Bear in mind that over the course of time, trends change, so you’ll need to remain up to date with current retail values in order to assess correctly. You can also visit other pawn shops in your area to see how they are pricing items. Apply for an internship or a job at a local pawn shop. This will allow you to learn how professionals assess goods, as well as how they determine what percentage of the assessed value to pay in the event a customer wants to sell an item.
Your business concept: The focus here is on describing your business and the market for your products and services. Market research: Market research is critical, as it describes the nature of the market you are entering into. Identify who your major competitors are, who your target market is, and the preferences and needs of your target market. A marketing plan: This should describe how you plan on addressing the needs of your market, how you will communicate with customers, and how you will advertise your shop. An operations plan: This will describe your operations on a day to day basis. It would include, for example, how you will make loans, how you will acquire items to sell, how you will price items and what interest rate you will charge for loans. A financial plan: This would outline how you will finance your business, what your expected costs are, and projections as to your revenue.
Operating expenses include licenses, permits, insurance, a location, security system, contracts, employees’ salaries, display cases, accounting software and repair costs of goods you want to resell.
You will also need to pay an application fee ranging from $1,500 to $2,000 per shop.
For example, in many areas a pawn shop must be a certain distance from schools. When you find a potential location, sit in your car for a few hours and analyze the foot traffic in the neighborhood. Is it near public transportation or highways? Is there enough parking? Are competitors and other shops nearby? Being near the competition can help attract the right customers if you believe your products and services will be superior. [8] X Research source You will want to also analyze the demographics of the area. Does the income level match the type of clientele you hope to attract? Your local librarian or commercial real estate broker can help provide this information. Once you find a location purchase insurance policies for general liability and fire insurance.
Your local police department can run the background checks for you.
Consider having a grand opening with door prizes or discount coupons. Advertise the opening in newspapers, radio stations, Facebook, signage at bus stops and on your website.
