Get Your FREE Subscription to HQ Magazine!
Total Product Expo is the highly-anticipated premier B2B trade show that brings manufacturers, distributors, and independent retailers together under one roof.

A Word to the Newcomers Among Us

Introductory Thoughts on Starting a Head Shop

Dear Newbies,

We see you. We know you’re here. We’ve watched you walk the trade show floors, doing your research and sizing up the market. You may be wondering why a good portion of the smaller, mom and pop vendors were so tight-lipped around you. Quite honestly, it’s because they thought you were a cop. It was mostly the iridescent Oakleys with the stability strap, but it was also the awkward way you carried yourself and the fact that you kept referring to cannabis as “dope.” That’s a big no-no. Read up on our history; you’ll understand.

Anyway, we know you’re planning to start a shop of your own soon, and for the most part, we’re OK with that. It’s a growing industry. There should be plenty of room for everyone. We just want you to promise that you’ll play fair. As an act of good will, we’re going to give you a few thoughts to chew on as you’re starting out; things to consider, pitfalls to avoid, etc. Consider it our neighborhood welcome gift to you.

Start with some soul searching. Why do you want to open a head shop? Is there a deep-seated passion for the culture? Or did someone tell you that it was easy money? Get to the bottom of your motivation and make sure you’re in for the right reasons. Going out on your own to start a business in any genre is a lifelong commitment. There will be a lot of sleepless nights, uncertain days and seven-day weeks ahead of you. You’ll only get through them if you have the passion to sustain yourself. So, ask yourself, is this that thing in your life that you simply have to do? Is this the space where you have to be? This is especially important in a niche industry, where it’s associated with a devoted subculture that requires a deep and specialized knowledge. If you can’t honestly say yes to those questions, you have one of two options: a) look elsewhere for the niche that does move you, or b) partner with/hire someone who has the passion you lack and step back to take more of an investor role.

Write a business plan. This should be a no-brainer, but it’s overlooked far more often than any rational person would naturally suspect. Don’t assume that because you’ve run a business before that you can come in here and just wing it. That would be a fatal mistake. Make your business plan exhaustive. Set a realistic budget. Cover every detail and make sure you devote plenty of space to research of your local market. And while you’re in the planning phase, it’s insanely important that you feel out the cultural climate of the area in which you’re looking to open. Make sure you won’t be run out of town by a torch and pitchfork mob over your choice of merchandise. Too many businesses in this industry have lost practically before they started just from overlooking this one thing.

Know the law. Whatever you do, don’t assume that you’re immune to the dangers your predecessors in this industry faced just because a few politicians have warmed up to the idea of legalization. You still need to know the ins and outs of every applicable law. That goes for federal, state and local statutes. Tripping up on one of them could end you as fast as a horde of angry soccer moms. We’re not just talking about the ones regarding paraphernalia, either. You need to look into your state’s rules for tobacco licensing and related taxes and learn how they apply to you. No two states are a like here and there’s often divergence between individual municipalities.

Secure funding. Bad news: If you apply for a bank loan, you’ll almost certainly be denied. Financial institutions are not typically our friends here. Nearly every day, there’s a shop out there being denied credit card processing. If they won’t even take your money, rest assured, they won’t be loaning you any. Most likely, any loan you take out will be personal. Therefore, your best bet is to start small and avoid leaving a family member or loved one high and dry when/if things go belly-up. There’s no shame in that; some of the most successful businesses in this space started on either a festival blanket or a flea market table. Look no further than this issue’s Shop of the Month for an example of such. If you’re brand new to the industry, you’re likely far better off starting small and growing into your vision than coming in throwing millions of dollars around anyway. It’s best to get your sea legs underneath you, to achieve that intangible “it” factor in the understanding of the niche before doing the heavy lifting. Limiting your scale and budget at the outset pushes you to weigh every purchase decision and ensure you’re making the right one in each situation. When you have to stretch every penny, you’re not going to make that $10,000 mistake buying the wrong merchandise or funding the wrong promotional campaign.

Network. The old cliché, “It’s not what you know, it’s who you know,” totally applies here. Get plugged in. Go to trade shows. Join Facebook forums and interact, both with vendors and fellow shop owners. We often come off as distrusting, but you’ll find fairly quickly that if you prove you’re not a total d-bag corporatist vulture, we can be a friendly bunch. Take on a mentor—or two, or three—and be willing to learn. There are a lot of successful shop owners out there who enjoy helping industry newcomers, so long as they’re not within competing range.

Don’t compete. Create. If you’re running a local brick and mortar store, Amazon’s technically already beaten you. That’s why it’s now more crucial than ever that you build something that’s more than just a place to buy stuff. Your clientele can already do that from comfort of their own home, and they don’t even have to wear pants. At bare minimum, you should have unrivaled product expertise and immaculate customer service, but don’t stop there. Create something of value, something experiential that will compel them to return over and over. If you go into business to compete, you’ll just end up in a race to the bottom. Instead, go into business to create and build something that you can climb to the top.

More Industry Insights