If you are thinking about starting a cell phone repair business or already have one and want to make sure you have all your bases covered, you’re in luck. We’re going to go over everything you need to know to run your business.

Starting a business is no easy task, we know because as a wireless master agent, Empower works with many cell phone repair shops and wireless dealers nationwide, helping them become authorized resellers of SIMs and activations for major carriers (AT&T, h2o, Cricket Wireless, FreeUp, Ultra Mobile, and more). We want to make sure you have everything you need to succeed, so let’s take a look at some of the first steps you should take to start your phone repair business the right way.


1. Create a cell phone repair business plan

The very first step towards starting your cell phone repair business is to create a business plan. This is also important for any established stores to have and constantly update every year as well. You want to make sure you are not just guessing what your next move should be every day.

Your business plan should include details such as your budget, your target customer, how you plan to get traffic to your business, how you plan to market, how much inventory you need, etc. It should be a yearlong plan with the goals you wish to accomplish and the estimated dates for them. This will make it easier for you to know what to do and when to do it. This may seem overwhelming at first but don’t worry, this is just a strategy to stay on track, which you can change and adapt if there are any changes in the market.


2. Form a legal entity

If you are just starting out you could start your cell phone repair business as a Sole Proprietor but it is recommended that you form a legal entity such as an LLC as soon as you are big enough. This will protect you from being personally liable in case someone sues your business. There are also other types of legal entities such as Corporations, DBA’s and more. LLC is what most brand new business use after Sole Proprietor but make sure you do your own research and find the classification that best fits yours.


3. Register your business for taxes

You will need to register your business for taxes through the IRS website as well. They will give you an EIN which is an identification number for your business. It is free to register and very easy to do online. You’ll want to make sure that you are paying all state and federal taxes required to stay compliant. Visit the IRS website here to get your EIN.


4. Setup bank accounts for your business and track expenses

It is very important that you separate any business accounts (checking, debit, credit cards) from your personal accounts. This will help you keep track of your expenses when declaring taxes and will give you many benefits that banks offer business accounts that they do not offer regular accounts, such as extra cashback and travel points for advertising expenses. These can come in very handy if you need to travel as a business expense. You can also build business credit which can help you get financing under your business name instead of your own name.

Having separate accounts also helps to protect your personal assets from your business assets in the case someone sues your business, which is a risk you can greatly minimize by paying close attention to customer service and staying compliant with business regulations.


5. Get required permits and licenses

Obtaining the required permits and licenses for your business protects it from being shut down for not being compliant with laws and regulations. These vary by industry and state so make sure you visit the SBA’s website here and check if your cell phone business needs any of them.

For example, businesses that are run out of a physical location like a cell phone storefront typically require a Certificate of Occupancy, which confirms that all building codes, zoning laws, and government regulations are being met. If you are leasing a storefront you will need to ask the landlord for the CO as they are legally responsible for having it. Any major renovations will require a new CO so you want to make sure this is stated in any agreements so you don’t have to make lease payments if there isn’t a valid CO issued (which can keep you from running your business). If you are purchasing or building the storefront then you will be responsible for getting a valid CO from local government authorities.


6. Getting insurance for your business

Having insurance for your business is also a legal requirement. This not only protects your business from covered losses but the government will need you to have different kinds of insurance depending on how you run your business. For example, if you have employees you will need Worker’s Compensation Insurance. Another type of insurance that is common is General Liability Insurance and will be the best place for you to get started.


7. Obtaining repair inventory – parts and tools

Once your business is all set up and you’re compliant with all required permits, licenses, and registrations with the government, the next step will be to get your repair inventory and the tools your business will need to provide repair services.

This can range depending on how much volume you are expecting but a good guess is to have $5,000 set aside for this. This may sound like a lot but in the grand scheme of things it really isn’t. Much of this you will recover as you repair phones, so think of this as a momentary investment which you will get back (and then some) as your business grows.


8. Marketing your business

The next step is to start marketing your new cell phone repair business. A great place to start is online using social media and building a website. If you need any help with this, Empower actually offers marketing services to help you set up a website and get digital marketing materials. If you want more information click this link to see our marketing services.


How profitable is a cell phone repair business?

Let’s talk about what you really want to know, namely, how much income can you expect?

Like all businesses, the level of success you reach will vary largely with the individual. But we can look at the profit margins of cell phone repair to get an idea of the potential.

The main costs to the consumer are parts and labor. Often, the price the customer pays for having their phone repaired gives repair shops margins of over 100%. This should give you an idea of how much money you might be able to make repairing phones if say, you invested $5,000 in parts and used all of it providing repairs.

If you start out small (alone and without a physical storefront) you can see how you would be able to quickly build up enough money to upgrade to a physical location and add employees to help you increase the amount of phones you can fix at the same time. Sure, these might raise your expenses given rent and wages payouts, but the productivity you would be able to achieve at this level has a great potential to give you a high return on investment.

Many phone repair shops also provide additional services to boost their bottom line, such as selling prepaid phones and activating SIMs. Empower helps many phone repair shops add this service to their businesses by helping them get authorized by major carriers to sell SIMs and activations (including AT&T, h2o, Cricket Wireless, FreeUp, Ultra Mobile, and more). We also provide wholesale cell phones through our online Retailer Marketplace (www.retailermarketplace.com), so if you want to know more make sure to reach out to us!




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