Do you want to start a mobile phone shop? If so, find here in this article, a stepwise plan guide to starting a profitable cell phone shop business.
The entry barrier to open a mobile shop is low. And that is why more and more people are interested to start a mobile store in their locality. However, it is seen, that 20% of mobile shop businesses become successful in the long run. The rest 80% closes their shops within a year or two due to financial loss. The main reason for such a high rate of failure is due to lack of business planning, and inability to understand the taste and trends of smartphone buyers.
Here are the 10 Steps to Open a Successful Cell Phone Shop
1. Understand the Local Market
Understanding the local market is the key to success for any retail-based business. It holds true for mobile shop businesses too. It is a fact cell phone business is getting saturated day by day. However, there is always a scope for new players to enter as the demand is high.
Conduct detailed market research and find out the cell phone store that is successful and also those that are not so successful. Check out their offerings like what kind of mobile phones they are selling. Are there any additional services like phone repairing or accessories offered? Find out the gaps and plan accordingly.
2. Create a Business Plan
After getting the necessary information from the market research, it is time to write the business plan for your cell shop. Do remember, mobile shop business plan document plays a critical role in not only working as a roadmap for your present and future business activities but also getting a license to become an authorized reseller from carrier companies and getting funds from investors.
Some of the basic aspects that your mobile shop business plan must include are the following:
- Startup and recurring costs
- Target customers
- Manpower plan
- How do you plan to promote your cell shop?
Another key chapter of the cell shop business plan is o list don the products and services you plan to sell. For example, one can sell products like headsets, power banks, headphones, battery chargers, memory cards, cables. You can also sell recharge plans of reputed wireless carriers. In addition, to boost up more income, one can include a handset repairing workstation. Write in detail about the products offered and the brands of those products.
3. Name your Cell Shop
It is extremely important to select a catchy and relatable name for your mobile phone shop business. The name must aptly reflect the activities of your business. For example, if your primary name is to sell cell phone handsets name accordingly. It holds the same if your focus is to sell mobile phone accessories or handset repairing.
4. Select a Location
Choosing a proper retail location is another make-or-break decision to make before opening a mobile phone store. An ideal location for a cell phone store is to find a centrally located retail space where there is a steady flow of traffic and not many similar shops are nearby. Though this kind of retail space will cost you more, the profit return will ensure a fast payback period.
But if you are short on budget for paying for a premium location, find one that at least ensures good traffic.
5. Register Your Cell Phone Shop Business
If you are planning to start and run a legally compliant mobile shop, it is necessary to register your business. Talk to the local competent authority or a local attorney and find the right business structure based on your scale of operation. For example, for mobile shop owners in the United States, forming an LLC provide additional benefits like protecting personal assets and making annual filing of taxes easier
6. Procure Licenses
It is mandatory in the United States to have an electronics store license if the shop owner sells more than 30 different items. For fewer items, it is not a must to procure a store license. Visit the official SBA website and find out the licenses required to open a cell shop. You may need additional licenses if services like mobile handset repairing jobs.
7. Buy Liability Insurances
There are various types of financial risks involved in running a cellphone shop business. Some of the insurances that you need to consider are product liability insurance, property insurance, and worker’s compensation insurance. Check this article on various types of liability insurance to learn more.
8. Contact Wireless Providers & Understand Carrier Contracts
Contacting wireless plan providers and understanding their carrier contracts is one of the most key decisions one needs to make before opening a cell shop business that sells recharge plans.
The most popular wireless companies in the United States are T -Mobiles, Verizon, and AT& T. However there are other upcoming wireless companies you can reach are Mint, Visible, and Google Fi.
Check the plans of the phone carriers and select the one that fits best in terms of speed, monthly cost, and other parameters. In addition, read carefully the contract document of each of the carriers. The terms and conditions of the reseller contract agreement vary from company to company. You must be comfortable and confident in adhering to their terms. Failure to which will lead to unfortunate termination of the contract.
9. Apply as an Authorized Reseller
The next final step is to apply for an authorized reseller with the chosen cell carrier/ carriers. Here in this part, your business plan document will come in handy. Your business plan must convince the principal carrier that you are fit to be a reseller to their products and services.
Another aspect that will be taken into account seriously before granting authorized resellers is your financial status. This is because all cell phone plans are credit-based. The more credit you can provide, the more the sales and the more the profit.
10. Promote your Cell Shop Business
The final and the most important step for a successful cell phone shop business is to devise marketing strategies so that more and more customers visit your store. Create a promotional plan that includes both online and offline advertisement activities like good signage with high visibility, printed brochures, informative website, social media pages, and so on.
FAQS on Cell Phone Business
Is Cell Phone Shop a Profitable Business?
It is without saying, the retail-based cell phone business is one of the most competitive industries across the world. However, the volume of smartphone sales is such high, that there is always a scope for new players to step in.
As per Statista, the number of smartphone sales is more than six billion at present. It is expected that the market will grow even more in the coming tears and decades. Most mobile phone subscriptions come from countries like China, India, and the United States.
If you are from highly populated countries like India and China, opening a mobile shop business has the potential to be still a hugely profitable retail venture. There is still a big number of people yet to get access to smartphones in most south Asian countries.
It is worthwhile to mention here is that mobile brands like Samsung and Apple are the two biggest companies and together they account for 50% of the total smartphone sales worldwide.
What is the Cost of Starting a Cellphone Shop Business?
The investment will depend primarily on the location, initial stocks, and service offered. However, as a rough estimate, the cost of starting a cell phone shop business will be in the range of $20,000 to $1,00,000.
About the Author: 99businessideas.com led by Rupak Chakrabarty is committed to helping beginners, entrepreneurs, and small business owners in starting, managing, and growing their business. Our aim is to educate the entrepreneur on the various stages of entrepreneurship.