Cell phone repair is currently a $1.4 billion industry and is growing at twice the rate of the economy, according to research firm IBISWorld. Repairing mobile phones is a profitable venture, with inventory that lasts, low overhead, and technical skills that fall under the “day to learn lifetime to master” concept. But when considering starting your own cell phone repair business, when is a franchise the better option vs. a startup? Let’s take a look at a few basics when deciding.
Money Lets face it, it takes money to make money, and franchising is no exception to this rule
While many high earning franchises (especially in the food industry) offer $500,000+ multi-store commitments, (and with many easily reaching into the $1 million+ range) there is a strong market for a more mid-level franchise opportunity. A Dr. Phone Fix franchise for example estimates an all told initial investment of between $68,000-$135,000 including the one time $25,000 license fee. This includes a fully stocked inventory, tools and needed equipment, and of course a fully furnished store and façade, along with the POS system and 2 weeks of training.
If this isn’t in your price range, the cell phone repair industry is still a great place to be. The true startup cost for that first day, is simply the cost of parts, your time, and a customer. Once you begin to profit on your repair volume, you can scale up your business as you go along, but there are other factors where startups fall behind the current 2,400 phone repair businesses and their respective franchise opportunities.
Any cell phone repair company worth its salt has spent years building relations with their parts wholesalers, and Dr. Phone Fix is no exception. Many phone repair businesses have even grown to the point of vertical integration, wherein they own both the local parts distribution as well as the repairs shops. The access to prices, deals, volume, and quality will take years match if starting from scratch, and having a reliable distributor on your side can make or great your business when it comes to customer experience and quality of service. We’re talking the pros vs. ordering parts on Ebay.
Scalability and Branding
All right, so you want to start a phone repair business, here is the truth. There are a lot of people just like you. This industry is growing at an alarming rate and market saturation is imminent. Partnering with a company that already has brand name recognition, and the ability to scale out their store image through franchising is invaluable as far as long-term return. In many situations, unless you’ve thought of something truly unique that the 7,400+ phone repair employees have not, saving for the initial start up cost might yield a higher long term return than spending it over time on your own business. If you choose to franchise you would still own your store, pay yourself, and have the option of growing as success allows.
Owning your own cell phone repair shop is a great investment. The market will be there for years to come, the training is straight forward enough, and the profits are wonderful compared to most repair businesses. Most phone repairs take anywhere from 10-30 minutes for a skilled technician, and can yield a pretty heft profit per hour for your company.