How to Start a Watch Business

Start a watch business by following these 10 steps:

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

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.

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 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

If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

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.

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.

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 watch 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 watch 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?

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.

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.