Hookah Bar and Lounge Business Plan [Sample Template]

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Are you about starting a hookah bar & lounge? If YES, here is a complete sample hookah bar business plan template & feasibility report you can use for FREE.

The truth is that, if you choose to start a business just for the sake of making money, you are likely going to struggle to grow the business.

When the going gets tough as expected, you are likely going to pull out. One business that falls under this category is a hookah bar; you cannot successfully run a hookah bar business if you aren’t a smoker yourself.

The fact that The World Health Organization (WHO), in conjunction with Governments of various Countries are clamping down on smoking in public places just in a bid to protect non- smokers from the harmful effect of smoking makes hookah bar welcome loads of clients who usually love to share their experience with friends (smoking tobacco with friends) in a cozy environment.

Right there in the Airports, Cinemas, Shopping Malls and Public places in general, you might have noticed the “Smoking Not Allowed” signs hung at various spots informing the general public that the area is a no smoking zone. However, if you took your time to make enquiry, you would find that there are hookah bars and cigar lounges just around the corner.

Banning smoking in public places is actually a blessing in disguise for people with the intention of starting a hookah bar or a cigar lounge.

Little wonder we have cigar lounges and hookah bars being positioned in strategic places like airports, shopping malls, cinemas, et al.

Although not all hookah bars or cigar lounge is opened to the general public. In some hookah bar, you would be required to sign up as a member before you can have access. Below is a sample Hookah Bar business plan template that can help you to successfully write your own with little or no difficulty.

A Sample Hookah Bar Business Plan Template

1. Industry Overview

The hookah bar / lounge which is also known as a shisha bar or den, especially in united kingdom and some parts of Canada is an establishment where patrons share shisha from a communal hookah or nargile which is placed at each table.

This is a location where tobacco smokers can purchase and smoke tobacco and cigars freely without the fear of breaking the law of a country or city. Businesses in this industry usually provide limited food and alcohol services as a means of increasing their revenue generation.

According to the American Cancer Society – ACS, hookah basically a flavored tobacco and it is smoked out of a ‘hookah’ water pipe. The tobacco is often called shisha which is a higher grade hookah with only molasses and flavoring added. It is a centuries old practice and most likely originated from india.

Hookah bars are mostly found in college towns and urban areas and are regarded by some as a trendy way to socialize and embrace multiculturalism. Some people of Middle Eastern or South Asian extraction consider them a continuation of their own cultural traditions.

Some hookah bars have well-equipped kitchens and are more similar to wine bars. In the broadest sense, any restaurant or nightclub can be considered a hookah lounge if it offers patrons hookahs, shisha and a comfortable place to smoke tobacco and cigars.

Because of several state anti-tobacco laws, most Hookah bars have made the transition from smoking traditional shisha to smoking herbal shisha because it contains no tobacco or nicotine and is legal indoors in areas specific to the prohibition of tobacco and cigar smoking. Besides, herbs do produce tar when they burn.

In recent time, the Hookah bars cum Cigar Lounges industry has made a strong comeback in the united states over the last five years as a large increase in tobacco consumption has boosted the demand for tobacco related products. In the face of regulatory hurdles in obtaining exemption from state indoor smoking bans, both industry participation and revenue have grown at rapid rates since 2010.

No doubt, as the economy continues to grow and improve over the next five years, more consumers will likely indulge in premium cigars and tobaccos at high-end hookah bars or cigar lounges, helping the industry sustain its growth and widen profit margins. So also, with the United States recent steps toward normalization of relations with Cuba will definitely expand access to the country’s high-end cigars and tobaccos, providing an opportunity for the industry to maximize profits.

The Hookah Bars cum Cigar Lounges industry is indeed a thriving industry in the United States, Canada and in most countries in Europe, Statistics has it that the Cigar Lounges and Hookah Bars industry in the United States of America, is worth $2 billion, with an estimated growth rate of 11.0 percent.

There are about 7,684 legally registered and licensed cigar lounges / Hookah bars businesses scattered across the United States of America and they are responsible for employing about 17,980 people. The industry is an open industry hence a low level of market share concentration.

In order to invest wisely, you need to carry out a research on the industry or line of business you intend investing in. if you are opening a hookah bar for the first time, it is important you conduct a thorough research so that you can be well informed and guided when making the choices of what you want from the array of options that are available to you.

Researching will open you up to the various opportunities you can leverage on and how you can access them. It’s not compulsory that you must be the one to carry out the research; you can pay professionals to help you garner the needed information.

Any entrepreneur who wants to start a hookah bar business in the US would definitely be confronted with tough competition out there. The truth is that, you will not only compete with hookah bars /smoke shops / cigar lounges in your location or city, but you would be competing with every other entertainment options such as wine bars, night clubs, restaurants, casinos et al where cigars and tobacco et al are retailed and can be freely smoked.

For instance, people go to bars to drink, smoke and socialize and they tend to get more when they go to night clubs or other entertainment hub. In night clubs, people do not only drink, smoke and socialize, but they also dance if they choose to and get entertained.

2. Executive Summary

Purple & Blue Hookah Bar®, LLC is a neighborhood hookah bar cum cigar lounge that will be located on the ground floor of one of the busiest campus communities with a robust international in the United States of America – The University of California – Los Angeles. We have been able to secure a one-year lease of a vacant shop within the campus facility. We are fortunate to secure a facility with an option of renewal for 5 years at an agreed rate that is favorable to us.

We are going to be involved in the sale of traditional shisha, sale of herbal shisha sale of cigars, sale of tobacco-related accessories, sale of other tobacco products, sale of food and drink, mass marketing cigars and cigarillos, sale of premium cigars, providing a cigar-friendly smoking environment, sale of assorted red and white wines, sale of beer and liquor, sale of distilled spirits, martinis and tobacco et al to campus students and visitors in a conducive environment that is specifically designed for socializing and networking and free from all forms of violence.

Purple & Blue Hookah Bar®, LLC is designed and constructed to meet both the health and safety standard as recommended by the local authority. Our customers are going to be treated with good music at all times. We have made provision for live band, karaoke, country side music and jazz et al. This will be played at the background to create the ambience that our customers will cherish.

We are in business to make profits at the same to give our customers value for their money; we want to give people the opportunity to choose from the wide range of shisha, assorted cigars, tobaccos and drinks that are manufactured both in the United States of America and overseas.

Purple & Blue Hookah Bar®, LLC will go all the way to make available in our hookah bar most of the shisha, tobacco and cigar brands produced in the United States of America and in other parts of the world especially in countries like Cuba, India and Italy.

We aware that hookah bars easily attract intellectuals and business people and we know that the campus community is one of the places where we can easily tie down these people especially when they have to socialize.

We will ensure that all our employees are selected from a pool of qualified and customer centric people in and around Los Angeles – California and also from any part of the United States. We will make sure that we take all the members of our workforce through the required trainings that will position them to meet the expectation of the company and to compete with other players in the United States and throughout the globe.

Purple & Blue Hookah Bar®, LLC is owned by Clarence Williams and his immediate family members. Clarence Williams has managed several cigar lounges, smoke shops, bars and night clubs in Los Angeles and Las Vegas prior to opening his own hookah bar. He has the magic wand to attract people who go to cigar lounges and hookah bars on a regular basis.

3. Our Products and Services

Purple & Blue Hookah Bar®, LLC is going to operate a standard and health compliance hookah bar in University of California – Los Angeles that will make available shisha, most of the cigar products and accessories that can be found in a standard cigar lounge or hookah bar in the United States.

We will also ensure that we go all the way to make available assorted wines and alcoholic drinks in our smoke hookah bar. These are some of our product and service offerings;

Sales of traditional shisha and herbal shisha
Sales of cigars
Sales of tobacco-related accessories
Sales of other tobacco products
Sales of food and drink
Mass market cigars and cigarillos
Premium cigars
Providing a cigar-friendly smoking environment
Assorted red and white wines
Beer and liquor
Distilled spirits
Martinis
Tobacco
Sale of E – Cigars

4. Our Mission and Vision Statement

Our vision is to establish a standard, health compliance and secured hookah bar in Los Angeles – California that will be the melting pot of all lovers of shisha, cigars, tobaccos, wine, alcoholic and non – alcoholic drinks.
Our mission is to establish a hookah bar business that will make available all the brands of shisha, cigars, tobaccos, wine, and alcoholic drinks in the United States and other parts of the world at every given time to our highly esteemed customers and a place where people can network and socialize.

Our Business Structure

Purple & Blue Hookah Bar®, LLC is a business that is established to be a pacesetter when it comes to how standard hookah bar should be run in Los Angeles and even in the United States of America. We have the goal of assembling a team of dedicated workforce who will give our customers excellent customer service at all times, a team that will ensure that we will continue to have repeated customers and a team that will indeed make us the melting pot for smokers and socialites in Los Angeles.

In view of the above, we have been able to follow suits on what is obtainable in standard hookah bars and cigar lounges in the United States and perhaps improve on the structure with time when the need arises. We will work hard to ensure that we only attract people with the right mindset to help us achieve our business goals and objectives in record time.

Below is the business structure that we will build Purple & Blue Hookah Bar®, LLC;

Chief Executive Officer (Owner)
Hookah Bar Manager
Bartender / Baristas
Accountants / Cashiers
Procurement Officer
DJ
Greeters / Customer Service Agent / Table Attendant
Cleaners
Security Officers

5. Job Roles and Responsibilities

Chief Executive Officer – CEO:

Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions; providing educational opportunities.
Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
Responsible for fixing prices and signing business deals
Responsible for providing direction for the business
Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
Responsible for signing checks and documents on behalf of the company
Evaluates the success of the organization
Carries out staff induction for new team members

Hookah bar Manager:

Responsible for managing the daily activities in the hookah lounge
Ensures that the facility is in tip top shape and conducive enough to welcome customers
Interfaces with vendors
Reports to the Chief Executive Officer
Attends to Customers complains and enquiries
Prepares budget and reports for the organization
Responsible for Training and Development in the organization
Responsible for procuring of supplies and equipment
Handles any other duty as assigned by the CEO

Bartender / Baristas:

Makes lists of supplies in conjunction with the hookah bar manager / management
Assess customers’ needs and preferences and make recommendations
Arranges bottles and glasses to make attractive displays.
Serves wine and beer to guests.
Prepares alcohol or non-alcohol beverages.
Mixes drinks, cocktails and other bar beverages as ordered and in compliance with standard drink recipes.
Mixes ingredients to prepare cocktails and other drinks.
Checks identification of the guest to make sure they meet age requirements for purchase of alcohol and tobacco products.
Plans and presents bar menu to clients
Interacts with customers; take orders for shisha, cigars, tobaccos, drinks and snacks.
Prepares inventory or purchase requisitions as needed to replenish supplies.
Ensures that the assigned bar area is fully equipped with tools and products needed for mixing beverages and serving guests.

Accountant / Cashier:

Responsible for preparing financial reports, budgets, and financial statements for the organization
Provides managements with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
Responsible for financial forecasting and risks analysis.
Performs cash management, general ledger accounting, and financial reporting for one or more properties.
Responsible for developing and managing financial systems and policies
Responsible for administering payrolls
Ensures compliance with taxation legislation
Handles all financial transactions for the company
Serves as internal auditor for the company.

Disc Jockey (DJ)

Ensures that customers are entertained with the best of music per time
Manages the sound system for the hookah bar
In charge of music collections
Provides music at events.
Responsible for developing music playlists.
Interacts with public at parties.
Responsible for mixing music tracks.

Greeters / Customer Service Agent / Table Attendant

Opens door and welcome customers
Ensures that customers feel relaxed and at home
Handles customers enquiries
Assesses customers’ needs and preferences and make recommendations
Ability to sell or influence others for up selling and suggestive selling.
Provides recommendations and suggestions to guest for choosing Drinks and Snacks.
Serves customers in a friendly and helpful manner.
Determines when a customer has had too much shisha, cigar and alcohol and if required refusing any further serving on a polite way.
Demonstrates a thorough knowledge of shisha, cigar and alcoholic products, menus and Promotions
Handles any other duty as assigned by the smoke shop manager

Cleaners:

Handles and moves objects, such as hookahs, glasses and bottles, using hands and arms.
Cleans up after customers and clean work area.
Clears ashtrays as and when required.
Washes glassware and utensils after each use.
Maintains a clean working area by sweeping, vacuuming, dusting, cleaning of glass doors and windows, etc. if required.
Ensures that toiletries and supplies don’t run out of stock
Handles any other duty as assigned by the hookah bar manager.

Security Officers

Ensures that the hookah bar facility is secured at all time
Controls traffic and organize parking
Gives security tips to staff members from time to time
Patrols around the building on a 24 hours basis
Submits security reports weekly
Any other duty as assigned by the smoke shop manager

6. SWOT Analysis

Purple & Blue Hookah Bar®, LLC is established with the aim of becoming the melting point for smokers and socialites in Los Angles which is why we have taken our time to critically analyze and conduct SWOT analysis to be able to identify areas we need to work on if indeed we want to achieve our business goal.

No investor would want to invest his or hard earned money without assessing the risks involved in the venture and also his or her capability to deliver and make profits from the business. The ability to make profits from any business and to favorably compete with competitors in the industry starts with the result you get from your SWOT analysis.

In view of that, Purple & Blue Hookah Bar®, LLC hired a business and HR specialist to help her conduct SWOT analysis for the business and below is a summary of the result that was generated;

Strength:

Our strength as a company are, excellent and detailed customer service a wide range of assorted shisha, cigars, tobaccos, and alcoholic drinks both from the United States and other parts of the world. Excellent facility, excellent ambience and perfect location for a hookah lounge in metropolitan city like Los Angles.

Weakness:

Our perceived weakness could be that we are new business, and we may not have the financial muscle to sustain the kind of publicity we want to give our business.

Opportunities:

There are unlimited business opportunities available to hookah bar businesses in busy communities like University of California – Los Angeles; Los Angeles is one of the cities in the world where social life is at its peak. Besides the campus facility where our hookah lounge is located is one of the busiest in the United States and it is open to loads of opportunities due to the influx of international students especially from India and other Asia countries.

Another opportunity that we stand to leverage on is the fact that we can easily order any brand of shisha, cigar, tobacco, wine and drinks directly from the manufacturer with little or no stress.

Threat:

Just like any other business, one of the major threats that we are likely going to face is economic downturn. It is a fact that economic downturn affects purchasing / spending power. Another threat that may likely confront us is the arrival of a new hookah bar, cigar lounge or wine bar in same facility or within same location where our target market exist and who may want to adopt same Business model like us.

7. MARKET ANALYSIS

Market Trends

Despite the fact that the hookah bars cum cigar lounges industry has long existed in the United States, it is starting to fall back into fashion. Innovative flavors and different varieties of shisha and cigars have increased demand over the last five years.

Recent data from the Centers for Disease Control and Prevention (CDC) clearly indicated that 40.0 percent of people who try smoking try flavored cigarettes or cigarillos. Consequently, this industry has jumped back into a growth phase.

A close observation of the trends in the industry shows that hookah use has increased dramatically among American and European youth in recent years because of the social atmosphere it creates, and because many young adults believe hookah is a safer alternative to cigarette smoking, for that reason they do not fully understand the health effects that come along with it. In order to remain open, many hookah lounges cannot sell food or beverages. Roughly 90 percent of the cities that have put a ban on smoking in public places have exemptions for hookah bars.

Most hookah bars in the United States have chic or ultramodern elements such as glass tables, plasma televisions, and oxygen bars et al. Most bars in the U.S. require patrons to be at least 18 years of age to smoke shisha and 18 years of age to purchase (exceptions are Utah, Arizona, Alabama, and New Jersey: 19 years of age to smoke).

However the laws in some other states require the patron to only be 18 years of age to purchase or possess tobacco, which in a hookah bar, the patron is doing none of these, for that reason one is likely going to find under age teenagers in many hookah bars in the United States

No doubt, the Hookah Bars cum Cigar Lounges industry will continue to improvise on ways to increase sales. They seek to remove the association of shisha, tobacco and cigar with high – end clientele and overwhelming cigar lists and replace it with a more casual and relaxing atmosphere.

Many of these hookah lounges are furnished with nooks and cozy booths encased in rich colors and plush surroundings in hopes their guests will linger. Hookah lounges look to embrace the intellectual stimulation linked to shisha, cigar and tobacco and offer an alternative to the hookah bar scene. The phlegmatic environment lends itself to a good socializing setting with a less crowded feel and more intimate appeal.

In recent time, hookah lounges have begun to incorporate a larger variety of alcoholic drinks and food choices as part of their product offerings. It is obvious that adding these product offerings help in creating alternate source of generating sales and increasing their overall income even if they struggle to sell their shishas, cigars and tobaccos.

8. Our Target Market

Before starting our hookah lounge business in Los Angeles – California, we conducted a market survey and feasibility studies and we are certain that there is a wide range of people who would patronize our hookah lounge on a regular basis.

In view of that, we have created strategies that will enable us reach out to various groups of people who are likely going to become our loyal customer. Below are our target markets;

Corporate Executives
Politicians
Celebrities
Taxi Drivers
Socialites
Business People
Sports Men and Women
Government Officials
College Students
Tourists

Our competitive advantage

We are mindful of the fact that there are stiffer competitions in the hookah bars cum cigar lounges industry in the United States of America; hence we have been able to hire some of the best business developer to handle our sales and marketing.

Part of what is going to be our selling point is the fact that we operate a standard and health compliance hookah bar, in a perfect location (one of the busiest campus facilities in University of California – Los Angeles, the United States) for the kind of business that we run and also the fact that our hookah lounge facility is highly secured.

Another factor that will give Purple & Blue Hookah Bar®, LLC competitive edge is that we have enough parking space to accommodate the numbers of customers our hookah lounge can contain per time. We are not ruling out the fact that we have a dedicated and customer centric workforce that are willing to go the extra mile to give our customers full value for their money and time whenever the patronize our hookah lounge.

We are not ignoring the fact that we are among the few neighborhood hookah lounge in Los Angeles that sells almost all the brands of shisha, cigar, tobacco, and alcoholic drinks available in the United States of America, crafted beers, distilled spirits, liquors et al and obviously, that will surely count towards our advantage in the market place and also the robust experience of our CEO and the hookah bar manager is also a positive for Purple & Blue Hookah Bar®, LLC.

Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category (startups hookah lounges, wine bars and night club businesses in the United States) in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives.

9. SALES AND MARKETING STRATEGY

Sources of Income

Purple & Blue Hookah Bar®, LLC is established with the aim of maximizing profits in the hookah bars cum cigar lounges industry and we are going to go all the way to ensure that we do all it takes to attract our target market. The sources of income for Purple & Blue Hookah Bar®, LLC are stated below;

Sales of traditional shisha and herbal shisha
Sales of cigars
Sales of tobacco-related accessories
Sales of other tobacco products
Sales of food and drink
Mass market cigars and cigarillos
Premium cigars
Providing a cigar-friendly smoking environment
Assorted red and white wines
Beer and liquor
Distilled spirits
Martinis
Tobacco
Sale of E – Cigars

10. Sales Forecast

One thing is certain when it comes to hookah lounge business, if your hookah lounge is cozy, relaxing, well stocked and centrally positioned, you will always attract customers cum sales and that will sure translate to increase in revenue generation for the business.

We are well positioned to take on the available market in Los Angeles California and we are quite optimistic that we will meet our set target of generating enough income / profits from the first six month of operations and grow the business and our clientele base.

We have been able to critically examine the hookah lounge market and we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions that are peculiar to similar startups in Los Angeles – CA.

Below are the sales projections for Purple & Blue Hookah Bar®, LLC, it is based on the location of our business and other factors as it relates to hookah bars start – ups in the United States;

First Fiscal Year-: $120,000
Second Fiscal Year-: $350,000
Third Fiscal Year-: $750,000

N.B: This projection is done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor offering same products and customer care services as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.

Marketing Strategy and Sales Strategy

Top of the list on our marketing and sale strategy document is generating a buzz for our hookah lounge via word-of-mouth and leveraging on road show around UCL campus community.

Despite the fact that our first outlet is located inside University of California Los Angeles, the model of hookah lounge we intend running is a neighborhood bar hence we are not going to rely only on the conventional ways of marketing.

We don’t have the plans to run paid adverts on Local TV stations, local radio stations or even local newspaper but we will sure maximize every other available means to promote our business. Our unique selling proposition is that we have a collections of almost all the brand shishas, cigars and tobaccos produced in The United States in our hookah lounge, we also have assorted alcoholic drinks et al.

In view of that, we are going to adopt the following marketing strategies to ensure that we do not only attract customers but generate repeated sales from them. Parts of the marketing and sales strategies that we will adopt are;

Open our hookah lounge in a grand style with a party for all.
Introduce our hookah lounge by sending introductory letters alongside our brochure to organizations, households and key stake holders in Los Angeles – California
Ensure that we have a wide range of shishas, cigars, tobaccos, wines, beers, liquors, distilled spirits, martinis and non-alcoholic drinks at all times.
Make use of attractive hand bills to create awareness and also to give direction to our hookah lounge
Position our signage / flexi banners at strategic places all around Los Angeles
Position our greeters to welcome and direct potential customers
Create a loyalty plan that will enable us reward our regular customers
Engage on road shows within our neighborhood to create awareness for our hookah lounge.

11. Publicity and Advertising Strategy

Purple & Blue Hookah Bar®, LLC is a campus hookah bar and we will ensure that we create the buzz that will make people in our area know about us and what we do. We are quite aware that one of the effective ways of promoting our hookah lounge is to create special internal promotions which in turn will help us achieve our aim of leveraging on word of mouth publicity.

Here are the platforms we intend leveraging on to promote and advertise Purple & Blue Hookah Bar®, LLC;

Encourage the use of word of mouth publicity from our loyal customers
Leverage on the internet and social media platforms like; YouTube, Instagram, Facebook ,Twitter, LinkedIn, Snapchat, Badoo, Google+ and other platforms (music online forums) to promote our business.
Ensure that our we position our banners and billboards in strategic positions all around Los Angeles – CA
Distribute our fliers and handbills in target areas in and around our neighborhood
Contact corporate organizations, college students, business people, households, landlord associations and political parties by calling them up and informing them of Purple & Blue Hookah Bar®, LLC and the products we sell
Advertise our cigar lounge business in our official website and employ strategies that will help us pull traffic to the site
Brand all our official cars and vans and ensure that all our staff members and management staff wears our branded shirt or cap at regular intervals.

12. Our Pricing Strategy

The prices of our shishas, cigars, tobaccos, wines, beers, and other alcoholic drinks et al will be what is obtainable in the market. In fact we will try as much as we can to sell below the industry’s average so as to attract loads of customers. We also have plans in place to discount our products once in a while and also to reward our loyal customers.

Payment Options

The payment policy adopted by Purple & Blue Hookah Bar®, LLC is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.

Here are the payment options that Purple & Blue Hookah Bar®, LLC will make available to her clients;

Payment via bank transfer
Payment with cash
Payment via credit cards / Point of Sale Machines (POS Machines)
Payment via online bank transfer
Payment via check
Payment via mobile money transfer
Payment via bank draft

In view of the above, we have chosen banking platforms that will enable our client make payment for farm produces purchase without any stress on their part. Our bank account numbers will be made available on our website and promotional materials to clients who may want to deposit cash or make online transfer for our products.

13. Startup Expenditure (Budget)

In setting up any business, the amount or cost will depend on the approach and scale you want to undertake. If you intend to go big by renting a place, then you would need a good amount of capital as you would need to ensure that your employees are well taken care of, and that your facility is conducive enough for workers to be creative and productive.

This means that the start-up can either be low or high depending on your goals, vision and aspirations for your business.

The tools and equipment that will be used are nearly the same cost everywhere, and any difference in prices would be minimal and can be overlooked. As for the detailed cost analysis for starting a hookah lounge business; it might differ in other countries due to the value of their money.

This is what it would cost us to start Purple & Blue Hookah Bar®, LLC in the United of America;

The Total Fee for Registering the Business in Los Angeles, CA – $750.
Legal expenses for obtaining licenses and permits as well as the accounting services totaling – $1,200.
Marketing promotion expenses (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
The cost for hiring Consultant – $2,500.
Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
The cost of accounting software, CRM software and Payroll Software – $15,000
Cost for payment of rent for 12 month at $1.76 per square feet in the total amount of – $105,600.
The cost for facility remodeling – $25,000.
Other start-up expenses including stationery – $500
Phone and utility deposits – ($2,500)
Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
The cost for start-up inventory (traditional shisha, herbal shisha, assorted tobaccos, assorted cigars and alcoholic drinks and non-alcoholic drinks) – $16,027
Storage hardware (bins, utensil rack, shelves, glasses case) – $3,720
The cost for counter area equipment (counter top, sink, ice machine, etc.) – $9,500
The cost for serving area equipment ( glasses, flatware) – $3,000
The cost for store equipment (cash register, security, ventilation, signage) – $13,750
Office equipment and furniture – $3,600
The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al) – $4,000.
The cost of Launching a Website – $600
The cost for our grand opening party – $5,000
Miscellaneous – $2,500

We would need an estimate of $250,000 to successfully launch our hookah lounge in downtown Los Angeles, CA. This amount includes the salary of all employees and the CEO (Owner) for 3 months.

Generating Funds/ Startup Capital for Purple & Blue Hookah Bar®, LLC

Purple & Blue Hookah Bar®, LLC is a private business that is owned by Clarence Williams and his immediate family members and they intend to finance the business alone. Although they have plans to make the hookah bar manager part owner of the business after 5 or 7 years of services, but that does not stop him from reserving well over 80 percent stake of the business for himself and his family.

Since they are the sole financier of the business, they have decided to adopt the following means to generate start – up capital for the business;

Generate part of the start – up capital from his personal savings and sale of his stocks
Source for soft loans from family members and friends
Apply for loan from my Banks

N.B: Mr. Sleek Davenport and his family have been able to generate $100,000 the breakdown shows that they generated $75,000 from their personal savings and sale of their stocks and they generated $25,000 soft loans from their family members and friends. The balance of $150,000 will be generated as loan facility from the bank.

14. Sustainability and Expansion Strategy

The future of a business lies in the numbers of loyal customers that they have the capacity and competence of the employees, their investment strategy and the business structure. If all of these factors are missing from a business (company), then it won’t be too long before the business close shop.

One of our major goals of starting Purple & Blue Hookah Bar®, LLC is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running. We know that one of the ways of gaining approval and winning customers over is to properly position our hookah lounge, ensure adequate security, availability of various brand of shishas, cigars, tobaccos, alcoholic drinks and excellent customer service et al.

Purple & Blue Hookah Bar®, LLC will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and re – training of our workforce is at the top burner.

As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of three years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List / Milestone

Business Name Availability Check: Completed
Business Registration: Completed
Opening of Corporate Bank Accounts: Completed
Securing Point of Sales (POS) Machines: Completed
Opening Mobile Money Accounts: Completed
Opening Online Payment Platforms: Completed
Application and Obtaining Tax Payer’s ID: In Progress
Application for business license and permit: Completed
Purchase of Insurance for the Business: Completed
Renting of facility and remodeling the facility: In Progress
Conducting Feasibility Studies: Completed
Generating capital from family members: Completed
Applications for Loan from the bank: In Progress
writing of business plan: Completed
Drafting of Employee’s Handbook: Completed
Drafting of Contract Documents and other relevant Legal Documents: In Progress
Design of The Company’s Logo: Completed
Graphic Designs and Printing of Packaging Marketing / Promotional Materials: In Progress
Recruitment of employees: In Progress
Purchase of the Needed furniture, electronic appliances, office appliances and bar accessories: In progress
Creating Official Website for the Company: Completed
Creating Awareness for the business both online and in the neighborhood: In Progress
Health and Safety and Fire Safety Arrangement (License): Secured
Opening party / launching party planning: In Progress
Establishing business relationship with vendors – suppliers of all our needed shishas, cigars, wine, alcoholic and non – alcoholic drinks, tobacco and small chops et al: In Progress