Business Overview

Despite public health campaigns and legislation against tobacco products, the demand for cigars remains strong. In fact, the limits placed on where people can smoke may actually be helping cigar shops. Where allowed, cigar shops sometimes double as smoking lounges and are one of the few places at which people can still enjoy a smoking product.

According to IBISWorld, cigar lounges in the United States have grown at 2.7 percent annually in recent years and have an annual revenue of $903 million. With just 930 businesses in the industry, there’s lots of opportunity for newcomers to open cigar shops.

Who is this business right for?

Anyone who enjoys cigars may like running a cigar shop business. Having a passion for the product helps business owners connect with and give advice to customers.

What happens during a typical day at a cigar shop?

A typical day at a cigar shop involves a variety of activities. Businesses owners:

  • check inventory and humidor settings
  • welcome customers and recommend cigars
  • cut and light cigars (at shops that double as lounges)
  • order more inventory as necessary
  • sell other products (see “make your business more profitable”)

Similar to a bar setting, business owners might also spend time talking with customers. Some customers will want to have lengthy discussions on almost any topic, while others will simply want to buy a cigar or visit with their friends.

What is the target market?

The cigar-smoking population is traditionally thought of as older men. This remains generally true, but trends among cigar smokers are changing. The target market for a cigar shop business is:

  • 98 percent male, but growing among women
  • mostly between 40 and 60 years old, but growing among young adults
  • Well-educated about cigars, regardless of gender or age

How does a cigar shop make money?

A cigar shop business makes money by selling cigars. Cigars are normally sold by the stick or the box.

What is the growth potential for a cigar shop?

A cigar store may be a small operation with just one location, or it can grow to be a multi-site business. Cheap Smokes & Cigars is an example of a franchised business in Alberta, Canada. Ithaca Cigars and Sheik’s are two examples of local cigar shops in Upstate New York.