2000-4000 BTC loan - Hookah Lounge

[Shadow383]

My local Hookah bar makes more money off the alcohol than the hookah - particularly among students you'll probably find that the alcohol revenue is required to make this business really work.

[JMAHH]

automagically

Is this on purpose or an epic typo?

If you're drunk, join the Crewe.  If you're sober, take a drink, troll harder, THEN join the Crewe.  That is all.

Thanks for the invite. However I prefer drinking in a... you know... bar.

[dank]

Due to the size of the facility I want, now, $30k-$40k may be more suitable as to finish the entire building, but I could make it happen off $20k.

Remodeling can cost hundreds of thousands of dollars.  A commercial property broker will only let you have that work done by licensed professionals.  You should have enough of a line of credit to sustain the business for at least a year with the assumption of very little revenue.  If you are profitable immediately, great.  Then you pay back your lenders.  If you're not profitable immediately, then you have to have a good chunk of cash to keep the bills paid while making attempts to attract customers. 

The facility is very nice as is, there's no need to spend that much remodeling.  The only 'remodeling' I'm going to be doing will be putting up decoration, room dividers and furniture.

It's worth thinking hard about smoking regulations and where they're heading Dank. My feeling is the writing is on the wall for businesses which allow tobacco to be smoked on premises. It would be a shame to see you spend all this time and money setting up a bar only to have the govt regulate you out of existence shortly thereafter.

Good luck.

I won't live in fear of something that hasn't happened.  Actually, there is already a smoking ban, for bars and restaurants, in my state.  Hookah bars continue to operate.  My lounge is neither a bar nor restaurant.  Also, hookahs do not qualify as smoking because the tobacco is never burned.

Thank you.

Hello, my idea for Dank Glass has evolved thanks to a friend.  I now plan on opening a hookah bar in my area.  Hookah lounges can be a lucrative business and I have the perfect location for it.  There are several colleges in my town and only one other competing hookah bar.  I can easily compete with this hookah bar by pricing alone, but the unique psychedelic atmosphere in my lounge will further attract customers.  We may also accept Bitcoin.  I am more than capable of designing a logo, website and promotional material myself.

How is the other bar doing? How many customers do they have per night? What is the square footage of their premises? How many employees do they have on the payroll? Does it stay open during the vacation, when students are not on campus?

Since you're posting here, why not write "We will also accept Bitcoin"? A Bitcoin Hookah lounge may be more attractive to lenders or investors.

I'm seeking a 1000-2000 BTC loan, depending on the total expenses, for a maximum term of one year.  I can pay back the loan on a monthly basis if desired.

You should be seeking a USD loan, not a BTC loan. If the USD/BTC rate increases, it may become very difficult to reimburse your loan. Also, the USD lending rates would be much lower.

I'm willing to provide identification for this loan.  If you'd like to invest, please shoot me a PM so we can talk the finer details including interest.

Are you looking for lenders (who will get their money back + interests) or for investors (who will get dividends as long as they hold the shares)? What access to the business accounting information would they have? If you're looking for investors, will they have any voting rights?

Lenders will probably request much higher interest rates given the risk of this business failing, especially if no property is put as collateral. Investors will be there for the long term, but it means that you would share the profits forever should your venture succeed.

It's worth thinking hard about smoking regulations and where they're heading Dank. My feeling is the writing is on the wall for businesses which allow tobacco to be smoked on premises. It would be a shame to see you spend all this time and money setting up a bar only to have the govt regulate you out of existence shortly thereafter.

That happened in France, and many hookah bars became fast foods when smoking inside any public place got banned.

As posted earlier, the other bar (primarily a restaurant) has stopped serving hookah.

I don't like to post definites about something I've never took time to think over, I probably, 99% chance will accept Bitcoin but I've never looked over the procedure and requirements to do so.

As I said earlier, I would like to recalculate the loan, each time interest is calculated based off the initial loan size.  This would prevent BTC rates having an effect but would also secure against a declining USD value.  I will seek a USD loan from a bank if Bitcoin fails me on this one.

Preferably, a single lender.  I'm fine with generous interest rates, I don't think it will be an issue with this business.

My local Hookah bar makes more money off the alcohol than the hookah - particularly among students you'll probably find that the alcohol revenue is required to make this business really work.

That's great for them but I've already calculated the hookah revenue is all I need to make this business work.

[Shadow383]

My local Hookah bar makes more money off the alcohol than the hookah - particularly among students you'll probably find that the alcohol revenue is required to make this business really work.

That's great for them but I've already calculated the hookah revenue is all I need to make this business work.
[/quote]

More profit = happier investors = get a liquor license 

[dank]

My local Hookah bar makes more money off the alcohol than the hookah - particularly among students you'll probably find that the alcohol revenue is required to make this business really work.

That's great for them but I've already calculated the hookah revenue is all I need to make this business work.

More profit = happier investors = get a liquor license  

I don't believe I could get one if I wanted to.  I don't like alcohol anyways, only on like, 4th of July parties.

[BorderBits]

My local Hookah bar makes more money off the alcohol than the hookah - particularly among students you'll probably find that the alcohol revenue is required to make this business really work.

That's great for them but I've already calculated the hookah revenue is all I need to make this business work.

More profit = happier investors = get a liquor license  

I don't believe I could get one if I wanted to.  I don't like alcohol anyways, only on like, 4th of July parties.

One of the biggest reasons for failure in the restaurant/service industry is that owner/operators try to create their perfect place to eat, hangout, or bring their friends.  It doesn't matter that you don't like alcohol.  It matters if serving alcohol would be a necessary component in order to make the operation successful. 

[dank]

My local Hookah bar makes more money off the alcohol than the hookah - particularly among students you'll probably find that the alcohol revenue is required to make this business really work.

That's great for them but I've already calculated the hookah revenue is all I need to make this business work.

More profit = happier investors = get a liquor license  

I don't believe I could get one if I wanted to.  I don't like alcohol anyways, only on like, 4th of July parties.

One of the biggest reasons for failure in the restaurant/service industry is that owner/operators try to create their perfect place to eat, hangout, or bring their friends.  It doesn't matter that you don't like alcohol.  It matters if serving alcohol would be a necessary component in order to make the operation successful. 

And it wouldn't be a necessary component to make this operation successful.  I've already calculated that I can bring in $16,000 a month off hookah, alone.  People can get their own drinks and still have a good time at the only hookah lounge in the city.

Besides, I'm not of age to obtain such a license.

[dank]

Rewrote initial post now that I've had time to look through the idea.

[greyhawk]

Are you accounting for VAT, because it doesn't look like you do?

[dank]

Are you accounting for VAT, because it doesn't look like you do?

We'll be operating in America, but no, I will add taxes into the spreadsheets when I have more information regarding them.

[8668]

I dont know what state you live in, but in mine (Ohio) it is against the law to smoke indoors. There are exceptions, for businesses who make their primary revenue from tobacco sales. We have many hooka lounges in my area due to the vicinity to Dearborn, but they can only sell very small snacks ie candy bars and bags of chips. The most popular one here is 1 block from a major MAC University with a HUGE Middle Eastern customer base and the owner basically lives in the back in order to stay afloat. Not trying to bash your business idea, but the days of profiting from tobacco are gone

[OneEyed]

For example, you lend me 4000 BTC @ $11/coin, $44,000 and I plan on repaying it over two years with 2% interest/month.  Our monthly payment would equal $1870, or 167 BTC, including interest.

You know that what you're proposing is a total 0.2% interest for the whole loan duration, right? Far from 2%/month!

Also, you should use real formulas to make your simulations, especially if you want to be able to do an early buyout of your loan. For example, the first month you will generate 2% of 4000 BTC as interests, that is 80 BTC. If you reimburse 210 BTC, 80 of them are interests, while 130 of them will decrease the capital you still owe. The second month will generate 2% of 3870 BTC as interests, that is 77.4 BTC. Our of your 210 BTC, 77.4 will be interests while 132.6 BTC will reduce your debt. And so on.

[dank]

I dont know what state you live in, but in mine (Ohio) it is against the law to smoke indoors. There are exceptions, for businesses who make their primary revenue from tobacco sales. We have many hooka lounges in my area due to the vicinity to Dearborn, but they can only sell very small snacks ie candy bars and bags of chips. The most popular one here is 1 block from a major MAC University with a HUGE Middle Eastern customer base and the owner basically lives in the back in order to stay afloat. Not trying to bash your business idea, but the days of profiting from tobacco are gone

According to my spreadsheet, tobacco (hookah specifically) is a very profitable business.  Without knowing anything about his business, it can't really be compared to mine, which does have numbers to back it up.

For example, you lend me 4000 BTC @ $11/coin, $44,000 and I plan on repaying it over two years with 2% interest/month.  Our monthly payment would equal $1870, or 167 BTC, including interest.

You know that what you're proposing is a total 0.2% interest for the whole loan duration, right? Far from 2%/month!

Also, you should use real formulas to make your simulations, especially if you want to be able to do an early buyout of your loan. For example, the first month you will generate 2% of 4000 BTC as interests, that is 80 BTC. If you reimburse 210 BTC, 80 of them are interests, while 130 of them will decrease the capital you still owe. The second month will generate 2% of 3870 BTC as interests, that is 77.4 BTC. Our of your 210 BTC, 77.4 will be interests while 132.6 BTC will reduce your debt. And so on.

Sorry, I meant 2% of each months payment as interest.  I'll work out a formula when I know exactly what manner and how much interest we'll be dealing with.

[BorderBits]

According to my spreadsheet, tobacco (hookah specifically) is a very profitable business.  Without knowing anything about his business, it can't really be compared to mine, which does have numbers to back it up.

What market data do you have to support any numbers on your spreadsheet? 

Also, since you have no track record in this industry that would support high risk venture capital investment, what do you have as collateral for a $20k-$40k loan? 

[dank]

According to my spreadsheet, tobacco (hookah specifically) is a very profitable business.  Without knowing anything about his business, it can't really be compared to mine, which does have numbers to back it up.

What market data do you have to support any numbers on your spreadsheet?  

Also, since you have no track record in this industry that would support high risk venture capital investment, what do you have as collateral for a $20k-$40k loan?  

I've simply calculated potential revenue factored by things such as number of people/group, groups/hour, operational hours/day, and prices for various services.  My spreadsheet simply says if I can get 48 customers/day, 144 on Friday/Saturday and 96 on Sunday, I will earn $13,600 in profit each month.  That takes into account rent, material costs and wages.  For the size facility I'm looking at, these estimates are fairly low and could be doubled or tripled practically.

You're right, I have no track record, because I'm 18.  That doesn't mean I'm a high risk, I obviously have an idea of what I'm doing.  Dismissing someone's idea because they haven't done it yet or because of their age is fallacious.  This project isn't going to fail, I'm quite confident in my ability to attract 48 customers/day even though I would only need half that to turn profit.

So what can I offer in collateral?  Nothing now, tomorrow, everything.  I have to start somewhere before I get somewhere.

[BorderBits]

According to my spreadsheet, tobacco (hookah specifically) is a very profitable business.  Without knowing anything about his business, it can't really be compared to mine, which does have numbers to back it up.

What market data do you have to support any numbers on your spreadsheet?  

Also, since you have no track record in this industry that would support high risk venture capital investment, what do you have as collateral for a $20k-$40k loan?  

I've simply calculated potential revenue factored by things such as number of people/group, groups/hour, operational hours/day, and prices for various services.  My spreadsheet simply says if I can get 48 customers/day, 144 on Friday/Saturday and 96 on Sunday, I will earn $13,600 in profit each month.  That takes into account rent, material costs and wages.  For the size facility I'm looking at, these estimates are fairly low and could be doubled or tripled practically.

You're right, I have no track record, because I'm 18.  That doesn't mean I'm a high risk, I obviously have an idea of what I'm doing.  Dismissing someone's idea because they haven't done it yet or because of their age is fallacious.  This project isn't going to fail, I'm quite confident in my ability to attract 48 customers/day even though I would only need half that to turn profit.

So what can I offer in collateral?  Nothing now, tomorrow, everything.  I have to start somewhere before I get somewhere.

A good place to start would be getting some experience in the service industry.  A few years getting to know the ins and outs of everything that goes into managing such an operation would give investors confidence.  Without a track record, collateral, or even market research, and absolutely no monetary risk to yourself, you're basically asking for $40k for an idea.  Even with the best intentions, that is about as high risk as it gets -- You have zero chance of securing a loan with a bank.  We'll see what happens here.   

[dank]

According to my spreadsheet, tobacco (hookah specifically) is a very profitable business.  Without knowing anything about his business, it can't really be compared to mine, which does have numbers to back it up.

What market data do you have to support any numbers on your spreadsheet?  

Also, since you have no track record in this industry that would support high risk venture capital investment, what do you have as collateral for a $20k-$40k loan?  

I've simply calculated potential revenue factored by things such as number of people/group, groups/hour, operational hours/day, and prices for various services.  My spreadsheet simply says if I can get 48 customers/day, 144 on Friday/Saturday and 96 on Sunday, I will earn $13,600 in profit each month.  That takes into account rent, material costs and wages.  For the size facility I'm looking at, these estimates are fairly low and could be doubled or tripled practically.

You're right, I have no track record, because I'm 18.  That doesn't mean I'm a high risk, I obviously have an idea of what I'm doing.  Dismissing someone's idea because they haven't done it yet or because of their age is fallacious.  This project isn't going to fail, I'm quite confident in my ability to attract 48 customers/day even though I would only need half that to turn profit.

So what can I offer in collateral?  Nothing now, tomorrow, everything.  I have to start somewhere before I get somewhere.

A good place to start would be getting some experience in the service industry.  A few years getting to know the ins and outs of everything that goes into managing such an operation would give investors confidence.  Without a track record, collateral, or even market research, and absolutely no monetary risk to yourself, you're basically asking for $40k for an idea.  Even with the best intentions, that is about as high risk as it gets -- You have zero chance of securing a loan with a bank.  We'll see what happens here.  

I did a project on managing restaurants in 7th grade.  I learned the same information in a high school business class, it's not that complicated that you have to plan for years before doing it.  As with anything in life, you just have to do it.  The idea that you need to work for somebody before doing things yourself is wrong.  

Anybody is capable of anything, I've demonstrated my capability to manage a profitable hookah lounge through numbers, you're saying I'm not capable of it because I haven't worked for a few years, which I think is ridiculous.

I have all the incentive in the world to make this hookah lounge as successful as possible, because I have a plan for my life.  I have goals including million dollar business ventures and becoming a rockstar, which I know I will reach.  This is a stepping stone to reach those goals, I'm not just suggesting I get a $40k loan for a hookah bar as a side job that may or may not succeed.  I will be putting all of my effort into this lounge to ensure it will succeed, no matter what.  That right there should be incentive for an investor.

[8668]

I dont know what state you live in, but in mine (Ohio) it is against the law to smoke indoors. There are exceptions, for businesses who make their primary revenue from tobacco sales. We have many hooka lounges in my area due to the vicinity to Dearborn, but they can only sell very small snacks ie candy bars and bags of chips. The most popular one here is 1 block from a major MAC University with a HUGE Middle Eastern customer base and the owner basically lives in the back in order to stay afloat. Not trying to bash your business idea, but the days of profiting from tobacco are gone

According to my spreadsheet, tobacco (hookah specifically) is a very profitable business.  Without knowing anything about his business, it can't really be compared to mine, which does have numbers to back it up.

[/quote]

[/quote]

Well youre correct, his business can't be compared to yours. While his is an actual brick and mortar establishment, your's is merely a thrown-together business plan. And again, no offense intended, but hookah lounges aren't incredibly profitable as stand-alone businesses. Most are attached to established bars/coffee houses with a pre-existing customer base. Coming from a decade in the service industry with over half of those years in coffee houses WITH hookah lounges, its tough. To get the good seesha you have to order directly from UAE or Lebanon (trade with UAE is restricted). Importers in American sell sub-par quality seesha to white guys (again, not meant to be discriminatory, just a cold fact) at inflated prices. If you are interested more I would be willing to discuss more via PM and I can happily provide websites of both the places I managed as further proof.
Not trying to discourage you. If you have a corner on the market it is possible to overcome and become profitable after a couple years, theres just alot to consider. For instance, in some municipalities the ability to sell tobacco is linked to liquor licenses (limited by design)  

[dank]

I dont know what state you live in, but in mine (Ohio) it is against the law to smoke indoors. There are exceptions, for businesses who make their primary revenue from tobacco sales. We have many hooka lounges in my area due to the vicinity to Dearborn, but they can only sell very small snacks ie candy bars and bags of chips. The most popular one here is 1 block from a major MAC University with a HUGE Middle Eastern customer base and the owner basically lives in the back in order to stay afloat. Not trying to bash your business idea, but the days of profiting from tobacco are gone

According to my spreadsheet, tobacco (hookah specifically) is a very profitable business.  Without knowing anything about his business, it can't really be compared to mine, which does have numbers to back it up.

Well youre correct, his business can't be compared to yours. While his is an actual brick and mortar establishment, your's is merely a thrown-together business plan. And again, no offense intended, but hookah lounges aren't incredibly profitable as stand-alone businesses. Most are attached to established bars/coffee houses with a pre-existing customer base. Coming from a decade in the service industry with over half of those years in coffee houses WITH hookah lounges, its tough. To get the good seesha you have to order directly from UAE or Lebanon (trade with UAE is restricted). Importers in American sell sub-par quality seesha to white guys (again, not meant to be discriminatory, just a cold fact) at inflated prices. If you are interested more I would be willing to discuss more via PM and I can happily provide websites of both the places I managed as further proof.
Not trying to discourage you. If you have a corner on the market it is possible to overcome and become profitable after a couple years, theres just alot to consider. For instance, in some municipalities the ability to sell tobacco is linked to liquor licenses (limited by design)  

I guess we will find out, since it seems to me that hookah is quite profitable as a stand alone service.  Not that I think it's appropriate to compare it with any existing hookah lounge, really, mine will have a huge 6000 square foot facility with live music, an attached smokeshop, downtown, with colleges all around.  I think I'll be turning profit in a few months, not years, we'll see.

[BorderBits]

I guess we will find out, since it seems to me that hookah is quite profitable as a stand alone service.

Where are you getting the idea that "hookah is quite profitable as a stand alone service"?  You just had someone who actually knows a thing or two about the business tell you that it's not.