My store is opening a lounge but we need some help...

[ninjavanish]

I think charging for lounge usage is a bad idea.

I've worked at several (highly profitable) cigar stores over the years and none charged for lounge use.

We always rented lockers. And on occasion, the lounge would be reserved for locker members only events. However, if a non locker member wished to attend the event, they could pay a month's equivilant locker fee which would grant them access to the day's event. Typically they would need to RSVP/pay in advance so that beer/pizza/etc could be purchased in sufficient quantity for these member's only events.

The bottom line is... you're selling cigars. Not your lounge. Cigars are where you profit comes from. Not your lounge. Budget the amount of money you spend. Come up with a solid purchasing system that gives you a high level of control and visibility on the outflow and inflow of money and allows you to forecast your sales and profit. Rather than creating new fees for using the new lounge area, consider cutting the bottom line first. Order fewer cigars, less often. Cut SKU's that aren't moving as quickly as you'd like, try to contact some of the companies and see if they will credit you for returning product that hasn't moved in recent months... That last thing you want is a ton of money tied up in stock that sits on your shelves forever. If it hasn't moved in 6 months. Ditch it.

I'd recommend purchasing the services of a CPA if you haven't already.

The primary reason for creating a lounge area is to engage your customers. Show them a high level of customer service, and provide an experience that will keep them coming back to purchase more cigars.

[Bill86]

Originally Posted by ninjavanish

I think charging for lounge usage is a bad idea.

I've worked at several (highly profitable) cigar stores over the years and none charged for lounge use.

We always rented lockers. And on occasion, the lounge would be reserved for locker members only events. However, if a non locker member wished to attend the event, they could pay a month's equivilant locker fee which would grant them access to the day's event. Typically they would need to RSVP/pay in advance so that beer/pizza/etc could be purchased in sufficient quantity for these member's only events.

The bottom line is... you're selling cigars. Not your lounge. Cigars are where you profit comes from. Not your lounge. Budget the amount of money you spend. Come up with a solid purchasing system that gives you a high level of control and visibility on the outflow and inflow of money and allows you to forecast your sales and profit. Rather than creating new fees for using the new lounge area, consider cutting the bottom line first. Order fewer cigars, less often. Cut SKU's that aren't moving as quickly as you'd like, try to contact some of the companies and see if they will credit you for returning product that hasn't moved in recent months... That last thing you want is a ton of money tied up in stock that sits on your shelves forever. If it hasn't moved in 6 months. Ditch it.

I'd recommend purchasing the services of a CPA if you haven't already.

The primary reason for creating a lounge area is to engage your customers. Show them a high level of customer service, and provide an experience that will keep them coming back to purchase more cigars.

As I was reading through the posts this is exactly what I wanted to say. Ninja hit the nail on the head.

A lounge area is a service to the customers to keep them in your store. You can't charge for a lounge if you want people coming back. You can however sell whatever drinks you are allowed to. Coffee, tea, water, sodas, beer and liquor if you can.

Lockers are a great idea too as mentioned. Charge people a few bucks for bringing in liquor if you can't sell it. Something like $5 or so for a bottle. Locker fees would allow them to avoid this charge. Things like this will gather more customers, their friends, and have them smoking 2-3 cigars each instead of buying a few and leaving. Customers that are regulars will make friends and have another excuse to stop by.

You really just need the space, a few TVs, and a couch. Couple chairs and tables as well. The smoke eaters will be what costs you a bit. Proper air flow as well.

The lounge also gives you additional time to converse with customers, which is where you can educate them and help them with any problems they incur while making sales at the same time. I've sold quite a few lighters and cutters after fixing them for customers. It's always bad butane, another sale by the way, purge the lighter with the mtx scissors toss some Xikar/Vector in it done deal. Customers will frequent your store more often if you have the time to spend with them.

After having the lounge you'll need to create events to bring people in. Regular poker nights with prizes work well. Fantasy football sign ups too. Once you have the lounge you want to always have people there. A dead lounge is a dead shop, people will leave.

FWIW, just my experiences.