Vape Shop Business Plan Template

Vape Shop Business Plan

Over the past 20+ years, we have helped over 1,000 entrepreneurs and business owners create business plans to start and grow their vape shops. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a vape shop business plan template step-by-step so you can create your plan today.

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What is a Vape Shop Business Plan?

A business plan provides a snapshot of your vape store as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for a Vape Shop

If you’re looking to start a vape shop or grow your existing shop, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your vape shop in order to improve your chances of success. Your business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Vape Shops

With regards to funding, the main sources of funding for a vape shop are personal savings, credit cards, bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the bank will not only want to confirm that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for vape shops.

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How to Write a Business Plan for a Vape Shop

If you want to start your own vape shop or expand a current vape business, you need a business plan. Below we detail what should be included in each section of a traditional business plan for a vape shop.

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of vape business you are operating and its status. For example, are you a startup, do you have a vape shop business that you would like to grow, or are you operating a chain of vape shops?

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the vape industry. Discuss the type of vape business you are operating. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.
 

Company Analysis

In your company analysis, you will detail the type of vape business you are operating.

For example, you might operate one of the following types of vape shops:

1. Convenience Store with Vape Section: this type of business will sell everyday items that you would find in small convenience stores such as snacks and drinks, but also have vape products for sale (usually behind the register or a counter somewhere in the shop).
2. Vape Lounge: this type of vape business sells vape items and also has an area of the shop dedicated to use as a lounge area while vaping.
3. Vape Showroom: this type of vape business primarily focuses on the display of their items for sale, similar to a jewelry store showroom.
4. Online Vape Shop: this type of vape business retails products online versus in a physical location.

In addition to explaining the type of vape shop you will operate, the Company Analysis section of your business plan needs to provide background on the business.

Include answers to question such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include the number of customers served, number of positive reviews, number of conventions attended, etc.
• Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal business structure here.

Industry Analysis

In your industry analysis, you need to provide an overview of the vape industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the vape industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your strategy, particularly if your research identifies market trends.

The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section:

• How big is the vape industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential market for your vape shop? You can extrapolate such a figure by assessing the size of the target market in the entire country and then applying that figure to your local population.

 

Customer Analysis

The customer analysis section must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: former smokers, current smokers, social smokers.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of vape shop you operate. Clearly, a former cigarette smoker would respond to different marketing promotions than a social smoker, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve. Because most vape shops primarily serve customers living in the same city or town, such demographic information is easy to find on government websites.

Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.

Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other vape shops.

Indirect competitors are other options that customers have to purchase from that aren’t direct competitors. This includes cigar shops, hookah bars, and tobacconists. You need to mention such competition as well.

With regards to direct competition, you want to describe the other vape shops with which you compete. Most likely, your direct competitors will be vape retailers located very close to your location.

For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

• What types of e-juice do they carry?
• What types of vaping hardware do they specialize in?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide a wider variety of vaping flavors?
• Will you provide special discounts or perks for customers?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.
 

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a vape shop, your marketing plan should include the following:

Product: In the product section, you should reiterate the type of vape company that you documented in your Company Analysis. Then, detail the specific products you will be offering. For example, in addition to retail sales, will you allow flavor customization for your customers, provide complimentary products or have multiple lounging spaces in your shop?

Price: Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the services you offer and their prices.

Place: Place refers to the location of your vape shop. Document your location and mention how the location will impact your success. For example, will you sell your products directly to consumers via a storefront? Will you sell via an ecommerce site? Or will you sell e-juice to other retailers who will then sell to consumers? In this section, document each method by which you will sell your products.

Promotions: The final part of your marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:

• Advertising in local papers and magazines
• Reaching out to local websites
• Signs and billboards
• Flyers
• Social media marketing
• Local radio advertising

Finish Your Business Plan Today!

If you’d like to quickly and easily complete your business plan, download Growthink’s Ultimate Business Plan Template and complete your plan and financial model in hours.

Operations Plan

While the earlier sections of your smoke shop business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your vape shop, including ordering and tracking inventory, managing your shop, completing sales, and marketing your business.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to complete your 1,000^th sale, or when you hope to reach $X in revenue. It could also be when you expect to open a vape shop in a new location.
 

Management Team

To demonstrate your vape shop’s ability to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally, you and/or your team members have direct experience in managing vape shops. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in overseeing a retail store or successfully running a small business.
 

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.

Income Statement: an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you serve 100 customers per week? Or 100 per day? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets: Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your vape shop, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement: Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a vape shop:

• Location build-out including design fees, construction, etc.
• Cost of equipment and supplies
• Payroll or salaries paid to staff
• Business insurance
• Taxes and permits
• Legal business expenses

 

Appendix

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your retail location lease, or an overview of the product brands you will carry, or elevations of your state-of-the-art display design.
 

Summary

Putting together a business plan for your vape shop is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will really understand the vape shop industry, your competition, and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful vape shop.
 

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