How to Start Mobile Phone Business

Mobile phone business is not yet saturated.

Few years ago, having a mobile phone was a luxury and was exclusively for rich people. Acquisition of mobile phone could be regarded as capital expenditure then because of the cost implication of getting one. I remember that the company I was working for bought Nokia mobile phones for all its Directors that time. The cost ran into several thousands of naira and we were asked to capitalise it. Today, the story about mobile phone has changed. Without a mobile phone now, our dressing seems incomplete. That is, mobile phone has become more or less a necessity of life. Apart from little kids who may not understand the functionality of mobile phones, everybody actually need a mobile phone. Let’s briefly talk about why mobile phone is a must have for everybody. This will help you see why starting a mobile phone business will be a good business idea. Mobile phones are used for various purposes. Among the usefulness of mobile phones are:

  • Making and receiving calls: There is no doubt that this is an information age. People need access to information almost immediately. One of the ways people communicate is by makings calls. For instance, a person wants to go for a visit, he may like to confirm if the person is available before he sets out. You want to buy something; you place calls to confirm the price and the availability of the products. It might be that you want to pass an important information to someone else.
  • Sending and receiving text messages: At times you may want to quickly pass information to another person but you are not in an environment where you can talk. In such situations, people send text messages. Also, text messages are used to pass the same information to many people at the same time. For example, a business owner may like to inform his customers about arrival of new products.
  • Sending and reading mails. Supposing you want to send long messages which you cannot send through short messages, people use mobile phone to send and read mails. It is very fast compared to sending letters by posts.
  • People use mobile phone to surf the internet. There is nothing you want to know that you cannot find on the internet. Internet is actually a resource centre where all sorts of information can be accessed. Whether you are a student, a lecturer or a professor in the university, you will get the information you need if only you can surf. Mobile phone with data enabled will allow you to do this.
  • People use mobile phone as clock. Since the time I have started using mobile phone, I have lost taste for wrist watches. I believe that I am not the only person in this category. In fact, if everybody is like me, there will not be any market for wrist watches any more.
  • Mobile phone can be used to set alarm and reminders. Possibly you have an important meeting or an event that you want to attend in a future time, you can use your mobile phone as alarm to remind you. Also, people use mobile phone to set alarm to wake them up in the morning.
  • In this era of social media such as Twitter, Facebook, Instagram and so on, mobile phone seems handy to quickly connect with other people. Some of these social media platforms are actually connected to phone numbers. So, could there be a better means of connecting to other people on social media? Of course, there are other ways but the use of mobile phone is very effective. While on the go, you are constantly in touch with your friends or fans.
  • If you operate mobile banking, you can use your mobile phone to conduct transactions real time.
  • Other usefulness of mobile phone includes voice recording, video, taking of photographs and selfie, checking of weather reports or forecast etc. Your mobile phone can also be used as a torch, radio or media player. Mobile phone can be used to store and retrieve important information. Mobile phone can be turned to Bible or Quran. This list is still growing.

I hope I did not bore you with all the points listed above. It may look like a digression. I actually want you to see why starting a mobile phone business may be a good business idea for you. Any business idea that provides people with solutions is actually a good business idea. If a business idea is not adding value, no matter how brilliant such idea is, it will not work out. So, with all the usefulness of mobile phones listed above, you can see why mobile phone business will continue to thrive.

Now, let’s go back to our main topic; “How to Start Mobile Phone Business”.

To start a mobile phone business, you need to do the following among others:

Register your business

I will say your mobile phone business remains a mere dream until you register it. There is something I have realised about business name or company registration. It gives you a sense of commitment to your dream. Immediately you register the business, it becomes more real to you. It does not matter the form of legal structure the business takes, the most important thing is that you need to register the business. The popular forms of legal structure of business are sole proprietorship, partnership or a limited liability company. Each form of legal structure has its own legal and tax implications. It is better you contact an attorney or an accountant to advise you on the legal structure that will best suit you.

Read Also: Factors Affecting Choice of Legal Structure of Your Business

Develop a business plan

Whatever type of business you want to do, I will always encourage you to develop a business plan no matter how brief it may be. Planning is a core aspect of any business that will succeed. If you don’t plan, what you don’t plan for may crash your business. A lot of small businesses fail not because the business ideas are bad, but for the lack of adequate planning. If you want to start a mobile phone business, you need to decide on the type of mobile phones you want to sell. Do you want to sell new mobile phones or used mobile phones? This decision alone will affect many things. It will determine your initial capital requirement, target customers, sources of supplies and other things. Imagine you fail to take this into consideration before you venture into mobile phone business, it can bring about frustration.  Part of your planning will involve asking people that are already in the mobile phone business vital information that can help you in your own mobile phone business. Don’t assume that you know it all. You may be surprised that a piece of information can make the whole difference in the business. With a business plan, you can even approach investors and lenders to raise capital for your mobile phone business. No serious investor or lender will just throw money at you without you having your mobile phone business plan in place. Therefore, the seriousness begins with you. When you have a business plan for your mobile phone business, people will take you more serious.

Raise Capital

With the help of your business plan, you will be able to know the estimated amount you need to start your mobile phone business. Your first source of capital is your personal savings. I expect anyone that wants to start a business to have personal savings. In case you don’t have liquid cash, you can sell part of your liquid assets such as stocks and other securities to raise the initial capital. If you actually believe in your business idea, this should not be difficult for you to do. The truth is that, if you can’t prove to others that you believe in your business idea, it may be difficult for you to convince other people to invest in the business. One of the ways you can prove that you believe in your business idea is for you to have your own personal equity. Your personal equity is your own cash contribution into the business. If this is not enough, you can then approach other people such as friends, colleagues and relations. However, if you want to receive money from these people, it is important that you define the relationship properly. Will the money be a capital contribution? If it is, it means that they are part owners of the business and that qualifies them to share your profits with you. If it is a loan, you are required to define the repayment terms. Is it going to be interest free? If it is not, you need to ascertain the interest rate. Peradventure, it is a gift; you should let them understand that the gifts should not be seen as equity contribution. This is very important.

If you still can’t raise enough capital through these means, you can then approach banks or other lenders. I advise that you should not rely on loans to finance your mobile phone business. The loan interest can cripple the mobile phone business.

Choose location

Location is very crucial to the success of a mobile phone business. Mobile phone business is not a home based business idea except your house is located by the road side where there is heavy foot traffic. If your house is located in such place, then you can run your mobile phone business as a home based business by opening a storefront. Otherwise, you need a shop in a strategic location.

Read Also: How to Choose Business Location for Your Business

Source for suppliers

The type of mobile phones you will sell will determine who your suppliers will be. If you want to be selling new phones, you may choose to place orders directly to the manufacturers. But this will require that you buy in large quantities. In case you don’t have that kind of capital, you can locate distributors and negotiate prices with them. It is important that your cost price is relatively low so that your prices can be competitive in the market. And you will still be able to sell at profits.

If you want to be selling used mobile phones, you can buy from individuals who want to sell off their used mobile phones and from other suppliers. People change their mobile phone for various reasons. The reason that is more prevalent among the reasons people sell their phone is the release of new mobile phones. Possibly the new mobile phone has more features. Selling either new or mobile phones carries its own risks. The release of new mobile phone usually impacts on the prices of the existing mobile phones. That is why it is important you don’t overstock. You also need to keep yourself updated about the trends of mobile phones.

If you sell used mobile phones, you can be exposed to additional risk of buying stolen mobile phones. It is not always advisable to buy used mobile phones online. You should be able to check the phone details before making payments. Before you buy a used mobile phone, you need to find out if it is active in any network. You can check the details of any mobile phone online through ESN and MEID.

Apart from selling mobile phones, you can also add other mobile phone accessories such as batteries, mobile phone skins, belt clips, face plates, chargers, adapters, cables, modems, memory cards and headsets.


Although mobile phone market is very huge, it is becoming more and more competitive. Your target market includes children, students, parents and public professionals. The type of mobile phones you sell will determine your target market. To market your mobile phone business, you can print and distribute flyers within your locality. Having a website for your mobile phone business is another step in the right direction. If you have the money to invest in ecommerce website, this can boost your revenue. However, if you sell used mobile phones, people will like to check the physical mobile phone that they want to buy before they make payment. That is why ecommerce website may not be too relevant for a used mobile phone business. You can also take advantage of free social media such as Facebook, Twitter and Instagram to reach your customers.

Further Analysis of Mobile Phone Business

To help you further in your decision whether starting a mobile phone business will be okay for you, I like to do this further analysis about the mobile phone business. I will use the combination of certain business analysis tools such as SWOT Analysis, PESTEL Analysis and Porter’s Five Forces Model. This time around, I will not focus on any business analysis tool. I will only mention some factors which I consider relevant to mobile phone business. So, if you are contemplating starting a mobile phone business, you need to take these factors into consideration.

Capital Requirements

You need capital to start your mobile phone business. This is not a business idea you can start without capital investment. It is important you rely more on equity capital than loan capital even though it is available. The interest on loan, if too high, can drain your profits thereby making the mobile phone business unprofitable. Mobile phone business is lucrative but the way you finance the business can determine whether the business will return profits or losses. Another thing you need to consider is the amount of capital you need. I mentioned that you need to develop a business plan for your mobile phone business. With the business place, you will be able to estimate your capital requirements to certain degree. Your capital should be able to cover the cost for company registration, rent of shop, cost of painting the shop, fixtures and fittings, the cost for buying initial inventories and your working capital. You need to set aside enough working capital to meet the day to day activities of the company. This is because, it may take some time before your business starts generating enough profits that will help you finance your recurrent expenditure such as salaries, utility bills and transportation expenses.


Don’t under-estimate the impacts of your competitors on your mobile phone business. You should consider the strengths of your competitors; their brands, size, capital base, market share, pricing, location and so on. If your mobile phone business is too close to a competitor who is too strong for you to compete with, you may not be able to attract enough customers. The only thing that can help you is if you are strong in the area of its weakness. However, you still need to consider the possibility of the competitor turning its weakness into strength. To be at a safer side, it is better to locate your mobile phone business in a place where the competition is less fierce.

Read Also: PESTEL Analysis And How It Can Be Used

New Entrants

People tend to focus only on the existing competitors when analysing their business ideas without paying attention to the effects the new entrants may have on their business. The same way you are planning to start a mobile phone business, you should understand that other people may be doing the same thing. Even if you delay a bit, you may be surprised to see a new shop selling exactly the same things you are planning to sell. Therefore, you should not overlook the power of new entrants. In mobile phone business, there is free entry and free exit. The only limiting factor may be finance. Do you have enough capital that will make new entrants to find it difficult to compete with you? If you don’t have robust capital, another person with good capital base may start a mobile phone business close to your shop and suddenly take over the market. Because of adequate capital, he can afford to buy inventories in large quantity. This may qualify him to enjoy quantity and cash discounts. This in turn will allow him to sell at lower prices and you may not be able to match his prices.

Economic Factors

There are different types of mobile phone in the market. There are cheap phones and there are phones that are very expensive. Therefore, it is important that you understand who your customers are. What is their income level? The kind of mobile phone you want to sell should match the disposable income of your customers. Their disposal income will determine their ability to buy a particular mobile phone. What is the level of employment in your country? If people find it difficult to meet the basic needs, there is no way they will be thinking of buying a mobile phone.

Also, you have to know the prevailing interest rates. If interest rates are too high, it may be too expensive to consider loans as a way of financing your mobile phone business. The same thing goes for the exchange rates. You know that all the mobile phones being sold in the market are imported. The exchange rates affect the prices of all the mobile phones that you sell. Therefore, if the exchange rates go up, the mobile phones prices equally go up. If the prices go up, will your customers still be able to afford to buy the mobile phones?

Technological Factors

Hey!, If you are not conversant of technological trends, you may not need to start a mobile phone business. Mobile phone business is technologically driven. There are different brands by different companies in the market. You should keep your ears open to the news about new products release. Every time a new mobile phone is released into the market, it has effects on the prices of the existing mobile phones. To avoid obsolescence of your inventories, you should know the right products and the quantity to stock per time, so that you don’t experience a sudden price fall of your inventories.

Support Services

This is the secret you need to know about starting a mobile phone business. Customers like buying their phones where they are guaranteed of warranty and supports. If you can provide after sales service to your customers, they will be willing to buy from you. Warranty gives your customers assurance that you are selling quality products. No one likes risking his money on buying something that will not serve them its purposes. No matter how stiff the competition may be, if you can succeed in distinguishing your mobile phone business in the area of customer service, the odd is that you will be preferred to others.

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