Any small business owners?

[Ivaden]

Hey guys,

A friend of mine and I have begun seriously discussing the plans for opening our own small business within the next three years or so. It will be a hookah lounge, since that's pretty relative to the discussion. We live in the middle of a few small college towns, and the closest hookah lounge is about thirty minutes or so away, give or take, so we figured having one in this location would be smart. Admittedly, I'm not very business oriented, in the sense that I've never taken business classes outside of high-school entrepreneurship class, but my friend is in college with a business major.

I was just looking for some advice, words of encouragement/discouragement, anything anyone could offer on the subject. Success stories, failure stories, whatever that could educate me a bit I'd be grateful for. If you're one of those people who feel the need to post something discouraging, by all means, but at least back it up so I could see things from your point of view.

As of now, we have no start-up capital (the idea is fresh, but certainly not a "oh, let's do it!" sort of spur of the moment deal), but I'm not looking for ideas on how to raise money. I realize we're probably in over our heads and going to run into a lot of bumps in the road, but both of us are very determined people so I feel we could handle anything thrown at us.

I'm sure there's a ton of things to research, find out, etc., about starting a business, and I hope anyone willing to help could point me in the right direction as far as what to find out.

Thanks!

[Kurp]

You should have a backup plan if your town bans smoking in public places.

[miokomioko]

Make a business plan that explains everything you have done, everything you are doing, everything you will do, everything you might do, everything you won't do, and reasons/explainations on each one. Then, you might get a loan.

I just got done with college (professional photography) and about 50% of my courses were focused on business... contracts/plans/moneys/invoicing/estimating/permits/lawsuits/etc etc etc. Just take the first steps first. Permits, fictitious business name "Doing Business As (DBA)" and all that kind of stuff before you even submit a business plan to possible investors. You'll learn a lot about yourself and whether you're even ready for this in the process of putting together an extensive business plans that spans years in the future... and you might impress the people at the bank enough for them to fork over the dough so you can set up shop.

p.s. lolsmoking

[Ivaden]

That's actually something I'm not quite sure about at the moment, glad you brought it up. There has been a hookah lounge nearby a while ago (got shut down, owner went to jail for possession), but public smoking is banned in Pennsylvania to my knowledge. Also, it's the same case for Ohio, but the hookah bar we go to is in Ohio. They don't have a liquor license, or at least don't sell liquor to make them able to dodge the law.


@mioko

Thanks for the advice. I'd assume that's what my friend has been having stuffed in his brain so far in school, but it's nice for me to know as well. I'm a video production major, only my fourth quarter coming up, so I've yet to have any business/production classes myself, but I do know I have them in the future.

[ferigor]

Like mioko said you definitely want to have a business plan before you approach investors. If your friend is taking business classes, he probably has at least 3 books on the subject (I was a marketing/management dual emphasis, so I have shit ton). Here are a few things I'd do to get a feel for how your business is going to take off:
1. Check the legality of it, as has already been mentioned. Nothing sucks more than to get all pumped up about an idea and then realize that its unfeasible.
2. Conduct some preliminary market research. Talk to some people around your college to see if they are interested, talk to some people at the Hookah bar you go to to see how many people travel from your area, talk to the owner of the Hookah bar you go to and see how his business is doing. If there are any similar businesses in your area (Tobacco smoke shops, not head shops for example) talk to them and see how their business is doing.
3. Consider how you are going to deal with the negative publicity when you open up. Being a hookah bar you are going to be associated with weed smoking, so be ready for criticism with that (not that I think a hookah bar is associated with weed smoking, but remember that people aren't as educated on your business as you are). You'll also get the negative tobacco smoking crowd on your back which would be a bitch to deal with.
4. Be realistic with your goals. Often times new business owners will swing for the fences their first time out, and yeah, some of them are crazy success stories and make millions of dollars in their first year, and some of them file for bankruptcy. One of my final projects in college was writing a business plan for this guy who wanted to open up a "rock and roll high school" kind of thing, where the teachers would turn you into a rock star. The guy we were working for wanted to buy a huge building, hire a full staff of instructors and have entire curriculum laid out, the only problems were he hadn't paid taxes in over 15 years and he didn't have any "angel investors" in mind.
5. Right now would probably be one of the worst times imaginable to start up a new business with the way the economy is headed.

I am definitely not trying to discourage you, but you want to look into more than "Well there isn't one of these around here." A friend of mine started a music store in a town about an hour away from I am. The only other music store was in the back of a video store, they sold guitar strings/reeds/essentials like that. He bought a store down town, he and his dad remodeled the entire inside, built himself an apartment in the back, and then proceeded to struggle for about 5 years. His only saving grace was the fact that property value in that area sky rocketed after he bought the building and he sold it for more than double what he bought it for. He got really lucky.

That's what I've got for you, hopefully its coherent, I just woke up.

[Senoska]

Does your hookah make violins?

For real kind if interested in this. What is the point of going to a Hookah bar? Also, how would you deal with sanitary issues? (IE: People putting their mouths on it)

[Ivaden]

Thanks for the tips and the experience of your friend, ferigor. What you've said doesn't discourage me in the slightest, if anything it just makes me want to succeed even more.


@senoska

As far as I know, hookahs don't make violins. However, the point of going to a hookah bar (for myself and friends, at least) is that it's just a generally relaxed atmosphere. Sure, you can go elsewhere for a relaxed environment, there's no arguing that, and I'm certainly not going to argue that hookah is any better for you physically than cigarettes (because it's not), but it's just something to do. I'm in one of those cliche "nothing to do" small town areas, and it's just a niche hobby for some people. I'm sure some fancier hookah places have more "authentic" Middle Eastern stuff like belly dancers or something lol, but really we just plan on it being something like a sports bar without the bar. Come watch a sporting event on the televisions. I've even considered the idea of karaoke on some nights, or something like Guitar Hero tournaments or something just to offer something else to do while you kill your lungs. The one I go to now doesn't offer anything other than the hookah, some overpriced food and drinks and five televisions throughout the place, but every time I've went it's usually packed.

The problem with sanitation isn't a big concern, though. Any time I've bought shisha (the tobacco) for myself and my own hookah, they send about 25 mouth tips that are disposable. We'd hand them out depending on how many people are smoking the hookah accordingly, but also the hoses would be thoroughly cleaned after every use (as well as the hookah). Could probably buy extra hoses as well just to cycle them.

[Darus Grey]

Best advice for once you're actually up and running is to not let little things slide in terms of cost. They add up big.

Also get a meter on your alcohol...your bartender(assuming it isn't you)...is your biggest potential point of loss. They will rob you blind giving out free drinks to hot girls or friends.

[aru]

outside of some of the advice already posted, one of the things that struck me when i was taking some business courses in college was the time it takes to break even on your initial invenstments. the average was between 5 and 10+ years iirc. so make sure you have some money to fall back on while your business gains some steam and starts to pay itself off.

[toonces]

don't post your business idea on public forums.



Lots of business fail before they start cuz they open their mouth to the wrong person and get cockblocked.

Other than that good advices have been posted. Specially don't underestimate your costs and the ability to pay your debt.

[oxx2]

second hand smoke cancer bar for the lose

if you didn't notice smoking is on the outs only so long until its completely illegal and your business will fall into oblivion along with all your hard earned (read loaned) money

grats on a horrible idea try again tho its a start

[ismarc]

I was given advice on being self-employed once. I don't know where it originated or anything, but it's sad, true and funny all at once. Being self-employed is great, you only have to work half days. The bonus to this is that it doesn't matter which 12 hours you work. ><.

[toonces]

Also dont get emo if your first business doesn't work out, most people don't get it right til like the 3rd time. Atleast you are trying, some don't

[sb]

Enough people mentioned the anti smoking laws, and basically they hit it on the head. If your going to run a business you want to go into a venture with high demand, short supply, and little risk. And while a hookah lounge might be something that has potential to be quite popular in a college town, I would look for something that has a either a lower risk value or the associated risk is within your control(i.e. anti smoking laws and public opinion are for the most part out of your control).

It might be better to set up a late night grilled cheese shop outside of the bar the current smokers frequent.

[Norelco]

Sometimes business and friends don't mix well. You go in with the best of intentions, but once money is on the line things can change quickly.

[Ivaden]

@toonces

I'm honestly not that worried about anyone here stealing my idea and opening up a local shop. Like I said, small town, and Pittsburgh is far enough away for me not to worry about (since I know there's a few people from there on the forums). Whether we fail or not though, we really just want to give it a shot.

@oxx2

Ventilation. Also, there are companies that make herbal shisha which includes no tobacco whatsoever, eliminating the production of tar (which is pretty unlikely with a properly prepared hookah). There are certain coals that can be used to considerably cut down on the amount of carbon monoxide intake as well. Congratulations on being the first person to say anything negative though, didn't expect it to take that long. Would you have any suggestion for another business, out of curiosity?

@sb

Yeah, we've already concerned the potential (likely) backlash of the community given that drugs can easily be associated with hookah. And like you said, associated risks are out of our control, but as far as public opinion, it's not like we're forcing anyone to come or go. People should be well aware of what they're getting into before they decide to go anywhere that specializes in smoking.

@Norelco

Also have considered that, but really I would not want to run a business with anyone else I know. He's probably the most level-headed person I've ever met, and while I'm sure it's easy to say this now, and would most likely change if the business was a success, neither of us are in this really for the money so much so as to see whether we can do it or not.


Again though, guys, thanks for all the help and feedback. The thread has helped me with a few things to look for, check up on, etc., which was what I was hoping to gain. I appreciate it.

[Remyo]

congrats on deciding to start your own business, but the type of business you want to start sounds like it will fail. I don't live where you do, but I just can't see a hookah bar being very profitable particularly in todays plunging economy, I may be wrong. Start a business that people will always need, like food, water, shelter, health care, etc. etc. Then again who am I to decide that for you, so keep forging ahead on that.