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Yanciks Cigar Lounge

Business Plan
Andrew Yancik

The purpose of this business plan is to secure financing

TABLE OF CONTENTS:

EXECUTIVE SUMMARY
SECTION 1: BUSINESS DESCRIPTION
A. Business Concept
B. Business Name
C. Goals
D. Industry Analysis
E. Form of Ownership
F. Facility Requirements
G. Opening Date
H. Legal Requirements
SECTION 2: MARKETING PLAN
A.
B.
C.
D.
E.
F.
G.

Geographic Market
Customer Profile
Potential Customers
Market Penetration
Competitive Analysis
Pricing
Promotion

SECTION III: MANAGEMENT PLAN


A. Employees
B. Organizational Chart
C. Business Expertise
SECTION IV: FINANCIALS
APPENDIX-RESUMES

EXECUTIVE SUMMARY

Yanciks Cigar Lounge is a unique cigar smoking business. We offer three stages of
lounges. The bottom floor the Casual Lounge. In this lounge, customers can sit on comfortable
couches or in soft chairs. There will be a few televisions for people to watch whatever shows or
movies they want. The second floor will have the Sports Lounge. In this lounge, customers can
relax and watch different sports games on different televisions. They can watch Hockey,
Baseball, Football, Soccer, Golf, Tennis, and other sports while smoking cigars. The third floor
will have the Luxury Lounge. In this lounge, well dressed customers can relax in a very classy
setting while smoking cigars. Soft jazz music will be playing to add to the class. This lounge is
more for businessmen/women that want to keep it classy after work, or for people that want to
dress up and go smoke a cigar and have a drink. All lounges will have a bar with a bar tender and
a walk in humidor with a humidor attendant. When a customer purchases a cigar, they will be
given a cutter, lighter, and a small ash tray to borrow. The different stages of lounges offers a
more unique experience instead of the regular cigar bar. All lounges are very comfortable, well
ventilated, and relaxing.
The business will be located at 176 Newbury Street, in Boston, MA. This is a perfect
location because there are many people in Boston which means plenty of available customers.
The three floor unit is perfect for my three floor design.
Our customer base will include men and women who want to smoke a cigar in a casual
lounge, enjoy a sports game and a cigar, or smoke a cigar in a classy and sophisticated
environment. The minimum age is 18 but you must be 21 to buy alcoholic beverages. This will
be a great hangout area for many people and business will do well.
I am asking for a $200,000 investment that will cover the cost of rent for three months
and to add furniture and buy inventory.

SECTION 1: BUSINESS DESCRIPTION


A. BUSINESS CONCEPT
My business is a multilevel cigar lounge. There is a casual lounge, sports lounge, and
a luxury lounge. Each lounge will include a walk in humidor, bar, comfortable
seating, and televisions. Customers will be able to borrow cigar cutters, lighters, and
ash trays. Each lounge will have dcor specific to the name of the lounge. All lounges
will be well lit and well ventilated. The bar in each lounge will have a bartender that
can serve beer and wine. The humidor in each lounge will have a humidor attendant
that sells the cigars and gives recommendations. The location is in Boston, MA at 176
Newbury Street.
B. BUSINESS NAME
The business name is Yanciks Cigar Lounge. This is a combination of my last name
and what the business is. We sell cigars and it is a lounge, therefore the name works
well. I believe the name has a nice ring to it and people will want to go to my
business. The key word lounge is what makes it different from a bar. A lounge is more
of a place to relax instead of a place to just go smoke and drink.
C. GOALS AND OBJECTIVES
My goal is to provide a unique cigar lounge experience for people that enjoy smoking
cigars. There arent many lounges or cigar lounges in the Boston area. There are quite
a few cigar bars, but not many cigar lounges. This will supply the demand for people
that want to go to a cigar lounge. My location is very close to Copley Center near the
Boston Public Library. This area has a lot of people shopping so foot traffic going by
my business will be great and anyone that wants to head in for a cigar can. My
objectives are to make a lot of money and be happy running this business. Providing
this experience for people will bring me joy and hopefully quite a bit of money.
D. INDUSTRY TREND

All over the world, smoking cigars is done by many people and it wont stop any time
soon. 13.4 million people are cigar smokers in the United States. 5.4% of all adults in
the United States smoke cigars regularly. The industry has improved 0.4% since 2012.
The cigar lounge industry is very small so I wont have many competitors. Cigar
lounges are usually found in cities where there are a larger population of cigar
smokers. Over the next five years, the cigar industry is projected to decline as more
and more people quit smoking or choose not to smoke at all. There is a demand for
nice cigar lounges in Boston, especially because there are less than five in the city.
The industry will maintain itself from the wealthy that have a larger disposable
income. New smokers may also choose to smoke cigars rather than cigarettes. I know
quite a few people that want to smoke cigars in a lounge, but there arent any in our
area. The introduction of my cigar lounge will cater to their demands.
E. FORM OF OWNERSHIP
My form of ownership is a Limited Liability Corporation. I chose this form of
ownership because its flexible and allows for the liability I would need. I need
protection from liability because people may overindulge in alcohol and I wouldnt
want to pay for any hospital or ambulance bills. Also smoking is a known cause of
cancer and many other health issues, and I need protection from people that would
want to file a lawsuit against me. Being an LLC allows me to run the business myself
without the complexity of being a true corporation. I will still get tax benefits which
is always a good thing.
F. FACILITY NEEDS
My facility needs are a three story retail building. This is located at 176 Newbury
Street, Boston, Massachusetts. There is plenty of room for the three floors I need. The
ground floor has the largest square footage. The first floor has the second most square

footage. The second floor has a very small amount of square footage, so the luxury
lounge will be quite small and cozy. This facility costs a total of $63,200 per month
which is a very steep rent fee. This is the best facility I could find for me needs.
G. SIGN REGUIREMENTS
I will have a pretty small sign. It will be three feet by two feet with the name and logo
on it. The sign will be made of wood and will be engraved with gold lettering. The
sign needs to be large enough to show people I have business, yet small enough thats
its not overly big and weird looking. I will have external lights on the building that
will illuminate the sign. I think the sign will help to pull in people and look elegant.
H. OPENING DAY
Opening day would be May 1st because it will be warm and people will want to walk
around the city. This starts a higher foot traffic part of the year because of the warm
spring weather. The business will be open from 5:00 PM to 1:00 AM, seven days a
week except for major holidays such as Christmas, Thanksgiving, etc. This allows my
business to maximize profits and keep my workers happy by not having to work
holidays that they want to spend with family.

I. LEGAL REQUIREMENTS
Business Registration
State Business License
Local Business License
Federal Business License
Federal Employer ID Number
Sales and Use Tax Permit
Business Permit
Tax Registration
Unemployment and Workers Comp.
Health and Safety Requirements
Tax Requirements
Liquor License
Beer and Wine License

SECTION 2: MARKETING PLAN


A. GEOPHRAPIC MARKET
The Geographic market for Yanciks Cigar Lounge is 30% Suffolk County, 20% Essex
County, 20% Middlesex County, 15% Norfolk County, and 15% Plymouth County. I
came to these numbers based on proximity to my location. More people will come from
the County with Boston and from the surrounding Counties. People arent going to travel
across state or come from a different state just to smoke a cigar in a lounge.
B. CUSTOMER PROFILE
The target market for my business is 18+ for cigar smoking and 21+ to also drink alcohol.
You have to be 18 years old to buy tobacco products and 21 to buy alcohol, so the ages
makes sense. I dont have an age cap because people who smoke will do so until the day
they die unless they decide to quit, the same thing goes for alcohol consumption. I predict
the gender diversity to be 65% male and 35% female. This is because males tend to
smoke more cigars than females. Many females find cigar smoking unappealing so there
wont be as many female customers.
C. POTENTIAL CUSTOMERS
My potential customer base is around 3,000,000 people. This comes from the size of the
adult populations in Suffolk County and the surrounding Counties. Middlesex County has
the highest population in Massachusetts and many of those people commute to Boston
every day. The people that live in and around Boston are more likely to come to my
business than other areas. These numbers also include tourists that visit Boston all the
time. There may also be more customers from the western part of the state but it isnt
easy to predict how many of those people would be willing to drive all the way to Boston.
D. MARKET PENETRATION

The market penetration number that I expect is based on the number of customers in the
area and the number of people I could serve a day. I expect to have around sixty
customers a day. That comes to 420 customers a week, 1,680 customers a month, and
87,360 a year. That would come up to about $4,368,000 in revenue assuming each
customer pays $50. I expect my market penetration level to be around 60% so my number
of customers I can start to serve will be more around 52,416 customers and $2,620,800 in
revenue. These numbers are reasonable for my first year and will continue to grow over
the next four years. I dont expect to serve as many customers as a restaurant. They may
have several hundred customers a day. My numbers are low based on the limited number
of smokers available, but it could rise if more people get into smoking cigars. My lounge
can also be used by people smoking vaporizers and can buy alcohol while they enjoy the
lounge.
E. COMPETITIVE ANALYSIS
My top three competitors are:
Stanza Dei Sigari
Cigar and Lounge
Venom
Strengths and Weaknesses of Competition

Stanza Dei Sigari


Strengths:
Weaknesses:

I. Classy and popular for cigar smokers in the North End.


II. Offers a full bar, cigars, and hookah.
I. Limited space and is dark.
II. Not wheelchair accessible and the waitresses are slow.

Cigar and Lounge


Strengths:
Weaknesses:

I. Owners are very nice and know their stuff.


II. Lounge is comfortable and well decorated.
I. Not that many people have knowledge of this place.
II. The lounge can get crowded forcing people to stand.

Oak Room
Strengths:
Weaknesses:

I. Extremely classy and popular.


II. It has an excellent selection of cigars and drinks.
I. It requires reservations to get it
II. Secret part of a larger restaurant.

Yanciks Cigar Lounge


Strengths:
Weaknesses:

I. Multilevel lounge offers more than one experience.


II. Excellent selection of cigars and great service
I. The lounges may be smaller than expected.
II. New guy on the block.

F. PRICING
My pricing is based on several factors. The first factor is setting my prices to a number
that meets my break-even point, from there I increase the price per item to get a profit.
Cigars can range anywhere for eight dollars to forty dollars depending on the brand, and
quality of the cigar. Buying from a wholesaler will get me very good cigars without
dealing with a middle man. I can have some lower prices if I pay lower prices for my
cigars. Alcoholic beverages are expensive and cost a lot to keep inventory. I may have
over a thousand dollars worth of alcohol in my inventory at any given time. This is
anything tequila to rum, to vodka, to beer, and wine. It is important that I make money on
my alcohol sales because people are willing to spend a lot of money for good drinks.
Great drinks and cigars will keep my customers happy, as well as low prices. If I can
price my items lower than the competition and still make a profit, then I will make a lot
of money by getting my competitors customers. Another part of my break-even point that
is important is the pay of my workers. I need to break even with all my expenses per
month and still turn a profit. Budgeting is immensely important when calculating my
prices to make sure that I am capitalizing on everything I possibly can.
Breakdown of my prices:
Cigars:
$8.00-40.00

Beer:
$5.00
Wine:
$5.00
Wine bottle: $15.00-35.00
Shot of liquor: $3.00
Mixed drink: $5.00-small $10.00-large
G. PROMOTION
I plan on having many promotions with my business. The opening weekend I will have a
promotion where if you bring two people then you each get a free cigar. This promotion
is designed to get people in and to introduce a customer base. If this is successful then the
initial loss of giving cigars away will pay off by having many customers. I will have
special where if you have a group of five or more, you get 20% taken off the bill. This
will encourage people to bring as many friends as they can to save money. On certain
days I will have a sale on the more expensive cigars. This sale could happen once a
month depending on how well it works. Another promotion is a buy three cigars, get one
free deal. This will make people spend more money to get that free cigar. I will also have
membership cards. This works by having a member pay a yearly fee, and in return they
get access to a private lounge and they get great deals on cigars and drinks. I will also
have deals where in my sports bar I will have reduced prices for major sporting events
such as the Super Bowl, Stanley Cup Finals, World Series, major golf tournaments, and
major pay-per-view events. With pay-per-views, customers will need to fill the lounge to
maximum capacity to have a discount. If people host a party at my lounge and have thirty
or more people, then they will get 40% off of their total bill. I will also have some special
social media deals where if you take a selfie in front of my lounge and can get ten
favorites or likes on sites such as Twitter, Facebook, and Instagram, you will get 25% off
that day. All of these promotions are designed to get more people through the door and

spending money. Without large numbers of people, the discounts will hurt me and I will
need to stop my promotions to save money.
Section 3: Management Plan
A. EMPLOYEES
There will be six employees besides myself. I am the owner and general manager of
Yanciks Cigar Lounge. I will also have three bartenders and three humidor attendants.
My job will be to make sure everything is running smoothly, order my supplies, manage
my employees, set budgets, set prices, and make decisions on when promotions can help.
I will be doing most of the work and will check up on customers to make sure everything
is okay and that they are having a great time. I will have a bartender in each lounge and
their job is to pour and make drinks for people. They can recommend drinks based on
cigars and they are allowed to create their own signature drinks to add to the menu. I will
have one humidor attendant in each of the lounges. They will make sure that people are
getting exactly the cigar they want and will give recommendations to people that are new
to cigar smoking. My humidor attendants and bartenders will all be very nice and
personable to people and make sure that they are getting what they want. It is also the job
of the bartender to make sure that they dont let people get too intoxicated, and if they do,
they are required to call a cab or another form of transportation to come and get the
person. Each of my employees will make good money and I will make sure they are
compensated for their good performance with a raise. My employees will get discounts
on all the cigars and drinks and will get it free on their birthday and on Christmas as a gift
to them. I want to make sure my employees are happy and they enjoy their job. I need to
make sure that they arent stealing from me, so I will have cameras set up to watch the
humidors and bars. This will also prevent customers from stealing from me. If I have a

problem with one of my employees where they are stealing or having a bad attitude, they
will get a warning, and if it continues they will be fired.
B. ORGANIZATIONAL CHART
The organizational chart is pretty simple. I am on top as the owner, below me are six
boxes that contain the bartenders and humidor attendants. They are all equal in a
horizontal line. They will all report to me and I will give them instructions. I want to
make sure that they all feel equal and that none of them has more power than another.
This is important because I dont want to have any favorites that will be treated
differently than the others.
C. BUSINESS EXPERTISE
I am a cigar connoisseur and have been smoking cigars casually for around three years
now. I know a lot about good cigars and cigar brands and I can bring my knowledge to
the business. I also know a lot about good alcohol too. Beer is pretty easy as most people
will drink light beer such as Coors Light, Miller Light, and Bud Light. I also know of
craft beers that people enjoy, and Sam Adams is a popular choice in Boston. I know quite
a bit about good liquor brands and different types of alcohol. I know the best types of
rum, tequila, vodka, whiskey, scotch, etc. Anything I dont know about I can do research
on online. This research goes for all my alcohol and cigars. I also have soda for people
that arent old enough to legally drink and people that dont want to drink. I will supply
soda that people enjoy such as Coca-Cola, Pepsi, Sprite, Dr. Pepper, and other products
from Coca-Cola and Pepsi.
Aside from knowing about my products, I know what people want in a cigar lounge. The
basics are nice and comfortable dcor, a great selection of cigars and drinks, and great
service. I know how to make all of those things happen. I also know a lot of core business
skills such as management, human resources, marketing, accounting, entrepreneurship,

etc. I am a management major so my courses give me the expertise I need to manage a


business and my employees. I have taken courses in human resources that gives me the
knowledge about what to offer employees and how to make them happy. I have taken
marketing courses that has given me knowledge on how to market to people, target
marketing, market segmentation, and other concepts. I have taken courses in financial
and managerial accounting to be able to handle all of my accounting needs such a
budgeting, costing, and making spreadsheets and financial records. I am in an
entrepreneurship certification and I have taken courses to help me be a better
entrepreneur and business man.

Section 4: Financials

APPENDIX: RESUME

ANDREW YANCIK
1 Brookstone Drive
Dudley, MA 01571
774-452-6073
andrew.yancik@gmail.com

EDUCATION

Nichols College
Dudley, MA 01571
Expected Graduation: May 2017
Major: Business Management

WORK
EXPERIENCE

Park N Shop
14 Airport Road, Dudley, MA 01571
May 2013- Present
Stocking Dairy
Bagging Groceries
Stocking Produce
Customer Service

SKILLS

Advanced Microsoft Word


Proficient Microsoft Excel
Advanced Microsoft PowerPoint
Proficient Google Docs
Management
Accounting
Entrepreneurship
Marketing

ACHIEVEMENTS

Deans List- Fall Semester 2013


Entrepreneurship Certification- in progress