Cigar Lounge Business Plan

How to Write a Cigar Lounge Business Plan?

Cigar Lounge Business Plan is an outline of your overall business. The business plan should include a 5 year financial projection, marketing plan, industry analysis, organizational overview, operational overview and finally an executive summary. Remember to write your executive summary at the end as it is considered as a snapshot of the overall plan. You need to be careful while writing the plan as you need to consider various factors that can impact the business’s success. Read the sample business plan in order to have a clear understanding of the process.

This article will provide you a step by step process to write your Business Plan.

Executive Summary

Overview: We’re in the middle of the city and our lounge has a mix of old-school and new-school charm. Cigar Haven is different from other others in exciting ways. Our bar is in a busy area but still feels like a friendly neighborhood. It adds a touch of luxury to the everyday chaos. We have a carefully chosen range of fine wines and spirits unlike most bars that only serve cigars. This makes us a great place for people who want to relax and feel sophisticated at the same time. Our walk-in humidor is filled with a unique selection of hand-rolled cigars from all over the world so every puff is fresh and smells great. We’re not just about smoking cigars at Cigar Haven; we’re also building a community where cigar fans and newbies can meet, share stories, and enjoy the better things in life. This means that whenever you come into our store you can relax and enjoy in style!

Mission: Our mission at Cigar Haven is to provide a distinguished and relaxing experience for our guests. We are dedicated to fostering an atmosphere of refinement and enjoyment. Our approach to hospitality centers on making a positive impact in the lives of those we interact with daily. We achieve this in a setting that respects diversity and values each individual’s contributions. By delivering our services with speed and precision, we ensure outstanding results and satisfaction for our patrons.

Vision: The vision of Cigar Haven is to establish itself as an esteemed and globally recognized brand in the sector. We are committed to building lasting relationships with our clients by offering unparalleled service and enhancing their overall smoking experience. We take pride in creating an inviting atmosphere that caters to the desires and comforts of our guests. Additionally, we are dedicated to operating in an environmentally conscious manner, respecting and preserving the world around us.

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Financial Highlights

Earnings & Profitability

Break-Even Analysis

KPIs

Liquidity	2020A	2021A	2022F	2023F	2024F
Current ratio	6	12	23	32	42
Quick ratio	6	11	22	31	40
DSO	8	8	8	8	8
Solvency
Interest coverage ratio			8.2	11.1	14.2
Debt to asset ratio	0.01	0.01	0.2	0.18	0.16
Profitability
Gross profit margin	51%	51%	53%	53%	53%
EBITDA margin	12%	14%	21%	22%	22%
Return on asset	5%	6%	13%	14%	14%
Return on equity	5%	6%	16%	17%	17%

Business Description

Business Name: Embers & Oak Cigar Haven

Founder: Alexander Belmont

Management Team:

Legal Structure: LLC

Location: 

Goals: 

• Achieve a reputation as a trusted and respected service provider
• Increase retention rate to over 85% within the next year.
• Continuously review and improve our business processes to increase customer satisfaction and retention.

Products:

• Hand-rolled Cigars: Premium selections from renowned regions like Cuba, Nicaragua, and the Dominican Republic.
• Machine-made Cigars: For those seeking a more casual or budget-friendly smoking experience.
• Limited Edition Cigars: Offer exclusive cigars for collectors and enthusiasts.
• Cigar Samplers: Curated collections that allow customers to explore different flavors and brands.
• Humidors: From small, personal-sized to large, walk-in humidors for proper cigar storage.
• Cigar Cutters: Offer a variety of styles, including guillotine, V-cut, and punch cutters.
• Lighters: High-quality torch lighters designed for cigars.
• Ashtrays: Stylish options made from materials like crystal, metal, or ceramic.
• Cigar Cases: Leather cases for transporting cigars safely and stylishly.
• Cigar Rests: Allow customers to rest their cigars elegantly when not in use.

Business Model Canvas

The Business Model Canvas is a high-level overview of the business model. The important partners, key activities, value proposition and cost & revenue sections are only some of the nine vital components. A company idea’s complexities may be mapped out, analyzed and communicated with the use of the canvas. It shows the whole picture of a company’s value creation, delivery and capture processes. It helps new business owners hone their ideas, encourage creative thinking and make sound strategic decisions. Check out 100 samples of business model canvas.

SWOT

Check out the 100 SWOT samples which will give you a better idea on SWOT writing process.

Organizational Overview

Founder

Alexander Belmont is the founder and CEO of Embers & Oak Cigar Haven, a company known for its high-class bars. He got into cigars because he was naturally interested in the industry’s allure and the skill that goes into making each luxury cigar. Because of this, he created a haven for cigar lovers, where the culture of smoking cigars is recognized in a setting that is both elegant and comfortable like no other.

Alexander started Embers & Oak Cigar Haven by carefully combining his knowledge of business management and his love of cigars. He has a deep understanding of luxury hospitality. His job, which was marked by a string of great business projects, gave him the skills he needed to work in this complicated field. Alexander has a degree in Business Administration and also has certifications in two areas: hotel management and wine training with a focus on tobacco.

Alexander has been involved with every part of Embers & Oak since the beginning. He has helped with everything from designing the store’s interior to choosing cigars and training staff. His method is a mix of careful attention to detail and a deep respect for the history of cigar smoking. Alexander thinks that atmosphere is a big part of having the best cigar experience. This is shown in the way that each bar is decorated in a way that is both classy and welcoming, and in the way that each guest is given individual service.

In the future, Alexander Belmont wants to grow Embers & Oak Cigar Haven so that the one-of-a-kind experience can be had in more places while still upholding the high standards he has set. His goal is to bring together cigar fans from all over the world who share a love of quality cigars and the high-class but cozy atmosphere of his bars. Alexander’s journey with Embers & Oak shows how much he loves the cigar business and how committed he is to giving cigar lovers all over the world a great experience.

Organogram

Industry Analysis

In-depth analysis of the business setting is given in the market study part. It points out problems and opens up new opportunities in the sector, defines the target audience to find specific buyer groups, estimates the market’s growth potential, and looks closely at the most important sector trends. This in-depth look is necessary for coming up with strategy initiatives, making sure that goals are in line with changes in the industry, and giving the setup a competitive edge.

Through this in-depth market study, business owners can make sure that their products meet the specific needs of the bar area and reach the right types of customers. This part also helps the business understand the competition, which lets it set itself apart through special events, better service, or a wider range of smokes.

The industry is going through a time of big changes and growth, which is caused by changing customer tastes and market trends. The world market for cigars is growing quickly and is expected to reach more than $21.41 billion by 2027. There are more and more people who love cigars, and by 2020, there will be 13.9 million cigar users in the United States alone. The attraction comes from the fact that they provide a unique social experience by mixing rest with networking in a classy setting.

Lounges are becoming more and more popular places to hang out with friends. Cigar lovers can enjoy a variety of cigars in a cozy and fancy setting. A lot of bars have special contracts that give people access to secret rooms, parties, and rare cigar types, as well as other perks. This concept of participation has worked well to build a loyal customer base and bring cigar lovers together as a group.

Source: Swiss Cuban Cigars

The predicted value of the worldwide cigar market in 2023 was USD 48.55 billion (mordorintelligence). This market is anticipated to undergo substantial expansion in the years to come, with a predicted revenue of $23.4 billion in 2024 and an anticipated climb to $88.28 billion by 2029, representing a CAGR of 10.48%. When it comes to market share, the US takes over 45%, followed by Western Europe and Asia. Due to rising demand from both sexes, the market is poised for substantial expansion; however, the market for male smokers is anticipated to have the most substantial increase. In 2023, the cigar industry in the US is projected to be worth 17.6 billion USD, according to 360researchreports. Statistics Canada predicts that this market will reach a volume of $15.8 billion in 2028, thanks to a growth rate of 4.28% from 2024 to 2028.

Industry Problems & Opportunities

Uncovering Opportunities within Niche Segments and Enhanced Experiences

Nonetheless, the industry is presented with significant growth opportunities by focusing on its unique market position. By targeting affluent segments and enhancing the quality of services, lounges can establish themselves as exclusive community centers. Adopting an experience-led business approach, emphasizing distinctive and opulent offerings, aligns with the increasing consumer preference for experiential shopping. Hosting specialized events, tastings, and informative sessions can draw in a varied customer base, fortifying the lounge’s position in a competitive landscape.

Following chart indicates cigar market growth in South Korea:

Source: Mordor Intelligence

Tourism, Partnerships, and Digital Integration

Tourism and themed events offer additional opportunities, especially in nightlife-rich cities. Collaborations with local businesses, alcohol brands, and cigar manufacturers can expand the customer base and create unique offerings. Embracing digital marketing strategies and e-commerce also plays a critical role in extending the lounge’s reach and engaging with a broader audience (Statista).

Adaptation and Diversification

Lastly, adapting to health-conscious trends and diversifying the business model are crucial strategies. Offering lower-risk alternatives or non-tobacco products, and focusing on responsible enjoyment, can attract a wider audience. Diversifying into related products and services, such as offering food, alcohol, or cigar accessories, and providing exclusive membership options can create additional revenue streams.

In summary, the industry in the USA while navigating through its unique challenges, also possesses numerous opportunities for growth and innovation. The key lies in balancing traditional lounge elements with modern business strategies to remain competitive in a changing market (Stellarmr).

Competitive Landscape Analysis

Club Macanudo in New York City

A prominent landmark in the middle of Manhattan is this chic and modern club. Notable features include a wide variety of quality beverages, a classy atmosphere, and a large cigar selection. A lot of famous people and successful business people frequent the club because of its classy ambiance.

Corona Cigar Company in Florida

Corona Cigar Company offers a one-of-a-kind “cigar bar” experience and a wide variety of cigars at its several Florida sites, such as Tampa and Orlando. tobacco connoisseurs go there for the huge walk-in humidor and wide selection of tobacco accessories (straitsresearch).

The Grand Havana Room in Beverly Hills and New York City

The opulence and seclusion of this members-only club set it apart. Guests may enjoy first-rate service, delectable cuisine, and a breathtaking panorama of the metropolitan skyline at its Beverly Hills location. Famous people, businesspeople, and true fans all frequent this establishment.

Casa Fuente in Las Vegas

Casa Fuente, located at the Forum Shops at Caesars Palace in Las Vegas, is well-known for its assortment of unique beverages and trademark Casa Fuente cigars. Tourists and cigar connoisseurs alike are drawn to the club by its lively atmosphere.

Davidoff of Geneva in Multiple Locations

Davidoff of Geneva is a byword for opulence, having lounges in major cities including Tampa, New York, and Las Vegas. The Davidoff brand, famous for its premium cigars, provides a high-end smoking experience with its attention to detail and dedication to quality.

Shelly’s Back Room in Washington D.C.

This lounge in the nation’s capital offers a sophisticated but laid-back atmosphere with touches of modernity. Both residents and tourists in the nation’s capital frequent this cigar bar for its welcoming atmosphere and extensive selection.

Each of these lounges brings a unique flavor to the industry, showcasing the diversity and richness of the lounge culture in the United States.

Target Market Segmentation

In the industry, target market segmentation is a vital aspect of business strategy, allowing for tailored marketing and service delivery to meet diverse customer needs. Here’s a breakdown of market segmentation:

Geographic Segmentation

Lounges in cities often draw a different crowd than those in the suburbs or the country, so targeting certain geographic locations is essential. Whereas suburban lounges may target locals, metropolitan ones tend to attract visitors and businesspeople. Lounges in popular tourist areas may also personalize their services to cater to those looking for something really local.

Demographic Segmentation

It is crucial to divide the market into segments based on age and income. Lounges with a more contemporary, energetic vibe tend to attract younger folks, while those with more mature tastes tend to choose more classic, laid-back spots. Furthermore, one’s financial level does affect their choices; those with more disposable money tend to frequent more posh lounges that provide premium experiences, while those with more moderate incomes like to frequent more affordable lounges that cater to a wider spectrum of people.

Psychographic Segmentation

This necessitates dividing the market into subsets defined by demographics such as income level, occupation, and interests. Some patrons choose exclusive, members-only venues since cigar lounging is a lifestyle choice and a status symbol for them. Some people may prefer a less formal setting when they want to meet new people. Those who like cigars and are curious about their complexities may enjoy lounges that provide seminars and other instructional events.

Behavioral Segmentation

Customization of services may be facilitated by gaining insight on client behavior in relation to the event for which they attend. Equally important is acknowledging and compensating loyal customers. This demographic may be successfully catered to via the introduction of memberships or loyalty programs.

Benefits Sought

Recognizing clients according to the advantages they want is crucial. While those who prioritize convenience place a premium on features like online booking and pre-order services, those who want experiences seek for comprehensive offerings like gourmet cuisine, beverages, and entertainment.

Target market segmentation allows lounges to effectively cater to the varied needs and preferences of their clientele, enhancing customer satisfaction and loyalty and contributing to the overall success of the business.

Marketing Plan

The marketing plan concisely focuses on customer engagement & competitive strategies, incorporating a marketing budget, promotional channels, brand management and a go-to-market approach. It requires understanding the target audience and competition, setting defined marketing goals and developing a strategy that blends these elements. This approach ensures efficient budget use, leverages appropriate channels for promotion, maintains brand integrity and executes a solid market entry strategy.

Content Marketing: Create a blog on your website on what you has to offer to prospective customers.

Discounts: Provide multiple rewards or incentives to frequent customers, you’ll be more likely to attract them. Create a member referral scheme, for example, where members get a discount if they successfully recommend someone.

Social Media: Engage and promote on Twitter, publish news on Facebook, and utilize Instagram to promote curated photos of your business.

SEO (Search Engine Optimization) Local SEO makes it easier for local consumers to find out what you have to offer and creates trust with potential members seeking for what your clinic has to offer.

Email Marketing: send automated in-product and website communications to reach out to consumers at the right time. Remember that if your client or target views your email to be really important, they are more likely to forward it or share it with others, so be sure to include social media share.

Financials

The financial model and statements act as a blueprint for the lounge’s financial health. These elements break down the expected earnings, costs, cash flow and overall profitability. They’re crucial for showcasing potential and viability of the lounge. 

A solid financial model details the lounge’s budget including initial expenses, sources of income and regular costs providing a clear path to profit. It helps spot financial risks and opportunities allowing for smarter business strategies.

Financial statements such as income statements, balance sheets and cash flow statements offer a clear view of the lounge’s finances at any given time. They track money movement, ensure the business keeps up with financial rules and maintain investor trust by showing where the money goes.

Investment & Capital Expenditure

Revenue

Cost of Goods Sold

Operating Expenditure

Income Statement

	2020A	2021A	2022F	2023F	2024F
ANNUAL REVENUE
Item 1	9,217	59,117	175,410	415,277	781,357
Item 2	34,701	222,558	660,368	1,563,394	2,941,580
Item 3	4,067	19,561	46,432	78,519	114,905
Total annual revenue	47,985	301,236	882,211	2,057,189	3,837,842
% increase		528%	193%	133%	87%
COST of REVENUE
Item 1	360	2,259	6,617	15,429	28,784
Item 2	480	3,012	8,822	20,572	38,378
Item 3	52,000	65,000	78,000	91,000	104,000
Item 4	720	3,615	8,822	16,458	23,027
Item 5	140,000	336,000	560,000	840,000	1,120,000
Item 6	60,000	144,000	240,000	360,000	480,000
Item 7	32,000	61,333	85,533	112,153	141,435
Total Cost of Revenue	285,560	615,220	987,794	1,455,612	1,935,625
as % of revenue	595%	204%	112%	71%	50%
Gross Profit	-237,575	-313,984	-105,583	601,578	1,902,218
SELLING & ADMIN EXPENSES
Item 1	28,000	96,800	154,880	175,692	193,261
Item 2	75,000	105,000	120,000	120,000	120,000
Item 3	36,000	96,000	108,000	120,000	120,000
Item 4	8,000	12,000	12,000	12,000	12,000
Item 5	3,839	18,074	44,111	61,716	115,135
Item 6	3,359	12,049	26,466	41,144	76,757
Item 7	5,600	10,000	12,904	15,034	17,376
Item 8	6,667	14,000	22,067	30,940	40,701
Total selling & admin expenses	166,464	363,924	500,428	576,525	695,230
as % of revenue	347%	121%	57%	28%	18%
Net profit	-404,039	-677,907	-606,011	25,052	1,206,987
Accumulated net profit	-404,039	-1,081,947	-1,687,957	-1,662,905	-455,918

Cash Flow Statement of Cigar Lounge

	2020A	2021A	2022F	2023F	2024F
CASH FLOW from OPERATING ACTIVITIES
Net profit before tax	-$404,039	-$677,907	-$606,011	$25,052	$1,206,987
Depreciation	$44,267	$85,333	$120,504	$158,127	$199,512
Payables
Item 1	$4,333	$5,417	$6,500	$7,583	$8,667
Item 2	$11,667	$28,000	$46,667	$70,000	$93,333
Item 3	$6,250	$8,750	$10,000	$10,000	$10,000
Item 4	$3,000	$8,000	$9,000	$10,000	$10,000
Item 5	$667	$1,000	$1,000	$1,000	$1,000
Total payables	$25,917	$51,167	$73,167	$98,583	$123,000
change in payables	$25,917	$25,250	$22,000	$25,417	$24,417
Receivables
Item 1	$320	$1,506	$3,676	$5,143	$9,595
Item 2	$360	$1,807	$4,411	$8,229	$11,514
Total receivables	$680	$3,314	$8,087	$13,372	$21,108
change in receivables	-$680	-$2,634	-$4,773	-$5,285	-$7,736
Net cash flow from operating activities	-$334,536	-$569,958	-$468,280	$203,311	$1,423,180
CASH FLOW from INVESTING ACTIVITIES
Item 1	$16,000	$13,200	$14,520	$15,972	$17,569
Item 2	$20,000	$22,000	$24,200	$26,620	$29,282
Item 3	$28,000	$22,000	$14,520	$10,648	$11,713
Item 4	$96,000	$88,000	$72,600	$79,860	$87,846
Item 5	$20,000	$22,000	$24,200	$26,620	$29,282
Net cash flow/ (outflow) from investing activities	-$180,000	-$167,200	-$150,040	-$159,720	-$175,692
CASH FLOW from FINANCING ACTIVITIES
Equity	$400,000	$440,000	$484,000	$532,400	$585,640
Net cash flow from financing activities	$400,000	$440,000	$484,000	$532,400	$585,640
Net (decrease)/ increase in cash/ cash equivalents	-$114,536	-$297,158	-$134,320	$575,991	$1,833,128
Cash and cash equivalents at the beginning of the year	–	-$114,536	-$411,693	-$546,014	$29,978
Cash & cash equivalents at the end of the year	-$114,536	-$411,693	-$546,014	$29,978	$1,863,105

Balance Sheet

	2020A	2021A	2022F	2023F	2024F
NON-CURRENT ASSETS
Item 1	$16,000	$29,200	$43,720	$59,692	$77,261
Item 2	$20,000	$42,000	$66,200	$92,820	$122,102
Item 3	$28,000	$50,000	$64,520	$75,168	$86,881
Item 4	$96,000	$184,000	$256,600	$336,460	$424,306
Item 5	$20,000	$42,000	$66,200	$92,820	$122,102
Total	$180,000	$347,200	$497,240	$656,960	$832,652
Accumulated depreciation	$44,267	$129,600	$250,104	$408,231	$607,743
Net non-current assets	$135,733	$217,600	$247,136	$248,729	$224,909
CURRENT ASSETS
Cash	-$114,536	-$411,693	-$546,014	$29,978	$1,863,105
Accounts receivables	$680	$3,314	$8,087	$13,372	$21,108
Total current assets	-$113,856	-$408,380	-$537,927	$43,349	$1,884,214
Total Assets	$21,878	-$190,780	-$290,791	$292,078	$2,109,122
LIABILITIES
Account payables	$25,917	$51,167	$73,167	$98,583	$123,000
Total liabilities	$25,917	$51,167	$73,167	$98,583	$123,000
EQUITIES
Owner’s equity	$400,000	$840,000	$1,324,000	$1,856,400	$2,442,040
Accumulated net profit	-$404,039	-$1,081,947	-$1,687,957	-$1,662,905	-$455,918
Total equities	-$4,039	-$241,947	-$363,957	$193,495	$1,986,122
Total liabilities & equities	$21,878	-$190,780	-$290,791	$292,078	$2,109,122

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