View Full Version : Business plan and loan

06-18-2008, 05:11 AM
So I decided to get an office/store. Basically a small to medium sized space where most of it is a work area to repair computers and a small store front with some computer parts/supplies. Nothing real major but efficient. The location I am going into has no "established" store or computer service center. They all have to make a hefty "journy" to get to these places.

So I am building a business plan to show potential investors (e.g. banks) and was just wondering if anyone had some suggestions on the financial aspect of a shop like this. (e.g. forecasting sales etc.) I have draft setup but I want to ensure all the numbers add up correctly and is actual. I have done some investigating on my own but its hard to get industry specific and market specific figures. Just wondering if anyone has went through this and might have some pointers.


06-19-2008, 03:36 PM
First, I owned a small appliance repair business for 17 years. I know a little about how to start a store. A good friend of mine had his computer store right next to my store.

Honestly, you won't get a loan from a bank unless you put up your house for collateral (if you do that you are just asking for trouble, never, ever let the banker talk you into this). You could go to the SBA or SCORE.

See, you are just looking at rent maybe $400-500 per month. But, add on yellow pages, advertising, employees, inventory, credit card machine, an accountant, a monthly bank charge. Signs and sign permits. Now you are talking about $1,500-2,000 per month.

It isn't worth it. You will not make any money the first year. You will piss away money and won't know what happened to it. People will abandon their computers in your store. Make sure you have an upfront charge.

Unless you already have an established number of customers and monthly maint. accounts of $4,000-5,000 forget it. You will spend all of your time being a business owner not doing repairs. Forget about selling computers, people are very sauvy about prices you might being giving the stuff away and they will want more off to buy and never today.

My friend hired his own sister-in-law and she ripped him off about $6,000. Stay mobile and stay independent.


06-19-2008, 04:37 PM
It isn't worth it. Stay mobile and stay independent.

I was going to post the same thing - I couldn't agree more. Using my hourly rate and the costs Peter outlined above, I would have to do 25-30 hours just to cover the expenses of the store. Even if you do get 30hours + of extra work, you'll still be busting your balls 24/7, 7 days a week. To add to the list above, you'll also have to pay gas/electricity/business rates aswell as sort out some decent security.

Do you work from home at the moment?

06-19-2008, 07:08 PM
Yeah I work at home at the moment.

I see your guys points and have thought of those myself, nice to get some feedback on it form others.

I was thinking of offering flat rate drops offs at my location, e.g. pull in 5 computers a day average and charge a flat rate, therefore the drop-off repairs will let me work more productivity and not standing by at a customers house while a virus scan or patches are updated etc. I should be able to work on 5 computers at a time etc. The thing is is getting the average amount of computers coming in. It seems a little high and tricky to get those computers coming in.

A couple reasons, most people expect for a tech to come out, this is the way its been for years, or always pretty much.

And its kind of a hassle for someone to pack their pc up and bring it in.

But I think with the right aggressive marketing you could convince ppl the value of bringing it in. I mean I would not have to charge them as much, plus I can get more done for them I would have more resources at my finger tips in office and would be able to do tunes-ups and diagnostics for them more fully. Also customers will know the price and not be worried about some hourly rate.

This also would give a chance to retail, customers coming in might see a procut while in the shop even if its just a 5 dollar mouse etc. that they may purchase.

I dunno I am still trying to work the numbers etc.

06-19-2008, 10:04 PM
an awful lot of "maybe"s and "i think that" in your last post. those are words that commonly precede others like "rejected" and "not approved" by "investors". Not to sound to hard or snarky but banks aren't investors in your business. They are more akin to bond holders than stock holders (true investor). I agree with the other guys for the same reasons. A store front will be an endless pit for you to throw your money into. Unless you plan on living there, it won't ever pencil out on paper for you.
Also, trends evolve because they work. The trend of having the technician come to your house to fix your computer is not one for you to look at bucking while trying to convince a bank to loan you money.
And one last point:
"But I think with the right expensive marketing you could try to convince ppl the value of bringing it in." There fixed that.

Sorry if this message is impolite... a little sleep deprived the moment.

06-19-2008, 10:27 PM
Everyone else has been right so far, for the most part. Don't just get a storefront because you want one. Get a storefront because you NEED it.
That's the only way it'll work.

I've said this several times on several different posts, but I have a storefront. The only reason I have a storefront is because in my specific location it works and IS necessary. I'm making a decent enough living and the storefront isn't a burden to me, but I very much consider my business the exception because of a few factors.

06-19-2008, 10:39 PM
The only reason I have a storefront is because in my specific location it works and IS necessary. I'm making a decent enough living and the storefront isn't a burden to me, but I very much consider my business the exception because of a few factors.

Can you identify those factors and your necessity just for a greater understanding of what circumstance would make a storefront make sense. I don't doubt that it's working for you at all. I just think people would like to understand the factors that play into your decision to have the store front.


06-19-2008, 11:07 PM
Can you identify those factors and your necessity just for a greater understanding of what circumstance would make a storefront make sense.

In my particular situation, there are a few reasons. The first is by far the most important.

1. I have a university directly across the street, with a student population of 50,000. Not counting faculty. Most of the students in the area don't have cars, don't have time to have someone come to them, or can't arrange for repairs in their dorms. They come to me because they can walk here between classes, studying and after school jobs.

2. I service laptops. It's not uncommon for me to have several (most so far was 13 in one day) laptops on my bench in various states of repair. I could do this easily enough in a workshop at home, but at a huge cost of space. Again, since I have the student population, bringing a laptop is no problem to me and isn't something I repair on-site anyway.

3. I don't own a home, and don't have the space to have a workshop in my apartment. The cost of an apartment big enough would be similar to the cost of what I pay for my current shop. Additionally, insurance is easier to manage (with renting, having a business partner, etc.)

4. My rent for my office is AMAZINGLY low for where I am. I'm one of the few places in the area with parking.... heat, water, trash are all paid. I pay a VERY low flat rate on electricity. The only extra bills I have are internet and phone. I could never have hoped to be so lucky with the location when I was planning things.

There are a few other things, but they don't make it necessary, just nice. Even though I wanted to be my own boss, I like the structured office hours and set work schedule. (that's not to say I don't work after hours). The image of having a shop is that I'm slightly more established than someone who doesn't (even if it's not true).
Finally, I can host some awesome lan parties here! :D

06-19-2008, 11:35 PM
irst of all, don't worry about being harsh with me. I can take constructive criticism and actually love it. It really gets minds thinking....

I understand all your replies and agree with you all %100 percent.

I guess I will put a little more detail into my situation.

I came back from a year in Iraq and was immediately discharged from the ARMY within that first year back it was tough for me and my took off to Germany with my 1 year old son unexpected and filed for divorce. I spent the majority of last year fighting for my son with a lot of trips to Germany. Unfortunately the courts there will not bring my son back to me.

So I lost my job last year and got rid of all my bills while taking on this endeavor. I have now been starting from scratch this company. For the last 4 months I have been able to somewhat establish myself without much main stream methods. (e.g. marketing, etc.) I have a logo, I have a licensed business name, I have book-keeping and accounting system, I have work orders etc. I have been able to pull in enough customers and cash to support my self for the last few months by word of mouth and hard work. Most of my marketing is really cheap methods and person to person types.

This has given me the opportunity to see the market and experience the industry in my market for ah wile and learn from it.

What I learned is most of the established companies here are doing pretty well but they don't have anything that sets them apart from others. The other thing I learned is they don't have "Great" locations so customers rarely come in to their shops. They don't have anything special in their shops for sale but misc. items and their shops look very unorganized and not friendly.

There is a part of town here that is growing and has a good amount of wealthy residents. I wont go into exact numbers but I think it could easily support a local shop itself. I wont rely on that as the outside area is also very good potential market and would be great edition to it.

So about the marriage and son part. This has made me very determined to be successful because it pretty much put me back no square one where I can start fresh. I have major motivation to do well so I will be able to go see my son in Germany as much as I want. I know most of this type of store/shop will not give ppl the ability to leave to Germany like this because it takes a lot of time and work and will not actually be a get rich company.

But I have used the last 4 months to really build a solid business model that should eventually if I follow through with the plan give me these things I want.

Now the question is if a shop right now in this location going to do more harm then good.

I think the market I am thinking of needs a local shop there. I think a great location offering great exposure will draw customers into me with the location alone.

I have been living with my father since all this happened to me last year. He a highly respected IT consultant and network designer and supports me %100, my brother who works as an IT tech for a local mid sized company recently got his degree in Computer Science and is willing to come on ship with me %100 and make sacrifices with me. I don't have much bills, I don't pay rent, I have a couple hundred dollar credit card bill and car insurance and thats about all my bills.

I have thought about living in this office but since my father offers me free stay that is not a big concern.

I want to utilize the loan to afford the startup costs of a new store and pay the rent for a few months while the rest is going towards aggressive and yes expensive advertising to gain the cash flow needed in a few months. I really think this location will bring it in if done right but as I have learned doing my business plan, market research, sales and finance forecasting etc. that there is no amount of research forecasting you can do that promises you the futures.

I do believe with the right idea, location, plan and ultimately "hard work" it can be done though.

Please any comments harsh or not is appreciated.

06-20-2008, 05:16 AM
I think you have a noble goal, and long term you can have your store front or your successful business. The question I guess everyone is asking is will the storefront bring you the money where it covers its own costs, (A few thousand estimated by the others) How many jobs does that take? If you make $100 off each job.. will it bring you 20 computers a month? The nice thing about this business I find is the overhead is low to begin with, a store front takes away this advantage.

I would love to know this information before I risked my nest egg on such a venture..

What do your potential customers currently do for their computer needs?

What are the demographics of the area?

How many computer part sales do I need, to make being a store worth while?

How much more will I have to charge for things compared to the big stores, (BESTBUY, circuit city, walmart etc.) to make a profit on the item?

Changing nothing else how many customer leads a month am I expecting the store front to generate for me with no additional advertising?

Its good you are following your dream, from what you say you certainly have what it takes to have a successful business. I would just think some more research is in order before taking the plunge.