Customers work with estate sale companies because they need to quickly dispose of an estate’s contents. Tag sale companies and estate liquidation firms are other names for estate sale companies. After experiencing a sudden life change, such as a divorce, a quick move, the death of a loved one, etc., clients start a tag sale business.
Every item in the house is given a price tag by an estate liquidation company, which also finds buyers. The public may attend the sale, which may last one day or several.
You need to know a lot before starting this business. Let’s get going! This article compiles a straightforward manual to assist you in starting an estate sale business from scratch and growing it into a successful enterprise.
1. Recognise The Dynamics of The Market
Knowing the market dynamics will make it easier to decide whether it is worthwhile to enter this sector. You must balance the benefits and drawbacks of the estate sale market. You don’t want to start a business and then quickly shut it down. You should be aware of the trends and obstacles influencing this industry because of this.
Find out how much money is needed now to start an estate sale company. The price varies according to the company’s size and location. However, this business requires between $20,000 and $15,000 in startup capital. A large sum of money will be spent on the purchase of equipment, marketing, branding, and storage space. You will require a truck to transport goods to the auction site, a cash register, a desk or table, stationery, and a computer for your business.
Consider the entry barriers and whether you can manage them as you assess the dynamics of this industry. Consider your company name if you are certain that this is a venture you would love to pursue.
2. Select A Business Name
Your company identity is conveyed by your business name. It serves as the trademark design’s foundation. It has a significant role to play in the development and perception of a brand. The best course of action is to pick a company name that succinctly expresses your goals, objectives, and services.
Your target audience should receive the appropriate messages from a good business name.
The best option would be to select a name for your company that has the potential to forge enduring bonds with clients. Consider using a short, memorable name for your company because it will be the first thing customers will encounter.
Here are some tips on how to come up with ideas for your company name:
- Choose a word that can be expanded upon.
- Avoid geographic names because they may have an impact on future expansion.
- Pick a memorable name
- Pick a name that is brief and simple to remember.
- To improve SEO, try including words like “liquidate” or “estate.”
You can quickly create the name of your estate sales company using online tools. Once you’ve decided on a name for your company, start branding it.
3. Create a Business Plan
The success of your company depends on having a solid plan for how to run it. It enables you to map out the requirements for starting your business, such as the funding, target market, company name, etc.
To have a successful business, it would be best if you budgeted for both the initial costs and ongoing expenses. Create a budget for the personnel you will need to hire, the cost of workspace rental, the cost of creating your logo, licencing fees, permit requirements, and insurance costs during this phase.
Determine your target market during the planning process, as well as how to contact them. Your choice of location and method of operation will depend on your target market.
You must realise that a business plan serves as a road map for starting your estate sales enterprise while keeping the main objective in mind. Create a concise business plan to help potential partners and investors understand your company’s mission.
If you have trouble writing a business plan, think about getting professional assistance. You can look for a business plan expert on websites like Upwork, Fiverr, and freelancer.
4. Declare Your Estate Sales Company
Making your business official through registration completes the process of launching a company.
You should think about the location where you want to register your estate sales business before registering it. Revenue, taxes, and legal requirements may vary depending on location.
You must select a business structure that will work best for you during this phase. Corporations, limited liability companies (LLCs), sole proprietorships, and partnerships are the most typical business entities. Your choice of business entity will affect your personal liability, taxes, and registration requirements. The best business structure for new entrepreneurs is limited liability.
5. File Your Taxes
To register for taxes, you must obtain a federal tax identification number or employer identification number. If you have registered your sales estate business as a sole proprietorship business entity, you may use your social security number (SSN) as your employer identification number. You can now select your tax year using your employer identification number. Consult an accountant if you have issues filing your taxes to make sure you are following the law.
6. Establish A Business Bank Account
Consider where you’ll keep your money. The best option is to keep it in the bank, but first you must open a business account.
Based on their offerings, banks vary. It’s easy to open a business account for estate sales. It will be simpler for you to file taxes and carry out other accounting duties if you have a business bank account. You can divide your personal assets from those of your sales estate business with the aid of the performance. In the event that the business is sued, protecting your personal investment is crucial.
In order to choose your preferred plan, it would be best if you enquired at the bank of your choice about its rates and features.
You can now get a business credit card after opening a business account. Your estate sales business expenses will be collected on a business credit card, which will assist you in keeping your business and personal expenses separate. You can also use this account to establish your company’s credit history. A strong credit history can aid in future fundraising.
7. Set Up A Phone
Just as crucial as opening a business account is setting up your phone system for your estate sales enterprise. Instead of answering calls on your private line related to business, there are better options. It’s a useful method for keeping your personal and professional lives apart. Particularly when you greet a business call with a greeting you use with friends, it appears unprofessional. Additionally, you expose yourself to getting business calls every single day.
You don’t want to choose an expensive phone service because you are just starting out in the estate sales industry. You can increase the level of automation in your company by installing a phone system. Additionally, it improves the legitimacy of your company and makes it simpler for potential customers to find you. Numerous businesses provide phone services to small businesses. However, their prices vary depending on the phone’s features and usability. Pick a service with reasonable prices.
8. Obtain Business Licences and Permits
Legal prerequisites for operating an estate sale business include business permits and licences. Make sure to obtain the necessary business permits before starting your business. If not, you risk getting fined or having your company shut down. The state and local governments have different requirements for licences and permits. As a result, you must contact the county, city, or town clerk’s office.
Products will be sold by your company on behalf of your customers. Thus, a consignment agreement should be signed by both you and your clients. The details of the arrangement between your estate sales business and the clients are specified in the agreement. It would be best to be familiar with other contracts, such as consignment and service agreements.
Before starting any project with a client, your estate company also requires that they sign a service agreement. Clients’ expectations, payment conditions, service level expectations, terms, and property ownership are all explained in this agreement.
9. Business Insurance
Business insurance is essential because it safeguards the financial stability of your company in the event of a covered loss. Depending on the type of business, there are many different types of policies. The most popular type of insurance you can start with is general liability insurance. It covers a wide range of business-related aspects, making it the most comprehensive insurance. Because it helps cover the costs of liability claims that may be made against your estate sales company, it is sometimes referred to as commercial liability insurance.
For example, a client may suffer an injury while on the property of your business. General liability insurance will come in to help you cover the costs of that claim if he files a lawsuit against your company.
If you have hired staff to assist you in running your business, you might want to consider purchasing worker’s compensation insurance. Employees who sustain injuries at work are offered insurance by compensation insurance. Workers’ compensation insurance provides financial assistance to employees who are unable to work due to illness. For instance, worker’s compensation insurance can assist in paying your employee’s medical expenses if he sustains an injury while lifting heavy objects while performing work-related duties.
10. Promote Your Business
Marketing is key for new businesses. It will help in boosting customers and brand awareness. To begin with, build a professional website. Ensure you state what your business does and where its located, and encourage response. In the modern world today, social media has offered a good platform for promoting business. Therefore, ensure you link the website to your social media accounts such as Facebook, LinkedIn, and Instagram. Begin by creating engaging posts that feature and advertise your products.
When conducting marketing to pique the interests of consumers, concentrate on unique selling propositions. It’s also a good idea to try to attract customers to your estate sale business. Calling them on the phone will enable you to do this. Hire a social media manager to help with marketing tasks if your budget permits. A social media manager can be hired by going to websites like Upwork, freelancer, and people per hour. Additionally, you can post your job ad on employment websites like ZipRecruiter or Indeed.
11. Make contacts
The success of your business depends on networking. You should look over your professional and personal networks and get in touch with people who might have connections to estate sales if you want your business to succeed. Sending mailers to businesses you want to work with, setting up meetings with business owners, and attending relevant events are all examples of how to do this.
Untapped business opportunities may present themselves through your network, such as meeting new clients with whom you can form a partnership. Some of your friends may already be involved in this line of work, and they can offer you helpful advice that will enable you to succeed in this field with ease. Others might provide you with connections to the industry that you might not have found elsewhere.
Without a network of buyers, it is impossible to run an estate liquidation business. As a result, you must create and keep a strong network of brokers. They are crucial for asset valuation and sale. A strong network will help your estate sales business take off quickly.
12. Create A Solid Team
You might need to hire a group of employees to help you manage your estate sales business as your business expands. You can establish jobs like marketing lead, estate sales executive, and general manager depending on the demands of your company.
Making sure customers can easily find your company’s website is the goal of marketing lead work. They are in charge of SEO optimisation and social media marketing.
Estate sales executives are in charge of establishing and negotiating contracts, closing deals, and enlisting new prospects.
With the aid of a general manager, you can manage administrative responsibilities such as hiring, firing, client support, bookkeeping, and scheduling, among others.
These positions might need to be filled immediately or as your company’s needs change. You can work with recruiting agencies if you are having trouble finding qualified candidates. You can also find and hire the best candidates using free methods, such as posting job ads on social media sites. If your budget permits, you can post job openings on premium job boards like Indeed, Glassdoor, and ZipRecruiter.
13. Plan Your Business’s Strategy
Liquidating an estate can be difficult and exhausting. However, it will be simple for you to get rid of the items on your list if you design a good system from the start. The best approach is grouping comparable items with price tags on each one. Make sure to do your research to determine a fair price before you assign an item a price. You should be able to accurately assess the worth of any antiques, works of art, furniture, office supplies, collectibles, books, electronics, and other items that are part of an estate that is being sold. You must therefore take the time to investigate sales items for appropriate pricing.
In the liquidation of estate sales, timing is also crucial. You can reach out to a large number of potential buyers by holding an estate sale when many clients are likely to be available. So holding an estate sale over the weekend or on a holiday may be a good idea.
To reach a large audience of buyers, you should also make proper advertising before the deadline. You are more likely to have estate sales if more people attend your sales event. The client whose estate you are liquidating, the buyers of the items, and the referrers who are most likely to recommend you to others should all be your main targets when selling your business.
Make the most of your ability to manage crowds and stay organised to set up and manage the sale, as well as to lead a team under pressure.
To prevent thefts that could result in the loss of items, make sure to have the highest level of security during the estate sale process.
14. Scoping Your Service
Taking a certain percentage of the gross sales generated by an estate is the most typical way that estate liquidation businesses make money. The type of service you offer will determine the percentage you charge. If you offer complete disposal and cleaning services, you are allowed to charge a higher percentage. The benefit of running an estate sale business is that you can mould it to fit your vision, abilities, and objectives while also starting to generate revenue. You must make the entire estate sale alluring and presentable if you want to increase sales. Selling damaged or clean items will make it easier to find buyers than selling damaged or good items. The way the items are packaged can either increase or decrease the value of the entire sale.
Conclusion
Building a prosperous estate liquidation business can be difficult. It requires a clever business strategy and an effective marketing strategy. Adopt a well-thought-out, sensible, and dependable strategy when starting your estate sale business if you want to succeed in this industry. Before putting a price on the items being disposed of, do extensive research and develop a strong network. You’ll see success with your estate sales business sooner than you think! Good fortune
