How to Start a Pawn Shop

年代tart a pawn shop by following these 10 steps:

1. Plan your Pawn Shop
2. Form your Pawn Shop into a Legal Entity
3. Register your Pawn Shop for Taxes
4. Open a Business Bank Account & Credit Card
5. 年代et up Accounting for your Pawn Shop
6. Get the Necessary Permits & Licenses for your Pawn Shop
7. Get Pawn Shop Insurance
8. Define your Pawn Shop Brand
9. Create your Pawn Shop Website
10. 年代et up your Business Phone System

We have put together this simple guide to starting your pawn shop. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out othersmall business ideas．

年代TEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

• What will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

Luckily we have done a lot of this research for you.

What will you name your business?

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit ourHow to Name a Businessguide or get help brainstorming a name with ourPawn Shop Name Generator

If you operate asole proprietorship, you might want to operate under a business name other than your own name. Visit ourDBAguide to learn more.

Whenregistering a business name, we recommend researching your business name by checking:

• Your state's business records
• Federal and state trademark records
• 年代ocial media platforms
• Web domain availability．

It's very important to secure your domain name before someone else does.

What are the costs involved in opening a pawn shop?

可以打开一个少一个当铺s $10,000 dollars, but most cost much more. Since pawn shops make most of their profit from providing loans to customers, possible income is limited by the amount of money available to loan out, so it makes sense to have a significant amount of capital before opening a pawn shop.

Rent: Your largest fixed-cost is rent. Most pawn shops find it better not to choose locations in the high-rent business district, but it is still important to find a location convenient for your customers. Pawn shops need enough space to display, test, and securely store items.

Operating capital: Reserve the bulk of your budget as operating capital. This is the money you will use to make loans and to cover the expenses of running a pawn shop.

年代ecurity: Pawn shops have a lot of valuable items and tend to keep a lot of cash on hand. This makes them attractive targets for thieves. Installing a top-of-the-line security system is important for preventing loss and reducing the cost of insurance.

Insurance: Pawn shops need comprehensive insurance to protect themselves from loss and legal liability. The amount of insurance a pawn shop must carry depends on the state where it operates.

Initial inventory: While an extensive inventory is not advisable, an empty showroom does not give the best impressions to customers. Make sure you have at least some inventory in stock before opening the doors but don't spend too much of your entire budget.

Computer system: You will need a computer system for keeping records, printing receipts and researching. Any low-end computer and printer will more than suit your needs.

What are the ongoing expenses for a pawn shop?

Rent, utilities, salaries, and security are all part of ongoing expenses associated with owning a pawn shop.

Who is the target market?

因为一个当铺以多种方式赚钱,它needs to attract more than one type of customers to be successful. In order to make money off short-term collateral loans, the shop must have customers who need cash to pay for something immediately, do not have or do not want to use other forms of credit, and has a source of income to pay off the loan and interest to redeem the item. To make a profit by selling items, the pawn shop needs customers who want to save money buying secondhand items.

How does a pawn shop make money?

Pawn shops make money in two ways. The first way is to offer collateral loans and to make money on the interest rate. The second way is to sell items at a profit.

How much can you charge customers?

The maximum amount pawn shops can charge customers on a loan is controlled by the state. According to the National Pawnbrokers Association, charging $15 on a 30-day, $150 loan is typical. Pawn shops usually mark up items they sell between 15 and 45 percent.

How much profit can a pawn shop make?

The amount of money a pawn shop owner makes varies greatly by region. According to PayScale.comthe average salary for a pawnshop owneris just over $32,000 a year.

How can you make your business more profitable?

Many pawnshop owners add sideline businesses to increase their profitability. Some common side businesses include check cashing, storage, online sales, and appraisal services.

年代TEP 2: Form a legal entity

The most commonbusiness structuretypes are thesole proprietorship,partnership,118bet金博宝 , andcorporation．

Establishing a legal business entity such as anLLCorcorporationprotects you from being held personally liable if your pawn shop is sued.

You can金宝搏188是什么公司yourself and pay only the minimal stateLLC costsor hire one of the118金宝app for a small, additional fee.

年代TEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

There are specific state taxes that might apply to your business. Learn more aboutstate sales taxand franchise taxes in our state sales tax guides.

年代TEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to aspiercing your corporate veil．

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• 年代eparates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Get a business credit card

Getting abusiness credit cardhelps you:

• 年代eparate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history, which can be useful to raise money later on.

年代TEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with ourLLC Expenses Cheat Sheet.

年代TEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

年代tate & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate a pawn shop business. Learn more about licensing requirements in your state by visiting年代BA’s reference to state licenses and permits．

Certificate of Occupancy

A pawn shop is generally run out of a storefront. Businesses operating out of a physical location typically require aCertificate of Occupancy(CO). A CO confirms that all building codes, zoning laws and government regulations have been met.

• If you plan to lease a location:
• It is generally the landlord’s responsibility to obtain a CO.
• Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a pawn shop.
• After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening,it is recommendedto include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.

• If you plan to purchase or build a location:
• You will be responsible for obtaining a valid CO from a local government authority.
• Review all building codes and zoning requirements for your business’ location to ensure your pawn shop will be in compliance and able to obtain a CO.

年代ervices Contract

Pawn shops should require clients to sign a services agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, service level expectations, and intellectual property ownership. Here is anexampleof one such services agreement.

年代TEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully.Business Insuranceprotects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face,begin withGeneral Liability Insurance．This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need isWorkers’ Compensation Insurance．If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

Is this Business Right For You?

Many people view pawn shops as operating in the gray area between being legal and illegal. While this is mostly untrue, it is important for successful pawnbrokers to maintain a good reputation in the community. Due to the nature of the business, it is helpful if an owner of a pawn shop is someone who is able to get along with a wide variety of people.

What happens during a typical day at a pawn shop?

An owner of a pawn shop usually spends a lot of time maintaining records, filing reports, and doing inventory. At other times, the owner is responsible for making appraisals, buying, and selling items.

What are some skills and experiences that will help you build a successful pawn shop?

An owner of a pawn shop needs to be highly organized to keep perfect records and to adhere to all the laws and regulations related to pawn shops. In addition, an owner should be able to assess the value of a wide range of items and deal with people in potentially high-stress situations. As online sales continue to chip away at brick and mortar stores, the ability for a pawn shop owner to sell online will increase your pawn shop's profits.

What is the growth potential for a pawn shop?

According to Pawn Shops Today, the number of defaults on collateral loans is increasing, while the ability to resell pawned items is decreasing.