A pawnshop is an organization that provides short-term loans to the public, as well as the reception and storage of valuables made of precious metals. Money loans to those who wish are issued by such a financial organization only on the security of movable property.
The most common and beneficial collateral for a pawnshop is gold jewelry and other valuables, but a financial institution is ready to accept other valuable items, including, for example, household appliances and electronics, watches, cars, antiques and more.
When developing a business plan for a pawnshop, you can be sure that such an enterprise has high viability and payback. Profit is almost independent of 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-return of funds than pawnshops.
For an organization such as a pawnshop, the risks of losing money as a result of the client’s insolvency are minimized, because the owner, having not received the loan payment on time, has the right to sell his client’s property previously pledged. Another important feature of such a credit organization is that in the first months of work, it acquires regular customers who apply for a loan regularly.
People often go to pawnshops, because in this credit organization they require a minimum package of documents to obtain wealth. Also, customers are attracted by the lack of queues in these establishments, optimal lending conditions, step-by-step availability and instant clearance.
Pawnshop Act
When compiling a business plan for a pawnshop, it should be borne in mind that the main document governing the work of this financial organization in Russia is the Federal Law of 2007 under number 196. It contains instructions on the rules for lending, as well as storing valuable items in the organization.
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 No. 353. This document contains articles that prohibit the distribution of confidential information about the client at the legislative level, and also warns about the forced seizure of things.
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 entrepreneurial 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 company. It will relate to retail.
Most often, a form of entrepreneurship to open a credit institution such as a pawnshop becomes a closed joint-stock company or LLC with a common taxation system.
The main source of income for an organization engaged in issuing loans on bail is the collection of interest on the use of credit. From this earnings will have to pay VAT to the state. Several types of financial accounting in the organization involves conducting separate accounting. These facts must be taken into account when developing a business plan for a pawnshop.
Registration with the tax office
To open your pawnshop, you first need to visit the tax office. There you need to apply for registration of a new company. The following documents are required for this procedure:
- conclusion of the SES on the safety and suitability of the premises;
- certificate of a business entity;
- a document that confirms the planned location of the loan office, for example, a lease of premises, a document confirming the private ownership of a commercial premises.
Rosfinmonitoring
At the next stage, it is necessary 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 carries out a financial transaction in excess of the amount of 600 thousand rubles, then it is subject to strict control by the state. The owners of pawnshops are required to inform Rosfinmonitoring of major transactions.
Assay supervision
If you need to develop a business plan for a pawnshop with calculations, and the company will be associated with jewelry (bailing, buying and selling), 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, and acts as advocates for consumers who have been hurt by the purchase of substandard or counterfeit jewelry.
Choosing a location for a pawnshop
In order to correctly draw up a business plan for a pawnshop (jewelry is the main activity of the enterprise), you need to know that you will need a building measuring about 30 square meters. For loan offices, they rent or buy built-in premises in the streets with a large flow of cars and people.
Opening your jewelry business is best in the city center. It is advisable that the facade of the building be visible from afar, and a large street poster immediately in front of the entrance to the institution will not interfere. Inside the building there should be a familiarization stand with the current price of a gram of gold that a pawnshop is willing to pay.
When developing a business plan for a pawnshop with calculations, it is necessary to take into account that a good location is the key to the success of this financial organization, 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 amendments to the federal law, the pawnshop working hours are limited to 12 hours (from 8:00 to 20:00).
Technical equipment
For the successful work of a financial organization to issue 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 on gold products, it is necessary to acquire a special tool for cutting, reagents containing acid, several test tubes and a magnifying glass. To ensure the quality of pledged jewelry and valuables, specialized equipment is required.
To check the operability of the equipment, it is necessary to purchase charging for different phone models, a monitor to check system units and speakers.
In addition to all of the above funds, the businessman will have to pay a certain amount of money for furniture, household appliances (microwave and kettle), as well as office supplies.
How to choose the right staff
During the development of a detailed business plan for a pawnshop, remember that the main problem for the first time working with novice entrepreneurs is the low qualification of hired personnel. In our country, there are no special educational institutions that train experts in the evaluation of electronics, precious metal products and antiques. Large networks of pawnshops open their training centers, where in a few months they prepare newcomers to work. It is there that they teach to recognize the purity of diamonds, consider how to test gold, and talk about methods for detecting sealed lead inside a large piece of jewelry.
Opening a small point, most likely, you will have to train the staff yourself. Each of the wage workers must strive to conscientiously and honestly fulfill their duties.
Safety during work
When drawing up a business plan for a pawnshop (products made of gold and other precious metals will be its main focus), it must be taken into account that the premises must be reliably protected from burglars. It is important to equip the premises in which the evaluator is located with a metal door. A client visiting a pawnshop must communicate with an employee through a small window.
For the safety of funds stored in the building, as well as for protecting personnel from criminals, it is necessary to set the call button for employees of the private security company. Some large establishments hire a security guard.
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 carry their property on bail 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. Calculations
Many novice 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 work of such an enterprise. Before starting a business in any country and city, it is necessary to calculate the planned income and expenses, and it is mandatory in writing. At the initial stage, compare your expenses with the starting capital, while there must be money for unforeseen expenses.
When studying a ready-made business plan for a pawnshop, make sure that it takes into account the costs of obtaining permits and buying furniture. A lot of money will also be spent on the rental of premises and the salary of employees.
In order to correctly calculate the income that you plan to receive, you need to determine the interest rate on loans issued. For example, take a rate of 10%. Monthly expenses amount to 100 thousand rubles, expected profit - 120 thousand rubles. To achieve such a result, it is necessary to issue a sum of money in the amount of 220 thousand rubles. The net profit will be brought by the money received from the interest rate and interest payments as a result of delay. In the event that the client does not redeem his mortgaged property for a long time, the owner of the pawnshop has every right to sell it at auctions.
Performance statistics
About 5 thousand pawnshops were registered on the territory of Russia; new points for buying up jewelry from the population regularly open. According to the statistics collected, each 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.
Pawn shops began to bring maximum profit in Russia several years ago with the onset of the economic downturn. At this time, the population especially needs loans. Experts believe that in the past ten years, the opening of a pawnshop is considered an incredibly profitable activity, which can be organized by any businessman with the necessary amount of money.
Advantages and disadvantages
When writing a business plan for opening a pawnshop, always keep in mind that the main drawback of such a business is the significant investment of funds that will be needed to open a loan office and maintain accounting records. The following risks should also be considered:
- It is likely that the things that are being rented to the pawnshop are stolen. They can be removed at any time by police without compensation for damage to the businessman.
- The sample that is applied to the product cannot be a guarantee of the quality of the metal. Often, pawnshop workers come across fake low-quality goods. Also dishonest visitors can make jewelry heavier by wrapping cheap metal with 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 consider the advantages of this type of activity. All are listed below:
- to open a point, it is enough to rent a small room;
- thanks to the high revenue, the businessman will have a chance to open several additional points;
- granting a loan secured by property reduces the risks associated with insolvency of persons.
In order for income to constantly grow, you need to constantly work with consumers: remind about monthly payments, introduce a discount system for regular customers, etc.
Advertising campaign
Promotion of your business and launching advertising using several sources of information dissemination are quite expensive, but such a policy will significantly increase the number of customers visiting a pawnshop. To attract borrowers, use bright signs, posters, advertisements in public transport, in newspapers, on the Internet. You can remove the video, which will be broadcast on local TV channels.
On the opening day, it will not be amiss to hold 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 for their purchase and installation you will need to spend a lot of money. To simplify financial calculations while doing business, there are a number of specialized programs. The most popular ones are listed below:
Jadatex PawnShop is a fairly simple program that is able to automatically perform complex calculations. In it, you can configure your loan rates, as well as the conditions for issuing.
PawnExpert is capable of reading barcodes. This simplifies payments. She is also able to spend income and expenses of the enterprise.
The Kors Lombard utility is intended for execution of agreements between a financial organization and a borrower. She is also able to write checks, control the issuance and payment of issued loans.