How to Start a Toy Hospital

A toy hospital performs repairs and restoration on toys, such as porcelain dolls and teddy bears. Typically, this type of business focuses on repairing classic toys and collectibles. A toy hospital can repair newer toys as well, but the most detailed and expensive services it offers tend to be for more valuable toys. The repairs can be quite complex and challenging, including china painting, wig making, and mechanical repairs.

Learn how to start your own Toy Hospital and whether it is the right fit for you.

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Start a Toy Hospital by following these 10 steps:

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

We have put together this simple guide to starting your Toy Hospital. 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:

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.

Want some help naming your Toy Hospital?

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What are the costs involved in opening a Toy Hospital?

To open a toy hospital, you will need to purchase a variety of tools and materials. Exactly what those are will depend on what types of repairs you are planning to offer. For example, if you are going to repair porcelain dolls, you will need tools and supplies for cleaning, painting, porcelain manufacturing, dress making, and more. You should expect to spend $10,000-$20,000 or more for tools, supplies, and the space to operate your business. If you are planning on selling toys as well, you will also need to purchase enough inventory to get that part of your business started.

What are the ongoing expenses for a Toy Hospital?

There are a variety of ongoing expenses for a toy hospital. These include tool repair and replacement, replenishing supplies like cleaning supplies and paints, and purchasing more parts for repairs. Other ongoing expenses include rent for your commercial space and shop, as well as employee wages if you have employees. One other expense that you may want to consider is continuing education. You can take classes periodically to bolster your repair skills each year.

Who is the target market?

The customers that come into toy hospitals range in age from 5 years old to 90 years old. They all share a love for their toys and are willing to pay for quality repair services. Your target market is anyone who loves old toys, but you need to narrow this down to focus your marketing efforts. Toy collectors, for instance, are an obvious target market for your repair services.

How does a Toy Hospital make money?

A toy hospital makes money by charging customers for toy repairs. Many also make money by selling classic toys and games. You will steadily gain experience in collectibles like dolls and stuffed animals, experience that can help you with stocking and selling handmade toys. You can also charge more for repairs to high-value items and items that are difficult to repair.

How much can you charge customers?

The cost of toy repair services varies depending on complexity and the specific toy. One doll repair company states that a typical doll restoration costs between $12-$18 per inch of doll. However, it also states that every doll is different, so the repair costs can vary greatly depending on the doll.

For toy sales, these businesses charge the market rate for whatever toy they are selling. Newer toys will have a manufacturer's suggested retail price. But, older toys will cost more or less depending on their rarity and desirability. Pricing these types of toys is an art in and of itself.

How much profit can a Toy Hospital make?

Most toy hospitals are modest enterprises that hopefully make enough to keep the owners comfortable and the lights on. One of the most well-known toy hospitals, The Doll Hospital & Toy Soldier Shop in Berkley, reported about $6 million in annual revenue. The shop still struggled, however, and had to close its doors recently. Two of the employees reopened the store in their basement, but it is not nearly as big an operation now.

How can you make your business more profitable?

There are several ways you can make your business more profitable. If you can become a trusted name in toy repair, you can charge more and repair more valuable toys. You can also take advantage of the online marketplace to reach more customers while keeping your overhead lower. The less you can spend on store space and excess inventory, the leaner you can run your operation.

Want a more guided approach? Access TRUiC's free Small Business Startup Guide - a step-by-step course for turning your business idea into reality. Get started today!

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 Toy Hospital is sued.

Form Your LLC

Read our Guide to Form Your Own LLC

Have a Professional Service Form your LLC for You

Two such reliable services:

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.

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 through the IRS website. If you would like to learn more about EINs, read our article, What is an EIN?

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.

Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.

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.

Recommended: Apply for an easy approval business credit card from BILL and build your business credit quickly.

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.

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.

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.

Recommended: Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker.

If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.

How to promote & market a Toy Hospital

Social media is a great way to promote a toy hospital business because you can find groups that are passionate about classic toys. Through Facebook, Instagram, and Pinterest, you can identify toy-loving communities and let those communities know you can help with their toys. Another useful way to promote your services is to sell handmade and classic toys. The kind of people that will come to your shop to find toys are the same people who will look to you for repairs.

How to keep customers coming back

Work diligently to ensure that your repairs and restorations are the best they can be. Your customers are going to look over your work with a fine-toothed comb. You want to be certain that you have done everything you can to properly repair their toys. Once you prove that you are reliable with one toy repair, they are likely to come back to you for all future repairs.

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.

Recommended: Get started today using our recommended website builder or check out our review of the Best Website Builders.

Other popular website builders are: WordPress, WIX, Weebly, Squarespace, and Shopify.

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. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.

Recommended Business Phone Service: is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.

Is this Business Right For You?

This business is right for entrepreneurs who have a deep appreciation for classic, handcrafted toys. The more you know about subjects like doll making and historic toy manufacturing practices, the more accurately you can recreate those practices. It is difficult, time-consuming work. But, if you love craftsmanship and are willing to bolster your skills, you can learn to return beloved toys to their former glory.

Want to know if you are cut out to be an entrepreneur?

Take our Entrepreneurship Quiz to find out!

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What happens during a typical day at a Toy Hospital?

A typical day at a toy hospital is split between repair work and customer service. You will have a variety of toys in different stages of repair that you will steadily work on each day. You will also have customers coming into your store and asking about potential repairs. Like any repair shop, you will have to balance your days to ensure you continue making progress on repairs and get new business at the same time.

What are some skills and experiences that will help you build a successful Toy Hospital?

Doll making skills and experience are a necessity if you are planning on repairing collectible dolls. It’s helpful to have similar skills for each of the toy types you plan on repairing. Many toy hospital owners began by working at other toy repair companies before opening their own businesses. There are also doll-making schools where you can learn these skills, such as the Doll Artisan Guild in New York.

What is the growth potential for a Toy Hospital?

The classic and handmade toy market has increased dramatically. While it is difficult to say if the growth will continue at the same rate, it is reasonable to assume that the public’s desire for high-quality toys will continue to grow. As the public’s interest in these types of toys increases, the need for repairs to those toys will likely grow as well.  

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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:

  • Funding
  • Events
  • Guides
  • Support

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 Toy Hospital?

You want customers to trust you with their most prized collectibles – toys that may have significant emotional value as well as monetary value. To ensure you can meet their expectations, you must develop the repair skills they require. You should plan on educating yourself on repair techniques, either through classes, through working at a repair shop, or both. Then, try to get plenty of practice before you start charging customers for your work. You can start by offering free repair services to charities, hospitals, and other organizations that are likely to need such services.

How and when to build a team

When you are first opening your business, you may need to be a one-person operation. But if you start building a customer base and getting more and more repair requests, you probably won’t be able to keep up with everything. You may need to focus on repairs each day while you have someone else take care of the store, customer service, and scheduling repairs.

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Real World Examples

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