Efficient Investment: Pawnshop Business Plan

Pawnshops have always been, remain and seem to be still needed in future. This type of the companies continues to be popular irrespectively of economical situation, presence/absence of political or financial crisis, etc. In other words, despite large number of operators, the pawnshop niche remains open for the new companies. In this publication we tell you about the process of pawnshop opening, we share some tips for successful organization of pawnshop operation.

                                                General Characteristics

As a rule, it makes sense to open not a single pawnshop, but the chain consisting of several branches in different regions of the city. Future office may be located in residential quarters or not far away from the office centers.

Recently the pawnshops expanded the range of their services; they do not focus on non-bank consumer credits only. Areas of pawnshop activities also include assessment of mortgaged property, intermediary services connected with insurance of mortgaged property, and sale of the mortgaged items of value items according to the provisions of actual laws.

Key Aspects of Activity

Pawnshop is a type of business, organization of which requires, first of all, clear and competent business plan with all necessary parameters. The experts of Pro-Consulting Company will help you to perform calculations and determine priorities of activity at the first stage.

It is economically reasonable and profitable to organize the chain of pawnshops consisting of 5 branches or more. Taking in consideration the fact that activities of such company are connected with money, jewellery and other items of value, security in the premises should be planned in all details before beginning of operation. First of all, it is recommended to purchase safe-deposit boxes and to conclude contract with security company. You will also need such equipment and materials required for everyday pawnshop operation as special scales, reagents and operating system.

Special attention should be accorded to the repairs done in premises where the pawnshop will be located. The mandatory features are the armoured door, auxiliary premises and window grates.

In order to ensure normal pawnshop operation, its owner has to employ at least 5 key employees: director, chief accountant, appraiser - merchandiser, guardian and cleaner.

Taking into account rather high competition among the pawnshops, in process of establishment of the new company we recommend to focus on the proper advertising campaign. Consumers have to receive information about opening at the earliest possible stage. Different marketing channels are suitable for that, starting from Internet advertising and up to the common ads in newspapers. At the beginning we should think about flexible pricing policy and discount system in order to get attention of potential customers.

Pawnshop market is actively growing at the present time. Each month about 5-7 investors tell about their intention to purchase or finance such company, 40% of them are already the owners of operating business. Such statistics evidences that the demand for pawnshop services will definitely grow.