What is a cigar lounge, and why would you want to open one?
A cigar lounge offers customers an exclusive environment to buy and enjoy cigars. Cigar lounges are a nice, but very popular business – especially if there’s local demand for one.
Whether you’ve got an existing smoke shop business or you’re looking to start something brand new, opening a cigar lounge might be a great choice!
Here are some of our top reasons for opening a cigar bar or lounge.
What is a Cigar Lounge?
Before getting too ahead of ourselves, let’s start with the basics: what is a cigar lounge?
A cigar lounge is a place where people can buy and smoke cigars. Some cigar lounges also offer food and alcohol to patrons. Many are members-only, but that is not a requirement (though it can help with some regulations — more on that later).
One of the main draws of a cigar lounge is the customer service. Patrons of a cigar lounge aren’t just looking for a place to smoke. They expect a classy atmosphere and knowledgeable staff.
It’s this sense of exclusivity and community that sets a cigar lounge apart from a typical tobacco shop – and it’s that same focus on quality that provides value for cigar lounge customers and owners alike.
What Are the Rules for Opening a Cigar Lounge?
Different states have different licenses, regulations, and requirements for opening a cigar lounge. Further, those rules can vary further by city and even county. At a minimum you’ll need to apply for a tobacco retailer’s license and a sales tax permit. If you’re planning to run a cigar lounge and bar, you’ll also need to apply for an on-premises liquor license as well.
Related Read: Do You Need a License To Sell Tobacco? 8 Regulations To Follow
In general, the rules for selling cigars are:
- You must ID everyone under 27 and only sell to people over 21
- You can’t sell cigars in a vending machine
- You can’t give away any free samples
- You must clearly display health warnings and age restriction signage
These restrictions make age verification and tobacco inventory management systems vital to smooth operations. To maintain legal compliance, you’ll need a real-time view of what is being sold by which employee and to which customers.
It may be worth consulting an insurance agent or lawyer who specializes in smoking establishments to make sure you don’t miss any details. In many states, violations for underage or unlicensed sales can carry steep fines.
Finally, while it’s not specifically required, having a high-end ventilation system will both make your customers happy and create a cleaner environment.
Can You Run a Cigar Lounge in States with Indoor Smoking Bans?
As of writing, there are 29 states that ban indoor smoking, but many of them exempt tobacconists, cigar bars, and/or private clubs. For instance, in New York, there are exceptions to the Smoke-Free Air Act for registered tobacco events and registered tobacco retail stores.
So, even if your state does have a smoking ban in effect, it’s still worth checking local rules and regulations to see what your cigar lounge can and can’t do.
Related Read: How To Open a Cigar Lounge: A 4-Step Checklist
Why You Should Open a Cigar Lounge: 4 Reasons
While some cities and urban locations have well-established cigar lounges, there are plenty of places that don’t. This provides ample opportunities for cigar enthusiasts and entrepreneurs to start their own businesses.
Here are a few of the reasons why you should consider opening a cigar lounge.
1. You Get To Follow Your Passion
You wouldn’t be thinking about opening a cigar lounge if you weren’t passionate about a good cigar. Opening a cigar lounge is a great way to work in an environment you love and share your knowledge and expertise with customers.
Unlike a general cigar shop, you’re not just selling products — it’s a people-oriented business. If you know your stuff and excel at customer service, a cigar lounge may be a great fit.
It also gives you a chance to show off your interior design skills. A cigar lounge is your opportunity to create the ultimate smoke spot, so don’t hold back on the little details. Just make sure your layout follows any specific tobacco advertising rules.
2. The Opportunity To Offer a Unique Experience
Cigar lounges tend not to be like a run-of-the-mill bar. They offer a very particular ambiance and experience for customers. There are countless articles on cigar lounge etiquette because customers at cigar lounges love the high-end atmosphere they provide.
By knowing the local market, you can create your own environment. Do you want to create something old-fashioned and sophisticated? Or maybe you want to create a more laid-back feel with snacks?
The choice is yours — and the more unique your cigar lounge is, the better chance it will have of standing out. We also recommend sampling a few cigar lounges to get a feel for what’s in your area. After all, you don’t want to go through all the effort of starting up your own cigar lounge just to offer something that already exists.
3. You Can Create Exclusivity With a Membership Model
Many cigar lounges are not open to the public and require a membership. Because many smoking laws allow for smoking in private clubs, a member-only location can help skirt some of the restrictions on smoking indoors.
As an added benefit, by having a private club, you create a more exclusive atmosphere while networking and selling premium items to a group of cigar enthusiasts.
Membership fees are a great source of recurring revenue. You could start with a basic tier or set up a customer loyalty program with higher-tier memberships that offer exclusive discounts and offers.
If you do offer memberships, it can also be a good idea to collect customer emails and set up a newsletter to let members know about upcoming events, new products, and any discounts.
4. Ability To Cater to Connoisseurs
The type of customer that frequents a cigar lounge is probably not a casual smoker. Cigar lounge customers know their stuff and will expect you to as well. But for people who love cigars, this isn’t a bad thing – it’s a perk of the job!
At a cigar lounge, you can offer higher-end products than you could at a typical smoke shop. As you gain more customers and learn their preferences, you’ll have chances to make special orders and suggestions, too.
Modern point of sale (POS) systems also give you the option to build custom product bundles, so you can create boxes of complimentary items and more.
How the Right Technology Can Help Your Cigar Lounge Run Smoothly
While old, established cigar lounges have history and word of mouth to help them, a new cigar lounge won’t have that advantage.
But that doesn’t mean there aren’t tools at your disposal. Modern point of sale systems for cigar and smoke shops come with features that can help you market your business, run more efficiently, and boost customer loyalty.
When evaluating technology partners for your cigar lounge, look for the following features:
- Automated inventory and reporting
- Carton-pack inventory breaking
- Out-of-the-box customer loyalty and discounts
- Adjustable tax rates
- Built-in age verification and ID scanning
- Cloud-based software to avoid outages
Regardless of features, no matter how advanced the technology is, it’s useless if no one in your store can use it. So make sure any POS system you pick is user-friendly.
Related Read: Top 3 Cigar Lounge Point of Sale System Options
Set Your Cigar Lounge Up for Success
Starting a cigar lounge can be intimidating, but there’s a lot to be excited about. In areas without a place for enthusiasts to socialize and smoke, there’s a huge opportunity to meet local demand.
So what are you waiting for? If you’re ready to open a cigar lounge business, smoke the competition with a leading solution for simplified, streamlined cigar store operations.
Cigars POS was built specifically to help cigar shops and lounges thrive with fully compliant inventory, sales, and employee management features.
Ready to open your dream cigar lounge? Schedule a free demo today.
