There are no two ways around it, people simply cannot get by these days without a cellular phone. What’s even more surprising, as soon as the next, flashiest new phone hits the shelves- people will beat down the doors to buy it. You just couldn’t ask for a more attractive business proposition. Well, if you’re itching to get a piece of the pie and start your own cell phone business- you’ll need to obtain a brick and mortar location and make an authorized seller agreement with one or more of the major cell phone carriers. Here’s our quick guide on how to open a cell phone business.
Step One: Register Your Business
Your first step should be to register your chosen business name with your state and/or local authorities. This is a necessary step to becoming a legitimate business entity and gain the right to access retail leasing services, financial services, and to apply with wireless service carriers.
Visit your state’s Secretary of State website. There, search your chosen name to make sure you haven’t selected a name that’s too similar to existing business names.
Then you can go ahead and complete your business registration, and file all of your articles of incorporation. The information you receive after this process is complete should be taken to the IRS website. There, you will be issued your official tax identification number.
Step Two: Develop Your Business Plan
Now, it’s time for you to draft your business plan. Your business plan should demonstrate that you have a working understanding of market forces and conditions. Your plan must include the ways in which you intend to perform marketing campaigns and outreach. You must also demonstrate your ability to serve your customer’s needs.
Even if you still don’t have precise figures on employee costs, rental or leasing costs, and other overhead expenses, you should be able to present and work with reasonable and realistic averages. You will use this information to demonstrate your understanding of how your business should work. You will have the opportunity to revise your business plan when your actual expenditures and resources become known quantities. In this plan, you will be expected to include pricing for inventory both initial and ongoing.
A cell phone retailer must demonstrate the existence of proper electrical facilities and access to the Internet. For a start, you can expect to spend between $20,000 and $100,000 of startup capital in order to set up your retail establishment.
If you don’t have at least the bottom figure to start with, you should look to small business financing options.
Step Three: Understand Your Carrier Contracts
You will need to get in touch with the wireless service companies whose products you wish to carry. Each one of them is going to have a different approach to dealing with retail outlets like yours. T-Mobile, for example, has a much less involved process than Verizon.
You will need to take the time to fully read and understand all of the terms and conditions of each contract you intend to sign. As you go over the details of each contract, it’s wise to make quick reference notes to look at later. If you fail to uphold any of the terms and conditions of these contracts, you can have your agreement canceled. If this happens while you still have a large number of unsold products on your hands, it could be a serious problem.
Step Four: Apply to Become an Authorized Cell Phone Reseller
After you’ve read and understood the contracts, it’s time to choose which carriers you wish to work with. You must submit a formal application to each carrier whose products you want to carry. You will be required to submit copies of your business plan.
When you have studied their terms and conditions, you may choose to revise your business plan. This is probably the best time to develop your subsequent drafts. The carriers you apply to want to make sure your business does not harm their reputations. After all, most customers do not see the line of separation between you and the companies that make and distribute the products you will be selling. Your business plan is your way of showing these big cell phone companies that you have the ability to run a successful business with which they will want to be associated.
These carriers will check your credit score and look for verification of your ability to run a business. This is easily the most grueling part of your journey to becoming a cell phone retailer. They will ask you to demonstrate your ability to provide good customer service and prove that you are a competent manager. The carriers would prefer that you have experience in the industry, but this is not required. Be ready to jump through a lot of difficult hoops. Above all- have patience.
Once you have successfully passed through the corporate gauntlet, you will be officially granted the status of an authorized cell phone reseller.
Step Five: Choose and Establish Your Store Location
After you’ve been granted at least one contract with a carrier, you can begin to seek out a viable location for your store. Keep in mind that your potential landlord will check your credit. With all of the loans and credit checks you’ll have been going through, you’ll want to be very careful not to damage your credit before applying for a lease.
You want to secure a location with a great deal of foot traffic. Malls, busy downtown areas with lots of popular curio shops and the like are your best bet. You do not want a drive-by location!
The location should be amenable to developing a high tech and modern feel. Avoid locations that feel run down, old, or in the least bit shady. You should expect to have to buy liability insurance. Look for a policy which covers inventory and business property. Remember, cell phone stores are popular targets for thieves, so you’ll need to take measures to protect your investments.
We recommend that you consult a business credit expert before applying for business credit of any kind. If you require financial services, a qualified business credit professional will help you understand how to obtain startup capital to build up your business credit score.