Pawn shops whether in a big city like New York or a small town of Charlotte North Carolina have a negative connotation attached to their name. However, a small business like a pawn shop can provide financial assistance for many people who do not have funding for any other type of business.
Moreover, you can provide small loans to many people who cannot apply for credit through banks. With the right kind of marketing, set up and business plan you can make good money from a pawn shop even if it is in Charlotte North Carolina.
Start your pawn shop business in 8 Steps
- Come up with a business plan
The first step before starting any business in the market is to come up with a feasible and practical business plan. Research has shown that people who make a business plan end up making more profit than those who don’t. Even banks would ask for your action plan if you apply for funding.
- Choose your type of business entity
This is more of a legal framework. You need to select your business entity type from four of the following options:
sole proprietorship,
partnership,
corporation
LLC
A good idea would be to consult your attorney and see the benefits, drawbacks, financing and documentation for each of the entities. Then decide what type of entity you want your business to be.
- Choose a location for your pawn shop business
You then need to find a feasible location for your pawn shop including the rent you would be willing to pay. Check the area of the location, accessibility, availability of parking among other feasibility perspectives. Usually pawn shops are present in retail places however they still must be accessible to the public.
- Complete your licensing requirements to run your business
This will depend on the state where you are planning to start your business. Many states will ask you to get a business permit and license of some form to be able to run your business in that particular state.
- Get your business capital ready
There are many people in the world with great business ideas however not each one of them can fetch the right funding. Besides, it is not cheap to start a pawn shop. You need a good amount of money to set up the inventory. So if you need a loan, get in touch with your bank for your funding options and find out whether you have the correct credit history to be approved for your desired loan.
- Come up with a good and targeted marketing strategy
If you advertise your business to the right targeted group of people then you will get good clientele in a short amount of time. Come up with a social media marketing strategy and directly address the right customers who are in search of loans especially those who cannot apply for loans through banks.
- Get your business insured
Yes, it is important to get all kinds of insurances for your pawn shop to avoid hassle in time of trouble or emergency situations. Some of the required insurance types are:
The General liability insurance,
The Commercial property insurance
The Worker Insurance
- Interview and hire your employees or working staff
Even though a pawn shop owner may be able to operate the business all on his own without any assistance however, once the business grows it is wise to hire at least 2 employees in your shop to note inventory, market the products and find buyers or customers.
