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Executive Summary

Overview: Puff Tobacco Inc. is a New Orleans tobacco smoking store. Providing the greatest tobacco goods, such as premium tobacco, which includes both pipe tobacco and cigars for clients with various tastes, as well as bar services, such as wines of various sorts, gourmet coffee, and a diverse selection of beer. Puff Tobacco Inc. is poised to become the premier brand in the tobacco services industry, with the ultimate objective of complete customer pleasure.

Mission:” Our objective is to become the best tobacco shop in New Orleans within five years, and then expand to all 50 states. Puff Tobacco will have built a great brand identification and will begin franchising within 7 years of its creation.”

 Vision: “Puff Tobacco’s objective is to provide diversity under one roof, providing a one-stop-shop for fun-seekers looking for a place to relax while also enjoying their tobacco products, as well as a wine and alcohol bar. These services are only intended to make our customers feel unique, since we believe in our tagline, “The Customer is King!”

Industry Overview: 

The tobacco products sector produces chewing tobacco, cigars, reconstituted tobacco, cigarettes, and smoking tobacco. Tobacco stemmers, growers, paper and fiber makers, and re-driers commonly provide raw materials. Tobacco products are made from raw ingredients. Tobacco wholesalers and merchants buy the finished product to resell. Tobacco items include cigarettes and cigars. The most lucrative consumer good is cigarettes. Tobacco is an annual crop that must be planted. To harvest tobacco, the leaves are chopped by hand or machine. The leaves’ moisture is then cured and removed to increase the taste. There are two methods of curing: flue and air. Air-curing takes two months, but flue-curing takes just a week. After curing, the tobacco leaves are washed and shipped to processing factories to be de-steamed (threshed). The tobacco leaves are then dried again, put into boxes or vats, and aged. It takes two years to age. Demand is driven by consumer buying behavior and consumer understanding of the negative health implications of tobacco use. Larger tobacco businesses often dominate production because they can provide a wider range of products. Smaller firms may compete by providing deep prices, imaginative branding and packaging, and specialty product niches like additive-free cigarettes. These small businesses concentrate on promoting their products and increasing profits.

Financial Overview:

Financial Overview of Smoke Shop Business Plan

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Financial Highlights:

Liquidity2020A2021A2022F2023F2024F
Current ratio612233242
Quick ratio611223140
DSO88888
Solvency     
Interest coverage ratio  8.211.114.2
Debt to asset ratio0.010.010.20.180.16
Profitability     
Gross profit margin51%51%53%53%53%
EBITDA margin12%14%21%22%22%
Return on asset5%6%13%14%14%
Return on equity5%6%16%17%17%

Fund Usage:

Fund Usage of Smoke Shop Business Plan

Industry Analysis:

Overview:

On expects a 1.8% CAGR from 2021 to 2028 for the global tobacco market, which was valued at USD 932.11 billion in 2010. Globally, more people are smoking. New goods like clove cigarettes and menthol cigars are helping to fuel this trend. These reasons will likely drive the market in the next few years. The creation of novel tobacco products in a variety of flavors has become crucial in recent years as customers have shifted away from tobacco. Premium tobacco products made from flue-cured and fine whole leaves are now the focus of producers.

Industry Analysis of Smoke Shop Business Plan

Products Insight:

In 2020, cigarettes accounted for almost 75%. With millennials and working-class people increasingly partying and pub-hopping, global demand for flavored and plain cigarettes has risen. Another factor driving up cigarette consumption is the increasing number of young people in developing nations like India, Thailand, and China

Product Insights for Smoke Shop Business Plan

A CAGR of 2.8% is predicted for next-generation tobacco products between 2021 and 2028. Tobacco products with fewer hazardous effects are becoming more popular among smokers. Demand for next-generation tobacco products has increased. Demand for next-generation goods is expected to develop rapidly in North America, driven by growing consumer disposable income, more product launches, and increased access to high-quality items.

Marketing Plan:

Marketing Plan of Smoke Shop Business Plan

Website and Social Media: To market our brand, we use the internet and social media platforms like Instagram, Facebook, Twitter, YouTube, Google+, and others. Include Universal Laundromat in phone books and directories in your neighborhood. Create a company website and be active on key social media sites.

Seminar and Programs: Sponsor sports events and tournaments in town that are meaningful to you.

Referral Marketing: Encourage individuals to utilize referral marketing (word-of-mouth), and engage in direct marketing

Advertisement: Advertise Puff Tobacco Inc. on local television and radio stations, as well as in local publications. Ensure that all of our employees are wearing our branded clothing and that all of our official cars and trucks are well-branded with our company emblem and other identifying information. Distribute our flyers and handbills at strategic locations. Advertise Puff Tobacco Inc. on local television, radio, and print stations.

Pre-Opening Events: To raise awareness, have a party to honor the Puff Tobacco Inc. launch.

Commute Advertising: By employing individuals to display signs alongside we will draw attention to Puff Tobacco Inc. Install our billboards in high-traffic areas,

Organogram:

Organogram of Smoke Shop Business Plan

Financial Plan:

Earnings:

Financial Plan of Smoke Shop Business Plan

Break-Even Analysis:

Financial Plan of Smoke Shop Business Plan

Income Statement:

2020A2021A2022F2023F2024F
ANNUAL REVENUE     
Item 19,21759,117175,410415,277781,357
Item 234,701222,558660,3681,563,3942,941,580
Item 34,06719,56146,43278,519114,905
Total annual revenue47,985301,236882,2112,057,1893,837,842
% increase 528%193%133%87%
COST of REVENUE     
Item 13602,2596,61715,42928,784
Item 24803,0128,82220,57238,378
Item 352,00065,00078,00091,000104,000
Item 47203,6158,82216,45823,027
Item 5140,000336,000560,000840,0001,120,000
Item 660,000144,000240,000360,000480,000
Item 732,00061,33385,533112,153141,435
2020A2021A2022F2023F2024F
ANNUAL REVENUE     
Item 19,21759,117175,410415,277781,357
Item 234,701222,558660,3681,563,3942,941,580
Item 34,06719,56146,43278,519114,905
Total annual revenue47,985301,236882,2112,057,1893,837,842
% increase 528%193%133%87%
COST of REVENUE     
Item 13602,2596,61715,42928,784
Item 24803,0128,82220,57238,378
Item 352,00065,00078,00091,000104,000
Item 47203,6158,82216,45823,027
Item 5140,000336,000560,000840,0001,120,000
Item 660,000144,000240,000360,000480,000
Item 732,00061,33385,533112,153141,435
Total Cost of Revenue285,560615,220987,7941,455,6121,935,625
as % of revenue595%204%112%71%50%
Gross Profit-237,575-313,984-105,583601,5781,902,218
SELLING & ADMIN EXPENSES     
Item 128,00096,800154,880175,692193,261
Item 275,000105,000120,000120,000120,000
Item 336,00096,000108,000120,000120,000
Item 48,00012,00012,00012,00012,000
Item 53,83918,07444,11161,716115,135
Item 63,35912,04926,46641,14476,757
Item 75,60010,00012,90415,03417,376
Item 86,66714,00022,06730,94040,701
Total selling & admin expenses166,464363,924500,428576,525695,230
as % of revenue347%121%57%28%18%
Net profit-404,039-677,907-606,01125,0521,206,987
Accumulated net profit-404,039-1,081,947-1,687,957-1,662,905-455,918

Cash Flow Statement:

2020A2021A2022F2023F2024F
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:

2020A2021A2022F2023F2024F
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