Considering the opening of a repair shop

[hiltonizer]

Hi Everyone,

I thought i'd post here to get some input from individuals that are most likey to have experience with this:

I am currently a IT technician at a pharmaceutical company, making a little over 50k a year.... a great job by most standards, but I wasn't built to be a cubicle rat. The thought of 40 years of commuting hoping my 401k will pay off isn't my idea of a plan. I have always been tortured by the desire to just go nuts, and try and make my own way as a business owner. It's not hard work that bothers me, its the sense of enslavement.

Just this week, a good long term friend of mine, who is a special ed computer teacher got laid off. He didn't make even close to what I do, so the job loss isn't a big deal for him, unemployment checks should suit him just fine for a while. He's a real minimalist.

We have always loved the idea of just opening a repair shop, and doing whatever it took to get away from being a wage-slave. Now that he is unemployed, there is opportunity for both of us.

I don't have to loose my job to make a run at this, since he will be able to operate during the week while i'm at work, then I can just make myself useful on the weekends and evenings... and use my disposable income to keep the lights on while be build a customer base.

Im curious if any readers here have done anything like this in the past, or have any advice.

[30'06]

I have a good friend who is a Windows certified technician, builds and repairs PCs, networks, etc. and has been doing this for years. He is very good at what he does and very fair to customers but he'll tell you straight up that it takes time to build clientel, that sometimes it is long time between jobs of any worthwile $, and that the majority of people's tech repair understanding is limited to Dell's online phone support and/or the Geek Squad.

So he keeps his day job and works his computer side job as needed/called. And then there are those customers who aren't the most reliable in payments.

Also, most of his work comes by word of mouth so as you rightly mentioned you will need to build a client base.

I'm not trying to discourage you in the least, but you did ask for advice and my friend's experience certainly speaks to your request.

[Mjölnir]

A shop is one of the harder ways of doing it. You have to man the store during business hours and as such you're limited in your ability to do on-site service. With two of you, it'd be easier to get around that. Alternatively you could set up a workshop at home and operate from there. On site only.

As 30'06 said, one of the hardest parts of a new business is developing the customer base to a sustainable level. You need to research your target market and competition (among other things) in the area that you wish to operate. How much competition is there? Are they good? Are people happy with them? What don't they offer that you might be able to provide? Are meny people in that area dependent on computers? Do they have the money to spend on repairs? etc, etc...

You guys will have many more questions arise as you consider this more seriously. The best idea that I can offer is to write up a business plan. To complete a good business plan, you'll need to consider all aspects that are important to the business. At the end of that process, both of you will have a much better idea if it's a sustainable idea for your area.

Here's a file that I found very useful in completing my own business plan. Print it out and start working through it. You might need to omit or include one or two things, but apart from that it's very helpful. Good luck

http://rapidshare.com/files/90282554/BUSPLAN.TXT.html

[montanatim]

I've owned my own repair business in the Philly area 5 years ago, before I moved to Montana, and Mjolnir makes a few good points.

First off, I did all my work on site, and that eliminates a huge amount of overhead right there. You have to pay fuel, but you need to put on a lot of miles before it adds up to $1000 monthly rent for a small store front. Plus, many people still like the idea of you coming to them, it's more personal, and it saves them a whole lot of time.

Also, you have to know what the people in your area can, and are willing to spend. For example, I still do a lot of repairs, but the area I live in has about 70% of the population far below poverty levels, and the other 30% are way above the poverty level. The people I do the work for now fall into the lower income group, maybe they inherited an old 350 mhz P-2 and are trying to do everything they can to keep it running so their kids can type on it or do whatever they can with it. Needless to say, I don't make any money, but I look at it more as volunteer work. Even if I was in it for the money, it just wouldn't work out since the people just plain can't afford it, and even if I had a shop, people wouldn't travel 30 miles from the city to get to it.

As far as what 30'06 said, building a client base is by far the most important thing. Your reputation will make or break you. I advertised heavily my first year in business, but after that, I found that I had more than enough referrals to keep me as busy as I wanted to be. As far as advertising, the yellow pages is the most important thing, you can supplement it with newspaper ads, but generally newspaper ads are best for specials on systems or upgrades, whereas the yellow pages is what people pick up when little Johnny can't do his homework because mom and dad weren't using a surge protector and an electrical storm rolled through and now the computer smells "funny."

Another thing about reputation, if you do a great job for someone, they'll probably only tell one or two other people about it, if you rip someone off, or do poor work, they will tell at least 10 other people about it, if not more. A way that I got customers who bought systems to refer me, was to offer them some kind of upgrade to their system, if they referred a friend and that friend bought an equal or better system. You offer each buyer a different upgrade, and if it works, you end up with enough parts to build a used system, and, since you know all the components' background, you can sell with a warranty and you really don't lose any money.

Another thing about working out of your home and doing everything on site, is your stock can be kept to a minimum. If you walked into a shop and they had 3 systems on display, a few processors, a few motherboards, and basically enough other stuff to fill a coat closet, would you do business with them? I always kept 3 complete systems on hand, a "budget" model, "mainstream" model, and "high end" model. If someone called about buying a system, I'd take the proper one or two to their house, show it to them, and if they bought it, I could have a replacement built within a few days for the next call. Same with power supplies and everything else. If a customer had a bad motherboard, and it was in, let's say, a 3 year old computer, I could tell them that I could order the exact replacement board and have it in 3 days, and they'd still be 3 years behind the times, or, for not much more money, they could have a new board, with new technology, and have it repaired while they wait. That way, you're not special ordering everything, but you're not stocking $20,000 worth of parts that you may never need.

If you decide to go through with it, best of luck to you. It is a great way to meet people, in fact I'm best friends with a few of my old customers from the Philly area, and 3 of them have been out to visit since we moved to Montana. On the bad side, having a business IS a lot more work than working for someone else. Like Mjolnir said, make a business plan and try to figure in everything you can.

Oh, and as far as enslavement, I think when you have your own business, you're much more enslaved. If I have a bad day at work now, and write a bad program, no big deal, I fix it and move on. If, on the other hand, I have a bad day fixing a virus on someone's system and end up losing their "priceless" wedding pictures, then I'll pay for that for a lonnnnnggggggg time (see my comment above on how many people someone will tell if you do bad work for them.)

Hope this helps, and once again, good luck.

Tim

[Mjölnir]

Originally Posted by montanatim

First off, I did all my work on site, and that eliminates a huge amount of overhead right there. You have to pay fuel, but you need to put on a lot of miles before it adds up to $1000 monthly rent for a small store front. Plus, many people still like the idea of you coming to them, it's more personal, and it saves them a whole lot of time.

I do a similar thing. If I can do the work onsite within an hour, then I do that. If it's gonna take longer, I take it back home where I have a well kitted out work space. Working from home has the added bonus of being able to share some of the business expenses with your personal usage. Internet, phone, rent, electricity, etc, etc.

Originally Posted by montanatim

As far as advertising, the yellow pages is the most important thing, you can supplement it with newspaper ads, but generally newspaper ads are best for specials on systems or upgrades...

I have a different experience. For me newspaper advertising was a massive waste of money. I've had about half of my customer base through distributing flyers in the mail and the other half has been word of mouth referral. A very good ratio. All that depends on what sort of exposure each form of media gets and how you present your business. Ultimately you're going to have to do a couple of trials to see what works for you. Can be an expensive learning curve, but once you hit your mark you'll be flying. Another good suggestion would be to talk to other people with small businesses in your target area and ask them what kind of success or failure they've had with it. Might be that things like radio advertising or business networks are the most effective in your area. Either way, don't expect something that works in one place to be as effective in another place.

Got friends who can help with their skills or who work in places that can benfit you? Lean on them for favours. You'd be surprised at how far a slab of nice beer will get you. More often than not, they're delighted that you came to them for help.

Originally Posted by montanatim

Another thing about working out of your home and doing everything on site, is your stock can be kept to a minimum. If you walked into a shop and they had 3 systems on display, a few processors, a few motherboards, and basically enough other stuff to fill a coat closet, would you do business with them? I always kept 3 complete systems on hand, a "budget" model, "mainstream" model, and "high end" model.

Alot of that depends on what the target market needs are, but I do agree that by running a home based business you can get away without much stock. To put a different spin on what Tim has said, it'd be risky for me to hang onto three complete systems because most of my customers want to spend as little as possible rather than upgrading. Only 33% of people in this area are computer literate so many of them see their PC as a little box kept in a dark corner. Suits me. I keep a handful of common hardware and software on hand and that's it. PSU's, RAM, HDD's, AV software and a range of other tidbits. If they want something else, I either buy locally or mail order it, depending on price and time constraints. Again, all that really comes down to the needs of your own target market.

Originally Posted by montanatim

If you decide to go through with it, best of luck to you. It is a great way to meet people, in fact I'm best friends with a few of my old customers from the Philly area, and 3 of them have been out to visit since we moved to Montana. On the bad side, having a business IS a lot more work than working for someone else.

So true. I like doing barter deals. I had deals going with my local butcher and a local golf pro. You scratch my back and I'll scratch yours. You probably won't notice the bad stuff so much 'cos you'll control your hours and won't have a boss breathing down your neck. If you can handle the responsibility, running your own business can bring great satisfaction. Take note of procedures you've learnt in the past jobs and consider why those places used them. They can be valuable in protecting you from your own mistakes.

There are a bunch of guys in here who run successful computer businesses. If you know what you're doing, plan well and stay organised, it's easy as pie to outshine competition in your area. Plenty of cowboys out there without a clue.

[bosamar]

I'd say if you are running a successful business you won't have much time to freqeunt this forum! All joking aside.

There are plenty of books out there that will tell you how to run a successful business. One major point is keeping good records. It will come down to customer service and the quality of your product. If you can achieve high markrs in both cases you business should do well.

I have no idea where you are located. If in the US then rules are different from state-to-state such as creating a LLC. There is plenty of support in the US for new business owners. In the larger metro areas there are clubs where small business owners meet to discuss and share their experiences.

Good luck.

[supercat]

I have been selling systems for several years on the side. Repairs are the only real profit making part of computer business, and I like the idea of offering incentives to customers who refer people. Fix em like they are your own, do it right. People will come back. The biggest thing hurting small computer repair is the fact that folks sometimes just ditch their old computer and get a cheapie at the local Mall Wart. In one day they sold 30 laptops at a special price. Small town, so you can imagine how much business that took from folks like us. Best of luck, and I can certainly identify with not wanting to be enslaved. Go for it !

[Compman55]

I am no expert by any means at this but I can offer a few things from my experiance.

I was an HVAC technician and could not take it anymore. I up and quit without having anything lined up nor did I devote any time for analizing my local market. I just slapped an ad in the yellow pages with the effect of mobile computer service & onsite repairs, did near perfect work, charged too little, and ended up getting more refferals from word of mouth than from the yellow pages. I made business cards and always gave out 2. Each had $5 off your next service, and people actually did the advertising for me thru passing the cards out. Flyers are a great success and garage sales & block sales are key advertising. You sell a bunch of used systems cheap with your card on the side and your company info under the support properties in the system tab.

I did end up getting a good full time job in sales and still do repair strictly by word of mouth now. I gave up on the effort in getting work and just let it flow. In my area, the in home computer repair is not good enough for full time because people would rather buy a new system for $500 than get theirs fixed. All the local colleges have in house IT staff, and schools and large institutions are already contracted out to huge IT companies. Unless you are good with large networks, I would consider how much home repair you can do. It certainly could be a nice side business for you, but for full time it may be difficult.

If you have it all in the networking end of things, then I think you will be ahead of the game. I see even the large compnies send out "parts changers" techs and they scratch their heads with the new spam servers and mail servers.