Our guide on starting a hookah lounge covers all the essential information to help you decide if this business is a good match for you. Learn about the day-to-day activities of a hookah lounge owner, the typical target market, growth potential, startup costs, legal considerations, and more!
Also called a hookah café, a shisha bar, or a hookah den, a hookah lounge is a place where customers go to smoke shisha. This flavored tobacco is smoked through a pipe, and it can be shared by multiple people. Hookah lounges can charge by time, by pipe, or by tobacco amount.
Who is this business right for?
Anyone who’s interested in shisha, hookah, or the hookah culture should open a lounge. A hookah lounge is a good business for entrepreneur types, diner lovers, and tobacco connoisseurs.
What happens during a typical day at a hookah lounge?
A hookah lounge owner is in charge of setting up hookahs for people to smoke. A lounge owner needs to make sure all the hookah pipe pieces are clean. Similarly, they need to make sure the lounge’s shisha supply is clean and unspoiled. A lounge owner charges customers, keeps track of payments, and cleans the establishment. Hookah lounges are typically small, and they can be operated by a single person. Some hookah lounge owners stock hookahs for sale. They can also sell shisha, hookah hoses, hookah bowls, and other accessories.
What is the target market?
The best customers are those who aren’t rowdy. Because hookah smokers need to be at least 18 years old, the hookah-smoking culture can be chaotic. Hookahs are fragile, and a hookah lounge owner will lose money if their hookahs are broken. Every lost hookah reduces the overall number of people who will buy services. Ideal customers are quiet. They’re also return visitors. Hookah lounges make a lot of money from familiars, often creating deals and discounts for them.
How does a hookah lounge make money?
A hookah lounge makes most of its money by giving patrons a hookah to smoke. A hookah “session” is paid for either before it begins or after it is over. Normally, one hookah is shared between two and four people. Hookah lounges can either charge by the hour, or they can charge by the bowl’s size. Normally, a hookah lounge will determine a bowl’s price by how much shisha it can hold. A large bowl, for example, may burn longer. For this reason, it costs more to smoke.
Hookah lounges can also make money by selling shisha separately. Or, they can sell hookahs and hookah accessories. These accessories include coals, hoses, and vases. Other hookah lounges may sell food or even alcoholic beverages.
What is the growth potential for a hookah lounge?
A lot of hookah lounges are local. Because of this, there isn’t much growth potential on a state, or even national, level. A hookah lounge can, however, become a local favorite. If your hookah lounge offers the best shisha, the lowest prices, the best discounts or other great amenities, expect it to be a main location for visitors.
Hookah lounges gain a lot from tobacco’s inelastic demand. People who smoke hookah will often pay a lot for it, and they’ll keep returning to purchase it. For this reason, a hookah lounge which provides the best products, services or cost opportunities will have a very big advantage.
What are some skills and experiences that will help you build a successful hookah lounge?
A hookah lounge owner needs to have a firm grasp on hookahs. They need to understand how they’re smoked, how shisha is measured, how to take care of a hookah, and how to make a pleasant smoking session. High-quality hookah lounge owners also understand the culture of smoking hookah. Because hookah is a middle-eastern novelty, some visitors go to lounges to try something exotic. While hookah has become pretty popular, a high-quality lounge will still cover the “bells and whistles” to make a nice experience.
A hookah lounge owner also needs to understand liquor and tobacco laws. Guests need to be safe at all times. Guests can smoke too much hookah, causing them to get sick. A good hookah lounge owner will make sure guests are knowledgeable about hookah.
What are the costs involved in opening a hookah lounge?
A hookah lounge costs about $40,0000 to start. This price includes having a nice retail space to fund. It also includes licensing and insurance. The other costs include sourcing useable hookahs and shisha. Typically, a lounge will carry between 10 and 30 hookahs. Each can cost as much as $150.
What are the steps to start a hookah lounge business?
Once you’re ready to start your hookah lounge, follow these steps to ensure that your business is legally compliant and avoid wasting time and money as your business grows:
- Plan your business. A clear plan is essential for success as an entrepreneur. A few important topics to consider are your initial costs, your target market, and how long it will take you to break even.
- Form a legal entity. Establishing a legal business entity prevents you from being personally liable if your hookah lounge is sued.
- Register for taxes. You will need to register for a variety of state and federal taxes before you can open for business.
- Open a business bank account. A dedicated checking account for your hookah lounge business keeps your finances organized and makes your business appear more professional to your customers.
- Set up business accounting. Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
- Obtain necessary permits and licenses. Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
- Get business insurance. Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
- Define your brand. Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
- Establish a web presence. A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.