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mushrat

So, You Want To Start A Hookah Lounge : Updated.

262 posts in this topic
Don't even think it, get a real job, with a reguar pay check, benefits, vacation time. That sorta thing. 9 out of every 10 new businesses fail. So the next 9 of you are doomed. rolleyes.gif

Still here? Ok. Here's what I have learned.

1) Get en EIN number. This is your federal Tax ID number. You can get it online.

http://www.irs.gov/businesses/small/articl...=102767,00.html


With this companies will show your their wholesale catalogs and anyone you deal with locally will know you are atleast a little serious about this whole thing.

2)Visit your state government site. Find out what it takes to register a business in your state. You'll also have to register with the Federal government. State registration will cost you . Here ion NC it was $125. The federal registration is free. Figure out what kind of business you want to be. S corp, LLC, Sole Proprietor? Going to run it yourself? Have partners, Investors, Bank loans (heh, ya right). Figure out what kind of business you want to open. I have a piece of Business software by Quicken, I'll get the name tonight, that can help yu with everything including the legal forms, both Federal and State, It costs about $100 but covers EVERYTHING including forms for partnerships, loans, bills of sale, the works. So we're up to a little over $200. Can't afford it? How the heck you gonna support yourself while the business is starting up?

3)Look around for a place. If not the actual place you are going into then one like it in a similar area. Find out what the rent is going to be. See if the realtor will let you see utility bills and such. Find out what insurance is going to be. Not to mention Permits.

4)Already being incorperated will help get people to take you seriously.

5)Start adding up costs. How much to get the place set up the way you like it, rent and utilities, stock for in store use, retail stock, PAY. Even if you don't end up being able to pay yourself at first, figure in a fair salery. Employees? If you are going to hire friends you better be able to fire friends. And as a start up you aren't going to be able to pay them squat, so think hard before hring your smoking buddies.

6) Now, you knwo roughly what it will cost. How much to you have? Savings? Stocks and bonds? equity in your hourse? No matter what they say, even with the best business plan, most banks nor the SBA are interesting in funding a start up, especially if you are doing anything with food, and especially if you dont have assets equal to what you are asking to borrow to put up for collateral. Don't let that keep you from trying, but don't count on that sort of funding. I used a private investor plus all the money o could save for about a year from tax returns,bonuses at work, alittle from each pay check. If you can find an individual or 3 who want to plunk down some cash for a decent return, go for it. Use a legal form or a lawyer to draw up a promessory note and run.

7) decide how much you are going to have to make each month to pay off everyone. Start working prices from there. Excel is your friend. figure out if you can sell enough to make it worth your while. Check the competition if there is any. My closest competition's entire staff comes to MY place to smoke, Including their hookah packer.... wink.gif

8) KNOW YOUR STUFF. People love to hear you speak authoritatively about what you have and what you serve. I have 33 flavours and 8 brands and I can tell someone about each and every one. People love when you can do that and will tell their friends "that guy knows his stuff."

I'll add to this later, and I know it kind of rambles, thats cause I've had one day off in the last 10 weeks.

Questions? laugh.gif Edited by mushrat

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QUOTE (mushrat @ Jun 25 2007, 03:34 PM) <{POST_SNAPBACK}>
Don't even think it, get a real job, with a reguar pay check, benefits, vacation time. That sorta thing. 9 out of every 10 new businesses fail. So the next 9 of you are doomed. rolleyes.gif

Still here? Ok. Here's what I have learned.

1) Get en EIN number. This is your federal Tax ID number. You can get it online.

http://www.irs.gov/businesses/small/articl...=102767,00.html


With this companies will show your their wholesale catalogs and anyone you deal with locally will know you are atleast a little serious about this whole thing.

2)Visit your state government site. Find out what it takes to register a business in your state. You'll also have to register with the Federal government. State registration will cost you . Here ion NC it was $125. The federal registration is free. Figure out what kind of business you want to be. S corp, LLC, Sole Proprietor? Going to run it yourself? Have partners, Investors, Bank loans (heh, ya right). Figure out what kind of business you want to open. I have a piece of Business software by Quicken, I'll get the name tonight, that can help yu with everything including the legal forms, both Federal and State, It costs about $100 but covers EVERYTHING including forms for partnerships, loans, bills of sale, the works. So we're up to a little over $200. Can't afford it? How the heck you gonna support yourself while the business is starting up?

3)Look around for a place. If not the actual place you are going into then one like it in a similar area. Find out what the rent is going to be. See if the realtor will let you see utility bills and such. Find out what insurance is going to be. Not to mention Permits.

4)Already being incorperated will help get people to take you seriously.

5)Start adding up costs. How much to get the place set up the way you like it, rent and utilities, stock for in store use, retail stock, PAY. Even if you don't end up being able to pay yourself at first, figure in a fair salery. Employees? If you are going to hire friends you better be able to fire friends. And as a start up you aren't going to be able to pay them squat, so think hard before hring your smoking buddies.

6) Now, you knwo roughly what it will cost. How much to you have? Savings? Stocks and bonds? equity in your hourse? No matter what they say, even with the best business plan, most banks nor the SBA are interesting in funding a start up, especially if you are doing anything with food, and especially if you dont have assets equal to what you are asking to borrow to put up for collateral. Don't let that keep you from trying, but don't count on that sort of funding. I used a private investor plus all the money o could save for about a year from tax returns,bonuses at work, alittle from each pay check. If you can find an individual or 3 who want to plunk down some cash for a decent return, go for it. Use a legal form or a lawyer to draw up a promessory note and run.

7) decide how much you are going to have to make each month to pay off everyone. Start working prices from there. Excel is your friend. figure out if you can sell enough to make it worth your while. Check the competition if there is any. My closest competition's entire staff comes to MY place to smoke, Including their hookah packer.... wink.gif

8) KNOW YOUR STUFF. People love to hear you speak authoritatively about what you have and what you serve. I have 33 flavours and 8 brands and I can tell someone about each and every one. People love when you can do that and will tell their friends "that guy knows his stuff."

I'll add to this later, and I know it kind of rambles, thats cause I've had one day off in the last 10 weeks.

Questions? laugh.gif


your my hero... ive wanted to know about how to get into doing something like this... too bad im only 19... and the laws where i live are quite strict... sad.gif hopefully when i do get some money by then hookah lounges arent like starbucks lol

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LOL to add to Mush:

If you are young, well show up with A LOT OF CASH IN HAND. Otherwise they will not take you seriously. Trust me I have had 2 realtors not even show up. They had no idea of our age but found out about us through other means.

Money talks, if you do not have it they do not want to deal with you. They just think its a bunch of college kids who are dreaming and wasting their time.


Life is a whole lot different when you show up to their office with large amounts of money and ready to throw down.



Mush gonna send you a PM. Got a question on something.

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The cash is good...second best is giving them your Corperation name....

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Finding the right broker is a challenge especially if its your first commercial lease. If you get lucky you'll find a young broker who works for a prestigeous company and no matter what property management company they call you're going to get an answer. Typically your broker's payment will be built into your lease, unlease you hire a broker and understand broker rates. That is an advantage b/c then your boker is working for you and he will get the best rates for you. If you've got a middle man working the deal for you and he's getting paid by the close of the lease through the property manager then he might lean towards giving you the shaft so to get a higher commission.

Either way - read,read read about commercial leases b/c they will do anything to make extra money. Edited by 40thieves

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I have been considering setting up a "hookah catering" service, and setting up hookah parties in private homes. Here is the plan:

Get a van to transport all of the equipment to the residences.

Purchase 5 or so hookahs, and required tobacco, coals, etc.

Have turkish coffee, dates/apricots/figs,etc. Also arabian sweets and candies.

Get arabian music CDs and cassettes.

Have carpets, etc. to take along.

Have my wife dressed up in "Harem Girl" outfit as assistant.

Carry the party equipment to the residence, set up hookahs, play music on the portable stereo.

Teach the hosts/guests hookah history/etiquette,etc.

Charge $100 for each party.

This way I have minimal overhead costs, and if the demand is there, I could get a second van, and bring on additional staff.

If the business takes off, I could get a "fixed" location, and go on.

Has this been tried? What do you think about my chance to make it a success? Since my initial outlay is so small, If it does not "fly", I am not out but a few hundred dollars.

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QUOTE (cemab4y @ Jun 25 2007, 11:25 PM) <{POST_SNAPBACK}>
I have been considering setting up a "hookah catering" service, and setting up hookah parties in private homes. Here is the plan:

Get a van to transport all of the equipment to the residences.

Purchase 5 or so hookahs, and required tobacco, coals, etc.

Have turkish coffee, dates/apricots/figs,etc. Also arabian sweets and candies.

Get arabian music CDs and cassettes.

Have carpets, etc. to take along.

Have my wife dressed up in "Harem Girl" outfit as assistant.

Carry the party equipment to the residence, set up hookahs, play music on the portable stereo.

Teach the hosts/guests hookah history/etiquette,etc.

Charge $100 for each party.

This way I have minimal overhead costs, and if the demand is there, I could get a second van, and bring on additional staff.

If the business takes off, I could get a "fixed" location, and go on.

Has this been tried? What do you think about my chance to make it a success? Since my initial outlay is so small, If it does not "fly", I am not out but a few hundred dollars.


1. of all you are going to need more than 5 hookahs its more like 15 20
i just caterd a party on saturday i brought 15 with me and i still needed more
2. a standerd price of $100 dollars is a bad idea due to the fact that hookah supplys are not cheep and gas as well what you shold do is charge by hookah
@ the MEd-fusion party i caterd at a club i charged 15-20 a hookah for 30 mins by the end of the night i closed around $ 375.
and that was a bad night... nothing beter than a bunch of drunk arabs who want to show off how much money they can spend.
3. only carry 3-4 flavors
4. label your hookahs by flavor and by nuber via stickers or marker
5. keep a chart on what time a hookah went out and when it is soposed to come in.
6.at the end of the time ask them for a re-fill or just take it in.
and that should be it just rember dont charge a flat rate unless its a high one try to average how much each hookah will cost you light up.

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QUOTE (mushrat @ Jun 25 2007, 03:34 PM) <{POST_SNAPBACK}>
6) Now, you knwo roughly what it will cost. How much to you have? Savings? Stocks and bonds? equity in your hourse? No matter what they say, even with the best business plan, most banks nor the SBA are interesting in funding a start up, especially if you are doing anything with food, and especially if you dont have assets equal to what you are asking to borrow to put up for collateral. Don't let that keep you from trying, but don't count on that sort of funding. I used a private investor plus all the money o could save for about a year from tax returns,bonuses at work, alittle from each pay check. If you can find an individual or 3 who want to plunk down some cash for a decent return, go for it. Use a legal form or a lawyer to draw up a promessory note and run.


Yeah, if you are young or opening your first place, a bank loan really isn't much of an option. You are gonna have to have access to cash or capital if you wanna open your own place (this goes for all business, not just hookah lounges of course).

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The catering thing... is interesting.. and a lot of the time.. if you are at a club or party with 300+ people... and they have already paid to get in to where they are... they don't want to pay extra money for smoking a hookah...
ALSO... it's quite illegal.... hahaha.. as I found out =o) You need an actually place of business in order to sell tobacco products.

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I thought about the hookah catering thing a lot as well, but i wouldn't be charging the people at the party, if im doing it, i want to charge the organization throwing the party. The deep pockets. Setup a tip jar for everyone there, but the people bankrolling the event are the people you want paying.

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on the conterery they do pay because they want to look cool smoking a hookah while every one eles is smoking a cigerete. i have another party to cater next week and and if you would like to see how many people actule buy a hookah from me then speek. as for legality that is questionable. though i partner in a cafe and have the licence there is no such licenece to operate that kind of bussness un less it is in a C2 zone but money is money... .

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I was told you need an actual location to sell tobacco out of as well.

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QUOTE (Scoop @ Jun 26 2007, 05:05 PM) <{POST_SNAPBACK}>
I was told you need an actual location to sell tobacco out of as well.


I wonder if that is a federal or state law since it seems both of you are from CA... And can you get around it by having a physical location of business but not actually operating in that location. EG a cafe/storefront that you are based out of, but running the party down the road...

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just realized Ill be going to college 15-25 mins from mushy's longue biggrin.gif Ill def have to stop by

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Nope... You are only allowed to sell tobacco products at the location your store is at.. lOL..

trust me.. I went over this time and time again..

I tried to find loop holes... and there werent really anything worth paying for...

LOL.. as for looking "cool" by smoking hookah...

Yea

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Ill be going to winthrop in rock hill,sc but I gotta travel to charlette(sp?) for a cross-town class, and if Im not mistaken chapel hill, isnt that far away

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QUOTE (Erica @ Jul 2 2007, 04:33 PM) <{POST_SNAPBACK}>
LOL.. as for looking "cool" by smoking hookah...

Yea



+1 to Erica for that.

A Couple of companies in the uk offer this service. I'm not sure how successfull they are.

If you owned a lounge I guess it would be possible to 'sell' the tobacco from the lounge... But serve it at a remote location?

JD

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Anybody have any idea about the actual laws for a smoking establishment in Upstate New York? Smoking in regular bars is illegal. I have looked but cannot find the actual smoking law for the state. Thanks for any help.

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QUOTE (Scheetz @ Jun 25 2007, 01:00 PM) <{POST_SNAPBACK}>
LOL to add to Mush:

If you are young, well show up with A LOT OF CASH IN HAND. Otherwise they will not take you seriously. Trust me I have had 2 realtors not even show up. They had no idea of our age but found out about us through other means.

Money talks, if you do not have it they do not want to deal with you. They just think its a bunch of college kids who are dreaming and wasting their time.


Life is a whole lot different when you show up to their office with large amounts of money and ready to throw down.



Mush gonna send you a PM. Got a question on something.


Mush think you could send me those files @ paramxgrewal@hotmail.com /

i dont have an EIN im in canada, but i graduate in dec and have 1.5 years accounting experience + a 3 yr accounting diploma. I've managed small companies (u.p.s online store i did all the work for them, and now another manufacturing company i do all the branch accounting).

Im just curious on how much it cost you etc on set up and such ?

also curious don't the smoking by laws hurt business? or is that not started in the u.s yet?

i was planning on buying a beachfront house by lake huron and paying it off over the next 4 years, as those realistate values aughta hit a million or two in 10-15 years

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For the catering:

put it into large tins, label is at the herbal insense stuff 99% of the time if a cop hassles you (1% chance) they will be 99% of the time stupid and believe you.. assuming you carry 1-2 boxes of the herbal stuff which appears to be missing some i.e used up smile.gif . I can't see it as a profitable night though... you'd have to charge like $300-400 cdn to make it worth your while. Edited by Brownman18

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thanks for the information mushy. expect an email the second weae of august with some questions.. thats when I hope to get things moving into full gear wink.gif

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QUOTE (jaker29902 @ Jul 2 2007, 04:46 PM) <{POST_SNAPBACK}>
Ill be going to winthrop in rock hill,sc but I gotta travel to charlette(sp?) for a cross-town class, and if Im not mistaken chapel hill, isnt that far away


You're mistaken. Charlotte -> Chapel Hill is on the order of 3 hours. I used to live about an hour north of Charlotte and it was 2 and a half to Chapel Thrill and that was with a straight shot down I-40, which you don't have.

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There is a lot more to opening a hookah lounge. For example:

1. Know your market. You need students, students, students. Only students.
2. Build your store cheap. Hire a service (like ours) or do it yourself.
3. Know your product. If you make a crappy hookah, say goodbye to repeat customers.
4. Set realistic expectations. It takes hard work to make money in this business.
5. Diversify your cash flows. Hookah sales alone won't let you "make it".

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