing your inventory is science you will have to master. Not only do you need to gauge the demand that you’ll see at the opening, but in the future as well. The cigar lines you feature will make a big difference too. So you don’t overdo it, we recommend finding manufacturers that can send you smaller quantities at the shorter notice in the beginning.
Legal: Licensing, Insurance, Certificates & More
When it comes to the legal side of things, there are quite a few boxes to check. For this reason, we recommend tracking down a lawyer with experience in the tobacco industry to be safe. That being said, there are plenty of things to start considering now:
- Company name: Your name should reflect the type of shop you intend to run. It also needs to be unique. You should search the state’s business records, federal and state trademark records, and social media platforms. It’s also important to make sure the web domain is available.
- Form a legal entity: Operating as an LLC or a corporation removes your personal liability from the company. It protects you from being sued and allows you to set up accounts in your business’ name. There is a small state fee to start an LLC, or you can pay someone to make it for you.
- Register an EIN: You must apply for an Employer Identification Number (EIN) as per the law. This identifies your business for the IRS’ tax reporting. You must form your business first before applying to receive an EIN. Find info on the IRS site here.
- Understand the regulations: The Food and Drug Administration is in charge of tobacco regulations. To avoid being shut down, become familiar with the guidelines. The FDA regulations for selling tobacco can be found here.
- Permits and Licenses: Many of these are included in federal regulations, but each state varies slightly in terms of what permits and licenses you to need to sell tobacco. You can find links to each state’s requirements here.
Cigar Shop Branding and Vision
Branding is important for any business, but even more so for cigar shops. Most of your customers don’t need to be convinced that they want a cigar, but you’ll have to put in some effort to make them choose your store over another. This will all come down to the image you create of your business.
The signs and advertisements you use should reflect the type of shop you are running. Are you focused on high-end cigars and providing a nice lounge atmosphere? Are you just selling the basics at a great price? Your name and theme of your branding should reflect what you offer.
For local advertising, it can be a great idea to include your name and face as the owner on your signs, billboards, and other ads. This gives more personality and legitimacy to a business that is new to the area.
For more tips along these lines, check out our article on How to Get Your Cigar Business Noticed Locally.
Regardless of which industry you are working in, effectively spreading the good word about your business requires digital marketing. Your brick-and-mortar operation is integral to your profits, but failing to ignore the online world is tossing away a golden opportunity.
There are many ways to use the internet to your advantage. Focusing on paid ads is a great place to start. Explore the advertisement options from Google, Facebook, Tik Tok, and more to see which might fit your business the best.
Another smart move for growing your cigar shop online is the use of proper Search Engine Optimization. The factors that contribute to SEO vary greatly. For example, the frequency and accuracy of your keywords are important. Creating a business blog can simultaneously give local customers another way to connect with you as well as drive more search engine traffic to your site.
Growing a local business is tough, but incredibly rewarding. Juggling things such as events, social media, SEO, and more can feel overwhelming. This is when hiring professionals can make all the difference. When it comes to getting your cigar shop recognized locally and online, look to Cigarketing for help every step of the way.
You didn’t open your cigar shop or launch your cigar brand so you could worry about Google Maps, search engines, event promotion, or web design. Cigarketing exists to ensure your shop stays full, the cigars move off your shelves, and you dominate your local market.
To see what Cigarketing can do for you, contact us here!