Is A Hookah Bar Really Profittable?

[Pavo21]

opening a hookah bar first off isn't easy, my gf, friend and i are in process right now, living in Sourthen cali, doesn't help we have been looking for a location for a about 2 years we found one where there isn't any for about 15 miles the others are semi busy but not really. we luckly know people that own hookah bars and we wont be competing with them its all about who you know and what you know we've been hookah smokers for over 8 years now we know what sells what doesn't prices and what kind of place people like to be in, definity have to have the money that hasn't been as bad for us since we've had so much time to save up and have everything done right.

our two biggest plus's is our closest friend who owns a hookah lounge is the only person with big connections with Mya and starbuzz, good pipes semi ok tobacco.

also we got eric who is a great friend with my girlfriend, she used to be moderator on here years ago, eric is a good person and always helping us out. so you need to have a ambition to do so also make the customers self serve. give them dry coals at the begining. tell them if they need ask or get it your self, i work at a hookah lounge sometimes when my friend goes out of town, he does good enough to pay the bills and keep his head above water with spending money here and there.

you need to know what you are getting into, not just try to have your friends there and survive, no free smoke, ever, even to your friends also having prices that people will pay and want to come back, have good quality of smoke and advertising is KEY. sorry for the sloppy response gf's 3 year old keeps distracing me lol.

if you have questions definitly ask if you have doubts dont do it, or you will pay one way or another

[mushrat]

wow, the thread that would not die.

Any business can be profitable if you do it right. also 9/10 business fail in the first year so....

[Pavo21]

yeah 9/10 fail their first year due to bad location, bad idea(over populated business), not advertising the right way or enough and just not having the knowledge of your product or business, be smart , thing a head and do your job

[leo]

im starting a hookah lounge, im in a 3 college town, no other lounges for at least 50 miles or an hour
have all startup fixed, got 5k to invest, got location around 400 sqft, (small), all permits and go aheads
opening in mid winter 2013, got facebook page and some college buddies gonna spread the word when i open, (everybody pays) i read the previous thread that was 12 pages long, i will be in downtown area within walking distance to pawn shops,tattoo,bars etc, loking to start with cheap hookahs and
quality shisha, i own my house so no overhead on my end, looking like im gonna be able to fit around 30 people max (at first) before i take over the lower building in 12 mos (planning) and is 950 sq ft downstairs, i need practical advice to thrive, i am an exsperienced hookah smoker, and love the lounge scene, and looking to give these studens something fun to do, as theres only a movie theater,lots of bars,bt NO recreation otside of parks and rec i think i could do this with only two months rent saved up, and then the biz would at least float itself, no employees at first just me and my wife,
doin,wifi,xbox,ps3,sodas,snacks,energy drinks, what should i charge?? has anyone else out there made a situation like mine work? i have the ability to expand aytime i need to, just keeping overhead down to bare minimum

[insidius]

Only you can really decide what to charge based on what your costs are and such, I would think, but I'm no business guru.

[Pavo21]

you should look up laws on beverages and food, just due to you might not be able to serve them along with tobacco prodcuts. also charging a customer a fair price but enough where you will make money. we charge 13$ a hookah at our lougne an 10$ for friends MEANING COME BY PEOPLE I MISS U. so just depends on what your costs are and what not. where you can find a nice mark up but its not to much for the consumer. good luck.

[Chreees]

One question... What's your business plan like?

[Kathryn T. Devonshire]

Thank you for all the excellent information and food for thought..... I am working on my Master's Thesis and would like to quote you! 

[Kathryn T. Devonshire]

Hey CaliHookah.... I got out of the Army myself and am working on my MBA right now... my Master's Thesis is about opening a Hookah Lounge.  I would LOVE to know if you opened it, how things are going, etc.  Let me know!!!

[Pavo21]

hey there, you are talking to a post that is over a year old and to a un-active person

[Erica]

hahahaha well either way.. its not profitable! LMAO

[Chreees]

hahahaha well either way.. its not profitable! LMAO

 

SHE LIVES!!!!!!!

[WhoBlowsThere]

Hey, a lot of suggestions have been answered here and it's great you want to be an entrepreneur at your age! The biggest 2 cents that comes to mind from me is that this is a brick sale front and ties you to that town for the foreseeable future. You will always need to be some form of manager unless you luck out, and even 5 years from now you may want to sell it. Hookah lounges have been a really tough sale from what I've seen.

 

If you are really passionate about it, I would love to help. I have a background in financial operations (senior fin analyst @ City Center in Las Vegas), real estate, and online start ups (marketing, sales, you name it). you can reach me here or at ardonlukas@gmail.com

 

EDIT: Just saw how inactive it is from 2011 O.o

EDIT 2: If Leo wants to reach out, I could advise a bit too.

Edited February 14, 2013 by Ardon Lukasiewicz

[mustang67n]

Are you a resident here, in las vegas, ardon?

[Coyote]

all I have to add is make sure you have comfortable sofas. 

[Bawhee]

Thats a life rule not just lounge owner rule.

[WhoBlowsThere]

Are you a resident here, in las vegas, ardon?

 

Yeah, live on the edge of Summerlin/North Las Vegas. What about you?

[mustang67n]

Nice! I'm on the other side of the world from you, kinda. I live just south of the airport, not technically henderson, but a mile away from where henderson/green valley begins

[Alan]

On December 8, 2009 at 11:28 AM, cotsi95 said:

1st. Rani its coTSI not STI....sorry its a Mitsubishi vs. Subaru thing

2nd. Before I even start, a hookah bar is a BUSINESS! The purpose of a business is to make the most amount of money while serving your customers. NOT being a place where people can come smoke for nothing. That is why bars charge more then it costs for you to smoke at home, We have to pay taxes, employee wages, employee taxes, Rent, Utilities, AND make enough money to support our own living! That being said id love to answer any questions you might have to the best of my abilities.

3rd. There are a few things you need to figure out law wise before you even start thinking about opening, since the laws can make or break you. In Colorado there is a smoking ban, In all buildings. Now that being said there is also an exemption (99% thanks to cigar bars with big wigs on city counsels that like to go there) that if 70% of your sales come from tobacco and you are a retail tobacco outlet you can offer "in house sampling." Thats not saying that you have to sell 70% shisha to sell a bowl to someone to smoke there, Since when u offer in house "sampling" it is a tobacco sale, so therefore all of you sales can be sampling, (This is where 80% of your profit comes from BTW.)

There are also local laws that you have to look into, such as ventilation regulations, For instance in Fort Collins there is no regulation for ventilation for our lounge, But in Boulder there is. Now that might not seem like a big deal but when its going to cost you around 5k-8k IF YOUR LUCKY to do your ventilation it becomes a bigger deal. Also there is a specific hookah bar ban in Fort Collins, that means us (Narghile Nights) and Algiers are the ONLY 2 bars that will ever be here since we are grandfathered in. If we or they go under, thats it no more hookah here. But in Boulder there is no such law. When i went to the city mangers office they gave me a Hookah Bar regulation sheet. So each State and each City is different.

Now lets say that you looked into the laws, you can have a hookah bar (All it takes is a tobacco retail license in Colorado). There are no laws regarding ventilation, and no out right bans on hookah bars. Sweet! Step 1 done.

Step 2! How are you going to pay for this? Get a business loan DUH! WRONG!!! 95% of the banks wont even look at you if its a tobacco related business. Because if you go under what are they going to seize to repay your loan? Shisha, hookahs?! ya no. So your only options for getting the money is 1. Private investors and 2. Personal loans. Private investors are hard to find but if you know the right people then it can be relatively easy. You also need to look into how much this is going to cost. The biggest thing you are going to spend your money on is rent. Because when you sign a lease you not only are responsible to pay rent every month. But if the business goes under you PERSONALLY are responsible for the rent. So if you pay 3k a month in rent, which rent differs WIDELY by state/ city, and your sign a lease for 3 years with an option to renew at the end you personally owe your landlord $108,000 over the next 3 years. That is a HUGE burden, and it takes a lot of balls to sign that lease knowing that if you fail you pretty much have to declare personal bankruptcy to get out of the lease. But lets say you found the money to start! YAY! then you found a place where the landlord will let you start it with a decent location and decent rent. Awesome! now what?

Renovation time! Bet you didnt think of this when you we deciding what shisha, coals and hookahs you were gonna have! The MOST important thing when it comes to hookah bars is ATMOSPHERE! There are shitty looking bars out there with the BEST hookahs that close down because no one wants to go sit on an old dirty couch, and there are hookah bars out there with the NASTIEST tasting hookahs but the best seating and atmosphere that are raking it in. Why? ATMOSPHERE! Now this is one of the many areas where I cant really help you, since its a personal preference on what you think the area wants more in a hookah bar. Do they want a nice homey/ chill vibe? or do they want a classy night club/ modern vibe? Its up to you but choose wisely because if your wrong it can be disastrous. So you've gotten your space renovated, youve ordered your lounge shisha, coals, hookahs, and your retail stuff! Now what?

Pricing this can make or break you. You start out too high and noone will come, your start out too low and everyone will be there but you wont make a dime. And it is VERY hard to raise prices on college students. VERY HARD! I personally recommend charging per person vs. per hookah with a max # of people on a hookah. You make more money per hookah and its alot easier when it comes time for people to pay. i also recommend including tax in everything you sell. It streamlines things tremendously! Imagine a group of 5 people come in to smoke. 1 lounge offers a hookah at $10 with a max of 3 people on it, after 3 people you have to buy a 2nd hookah. The other lounge offers a hookah at $7 per person and if you come in with 3-5 people you get 2 hookahs. Which bar are you going to? One that makes you pay for 2nd hookah or the one that GIVES you a 2nd one for free?

Now if you look at the business side of it both are sending out 2 hookahs but the lounge that makes them buy a 2nd is only getting $20. Where as the one that gives the 2nd hookah is making $35 for the same amount of people that are smoking. Remember this is a business not a charity, the objective is to make the most money you can without sacrificing what is important to you.

There are so many other things that you have to decide when opening a lounge, Advertisement, How many employees are you going to have, coals, shisha, drinks, music. Etc. Its very time consuming. But the MOST important thing you have to remember is have fun. This is a fun job, stressful yes! but FUN. In the end do what you love, I think i can speak for Mush and Eric when i say that they do what they love everyday! And that is the most important thing.

If you have any other questions that I can help you out with fell free to PM me or ask them here. I didnt cover 70% of the things that you will have to decide on if you decide to open a lounge, but theres enough there for you to see what truly does go into opening a lounge. Its a lot more then a bunch of hookahs and a couch.

-Wade
 

Hey Wade I want to ask you for some advice. 

Im starting a hookah business at the night club I work for in Houston. I don't know too much about hookah besides the basics. I WON'T have to pay rent for the place, I will only be paying for the supplies and hookahs only. Once I get my licenses/permits, what else should I look at? 

What should I expect to pay as far shisha, charcoal, etc? (Fair wholesale prices)

Also what brands of shisha is the best bang for the buck, I don't want to get some super cheap low quality stuff but also not trying to spend a lot on the shisha. 

I'm grateful for your feedback