We get this question all the time. Of course, the answer varies considerably depending upon where you are, since the lease is one of the biggest factors in your overall budget.
A commercial lease can vary from under $1 per square foot in industrial areas in certain parts of the country to many times that. In southern California, home to hundreds of vape shops, you can easily pay $50 or more per square foot for a high visibility location.
Don’t Underestimate Your Costs
One of the biggest failures of all businesses is under-capitalization or put simply: running out of money. Getting a bank loan is not going to happen and your friends or relatives won’t be too happy if you borrow from them, fail to open up shop and can’t pay them back.
Don’t forget that after rent, you also have to factor in several other expenses such as insurance, taxes, licensing and permits.
Your next biggest expense in your inventory – starter kits, mods, parts, e-liquids, etc. This can add up very fast. But you don’t want to skimp on that, because after all, that’s your primary product and the entire reason people will visit your store.
If you’re going to hire employees, don’t forget about your payroll. Our advice is to hire people with retail experience with excellent customer service skills. It’s much easier to train them in the products than it is to train them to adopt the right attitude.
In fact, hiring the right people can literally make or break your business. In another special report, we calculate you could lose $300,000 a year or more when ineffective employees are minding your store. There are only a few ways to do a business right but a multitude of ways to screw it up!
Merchant Account Advice
New vapreneurs have also found it difficult to find a merchant account charging reasonable prices for their vape space business. Lots of merchant account providers are willing to work with brick and mortar stores. But it’s true that they’ll put you in a high-risk category, where you’ll pay higher fees.
Don’t let that stop you, and don’t try to get by just with Paypal or a Square account. At VapeMentors, we can also recommend vendors for you.
Costs to Open a Kiosk
Opening a cart or kiosk can be much less expensive than opening a retail vape shop. But be sure to check if your city will allow one before you go chasing this dream.
Assuming you have permission from your city to open a cart or kiosks, your start-up costs will be at least $25,000. Below is a breakdown of the approximate costs:
|Low End||High End|
|Total Cart Costs||$2,600||$6,350|
|Total Kiosk Costs||$3,800||$6,850|
|E-Liquids & Accessories||$5,000||$10,000|
|Total Start-Up Costs||$8,500||$18,000|
|TOTAL (first month)||$11,100||$24,850|
Costs to Open a Retail Store
If you’re determined to open a retail store, the costs will be much higher, primarily because you’ll need to secure a year-long lease. We estimate your start-up costs will be at least $50,000 and possibly up to $100,000.
A few years ago, simply opening a store would guarantee you business, but now there are at least 5,000 retail stores and you’ll probably have to compete for business. We recommend having six months of operating expenses available to be on the safe side.
Although you may not need a full-fledged business plan to get a loan, it’s a good idea to at least build a solid business model, which you’ll find in our VapeMasters program.
|Low End||High End|
|Total Monthly Costs||$6,270||$10,580|
|E-Liquids & Accessories||$10,000||$15,000|
|Total Start-Up Costs||$22,500||$50,000|
|TOTAL (first month)||$28,770||$60,580|
A Note About Inventory
In this spreadsheet, our inventory estimates are on the low end. You’ll want to modify your numbers based on your situation. For example, if you’re in an area where you’ll be competing for business, you may want significantly increase these numbers. On the other hand, if there are no vape shops around for miles, you can get your vape shop up and running with less inventory.
At VapeMentors, we can also help you with inventory by recommending trusted suppliers and wholesalers such as VaporBeast.
And if you are seeking capital for your vape shop (new or existing), be sure to check out our page on Financing options!
Norm Bour is the founder of VapeMentors and the host of the award-winning podcast Vape Radio. He’s a vape industry coach, speaker, author and can be seen rubbing shoulders with the top influencers in the vape industry.