Starting a Pawn Shop: A Comprehensive Guide for Entrepreneurs

If you're interested in the buying and selling of goods and you want to start a small business that can withstand the volatile economy, consider opening up your own pawn shop. A pawn shop will enable you to be your own boss and be in control of the products with which you deal. Read the tips listed below and learn about how you can open a pawn shop.

• Education An important aspect of running a successful and prosperous pawn shop is dealing in goods that you're familiar with. The more knowledge and experience you have with the products, the cheaper you will buy them and the higher you will sell them. If you're considering opening up a high end pawn shop that deals in jewelry, consider taking courses in jewelry appraisal, gold purity and analyzing fine watches. Having a solid background in a wide variety of goods will ensure that you make more money and avoid getting cheated by con artists [source: Gornbein].
• Location Find a good location for your pawn shop. Make sure to set up shop where the local population is interested in buying your goods [source: SBTV]. Choose a location with a population that has supply and demand for the specific products you're selling.
• Licensing and Paperwork State laws differ regarding licensing requirements for pawn shops. Most states require that you apply for a pawn shop license. This entails paying an application fee. You may also have to provide a variety of documentation, including credit reports, financial statements, criminal records and reference letters. Contact your state's Department of Financial Institutions to find out what documents and licenses you need to operate a legal pawn shop [source: OCCC].