Expert: James Yee - 10/7/2008

Question
This is a follow up from previous concerns, my names nav i think ull know which one I am, So I am guessing this is a costly business to start up. The inventory costs are in the millions range, the renovating costs and the furnishings for a luxury feel will be in the couple hundred thousands range im guessing? Its best if I would work with a interior designer to get the best value out of the buck right? I guess they can make a place look luxurious with a low budget. Do you think it is a good idea to start e-commerce website also on the side selling cigars? Which will help me with the monthly expenses of running the business. Oh yeah and im only 19 and a novice in the cigar industry, I do however have around 22k invested into realestate, around 40k savings, and might sell my domain name for 100k - 300k. I hope I get the fundings I need for the start up costs, I will take my time on the business plan and then convince banks to loan me money. Its hard to get a business loan these days. Thanx!

Answer
Hi Nav,

Starting and maintaining a cigar store/lounge can indeed be very expensive but if you have a rock-solid business plan, I'm sure you'll be able to find investors or acquire a healthy bank loan.

Enlisting the help of an interior decorator and letting them furnish your store is also a good idea.  Just be sure to work with the decorator so they understand the style of decor that you want and what their budget is.  90% of all the people that contacted me with questions about starting a cigar lounge have hired interior decorators to design their stores and all have said that hiring a decorator was an extremely smart decision that saved them time, money and stress. ;)

Operating a cigar mailorder website can be extremely difficult.  It's hard to be successful because a lot of counterfeit cigars are sold via mailorder (specifically on the Internet) and new cigar mailorder websites are constantly appearing on the Internet every month.  Many people are weary of ordering Cuban cigars online because they don't know if their cigars will be real or fake.  (Unless they're ordering from a VERY reputable company.) As a result, many new cigar mailorder websites have a hard time making themselves well known and many don't survive.  Cigar mailorder can also be tricky because there are specific policies that you must follow as a [legitimate] business owner.  Customers are also subjected to potential duties, tariffs, excise taxes, etc. and all this must be thoroughly discussed and planned before you start a cigar mailorder business.

My best suggestion is that you focus on your store/lounge first, establish your business as a reputable name and then branch out to e-commerce.

Hopes this helps!

Regards,
James