The bar is one of the businesses that can be just as successful in a classic, simple version as in a creative interpretation. Depending on your budget and target audience, it can be an adaptable business with a high chance of success.
The bar represents a relaxing space for the consumer, a place to get away from monotony, looking to relax and spend quality time from the time you step inside the place until leaving it. Because there are different categories of consumers who can influence each other’s presence in the bar, it is recommended to set a clear niche for the consumers right from the beginning.
The place where people go to smoke a hookah is called either a hookah bar, a shisha cafe, or a shisha lounge. Aromatic tobacco is smoked through a hose, and the hookah can be shared between several people. Hookah bars can charge customers either depending on the time, the hookah, or the amount of tobacco.
How Much Does it Cost to Open a Hookah Bar?
The cost to open a hookah bar starts at around $32,000 and can go up to more than $200,000, but the average cost is around $150,000. It should be noted that there are a lot of different factors that influence the final cost for opening a business and the long-term expenses associated with having and running such a business.
A hookah lounge can be a great place to socialize, meet new people, and enjoy some delicious flavors. But opening one may not come without its challenges, from purchasing the right equipment for ventilation systems (on top of construction costs) to taxes varying by location as well as licensing fees, all could make you think twice before embarking on this venture.
Some people choose to go on the easier road and just buy the business outright, which means that they are purchasing the assets and will avoid having to build it themselves. There are many benefits to this approach, such as being able to run an existing company with an already established base of clients and less risky than starting from scratch. In the table below you will find the price estimates for buying a hookah bar in some U.S. states.
|Location||Price||Building Size||Building Rent|
|Chicago, IL||$700,000||F2,000 Square Ft.||$4,500/mo.|
|Brooklyn, NY||$350,000||1,600 Square Ft.||$4,382/mo.|
|West Amherst, NY||$75,000||2,500 Square Ft.||$3,200/mo.|
|Charlotte, NC||$585,000||3,600 Square Ft.||$4,250/mo.|
|Duarte, CA||$145,000||1,060 Square Ft.||$2,500/mo.|
|Orlando, FL||$995,000||2,000 Square Ft.||$6,300/mo.|
When you open up a Hookah bar, there are many costs that come with it and we are going to analyze some of them.
One of the greatest costs when opening a new business is represented by the space needed to operate it. A well-positioned space will be more expensive but will bring more profit. The monthly cost for renting a commercial space located in a central area is anywhere between $3,100 and $5,200. Many businessmen choose to rent the necessary space instead of buying it, but they must take into consideration that besides the rent there are other costs related to the maintenance, taxes, and insurance of the space. The average cost for a square foot retail space is anywhere between $30 and $85, depending on location, as seen in the table below.
You must consider the costs of renovating the space as well, which can be around $27,000, bringing up the total to almost $62,000 in building expenses alone in the first year of activity.
There is no doubt that starting a business in the United States can be quite costly. Opening up and running an indoor smoking lounge with food service might seem like it’s going to cost you lots of money. In the table below you will find the estimated costs associated with different permits and licenses that you will need.
|Legal Fees for Licensing and Permits||$1,200|
|Food Handler’s Permit||$300|
|Food Service License||$500|
|Live Entertainment/Music License||$400|
|Indoor Smoking Permit (if required)||$600|
|Alcoholic Beverage License (varies by state)||$1800|
After you have secured your business location and obtained the necessary permits and licenses, it’s time to purchase startup equipment for the hookah bar. You will have to budget for the following:
- security system – $850;
- shelving and storage hardware (racks, bins, glassware storage) – $4,000;
- service equipment and dishware (dishes, glasses, flatware) – $3,300;
- furniture, office, and electronics (printers, TVs, computers, chairs, sound system, tables) – $11,000;
- internet, phone, utilities (deposits, setup) – $2,100;
- cash register – $1,200;
- bar equipment and counter area (ice machine, sink, bar counter) – $6,500;
- website design and maintenance – $900;
- payroll and accounting software – $1,100;
- signage – $1,100.
All these expenses come to a total of $32,050.
The operational costs are the expenses needed to run and keep the business up. These include:
- inventory – $16,000;
- marketing and advertising – $2,200;
- monthly bills including payroll – $32,000;
- supplies – $1,100;
- insurance premiums – $3,200;
- consulting – $2,100.
These costs are greatly influenced by the business size and the number of employees, but for these operational expenses, you should budget around $55,000 in the start-up phase.
Surprisingly, tobacco and hookahs are the least expensive costs when opening a hookah bar. But when you are purchasing the hookahs you must pay attention to their durability, stability, and hoses. Also, the type of hookah is very important. There are traditional and modern hookahs, as well as single and multi-hosed ones. However, the average cost is anywhere between $30 and $40 for low-end pieces and $160 to $240 for the best quality hookah.
You must also budget for the hoses, which are anywhere between $2 and $7 each. Usually, the mouthpiece is made of ceramic and costs around $11 per piece. Besides these, you will also need coal to heat the hookah. You might spend around $60 per day on coal.
The tobacco that your customers are going to smoke through the hookah is called shisha. The cost of shisha is variable, depending on the quality, type, and brand. The best way to save money when purchasing it is if you get it in bulk from a wholesaler. Moreover, most of the wholesalers offer discounts if you buy in larger quantities. The average price for most brands is anywhere between $0.07 and $0.15 per gram.
Hookah Bar details
A shisha bar brings you a lot of money just from hookah smoking. A hookah session is paid for either before it is started or after it ends. Normally, a hookah is split between two and four people.
Hookah bars can also make money by selling shisha and hookah accessories. These accessories include coals, hoses, and dishes.
In addition, these types of bars can provide other services in addition to hookahs, such as food, alcoholic drinks, and soft drinks.
Important things to consider
After setting up the company, it is necessary to obtain all the approvals and authorizations specific to the niche. In the case of a bar, you need the following: fire permit, health permit, occupational medicine, occupational safety, environmental permit, copyright license for the music broadcast on the site.
Make sure you have enough hookahs for your guests. Each bar needs at least 12, but if space allows you can have 16 or even 18 stations depending on how many tables are available.
In order to have a successful business from the beginning, it is important to offer customers quality hookahs. To purchase the best products, you need to contact a hookah shop that sells handmade Egyptian hookahs and accessories made from durable materials.
High-quality shisha bar owners must also understand the culture of hookah smoking. Because hookah is a novelty for many, some visitors go to bars to try something exotic.
People who smoke hookah must be at least 21 years old. So, most likely you will have mature customers who come to try and enjoy the services of a hookah bar.
How can I build a successful business in this niche?
If your hookah bar offers the best shisha, the lowest prices, the best discounts, or other excellent features, it will most likely be a prime location for visitors. Hookah bars earn a lot from tobacco and hookahs. People who usually smoke shisha will pay as much as needed for quality and good tobacco and will return to the bar quite often. For this reason, a hookah lounge that offers the best products, services, or prices will have a huge advantage.