7 Cellphone Repair Business Startup Costs To Look Out For

Are you ready to turn your dreams of owning a profitable cellphone repair business into a reality? 

The first step is to understand the cost of opening your repair shop. 

In this blog, we’ll explore the top seven cellphone repair business startup costs to plan for. Plus, we’ll share a sample budget to help you craft an accurate, thorough repair shop business plan. 

Initial and Ongoing Cellphone Repair Business Costs

Your cellphone repair shop business plan should include a thorough list of your projected expenses. This breakdown will guide you as you gather funds, apply for small business loans, and calculate your potential profitability. 

Here’s an overview of the initial and ongoing expenses to plan for as you open and run your cellphone repair business. 

1. Obtaining Business Licenses and Insurance

Before opening your repair shop’s doors to the public, you need to get your paperwork in order. 

The process and costs of setting up a new small business vary by location, so check out the IRS’ list of state-specific resources to learn about your state’s requirements. 

Here’s what to expect during this phase of the startup process. 

• Choose a structure for your business. A limited liability company (LLC) is a popular choice among cellphone repair shop owners because it’s easy to establish and protects your personal assets even if a repair goes wrong. 
• File your LLC formation documents through your local Secretary of State office. Most states have a convenient online filing option with fees ranging from $50 to $100, depending on your state. 
• Apply for a local business license. Some states require you to apply and pay for a small business license before opening, so check with your local Small Business Administration office to learn about the processes and fees. Set aside $50 to $400 to be prepared. 
• Insure your new business. We recommend setting aside at least $500 to $1000 to purchase liability insurance. This policy is more than just paperwork; it protects your business in case of accidental damage during a repair. 

These administrative expenses can add up, so make sure you understand your state and county’s filing processes and fees before finalizing your financial plan. 

Remember that insurance and licensing fees aren’t one-time expenses! Plan to renew your licenses and policies annually, and include the divided cost in your projected monthly expenses. 

2. Finding a Location and Setting Up Shop

Securing a storefront is the next cellphone repair business startup cost on your horizon. 

While $20 to $25 per square foot is the general industry standard, the cost to lease or purchase a retail space for your repair shop can vary wildly. 

For example, a mall kiosk will be small, but its high visibility and foot traffic will mean higher rent. A larger, more affordable retail space farther across town will have room for additional workbenches and an upscale waiting area, but you’ll have to work harder to market your business and bring in customers. 

The initial costs of setting up your shop’s physical space include a down payment or security deposit, renovations, and furniture like workbenches and waiting area seating. Don’t forget to budget for ongoing costs like regular maintenance and utility fees to keep your shop looking clean and professional. 

3. Purchasing Repair Tools

Now that you’ve moved into your shop and set up your workbenches, it’s time to deck them out with the right repair tools. 

Budget $100 to $500 to purchase a mix of simple hand tools like screwdrivers and spudgers and more advanced tools like soldering irons and diagnostic devices. We also recommend setting aside a budget to replace or repair these tools as they wear out. 

4. Keeping Your Shop Well-Stocked

To get ready for your first repairs, you need a solid selection of repair parts on hand. 

Budget between $1000 and $4000 to place your first parts order, and make sure to stock replacement screens, batteries, and charging ports for the most popular smartphone model. 

For a profit-boosting cross-selling strategy, you can also stock accessories like cellphone cases, screen protectors, and extra chargers for customers to purchase after they pick up their repaired devices. 

To make the most of your inventory investment, use cellphone repair shop management software to monitor your stock levels, record your inventory spending, and track parts usage. 

Related read: 4 Best Repair Shop Management Software Solutions

5. Hiring a Team

Employing a team of trustworthy technicians is another major cellphone repair business startup cost. 

Pay for cellphone repair technicians can range from $15 to $30/hour depending on their experience, the local job market, and current economic conditions. To determine an attractive yet realistic rate for your shop’s technicians, take a look at online job boards to learn what your competitors pay. 

If you hire full-time technicians, be prepared to offer benefits like health insurance and retirement savings plans. You can expect to pay between $6000 and $8000/year to offer health insurance to a single employee. 

6. Repair Ticket Management Software

Ticket management software is a nonnegotiable cellphone repair business startup expense. 

This powerful tool is your best bet for running an efficient and profitable repair shop. It simplifies the device intake process, organizes your repair tickets, lets you assign repairs to your technicians, and updates your customers automatically about their repair status. 

Along with helping you manage jobs, an all-in-one management software tool can help you: 

• Process sales transactions quickly and securely
• Track your repair part and retail item inventory levels
• Manage a loaner phone service to boost customer satisfaction
• Monitor your shop’s financial performance

Repair management software subscriptions range from $20 to $200/month depending on your shop’s size and repair volume. 

7. Marketing Expenses

You’ve invested in the right tools and parts, hired and trained a team of expert technicians, and set up your repair ticket management software — which means you’re ready for your first customers. 

Unfortunately, attracting them isn’t always free. 

Since your repair business is new, we recommend setting aside $50 to $100 for Facebook and Instagram ads to raise awareness and bring in your first customers. 

Once you’ve built a small customer base, you can transition to a retention-focused marketing strategy. Launching a loyalty program, offering regular promotions, and sending email and SMS updates are affordable ways to build relationships with your customers and encourage them to choose your shop for all their cellphone needs. 

Relying on an all-in-one POS system to manage your loyalty program and promotions can keep your marketing costs low and make it easier to track the success of different campaigns. 

Example of a Budget for Cellphone Repair Business Startup Costs

Before you start crunching the numbers, check out this sample budget for a cellphone repair business startup. 

While actual expenses will vary depending on your location, shop size, and more, we hope these real-world estimates will help you make informed decisions as you start your small business journey. 

• LLC filing fee: $50
• Local business license fee: $150
• Liability insurance: $500
• Rent and utilities: $1,000/month
• Renovations and setup: $800
• Cellphone repair tools: $200
• Initial parts inventory: $2000
• Staff: $3500/month for one technician
• Ticket management software: $100/month
• Marketing: $50/month

With some wiggle room for unexpected expenses, you can expect to spend around $10,000 (minimum) to get your cellphone repair business up and running in the first month. 

Next Steps for Your Cellphone Repair Business Startup

You’ve explored the cost of starting a cellphone repair shop and crafted a thorough business plan. Now, it’s time to make sure your small business toolbox includes the right repair management software. 

Relying on a powerful software solution like CellSmart POS from day one will put you on the smoothest path to profitability. CellSmart POS is specifically designed to help you stay organized, shorten repair turnaround times, and grow your business. 

Schedule your personalized demo with one of our industry experts to see how CellSmart POS can set your startup up for success.