How to Start a Tech Refurbisher Business

Start a tech refurbisher business by following these 10 steps:

1. Plan your Tech Refurbisher Business
2. Form your Tech Refurbisher Business into a Legal Entity
3. Register your Tech Refurbisher Business for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your Tech Refurbisher Business
6. Get the Necessary Permits & Licenses for your Tech Refurbisher Business
7. Get Tech Refurbisher Business Insurance
8. Define your Tech Refurbisher Business Brand
9. Create your Tech Refurbisher Business Website
10. Set up your Business Phone System

We have put together this simple guide to starting your tech refurbisher business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas.

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 will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

Luckily we have done a lot of this research for you.

What will you name your business?

Choosing the right name is very important. Read our detailed guide on how to name your business. 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.

What are the costs involved in opening a tech refurbisher business?

It doesn’t take a fortune to start a tech refurbishing business. You can start small, such as with a mobile repair business, or you can spend more and set up a legitimate brick and mortar store.

You can start with a strong foundation by taking some courses, such as a basic phone repair course. Courses can cost $1,000 or so, depending on how in-depth they are. Basic repair tools can cost around $50-$100. Building a part inventory can run between $100-$500 – or more if you want to have a bigger inventory. If you do everything from your home and vehicle, you could get set up for $3,000-$5,000.

If you want to open a store, you will need more money. Opening a store can cost upwards of $50,000 – which means you will probably need a loan.

What are the ongoing expenses for a tech refurbisher business?

The ongoing expenses for a tech refurbishing business can include:

•         Tool replacement
•         Training and education on new tech
•         Vehicle maintenance
•         Licenses, insurance, bonding
•         Parts inventory
•         Office supplies

If you have staff, your expenses will also include labor. Depending on the size of your operation, your ongoing expenses could range from a few thousand dollars a year to $50,000 or more.

Who is the target market?

Your target market is those who want to repair their devices rather than replace them. They may want to do so to save money. Or, they may be environmentally conscious and want to minimize their impact by using their devices as long as possible. You may also target businesses that need repair services but do not have the budget for an IT team.

How does a tech refurbisher business make money?

This kind of business makes money from repair and refurbishment services. Customers bring in their devices and ask for repairs. Your business will charge them for making those repairs, labor, parts, and possibly other fees like disposal fees. The more devices you can repair, the more money your business can make.

How much can you charge customers?

Tech repair and refurbishment can cost anywhere between $10-$100 an hour. When you are just starting, you may want to aim for the middle. But once you get enough demand, it could be helpful to increase your rates. You can also charge more when the work is more complex or requires more skill. For example, it takes more skill and training to repair a brand new smartphone than a flip phone from 10 years ago.

How much profit can a tech refurbisher business make?

Just like your expenses can range broadly depending on your business, so can your profits. In the beginning, you may only be able to earn $20,000 to $30,000. But if you can build a team and diversify your services, your business could eventually pull in $100,000 or more in profits a year.

How can you make your business more profitable?

Probably the best way to make your business more profitable is to build a skilled team and offer a variety of repair services. If you can handle any job, big or small, you will be able to attract all types of customers – even businesses with plenty to spend on repairs.

If you are just starting your business, you can increase your profits by offering more repair services. Take classes, get plenty of practice, and learn how to repair everything that comes your way.

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your tech refurbisher business is sued.

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

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!

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

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

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history, which can be useful to raise money 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.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

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 Tech Refurbisher business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

Is this Business Right For You?

Tech refurbishment and repair is a business that requires continuous attention to detail and creative problem-solving. If you like to help people and you love solving problems with technology, you might be a great fit for this industry. You need to be capable of focusing on fine details and doing repetitive work hour after hour to excel as a tech refurbisher.

What happens during a typical day at a tech refurbisher business?

A typical day at a tech refurbishing business starts with opening up shop and planning your work for the day. If business is good, you will have multiple devices to repair. Your day will consist of repairing those devices and serving any customers that come through your door. Customers will have questions and want estimates. Some may try to wheel and deal with you. Your goal is to get them to agree to repair services at a price you can both be happy with. In addition to serving customers, a typical day may also consist of ordering parts, organizing your shop, and marketing your services.

What are some skills and experiences that will help you build a successful tech refurbisher business?

If you have an educational background or practical background in technology – such as a hobby of building and repairing tech – it will serve you well as a tech refurbisher. Although technology continues to develop at a rapid pace, many of the skills that were applicable in earlier tech are still applicable now. If you can repair small devices or have a strong interest in learning how to repair them, you can learn to be a tech refurbisher.

What is the growth potential for a tech refurbisher business?

The cell phone repair industry alone is worth $3.9 billion, and that doesn’t include tablets, smartwatches, and other personal tech device repair. There is some concern in the cell phone repair industry that device manufacturers are making devices tougher and encouraging device buyback and leasing options. However, there remains a market segment that prefers repair and/or refurbishment, either because they do not have the financial means to continuously buy new phones or they prefer to use what they have as long as possible.

There is solid growth potential for tech refurbishing businesses that diversify their offerings to include all types of personal tech. As long as you can stay current with all the various devices, there will likely always be a market for your services.