Is it spot on to say that you are one of those persons who has been bitten by the entrepreneurial bug? Is it correct to say that you are one who gets excited at the mere thought of starting a new business?
Now, if you've nodded your head in agreement to all the above questions, then you should consider starting a cell phone repair business. Why this industry? Because this is a multi-billion-dollar industry and growing by leaps and bounds with minimum investment required.
The industry is growing annually at an average of 3% or higher, and the estimated revenue is thought to be a whopping 4 billion dollars. With the increasing number of smartphones being sold and damaged, the cell phone repair industry is growing at a rapid pace. A frustrating piece of news for consumers is a tremendous business opportunity for the repair shops.
Growth Potential Of This Industry
Cell phones have become extremely popular these days. Now and then, either the phone breaks or is not functioning well. Buying a new phone is not always a feasible solution. Hence, repairing the phone is a necessity.
With cell phone sales continuing to skyrocket, the growth potential of the repair industry is enormous. Surely and indeed, the industry will soon become one of the bigger money-spinners of the technology industry, with more and more individuals wanting to opt for repair services rather than buying a new phone.
Considering the fact that this is a new industry, there aren’t many resources available to guide you on getting started with the business. But we plan to change that! Not only will this article give you a sneak peek to all the essential details on starting the business, but it will also exhaustively cover the scope of activities of the repair business owner, the target audience and its growth potential, the initial start-up costs, legal considerations and much more! Also, please do take note all the prices and laws involved in this article are Canadian Based, if you are not in Canada this article is for you but be wary of the prices and regulations in your location.
Let’s start...
Business Models
To get started with the cell phone repair business, you'll find that there are many ways with which you can begin. The two most popular are the storefront and mobile repair business. Let us understand each one better.
#1. Storefront
The storefront brings in more legitimacy and builds trust among customers. However, the initial costs associated with a store is high and would attract a substantial capital.
#2. Mobile business
This is an ideal business model for people with low capital.
In this model, you can appoint delivery executives to either pick and drop the device after repairing or maybe it can be sent to the customer via courier. Initially, the profit margins might be low, but rest assured, they will gradually improve as you increase the customer base.
Which business model is apt for you primarily depends on your situation.
Understanding The Costs Involved
Most of the start-up costs incurred would be towards rent and utilities depending on the location of the shop. Some business owners operate as kiosks at a mall to bring in operational cost-effectiveness. Others might work out of their home, thereby reducing the overhead costs of brick and mortar. If it is a mobile repair business, then customers could find your business online via a social media page or a website. Consider all the options before deciding upon what works best for you. There might be some additional costs involved too.
Let us list them below:
#1. Parts Inventory
Depending on the demand, you might want to stock at least 5-15 pieces of each item that can be undertaken for repair depending on you and your staff expertise. This cost might range between $100 – 500.
#2. Tools inventory
Now that you have all the parts you would need to repair the phones; it is time to have the right tools. Many cell phone repair kits are available, but each cell phone requires different types and number of tools. To have a basic repair kit, it would cost you about $50.
With the two most important factors - business model and costs being understood lets now get into further nuances of this industry.
Finding genuine parts and reliable hardware for cell phone repair can be a tough nut to crack. There are plenty of knock-offs in the market and it makes it critical to pick a vendor who can guarantee genuinely good quality parts.
We at TechRepair, vouch for the quality of parts we offer for iPhones, Samsung, LG, and other brands. Be it digitizers, LCD screens, smaller repair parts… you can rest assured of finding the best replacement parts for cell phones.
Steps To Start A Cell Phone Repair Business
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Business plan:
Have a business plan with the costs, target audience and the break-even time-frame to ensure success in your business.
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Legal entity: Establish a legal business entity and register for the state taxes.
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Business accounting: Record your expenses and income to understand financial performance better.
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Permits and license: Obtain necessary permits and licenses wherever applicable.
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Branding: Define your brand as this is how your customers will perceive your company.
- Website: Having a site will attract more customers, and a social media presence will accelerate growth.
How The Dynamic Nature Of The Evolving Smartphones Affects Your Business?
Cell phone repair is complicated with a variety of multi brands and diversified techniques available. The most comfortable phone, to begin with, are iPhones due to their high-end design and the minimal number of parts that require fixing. Also, not everyone has an iPhone. The market is still dominated by Android phones when it comes to the sheer number of users.
Again in Android phones, there are multiple brands, all having their own design, hardware and parts. Some of the leading brands are Samsung, Huawei, OnePlus, etc. there are still plenty of brands and sub-brands which are widely used by people. This entire range of devices means, they all require more equipment and a little more technical experience to fix them.
The Earning Potential Of The Industry
#1. Charging Customers
Depending on the device model, the repair prices would vary. For instance, the average cost of a broken screen can range between $75- $300. Also, the repair cost of a $1000 phone would be far more affordable than replacing with a new one. So expect more earning potential with this line of business.
#2. Net Profits
The profit margins of repair costs to that of part costs are enormously high. The money made from one repair can very soon help in quadrupling your inventory.
If the average revenue is $80 and you fix ten devices a week, then the revenue per week is $800. The average net profits in this industry range between $50 – $65 000, with higher earning potential as you become more established.
What Sort Of Marketing And Promotion Is Required?
Succinctly put, the marketing and promotion should be the heart and soul of your business, as customers aware of your business and services will be the deciding factor for your success.
Using inexpensive and effective methods to promote your services will not only keep the costs low but at the same time, ensure visibility. Initially, flyers and brochures can be distributed to increase visibility. The next is to start a webpage or a social media page. Since most customers would do a google search to find a repair shop, make sure that you use keywords to push your business to the top of these searches. Word of mouth and positive reviews will bring in more success to your business.
Retaining Your Customers!
Customer reviews and referrals are essential for repeat business. Do not over promise and make your prices too low to attract customers. Costs need to be ‘competitive.’ To ensure customer retention and repeat business, a positive reputation and positive feedback are critical.
Since this business is customer driven and dependent on your repair and service reputation, it is vital to share success stories and to connect with your customers via brand promotions or marketing activities. Do have a strong rapport with your parts supplier too - repair service demands the timely availability of parts. Hence, establishing strong ties with the suppliers would promote business. Qualified parts and trustworthy and reliable service are the keys to staying profitable in the long run.
Ready to get started!
Be it cell phone repair business, sourcing of good quality reliable parts, unlocking services and more - do check out Techrepair.io!