Vape Shop Business Plan Template
If you want to start a Vape Shop business or expand your current Vape Shop business, you need a business plan.
The following Vape Shop business plan template gives you the key elements to include in a winning Vape Shop business plan.
Sample Vape Shop Business Plan Template
Below is a vape shop business plan example with each of the key sections to help you write a vape shop business plan for your own company.
I. Executive Summary
Business Overview
[Company Name] is a neighborhood vape shop located in [insert location here], that sells assorted electronic cigarette products and accessories. The Company will provide a large selection of products including starter kits, vape pens, vape mods, vape pods, dry herb vapes, disposable vapes and flavored liquid.
Products Served
[Company Name] will operate a vape shop that sells electronic cigarette products and accessories:
- Electronic cigarettes
- Electronic cigarette accessories
- Tank refills
- Vaping equipment
- E-liquids
Customer Focus
[Company Name] will primarily offer its products to the residents living within a 10-mile radius of the business location. The demographics of these customers are:
- 47,827 residents
- Average income of $74,700
- 58.9% married
- 49.6% in Professional occupations
- Median age: 38 years
Management Team
[Company Name] is led by [Founder’s name], who has been in the vaping industry for [x] years. He has worked extensively in the e-cigarette manufacturing industry during his career. Additionally, he has managed several vape shops, smoke shops, bars, and nightclubs in the local market. As such [Founder] has an in-depth knowledge of the vape shop business including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.).
Success Factors
[Company Name] is qualified to succeed due to the following reasons:
- There is currently a high demand for e-cigarettes and vape products in the community. In addition, the company surveyed the local population and received highly positive feedback pointing towards an explicit demand for the products, supporting the business after launch.
- The Company’s location is in a high-volume traffic area and will thus be highly convenient for a significant number of youngsters visiting nearby. The Company plans to set up its shop in a strategic location with plenty of foot traffic and sufficient parking space.
- The management team has a track record of success in the e-cigar business.
- The upscale vaping business is a proven business and has succeeded in communities throughout the United States.
Financial Highlights
[Company Name] is currently seeking $270,000 to launch the vape shop. Specifically, these funds will be used as follows:
- Store design/build: $150,000
- Working capital: $120,000 to pay for marketing, salaries, inventory and supplies, and lease costs until [Company Name] reaches break-even
Top line projections over the next five years are as follows:
| Financial Summary | FY 1 | FY 2 | FY 3 | FY 4 | FY 5 |
|---|---|---|---|---|---|
| Revenue | $560,401 | $782,152 | $1,069,331 | $1,379,434 | $1,699,644 |
| Total Expenses | $328,233 | $391,429 | $552,149 | $696,577 | $776,687 |
| EBITDA | $232,168 | $390,722 | $517,182 | $682,858 | $922,956 |
| Depreciation | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 |
| EBIT | $225,168 | $383,722 | $510,182 | $675,858 | $915,956 |
| Interest | $6,016 | $5,264 | $4,512 | $3,760 | $3,008 |
| Pre Tax Income | $219,152 | $378,458 | $505,670 | $672,098 | $912,948 |
| Income Tax Expense | $76,703 | $132,460 | $176,985 | $235,234 | $319,532 |
| Net Income | $142,449 | $245,998 | $328,686 | $436,864 | $593,416 |
| Net Profit Margin | 25% | 31% | 31% | 32% | 35% |
II. Company Overview
Who is [Company Name]?
[Company Name], located in [insert location here], is a new, upscale vape shop that will sell electronic cigarette products and accessories. The Company will provide a large selection of products including starter kits, vape pens, vape mods, vape pods, dry herb vapes, disposable vapes and flavored liquid.
[Company Name]’s History
[Founder’s Name] is an entrepreneur who is passionate about vaping as an alternative to tobacco smoke. [Company Name] will become a well-known vape shop in [Location].
Upon surveying the local customer base and finding the potential retail location, [Founder’s Name] incorporated [Company Name] as an S-Corporation on [date of incorporation].
[Founder’s Name] has selected an initial location and is currently undergoing due diligence on each property and the local market to assess the most desirable location for the vape shop.
Since incorporation, the company has achieved the following milestones:
- Found location and signed a Letter of Intent to lease it
- Developed the company’s name, logo, and website
- Determined the list of products to be offered
- Began recruiting key employees with experience in vape shops
[Company Name]’s Products/Services
[Company Name] will provide the following products to its customers:
- Electronic cigarettes
- Electronic cigarette accessories
- Tank refills
- Vaping equipment
- E-liquids
III. Industry Analysis
[Company Name] competes against small, individually owned vape shops and major regional or national chains. The global vape shop market size was valued at $15.04 billion last year and is expected to expand at a compound annual growth rate (CAGR) of 28.1% over the next five years. The US vape market size is expected to reach $40.25 billion this year, indicating a CAGR of 27.3% over the past 10 years.
Vaping in the US has soared in popularity lately, especially amongst millennials, fueling an increased number of vape shops. Going forward, the vape industry will continue to grow, as the US population will likely switch to e-cigarettes, especially youngsters and those who want to quit smoking. As more consumers become aware of the hazardous effects of tobacco smoking, they are introduced to new and safer smoking devices, thereby increasing the demand for these products.
To gain a significant share in the market, the key players are now focusing on adopting strategies such as product innovations, mergers & acquisitions, recent developments, joint ventures, collaborations, and partnerships. The leading players are introducing various e-liquid flavors in the market to cater to the evolving preferences of customers, thereby propelling market growth.
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name] will serve the residents of [company location] and the immediate surrounding areas. The residents it will serve are affluent and have the disposable income to purchase their products.
The precise demographics of the town in which the retail location resides is as follows:
| Fort Lauderdale, FL | |
|---|---|
| Total Population | 9,818,605 |
| 15 to 19 years | 753,630 |
| 20 to 24 years | 752,788 |
| 25 to 29 years | 759,602 |
| 30 to 34 years | 716,129 |
| Total Households: | 3,218,511 |
| Household income $50,000 to $74,999 | 550,971 |
| Household income $75,000 to $99,999 | 382,770 |
| Household income $100,000 to $149,999 | 440,285 |
| Household income $150,000 to $199,999 | 187,449 |
| Household income $200,000 or more | 208,954 |
Customer Segmentation
We will primarily target the following three customer segments:
- College Students: The establishment will be located near a predominant university and tailor its services and products for its target customer.
- Local office workers: Approximately 5,000 individuals work in offices within a quarter mile of our location, and we expect a fair portion of these individuals to frequent the establishment from 5:00pm on.
- Local residents: Approximately 10,000 residents live near the surrounding area and a majority will frequent the establishment.
V. Competitive Analysis
Direct & Indirect Competitors
Smoke Shop
Smoke Shop is an online vape shop that has a large selection of products and has been in business for xx years. Smoke Shop offers a wide array of products like vape tanks, replacement coils, kanthal wire and wick, batteries and drip tips, and a huge selection of the most popular vape juice flavors currently on the market. Besides offering vaping products, Smoke Shop also provides a vast array of flavored liquids. It also provides the service of refilling the tank on-site for the customer.
Smoketown
Founded in [xx], Smoketown is the premier online vape store offering a selection of electronic cigarettes, e-liquids, and accessories. The company’s friendly and knowledgeable customer service team is always ready to provide the best customer service experience to ensure customers find what they’re looking for. In its e-cigarette gear shop, customers can find all their favorite electronic cigarette brands and accessories in one location.
Vape 299
Vape 299 is a local favorite known for its large selection of portable and desktop vaporizers. It also has an impressive selection of CBD, pipes, and other 420 accessories that are sold at some pretty low prices. All products sold on Vape 299’s website are strictly authentic. The company’s support team is super friendly, available 24/7 and helpful, and works to quickly resolve any issues customers may have with the ordering process.
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. These advantages include:
- Management: The Company’s management team has xx years of business and marketing experience that allows them to market and serve customers in an improved and more sophisticated manner than the competitors. The Company has been able to hire some of the best business developers to handle the sales and marketing.
- Relationships: Having lived in the community for xx years, [Founder’s Name] knows all the local leaders, newspapers, and other influencers. As such, it will be relatively easy for [Company Name] to build brand awareness and an initial customer base.
- Great service at an affordable price: The complete array of vaping products and services offered by [Company Name] nearly equals the most premium positioned competitor, [Competitor Name]. However, [Company Name] will offer these services at a much more affordable price.
- Location: [Company Name]’s location is near the center of town, giving the company access to people going to and leaving the colleges, clubs, bars, and passersby shopping in the city.
VI. Marketing Plan
The [Company Name] Brand
[Company name] seeks to position itself as a respectable, upper-middle-market competitor in the local vape shop landscape. Customers can expect to receive the most popular vapes and accessories for a price somewhere between discount chains and luxury establishments.
The [Company Name] brand will focus on the company’s unique value proposition:
- Offering a wide collection of vapes
- Convenient location
- Comfortable, customer-focused environment
- Moderate price point
Promotions Strategy
[Company Name]’s target market are residents living within a 10-mile radius of the location. The Company’s promotions strategy to reach the audience includes:
Pre-Opening Events
Before opening, [Company Name] will organize pre-opening events designed for prospective customers and press contacts. These events will create buzz, and awareness for [Company Name] in the area.
Advertisement
Advertisements in print publications like newspapers, magazines, etc., are an excellent way for businesses to connect with their audience. The Company will advertise its products in popular magazines and news dailies. Obtaining relevant placements in industry magazines and journals will also help in increasing brand visibility.
Local Publications
[Company name] will announce its opening several weeks in advance through publicity pieces in multiple local newspapers and publications. It will run regular advertisements to maintain exposure to relevant markets. Community newspapers, college publications, fashion programs, and similar channels will be a major promotion effort.
Social Media Marketing
Social media is one of the most cost-effective and practical marketing methods for improving brand visibility. The Company will use social media to develop engaging content in terms of vaping benefits and customer reviews that will increase audience awareness and loyalty. Engaging with prospective clients and business partners on social media platforms like Facebook, Instagram, Twitter, and LinkedIn will also help understand changing customer needs.
Word of Mouth Marketing
[Company name] will encourage word-of-mouth marketing from loyal and satisfied clients. The Company will use recommendations and word-of-mouth marketing to grow the customer base through the network of its existing customers. The Company will be incentivizing its existing customer base to encourage their friends to come and try their service for the first time.
Special Offers
Offers and incentives are an excellent approach to assisting businesses in replenishing the churn in their customer base that they lose each year. The Company will introduce special offers to attract new consumers and encourage repeat purchases, which will be quite advantageous in the long run.
Pricing Strategy
[Company Name]’s pricing will be moderate, so that customers feel they receive great value when availing of the products and services. The customer can expect to receive good quality vaping products at a more affordable price than what they pay at an ultra-premium vape shop.
VII. Operations Plan
Functional Roles
To execute on [Company Name]’s business model, the company needs to perform several functions, including the following:
Service & Administrative Functions
- Sales associate (2-3)
- Store Manager
- General & administrative functions including legal, marketing, bookkeeping, etc.
- Inventory management
- Hiring and training staff
Milestones
[Company Name] expects to achieve the following milestones in the following [] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Kickoff of promotional campaign |
| [Date 5] | Launch [Company Name] |
| [Date 6] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name] is led by [Founder’s name], who has been in the vaping industry for [x] years. He has worked extensively in the e-cigarette manufacturing industry during his career. Additionally, he has managed several vape shops, smoke shops, bars, and nightclubs in the local market. As such [Founder] has an in-depth knowledge of the vape shop business including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.).
[Founder] graduated from the University of ABC, where he majored in Business management.
Hiring Plan
[Founder] will serve as the store’s general manager. To launch the vape shop, the company will need to hire the following personnel:
- Sales people/Cashiers
- Marketing Executive
- Security
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s revenues will come from the sale of electronic cigarette products and accessories. The major costs for the company will be salaries and inventory. In the initial years, the company’s marketing spend will be high, as it establishes itself in the market.
Capital Requirements and Use of Funds
[Company Name] is currently seeking $270,000 to launch the vape shop. Specifically, these funds will be used as follows:
- Store design/build: $150,000
- Working capital: $120,000 to pay for marketing, salaries, inventory and supplies, and lease costs until [Company Name] reaches break-even
Key Assumptions
The following table reflects the key revenue and cost assumptions made in the financial model:
| Number of customers per day | Per location |
|---|---|
| FY 1 | 100 |
| FY 2 | 120 |
| FY 3 | 140 |
| FY 4 | 165 |
| FY 5 | 190 |
| Annual Lease (per location) | $60,000 |
| Yearly Lease Increase % | 2.50% |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRE-TAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
