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Old April 12th, 2010, 08:38 AM
ngraz617's Avatar
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Hookah Nut
Join Date: Jul 2009
Location: NY
Posts: 354
Default Re: Throwing around the idea of creating a hookah lounge

Originally Posted by Hajo Flettner View Post
I'd be very cautious about getting into this line of business. You need to keep in mind that start up costs are pretty substantial ( in my case 100K) and that you must be able to operate at a loss for several months and often for over a year while still meeting all of your personal bills. We should remember that while narghiles are presently very trendy it could cease being hip any time and business can decline in any area do to increased competition, tax increases, new anti-smoking laws or a decline in the local economy. In Albuquerque, not too far from me, it's impossible to keep a record shop open even when it's a block from a university which shows the local economy is shit. You should note that in some places in order to allow smoking in a retail establishment you need to generate upto 80% of your revenue from tobacco products. For a lot of lounges that simply is not possible as selling drinks and snacks is a major source of revenues. When I had a narghile cafe I had a record shop in the same space which helped a lot in paying the bills and that simply is not an option in a lot of places.

Still, if you have carefully researched everything, have means to get the money on decent terms and know something about running a cafe by all means give it shot. Just be ready to opperate at a loss for a year or more.
What makes everyone say you are going to operate at a loss for months to years. If for instance this was the scenario. You're in a college town with over 30k students and you have a small Middle Eastern community too and a hospital and two Pharmaceutical companies with a combined 10K employees surrounding a small town that has a huge night life basically 7 nights a week and not another lounge within 50 miles, do you think if set up right and ran correctly it couldn't turn a profit from day one if advertised and buzzed about for months prior to the opening. with say a potential 40k customers that all meet the required demographics exactly and it's really more than that, for hookah, if you were able to average one half of one percent of them daily and they on average spent $20 each that's 200 customers a dayx$20.00=$4000.00x 7days= $28000 a week in business about 120K a month. I think that's conservative figures?? even at $15 a head thats still 84000 a month and oprating costs are no more than 20k a month and that's highly overestimated.
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