Pawn shop business plan. Features and Description

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Pawnshop is an organization that provides short-term loans to the population, as well as the acceptance and storage of valuables from precious metals. Cash loans to those who wish are issued by such a financial institution only against the security of movable property.

Gold jewelry and other valuables are considered the most common and profitable for a pawnshop, however, a financial institution is ready to accept other valuables, including, for example, household appliances and electronics, watches, cars, antiques and more.

By developing a business plan for a pawnshop, you can be sure that such an enterprise has a high viability and payback. Profit practically does not depend on the economic situation in the country. The main competitors of such institutions are microcredit organizations and banks, since they also have many programs for lending to the population for short periods. However, competing organizations have a much higher risk of non-repayment of funds than pawnshops.

An organization like a pawnshop has riskslosing money as a result of the client's insolvency is reduced to a minimum, since the owner, having not received the loan payment on time, has the right to sell the client's property previously pledged. Another important feature of such a credit institution is that in the very first months of operation, it acquires regular customers who apply for a loan regularly.

People often go to pawnshops, because this credit institution requires a minimum package of documents to receive material values. Also, customers are attracted by the absence of queues in these establishments, optimal lending conditions, walking distance and instant clearance.

Law on the operation of pawnshops

When compiling a business plan for a pawnshop, it should be borne in mind that the main document regulating the work of this financial organization in Russia is the Federal Law of 2007 number 196. It contains instructions on the rules for lending, as well as storing valuables in organizations.

According to this document, only a legal entity can open a pawnshop. The Central Bank of the Russian Federation supervises such organizations, and it also acts as a plaintiff in case of litigation on the liquidation of pawnshops as a result of legal or functional violations.

The relationship between the lender (pawnshop) and the borrower is regulated by the Federal Law number 353. This document contains articles that at the legislative level prohibit the dissemination of confidential information about the client, it also warns of compulsory seizurethings.

When drawing up a business plan for a pawnshop, the owner must take into account that this organization has the right to enter into contractual relations only with individuals.

Taxation

According to the law, a pawnshop is an independent unit of business activity, which is limited only by the function of issuing loans. In order for the owner to be able to legally sell unclaimed things that were previously pledged, it is necessary to open another enterprise. It will refer to retail.

Most often, a CJSC or LLC with a general taxation system becomes a form of business for opening a credit institution such as a pawnshop.

The main source of income for an organization engaged in issuing secured loans is the collection of interest for using the loan. This income will have to pay VAT to the state. Several types of financial accounting in the organization involves the maintenance of separate accounting. These facts must be taken into account when developing a business plan for a pawnshop.

Registration at the tax office

To open your own pawnshop, first you need to visit the tax office. There you need to apply for registration of a new enterprise. The following documents are required for this procedure:

• conclusion of the SES on the safety and suitability of the premises;
• certificate of business entity;
• document that confirms the planned location of the loan office, for example, a lease agreement for premises, a document confirming private ownership of a commercial premises.

Rosfinmonitoring

The next step is to register with the Rosfinmonitoring service. Such an action will require some funds, do not forget to take them into account when writing a detailed business plan for a pawnshop. This structure fights against illegal money laundering, and also counteracts the financing of terrorism. If a company conducts a financial transaction exceeding the amount of 600 thousand rubles, then it is mandatory subject to careful control by the state. Pawnshop owners are required to provide documentary information to Rosfinmonitoring on major transactions.

Assay supervision

If you need to develop a business plan for a pawnshop with calculations, while the company will be associated with jewelry (acceptance on bail, buying and selling), then you need to know that the company will have to be registered with another supervisory authority. It is called assay supervision.

This government agency monitors the rights of jewelry manufacturers, fights against unscrupulous competitors, acts as advocates for consumers who have suffered when buying low-quality or fake jewelry.

Choosing a location for a pawnshop

Toto draw up a business plan for a pawnshop correctly (jewelry is the main activity of the enterprise), you need to know that a building of about 30 square meters will be required. For loan offices, they rent or buy built-in premises on the streets with a large flow of cars and people.

Opening your jewelry business is best in the city center. It is desirable that the facade of the building be visible from afar, and a large street poster directly in front of the entrance to the institution will also not interfere. Inside the building there should be an introductory stand with the current price of a gram of gold that the pawnshop is willing to pay.

When developing a business plan for a pawnshop with calculations, it must be taken into account that a good location is the key to the successful operation of this financial institution, so a thorough analysis of the target audience should be carried out. When calculating the payback of a business, one should not forget that, according to the latest changes in the federal law, the opening hours of pawnshops are limited to 12 hours (from 8:00 to 20:00).

Technical equipment

For the successful operation of a financial institution for issuing loans, you will need the following:

• cash register;
• racks for storing handed-over jewelry, watches and other items;
• printer for printing contracts and other documents;
• computer;
• safe for storing securities and cash.

In addition to all this, in order to determine the sample ongold items, you need to get a special tool for filing, reagents containing acid, several test tubes and a magnifying glass. To ensure the quality of jewelry and valuables accepted as collateral, specialized equipment will be required.

To check the performance of the equipment, you need to purchase chargers for different phone models, a monitor for checking system units and speakers.

In addition to all the above funds, a businessman will have to shell out a certain amount of money for furniture, household appliances (microwave and kettle), as well as office supplies.

How to choose the right staff

When developing a detailed business plan for a pawnshop, remember that the main problem in the early days of working for start-up entrepreneurs is the low qualification of hired personnel. In our country, there are no special educational institutions that train experts in evaluating electronics, precious metal products and antiques. Large chains of pawnshops open their training centers, where newcomers are prepared for work in a few months. It is there that they teach to recognize the purity of diamonds, consider how to test gold, talk about methods for detecting soldered lead inside a large piece of jewelry.

Opening a small point, most likely, you will have to train the staff yourself. Each of the employees should strive to fulfill their duties conscientiously and honestly.

Safety at work

When drawing up a business plan for a pawnshop (gold andother precious metals will be its main focus), it must be taken into account that the premises must be reliably protected from robbers. It is important to equip the room in which the appraiser is located with a metal door. When visiting a pawnshop, a client must communicate with an employee through a small window.

For the safety of funds stored in the building, as well as to protect personnel from criminals, it is necessary to install a button to call the employees of the private security company. Some large establishments hire a security guard.

Work Schedule

The organization's work schedule greatly affects revenue. Therefore, when drawing up a business plan for a pawnshop (jewelry is one of the main sources of income), it is worth considering the number of working hours.

People bail their property in the hope of selling it as soon as possible. A businessman needs to organize the work of his office even on holidays and weekends.

Drawing up a business plan. Settlements

Many aspiring entrepreneurs are wondering where to find a business plan and how to open a pawnshop in Kazakhstan, for example, using ready-made ideas for the operation of such an enterprise. Before opening a business in any country and city, it is necessary to calculate the planned income and expenses, and be sure to do so in writing. At the initial stage, compare your expenses with the start-up capital, and be sure to have money for contingencies.

When studying a ready-made business plan for a pawnshop, make sure that it takes into account the cost of obtaining permitsdocuments and purchase of furniture. A lot of money will also be spent on renting the premises and salaries of employees.

In order to correctly calculate the income that is planned to be received, it is necessary to determine the interest rate on loans issued. Let's take a 10% rate as an example. Monthly expenses amount to 100 thousand rubles, the expected profit is 120 thousand rubles. To achieve this result, it is necessary to issue a sum of money in the amount of 220 thousand rubles. The net profit will come from the money received from the interest rate and interest payments as a result of the delay. In the event that the client does not redeem his pledged property for a long time, the owner of the pawnshop has every right to sell it at auctions.

Efficiency statistics

About 5 thousand pawnshops are registered in Russia, more and more new points for buying jewelry from the population are regularly opened. According to the collected statistics, every year such a business brings its owners 15% of net profit. This figure is considered quite high. For comparison: large retail chains receive no more than 12% of net profit annually.

Pawnshops began to bring maximum profit in Russia several years ago with the onset of the economic downturn. At this time, the population is especially in need of loans. Experts believe that in the last ten years, opening a pawnshop has been considered an incredibly profitable type of activity, which can be organized by any businessman with the necessary amount of money.

Pros and cons

When writing a business plan for opening a pawnshop, always keep in mind that the main disadvantage of such a business is the significant investment that will be needed to open a loan office and bookkeeping. The following risks should also be considered:

• It is highly likely that the things that are taken to the pawnshop are stolen. They can be seized at any time by the police without compensation for damage to the businessman.
• The test that is applied to the product cannot be a guarantee of the quality of the metal. Often, pawnshop workers come across counterfeit low-quality goods. Also, dishonest visitors can make jewelry heavier by wrapping cheap metal in gold foil.
• Household appliances and electronics quickly become obsolete, losing their market value. Perhaps the products have hidden defects that cannot be visually determined.

In addition to the negative aspects, when drawing up a business plan for opening a pawnshop, it is important to take into account the advantages of this type of activity. They are all listed below:

• to open a point, it is enough to rent a small room;
• due to high revenue, a businessman will have a chance to open several additional outlets;
• issuing a loan secured by property reduces the risks associated with the insolvency of persons.

In order for income to constantly grow, it is necessary to constantly work with consumers: remind them of the monthly payment, introduce a discount system for regular customers, etc.

Advertising campaign

Promoting your business and launching advertising using multiple sources of information is quite costly, but such a policy will significantly increase the number of customers visiting the pawnshop. To attract borrowers, use bright signs, posters, advertising in public transport, in newspapers, on the Internet. You can make a video that will be broadcast on local TV channels.

On the opening day, it will not be superfluous to spend a holiday with a drawing of valuable prizes. In the early days, you need to attract as many customers as possible.

Software

During the development of a business plan for a pawnshop, hardware and software are important cost factors, because it will require a lot of money to purchase and install them. To simplify financial calculations while doing business, there are a number of specialized programs. The most popular ones are listed below:

1. Jadatex PawnShop is a fairly simple program that can automatically perform complex calculations. In it, you can set your loan rates, as well as the conditions for issuing.
2. PawnExpert can read barcodes. This makes payments easier. It is also able to record the income and expenses of the enterprise.

Kors Lombard utility is designed to draw up contracts between a financial institution and a borrower. She is also able to write checks, control the issuance and payment of issued loans.