The following is a guest post by Norm Bour, who works with vape shops to help them build successful businesses. I sometimes get questions from hopeful shop owners, so I’ve asked the expert to share some things to consider if you’re considering such a jump into the industry. As usual, the opinions expressed in here are the authors.
There are more questions than answers when it comes to opening a store and there are many ways to screw it up and just a few ways to do it right. Do you open a franchise? Go it alone? What about supplies? Must I/you import directly from overseas? What about credit cards and merchant accounts. And financing?
We’re going to assume you made it through the “should I?” phase and now delving into “how do I?” arena.
How much money does it take to open a store?
Since the biggest cause of failure in any business is undercapitalization, whatever you plan on having—double it. I recommend no less than $25,000 and depending upon where you live and the cost to open that could easily be twice as high. I’ve spoken with some that have been able to get by for less than $20K and many have spent close to the six-figure area. Do you want a small little cubicle environment or a large comfy room with big screen TVs and adequate seating? The choice is yours and limited only by your vision and budget. If you need financing let us know since we offer it.
Depends on you, and there are pros and cons. This industry is new, always in flux, and subject to more outside influences than most. That includes the Fed, local political and regulatory agencies and the competition itself.
A franchise will offer you branding, some degree of experience to tap in to (that varies) and support in marketing and operations (usually).
Go solo or with a partner or partners?
“It’s easy to fail by yourself, but it’s hard to success alone.” I have shared that mantra for years and if you don’t have a partner in the legal sense, at least have supporters that back you up in all aspects from the emotional journey to the financial help.
Opening your store
Don’t get any more square footage than you think you will need. One of our first clients leased a cavernous 3000 square foot and is using half of it. Their plans for a lounge were premature and we had to intervene with the city to get it resolved. You do want an open environment that is comfortable and uncrowded, but you don’t want a stadium feel that is impersonal. This is a very personal business and repeated customers will result from their comfort level.
This is a question that is subject to your budget and your market. If you offer too many choices it will be hard for your customers to pick any, but if you just have a few they’ll not become the loyal clients you desire. There is NO single flavor, taste or brand that everyone will love, so don’t bother looking. Offer a good selection of fruits, “normal flavors”, candies and more traditional is a good rule of thumb and you should have ten to 15 or so offerings.
The same applies for mods since they can be costly to inventory. You do not want to tie up thousands of dollars in mods that are sitting there and that applies for juice as well. The secret: survey your market and track it. New products will always be offered so don’t worry about being the answer for every single person’s tastes. A more complete breakdown on costs can be read in my piece called “How much does it COST to open a Vape Shop” , which was based on information from Jon Merton with Vapor Craze.
Editor’s note: Check out this post for more info on a distributor with a good selection.
Read our Special Report on “The Missing Ingredient in the Vape Space: Customer Service” and you’ll get an idea of how I feel about the dismal shape of most Vape store training programs or hiring practices. Anyone who gets into this business JUST to make money will find challenges and hiring the wrong people is a costly mistake.
I’ve seen various opening hours from different vape shops and varying degrees of success when I call them. Most have hours that are too limiting and crappy telephone skills when answering the phones.
Accounting and Finances
A few things to think about are insurance, how you handle accounts receivable and merchant accounts. I met with Efren Gomez, the owner of Elite Vape Shop in Bakersfield, who had many concerns about merchant accounts. He shares “The Point of Sale selection is confusing and it’s hard to know what type of POS (Point of Sale) device to get.” Can you get by with just a Square or Pay Pal dongle? IMHO, no.
The China Question
Business can be difficult or can be easy or easier. Do you want to deal directly with importing and the rules and regs that go with it? Or do you find a local supplier that you trust and can work with? The hardware will continue to come from China, but juice is heading the other direction and more people are insistent on US made juice from a Clean Room. The profit margin on both items is generous so don’t be greedy.
I hope this offers some solid direction on the best tried and true practices and experiences. If you want more information visit VapeMentorS and download any of our Special Reports or contact support@VapeMentorS.com