A smoke shop without a business plan is like a ship without a rudder. A great business plan gives small tobacco shops a practical way to map out their goals and operations for future success.
Whether you’re starting a smoke shop for the first time or expanding in a new direction, a business plan is a must.
But what goes into a successful smoke shop business plan? Why is it important? How long will it take?
In this post, we’ll examine each component in depth so you can confidently craft a winning strategy.
Why Smoke Shops Need a Business Plan
Business plans are required for banks or other financial backers to invest in your business.
But more importantly, a business plan isn’t just for investors, it’s for you. A business plan sets goals for your store and gives you and your staff a roadmap for how to reach those goals at different stages of the business.
As your business grows, you can see how your growth aligns with the plan and make adjustments if needed. Consider a business plan as the North Star — something you can look at occasionally to make sure your business is on track and meeting expectations.
How Long Does Writing a Business Plan Take?
We won’t sugarcoat it. A typical smoke shop business plan should be about 15-20 pages and writing one takes some time.
The exact time can vary based on whether you’ve written a plan before, if you’re working on it alone, and other factors. But generally speaking, a great business plan takes about three weeks to a few months to complete.
Not all of that time will be spent bent over a keyboard. Outside of writing the plan itself, you’ll also need to put in some hours researching.
Elements of a Successful Smoke Shop Business Plan
If you’ve never written a smoke shop business plan before, looking at some examples might help get the creative juices flowing.
While business plans for different shops aren’t identical, they do share some basic components in common. These are the most important elements that all successful smoke shop business plans should include.
1. Executive Summary
The executive summary is like an elevator pitch for your company. In a few paragraphs, your executive summary should highlight:
- Who you are
- Why you’re different from your competitors
- Who your target customers are
- Why you’ll be successful
- Where you’re based
- Who’s in charge
- Your high-level goals
Remember: the executive summary is at the top of the business plan for a reason. It should capture people’s attention and make them want to dive into the more detailed sections below.
So take the time to craft a compelling executive summary and make your business stand out.
2. Company Mission Statement, History, and Overview
The next section of your smoke shop business plan should go into more detail about who you are. Give a detailed description of your background, how you got into the business, who is involved, and how all of that will help you achieve success.
Include a mission statement that covers your core values and target market. This will define how you’ll stand out from the competition (and there is a lot of competition in the tobacco industry), which will be vital to your long-term success.
You may also detail what type of software or other technology you’ll use to streamline your business processes.
Last, show that you understand the rules surrounding tobacco advertising and age verification.
3. Your Goals
Not every business plan has a section explicitly for goals, but we think early goal setting can be helpful for a small business. While we all want to achieve meteoric success, the purpose of this section isn’t to daydream.
Instead, use it to set short and long-term goals for different stages of your business. What kind of profitability do you hope to achieve as the business starts up? What kind of growth do you hope to see?
Set SMART goals to make sure your goals stay realistic and achievable. SMART stands for:
- Specific
- Measurable
- Achievable
- Relevant
- Time-bound
Setting SMART goals ensures that you and your team are on the same page for what success looks like.
4. Market Analysis
Market analysis will take up the majority of your time, and is arguably the most important aspect of your business plan. This section demonstrates that you know your industry and how to be successful.
To start, research the businesses in your area. Look for things like:
- Are there existing smoke shops?
- What products and services do they offer?
- What are their strengths?
- Who is my target customer?
- What kind of demand is there for tobacco products?
- What holes in the market are there? How will your business fill them?
Market analysis helps determine your niche. For example, maybe you find there are many vape shops in your chosen location, but no cigar lounges or high-end smoke shops.
5. Products and Services
As its name suggests, the products and services section of your business plan is where you’ll describe what you plan to sell. More than just a list of brands, you’ll want to detail:
- What you’re going to sell
- What additional services you’ll provide (cigar lounge, product bundles, etc)
- How your offerings will benefit customers
- Similar products and competitors
- If you’re going to sell your products online
Similar to market analysis, this is a good opportunity to think of how you’ll differentiate yourself from the competition. When it comes time to run the business, you’ll have better insight into what kind of inventory to stock.
Related Read: Trend Watch for Vape Stores: Best Selling Vapes
6. Financial Projections and Funding Needs
At the end of the day, your smoke shop is a business — you need to show how you’re going to make money and turn a profit. Banks and investors need a clear understanding of your:
- Potential revenue streams
- Product pricing strategies
- Expenses and budget (including startup costs)
- How you’ll spend the investment
You may also include your financial projections and goals. The goal of the finance section is to show that your business will be sustainable and successful for years to come.
7. Marketing Strategy
Marketing for small businesses can be a challenge. To make things worse, tobacco shops are more limited in what and where they can advertise than general retailers. For instance, tobacco shops are not allowed to sponsor events, advertise to minors (which rules out some social media), or give out free samples.
However, a solid smoke shop marketing strategy is essential to attracting new customers and growing your business.
Putting some thought and planning into how you’ll advertise, what channels you’ll use, and what promotions you might run will pay off in the long run.
With a modern point of sale (POS) system you can track sales data to see how your promotions are performing. You can also collect customer contact information to set up loyalty programs or send out newsletters to advertise new arrivals.
Starting a Smoke Shop With the Right Foundation
Crafting a great business plan can take time — but we promise it’s time well spent. With a solid business plan, you’ll have an easier time raising money and be equipped with a solid roadmap for running the business.
Starting a smoke shop can be hard — but running it shouldn’t be.
Using a POS system built specifically for tobacco shops can help you stay in compliance, increase customer retention, and boost profits. If you’re thinking of starting a smoke shop check out our free guide to tobacco store POS systems.
