How to Open a Smoke Shop: Business Model Explained

so we are for for smoke shop we're in

Atlanta Georgia in several locations we

have a shop in Union City and one in a

couple in Atlanta proper one off

Roosevelt Highway on the south side one

off MLK and 25 on the southwest side

right in front of the famous cascade

skating rink

we specialize in babes and juices we

have who can shisha we have a lots of

different tobacco accessories pipe

supplies t-shirts CBD hemp oil cigars

cigarettes so we can kind of give you

some some advice on a lot of different

things here one of the things that we're

going to concentrate on eventually here

and today's presentation is of course a

quick glance at our business model that

has vaulted us to a million dollar

revenue per per year with only three

shops so it was pretty good

comparatively being a general smoke shop

is the way the go we think vapes are

easier to get into retail shopping

locations but we'll go into just

high-level and the major course that

we're going to present to you later on

we'll go into why you should really

concentrate on smoke shops versus vape

shops but at any rate that's a little

bit about us and we're just a laid-back

smoke shop so of course today's session

and will be just again a quick overview

of our business model and a business

model that you can use and starting up

your smoke shop or if you want a more

fit vape shop cigar shop however you

want to do it but one of the things that

you'll learn that you have to do in your

activities running a smoke shop is of

course marketing and so this is our

Instagram and we have lots of fun on

Instagram I only have 1200 followers but

we believe that our followers are pretty

organic and pretty pretty laid-back and

so if you kind of look through some of

the things that you'll be doing during


this model here's of course securing new

products so on this shot right here

we're securing new products there's a

new product called our our shisha and

delicious smelling delicious tasting and

a lot of different flavors here that

that we that we have here of course you

know you take the good with the bad

here we opened up a new shop and within

a few days some kids had shot out the

windows with uh with BB guns and so

you'll learn that and taking the good

with the bad you have to kind of planned

both ways so these are just things of

running your shop and part of your

business model that you'll have to kind

of consider with costs and operations

here's one of the new shops we just

opened in December 2019 so this was

pretty sweet for us it's in the area

where we did our research should should

have some decent traction once we get

our marketing and get established as a

new shop over there interestingly enough

one of the things in your business model

is also going to be how you make your

money and so this is a cool shot we

partnered up with a young lady in Dallas

Texas who who we work with in order to

create custom art and for that art we

couldn't put it on t-shirts we can sell

prints we can do a lot of different

things with that art it's pretty dope

dope situation we have a lot of fun part

of your thing and your daily activities

and it's going to be marketing and so we

come up with marketing events this is an

event of course we had for Halloween

here costume contest a cool little torte

contest so pretty cool pretty cool stuff

some marketing for the Halloween but

then also we work hard so we party hard

so this is actually a situation where we

worked with our I don't know if you can

hear the audio there but we worked with


our team there treated them to some some

lake action there jet skis pontoon boats

all that good stuff so if you work hard

you got a definitely you know treat

yourself to some some goodness there so

yeah so this just kind of lets you know

some of the things and all three shops

we have a humidor of certain size so in

one of our shops we have a built in

humidor we actually had the wood

imported the cedar

Spanish cedar wood imported from Dallas

Texas so we can give you more about more

information about that and our

experience with building out a custom

humidor so that's a new cigar that we

carry in one of the shops again you have

a lot of community things that you can

do this is a guy who actually rode his

scooter into one of the shops and we had

a lot of fun recording him and just kind

of playing around with him there so yeah

so again play hard you make your money

you got to play hard you know that was a

shot of us down and Barbados there

recently teamwork makes the dream work

me and my wife run the shops there on

the shops I should say tobacco

accessories are really cool here artwork

is really cool we actually had a guy who

came in and for one of our shops painted

this dope shot you know you got your

rolling you got your your cigars he got

your your vape so really cool new

products so these are portable hookahs

you could put in your car if you're

familiar with hookahs you got to always

be on top of different things again

another event this was Cinco de Mayo

where we actually had a pepper eating

contest and had a lot of fun with that

so I could go on and on with our events

and how community focus we are the

reason why you are community focus is of


that builds your your customers and so

that that's another thing that's part of

your business model is actually going to

be how you get your customers and how

you stay in touch with them so a lot of

people think you just email them text

them etc and that's it but we actually

have some nice events you get to play

around with different types of products

you'll learn that part of your daily

activities and operations of course new

inventory where you actually have to of

course work with new wholesalers and so

it's always something to do and try out

there's these shots from our first store

the flagship store it opened and a

couple years ago now we're going into

our third year with this particular

store so I've had a lot of a lot of wins

and bumps and bruises along the way but

it's definitely something to learn about

we've been through this experience

before where it was feast and famine

with certain cigars Russian creams were

really big back in the day and then

there were some issues with production

at the manufacturing level they became

very hard to get so we actually had to

go to different states to get cigars

tell you a little bit about that

workshops to actually use the products

accessories that we use is very

important this is an actual hookah

workshop that we were hosting and not

only can they buy their hookah from of

you but then also they can come in and

enjoy hookah from professional who could

call folks and and hookah companies so

that's something we that we've done in

the past you know and then getting out

you know these is one of our neighbors

down at one of cigar lounges around the

corner from us and so we get out and you

know again be in the community so that's

a little bit about us as far as our page

you know again marketing is going to be

one of the

the great things that you do in your

daily operations we've actually had a

lot of success from where we first

started if you can see that when we

first started our store you can kind of

see in the background here what you had

one shelf they kind of went all the way

around the store and so to kind of see

that first door kind of morph into into

the story that it is today is really

awesome here's here's another view of

the store that it is as it is today

lots of full shelves lots of inventory

lots of things to try and so it's it's

it's just really a great thing we'll go

ahead and cut the audio here for that

piece of the presentation so let's get

you into the purpose of why you're here

and that's to get introduction into the

smoke shop business and the model that

it takes or that we kind of took in the

approach that we took to open our three

shops long term we're going to have

smoke shop consulting and we'll also

have a mastermind class that you could

join to not only learn more details

about the business model but be able to

kind of go into further detail anything

from you know secret details and

information about how how we get our

products where we get our products from

we're gonna take a lot of that out of it

for you to where you could literally

have contacts of folks for cigars

contacts of folks for smoke shop

supplies things like that in our

mastermind courses and consultation so

we know that when we first started we

had a lot of growth to do and we

actually had to hire a consultant and

once we hired that consultant he was

able to kind of show us some of the

ropes so we're hopeful that for someone

out there we can kind of help and and at

the same time it

it's very a very good thing for us to

create a community of future smoke shop

owners so without further ado let's kind

of get into the business model here of

you know basically how you can create a

you know a business and what you're

gonna need so this is the business model

guys that kind of at a very high level

can replace you doing a full business

plan so some of the people that are

going to require a full business plan

and generally would be banks maybe your

uncle if he's loaning you some money

maybe he might request for business plan

but the problem with business plans is

that they are not agile they're not fast

and so we use this model it's called

business model generation it's a group

of folks that have basically come up

with a paradigm that you can create a

business model within hours if not

minutes and you can do it on one piece

of paper so let's get into how we used

it the number one thing on how we used

it was to kind of brainstorm upfront and

to create from this model lists and

further detailed and specific things

that we would need to open our business

so let's jump into it so one of the

things that we had to think about right

away was who some of our key partners

were going to be and so if you look in

the section that says key partners one

of them is gonna be manufacturers one of

them is going to be wholesalers and

vendors and a lot of times what you'll

find in the smoke shop industry is that

it's a little bit harder on some of the

products that you'll sell to get to the

manufacturer so an example of this would

be cigarettes premium cigars things like

that they have agreements with

wholesalers in your area so a lot of

for for game or for swisher Sweets which

are types of cigars for those of you who

don't know we might have to go to a

wholesale here locally and that's where

we would register our business show them

our state state tax information as well

as our tobacco license and then from

there we can buy and so these would be

considered wholesalers and vendors that

the manufacturer either ships directly

to or there's a supply chain basically

for where you get your information or

get your permission to get these

products on the flip side there will be

a lot of manufacturers who will reach

out to you directly and so our email is

just packed with with folks introducing

themselves as the creators of products

or those who kind of own the products

that they want you to market and sell in

your stores so those are going to be

some of your key partners and the reason

why they're your partners and what

you've got to think about is is that you

want to be able to to reach out to these

folks and be able to get better pricing

you want to have relationships with

several of them so that if you do get a

really messed up price from one of them

you can get your economy of scale from

another and sometimes let's be honest

one wholesaler is gonna run out of stuff

and so you're gonna need it and you're

gonna have to be able to know who's got

it you're gonna have to be able to make

contact with sales reps and folks at

these particular wholesalers who can

help you pick products and pull products

and also tell you what's new out there

and what's selling which kind of brings

us to some of our key activities in our

our model so if you look the next thing

over to the right some of our key

activities during the day marketing and

sales so you know whether it's jumping

on Instagram

whether it's cinah handing out flyers

whether it's

advertising that you have a rewards

program these are all things that we do

on a daily basis that will help to get

new people into the store and then help

us with the sales process which is

actually converting a new person into a

customer and then you've got to keep

that customer so you know whether it's

reward systems whether it's ongoing

events whether it's customer

appreciation days where we've barbecued

hot dogs hamburgers ribs things like

that and given the plates away you have

to kind of do things to retain your

customers customer retention is huge so

there's a lot of competition or it can

be a lot of competition in some areas so

you want to be able to uniquely

differentiate yourself against other

people so again key activity supplier

negotiation hey I get a better price

from someone else some of the day to day

operations is of course making sure your

staff shows up making sure that the

bills are paid making sure the

electricity is on making sure the heats

on you got to pay bills a product

creation is another thing that we do so

whether it's creating t-shirts or

whether it's creating art or whether

it's creating bundles of different

products that you have that's something

that's a daily activity and of course

like I just mentioned in contact with

your suppliers you have to do pricing

management just to stay competitive and

also to know what your competitors are

selling it for to stay competitive so

just a minute ago I kind of mentioned

you know what's gonna really set you

apart you know so your for your value

propositions you know there's a few

different ways to look at it you know

there's a bait and hook method so with

some of your propositions here you can

bait people with hookahs and the bait is

is that you have the greatest selection

of hookahs or you have the newest

selection of hookahs or you have a

special type of hookah and the hook and

the bait of the hook is

that they're going to need shisha

they're going to need consumable items

such as coals such as punched a little

bit of oil such as tongs they're gonna

break things so they're gonna have to

replace things they're gonna have to

replace their hookahs and that is a

value proposition that if you can

optimize that process we'll bring them

back our other specific value props with

that we're lifestyles the lifestyle

centric and what this means is is that

to set ourself up as a smoke shop is one

thing to have the products there but

then to kind of be in the middle of it

and to be a real smoke shop and to have

the feeling you know smoke is at the

center of music it's in TV it's an

entertainment you go to the club there's

a hookah there and folks want to come

home and they want to replicate that

Club feeling so you provide them the

atmosphere in their environment to to

kind of facilitate that lifestyle and so

that's that's an awesome thing you know

when they can come into your store and

vibe with you and in and you really have

folks there who've maybe tried the

accessories that you have or so it takes

a special type of even team for you to

develop or to really kind of have that

lifestyle you got to have a big

selection of popular products that's a

value proposition for us small business

versus big convenience chain so this

means that hey we're a small smoke shop

and yes Kwik Trip in other places sell

raps and cigarillos but hey it's the

vibe that comes with coming in you know

and talking with us and rapping with us

and and you know we're able to help you

try new things that a quick trip just

does not have the ability to stock so

it's kind of like the David and Goliath

thing to where you know you that's been

a value prop for us it's convenient

family atmosphere this means that they

come in we make them feel like family we

when we treat ourselves as co-workers

there and managers when we're working we

look like family amongst us

so and then there's the brand 404 smoke

shop I mean come on

404 is the area code the original area

code for Atlanta so for us to have four

or four smoke shop as our as our logo

and and everything that we kind of stand

for and centralize that back to our

Twitter and Instagram and things like

that is a very powerful thing for us and

so that's a cool thing our customer

relations so you know customer service

would repeat sales and high lifetime

value this basically means hey repeat

sales they're gonna not only come in and

break bread with you in the first sale

but make them feel welcome to come back

if you don't have a product get the

product or even get their phone number

call them let them know follow up going

that extra mile so what kind of helps us

with our customer relationships social

media you know email staying in touch

newsletters Google and Yelp reviewer


you'll learn to in our course that to me

even though I have this on our original

this is our original one by the way and

Yelp reviews are cool but do not pay

Yelp and I'll tell you why later Yelp is

a waste of money for a return on

investment and they lock you into some

things that are just unfair and you can

just do your own google research on yelp

so these are just some of the things

that we think are helpful as far as

customer relationships channels are just

going to be in your business model you

know how are you going to reach your

customers is it gonna be retail a retail

store are you gonna start a smoke shop

online you know or how are you gonna

reach via social media pop-ups means a

pop-up shop you know are you gonna show

up at someone else's venue in-store

until you get yours and then Vince is

something that we do you know basically

we have events where there's who could

workshops or whether it's just holiday

parties we have annual Cinco DeMayo

party that's off the chain we've had

Halloween parties

and when you invite your customers and

they know that they can eat and just

enjoy and get freebies and handouts and

things like that that's very important

so we've got three more sections to our

customers to customer to our smoke shop

model here and then we'll get you on

your way customer segments so we thought

about ours you know we of course mass

market means anybody on the street

anybody in Atlanta anybody visiting you

know Atlanta that's cool

they need to be smokers or Noah smoker

they needed to be vapors or Noah vapor

hookah clubs lounges so this means that

hey we can actually send sales reps into

a hookah club or lounge and say hey

maybe you've got a bulk deal with

someone or maybe you don't even have

hookahs yet but here's how much money

you can make off of this so that's

another service that we can offer and

another customer segment geo-targeting

to a store proximity any retail location

location location location is going to

be it so you'll find that in the

community you live in there are going to

be people who are 5-10 minutes away it's

just easier for them to be a major

customer segment with one of our stores

we're only about a 10 to 15 minute drive

from the airport so we've met plenty of

people visiting from out of the country

on the state and that's the first thing

that they googled when they got here was

you know smoke shop near me or shisha

shop or if a cop you know and so they

come in one of ours could be wholesale

in other words we could buy a wholesale

and and and sometimes we could pass the

the wholesale price you know to someone

else to flip out and of course you know

the lifestyle you know hip hop pop urban

you know it's always fun you know what

smoke shop you here know very few smoke

shops that are kind of

at you know Western country music even

though I love western music or country

music you I made in this area we don't

know of that many where for that matter

we're and the cool Atlanta you know so

Hollywood of the south you know any rate

so the next two were at the bottom

construction revenue streams and with

this these two activities right here or

what's going to help you determine how

much money you're gonna make marketing

so you're gonna you know social media

all that good stuff is gonna cost you

logistics to your inventory this

basically means you know taking

inventory knowing what inventory you

need paying someone to drive to the

warehouses knowing that there's a

resource that's gonna have to be

spending half his or her day one to two

days a week you know you know buying

stuff for all the stores or your store

you're doing it yourself then having the

resource actually put up the inventory

into the into the shops you know there's

a lot of that that's going to be

constantly your operations are gonna be

your you know your utility bills you

know your your your cable your internet

your gas bill your electric bill it's

gonna be how much you pay your

point-of-sale system it's gonna be do

you need to rent the credit card machine

or do you need to buy it it's gonna be

you know things like that it's going to

also include your startup cost for your

cost structure what's it gonna cost to

build out of place do I need to build a

wall how much are permits so there is a

lot of stuff that hopefully we'll be

able to consult with you on in the

future make it easy easier for you just

with the caveat that you know all good

things are gonna require some hard work

then the good stuff the dough the money

that de niro revenue streams and so

basically with this I mean you know of

course product sales consumable tobacco

and vape supplies

you know we sell apparel some folks have

talked to us about franchising so maybe

there's ability in our early model was

to license out you know that the name

and/or the franchise and or you know how

to do it you know so that's a revenue

stream potentially for us content and

informational products and custom

products such as t-shirts and in mugs

for or for small shop tattoos anything

that we can kind of make money off of so

let's review one final time why we're

doing this or why you should be here why

you should be here is that of course

this right here this this one sheet this

one sheet is what we've used to show to

all of our landlords getting real estate

is tough and you can't really go to them

and say hey I want to start a smoke shop

and then they're like well show me

something or they're like you're not you

don't even look like smoke shop material

right so you got to go to these

landlords even to be able to say you

know hey I'm qualified to do this and

not that a one-pager does that because

there's still a lot of Devils in the

details but what this is gonna do for

you is to act as an outline to give you

your yourself like an opportunity to get

an elevator pitch of a business plan in

front of someone and if you can get five

minutes of someone's time and you can

email this to them and review it on the

phone with them etc etc this makes a lot

more sense than you know showing them a

forty page business plan with

bullshit-ass projections from five years

you know three to five years from now

what you're going to make so again if

you found this interesting and if you

found this cool there's going to be

instructions on this page here to kind

of help

you to join and get some immediate

consultation and then get some further

information as far as you know the

timing of our different modules and

things like that we're pretty excited

about helping others and the reason why

we're kind of slowing down here is that

we're being throttled back by the lack

of real estate there's not a lot of

things of real estate places and retail

shops that are allowing smoke shops in

and so the areas that we want to go into

or either saturated or they just won't

rent to you as a smoke shop so if you're

in an area where you can open a smoke

shop and we can help you we can consult

with you that's what we're here for and

looking forward to working with you

there's instructions on the page here

hope you found this helpful