The Pawn Shop

You have the idea. Maybe you have the experience. Maybe you watched “Pawn Stars” one too many times. You find a building, you start to envision the layout, the merchandise, the tons of money that you will make.

You have $100,000 and just know you can make a go of this, you are the pawnbroker of pawnbrokers, and you are the person who can sell ice to an Eskimo. You close the building deal. Maybe you buy it, perhaps a lease.

Reality sets in. Shelving is not cheap, cases are not cheap, security is not cheap, safes are not cheap, and software is not cheap.

You cut corners, go to auctions. Where you can save you do. Coming together now but as you look at your $100,000 it is going fast. The burn rate is higher than you anticipated.

You demo software, they all seem the same so you settle for what works and is cheap. You open your doors waiting for the millions to roll in. Reality hits you again.

Remember that you get what you pay for. The cheaper software works fine up front and that is what you need. NOT!

Once you start running your pawn shop you will run in to a plethora of issues that will not be evident up front to a new person in the business. The reporting on the back end or lack of it could kill your business before you realize you are dying.

  • Do you have a location ledger? When you locate the loan physically and in the computer, will you get a report so that tomorrow you can verify all the loans and purchases you did yesterday?
  • Can you generate a report to see which types of loans are being paid on or not?
  • Can you generate a report that shows your turns by categories on the sales floor?
  • Can you see the average loan on that item in your store?
  • Can you see the average sale of that item in your store? How long it took to sell.
  • Can you get a monthly P&L?
  • Can you send a reminder text to your customer to pay on their loan?
  • Did that increase the yield on your loan balance?
  • Can you text to advertise your current sale to a customer or send a discount coupon?
  • Do you need a client server environment with the server in another state?
  • The entity hosting your data, what are they doing with the names of your customers?
  • If your ISP goes down, does it impact you? Are you manually writing tickets because of this?
  • In case of a problem, what kind of support are you getting? Ask someone who uses their software.
  • When you get something not in the pull down, how difficult is it to add it?
  • What type of security levels can be assigned? Can you customize one?

These are the types of questions you need to ask your vendors. Ask them to show you how to do that. Remember you are talking to sales people. Their job is to sell a product. Your job is to build a successful business.

You would not sail a cruise liners without the right tools, don’t start a business with the wrong ones.

Jimmie Ford
American Jewelry & Pawn