Currently, electronic cigarettes are gaining more popularity than the traditional ones. This has created an incredible opportunity for several entrepreneurs who have been trying to make the most of this industry. Did you know apart from offering a variety of vaping devices, several vape shops offer customers with lounges to enjoy the recently bought vape products? Are you ready to find out whether or not you can run a vape shop?
Start by Following These Step By Step Guideline:
You have come across the best idea for a successful business, however, there is more to opening and running a vape shop than simply registering it. The steps that we have put together will ensure your vape shop is not only perfectly planned but also compliant with state laws and is registered properly.
STEP 1: Planning Is the Key To Success
There is nothing that is more important for the success of a business than a perfect plan. This will help you to take into consideration the specifics of the business and explore the unknowns. These are some of the topics for you to consider –
- You need to estimate both startup and ongoing costs.
- Study about your target market.
- How much time will you take to break even?
- Have you thought about a name for your company?
If you have not considered any of the following, then go through the detailed research that we have done on your behalf.
How Much Is It Going To Cost You To Open A Vape Shop?
Opening a vape shop won’t cost you a huge amount of capital, unlike other start-ups. Industry leaders estimate an amount of $25,000 which is enough for small business and if you want to start with a large business then the amount can be close to $50,000.
These are some of the items that your budget should consist of:
- Lease: This is going to vary based on your location.
- Accessories and e-cigarette kits: $7500
- Accessories: $20,000
- iPad and point of sale software -$2500
If you have franchising in mind, then you will require an additional amount of $10,000 – $20,000 as franchising fees.
What Kind Of Expenses Do Vape Shops Incur?
On a monthly basis, you will have to incur ongoing expenses of $7500 – $10,000. This will include –
- Lease: $2500 -$5000 per month
- Insurance: $150 per month
- Payroll and Taxes: $3,700 monthly
- Miscellaneous Fees: $250 per month
- Marketing: $100 per month
This estimate does not comprise the cost required to replenish inventory. Though this is going to be your ongoing monthly expense, the numbers mentioned above will vary based on different factors.
Research Your Target Market:
Your target clientele will be divided into a group of three. First, the first one will consist of smokers who are looking for a way to break free from their habit. This can be done by informing them about the benefits of trying e-cigarettes and explaining how they can save money in the future by simply switching to e-cigarettes.
Your next target audience happens to be the ones who already use e-cigarettes. To attract these customers, stock up on an array of high-quality products that can be availed at attractive prices. Lastly, your vape shop should be easy to locate for vacationers. This is going to ensure a steady and regular flow of customers.
How Do Vape Shops Make Money?
Vape shops earn money by selling their products.
What Is The Amount Of Money You Can Charge Your Customers?
This will vary and depend on the products sold. The price range of products can vary from $3 to $300 depending on the kind of product a customer buys.
What Kind Of Profit Do Vape Shops Generally Make?
According to reports, an average vape shop makes $26,000 approximately on a monthly basis. If your vape shop incurs a monthly expenditure of $10,000, your annual profit will be close to $120,000.
Is There A Way You Can Make Your Vaping Business More Profitable?
Yes, there are several ways that your business can boost its profits.
- Try opening kiosks in traffic generated areas.
- You need to have an e-commerce site where you can sell your products.
- Manufacturing e-liquids for your brand.
Have You Thought About A Name For Your Business?
We don’t have to tell you how crucial it is to have the right name for your business. You can go through this in-depth guide that will help you understand how you can name your business. Make sure the business name that you select is available in the form of a web domain and before someone else takes it
STEP 2: Forming A Legal Entity
When you establish a legal business entity, like an LLC it will protect you from being liable in case your vape shop is being sued. You can select from a variety of different business structures that include DBAs, LLCs, and Corporations. It is a good idea to consider the services offered by a registered agent. This is going to ensure your privacy and help you stay compliant.
STEP 3: Register For Taxes
Keep in mind before you start your vaping business, you have to register for both federal as well as state taxes. In order to do so, you have to register your vaping company for taxes and apply for EIN. This will prove to be free and easy. Acquiring your EIN will cost you nothing and is easily available from the IRS website through mail or fax. In case you are wondering what is an EIN and how it will prove beneficial for your registered company, go through this detailed article.
STEP 4: You Will Need A Bank Account For Your Business
In order to protect your personal assets, it is essential to have credit and business banking accounts. If you have the same account for your business and personal life then your personal valuables are at high risk in case your vaping business gets sued. This term in business law is called piercing your corporate veil.
Open Your Business Bank Account:
When you open a bank account for your business, it separates your company’s assets from your personal assets. Another advantage of having a business bank account is it makes both tax filing and accounting an easy task.
You should also have a separate credit card for your business expenses, it will help to keep all business-related expenditure in one place. This will also enable you to maintain the credit history of the company which will enable you to raise money in the future and invest it later on.
STEP 5: Pay Attention To Business Accounting
In order to understand your company’s financial performance, you need to record both sources of income and various expenses. When you maintain detailed and accurate accounts, it will simplify the annual tax filing procedure.
STEP 6: Obtaining The Necessary Licenses and Permits
If you fail to obtain the crucial permits and licenses, not only will you bear hefty fines but it can also be the reason behind your company closing down.
The Requirements For Federal Business:
Vaping can be defined as a form of smokeless tobacco, however, the FDA regulates both vapes and e-cigarettes in the same manner as tobacco products. From consumers to retailers and manufacturers – everyone is supposed to follow a set of federal guidelines and regulations respectively. To have detailed knowledge about tobacco retailer regulations, go through this link.
What Kind Of Requirements Do The Local and State Businesses Need To Adhere To?
You have to keep in mind there are a few licenses and permits that a vape shop business needs to operate. For further information go through the overview of state licenses and permits.
Here’s some information about local permits and licenses:
- Check with the clerk office of your town, city, or county.
- You can seek assistance from the local associations that are listed here.
Certificate of Occupancy:
Basically, vape shop businesses are operated from a storefront. Businesses that operate out of any particular physical location will require a CO or Certificate of Occupancy. This piece of certificate is an assurance that all kinds of building codes, government regulations, and zoning laws have been met.
Are You Planning To Take A Lease For A Particular Location?
If the answer to this is a definite yes, then this is what needs to be done regarding the Certificate of Occupancy.
- The responsibility of obtaining the CO falls on the shoulders of the landlord.
- Before you lease a location, you must ensure whether or not your landlord has a Certificate of Occupancy in possession or he has the ability to acquire a valid one which will be applicable to your vape shop business.
- Once a major renovation has taken place, you will have to obtain a new Certificate of Occupancy. In case your place for vape shop business opens before renovation, it is highly recommended to state a clause in the lease agreement mentioning lease payments will commence once a valid Certificate of Occupancy has been issued.
Are You Planning Build A Location or Purchase It For Vape Shop Business?
- In this case, it is your responsibility to obtain the Certificate of Occupancy from the local government authorities.
- Carefully review every zoning requirements and building codes for your vape shop business location. This will ensure whether or not your business is in compliance with the Certificate of Occupancy and you have the ability to obtain it.
Learn the details of Tobacco Laws and get acquainted with the guidelines.
STEP 7: Time To Get Insurance For Your Business
You can’t overlook the importance of insurance. It is crucial for every business owner to get insurance. If you are planning to hire employees for your vape shop business, workers compensation insurance can be legally required in your state.
STEP 8: How Will Your Brand Stand Out?
Your brand signifies the principles on which your company is formed and the manner in which it is perceived by others. When you have a strong brand, your business will easily stand out from the rest.
Vape Shop: Promoting and Marketing It
Though rapidly growing, the vape community remains a tightly knit one. You must make an effort to research about the marketing staff of each brand your shop sells. This will enable you to connect with them better. Be it vape conventions or trade shows – you must not miss them. This will strengthen your position in the community and build further relationships.
The popularly used search engines (Google and Yahoo) prohibit the advertisement of e-cigarette companies. The only way to get around this is by getting creative. You need to maintain your online presence. In order to do so maintain an informative, effective, and simple website. Make the most of social media pages like Facebook and Twitter and create an unique page. You can even advertise your vape shop on Reddit. There are different online advertising services which excel in this specific industry. Your business must be found on Google Maps, this will ensure that customers who aren’t familiar to the neighborhood can reach your shop. Your shop can be listed on DuckDuckGo, Bing, and Google to increase the online visibility.
How To Ensure Customers Will Come Back To Your Vape Shop?
Your service must be flawless at all times. Always sell products that feature best quality and are affordable. You must encourage all your happy customers to inform others about the vape shop. Don’t miss out on feedback – positive and negative.
STEP 9: Create Your Online Presence
When you have an official business website, it will enable your customers to learn more about your business and the kind of vape products you have in store. Having an online presence will help your business attract prospective buyers.
Is This The Business For You?
There is a large number of entrepreneurs who are opening vape shops which in turn is increasing the competition. A successful vape shop owner possesses the passion and knowledge to educate his customers. In order to stay in business, you must research the ever-evolving market which is dedicated to delivering a strong customer service.
How Does A Vape Shop Operate On A Regular Basis?
There are certain duties one has to perform on an everyday basis. This includes the following set of tasks –
- You must interact with your customers. Answer every query they have and educate them about the different options they have based on their needs.
- Be on top of industry trends. This can be achieved by thorough research.
- You must create an efficient communication system with those working in the industry. This is non-negotiable for the manufacturers.
- Don’t forget to check your inventory. Place your orders accordingly.
- Your workspace should always be spick and span.
- Overseeing employees and delegating task.
- Administrative duties
What Kind Of Experiences and Skills Are Necessary For Running A Successful Vape Shop?
Your profession is such that it requires you to possess the skill to easily connect with others and customers. This will make sure that you’ve a proper place in the industry. Long-term success can be achieved by focusing on in-depth research of the industry trends, budgeting, inventory, and the ways you can make your customer happy.
What Kind Of Growth Potential Does A Vape Shop Have?
Vape industry has flourished since its inception regardless of being new. There is a lot of room for worldwide expansion in this industry.
How To Proceed Further?
- Find A Business Mentor –
You will benefit a lot from quality mentorship. If you have started planning your vape business then obtain the necessary help by connecting with free business resources. Success is bound to come to new business owners if they have a proper support network.
- Resources That Can Help Women In Vape Business
Women entrepreneurs can make the most of the resources that are out there. The useful and necessary information needed for women to succeed are –
Jump Start Your Business With These Insider Tips-
- You must build a brand that your prospective audience can relate with. Once the brand image has been created, stay consistent with it.
- Your initial inventory stocking should be based on this formula(which needs to be adjusted as you proceed). Starter kits – 50%, mid-level kits – 40%, and high-end hardware 10%. You should also maintain a stock of replacement parts.
- Brand loyalty plays a massive role in the success of your business. Try to stick to manufacturers you have 100% faith in.
- The price of your products will transform your target audience into loyal clients. Always sell high-quality products at affordable rates.
- Give your customers the opportunity to customize their e-cigs. This cuts down the need to carry kits and reduces ongoing expenses.
Building A Team: How and When?
Try to be present at all times to ensure the strategy on which your business is built is followed. In order to prevent burnout, you will need a team of people (minimum of two). Every employee should possess the necessary knowledge about the vape shop and it’s products. Try to get a better understanding of the vape shop’s demands. This will help you adjust the responsibility of the team members in your shop.