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 watch repair 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 watch repair business?
The initial cost of a watch repair shop is about $40,000. This amount covers initial franchising fees, a small workshop, watch repair parts, and a repair desk. Additional money can also be spent on educational fees.
What are the ongoing expenses for a watch repair business?
Expect to pay about $2,000 for a highly visible rent location. A lot of your watch repair tools will be purchased upfront, but you can spend as much as $500 per month to manage and replace these tools. Tools depreciate, too, requiring eventual replacement.
Who is the target market?
Watch repair shops make the most money from watch and clock enthusiasts. Customers with designer, collectible or otherwise rare watches are valuable. They often respect the art of watch and clock repair. They may also be return customers, if they’re sporting a collectible. These customers also return often for watch cleaning. While a watch repair shop may make most of its profits from watch repair, it can make extra money by offering watch cleanings.
How does a watch repair business make money?
A watch repair shop makes most of its money by repairing wristwatches. It can also make money by repairing pocket watches and clocks, however. A serious watch repair shop owner can make money by selling individual parts. They can even become a trusted watch parts provider.
Some watch repair shops may offer routine watch cleanings. By using a specialized machine, shop owners can ensure safe, effective cleanings after any tune-ups have been completed.
How much can you charge customers?
Each customer can be charged about $150 for a single repair job. This price is based on repairing stem, crown, or mainspring parts. Cleanings can be done for as little as $20. You can charge higher prices if you’re working on expensive watches.
How much profit can a watch repair business make?
A watch repairer can make between $24,000 and $36,000 per year, depending on their expertise. If they operate a shop, they can make a six-figure salary. To make this much, however, a watch repair shop owner needs to be incredibly marketable and reach a wide audience.
How can you make your business more profitable?
Offer services online. A lot of modern watch repair shops let customers ship watches to them. Because a lot of watch-wearers are turning to smartphones, the watch repair industry has become less effective. You’ll need to have a solid marketing plan to thrive.
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.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your watch repair 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 watch repair 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.
Watch repair businesses should consider requiring clients to sign a service agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, service level expectations, and intellectual property ownership. Here is an example service agreement.
Recommended: Rocket Lawyer makes it easy to create a professional service agreement for your watch repair business when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on call attorneys to get complimentary legal advice.
Certificate of Occupancy
A watch repair business is generally run out of a 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 watch repair 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 watch repair 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 watch repair business
Watch repair shops do well when marketed in shopping malls. Get the word out about your business. Have calling cards, and hand them out to local shoppers. Make sure you have a grand opening, and create awareness for your watch shop.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
Your watch repair shop will need to be incredibly visible. Establish your shop alongside busy streets, in shopping malls, or near big establishments. More often than not, location attracts and retains customers more than actual services—where watch repair is considered.
You should still offer incredible services, however. Repair watches quickly, and offer a slew of repair options. Offer cleaning services and sell watch parts.
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 Watch Repair Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
The ideal watch repair shop owner loves watches. They also have a passion for clockmaking, watchmaking, and the history of watches. Watch repair shop owners are good with people, and they also honor the world of repair.
Because watch repair is very specific, general repairmen may not be fit for the watch repair business. Those who’re experienced with repairing small mechanical items, however, may find watch repair to be incredibly fun. Those who enjoy collecting watches and clocks, too, may enjoy the art of watch repair. As a business owner, a watch repair shop owner will need to have a good handle on management, accounting, and marketing.
What happens during a typical day at a watch repair business?
A watch repair shop owner will need to study the art of watch repair. They need to constantly make their skills better, learning about band repair, cork repair, face repair, and parts replacement.
They should also make their workspace incredibly efficient. A watch repair shop owner will need to catch loose watch pieces, organize their workspace, and organize their tools. Over time, a watch repair expert will invest in better screwdriver sets, part trays, and watch components.
Other responsibilities include attracting customers, extending services to new clients, offering well-priced repairs, and more. From a management perspective, a watch repair shop owner will need to collect payments, manage employees, offer competitive services, and market to the local community.
What are some skills and experiences that will help you build a successful watch repair business?
A modern watch repair shop owner needs to be an expert at repairing watches. Normally, this requires years of experience. Watch repair shop owners need to be able to dismantle, clean and reassemble watches quickly, safely, and effectively.
The best watch repair shop owners have at least 20 years of experience fixing watches. They will also understand the ins and outs of watch benches. As part of the daily job, a watch repair shop owner will need to source their parts. Having a good eye for watch part prices helps. Watch repair shop owners will also be effective business operators. They understand customers, are very personable, and know how to reach new markets.
What is the growth potential for a watch repair business?
Most watch repair shops are local. Some, in fact, only exist in shopping malls. A watch repair shop with a lot of success, however, can easily become a local hotspot for watch enthusiasts. For this to happen, though, the shop needs to offer amazing prices. It also needs to be effective with a variety of watch repairs. A watch repair shop which offers additional watch parts and cleaning services has a higher growth potential.
It’s possible to become a multi-state provider, but a lot of customers prefer local settings. E-commerce watch repair shops also exist. These shops receive watches by mail, repair themm and return them within a certain amount of time. If you want to expand, consider becoming a digital provider. It’s a lot cheaper than becoming a national provider, and it’s a very popular modern job.
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.
What are some insider tips for jump starting a watch repair business?
Make sure you have all necessary equipment. If you want to be economical, settle for a basic tool box. Consider the complexity of becoming a master watch repairperson, too. As a watchmaker, you’ll need to be knowledgeable about different watch models. Watches have different technologies, and they can suffer a lot of damages.
Survey your competitors, too, and see their price ranges. Then, offer your watch repair skills for slightly better prices.
How and when to build a team
You can run a watch repair shop by yourself, if need be. That said, you should try to have a business partner as soon as possible. A small team of two to five people can run a watch repair shop effectively. By spreading responsibilities across multiple people, you can assure a higher turnaround time.