How to Open a Pawn Shop
Pawn shops give loans on items for a certain amount of time. The customers can come back and pay the amount plus a finance charge or give the item to the pawn shop so they can resell it. If this sounds like a business for you, then you can start your own pawn shop by following a several steps.
How to Open a Pawn Shop
Research state law about procedures and practices of opening a pawn shop. Visit the website of the National Pawnbrokers Association to get information about licenses and other regulations.
Get funds to open the pawn shop. You will be required to follow the same laws that financial institutions follow.
Submit an application to the Department of Financial Institution in your state to apply for a license. The application fee will cost around $1,500 or more.
Ask co-workers to write letters of reference to submit with your application.
Obtain a letter from a Certified Public Accountant or CPA that states your net worth and liquid assets. This will also go with the application.
Get a copy of your criminal record, business credit report and personal credit report to go along with the application.
Being looking for a location while waiting for your license to arrive.
After you find a location, select a grand opening date for your pawn shop. Place advertisements in the newspaper and on local websites.
Create a professional website for the business.
Add to your inventory by visiting yard sales and estate sales in the area. You will gain more inventory once you open the shop.