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How to Open a Cigar Shop in 5 Easy Steps

This year, opening a new business comes with a few unique challenges. The COVID-19 pandemic blindsided many business owners and managers.

However, with stay-at-home orders coming to an end, managing a small business post-pandemic has become a bit easier. Moreover, according to recent reports, new applications for small businesses are rising at incredible rates. In fact, employer identification applications have passed almost 3.2 million this year.

If you’re one of the 3.2 million business owners planning on opening a new cigar shop this year, know that you’re not alone. We know that opening a new business (especially during a pandemic) can feel a bit overwhelming. To make the process manageable, we’ve created this quick start guide on how to open a cigar shop in five easy steps.

How to Open a Cigar Shop in 5 Simple Steps

During these uncertain times, we’ve helped thousands of business owners invest in the best tobacco point of sale system. Finding the best point of sale system is a critical first step toward building a successful business this year. And with results-driven tobacco point of sale system features, you’ll have everything you need to reel in customers.

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Beyond investing in the right sales tools, here is a list of the other mission-critical steps that you must follow to open a cigar shop this year.

1. Create a Business Plan

The key to opening a successful cigar shop is to build a solid business plan. Unfortunately, failure to plan is one of the most common reasons why small businesses fail. According to recent research, creating a business plan increases the likelihood of business success by more than 30 percent. The question is – what are the mission-critical components of a great business plan?

Typically, the best business plans incorporate these essential elements:

  • Mission Statement
  • Business Description
  • Competitor Analysis
  • Marketing Plan
  • SWOT Analysis

Additionally, we recommend developing a cash flow statement to understand your financial needs now and into the future.

“As a business owner, you need to not only critically appraise your existing revenue streams but also find new ways to boost incoming (and reduce outgoing) cash,” recommends Forbes’ Finance Council in 14 Tips for Analyzing (and Increasing) Your Business’ Operational Cash Flow.

Related: Top Reasons Why Small Businesses Fail

2. Form a Legal Entity

To start a new business, owners are required to form a legal entity. There are a few unique business structures to consider, including a sole proprietorship, partnerships, corporations, or limited liability companies. However, sole proprietorship is the most common legal structure that most business owners select.

In this scenario, all profits and losses are transferred directly to the business owner. Additionally, for tax purposes, the owner must claim those profits and losses on her/his individual tax return. Moreover, because a sole proprietorship is treated as an unincorporated business, owners are not responsible for any corporate taxes.

3. Open a Business Account 

Next, create a business banking account. According to the U.S. Small Business Association, “a business bank account helps you stay legally compliant and protected. It also provides benefits to your customers and employees.”

Once you’ve selected a bank, there are a few required documents needed to open the business bank account, including an Employer Identification Number (EIN), formation documents, ownership agreements, and your business license.

4. Obtain Business Permits

From an operational and legal perspective, there are a few requirements that are unique to cigar and tobacco shops. The tobacco industry is heavily regulated. As such, securing the appropriate licenses and permits is hugely important.

A tobacco retailer permit allows for the sale of cigarettes, cigars, chewing tobacco, hookah, and any other smokeless tobacco product. Typically, it also includes electronic smoking devices. In short, the tobacco permit allows local governments to monitor the sale and distribution of tobacco products.

5. Promote Your Business

Finally, promote your business! Today, there are hundreds of ways to promote your cigar shop. From customer loyalty programs to social media marketing, many of the most effective promotional tactics are relatively simple to activate. 

We recommend launching a loyalty reward program. POS Nation’s integrated customer loyalty features make it simple and easy to track “points” or sales. Simply ring up the order, select the customer profile, and track the customers’ progress to goals. For example, you might offer a percentage discount on a new product for every ten purchases made. In this way, customers are incentivized to buy more. Retail POS System Buyers Guide

Power Your Cigar Shop With POS Nation

Did you know that POS Nation powers cigar shops all over the country?

Many cigar shop business owners and managers rely on our specialty POS system to power their stores. Additionally, many of these business owners and managers have found amazing cost savings in our scan data reporting feature.

The rebate packages that cigar and cigarette manufacturers offer translates to more than $1,000 in savings per month! Are you ready to take advantage of these rebates?

To get started, we recommend completing our simple system builder. With just a few clicks, you’ll have uncovered the tobacco shop POS system of your dreams.


Ready To Get Started? Call us at 877-727-3548

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