The hookah business in the Republic of Poland is not very developed, but it is gaining popularity among the local population every year. People want to relax, meet friends, and take a break from COVID-related topics. Today, we will discuss how to open a hookah lounge in Poland from scratch. You can start a business in two ways: open it independently or buy a franchise. This article will focus on the first option. We will cover the budget for opening, possible challenges, financial expenses and revenues, taxes, and advertising costs — these points will be reviewed below to give you a full picture and help you decide whether it’s worth opening a hookah lounge in Poland.
Opening a Hookah Lounge in Poland – What to Start With
The first thing you need to start your business with is the idea. Formulate the general concept of your future business and how it will differ from existing offers. Study the market, competitors, and local legislation. Here are the necessary steps you should take:
Business Registration
In the Republic of Poland, a foreigner can opt for the form of business activity called spółka z o.o. (the equivalent of an LLC). You can open a company offline through a notary or online either on your own or with the help of intermediaries. The second option is faster and cheaper.
Renting a Premises
Finding the right premises is one of the most challenging yet important steps. You can search on your own or hire a realtor (the cost of their services usually equals the rent for one month of the property found). Rental prices depend on the location, condition, and size of the premises. On average, it costs about 70 PLN per square meter. It is advisable to rent at least 100 m² to ensure there is enough space for visitors.
Licenses and Permits
To operate a hookah lounge in Poland, you need permits from the sanitary and epidemiological authorities. To obtain these, you must:
- Ensure the ventilation system works well because hookah involves smoke, so proper extraction systems must be in place.
- Ensure fire safety and have an evacuation plan.
If alcohol is planned to be sold, you will need a license. There are three types, depending on the strength of the alcohol. The costs are:
- Type 1 (alcohol strength from 4.5% to 18%) — 525 PLN.
- Type 3 (alcohol strength over 18%) — 2100 PLN.
Equipment and Staff
To open a hookah lounge in Poland, you will need at least 10 hookahs to start, as well as a month’s supply of charcoal and tobacco.
As for staff, in addition to bartenders and waiters, you will need hookah specialists, either experienced or those who require specialized hookah training. The salary expenses are from 3000 PLN.
If you plan to cater not only to Russian-speaking clients but also to locals and tourists, your staff should be fluent in Polish and English.
Promotion
In the EU, there are restrictions on advertising tobacco and alcohol products, so direct advertising of your venue via Instagram and Facebook targeting is not allowed. You can, however, use your personal profile for promotion.
Other options for promotion include:
- Word-of-mouth marketing
- Local bloggers
- Social media groups
- Offline advertising (flyers with promotions)
- Reviews on Tripadvisor and Google Reviews
The advertising budget should be from 1500 to 3-5 thousand PLN.
Additional Monthly Expenses
To start a hookah lounge in Poland, an investment of at least 80,000 PLN is required. With proper management, you can reach the breakeven point within 6 months. However, until then, you will need funds for regular expenses such as:
- Purchase of goods
- Rent
- Staff salaries
- Accountant (from 450 PLN per month)
- Taxes
The taxes include: corporate income tax (CIT) 9% or 19%, VAT (23%), ZUS (social insurance fund) — 1170 PLN, and dividend tax 19%. You can read more about Polish taxation here.
Despite the expenses, the main advantage of the hookah business in Poland is its high profitability. From each hookah, you can earn a profit ranging from 70% to 300%. Therefore, many foreigners consider it a profitable business idea to start their entrepreneurship journey.
