How Much Does It Cost To Open a Cigarette Store? 6 Key Considerations

Congratulations! You’re about to embark on the exciting journey of starting a new small business. 

Picture yourself a year or two from now as the proud owner of a successful cigarette shop. You’ve built a solid base of loyal customers, you’re raking in sales, and your business is well on its way to becoming your neighborhood’s favorite stop for cigarettes. 

But before you can get there, you have to iron out the logistics of opening a new business. 

In this blog, we’ll talk through how much it costs to open a cigarette store, as well as some key tips for opening a successful smoke shop. 

On Average, How Much Does It Cost To Open a Cigarette Store?

Determining how much it costs to open a cigarette store can be tricky. Every shop is different, and several factors like location, store size, and inventory suppliers will influence the cost of doing business. 

Most entrepreneurs in the tobacco space tend to spend between $50,000 to $100,000 on start-up costs. But this number is variable, and there are other ongoing costs to consider as well. 

Let’s explore how you can calculate how much it will cost to open your cigarette store. 

1. Location

Choosing a location is one of the first steps in starting a smoke shop. 

Your business’ location will have a major impact on your sales potential and your other costs, so this step should be at the very top of your to-do list. 

Cost is obviously the most important consideration when evaluating location options, but here are a few more questions to guide you as you search for the perfect spot:

• Would it make more sense to lease or purchase a property?
• How much foot traffic does each location get? How easily will your customers be able to access the location?
• Does the location need any major renovations? How much will those cost?
• What kinds of maintenance and utility fees will you need to budget for at each location?
• Are there other cigarette stores nearby that you’ll have to compete with for business?

2. Cigarette Store Setup

Now that you’ve picked a location, it’s time to turn it into your dream store. 

Depending on how retail-ready your space is, you’ll need to budget for essentials like shelving, signage, and counters. 

Along with these must-haves, you may also want to consider aesthetic modifications like paint, flooring, and lighting to create an attractive, inviting space for your shoppers. 

Make sure to include these one-time costs in your calculations when determining how much it will cost to open your cigarette store. 

3. Licenses

When discussing how to open a smoke shop, the importance of licensure can’t be overstated. 

With the strict laws regulating the tobacco industry, the proper licenses are a must to keep your small business operating above board. There are two types of licenses to keep in mind when calculating how much it will cost to open your cigarette store:

• Business License: Many regions mandate that all businesses have a license to operate. The costs and requirements vary, so make sure to check your state and city laws. 
• Tobacco License: Most states require tobacco retailers to have a special license for selling cigarettes, cigars, and other smoking products. The cost varies from state to state, so check out the CDC’s STATE System Licensure Fact Sheet to see if you’ll need to budget for a tobacco retail license. 

4. Inventory

Your inventory is probably the most important calculation when evaluating how much it will cost to open a cigarette store. 

Initially stocking your store will be expensive, since you’re starting completely from scratch — but it’s also crucial to remember that this is an ongoing cost. 

The brands of cigarettes you stock (as well as whether you carry other tobacco items, like cigars and vaping products) will determine your inventory costs. Make sure to include these elements in your business plan. 

5. Employee Salaries

Paying your employees is another critical ongoing cost to consider. You’ll need to determine how big your team should be to keep your store well-staffed — as well as what competitive wages are in your area. 

Don’t forget to budget for benefits like health insurance and paid time off for your full-time team members, too. 

6. Technology and Equipment

You’re so close to having your cigarette store up and running! You’ve chosen a great location, secured your business license, ordered your first batch of inventory, and assembled a stellar team. 

Now it’s time for the glue that holds everything together: a point of sale (POS) system. 

Your point of sale system handles every single sales transaction in your store — but it also tracks your stock, manages your customer loyalty program, and provides you with insightful reports about your business’ performance. 

When budgeting for a POS system, consider the price of both the software and the hardware you’ll need to outfit your store. Along with cost, here are a few other key factors to consider when shopping for the right solution:

• Powerful inventory management features, including real-time stock updates and carton-pack inventory management
• A built-in customer loyalty program to help you reward your repeat shoppers
• Detailed reporting and analytics, including automated ranking to show you your bestselling products
• Age verification to ensure that your smoke shop is selling only to customers who are of legal smoking age

Start Your Cigarette Store the Right Way

Now that we’ve covered nearly everything you need to know about how to open a smoke shop, you’re ready to embark on your small business journey! 

We’ll be here to help you every step of the way. Our top-of-the-line POS software is designed specifically for small cigarette store owners just like you, and it includes everything you need to grow a thriving, profitable small business.

Take Cigars POS for a spin by scheduling a live demo with one of our tobacco industry experts today!