Start a tech refurbisher business by following these 10 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 guide to starting your tech refurbisher business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Check out our How to Start a Business page.
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 much can you charge customers?
- 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 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.
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.
STEP 2: Form a legal entity
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.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
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?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
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.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
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: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Open net-30 accounts
When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term "net-30," which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.
Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.
Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our guide on the best net-30 vendors so you can start building business credit now, so you never have to worry about cash flow in the future. Keep in mind that poor cash flow is the #1 reason businesses fail!
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 Tech Refurbisher 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.
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.
Learn more about General Liability Insurance.
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.
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.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
How to promote & market a tech refurbisher business
When you are just getting started, you can find free ways to advertise like Craigslist and social media posts. Eventually, you will want to move into paid advertising to expand your reach. Many refurbishers buy ad space on billboards and in local magazines and publications. Some even purchase television ads to reach an older audience.
You can promote your services by offering discounts, loyalty programs, and other deals that make repairing devices more appealing to budget-conscious customers.
How to keep customers coming back
The main way you keep customers coming back is to provide excellent repair services. When they get their devices back, those devices need to work. They also need to look clean and professionally repaired. The better your services are, the more likely customers are to come back for more business.
Great customer service is also important. Some tech refurbishers are not the most customer-friendly. By being communicative, friendly, and professional, you can help set yourself apart from the competition.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use.
Recommended: Find the best phone system for your business; check out our review of the Best Business Phone Systems 2021.
Start A Tech Refurbisher 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?
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.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
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.
TRUiC's YouTube Channel
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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.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
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 tech refurbisher business?
You want to make sure you repair customer devices properly. Taking a few classes and practicing on various devices can help you get the skills you need and the experience to confidently make decisions. You can purchase broken devices online to practice your skills.
If you are worried about getting started, remember that it’s perfectly okay to begin small with a mobile repair business. That way, you can get your feet wet and gain some experience before taking on the added responsibilities of a full repair shop.
How and when to build a team
There is a ceiling to how much money you can make on your own in tech refurbishment. After all, you only have so much time in the day to make repairs, market your services, serve customers, and organize the shop. If you want to increase your revenue, you may need additional help.
An easy way to determine if you need to hire someone is to look at your schedule. Are you busy from morning to night with your repair business? Could you serve more customers if you had someone to either make repairs, serve customers, or both? If so, you need to seriously consider hiring someone.