Starting An Electronics Store Business – Profitable Business Plan
Electronics business is becoming a boom in the business world for reasons of its demand and increasing value. Also, the varying brands create a need for the construction of such a business centre that could guarantee the availability of all the brands under one roof. For instance, it is totally impossible for the brand Apple to have stores all over the world. Even if there is one store per city, it is absolutely not accessible for all the people of the city. There comes the need for you.
You, being a second or third tier will act as a distributor for these electronic items that your customers need. It is observed that you get a minimum profit of $50000 in a consumer electronics business. As you all know the dynamic in a business, the number specified is not any standard figure.
Profits change with criteria of business size, demand, products sold, mediators in selling, cost price of the product etc. Going to the opportunities that can possibly be spotted here in this business, the following two can be taken as the top-rated ideas which shows a clear- cut differentiation from others in the same business.
- Being a premium seller by selling luxury brands
- Partnership with corporate firms
Being a Premium seller
There is a division in the consumer group which follows the criteria of their choices and financial abilities. In that way, there is a group of consumers called the elite class or the class of people who constantly look for luxury brands in any type of product. Targeting this segment is highly beneficial as well as unsafe.
This means the effects of less demand when compared to serving the mixed group of consumers. For example, Apple is one of the luxury brands. It is totally acceptable that there is a decent number of people continuing to buy products from the same brand irrespective of the price at which they are being sold.
On the other hand, the demand is extremely less. On a rough scale, 75% of the people look for an averagely priced product than the highly priced luxury product. Here, the choice is yours and it is you who should take decisions as to what sort of store you are going to maintain.
Though the demand for the luxury brands are not as great as it is for the other products, the amounts coming in to the firm in terms of business is huge. It can be seen as a smart income where you will realise almost 50% of the investment by selling two or three products of the brand.
Partnership with corporates
Here the opportunity is found while carrying out your regular business itself. No special alteration to the business structure is needed. All you have to do is find companies that has immense use of electronics.
IT companies will undoubtedly be in need of computers and other related hardware items. You are in the path to provide them with such electronics as and when required. What makes it an opportunity is that there is one promising work for you with these corporate companies when your business is down or has an unfavourable financial situation.
Business plan for an Electronics business
This is the most important part of any business. Business plans help you all in explaining your business using statements. A typical business plan follows the format given below. These business plans not only serve in explaining the business, but also puts all your planning in written or printed form. This is more like a director for the entire business. With these business plans, you get to know the stand of your business that is yet to start.
- Executive Summary
- Key to success
- Company summary
- Company ownership
- Start-up summary
- Market analysis summary
- Market segmentation
- Commercial sales
- Target market segment strategy
- Industry analysis
- Buying patterns
The above subtitles cover almost all the information about the business you are up to start. These details are important for your funders too. Only with the reliable and empowering information you have, your funders will initiate the funding process.
Registration of the business
Business registration is an important document to be present in any retail store. This is to show the legal existence of the business and also the inclusion of your business’s name in the list of businesses that fall under the pursuit of the same industry. So, basically the need for a registration is to attain recognition in the industry. Business registration also serve in making the taxation processes easier.
The government of your country will identify your business only through the EIN designated to you over application. EIN is the Employer Identification Number which forms a code of identification for your business. Applications for the same are made online, by fax, by mail and also by telephone.
There are few restrictions laid by the government in order to be eligible for EIN. Of those, the most important one is the location at which your business exists. EIN applies for businesses which operate in the United States or any of the United States Territories. Also, as an applicant you will be demanded for a valid Taxpayer Identification Number (TIN).
Application process (ONLINE APPLICATION)
There are three steps that takes you to the final stage of obtaining the EIN.
- Eligibility check
- Online application
Eligibility check is to check from your side if you have all the necessary documents needed for the application. This step should be taken seriously, as it avoids the chances of being rejected for the process. As mentioned earlier, the check covers TIN, location of the business and other conditions pertaining to ownership and limitations of EIN applications.
Furtherance in the process of application is the clear view on the online application process. Before you start filling the application forms in the portal, be prepared for all possible information that you will be asked for. This is because, the application gets rejected right away when you return or pause in between for a longer time. It is a single session application process where resuming back to the webpage is impossible.
The last stage is the submission after filling in all the details in the form. Once you submit, verification process is initiated. Verification is done with the TIN you provide and the advantage of online application is that you get the work done immediately. You get your EIN after verification and all you have to do is print it with the downloaded copy.
Since your business falls in the category of retail businesses, you will have to obtain a state license for the same. Before directly switching to the application stage, let us clearly understand why we need a license. Licenses act as a legal document or authorization for your business and the products you sell. There is a wrong interpretation that all businesses require licenses. But you will definitely not need a license in the following conditions.
- If you have less than 30 electronic goods for sale or display, then you do not need a license.
- Measuring in linear feet, if the display space of the store is less than 20% of the total display space, the there is no requirement for a license.
Requirements for the application
To obtain an electronics store license, the following documents or legal identities will be required.
- License application
- Sales Tax Identification Number
Again, there are two more sub divisions in the licensing part. If you are planning to offer service for the electronic goods, then you will have to obtain an Electronic and Home Appliance Service Dealer License. Selling second hand electronic goods will ask for another license called, Second hand Dealer General License. These licenses are valid for a period of 2 years after which renewal of the same is needed in order to continue the business operation.
Insurances are now being provided and obtained on an appreciable rate. A number of emerging insurance companies allow for insurance policies that are favourable for both the insurer and the insured. In such a situation, electronics store insurances are one separate wing that holds in a number of types. Some of the insurances offered for an electronics store are,
- Electronics store general liability insurance
- Electronics store commercial auto insurance
- Electronics store business property insurance
- Electronics store Cyber liability insurance
- Electronics store Worker’s compensation
- Electronics store Crime insurance
Each of the mentioned insurance differ from each with the coverage of the loss. Insurances can be obtained from private insurance companies or from the government agencies. A proper evaluation of the best insurance policy is all you need to move further in obtaining insurance for your business.
Location of the electronics store
Location of any retail store should take in the factors relating to consumer behaviour. A place with enough of customers and demand can only be the right location for any retail store. Accessibility plays an important role in the survival of a business.
Having the supplies ready and not providing the right accessibility to reach your products is an utter flop plan. Hence, attempt to locate your business where customers can actually reach you. Also, have in mind the location of your manufacturer or distributor.
This is one area which assists you in growing more than your competitor. The research phase is not a one-time work. You will do it before initiating the business to find the value of the products sold. It also reveals the strength of your competitor. In later stages, pricing and promotional ideas for your business will definitely need the results from your competitors research.
Keeping track on the business pattern of your competitor is important in all businesses, but it is considered inevitable in a business that runs with electronics. New trends and models have to be understood and stocked in your store as soon as it reaches your competitors store or if you are smart enough, just before that.
Setup office space
Office space is something that shows the public how good your business is from the outlook. Generally, people tend to purchase in shops where the interiors and infrastructure is appealing. The fact isn’t wrong. There is some push experience by every customer due to the infrastructure of the shop.
Thus, plan it efficiently. In an electronics store, displaying the products is the only way to communicate the availability of it. Also, experiencing the real features of it is possible only if you have adequate space. I would recommend you to focus more on office space than any other planning.
Put in a minimum of 40% of your investment in constructing an impressive office space. Layout, the one which makes proper utilisation of the space should also be planned properly based on the electronic products in the store.
The last stage of the business is hiring the right number of employees. This could be a tedious task since you are a budding entrepreneur. You might think of outsourcing a planner for this, but my recommendation would be to decide it on yourself. This is because, only you know what kind of demand is there for your business.
It is a waste of money to have 100 employees in a store where the visitors or customers are not even 10% of it. Not only the demand, the floor space of your store is another factor in deciding the number of employees.
So, all these put together will give you a rough idea of the number of employees you need for the store. Next part is the type of employees. This certainly means the different positions in your business. Some of the vital ones are,
- Floor manager
- Sales representatives
- Stock manager
- Promotional heads
Hence, dividing them into various departments is all that you need for a perfect set of employees. Departments like maintenance, marketing, finance, stock, etc will bind together to give the resultant as planned and composed store
The type of store you open will depend on the products and services you intend to offer. Popular choices include consumer electronics, home appliances, and audio systems.
The amount of money you need to open an electronics store will depend on the type of store and level of inventory you plan to carry. It is important to prepare a detailed business plan in order to determine your exact needs.
Depending on the type of store you plan to open, you may need to stock a wide range of products to meet customer demand. This could include consumer electronics, home appliances, audio systems, and parts.
Depending on your location, you may need a variety of licenses and permits in order to open and operate an electronics store. Check with your local government to determine what type of license you need.
Your target customers will depend on the type of products and services you plan to offer. Your store may draw customers from a variety of sources, including local residents, students, and businesses.
Pricing techniques will depend on the type of store you plan to operate, as well as the products you stock. Popular pricing techniques include competitive pricing, dynamic pricing, and cost-plus pricing.
Your marketing strategy will depend on your target customers, the type of products and services you plan to offer, and the type of store you plan to open. Popular marketing strategies include social media campaigns, targeted advertising, and content marketing.
The type of location you select will depend on the type of store you plan to open, the size of the space, and the suitability of the location. Popular considerations include foot traffic, accessibility, and proximity to other businesses.
The type and amount of equipment and technology you need will depend on the type of store you plan to open and the products you plan to stock. This could include computer systems, audiovisual equipment, and security devices.
It is important to implement safety and security measures in order to protect your store, customers, and products. Popular measures include CCTV systems, alarm systems, and cash register/inventory tracking systems.