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mushrat

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

262 posts in this topic
ok folks here are all my files I used for opening my bar. The numbers are old but you'll get a good template.

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Thanks, Mush, for posting those. Opening a hookah bar off campus looks a lil bit more friendly every day. And I get countless requests for it. I'll probably be writing up my own business proposal while I'm home for Christmas break.

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I really enjoyed reading through your business proposal and everything else there.
I noticed one thing. You said for a QT, it would be 15 dollars. Now why is that? Do you get a discount because you're a hookah bar or because it was actually that price when you opened it?

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[quote name='rhineholt' date='13 December 2009 - 01:46 PM' timestamp='1260737175' post='438671']
I really enjoyed reading through your business proposal and everything else there.
I noticed one thing. You said for a QT, it would be 15 dollars. Now why is that? Do you get a discount because you're a hookah bar or because it was actually that price when you opened it?
[/quote]

Wholesale pricing.

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[quote name='cotsi95' date='13 December 2009 - 03:08 PM' timestamp='1260738485' post='438677']
[quote name='rhineholt' date='13 December 2009 - 01:46 PM' timestamp='1260737175' post='438671']
I really enjoyed reading through your business proposal and everything else there.
I noticed one thing. You said for a QT, it would be 15 dollars. Now why is that? Do you get a discount because you're a hookah bar or because it was actually that price when you opened it?
[/quote]

Wholesale pricing.
[/quote]

Thought so. Thanks cotsi.

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Hmm..I dont remember what the deal was. It was wholesale of course, I ended up ordering sevberal thousand dollars worth of hookahs to start with. As I said, prices are all VERY out of date so don't compare the numbers in there to anything resembleing reality now. :)

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[quote name='mushrat' date='13 December 2009 - 10:05 PM' timestamp='1260763534' post='438800']
Hmm..I dont remember what the deal was. It was wholesale of course, I ended up ordering sevberal thousand dollars worth of hookahs to start with. As I said, prices are all VERY out of date so don't compare the numbers in there to anything resembleing reality now. :)
[/quote]
heh, i was about to say "mush, you might want to raise your prices a bit" but that explains it, lol.

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[quote name='bradleyclark86' date='13 December 2009 - 03:28 PM' timestamp='1260736102' post='438670']
Thanks, Mush, for posting those. Opening a hookah bar off campus looks a lil bit more friendly every day. And I get countless requests for it. I'll probably be writing up my own business proposal while I'm home for Christmas break.
[/quote]

As far as opening a hookah bar on campus here's a little trick I used to drum up more interest in the bar before I even considered opening the doors. Make a facebook group, explain what you want to go on and make it seem very ambiguous by not associating yourself directly. That way people don't base their opinions on it from their opinion on you. Use terms like "the owners" or "we" then have a poll, ask people to invite their friends and offer a cash prize to be randomly awarded on a certain date. I did $10 and one day I went through, numbered everyone off and asked a friend to pick their favorite number out of the list (without them knowing what it was for) and gave the person their prize. You could even give one for the most invites to the group. It really upped the interest in it and helped out the hookah bar someone opened up later on here

- although the hookah bar closed in 6 months. Mainly because I visited with friends one time, critiqued it, explained to people why they shouldn't spend their money there and boom, it's gone. They weren't doing anything right and were in it for the quick buck. Beware people like me who know what they're doing and have pull with people on campus they can make or break you. Your best option is to figure out what the experienced hookah smoker (like yourself I'm sure) would want and everyone less experienced will love it too. The hookah bar I'm speaking of set it by their own "smoking with friends occasionally, limited knowledge" standard and it failed as a result.

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[quote name='liquidglass' date='14 December 2009 - 05:52 AM' timestamp='1260787961' post='438845']
[quote name='bradleyclark86' date='13 December 2009 - 03:28 PM' timestamp='1260736102' post='438670']
Thanks, Mush, for posting those. Opening a hookah bar off campus looks a lil bit more friendly every day. And I get countless requests for it. I'll probably be writing up my own business proposal while I'm home for Christmas break.
[/quote]

As far as opening a hookah bar on campus here's a little trick I used to drum up more interest in the bar before I even considered opening the doors. Make a facebook group, explain what you want to go on and make it seem very ambiguous by not associating yourself directly. That way people don't base their opinions on it from their opinion on you. Use terms like "the owners" or "we" then have a poll, ask people to invite their friends and offer a cash prize to be randomly awarded on a certain date. I did $10 and one day I went through, numbered everyone off and asked a friend to pick their favorite number out of the list (without them knowing what it was for) and gave the person their prize. You could even give one for the most invites to the group. It really upped the interest in it and helped out the hookah bar someone opened up later on here

- although the hookah bar closed in 6 months. Mainly because I visited with friends one time, critiqued it, explained to people why they shouldn't spend their money there and boom, it's gone. They weren't doing anything right and were in it for the quick buck. Beware people like me who know what they're doing and have pull with people on campus they can make or break you. Your best option is to figure out what the experienced hookah smoker (like yourself I'm sure) would want and everyone less experienced will love it too. The hookah bar I'm speaking of set it by their own "smoking with friends occasionally, limited knowledge" standard and it failed as a result.
[/quote]

10-4

As far as "free advertising," I'm gonna have a lot of options. Facebook of course. I have friends in the Greek system who can spread the word. And campus recently passed this free speech thing which says that I can advertise almost anywhere. Seeing how the nearest hookah bar is 20+ miles away, in the heart of a city known for congested traffic, convenience alone will be one of my biggest selling points. Plus if I can get it within walking distance of campus as well...even better. Right now, the biggest thing stopping me is money. I more or less have a plan of action, which I will be typing up in the coming weeks while I'm home on break. Scouting a location won't be difficult either. It's just having the finances to do all this.

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I've found my best advertising has been the whole staying open battle. Front page of the biggest paper in the state doesn't hurt. :)

Plus since i get a lot of student I get articles int he student paper all the time. Any publicity is good publicity.

There are ways to do a hookah bar on very little money.

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Howdy folks, I'm new here. I'm ruminating pretty seriously about opening a hookah lounge myself, and one thing I'm trying to figure out is how important the presence of alcohol would be. In my opinion it would be [i]wise[/i] to offer beer as I'd probably make a bigger profit margin off that than the hookahs themselves (and correct me if I'm wrong). I'm in Chattanooga TN, and from what I understand about TN law, the only way I could serve beer was to restrict the establishment to 21+. Personally I would like to include the 18+ crowd, and from observing the two hookah bars in Murfreesboro TN (why there's two in Murfreesboro and none in Chattanooga to my knowledge is beyond me, but anyway) I could allow customers to bring their own beer. That way, 18+ folks can smoke and 21+ can drink. Is serving beer, or allowing the consumption of beer, that important?

Also, how essential is it to preserve a traditional middle eastern atmosphere?

Thanks for all the helpful info on this site.

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here in Knoxville you have to be 21+ to allow any smoking whether there is alcohol or not. there is even a diner here that is 21+ so their patrons can smoke. As far as I can tell there is only one hookah bar here and it is an Egyptian restaurant that after 9 pm kitchen closes and hookahs come out. So they are family friendly till 9 then 21+ after.

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-Bump-
Mush, I'm looking into a venture in AZ... many people have talked about AZ (NY being the only state mentioned more from what I can tell), but there is still colleges that aren't catered to and the students are voicing a demand for a hookah lounge.
With the economy now vs 2006 for instance, what do you think roughly the opening cost for hookah lounge of the below specs would be:
[list][*]$500 monthly rent for location (seat 10-15)[*]shoot for 8 hookahs (minimum quality without being crap) + 4 extra bowls[*]some amount of shisha (whatever you recommend)[*]not selling other forms of tobacco[*]not including initial stock of soda/energy drinks[*]business license (Arizona), Feds free from what I read[*]tobacco license[/list]I'm sure there are factors I'm not thinking of, please bear with me. Thanks for any input

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hmm..do you think you can make the money off a 10-15 seat hookah lounge to actually make it worth your while?

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I dont know, i plan on having wifi and (simple) coffee during the day so me/friend can hang out and surf the web, play video games, and hopefully make sales. Outdoor is popular in tempe, but prescott is 10 degrees lower and can get snow in the winter. The place has not been picked yet, but that was what one the locations i looked at was. Could fit 25, but not comfortably i think.
Hmm, an estimate good ratio of copacity/monthly $$$ may be helpfull. Lol noob questions.
I'v ran some numbers, it would be profitable, but its probably not very accurate.

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[quote name='azbrian' date='17 January 2010 - 02:17 PM' timestamp='1263759474' post='446021']
I dont know, i plan on having wifi and (simple) coffee during the day so me/friend can hang out and surf the web, play video games, and hopefully make sales. Outdoor is popular in tempe, but prescott is 10 degrees lower and can get snow in the winter. The place has not been picked yet, but that was what one the locations i looked at was. Could fit 25, but not comfortably i think.
Hmm, an estimate good ratio of copacity/monthly $ may be helpfull. Lol noob questions.
I'v ran some numbers, it would be profitable, but its probably not very accurate.
[/quote]

um, not trying to burst your bubble, but i highly doubt you are going to be able to surf the web and play video games while making money. i have never owned my own business before, but i have talked to a lot of people who have and it sounds like a TON of work. if you want to properly run a business and make some money, you are really going to have to put some serious time into it.

also, in regards to what mush was talking about...unless your prices are going to be really high, or if your customers turnover at a high rate during the day, you probably won't make much money. especially if you are going to offer amenities in addition to hookah (wifi, coffee, etc) people are going to want to stay longer, thus decreasing your ability to earn more money off the next person who walks in to take the seat. one way to look at your numbers is figure out how much money you are making per square foot of space...then make a goal based on that, see what you need to do to accomplish that.

like i said, i have never owned a business before, but i am in college majoring in accounting and going to try to pick up a minor in finance, so i have had some exposure to this in the classroom (yes, classroom is much diff that real life) but i have also talked to a lot of people who have owned their own business, many of which have succeeded and many of which have failed.

heck, i worked at a bakery one time for an entrepreneur. she had a small building which she rented, kept the operation small but steady. then, a tornado blew the building down, so then a couple years later, she talked a guy into building a brand new building that she would rent. it was a much bigger establishment, nicer location, newer equipment....i went to work there for about a month before i decided to call it quits because i just didn't see it working out, i thought she invested way too much money into it, the building was too big for her operation, and overall i didn't like her plan...guess what? about 4-5 months later, it went under. and she WAS a hard worker, there all the time. she just didn't have a good plan set forth. you gotta look at how much clientele you plan to have and base a lot upon that. also, you have to look at the minimum amount of revenue you will need to stay afloat and see if you think you will be able to get enough business to support that revenue. if you think you will have 10-15 people show up, figure out how much you gotta make off that number, if it looks good, go for it, if not, look at something else.

i dunno, i know it all sounds like a jumbled up mess, but everytime i had one though, i got another then another because everything just builds on everything else, its one big picture. just be prepared, unfortunately, there is a high failure rate for new businesses. I do believe AZ is pretty into hookah though, so you may have a good adventure. hope this helps, and mush, if you see anything i am saying that is bullshit, feel free to call me out on it. oh, and eric too, if you see anything i said that is bullshit, feel free to mention it as well.

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delSol_si, thanks for your input.
I know a few of the hookah lounge owners here in AZ, although they don't have much interest in talking to there non-Arab hookah entrepreneurs. During the day, their locations are closed and they are in school or sleeping. These guys seem to be running successful businesses, who knows what there books look like. Also, free wifi is common for the hookah lounges here in AZ... almost 100% of them offer it but I've never seen people using it. But, if I were to sell hookah all day long and provide coffee... might be able to snag some students on lunch or "working on homework". Once daytime sales end, the night crew isn't likely to packing there Macbook, they will be there for hookah and friends. I wan't to focus on the social aspect of smoking sheesha rather than the club scene like many of the places here in AZ. Prescott is very laid back, mostly old Western themed stuff and hippies.
We've been tossing around some ideas to promote daytime activity during the weekdays even. We are video game nerds, I'm full blown geek (I program for a living), so allowing people to bring there game systems on certain weeknights sounds like a good idea.

Mush, I was looking over your business costs and evaluating my own. Insurance is the primary wild card, I'm not sure at all what it will cost. Otherwise, my calculations come out to be less than $15,000 after expense padding. I've attached my Microsoft Excel generic document I've started filling out. It doesn't include license costs, living, or any costs I don't expect yet (duh). This is still some early stage calculations.

Hey, thanks again for input, even if you are shooting my dreams down. Lol

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hmm..you may want ot send me the attachment. I don't see it in your post.

A few things. If you get people used to coming in and hanging out diring the day when it's slow, they will start doing it at night when you need the room. Trust me on this one. While it's good to have regulars, make sure those regulars are spending money, not just friends who are hanging out because it's a cool place to go and figure they dont have to buy anything cause they are your friends. Know what I mean?

As for insurance, find a few agents and go in and talk to them. If you tell them what you are planning they can give you quotes.

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I'll try attaching again... I think I skipped the step of click "Attach This File". (Side Question: Why not allow upload of .xlsx files? I had to zip it to upload)

[quote name='mushrat' date='19 January 2010 - 07:14 AM' timestamp='1263910490' post='446390']
A few things. If you get people used to coming in and hanging out during the day when it's slow, they will start doing it at night when you need the room. Trust me on this one. While it's good to have regulars, make sure those regulars are spending money, not just friends who are hanging out because it's a cool place to go and figure they don't have to buy anything cause they are your friends. Know what I mean?
[/quote]

I'm seeing a recurring trend of NOT letting friends have anything to do with the place. Outside of the friends thing, particularly in town like Prescott, some of the most popular places during the daytime hours to hang out are places with Wifi. I'm not sure if this is because the people don't have there own internet, they want to be social, or they want to make a show of their fancy Macbook. It was just an idea, it may not work out, but I will probably test for that town. If it proves not profitable, I will stop that practice. One additional reason why I'd want to be open during the day, I'm a web application developer and generally sit infront of a computer for 5+ hours a day anyways, might as well sell a soda or hookah while I'm at it. You may still find this idea stupid.


As for insurance: I will look into that, State Farm provides excellent private insurance, curios how there business insurance pans out.

[b]Again, thanks for the help.[/b]

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Hey there mush. hows business?? hope that all is well. i had a quick question what is the difference between brand hookahs and chinese hookah? is there really a difference? and if there is what is it in? thank you.

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I'd HIGHLY suggest allowing people to use their debit/credit cards. I NEVER carry cash, yes that sucks at some places but I hate carrying cash.. And I think craigslist may be your friend, but you may want to invest more than just 200 in furniture. As that will get you maybe 2 or 3 couchs, what about a small table with 4 chairs or even 2, because that would be an extra 8 people right there..

What happens if a light goes out, have to replace it, personally when I open my lounge, I will be getting hardwood floors so if your place doesn't have hardwood yet I'd get it, although thats just my preference (I want to as what happens if a coal drops and starts a fire.)

Plus I'd suggest getting enough money to last you minimum of 6 months if not a year in advance because you will be losing money at first and just be starting to begin your business and just as a backup. Reason why I say this, is your alloted money to your shisha/coals. It will cost more than just 600 for shisha and coals for 1 year. Me and my friends alone use about 100 coals in about a month. And yes I realize 600 is a lot of shisha, BUT you have a variety and you will be selling out of some but not others and need to restock that popular flavor.. And yes 100 of coals is roughly 1500-2000 coals, (I dont know the wholesale values yet so I may be wrong) But you could use those really quick.. Probably in 6 months with owning a lounge...

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@Bsw[b]
Credit Cards[/b]: I haven't looked into what the cost is to get the equipment and account to handle plastic transactions. Estimate cost anyone?
[b]Furniture[/b]: I have some furniture to use, but maybe I will allot more to it.
[b]Money[/b]: I will get a loan for more than what my start-up calculations come out to, just haven't decided on the padding yet.
[b]Flooring[/b]: I don't know what the location will have for floors, if it is carpet I will need to remodel.
[b]Startup Shisha & Coals[/b]: That amount I budgeted for is not for yearly, that was for initial inventory. We would buy more as needed. Wouldn't want to buy too much shisha before finding out the local favorite...

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hey there azbrian i was wondering if you ever got a reply from mush regarding you cost sheet?? also do you happen to know the difference between chinesse hookahs and brand hookahs?? thanks

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[quote name='anthony' date='26 January 2010 - 10:51 PM' timestamp='1264571479' post='447931']
hey there azbrian i was wondering if you ever got a reply from mush regarding you cost sheet?? also do you happen to know the difference between chinesse hookahs and brand hookahs?? thanks
[/quote]

If you don't see an answer here you are looking for, I didn't get it from Mush.
I'm not sure the difference, I haven't seen references to "brand" hookahs before. In my experience, Chinese hookahs are usually more acrylic and chrome than classic hookahs.

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sorry, ive been dealing with a lot of outside the forum shit. I'll catch up on the thread and post info later today when im sitting on my ass at work. :)

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