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 sport memorabilia 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 sport memorabilia business?
The startup costs associated with opening a sports memorabilia business are manageable. In total, business owners should be prepared to spend between $2,000 and $10,000.
If a business is opening a physical storefront, some of the startup funds will go toward leasing and building out a space. Otherwise, most of the money is invested in memorabilia to sell. There are several places to find items:
- Estate sales
For business owners who have limited funds, estate sales sometimes hold especially good bargains.
Whatever business owners purchase, any game-used or signed item must be authentic. Selling a single non-genuine item can severely tarnish a business’ reputation, possibly even permanently devastating a young business.
What are the ongoing expenses for a sport memorabilia business?
The ongoing expenses for a sports memorabilia business are manageable. They include the cost of acquiring new items, as well as any lease payments or listing fees.
Who is the target market?
The target market for a sports memorabilia business mostly consists of sports fans who have discretionary income. Sometimes, businesses will also sell to investors who are looking for alternative investments.
How does a sport memorabilia business make money?
A sports memorabilia business makes money by buying memorabilia and selling it at a higher price. Unlike an investor who hopes that items will appreciate in value over time, this type of business operates like a dealer and generates revenue by buying and selling.
How much can you charge customers?
The value of sports memorabilia varies significantly. Many items may sell for just a few dollars, but rare pieces can fetch four-, five- and six-figure sums. For instance, a famed pair of Michael Jordan’s shoes sold for $104,765 at auction a few years ago. The jersey from his final regular season game with the Chicago Bulls commanded $173,000.
How much profit can a sport memorabilia business make?
With such a variance in item values, how much sports memorabilia businesses make likewise varies significantly. Some businesses bring in a modest living while others are highly profitable ventures.
How can you make your business more profitable?
A sports memorabilia business can increase revenue by selling items in addition to true memorabilia. Display cases and new sports apparel are two natural types of products to add to a business’ inventory.
Business owners who become experts in their field can also become authenticators, which may lead to a side income verifying signatures.
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 sport memorabilia 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, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
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.
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 Sports Memorabilia business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits. In addition, certain local licensing or regulatory requirements may apply.
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 more 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.
Certificate of Occupancy
A Sport Memorabilia business is generally run out of a small 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 Sports Memorabilia 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 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 sport memorabilia business
While many sports memorabilia businesses still have storefronts and run local advertisements, most business is moving online. Businesses list memorabilia on Craigslist, Amazon, Ebay, Etsy and more. Those businesses that do sell in-store can attract potential customers by hosting signings with area athletes, game-watching parties, and other events.
Some businesses that primarily sell online set up temporary shops at flea markets, mall kiosks, or other low-rent locations during the holiday shopping and sports seasons.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
Specializing in a specific sport or team can help set a sports memorabilia business apart from others. It also gives new business owners an opportunity to focus on one specific part of the market as they learn.
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 Sport Memorabilia Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Many sports memorabilia business owners are themselves collectors and sports fans. Most have stories of collecting cards or autographs as children and turned their passion into a business during adulthood.
In addition to loving sports, business owners should also enjoy talking with people. The more a business owner converses with their customer, the better they’ll be able to recommend something that the collector will love.
What happens during a typical day at a sport memorabilia business?
Business owners spend a lot of time searching for sports memorabilia to purchase and talking with customers about the items they carry. Business owners who sell online spend time creating listings and answering specific questions about their listings. Those who sell in person often spend time manning their storefront, talking both about their merchandise and last night’s game.
What are some skills and experiences that will help you build a successful sport memorabilia business?
Making a profit reselling sports memorabilia requires an in-depth knowledge of the marketplace. Business owners spend hours combing through listings, sales, and collectors guides so they can learn how much different pieces sell for and how quickly those pieces should sell. Based on this knowledge, business owners are able to determine what’s worth buying and how much they can expect to pay for these items.
There are several specialized price guides on Amazon, such as Baseball Hall of Fame Autographs and Beckett Baseball Card Price Guide. The recently sold listings on Ebay (found via Advanced Search) and current listings on other sites can also be helpful.
What is the growth potential for a sport memorabilia business?
A sports memorabilia business may be a small business that’s run from home or a small storefront, or it can grow to be a major national company. Fanatics Authentic is a large website that sells items related to many sports. Many small businesses sell through their store and other platforms like Ebay, rather than maintain their own websites.
TRUiC's YouTube Channel
For fun informative videos about starting a busines visit the TRUiC YouTube Channel or subscribe below to view later.
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 sport memorabilia business?
Business owners who don’t have the funds needed to deal in high-profile signed items can still get signed memorabilia to sell. Attending events where players are signing items is an inexpensive way to get potentially valuable items.
When attending signings, business owners should try to take a selfie with the athlete(s) present. Even if the athletes are in the background, a picture can help authenticate the signature.
Should business owners go to multiple signing events that feature the same player, they can diversify their product offerings by asking for a slightly different note each time. For example, a business owner may get a signature with the player’s main number, one with the date they entered the major leagues, and one with the player’s minor league number. Such a strategy helps create a unique and varied inventory.
How and when to build a team
Many sports memorabilia businesses remain small and don’t hire employees starting out. Businesses that grow or that do open storefronts can hire employees as their revenue allows.