Laying the foundation: How to start an estate sale business
So, you’re looking to make the year ahead truly something special. You’re considering your next move as a new or hopeful business owner and despite the challenges you may be facing, you’re keen to begin your journey.
Today, we’re going to discuss in detail how to start an estate sale business. We’ll be going over important legal concerns, the kind of company structure you may wish to pursue and how to enter the market as a new business.
Let’s start by defining an estate sale agency
Often confused with an estate agency, estate sales services are related to the appraising and selling of a person’s assets following their death. It is the duty of an estate sale business to provide a service that allows for a person’s assets to be quickly, consistently and fairly appraised at a suitable value and, if required by the client, to arrange for their sale on their behalf.
These kinds of businesses help to provide a service that takes the burden and stress off the shoulders of the individual who would otherwise be left with the duty of handling the deceased person’s estate. They also help to ensure that important affairs are managed during a delicate time.
Starting with your plan
Before entering into this kind of industry, it’s important you begin with a frank and robust plan on how you intend to operate your company. For most hopeful business owners, capital is an initial concern; a problem for an industry like this where it can take a significant amount of time for your initial activities to produce a payout. The business may also require the hiring of administrative support staff to help process your activities and client requests. Therefore, if you’re looking for advice on how to start an estate sale business that can rapidly provide profit, you may be disappointed.
Key blockers in terms of time to profit for estate sales companies tend to revolve around digital marketing campaigns, licensing, permits and legal disputes or issues and complications surrounding insurance for your company and staff. Keeping staff paid and your operation continuing while you begin to make money can also be a challenging task, with many people each year seeking advice on how to start an estate sale business where they are not threatened by cash flow concerns.
Scoping your service
The predominant way in which estate sales companies make money is by taking a percentage of gross sales from an estate. This percentage can vary significantly, with some companies taking a quarter or less and others as much as half. The fee you require should be in part determined by the kind of service you offer. Some companies offer full cleaning and disposal services, necessitating a higher fee to cover the training and employment of extra staff. This means there’s no one hard and fast rule on how to start an estate sale business; you’re free to shape things to your goal, vision, skills and starting money.
These ancillary areas will require more of your time and that of your staff, but they do offer an opportunity to diversify your business, see it stand out from the competition and to generate more profit from each client you work with. It’s up to you as the person seeking advice on how to start an estate sale business on where to draw the line.
Understanding your legal requirements
There’s no one answer for people who are looking for legal information on how to start an estate sale business. The legalities of this kind of operation are linked intimately to legal procedures surrounding the passing of a person, meaning that they are prone to significant differences depending on your state or country.
In the USA, it’s most common for business owners in this industry to begin their company by forming a legal entity. This is essentially a type of business structure and may entail a person being a sole trader and proprietor or working in partnership with a business partner or team of professionals.
One of the key benefits of having a corporation or LLC set up for your business in the USA is that you are provided with a degree of protection from personal liability should your company be sued by a third party. The costs of establishing this kind of company will vary depending on where you establish your business, meaning you’ll have to do your own region-specific searching for exact clarification on how to start an estate sale business in your area. It’s also important at this stage of your company’s operation to ensure your taxes are in order, which will once again involve a varying degree of research depending on your location, business structure and services.
When operating within an industry like this, it’s vital that you develop and maintain a healthy network of connections to key services like brokers. These people are crucial for selling and appraising assets. If you’re looking to hit the ground running, one of the most important lessons you can learn about how to start an estate sale business is that you can’t move your assets without a network of buyers in place.
Fortunately, many companies are well-versed in working with estate sales businesses. As you navigate the legal and marketing setup for your company, it’s worth spending some time networking online and in-person where suitable. This can involve going to events, arranging meetings with company owners and sending mailshots or other forms of contact to companies you may wish to work with in the future. It’s an important part of how to start an estate sale business and it’s best to cover it sooner rather than later.
Starting this kind of company is challenging, but very doable if you adopt a careful, measured and consistent approach to the creation of your business. We wish you the best of luck in your endeavours and if you need business financing once your company is up and running, Idea Financial can help.