Young and ready to go with this idea,

[Business Attorney]

I hate to throw cold water on your idea but you are way off on your pricing.

First, you will have to pay federal and state excise taxes on your cigarettes or you will end up in BIG trouble. The average federal and state excise is over $2.20 per pack. In your state it could be higher or lower since that is only an average. The excise tax is the main reason that cigarettes cost so much.

So now your price is in the $4 per pack range, but you are still only getting $1.75. The rest is going to the government.

What are your costs for the papers, the tobacco and the packaging? Let's say it is 4 cents (I have no idea what the cost is; this is just an example). Since you are selling them for about 9 cents each, before excise tax, you will net about a nickel for each cigarette.

How many can you roll in an hour? If each one takes 15 seconds and you work non-stop, you can roll 240 in an hour. At 5 cents each, that would mean you get about $12 for each hour you spend hand rolling cigarettes.

But wait. The hour that you spend rolling the cigarettes is only a small portion of the time you will actually spend on the business. You have to spend time buying the raw materials (papers, tobacco and packaging materials). More important, once you make them, you have to sell them. How long does it take to sell 240 cigarettes (12 packs of 20)? An hour (one pack every 5 minutes)? Two hours (one pack every 10 minutes)? In addition to selling the product, you also need to spend time on administrative matters, such as preparing and filing the excise tax returns.

If your selling and administrative time is another 2 hours, then you are getting $12 for three hours of work, or $4 per hour.

Those numbers may be off a little, but you will find that trying to sell at a price that is below or even slightly above the mass-produced brands is a real losing proposition. They can buy the raw materials much cheaper than you ever can. They have machines that crank out millions of cigarettes faster than your eye can see.

There are markets for hand-crafted products, but to be profitable the sellers have to price them above the mass-produced products they are competing with. There has to be a perceived value in the hand crafted product that justifies the greater price.

There may be a market for premium priced hand-rolled cigarettes, but I would be surprised if it was very large. I know a few people who will pay a premium price for a cigar, but that may be once or twice a year for special events. Most cigarette smokers I know go through them fast. Cigarettes are not savored like an expensive cigar.

I think you need to take a real hard look at the numbers before you spend more time on this idea. You would be much better off finding a business with a more promising profit outlook.

[SnellExperts]

There is a lot of stuff that you could play with on a marketing angle. One of the biggy's that I was thinking about was growing your own tobacco without all of the junk that they put in them today. That would help you go with the classic approach more as well. The problem is between products, equipment, start up fees, and such, it will be difficult to save up a lot of money that will be needed by working at job like that. You will also have to worry about being approved by the FDA and such and complying with their regulations which I am sure will be a huge pain.