How to Start Your Own Tobacco Company

The American Council for Drug Education estimates that 47 Million Americans use tobacco. A tobacco company could become quite profitable, particularly one that focuses on the various genders and ages of its consumers. However, tobacco is the most regulated industry in terms of manufacturing, marketing and selling a product. To be successful, you need to commit time to understanding the law surrounding tobacco. Furthermore, you need a solid business plan and a store to sell your products.

The American Council for Drug Education estimates that 47 Million Americans use tobacco. A tobacco company could become quite profitable, particularly one that focuses on the various genders and ages of its consumers. However, tobacco is the most regulated industry in terms of manufacturing, marketing and selling a product. To be successful, you need to commit time to understanding the law surrounding tobacco. Furthermore, you need a solid business plan and a store to sell your products.

Write a detailed business plan for your tobacco company. Include in your plan the costs associated with obtaining permits, licenses and a lawyer, paying employees, purchasing or leasing a retail store and manufacturing your tobacco products. Conduct research on tobacco laws and include the regulations in your business plan. Ensure that your investors and business partners understand the regulations and guidelines set by the federal government.

Decide which kinds of tobacco products you want to sell. This may include cigarettes, cigars, chewing tobacco, pipes, imported cigarettes or hookahs. Consider producing non-tobacco items such as cigarette lighters, rolling papers, cigar cutters, holders, ash trays and T-shirts.

Work with domestic and international tobacco growers. Start out as a small independent firm in your state, manufacturing products from the tobacco you purchase form farmers. Hire individuals with experience in the tobacco industry including a scientist, chemist and farmer. As tobacco companies expand and become highly successful they often purchase their own tobacco farms.

Contact the U.S. Department of Health to obtain a tobacco license. Apply for sales tax permit and a business license through your state's Small Business Administration. Apply for an EIN (employer identification number) from the IRS if you hire employees. Consult with a trademark attorney to secure your tobacco company's brand and goods/services.

Purchase or lease a space for a retail store. Choose a location where your company's products can gain a good deal of traffic, such as near a shopping center, grocery store or university. Think about your clientele when opening your own shop. If you want a higher-end tobacco store, create a lounge area where customers can smoke, watch television and hang-out. Create a cigar lounge for male customers and a hookah lounge for a college-age crowd.

Sell your tobacco products in privately owned stores. Sign a legal contract with a third party to carry your company's tobacco items. Business laws for tobacco products vary in each state. Hire an attorney to assist you in contractual matters with distributors and suppliers. Consider purchasing a franchise if you have the capital.

Tips

  • Join national smoking associations for business resources such as networking and grant opportunities.

Warnings

  • It's illegal to advertise tobacco products on radio, billboards, television and sporting events. Tobacco laws are continuously changing. Make sure you stay current on the laws while selling your products.

References

Resources

About the Author

Lucy Bowles is an avid freelance writer from Indianapolis. She has written for various websites since 2009. As a certified paralegal Bowles has worked in the areas of business, intellectual property and entertainment law. She has a bachelor's degree in history and a minor in legal studies from Indiana University.