Start a watch 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 watch 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 watch business?
The startup expenses involved in opening a watch business are manageable. They include:
- Purchasing inventory to sell
- Setting up and hosting a website
- Running advertising campaigns
Because watches are small, businesses don’t need much room for storing inventory. An entire business can be run from a home office.
Business owners who have limited capital can minimize these expenses by opening with a limited inventory, setting up their website themselves and focusing on organic advertising methods.
What are the ongoing expenses for a watch business?
The ongoing expenses for a watch business are manageable. They include website hosting expenses, the cost of purchasing inventory and paying for any warranty claim repairs.
Who is the target market?
The target market for watches tends to be adults who have discretionary income and appreciate style. These customers will use watches to make fashion statements, and they have money to spend on watches.
How does a watch business make money?
A watch business makes money by selling watches. Watches are normally sold individually, but collections can be curated to encourage customers toward buying multiple watches.
How much can you charge customers?
Watches can sell for anywhere from a few dollars to tens of thousands. Most new watch businesses begin with watches priced around $50. This price point isn’t prohibitively expensive yet provides a reasonable profit margin. As a business establishes a customer base, lower- and higher-priced watches can be offered for diversity.
How much profit can a watch business make?
A watch business can make a substantial profit even in its first year. Within one year of opening, Watch Outfitters was bringing in $13,500 in sales each month. That’s an annual gross revenue of $162,000, and a lot of that is profit.
How can you make your business more profitable?
A watch business can increase its profits by designing and building its own watches. This involves more work but gives a business truly unique watches to sell. Additionally, the profit margin on watches is more when the watches are assembled from individual parts rather than purchased as manufactured units.
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Watch Business Name Generator
When registering a business name, we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
It's very important to secure your domain name before someone else does.
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 watch 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 watch 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 watch business
Almost any online advertising method can be used to market an ecommerce watch business. One of the most effective advertising methods, however, is email marketing. Jonah, owner of Watch Outfitters, generates $500 in sales each week with a single “Watch of the Week” email.
How to keep customers coming back
Because of the influx of phones, watches are no longer a functional accessory. Instead, they’re worn for fashion.
Businesses must keep this in mind and create content with style in mind. One anonymous but thorough guide to creating a watch business detailed how to:
- Come up with a brand name
- Create a brand’s story and history
- Show customers how a brand provides value
- Write luxurious-sounding product descriptions
- Use images to show craftsmanship
It’s no accident this list focuses on marketing and leaves out actually selecting a watch. The guide actually refers to the physical watch as “the less important.” While quality can’t be ignored completely, marketing is what drives sales.
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 Watch 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?
Anyone who has a passion for chronometers may be well-suited for running a watch store. Successfully running a store requires understanding why people want watches. People who themselves love and want watches already have this knowledge, which is knowledge that can’t easily be learned.
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 watch business?
A typical day at a watch business consists of:
- Fulfilling orders
- Ordering more inventory
- Responding to customer inquiries
- Running advertising campaigns
Some business owners may also perform repairs related to warranty claims, but business owners who don’t have technical repair skills can outsource this work.
What are some skills and experiences that will help you build a successful watch business?
Starting a watch business requires a knowledge of both watches and of how to run a business. Business owners must at least have a cursory knowledge of watches so that they can make wise inventory decisions and properly converse with customers. Basic business knowledge is essential to making sure a business is profitable.
Business owners who aren’t familiar with watches can take a watchmaking course, such as those offered by TimeZone Watch School and Learn Watchmaking. Even if business owners don’t plan on building watches by hand, the skills taught in these courses will help when selecting inventory. With the knowledge in these courses, business owners can identify which watches are well-made and which aren’t.
There are also a number of business classes available online. Some popular ones include those offered by Coursera and listed on Open Culture. Business owners without previous experience should focus on classes that teach the fundamentals of running a business rather than courses on complex and obscure topics.
What is the growth potential for a watch business?
A watch business can be a small one-person operation that serves a relatively small number of customers, or it can grow to have lots of sales and fulfill large orders for many watches. One company that started small but then grew is Modify Watches. Modify Watches’ first few sales were only to family and friends. The company eventually has since then fulfilled corporate orders for Google and Sega, both of which gave the watches to employees.
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 watch business?
Most watch businesses today are online. While it may be tempting to set up a stand in a high-traffic area, even a small physical retail space invites more risk and offers limited potential.
Businesses with physical locations must pay rent and carry more inventory, and they can only reach customers who pass by. Moreover, customers who are interested in watches likely won’t make an impulse purchase. They’ll instead want to compare options and prices online.
Ecommerce watch businesses come with limited risk, are flexible and have more potential. Therefore, efforts are better invested in an online watch business than a brick-and-mortar one.
How and when to build a team
Most watch businesses are small operations. Jonah, for instance, started his business himself. Business owners typically hire employees once the work becomes too much for them to handle and sales support the cost of bringing on staff.