You can learn how to start and operate a pawn shop. There are reports that say pawn shops have been in existence some 3,000 years ago. Today, many small business owners are making money by starting their own pawn shop. People always have things that they need to buy or sell. If you visit Ebay.com or Amazon.com, you will find thousands of items to buy. In fact, you can actually sell products on these sites and others as well. Read your local newspaper and you will definitely find someone trying to sell or buy something. As a pawn shop owner, you will be buying products, selling products, and making loans. There are 11,255 pawn shops in the United States. Learn how to start your own pawn shop.
Things You’ll Need:
Small Storefront Building
Cash $10,000 to $20,000
Pawn Shop Business Software
Step 1
Determine how much money you can afford to invest in a pawn shop. Do not invest more money than you can afford to lose. Set a budget. Select a location where the foot traffic and car traffic is very high. Make sure that the building’s rent rate reasonable. Do not buy a building or borrow money.
Step 2
Apply for a local business license to start and operate a pawn shop. Contact a business insurance agent and buy pawn shop business insurance. Make sure you get a state tax identification number and a federal tax identification number. Follow all the pawn broker shop laws in your state and city.
Step 3
Get ready to offer customers small pawn shop loans at a rate of 10% to 20%. You will need to buy and sell power tools, jewelry, electronics, instruments, and other items. Charge the customers at a rate that is one-half to one-third the value of each item. Do not forget that you are in business to make money.
Develop a business plan for your pawn brokering business. In the marketing section, explain how you will get people to use your services. Explain in the management section how you will operate on a day-to-day basis. Determine in the financial section how you will manage the cash flow.
Step 5
Learn how to operate your pawn shop. Find out how much an item is worth. A customer brings in a laptop computer worth $100. Make an offer to loan the customer $30.00 at 20%. Your ticket should tell the customer to pay you back $36 in 30 days or you keep the laptop. Apply this rule with all transactions.
Tips:
Join a pawn shop organization such as The National Pawnbrokers Association
Read books about operating a pawn shop.
Interview pawn shop owners and copy them.
Use the Internet to help you buy and sell products.
Warnings:
Get help and hire employees if the work load is heavy.
