Business idea: How to open your own vape bar? Business plan for opening a vape shop (vape bar), developing an online store of electronic cigarettes from scratch, making money selling electronic cigarettes. Ways to make money on electronic cigarettes.

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1. PROJECT SUMMARY

The goal of the project is to organize a vape shop in Novosibirsk. A vape shop is a place that combines the functions of a store and a club for lovers of so-called electronic vaporizers (electronic cigarettes). Customers can purchase the electronic devices themselves, consumables for them, related accessories, and also spend time smoking (“vaping”) and communicating with other visitors to the vape shop. Vaping today is a fairly powerful subculture, so a well-organized vape shop can attract a large number of customers.

The level of competition in Novosibirsk today is quite low - there are no more than 3 vape shops in the entire city. This is one of the main factors for the success of the project. The main indicators of the project's effectiveness are given in Table. 1.

Table 1. Project performance indicators

2. DESCRIPTION OF THE COMPANY AND INDUSTRY

Vaping (from the English Vape - steam) is a new subculture that is actively gaining popularity all over the world and in Russia in particular. Vapers contrast themselves with smokers of regular cigarettes; Smoking e-cigarettes is not considered harmful to health. To date, there are no official statistics on the number of vapers, sales volumes of devices and consumables. However, if we assume that every twentieth smoker in the country uses electronic cigarettes, then the market size can be estimated at 2.5 million people (according to statistics, in 2015 smokers made up 35% of the country’s population). This number will constantly grow - both due to the transition of smokers of regular cigarettes to electronic ones, and due to non-smokers joining the new subculture. The average cost of a smoking device is 3,000 rubles, the period of use is 1-2 years. Consumables – bases, flavors, batteries, etc. – purchased at different intervals depending on the activity of using the device, but, as a rule, at least once a week. The average bill is about 300 rubles. Thus, in monetary terms, the market can be estimated at 40 billion rubles per year.

Like any subculture, vaping is characterized by a high level of involvement of its participants, commitment to brands and trends, and active monitoring of new products and fashion trends.

In Novosibirsk today, vape culture is also actively developing, but the level of competition is still low - 12 stores specializing in the sale of electronic cigarettes and 3 vape shops.

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The main difference between a vape shop and a store is the possibility of visiting the former not only to purchase devices or consumables, but also to communicate over interests while smoking, like in a social club. For this purpose, the establishment has a bar-like counter and several chairs. Since the establishment does not belong to the catering industry, it is not required to have a bathroom for customers, and other requirements usually imposed on bars and clubs are also not applicable.

The location of the vape shop is the territory of the Creative World cultural and leisure center, which houses shops for youth, art workshops, bicycle rental and repair, etc. Since the most important target audience for the project is young men and women aged 18 - 35 years, the location in this location is the most appropriate and justified.

The range includes vaping devices, consumables and accessories. Price category – average. The product line includes devices for both beginners and professionals. The former are represented in less volume than the latter.

Investment costs for opening a vape shop include renovation and decoration of the premises, expenses for the launch advertising campaign, the purchase of the first batch of goods for storage, as well as the formation of a working capital fund until the project reaches payback. The project initiator performs, among other things, the function of a seller. Investment costs are shown in Table. 2.

Table 2. Investment costs

	NAME	AMOUNT, rub.
Real estate
	Room renovation
Equipment
	Cash register equipment and software

Intangible assets


Working capital
	Working capital

	Total:	411,000 ₽
	Own funds:	RUB 200,000.00
	Required borrowings:	211,000 ₽
	Bid:	18,00%
	Duration, months:

3. DESCRIPTION OF GOODS AND SERVICES

The project's assortment includes vaping devices, consumables, and accessories. The product line consists of 78 items, therefore, for ease of description and financial calculations, they are combined into product groups, for each of which the average bill amount is determined. Product groups and their characteristics are given in Table. 3.

Table 3. Product groups and their characteristics

	Product group	Characteristic
	Beginner Kits	Starter kit consisting of a maintenance-free low power electronic cigarette (clearomizer + battery pack) and battery (China)
	Professional kits	High power kits and mods, serviced (China)
	Professional Premium Kits	A line of professional sets from the USA, released in limited editions. Distinctive features: high autonomy and power, stylish design.
	Liquids	Liquids and flavors for vaping (China, Russia)
	Accessories	Electronic Cigarette Cases, Maintenance Tools and Other Accessories (China)

Table 4. Purchase cost and selling price

As an additional service, customers are offered testing of individual device models or types of liquids in a vape shop, on the basis of which they can make a purchasing decision. Also, vape shop visitors can vape inside the store behind the bar counter. There are five seats, however, if desired, visitors can also stand.

Sellers provide consulting services on the selection of devices and liquids, and provide instructions on their maintenance; If necessary, they can conduct a master class on maintenance.

4. SALES AND MARKETING

Sales are carried out directly at the vape shop. Behind the bar counter there is a display case on which devices and consumables are placed. The client can sit comfortably at the bar while the salesperson talks about the features of a particular device, and can also test the device on the spot.

At the initial stage, promotion is carried out through contextual advertising on the Internet, as well as through the distribution of advertising materials among visitors to the Creative World CDC, which is, in fact, a youth community with close relationships. Community members support each other and help in development. Thus, the first clients of the vape shop will be tenants and visitors of the CDC. In the future, it is expected that information will spread virally through people who have already visited the vape shop.

Traditional methods of promotion include promotion on social networks (vk.com, fb.com, Instagram, Twitter). In addition, it is planned to use innovative methods of brand promotion: filming viral videos, holding cloud-chasing competitions (vaping at the maximum power of electronic cigarettes in order to obtain a large cloud of vapor).

Reviews of new devices and liquids

Instructions for selecting and servicing devices

Life hacks for using vape devices

Cloudchasing competition video

company's news

It is planned to implement a loyalty program to stimulate the purchase of devices and consumables: each buyer receives a card, which the seller puts a mark on for each new purchase. After every tenth purchase, depending on the total amount, the client receives a gift from the store.

5. PRODUCTION PLAN

The vape shop is located on the ground floor of the Creative World CDC in a room with an area of 25 m2. The premises require cosmetic repairs and designer decoration. All communications have been completed. The estimated period for repair work is 10 working days. It is possible for the landlord to provide rental holidays for two months.

In parallel with the renovation of the premises, a bar counter is made to individual sizes. Manufacturer: furniture factory in Novosibirsk.

The goods are purchased in small quantities from two wholesale suppliers located in China and Moscow, delivery is carried out by a transport company. The back room of the vape shop is used for storage. The volume of the purchased batch is determined as the planned sales volume for the month plus ten percent.

6. ORGANIZATIONAL PLAN

The project implementation process can be divided into two main stages: preparatory and working. During the preparatory stage, the premises are renovated and decorated, and the first batch of goods is purchased. Duration – 3 weeks. At the second stage, operational activities are directly carried out. The duration of the project is limited to approximately five years, after which, depending on the development of the vape device market, a decision may be made to close it and withdraw funds.

The organizational and legal form of the project is individual entrepreneur. All the main management functions are performed by the entrepreneur, combining them with the responsibilities of the seller. The organizational structure of a vape shop is very simple: two shift salespeople (one of them is the initiator of the project), an outsourced accountant. Working hours – 10.00 – 20.00, 2/2.

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There are no special requirements for project personnel. For a hired salesperson, knowledge of the topic of vaping is preferred; in the absence of such knowledge, training is provided. The salesperson's salary is 25,000 rubles. The total wage fund (including payment for accounting services) is 37,700 rubles per month (with deductions to extra-budgetary funds).

7. FINANCIAL PLAN

The financial plan is drawn up for a period of five years and takes into account all the income and expenses of the enterprise.

Investment costs include the cost of repairs and furnishings of the premises. Purchasing cash register equipment and trading software, developing a website and conducting a launch advertising campaign. This also includes funds for the purchase of the first batch of goods, as well as for the formation of a working capital fund, with the help of which the losses of the first periods of the project will be covered (Table 2).

The project initiator’s own funds are 200,000 rubles. The missing amount of funds is planned to be raised using a bank loan for a period of 24 months at a rate of 18% per annum. Credit holidays – three months. Repayment is carried out by annuity payments.

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Variable costs include the costs of purchasing goods and transporting them (Table 4). Fixed costs include rent, utilities, advertising costs, etc. It also includes depreciation of fixed assets and intangible assets. The amount of depreciation charges is calculated using the straight-line method, the useful life is five years.

A detailed financial plan is given in Appendix. 1.

Table 5. Fixed costs

8. EVALUATION OF EFFECTIVENESS

Efficiency assessment is carried out on the basis of an analysis of the financial plan, as well as using simple and integral performance indicators (Table 1).

Revenue from the first year of project implementation – 3.7 million rubles; net profit (after taxes) – 617,147 rubles. Revenue in subsequent years is 4.6 million rubles, net profit is 994,524 rubles.

The simple and discounted payback period is 9 months. To take into account changes in the value of money over time, the cash flow discounting method is used, the discount rate is 7%.

The net present value of the project (NPV) is 532,473 rubles. Return on Investment Ratio (ARR) – 20.7%. Internal rate of return (IRR) – 13.21%. Profitability index (PI) – 1.3. All these indicators indicate the profitability of the project and its investment attractiveness.

9. WARRANTY AND RISKS

To achieve maximum efficiency and financial stability of the project, all possible risks associated with its implementation are analyzed. Both internal and external factors are assessed.

The main internal factor can be attributed to the incorrectly selected product line. To prevent loss of profit for this reason, constant monitoring of the market and competitors is necessary in order to identify the latest market trends and assess demand.

The main external influencing factor is government regulation of the industry. In particular, a ban on the use of vaping devices in public places, on the one hand, could negatively affect the level of consumer demand, and on the other hand, attract more visitors to the vape shop as a place where the devices can be used.

10.APPLICATIONS

Annex 1.

Financial plan

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Denis Miroshnichenko
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Every day there are more and more vape lovers. As a business idea, selling vaping products is considered very promising. There is no strong competition in this area. Along with the ever-growing number of fans of vaping, the need arose to create establishments where vapers could gather and communicate with like-minded people. Opening a vape bar is much easier than, for example, a hookah bar - smoking bans do not yet apply to vaping. How to open your own vape bar so that it becomes profitable? Below we will consider this issue in more detail, but for now we will consider the legality of organizing such a business.

Anti-tobacco law No. 15-FZ (02/23/2013) does not affect the use of electronic evaporators. The bans apply to the use of tobacco cigarettes and the spread of tobacco smoke. Administrative liability, approved by law, occurs only for tobacco use - sniffing, chewing and inhaling smoke. Electronic cigarettes do not contain tobacco products. When using an electronic vaporizer, no tobacco smoke is generated. The use of nicotine is not prohibited.

Most e-liquids do not contain nicotine. Therefore, the use of electronic cigarettes is not affected by legislation and it does not matter where the vaper is located.

The only caveat in the sale of electronic vaporizers is that it is prohibited to sell wholesale or retail products that look like regular cigarettes. Considering that the use of such products is not prohibited, it is not surprising that such a legislative norm is puzzling. It turns out that it is possible to produce tobacco cigarettes, but not imitation? But almost all models of electronic evaporators are not similar to tobacco products, so problems with their sale rarely arise.

Vape bar as a business project.

The main slogan of any vape bar: “ We don't sell food and drinks, but mood!". This is a fashionable place for like-minded people to relax. What attracts a vape bar to its customers?
Let's take a look at the features of vape bars:
The main clientele are young people aged 18-35 years. Young people are eager to get acquainted with all kinds of new products. Most of all, they like to relax in the company of like-minded people, in a comfortable environment. It is inconvenient to use a vaporizer outdoors. Although this is not prohibited by current legislation, vigilant people may consider the smoker a drug addict and call law enforcement officials.
The atmosphere of vape bars is not much different from ordinary hookah bars. The decor of hookah bars is most often made in oriental style, while the decor of vape bars is laconic. The design of the room is done in a high-tech style or similar to the decor of sports bars. In addition to the main components - stands and display cases with liquids for vaping, vape bars contain indispensable attributes - a TV, a game console, board games, and listening to music.
The main component of the success of a vape bar is competent staff. Vape bar employees must have professional knowledge of vaping and advise visitors on the selection of liquids and evaporators.

After reading numerous reviews from visitors to vape bars, we can conclude that the goals of visiting vape bars are to vape, chat with like-minded people, try out new flavors of liquids and learn all the intricacies of vaping. The desire to have a snack, play a console or watch TV fades into the background. That’s why friendly staff who can explain all the intricacies of visiting these establishments is so important for vape bars. Vape bars also hold competitions and master classes between vapers, during which they exchange all the subtleties of vaping with each other. Based on the results of search engine queries, you can see that such establishments are opening in large cities. Opening vape bars is becoming an increasingly popular business option.

The size of the investment and the payback period for the vape bar.

The amount of starting capital directly depends on the format of the vape bar. The full range of services involves dividing the bar into several zones:

« Fresh» - an area where visitors are offered: tea, coffee, sandwiches and light snacks, juices, smoothies;
« Vapetek» — a recreation area for steamers, in which they hold events, soar, and acquire new tastes of liquids;
« Bar» — for steamers who love strong alcoholic drinks and cocktails;
« Lounge» — a privacy zone for couples in love or fans of game consoles;

Services, prices for “gadgets” for vaping and liquids in different vape bars across the country.

The specifics of the establishment and the target audience of visitors depend on the presence of certain zones.
There are two formats of vape bars:

To open an online store, the initial investment is approx. 600000 rubles This amount consists of the following costs:

Purchase of electronic devices and liquids - 420000 rub.;
Advertising promotion - 100000 rub.;
Website creation - 50000 rub.;
Promotion and optimization of the resource - 20000 rub.;
Dedicated number. Domain maintenance, SSL certificate - 10000 rub.

Chinese goods have a low cost, so the markup on them can reach 300%. The daily income of an online store can reach 42,000 rubles. daily. From this it follows that with a competent approach, investments in an online store pay off in about a month and a half.

Conclusion.

Opening a vape bar is considered a promising business project, regardless of its format. You don't need too much space to store vaporizers and related accessories. Additional profit can come from servicing vaping equipment. After the entrepreneur has decided on the format of the club, he needs to start an advertising campaign on social networks. It is best to start informing the population about the opening of an establishment three months before its opening date. During this period, you will have time to gain a sufficient number of subscribers and tell them about the specifics of your establishment. During this advertising campaign, you will be able to determine the interest of potential customers in certain assortment items, and also arouse their interest in the opening establishment.

Nowadays, vaping is a popular element of the subculture, and the demand for it not only does not decrease, but is constantly growing. In addition to the actual sale of electronic cigarettes, you can open a vape bar - an atmospheric place, a club of interests among vapers.

Here you can chat with like-minded people, spend time with friends or your other half. At the same time, the atmosphere is absolutely comfortable: no opponents of electronic cigarettes and no ardent fans of real tobacco.

Legality of a vape bar

Any measures of administrative liability relate only to the use of tobacco, or more precisely, inhalation of its combustion product (smoke), sniffing or sucking. Electronic cigarettes are not banned because they do not contain tobacco and do not produce smoke during the “vaping” process.

Nicotine, which is contained in many mixtures, is not prohibited for use. In addition, many “liquids” do not contain it at all.

Thus, there is not a single document that would prohibit the distribution and use of E-cigarettes.

The only caveat. The production and sale of smoking products that externally imitate real cigarettes is prohibited. That is, you cannot sell vapes that have a similar shape, although you can use them.
Vaping is a legal and harmless analogue of cigarettes

Vape bar as a business

At the heart of this establishment is not the food and drinks, but the mood and atmosphere. This is a fashionable place that has the following distinctive features:

Decorated in a modern style (as opposed to an oriental one).
Equipped with upholstered furniture for complete relaxation, a bar with soft drinks (alcohol is in another room) and a display case with electronic cigarettes and a variety of liquids for them.
Has good ventilation.
E-cigarette rentals are available. Visitors who come with their own vapes should definitely purchase E-cigarette liquid and drinks at the bar. This is a must!
Equipped with a high-quality music system.

It wouldn’t hurt to equip the vape bar with additional entertainment options: massage chairs, board games, etc.

Visitors

The main contingent of such establishments are young people from 18 to 35 years old. If you open a vape bar right now, you can get into the wave of popularity, since such facilities are only gaining momentum. And the factor of novelty attracts young people.

In addition, it is not always comfortable to “float” on the street; you want to relax in an appropriate environment without the sidelong glances of passers-by.

Staff

The selection of employees should be taken seriously. First of all, all staff must be well versed in vaping. It is advisable that he is also a fan of vaping. In this case, visitors will be served by an experienced specialist who will advise new products to experienced vapers, and will also explain to beginners the process of smoking and the choice of “liquid” and a suitable device.

Staff must be on the same wavelength as customers

Institution format

A vape bar should consist of several zones:

Fresh is an area where tea, coffee, non-alcoholic cocktails, juices, and light snacks are sold.
Vapetek is the main area where people buy and try e-cigarettes and conduct entertainment events.
The lounge is a place of solitude with your other half or for those who like to sit alone.
Alcohol zone – for fans of strong drinks.

We calculate income and expenses

The size of the investment depends on the type of establishment chosen. Two options are most widespread.

A vape bar that combines catering and vaping services. Here you can have a snack, drink and “steam” at the same time. The area of the room in this case should be large enough. If you assume the presence of a kitchen, then this business idea is practically no different from ordinary cafes and restaurants, where it is necessary to adhere to a number of requirements.

To open such an establishment you will need about 5 million rubles. Payback period is about 8 months.

The projected income in the future is 700 thousand rubles in the summer and 1 million in the winter.

Club place for vapers. This is a bar where you can play board games, watch a movie, and take part in various competitions.

Organizing such a business is much easier, investments are much less. The entire project will cost no more than 2 million rubles.

Instead of the kitchen, you can install a vending machine for selling pizza or hot dogs, as well as a coffee machine.

Additional income will come from a point selling liquid, batteries, charging cords, and so on.

Selling vape liquids will bring additional income

Vape bar promotion

First of all, you will need a bright sign that would immediately indicate the format of the establishment.

Next, you need to create groups on social networks, regularly update them, post interesting news about your establishment, inform about promotions and discounts, and provide an assortment of liquids. It is better to lead a group of such a bar using an informal writing style, with a dose of humor and jokes. This inspires confidence in the main category of visitors – young people aged 18 and older.

Your own website is desirable, but not required.

As a rule, the vast majority of visitors are people who heard about you from someone somewhere or saw a sign. Therefore, the main components of success:

Location in a passable place
Attention-catching sign
Advertising on social networks
Focus on the quality of service delivery so that word of mouth works well.

Conclusion

Vape bars are booming right now. Whichever of the two formats you choose, both have excellent prospects. A large area of the establishment is not required, no difficult conditions are expected. All that is needed is the availability of related accessories for vaping and decent service.

The intricacies of the Vape Studio franchise business

To bookmarks

While vapers are being caricatured, the business of selling vaporizers is turning from a hobby into a global industry. The store owners told how to open a franchise business, what is the difference between metropolitan and regional vapers, and whether it is possible to make money from vaping.

The material was prepared with the support of Vape Studio.

The success of a franchise network highly depends on the performance of the franchisor himself. . It is all the more interesting to compare what problems the vaping franchise Vape Studio managed to solve.

Where to begin

Even in a well-promoted industry, franchisors often do not have serious assets, but only provide support on social networks and give advice of dubious quality. Vape Studio offers its partners something more tangible and meaningful: a well-promoted brand, a full set of instructions for setting up a retail outlet and training staff, discounts from suppliers, marketing support - and, most importantly, connections.

Selling vaping products is a completely new field, so Vape Studio's educational materials are unique. Consultants explain to newcomers what their stores and products should look like, how sellers should communicate with customers, and which e-liquids to purchase first.

A separate line includes consultations on working with government agencies. Vape Studio does not get involved in the accounting of partners, but it teaches how to register a retail outlet so that the sanitary and epidemiological station and the fire inspector do not issue a fine, and also explains the features of the taxation system.

We opened recently, at the end of May. Vape Studio consultants came to us and told us how to build a business, how to do repairs, what to write on social networks and what is best to buy for sale. Rodion (with founder of Vape Studio and"vaping sommelier" - approx. website) came to the opening and trained the staff, telling them how to present themselves in the market.

Now the company is well known, everyone knows that we are a network. This inspires trust, and sales grow; many people come to us because we have an interesting concept. Vape Studio negotiates with suppliers and gets us discounts.
- Tatyana, owner of the Vape Studio store in Nizhny Novgorod

Business entry cost

If in some franchises the owner only receives a sign and is otherwise left to his own devices, then at Vape Studio the expenses are broken down point by point and the threshold for entry is calculated. The cost of the franchise itself is 70 thousand rubles per city. Renovating the premises and decorating in accordance with the corporate style will cost another 350-500 thousand rubles, and the first purchase from suppliers will cost 600 thousand. Plus advertising costs. Although the studio provides banners, sketches and layouts for printing, the franchisee pays for the placement.

According to the advice of the co-owners of Vape Studio, when choosing a location, you need to focus on traffic, since the share of regular customers in this business is small. This is not a restaurant; here people prefer to buy consumables along the way. The one who stakes out the best place in the city will earn more.

“You shouldn’t be afraid of big expenses - you should be afraid of small incomes,” they say at Vape Studio and claim that the monthly profit from one store can be about 200 thousand rubles at the very beginning of work. The market is just emerging, there are no established competitors, often there is only one vape shop in the entire city or none at all. This determines the rules of the game: the marginality of commodity items ranges from 100% to 400%.

However, money is not all you need to be successful in the industry. The vape business is a type of retail trade, and without the appropriate experience, as the founders of the studio admit, it is very difficult in this area. Therefore, not everyone who submits applications on the franchise sales landing page makes it to Vape Studio partner.

“If a person says: “Dad gave me one and a half million, and I want to open a vape shop!” “We filter such people: they, as a rule, do not value their time and ours and think that if you open a business, you can immediately fly to the Dominican Republic to smoke cigars, but this is not so.”

A collective portrait of the owner of an electronic cigarette store - a young, accomplished entrepreneur of 25 years of age, who is often developing a second line of business.

“In the first month, we definitely recovered the salaries of sellers and rent, and partially recovered purchases. My accountant didn’t complain,” Tatyana continues to share her experience. “There is always enough for rent, salaries and purchases.”

Model feature

The Vape Studio network now includes 15 stores, four of which are managed by the owners themselves - that is, the franchisors are not divorced from the business, but work daily in the appropriate environment.

Vape Studio managers say their business is more like a consulting business than a classic franchise. Initially, a one-time payment is made for the right to use the sign, and the rest of the money from the franchisee comes in the form of consultation fees.

We test vape liquids and tell you in what proportions to purchase them. For example, milk will go well, but strawberries will go worse. The most important thing is information about what will be sold.
- Yuri, co-founder of Vape Studio

Liquids have to be tested carefully, since in Russia there is still no clear legislative framework and control over the creation of liquids for vaping. That is why Yuri jokingly calls his partner “sommelier.” Although all sorts of sanctions and counter-sanctions have not yet had any impact on the industry, the store owner can play with import substitution. Russia has already established the production of many brands of liquids that successfully replace foreign ones in the budget segment.

Capital vaping versus regional vapor

The difference between metropolitan vapers and regional fans of electronic cigarettes is striking. In Moscow, vaping has become part of city culture and a means of self-expression, which is often laughed at on the Internet.

In the regions there is no strict relationship between electronic cigarettes and the subculture. On the contrary: the phenomenon covers the entire population. Many people see vaping as an alternative to regular cigarettes, while others simply want to choose the taste of smoke themselves.

Different motivations have a strong impact on the consumption culture and, accordingly, the average price tag. If in Moscow expensive “liquids” with complex aromatic bouquets at a price of 1000–1500 rubles are valued, in the regions simpler liquids in the 400–700 ruble segment are more in demand. Only age and social criteria more or less coincide: the average vaper is 25 years old or older, and his income level can be assessed as stable.

Vape Studio resolved the “children’s issue” preemptively, without waiting for the State Duma to adopt relevant laws. The network already sells electronic cigarettes and consumables only to adults.

A business plan for opening a new business in the service sector, which can be used as an example to assess the investment attractiveness of opening your own vape shop.

The purpose of this review is to confirm the economic efficiency of launching a project to create your own vape shop in a city with a population of about 1 million people.

Relevance of the idea

Smoking is one of the most common bad habits of modern society. However, vaping (vape - from the English steam) is an unconventional form of this bad habit. Vapers (people who use electronic cigarettes to satisfy their smoking habit) contrast themselves with traditional smokers, stating that the use of electronic cigarette analogues does not harm their health. Vaping (smoking electronic cigarettes) has become widespread in modern cities; Moreover, this movement has even grown into a subculture. Some experts associate such a rapid and massive spread of this type of smoking with the ban on smoking tobacco in public places in some countries.

It is worth noting that legislative prohibitions relate exclusively to the use of tobacco (in all its forms) in public places, but the use of nicotine itself continues to remain unnoticed by the authorities. When opening your own vape shop, an entrepreneur must understand that this will not be a simple store selling electronic smoking devices and related consumables. Vape shops have become analogues of hookah bars: in addition to the sales points themselves, most of these stores have lounge spaces where the target audience can relax, try new flavors of smoking liquids, and just have a good time in the company of like-minded people. There are often cases when vape shops turn into an analogue of a cafe: the administration of such establishments offers their clients drinks, food and other attributes of public catering places. However, we should not forget that vaping is a fashionable, subcultural movement, and fashion, as we all know, tends to change and pass quickly.

Basic services provided in a vape shop

Sale of vaping devices
Sales of consumables
Sale of accessories

Below in the article we will describe step by step the stages of opening your own vape shop.

Organizational and legal form

To open your own vape shop, you can choose to create a legal entity in the form of a private entrepreneur or a limited liability company. Do not forget that when opening a legal entity in the form of a private (individual entrepreneur), all risks associated with conducting business activities fall on the business owner. When opening a legal entity in the form of an LLC, responsibility, according to current legislation, falls on the general director of the enterprise, as well as on the chief accountant of the company. We should not forget that the form of taxation also depends on the type of the chosen legal form of the company. Opening an LLC will allow you to easily sell a stake in your business, as well as attract partners. After choosing the organizational and legal form, you need to proceed to the selection and registration of a cash register customer service system.

Renting premises

When choosing a location to open your own vape shop, you need to carefully analyze the competitive environment. Due to the fact that the range of stores of this kind is relatively the same, before concluding a lease agreement, you should make sure that there are no competitors in the location you have chosen. To organize a small store selling electronic smoking devices, an area of 50 sq.m. is required. This area must be divided into two conventional zones - the zone for the direct sale of devices, liquids and accessories, and the zone in which customers can relax comfortably and spend time in the company of like-minded people and try the product you just purchased. You also need to make sure that your target audience is present in the location you choose. Considering that this phenomenon (vaping) is subcultural in nature, you should pay attention to locations near large higher educational institutions, fashionable shopping centers, etc.

Repair and design of premises

The costs of initial renovation and design of the premises depend on the concept of your business. An entrepreneur should pay attention to the fact that he is opening not just a store selling smoking equipment - he is opening a kind of space intended for customers to spend time. You shouldn’t skimp on the renovation and design of the premises, since the design of the premises will be one of the key competitive advantages of your business. Modern vape shops have become more and more like hookah shops, but while the latter are dominated by oriental interiors, vapers prefer high-tech style or classic English design.

Necessary equipment

To open your own vape shop, you need the following set of equipment, the most expensive of which is, of course, furniture designed to ensure a comfortable stay for your customers in your store. Below is an approximate set of equipment required for initial purchase.

Name of equipment	Quantity	Cost of 1 unit, $	Total position value
Rack	5	100	500	Bar-shaped counter	1	500	500	Sofa for relaxation area	4	300	1 200	Table for seating area	4	200	800	TV	1	400	400	Game console	1	500	500	Cash service system	1	600	600	Total			4 500

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Marketing plan

One of the key factors for the success of your own vape shop is a marketing campaign, the goals of which are to convey to the target audience the competitive advantages of your establishment (pricing policy, assortment, service, etc.). Printing printed products that will be distributed near your store, online promotion (website, social networks) and, of course, the external design of your store, which is definitely not worth saving on, will help you achieve your goals.

Direction of activity/costs per month in $	1 month	2 months	3 months	4 months	5 months	6 months	7 months	8 months	9 months	10 months	11 months	12 months
Signboard	700	0	0	0	0	0	0	0	0	0	0	0	Printing	150	150	150	150	150	150	150	150	150	150	150	150	Advertising on social networks, Instagram	250	250	250	250	250	250	250	250	250	250	250	250	Total advertising costs	1100	400	400	400	400	400	400	400	400	400	400	400

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Staff

To open a small vape shop, you need 4 sellers working in 2/2 shifts. It would be unnecessary to mention that specialists selling products of this kind must not only understand the basics of smoking using electronic devices, but also be real professionals in this matter. When hiring, you need to make sure that your future staff is knowledgeable and professional, since only a specialist knowledgeable in this area can provide the level of service necessary to sell your product. It is assumed that the functions of the establishment's administrator will be performed by the entrepreneur himself.

Job title	Number of staff	Salary, month, $
Fixed payroll costs			Shop assistant	4	400	Total fixed wage costs		1600

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Schedule for opening your vape shop

On average, it takes about 1 month to fully launch a small vape shop. The schedule for the preparatory work is presented schematically below.

Stage name	1 week	2 weeks	3 weeks	4 weeks
Registration of a legal entity, opening a current account					Conclusion of a lease agreement					Ordering the necessary equipment and furniture					Formation and ordering of the initial product range					Start of an advertising campaign					Repair and design of premises					Installation of equipment and furniture					Recruitment					Start of activity

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Calculation of the investment attractiveness of the project

For the calculations we used the following parameters (in addition to those already mentioned above)

Rent of a 50 sq.m. premises: $1,500 per month (rental price includes utilities)
Initial renovation and design of the premises: $50 per sq.m.
Vape shop opening hours: 12 hours a day without breaks and weekends (from 10.00 to 22.00)
Average cost of one smoking kit: $60.
Average cost of one smoking liquid: $5.
Average cost per accessory: $10.
Trade margin for the entire range: 100%

When drawing up a business plan, the calculation of net profit did not include costs associated with paying taxes.

In our financial model, we used the assumption that each client who purchased a smoking kit would purchase 3 smoking liquids per month.

Maximum capacity of the vape shop (sale of smoking kits): 120 clients per month
Maximum capacity of the vape shop (sale of smoking mixtures): 360 clients per month

Planned capacity of the vape shop: 80% of maximum capacity

Financial plan for the project

Revenue	1 month	2 months	3 months	4 months	5 months	6 months	7 months	8 months	9 months	10 months	11 months	12 months	2 year	3 year
Sale of smoking kits															Number of clients		30	36	43	52	62	75	90	100	100	100	100	800	800	Revenue from the sale of smoking kits		3 600	4 320	5 184	6 221	7 465	8 958	10 750	12 000	12 000	12 000	12 000	80 000	80 000	Sale of smoking liquids															Number of clients		90	108	130	156	187	224	269	300	300	300	300	2 400	2 400	Revenue from the sale of smoking liquids		900	1 080	1 296	1 555	1 866	2 239	2 687	3 000	3 000	3 000	3 000	24 000	24 000	Sale of accessories															Number of clients		50	60	72	86	104	124	149	179	180	180	180	2 160	2 160	Revenue from sales of accessories		1 000	1 200	1 440	1 728	2 074	2 488	2 986	3 583	3 600	3 600	3 600	43 200	43 200	Total revenue	0	5 500	6 600	7 920	9 504	11 405	13 686	16 423	18 583	18 600	18 600	18 600	147 200	147 200	Expenses															Rent	1 500	1 500	1 500	1 500	1 500	1 500	1 500	1 500	1 500	1 500	1 500	1 500	18 000	18 000	Licensing	300														Initial renovation and design of the premises	2 500														Current repairs of the premises							150	150	150	150	150	150	1800	1800	Product cost		2 750	3 300	3 960	4 752	5 702	6 843	8 211	9 292	9 300	9 300	9 300	73 600	73 600	Fixed part of the wage fund		1 600	1 600	1 600	1 600	1 600	1 600	1 600	1 600	1 600	1 600	1 600	19200	19200	Marketing	1 100	400	400	400	400	400	400	400	400	400	400	400	4800	4800	other expenses		150	150	150	150	150	150	150	150	150	150	150	1800	1800	Total expenses	5 400	6 400	6 950	7 610	8 402	9 352	10 643	12 011	13 092	13 100	13 100	13 100	119 200	119 200	Financial results	-5 400	-900	-350	310	1 102	2 052	3 043	4 411	5 492	5 500	5 500	5 500	28 000	28 000	Equipment	4 500														Formation of the initial product range	5000														Net cash flow	-14 900	-900	-350	310	1 102	2 052	3 043	4 411	5 492	5 500	5 500	5 500	28 000	28 000	Need for investment	16 150

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Average business margin after reaching planned capacity: 29.5%

It should be noted that the calculations do not take into account such items as depreciation, as well as all expenses associated with taxation of the enterprise’s activities.

Graphic representation of the dynamics of revenue and net profit by month in the first year of the project