A cigar lounge is a special place.
Patrons come together to smoke fine cigars, enjoy great conversation, and (most importantly) spend money.
But cigar lounge success depends on more than high ambitions and a passion for tobacco — which is why we’ve put together this quickstart guide on how to open a cigar lounge.
Keep reading to learn how to get your business up, running, and profitable in five steps.
Getting inspired is the first step in any small business journey, so let’s look at a thriving cigar lounge.
Tobacco Town Cigar Lounge, located in Trenton, Michigan, offers a wide variety of cigars, pipe tobacco options, and entertainment like a pool table and golf simulator.
Corey Grant, the owner, says his number-one goal is to create a welcoming environment for customers to enjoy a cigar or pipe with friends, and his efforts have paid off. Customers rave about his lounge’s tobacco selection, amenities, and service.
When Corey started his lounge, he had no retail experience — but a solid plan and the right tools have helped him launch and grow a popular, profitable lounge.
Ready to write your cigar lounge success story? Let’s dive in.
Pro tip: We recommend visiting other cigar lounges in your area. This will help you understand their day-to-day operations, identify your unique target market, and differentiate your business from the competition.
First, you need to file the paperwork to establish a legitimate business. The tobacco industry is tightly regulated at the state and federal levels, so start your research and license application as early as possible.
Establishing Your Business
To complete your tobacco license application, hire new employees, and secure funding, you’ll need to create a legal entity for your business and secure a federal employer identification number (EIN).
Most cigar lounges operate as sole proprietorships or limited liability companies (LLCs). Each state has a different process for establishing an LLC, so check with your local small business office for more information.
You can apply for an EIN online — all you need is your business type and Social Security number.
Applying for a Tobacco Retail License
Most states require a license to sell tobacco, so your next step is to start the application process. This looks different from state to state, but here’s a general overview:
Snags in the licensing process are the most common cause for grand opening delays, so prepare your application as soon as you have all the necessary paperwork.
Related Read: How To Get a Tobacco License in 4 Steps
Other Legal Requirements
Since a cigar lounge is an indoor smoking establishment, your state may have additional requirements and regulations.
For example, you may need to prove exemption from nonsmoking laws, install approved fire suppression and ventilation systems, or schedule a fire department inspection.
Now, it’s time to bring your cigar lounge to life — starting with the perfect location.
Choose a space that’s easily accessible from main highways and roads, has ample parking, and is highly visible to passersby. Don’t forget to measure proximity to competing lounges and smoke shops.
Air Filtration and Ventilation
Proper air filtration and ventilation are critical to the health and safety of your employees and customers, so start by investing in and installing the right equipment. Here’s a shortlist of what you need:
Remember: The easier customers can breathe in your lounge, the longer they’re willing to stay.
Related Read: Cigar Lounge Air Purifiers: 20 Top Options
Floor Plan and Furnishings
Your customers should be able to navigate the cigar lounge with ease, whether they’re browsing your display cases, seeking a recommendation from your employees, or looking for a place to sit.
Make sure you have a combination of seating for solo patrons, small groups, and larger parties — all with ample space in between.
When choosing furniture, look for fabrics that are durable, easy to clean, and odor-resistant.
Design and Decor
Stepping into your cigar lounge should feel like stepping into another world — one accented by luxurious furniture, rich colors, and dim lighting.
Leather and wood are classic options for cigar lounge decor, along with vintage tobacco ads, signage, and collectibles. Other popular themes include sports and music.
Free Resource: The Ultimate Guide to Cigar Lounge Layout & Design
You’ve created an environment that will attract cigar enthusiasts — but how will you encourage them to spend money?
Cigar Selection and Displays
Your cigar lounge should have something for everyone, including new and experienced smokers on any budget. Offer popular brands, rare imports, affordable single cigars, and premium cases.
You should also focus on displaying your cigars properly. Consider investing in a walk-in humidor, freestanding display cases, or easy-access shelves along the walls of your lounge.
Attractive displays serve as lounge decor and drive sales, so keep them well-stocked and organized.
Pro tip: Inventory management is another essential skill for cigar lounge success. Make sure your point of sale (POS) system includes features like real-time inventory tracking, product ranking, and automated purchase orders to ensure you never run out of your customers’ favorite smokes.
Easy Checkout Process
Your team members are also vital in the cigar lounge sales process. They should be prepared to guide customers around your displays, make expert cigar recommendations, and facilitate a quick and easy checkout process.
We recommend investing in a POS system specifically designed for cigar lounges. This tailored technology prompts cashiers to scan IDs for every sale, ensures quick and secure transactions, and even allows you to check customers out from the lounge floor.
Barcode labeling can also shorten the checkout and help you manage inventory more accurately, so look for a system that prints custom cigar labels.
Creating community is one of the most important steps in starting a cigar lounge, so you need to become a marketing expert.
Marketing can be complicated for tobacco shops and cigar lounges due to regulations, but there are a few strategies you can use hassle-free.
Social Media
Your marketing efforts should start well before your cigar lounge’s grand opening. Use social media to connect with potential customers and generate hype for your new business.
Share behind-the-scenes looks at your interior, sneak peeks at your cigar selection, and countdown updates on your opening plans.
Keep the momentum going once your lounge is open by posting educational content about cigars, encouraging followers to stop by, and offering social media-exclusive promotions.
Email and SMS Marketing
You can also build a community around your cigar lounge by starting an email or SMS marketing newsletter.
This approach gives you direct access to your customers, so you can send updates on your newest arrivals, upcoming events, and in-store promotions right to their inbox.
Customer Loyalty Programs
Want to encourage regular visits to your cigar lounge? Consider launching a loyalty program.
Every time a customer makes a purchase, they’ll earn points that can be redeemed for discounts or special perks like access to rare and exclusive cigar options.
Your cigar lounge POS system should make it easy to manage your loyalty program — just look for one with built-in marketing tools.
You know how to open a cigar lounge — now let’s talk about how to grow your business.
Here are some creative ways to expand your reach, attract new customers, and drive more revenue:
In short, a successful cigar lounge is a gathering place for customers to enjoy fine cigars and connect with their community.
Congratulations! You’ve achieved the first step to opening your cigar lounge: reading this article.
The next step is to schedule your live, personalized demo of our all-in-one cigar lounge POS system, Cigars POS. This powerful tool includes all the features you need to launch, manage, and grow your business, including:
Plus, you’ll have access to our team of tobacco industry experts to get you set up for success.
Ready to get started? Take Cigars POS for a spin.