[REVEALED] What Do You Need To Open A Smoke Shop?
You’re dreaming of leaving the 9 to 5 behind and opening your own smoke shop. Awesome!
But it’s not as easy as setting up a stall and selling the products you like. You’ll see your dreams go “up in smoke” (perhaps a good name for a smoke shop?) if you take that approach.
Where do you start? What do you need to open a smoke shop? In this quick guide, we’ll outline everything you need to open your smoke shop properly. From must-have licenses to picking a prime location, we leave no stone unturned.
What Do You Need To Open A Smoke Shop? The Skinny
Before you start shopping for glass and vape mods, you need to carefully plan opening your smoke shop the right way. You don’t want to skimp on anything, or else you might find yourself putting out your store like the burning end of a midnight cigarette.
Related Read: How To Start a Smoke Shop: Your 10-Step Guide to Success
With all your ducks in a row, you can set your smoke shop up for success from day one. If you take shortcuts, you’ll run into issues with the law, angry neighbors, and unhappy customers.
There are a few essential things to consider, including:
- Your business plan
- A good location
…and one more piece to complete the puzzle. Let’s dive into your business plan first.
#1: A Solid Smoke Shop Business Plan
You can’t set up your shop without a solid, well-written, and researched business plan. This living document will guide the opening of your store. It should outline your goals and how you’ll achieve them. Do you plan to break even in the first six months? Show how you’ll do it.
A business plan shows investors that you’ve thoroughly planned and researched your business. You can identify risks and opportunities and lay out your financial plan. Referring back to it guides the decisions you’ll make and keeps you on track. Key components include:
- Executive summary: A high-level summary or overview of your business. In two to three pages, you’ll summarize your smoke shop concept, target market, products, financial projections, and growth plans.
- Company description: What sets your smoke shop apart? Define your identity and how you’re different from your competition. Think about your name, logo, brand values, vision, and more.
- Market analysis: Show investors that there’s a need for your products by thoroughly researching your market. Consider demographics like age, income level, and geographic location. Also think about values, attitudes, and shopping preferences. Don’t forget the competition! Are they leaving gaps in the market for you to fill?
- Operations plan: How will you run your daily business? From inventory management to customer loyalty programs, show you’ve thought through everything and have plans in place.
- Financial projections: Outline your estimated startup costs — kitting out your store, buying your initial inventory, and more — and ongoing costs. Show your estimated revenue and how you’ll manage expenses.
There are various resources like business plan templates, software, and guides online. Your local Small Business Association (SBA) can help you and connect you with mentors. Lean on other successful smoke shop owners for insights.
#2: The Right Licenses and Permits
The right licenses and permits are absolute must-haves if you want to legally sell tobacco, vapes, CBD, and other smoke shop products. It’s not just to protect you, these laws and regulations also ensure customers can safely and legally buy tobacco products.
If you don’t get the right permits and licenses, expect steep fines, the closure of your business, and possible jail time.
That said, which licenses and permits might you need? First, refer to the CDC STATE System Licensure Fact Sheet to see if your state requires you to obtain a license before selling tobacco.
A Retail Tobacco License (RTL) is the main license to be aware of. You need one to sell tobacco and other products in most states. Apply for your license, and once you get it, make sure it’s prominently displayed in customer-facing areas.
#3: A Good Location
Location is key for any brick-and-mortar business. You need high visibility and foot traffic to help customers find your smoke shop. Ideal spots include nearby colleges or universities, busy downtowns, heavily trafficked roads and highways, and popular shopping centers.
You want a space big enough to stock a variety of products while keeping overhead costs affordable. Parking is desirable but not essential. Signage and storefront visibility are also critical — but remember to check laws and regulations around advertising.
Note: Be aware of any zoning restrictions on smoke shops in your area. Some limit proximity to schools, churches, residential districts, and more. Choose a permitted zone or apply for zoning variances if needed.
#4: Compliance With Regulations
There’s no getting around the red tape — state and federal laws dictate how you can sell and display tobacco, vape products, and more. The most obvious is age restrictions.
Make sure customers are of legal purchasing age by checking their IDs. It's illegal to sell to anyone under 21 in most states. Make sure your staff knows how to check IDs and watch out for fake IDs. Post clear age warnings.
Outside of age restrictions, the FDA requires compliance with the following:
- You need to get your inventory from manufacturers who comply with the reporting of ingredients and harmful constituents.
- Cigarette packs must have one of the FDA's 11 approved health warning statements on the side panels and the top 50 percent of the front and back panels.
- You can’t offer free samples or multi-pack incentives.
- You can’t sell single or loose cigarettes.
Following the rules and regulations for your area tells your community that you’re a responsible merchant and helps build your reputation. Consult an attorney to ensure you don’t miss anything.
#5: A Registered Business
Once you’ve got your smoke shop business plan, the right permits and licenses, and a good location, you can set up your business! Here’s how:
- Register your business: Choose a structure that makes sense for your business. Once you decide, register your business with the state. Get your ID tax number so you can hire employees, open bank accounts, and of course, pay your taxes.
- Open your business bank account: Don’t use your personal account! It makes life easier come tax season to separate your business and personal funds. Set up a merchant account for credit card processing.
- Get business insurance: Business insurance like property, liability, and workers' comp are essential. Protect your assets!
Once these are taken care of, you should have a registered business.
Related Read: Smoke Shop Credit Card Processing: 5 Tips and Tools
#6: The Products Your Customers Want
With the legal stuff squared away, you can start stocking your smoke shop. Don’t guess — start with your market research and go from there. Popular smoke shop items include:
- Premium cigars and cigarettes
- Humidors and accessories
- Vape mods, pens, and glass water pipes
- Premium e-liquids and CBD oils
- Delta-8 and Kratom
- Lighters, rolling papers, and other smoking accessories
- Gift sets
Related Read: What Do Smoke Shops Sell? 6 Items To Stock in Your Shop
Offer a wide variety and niche down once you find out what the popular products are in your store. Talk to customers, too. They’ll tell you what they like and what’s missing. Last, visit competitor smoke shops to analyze their product mixes. Identify any gaps you can fill with high-demand items.
How will you display your products? Start thinking about your store layout and design. From display cases and shelves to other shop fixtures, how you set up your smoke shop aids your potential success.
Other Things To Consider as You Start Your Smoke Shop
We’ve covered the main things you need to open your smoke shop. Here are a few more to consider:
- Employees: Determine who you’ll need, from managers to in-house marketing gurus. Factor in training costs and employee processes.
- Marketing: Think of ways to reach your target market. Create a distinct brand and image that helps you stand out. Think email, social media, and in-store promotions.
- Accounting software: Find accounting software that integrates with your other business tools so you can track sales, profits, losses, payroll, and other finances.
- A tobacco point of sale system: More on this below, but an industry-specific POS can be a game changer for your business!
What Do You Need To Open A Smoke Shop? The Missing Piece
You know the essentials — licenses, location, inventory, staff, and more. But there's one smoke shop puzzle piece that binds everything together into a seamless operation: the right point of sale (POS) system.
A POS system goes beyond processing sales. It acts like a central nervous system for your smoke shop. A modern smoke shop POS provides robust inventory control, sales analytics, and customer management, and has age verification baked in.
Cigars POS is a point of sale solution designed specifically for tobacco stores and smoke shops. It’s user-friendly and easy to set up. Key features include:
- Advanced tobacco inventory management
- Reporting and analytics
- Custom label printing
- Scan data reporting
- Customer loyalty programs
- Age verification
Schedule a personalized demo of Cigars POS today to see it for yourself!