You need to invest over $150,000 to open a standard head shop business. So also, you can start this business from a kiosk and still grow the business to become successful. The bottom line is that you can work with whatever budget you have and still establish your head shop business.
The amount required to start a head shop business in the United States is not the same across the board. This is so because an entrepreneur who wants to start a head shop business has the option of starting the business on a small scale or a large scale. This means that the amount and requirements needed to start the business will vary.
Factors That Influence the Cost of Opening a Head Shop
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Your Choice of Location of the Head Shop
Interestingly, in the United States, you cannot just open a head shop in any location or facility, because head shops are restricted to certain areas.
Because of that, if you want a location to open your head shop, then you must be ready to pay a premium. This is so because environmental influences largely drive the ease and cost of starting a business and it also applies to the cost of opening a head shop.
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The Size of the Head Shop
If you want to open your head shop in a small shop facility, then you should budget far less than someone who wants to open a shop in a large facility that can accommodate more customers or offer other related products and services.
Business consultants usually advise entrepreneurs to start small and grow big. The only reason why you should plan to open a head shop in a big facility is if you have successfully run such a business and you are planning to expand and grow the business.
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The Cost of Rent or Lease
Good enough, the combination of location and size of the shop is a major determinant of the amount you are expected to budget for rent or lease of your head shop. Note that the cost of renting or leasing a shop may vary across the board even in the same city.
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The Cost of Renovating the Facility
This cost could include the cost of painting, changing the water closet, changing the locks and keys, changing the nets, and even changing the flooring and chimney et al.
When you lease or rent a new shop facility, there is always a need for you to renovate the facility. Even if the landlord renovated the facility before leasing or renting it out to you, it might still not be to your taste.
Hence, you are expected to make the place look good and appealing to potential customers and this doesn’t come cheap especially if you want to attract celebrities and public figures in your city.
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The Cost of Furnishing and Equipping
The price of furnishing and equipping a head shop facility doesn’t come cheap, you should be prepared to dole out some cash in this regard especially if you want your head shop to be a place where people would want to spend their time and money.
Generally, you are expected to budget for display cases, humidors, tobacco grinders, lighters, and ashtrays et al. You are also expected to budget for chairs, sofas, shelves and tables, computers, flat-screen televisions, sound systems, payment systems (POS), and security gadgets (CCTV et al). No doubt, the cost of all these items will be significant in your overall budget.
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The Cost of Hiring and Training Your Staff
You may be able to operate a head shop as a sole proprietor, especially if you are starting on a very small scale. But, if you want to open a standard, well-structured business, then you, must be prepared to hire key employees.
In essence, if you are planning to open a standard head shop, then you must have a robust budget for hiring and training your staff members. The budget should also cover their salaries and other benefits.
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The Cost of Obtaining Licenses and Permits
You should budget for the cost of obtaining your business license, building and zoning permit, fire department permit, sales tax permit, music license, permits for selling items related to cannabis and counterculture items, tobacco retailer license and permit, and lastly signage permit among others.
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The Cost of Marketing, Branding, and Advertising the Business
Marketing, branding, and advertising are no doubt a business strategy that should not be wished away especially if you are going to be competing against other head shops in your locality.
With a good marketing, branding, and advertising strategy in place, you will be able to successfully announce your presence in your community and you will be able to win a reasonable market share in your city.
Of course, you should know that a good and workable marketing, branding, and advertising strategy will cost you money to execute hence you should have a budget for it.
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The Cost of Insurance
In the United States and most countries of the world, it is illegal to run a business without having the required insurance policy coverage. You are expected to have at least general liability insurance, property insurance, and workers’ compensation insurance in place.
The amount you are expected to spend on insurance policies will be determined by the risk involved in the business and for a head shop business, the risk might not be on the low end.
Please note that insurance policy covers cost money and they will increase the money you are expected to spend when opening your head shop.
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The Cost of Inventory and Ongoing Expenditures
Before you can successfully open a head shop, you are expected to have a budget for inventories or smoking accessories such as pipes, bongs, rolling papers, vaporizers, dab rigs cigarettes, tobacco, lighters, cleaning supplies toiletries, et al.
You can also make provisions for ongoing expenditures such as payment of utilities, salaries of your staff, maintenance, and repairs, and payment of tax and insurance.