My store is opening a lounge but we need some help...

[stj386]

The small shop i work in has recently expanded and we are in the process of making a smoking lounge. The only issue is how to make a profit off having the lounge or at the very least how to break even. We have considered several ideas but many seem to have us stuck in terms of execution. Any ideas would mean the world to me and the guys at my shop!

[Blak Smyth]

What kind of ideas are you looking for?
I know many lounges have a membership fee, like $200/year and members save like 10% off purchases. Also some offer members a locker/storage.
Events are a great way to draw a crowd.
You could sell beverages, coffee is a weapon of choice!

What ideas have you considered so far?

Do not, I repeat DO NOT charge a cover charge.

How will you make money? Buy having customers spend time (and money) in your business. You can't get my money if you can't get me to your shop.

There's a shop with a nice lounge here in So Cal. To use the lounge you have to spend at least $20 or be a member. I never go there.

[Blak Smyth]

Originally Posted by ysr_racer

Do not, I repeat DO NOT charge a cover charge.

How will you make money? Buy having customers spend time (and money) in your business. You can't get my money if you can't get me to your shop.

There's a shop with a nice lounge here in So Cal. To use the lounge you have to spend at least $20 or be a member. I never go there.

I go to a nice lounge sometimes that has a free lounge for walk-in guests (1 cigar minimum purhcase) and a seperate private lounge for members. Members receive a locker and a discount on all purchases. Also they have private events that only members are invited to.

[sevans105]

Adding coffee is a relatively easy way to add something that has a pretty high profit margin. Obviously, the idea of a lounge is to have as place for guys to hang out and enjoy a cigar or two. During that time, people get hungry and thirsty. Prepackaged snacks, a small fridge with bottled sodas, these are things that guys will want and can greatly impact the bottom line. One shop I know of charges a few bucks a month for a "business membership" Guys bring their laptops down and they have access to a printer, etc. Just a couple ideas.

[grateful1]

Originally Posted by stj386

The small shop i work in has recently expanded and we are in the process of making a smoking lounge. The only issue is how to make a profit off having the lounge or at the very least how to break even. We have considered several ideas but many seem to have us stuck in terms of execution. Any ideas would mean the world to me and the guys at my shop!

This is bothersome in that they are expanding without knowing how to afford it...(sound familiar)!

Anyhow - run some events with inexpensive treats or wine/booze tastings to get people in the shop and enjoy the lounge.

Aside from that...have great seats with tv's....maybe a coffee /soda area as well.

Free wi-fi too.

You don't need to make a lot off the lounge, it's just a way to get/keep customers in your shop.

I like the "1 cigar minimum purhcase" idea.

[stj386]

I think the idea of the business membership is great!

The only idea i have really is charging a monthly fee to use the room and having that fee go towards store credit.

[grateful1]

Originally Posted by stj386

I think the idea of the business membership is great!

The only idea i have really is charging a monthly fee to use the room and having that fee go towards store credit.

Not monthly...yearly for lockers.

Personally...charge for the lockers and NOT the lounge.

Also...see about running a poker night for charity (not yours!) or some such thing.

[mosesbotbol]

There's a ton of stuff you can do to bring profit in

Can you sell liquor, beer, wine, or food? You have to think of add on sales or value added services. Could be anything that you can offer. How about massage tables and time slots? How about poker tournaments?

Without knowing what options are available to you and how much of a budget is available to implement any option; it's hard to give advice.

[proguy747]

Do not charge for a membership. I spend money all the time at the lounge(maxamar). I love to hang out and talk the **** with the guys. Before you know it I am buying several cigars based on others reviews. Amar runs a free lounge and has a ton of repeats. You never feel pressured and are always welcome to bring your own smokes.

You also need to think of the lounge as the real cost to you is the construction of it. You are already paying the rent, electricity, etc.

You would be surprised how many locals would offer there help if you put a sign up asking for help building the lounge. Announce in advance that you plan on this lounge and love insight from your customers.

[Pseudosacred]

Originally Posted by Blak Smyth

I go to a nice lounge sometimes that has a free lounge for walk-in guests (1 cigar minimum purhcase) and a seperate private lounge for members. Members receive a locker and a discount on all purchases. Also they have private events that only members are invited to.

What shops is this?

[CoreyD]

I have been 2 2 lounges. 1 open to public and makes its money off events,cigar purchases and drinks and such. The other has a small i mean small area in its shop to smoke and a comfortable members section with lockers for a price I can't afford to be a member at.

Although I do like the members area when I go with a member I like the open public one better and I actually see more people in it.

[aaron72]

A few ideas that some of the local shops put on:

1. Monday night football during the football season
2. When it's not football season, they do Man Cave Monday where they have a guy movie (action flick) set to play at 7PM
3. On specific days, usually to go along with games or movies they have a food truck (big thing in California) come out and sell food (good food and priced right) to the people there for the event.

Being able to sell alcohol is a big deal, but I know getting the right licensing can be a nightmare.

I also agree not to charge a cover. Going with a 1 cigar purchase minimum is fine.

It's no secret that the clientele is primarily men, so think of events that guys would want to hang out and participate in, poker as was mentioned, darts, sporting events (UFC and such). Lots of ideas out there to be taken advantage of.

[Stephen]

Originally Posted by stj386

The small shop i work in has recently expanded and we are in the process of making a smoking lounge. The only issue is how to make a profit off having the lounge or at the very least how to break even. We have considered several ideas but many seem to have us stuck in terms of execution. Any ideas would mean the world to me and the guys at my shop!

Install stripper poles.

Honestly, you will have to charge a fee for people using the lounge. That is if you don't want to lose money on this expansion. Charge for lockers, rent the lounge out for special events, and offer beverages/food.

[hotreds]

Your question is how to make a profit or break even- well, methinks you'll hafta charge a membership fee. Don't make it too high, and give perks with it: free coffee, 10-15% off purchases, whatnot. Since it's new you might even offer a one-time lifetime membership for $500 or $1000 with 20% off purchases and maybe a real nice member card. Lotsa stuff you could do.

[cjhalbrooks]

I can not understand how you guys didnt think of the STRIPPERS. Strippers or dancers have to pay the owner a cut. Have the boss move out of his office and there you go you have a stripper lounge. THIS IS JUST A JOKE

[ninjavanish]

I think charging for lounge usage is a bad idea.

I've worked at several (highly profitable) cigar stores over the years and none charged for lounge use.

We always rented lockers. And on occasion, the lounge would be reserved for locker members only events. However, if a non locker member wished to attend the event, they could pay a month's equivilant locker fee which would grant them access to the day's event. Typically they would need to RSVP/pay in advance so that beer/pizza/etc could be purchased in sufficient quantity for these member's only events.

The bottom line is... you're selling cigars. Not your lounge. Cigars are where you profit comes from. Not your lounge. Budget the amount of money you spend. Come up with a solid purchasing system that gives you a high level of control and visibility on the outflow and inflow of money and allows you to forecast your sales and profit. Rather than creating new fees for using the new lounge area, consider cutting the bottom line first. Order fewer cigars, less often. Cut SKU's that aren't moving as quickly as you'd like, try to contact some of the companies and see if they will credit you for returning product that hasn't moved in recent months... That last thing you want is a ton of money tied up in stock that sits on your shelves forever. If it hasn't moved in 6 months. Ditch it.

I'd recommend purchasing the services of a CPA if you haven't already.

The primary reason for creating a lounge area is to engage your customers. Show them a high level of customer service, and provide an experience that will keep them coming back to purchase more cigars.

[Blak Smyth]

Originally Posted by Pseudosacred

What shops is this?

Hey maybe we will go there when you are off. They have a great lounge but not an amazing selection, good selection though and great coffee. PM sent!