Small pawn shop with secure storage

Customers needing short-term cash pay interest and fees. Bargain hunters and tradies buy unredeemed goods.

Interest and fees on loans, plus the resale margin on unredeemed items. Part of your start-up money is the cash you lend out.

• Valuing jewellery, tools and electronics
• Spotting stolen or fake goods
• Fair, clear dealings with customers in tough spots
• Basic bookkeeping and record keeping

• Pawnbrokers usually need a licence, and the rules differ by state and territory, so check yours first
• Check whether national consumer credit rules apply to your loans, and get legal advice on contract terms and disclosures
• Strict record keeping and police reporting of items often apply, so check what is required
• Risk of receiving stolen goods, so verify ID and follow your state's rules on holding periods
• Security of stock and cash, plus insurance for theft, public liability and contents
• Loans are lent out before you earn anything, so you can lose money if items are valued too high

Startup costs are estimated at typically around $90,000 to $250,000, depending on premises, security and how much you lend out. Monthly revenue is typically around $8,000 to $40,000 as an estimate, depending on loan volume and sales of unredeemed items.

Things to check include whether pawnbrokers need a licence in your state or territory, whether national consumer credit rules apply to your loans, record keeping and police reporting requirements, ID checks and holding periods, and insurance for theft and liability.

Useful skills include valuing jewellery, tools and electronics, spotting stolen or fake goods, dealing fairly with customers, and bookkeeping. As an estimate, plan on at least around 35 hours a week. You can lose money if items are valued too high.