How to Manage a Pawn Shop

Pawn shop business is more lucrative in hard economic times.

It is always heyday for the pawn shop owner when the economy is in the tank. This is a recession hedge-kind of business which thrives in hard economic times. Individuals who can't borrow money from the bank use their household goods as collateral to obtain a loan. Customers can also hawk their property at the pawn shop. It is a highly profitable business if you know how to manage it properly.

Instructions

1. Ensure you have enough staff to serve customers satisfactorily. Advertise job openings when you need to employ. Because a pawn shop has to deal with sensitive valuables including jewelry and gems, you must screen new employees to ensure their honesty. Conduct a background check before you can interview prospective staff. Employees must also be hard-working and team players. Train new employees to ensure they can independently handle customers.

2. Evaluate jewelry, precious metals, gems and electronics you take from customers. You must also teach employees how to assess the value of items and propose loan amounts to customers. Teach your employees how to use the Internet to determine the value of items if they are not sure. Ensure employees consult you before issuing a loan or payment involving a substantial amount of money. Remember that apart from the interests on loans, your profit derives from items you purchase or those that customers do not claim. Examine the products you purchase for resale or receive carefully.

3. Issue receipts with a description of the items from customers, the amount loaned and repayment date. Use the pawn shop software to record items and keep track of transactions. The software is important on your pawn shop computer if you want to manage your business efficiently and effectively. Place customers' property in a secure in a storeroom. Only display them when they are not claimed.

4. Give your workers specific duties. Make a schedule for your employees to ensure they know when they need to report for work. Customer service is also very important. Ensure your employees greet and assist customers. While employees are doing their work, you should monitor sales, inventory and inventory-taking. Reconcile cash receipts and sales to ensure you're not losing any money from theft.

5. Be security conscious when conducting your business. Pawn shops are usually targeted by armed robbers. Ensure cameras are working all the time. Cameras may not protect you from an armed robbery, but they will help trace criminals if you are robbed. Don't keep your cash in plain site. It is also important to have an armed security guard in the shop. Alternatively, keep a gun near you for self protection. It is not advisable to take the law into your own hands, but when your life is threatened you can protect yourself. In some pawn shops senior employees carry unconcealed weapons.

Tips & Warnings

• Receiving property suspected to have been stolen may land you in trouble. Call the police, if possible, whenever you suspect someone is trying to pawn or hawk stolen property.

References

• My Majors: Pawnbroker Career Information
• HD News 12; Security Measures for Risky Pawn Shop Businesses; Melissa Tune; October 15, 2010
• National Pawnbroker Association: Code of Ethics
• Get Job U.S.: Pawn Shop Employee
• "Wall Street Journal"; How Small Businesses Hire Employees; Sarah E. Needleman; April 28,2011

Resources

• National Brokers Association: NPA Best Practices for the Pawn Industry
• Pawn Shop Today: How the Pawn Process Works