Start a cell phone repair business by following these 9 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your cell phone repair business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a cell phone repair business?
Depending on the location of your shop, most of the costs involved for the startup will be rent and utilities. Some cell phone repair shops operate as kiosks in a mall or other heavily trafficked consumer center. These can be more cost effective, but may not have the storage area needed for your business, as it expands and grows.
Some businesses operate out of a home and reduce much of the overhead associated with a brick and mortar location. There will be some loss of walk in customer business, but most customers will find your business online through a website or webpage via social media. There are a few options and configurations for how you will set up your business, so consider them carefully and think about what will work best, both currently and for the future.
What are the ongoing expenses for a cell phone repair business?
Other than rent and utilities, if you have a brick and mortar, most costs will be generated from buying parts and supplies for the actual repairs. And you should be able to recoup these costs, once the repairs are completed. As you grow as a business, you may find additional costs pertaining to advertising or hiring additional staff, but this business tends to have a relatively low overhead.
Who is the target market?
Your target market is technology consumers. To be specific, you’re gunning for the savvy tech user, who understands how a repair can save them time and money. Especially as cell phones and other devices become more expensive and more powerful, the owners will want to stay with their tried and trusted choices for tech connectivity.
Another smaller, yet growing, target market is the environmentally conscious tech consumer. As more people become aware of the growing problem of added tech waste to our landfills, there are more and more consumers who wish to keep a device as long as possible, with repairs and upgrades keeping their device working and out of a dump pile. Appeal to both of these aesthetics to increase your overall business bottom line.
How does a cell phone repair business make money?
Revenue is generated through the fees customers pay to have their cell phone or other mobile device repaired or upgraded.
How much can you charge customers?
Repair and upgrade prices will vary, depending on the make and model of the device. An average cost for a broken screen, for instance can start around $75 but can climb to as much as $300. As stated before, make sure your prices are competitive, but remember that a repair on a $1000 phone will still be much more affordable than replacing the phone all together.
How much profit can a cell phone repair business make?
An average cell phone repair business could net profits in the range of $50-65,000, with greater earning potential, as you continue to become more well-known and successful.
How can you make your business more profitable?
Many cell phone repair businesses expand to include repairs on all kinds of tech gadgets. Gaming systems and music production equipment may also be good fits for your repair business. You can also offer customers phone and data plans through third-party service providers. As the technology surrounding our lives increases, as it is sure to, there will be more avenues to explore and include in your business plan.
What will you name your business?
Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your cell phone repair business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, and it's easy enough to form by yourself, or check out the top business formation services.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: You can get $200 when you open a Chase business checking account with qualifying activities. Learn more.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a cell phone repair business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
A cell phone repair business is generally run out of your home or a storefront. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a cell phone repair business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your cell phone repair business will be in compliance and able to obtain a CO.
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a cell phone repair business
Your biggest concern for success will be making sure customers are aware of your business and the services you can offer. Therefore, advertising and marketing are critical pieces to this puzzle. And, in order to keep costs low, you should consider all of the inexpensive, yet effective methods for getting your name known among consumers.
To start, business cards, flyers, and brochures or handouts explaining your prices and areas of expertise are still effective, especially if you’re able to leave them in places where customers will see them and pick them up. Some non-competitive tech stores will let you leave your information on their counters or in storefront windows. You can also hand out cards and flyers during social gatherings in your city or region. You’d be surprised how many people will refer to the tangible items they casually receive.
Next, look to set up a website or start a social media page on Facebook or Instagram. Many customers will do a Google search first, when looking for a cell phone repair shop. You want to be their top result, so use keywords to push your business to the top of these searches. You may also be able to join social clubs, groups, or organizations, specifically related to technology and even device repairing and modifications.
Finally, make sure that you make a connection with your customers. Word of mouth referrals and positive reviews are great marketing tools. When a friend refers another friend, they’re often going to follow up on the recommendation, as it’s coming from a trusted source. Remember, the main goal is to become known and trusted and then continually live up to your positive reputation.
How to keep customers coming back
As mentioned previously, customer reviews and referrals can be some of the most important aspects of a healthy business. Develop business relationships with your customers. Don’t over-promise what you can’t deliver. And don’t make your prices too low, simply to attract customers. You have to be competitive, but you should also be comparable to your competition. You can offer specials now and then, especially for repeat customers. And you may want to offer plans for future service visits. These incentives will help customers think of you first, when deciding on a repair business.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Cell Phone Repair Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
Individuals possessing an attention to detail, technical proficiency, specifically regarding electronics, as well as small business acumen, will find a rich market for their services.
What happens during a typical day at a cell phone repair business?
Since most cell phone repair shops and businesses make the majority of their money from the repairs performed on cell phones and similar devices, this is where the majority of the time is spent. There is also time allotted for ordering new supplies, planning advertising and marketing plans, returning customer phone calls and e-mails and cleaning and organizing the shop.
What are some skills and experiences that will help you build a successful cell phone repair business?
Fortunately for entrepreneurs looking to make cell phone repair a successful business venture, there is very little overhead or start-up cost involved. The skills needed for performing the repairs are also fairly manageable to learn and execute, as well. If you have a knack for working with your hands, especially on smaller or delicate items, you will be well-suited for this profession. If you also have experience or knowledge with small business management, you will equally have an advantage for this career. The last piece of the puzzle becomes communicating with customers and making sure their cell phones and devices are repaired and returned to them in a timely manner.
What is the growth potential for a cell phone repair business?
Cell phones are very popular and useful items for most people. They are fast becoming a necessity for most, no matter where you reside. We manage both our business and personal lives with these pint-sized technical powerhouses. When one breaks or is no longer working properly, many individuals find themselves in a situation in which they must quickly find a replacement.
But, not every person has the money or access to pick up a new phone or device, when there’s trouble with their current one. Because of this new dynamic, repairing a cell phone becomes another necessity for remaining connected and able to navigate the web, make calls, send and receive emails, texts, etc. Repairing a cell phone, then, becomes the best option for many, both economically and location-wise. And, with cell phone sales continuing to skyrocket, there will be many more devices requiring repairs in the coming days, months, and years. The cell phone repair business is poised to become one of the larger facets of the technology industry, with even more individuals opting for a repair, especially as the price of cell phones continues to skyrocket, as well.
TRUiC's YouTube Channel
For fun informative videos about starting a business visit the TRUiC YouTube Channel or subscribe below to view later.
Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a cell phone repair business?
Since this business thrives on customer recognition and your repair and service reputation, its important to make sure you’re sharing success stories and connecting customers with your website, webpage, or logo and business name. Social media can be quite helpful, and we detail how to achieve the recognition and return customers in the marketing and promotion section below.
You also want to make sure you have a strong relationship with your parts supplier. Your ability to repair and return devices to customers in a timely manner requires you to have the replacement materials shipped quickly, if not already on hand
How and when to build a team
Part of the draw of this business is that it can be operated by one or two people for a very long time. Your business will have to be extremely successful and isolated from other competitors in order to think about having a team of repair people working for you. You may want to have one other person in the front of the shop to greet and qualify customer needs, as your business grows. This will help you to focus on the repairs and making sure the customers are reunited with their devices as soon as possible. It would be ideal to have a partner who can do both, so either of you can handle front of house, as well as repairs, in order to maximize your effectiveness.