Are you thinking about opening a new vape shop? One of the biggest mistakes new business owners make is not writing a detailed business plan. You’ll need a business plan if you intend to seek investors or apply for a business loan. However, business plans aren’t just for other people. They also help you plan and monitor your own business growth, identify weaknesses, and understand your industry. Without a strategic roadmap, it’s hard to make a new smoke shop successful, especially in such a crowded market. According to the Bureau of Labor Statistics, 90% of startup businesses fail, with 10% failing quickly, within their first year. Let us help you write a vape shop business plan so you can be a success story instead of just another statistic.
What You Need Before You Start Writing Your Business Plan
A successful business is more than just a good idea or even passion for your industry. You also need to understand what will make your business profitable. Therefore, writing a smoke shop business plan starts with market research. Here are a few questions to help you get started with your research:
- Who is my target market?
- Is there a demand for a vape shop in my community?
- What market trends will influence my new vape shop?
- Who are my competitors locally and online?
- What pricing strategy do my direct competitors and other local businesses use?
- Are there barriers that will prevent me from entering this market?
Additionally, before you start writing a business plan, you will need to develop a marketing strategy for your smoke shop with a budget for advertising, special promotions, events, digital marketing, and other ways you will attract customers. Believe us, it would be nice if the “if I build it, they will come,” plan actually worked! However, you’re going to need a real strategy for getting your name out there.
Lastly, you’ll need to understand your state and local vape shop business requirements. This includes not only a business license, but also any special permitting needed for a business selling age-restricted products, a fictitious name license, registration with the state to collect sales tax, building permits, and more. Every state is different when it comes to licensing requirements. If you’re not sure where to start, many cities and counties have small business resource centers.
Your Vape Shop Business Plan Financial Forecast
Any business plan template will have sections for you to talk about your vape shop business description (execution summary), market research, marketing plan, operations plan, etc. That said, the most important part of this document is, arguably, the financial forecast. This is often the longest section of any business plan, and it’s definitely true if you want to open a vape store that’s successful in your community for years to come. You’ll need to develop the following:
- Profit & Loss Statement – Also called a P&L or Income Statement, this document shows your projected revenue and costs, along with expected growth over time. When you’re starting a new business, you’ll develop your P&L based on assumptions. This is why market research is so important. You want to base your figures in reality, not on your dreams.
- Balance Sheet – This document shows projected assets and liabilities. For example, your inventory will be an asset, so you’ll need to do research to find out exactly how much it will cost to stock your new vape shop. On the other hand, if you take out a loan to buy those items, the debt is a liability you’ll need to pay back over time.
- Cash Flow Statement – Did you know that you can make a profit and still fail? You need to ensure you always have enough cash to pay expenses such as payroll, rent/property fees, insurance, equipment expenses, taxes, etc.
Don’t make vague guesses when it comes to the Financial Forecast section of your vape shop business plan. The more accurate your numbers, the more likely you are to succeed.
The Right Tools for Your Vape Shop Success
Starting a new business can seem overwhelming to say the least. You can make your life easier with the right equipment. Starting a vape shop is unlike starting most other types of small businesses due to the rules around promoting and selling age-restricted products. So, it’s important to work with small business tools that are appropriate when it comes to vape shops. Even the best vape shop ideas can fail if you don’t have the right tools for the job, regardless of how well you write your business plan.
That’s where we come in. Here at Lifelong Merchant Services, we understand the needs of local shop owners. We build our point-of-sale (POS) solutions specifically for high risk merchant processing, and we have a team of experts ready to help you implement the Lifelong system to start accepting credit cards and running reports quickly. Check out these six amazing features of our POS system!
FAQs About Starting a Vape Shop
As you’re writing a business plan for your new vape shop, it’s completely normal to have many questions. We can help! Not only do we have a POS system that works well for vape shops, but we also provide marketing solutions to assist vape shop owners. We’d be happy to answer any questions you have. Here are a few that we commonly hear, but don’t hesitate to contact us with more:
How can I attract customers to my new vape shop?
The market research you’ve done for your business plan will come in extremely handy as you determine how to reach your target market. If marketing and promotions aren’t your strong suit, our team can help. This article has free tips for marketing your smoke shop.
What is dual pricing and why should I offer it?
With dual pricing, you offer customers a way to save money by using cash. Essentially, customers pay for credit card processing fees so you don’t have to. It provides flexibility for customers who want to save money and helps your business avoid added expenses. Dual-pricing is easy to implement when you work with Lifelong.
Why do I need a high-risk merchant POS system?
Many merchant services, such as POS systems, have identified certain industries that are at high risk for fraud, large numbers of returns, and chargebacks. It’s not a statement about your individual business, but rather about the smoke shop industry as a whole. Some POS solutions, such as Lifelong, aren’t afraid to work with vape shops even though other companies might automatically decline and close your account. Contact us today to learn more about how we can help you open your new vape shop.
