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Written by Elma Steven | Updated on January, 2024


Executive Summary

Your executive summary is the first part of your business plan, but you usually write it last because it is a summary of all the important parts of your plan.

Your Executive Summary should quickly grab the attention of the reader. Tell them what kind of business you have and where it stands. For example, are you a new business, do you want to grow your hookah bar or lounge, or do you run a chain of hookah bars or lounges?

Next, give an overview of each part of your plan that comes after this one. For example, describe the hookah lounge business in a few words. Talk about the kind of business you are running. Detail your direct competitors. Give an overview of the people you want to buy from you. Give a quick overview of your marketing plan. Find the most important people on your team. And give an overview of how you plan to handle your money.

Company Analysis

In your business analysis, you will talk about what kind of hookah lounge you run.

You could, for example, run one of the following hookah businesses:

  1. Hookah Lounge: This type of business will have a lounge-like atmosphere with comfortable couches and chairs where people can sit and smoke hookah. In this type of business, the social aspect of hookah is the most important thing. Food, drinks, and other items may be sold, but they are not the main focus.
  1. Hookah bars have a bar-like atmosphere and usually have a menu with drinks and alcoholic beverages.
  1. Hookah cafes are usually set up like coffee shops and serve coffee, tea, pastries, and other foods. Some hookah cafes focus on a certain type of food, like Middle Eastern food.

In the Company Analysis section of your business plan, you need to say what kind of business you will run and give some background on the business.

Be sure to answer questions like:

  • When did you start the business, and why?
  • What big steps have you taken so far? Some examples of milestones are the number of customers served, the number of good reviews, etc.
  • Your legal structure. Is your business set up as an S-Corp? An LLC? A one-person business? Tell us about how your legal system works.

Industry Analysis

In your industry analysis, you need to give a general picture of the hookah business.

This may seem pointless, but it has more than one use.

First, learning about the hookah business gives you knowledge. It gives you a better idea of the market you’re in.

Second, market research can help you make a better plan, especially if it shows you market trends.

The third reason to do market research is to show your readers that you know what you are talking about. This is what you do by doing the research and putting it in your plan.

In the market analysis part of your hookah business plan, you should answer the following questions:

  • How much money does the hookah business make?
  • Is the market getting smaller or bigger?
  • Who are your biggest rivals in the market?
  • Who are the most important market suppliers?
  • What changes are happening in the business world?
  • How do you think the industry will grow in the next 5–10 years?
  • What is the right size of the market? That is, how big could your hookah bar or lounge’s market be? You can figure out such a number by figuring out how big the market is in the whole country and then applying that number to the people in your area.

Customer Analysis

In the section of your hookah business plan called “Customer Analysis,” you must describe the customers you serve or expect to serve.

College students, Millennials, Gen X, and Baby Boomers are some types of customers who might smoke hookah.

As you might guess, the type of hookah business you run will depend a lot on the customer segment(s) you choose. Obviously, college students would react differently to marketing campaigns than, say, a wealthy Baby Boomer.

Try to figure out who your ideal customers are based on how they look and how they think. In terms of demographics, talk about the ages, genders, locations, and income levels of the people you want to serve. Because most hookah shops mostly serve people in their own city or town, it’s easy to find demographic information on government websites.

Psychographic profiles explain what your target customers want and need. The better you can understand and define these needs, the easier it will be to get customers and keep them coming back.

Competitive Analysis

In your competitive analysis, you should list your business’s direct and indirect competitors and then focus on the direct ones.

Other hookah lounges are direct competitors.

Indirect competitors are other places where customers can buy things that aren’t direct competitors. This includes gas stations, shops that sell tobacco, shops that sell cigars, and vape shops.

In terms of direct competition, you should list the other hookah lounge businesses that you are in direct competition with. Most likely, hookah lounges close to your location will be your main competitors.

Give an overview of each of these competitors’ businesses and list their strengths and weaknesses. Unless you’ve worked at one of your competitors’ companies, you won’t know everything about them. But you should be able to find out key facts about them, such as:

  • What kind of clients do they work with?
  • What kinds of hookah flavors do they offer?
  • Do they sell drinks and food?
  • How much do they charge (high, low, etc.)?
  • What can they do well?
  • What do they do wrong?

For the last two questions, try to answer them from the customers’ point of view. And don’t be afraid to ask the customers of your competitors what they like and dislike about them.

The last part of your competitive analysis section is to list the ways you are better than your competitors. As an example:

  • Will you have a wider variety of hookah flavors?
  • Will your lounge have a more trendy or a more upscale feel?
  • Will you treat your customers better?
  • Will you price things better?

Think about how you will do better than your competitors and write them down in this part of your plan.

Marketing Plan

Usually, a marketing plan has four parts: the product, the price, the place, and the promotion. Your marketing plan for a hookah lounge business plan should include the following:

Product: In the product section, you should repeat the type of hookah lounge business you wrote about in your Company Analysis. Then, give specifics about the products you’ll be selling. For example, in addition to hookah, does your lounge serve alcohol, offer oxygen, or sell hookah products that can be used outside of the lounge?

Price: Write down the prices you’ll be charging and how they compare to those of your competitors. In your marketing plan, the product and price sections are basically where you list the services you offer and how much they cost.

Place: This is where your hookah lounge business is located. Write down where you are and how that will affect your success. For instance, is your hookah lounge near a college campus or a place where people go to have fun? Will you sell hookahs and accessories online as well? Write down each way you’ll sell your products in this section.

Promotions: The last part of your marketing plan for your hookah lounge is the section on promotions. Here, you’ll write down how you’ll get people to your location (s). Here are some ways you could promote your business:

  • Putting ads in newspapers and magazines in your area
  • Contacting local websites
  • Billboards and signs
  • Flyers
  • Social media marketing
  • Local radio advertising

Operations Plan

In the other parts of your business plan, you talked about your goals. In the operations plan, you talk about how you will reach those goals. Your plan for operations should have two different parts.

Everyday short-term processes include everything you need to do to run your hookah lounge business, such as advertising, ordering and keeping track of inventory, serving customers, and getting ready for upcoming customers.

Long-term goals are the steps you want to take to get there. These could be the dates when you think you’ll seat your 1,000th customer or make $X in sales. It could also be when you plan to open a new hookah lounge somewhere else.

Management Team

For your hookah lounge business to show that it can be successful, you need a strong management team. Show the backgrounds of your key players, focusing on the skills and experiences that prove they can help a company grow.

You and/or other members of your team should have experience running hookah lounge businesses. If so, talk about this knowledge and experience. But you should also talk about any experience you have that you think will help your business do well.

If your team isn’t strong enough, you might want to put together an advisory board. There would be anywhere from 2 to 8 people on an advisory board. These people would act as mentors for your business. They’d help answer questions and give advice on how to plan. If you need to, look for advisory board members who have worked in food service, managed bars, or run small businesses well.

Financial Plan

Your 5-year financial plan should include a monthly or quarterly breakdown for the first year, then an annual breakdown after that. Your income statement, balance sheet, and cash flow statement are all part of your financial statements.

A more common name for an income statement is a Profit and Loss statement, or P&L. It shows how much money you made and how much it cost to run your hookah lounge. This tells you if you made a profit or not.

You need to make assumptions in order to make your income statement. For instance, will your lounge be full in the evenings and on weekends? And will sales grow by 2% or 10% every year? As you might expect, the financial forecasts for your business will be greatly affected by the assumptions you choose. Do as much research as you can to try to make sure your assumptions are true.

Balance sheets show both your assets and your debts. Balance sheets can have a lot of information, but try to boil them down to the most important parts. For example, if you spend $50,000 setting up your hookah lounge, you won’t make money right away. Instead, it is an asset that you can use to make money for years to come. Likewise, if a bank gives you a check for $50,000, you don’t have to pay it back right away. Instead, you will have to pay that back over time.

Cash Flow Statement: Your cash flow statement will help you figure out how much money you need to start or grow your business and make sure you never run out of cash. Most business owners and entrepreneurs don’t realise that you can make money but still go bankrupt if you run out of money.

When making your Income Statement and Balance Sheet, make sure to include some of the most important costs of starting or growing a hookah lounge business:

  • Location build-out, which includes construction, design fees, etc.
  • Cost of supplies and equipment
  • Payroll or salaries given to employees
  • Insurance for businesses
  • Taxes and licences
  • Legal expenses