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Joseph@Dagon
08-01-2011, 07:41 AM
OK, so here's my situation ATM.

I'm looking into opening my very first store here in Sydney, Australia.
I've been working mobile for a little over a year. Business is good. Income is great but I have always wanted a shop.

I found a place for rent on the busiest road in Western Sydney. The shop is 100sq metres. It is already decked out with floating floorboards, ducted aircons, data cabling, alarm etc. All i would basically need to do is paint interior and exterior, put up window signs and signs on the roof, move in all the furniture and computers and start advertising.

According to my calculations, a $20000 loan is enough to get me started (this includes the first 3 months of rent, electricity, insurance, phone and internet).

The rent is between $550 and $600 p.w (still negotiable). This price includes taxes and outgoings.

There is no other computer store for a good 10km radius. There are plenty of businesses in the area. It's actually one of Sydneys largest industrial and commercial suburbs. If i target mainly businesses in the area, i know i can get a good cashflow. But it would be a waste to only target businesses as there is alot of foot and car traffic on that road.

My plans are to start small with repairs and support, establish myself and then eventually holding a large amount of stock, reselling all computer products. The shop is big enough for it. I would also sell online, while still providing repairs and support to the community.

My heart is saying "DO IT!" but my head is saying "Don't be an idiot! You're paying no rent right now. Spend that $20k towards your mobile business and you will probably be better off".

I don't know what to do. I feel that if i wanted to open a shop, now would be the best time for it. If i don't open it and a year later someone else opens a store in the area (and is actually busy) i would hurt myself!

But then if i open up, and the business doesn't do too well, i would hate myself for getting into this mess in the first place.

Ugggghhh I'm stressing so much over this ****! Someone help please.

Trenatos
08-01-2011, 07:47 AM
It sounds like you've done some research.

If I were you, I'd make sure to have at least 6 months rent + utilities saved up just in case, and then go ahead and do it.

Of course make a big splash with your old customers that you now have a shop, come on by to check it out (Including a We-just-opened-promo-discount) etc. etc.

callthatgirl
08-01-2011, 07:52 AM
Just wondering about the loan, why do you need that you think?

I would try to figure out how to do it without the loan, my first office was $650 a month and I just marketed harder to make that pay for itself.

I'm excited for you!!! How fun to get into the shop!

Joseph@Dagon
08-01-2011, 08:08 AM
Just wondering about the loan, why do you need that you think?

I would try to figure out how to do it without the loan, my first office was $650 a month and I just marketed harder to make that pay for itself.

I'm excited for you!!! How fun to get into the shop!
$650 PER MONTH??? Woah! You will not find anywhere is Sydney for less than $1000 per month, and even then it would be in a very crappy suburb, hidden behind trees and probably infested with termites.

The $20000 loan will cover the first 3 months of rent, electricity, insurance, phone and internet. It will also pay for paint, any electrical work, signs, furniture, computers, printer, surveillance installation, website/hosting, cards/flyers/promotional stuff, advertising, some basic stock and some left over cash if needed.

It would be quite hard to do it without the loan i think.

RichmondTech
08-01-2011, 12:19 PM
Best of luck securing the loan. I'm in the same boat as you, but credit is just too tight for small businesses in the US right now. I am going to privately finance this expansion just as I've financed prior expansions. Would be nice to use other people's money for a change.

If you open the shop and continue your mobile business, who watches the shop while you're out doing service calls? I don't think you can just close up in the middle of the day and not expect some unhappy customers.

Joseph@Dagon
08-01-2011, 02:50 PM
Best of luck securing the loan. I'm in the same boat as you, but credit is just too tight for small businesses in the US right now. I am going to privately finance this expansion just as I've financed prior expansions. Would be nice to use other people's money for a change.

If you open the shop and continue your mobile business, who watches the shop while you're out doing service calls? I don't think you can just close up in the middle of the day and not expect some unhappy customers.
I will hire a technician (my future brother in law). He still needs abit of training, but working instore with me for a couple of months will get him all the training and experience needed. I trust him to run the shop for the hour or two when I am out doing onsites.

The planning of the shop is well thought out. My best friend is a marketing genius and he is going to help me out a fair bit in that department. I have all my suppliers on board. Once the loan is approved I am pretty much ready to rock n roll.

But there's just something in my head which is freaking me out. I am scared so much and stressing out at the fact that my business might bust.

That is the worrying part.

Tony_Scarpelli
08-01-2011, 04:39 PM
OK, so here's my situation ATM.

I'm looking into opening my very first store here in Sydney, Australia.
I've been working mobile for a little over a year. Business is good. Income is great but I have always wanted a shop.


I was to the point of taking appointments all day and taking some pc's home each night to repair while eating dinner. Girl friend got tired of stepping over pc's and parts in the house. So I got a shop with $500 rent. It was a flexible lease with only a 1 year term.

Thing is that you need to be able to hire a jr tech to handle the store....no big deal but they should be able to answer the phones, check in pc's, explain a diagnoses and get authorization for repair, do the repair and collect the visa or cash when done.

I presume you are still going to continue to do your out calls. This worked for me.


I found a place for rent on the busiest road in Western Sydney.

I had four shops and paid the most rent to a shop on a major highway. My clients didn't respond as well as I liked on the heavy traffic location. Apparently people hate busy intersections.


The shop is 100sq metres. It is already decked out with floating floorboards, ducted aircons, data cabling, alarm etc. All i would basically need to do is paint interior and exterior, put up window signs and signs on the roof, move in all the furniture and computers and start advertising.

Perfect. You might ask the landlord to paint the store for you in exchange for your signing a lease. If you feel a better price is available the way to handle this is to give him a letter of intent to lease the store. Which just states your intention to try and negotiate a lease.

Then in a separate letter you begin your negotiations. Things you might ask for are:

Paint and maintenance (plumbing or hvac) to perfect the store.
Lower rental rate initially or over all. Specify what you want to pay. I'd start about 75% of what he offered.
Free rent for a few months, I always ask for 1 month for each year on the lease. If he has a good sense about you he might even help out with the signs and put it in additional rent which lowers your upfront capital requirements.
Break out clause which states if you do not achieve a specified minimum amount of sales within 6 months you can give 30 day notice to cancel the lease. Expect to pay back all free rent and costs for any lease improvements if this happens.


According to my calculations, a $20000 loan is enough to get me started (this includes the first 3 months of rent, electricity, insurance, phone and internet).


I got my Chrome retail display racks from Sam's Club $69 ea. Tech bench I built from counter top material $99 ea 10' and ran the cat 5 myself. I also got power strips that plug into the wall and then mount on the wall and give 12 outlets without hiring an electrician. Bought a tool box for organizer. Used 2x4's to make triangle mounts to mount the counter top to the wall. Very simple and inexpensive.

I believe that the tech area should be separated by the check in area so that the customer doesn't try to talk to you and ask questions while you are working, nor see the disorganization that is sometimes present. We put a one way mirror in the wall to monitor customers while working on the bench plus we have a bell on the door to alert us when someone comes in.


There is no other computer store for a good 10km radius. There are plenty of businesses in the area. It's actually one of Sydneys largest industrial and commercial suburbs. If i target mainly businesses in the area, i know i can get a good cashflow. But it would be a waste to only target businesses as there is alot of foot and car traffic on that road.

yellow pages and web SEO will both help with getting the retail customers to call you. When I get a phone number for a new store I always request an old number that is easily associated with that geographical area. I find customers will quickly scan for the prefix that they recognize as close by and call them first.


My plans are to start small with repairs and support, establish myself and then eventually holding a large amount of stock, reselling all computer products. The shop is big enough for it. I would also sell online, while still providing repairs and support to the community.

I was probably making close to $10k per month when I decided I needed a shop. At that time I was only spending about $2000 per month so I had saved enough to open with cash and buy inventory. You can probably open with your credit line on your visa. I'd avoid buying more inventory than what you absolutely need at first. For about $2000 you can get enough hardware to build two complete pc's and have 10 power supplies, 2-3 hard drives and some memory for upgrade sales.


My heart is saying "DO IT!" but my head is saying "Don't be an idiot! You're paying no rent right now. Spend that $20k towards your mobile business and you will probably be better off".

If you were to spend it towards your mobile business, what would you do with the money?


I don't know what to do. I feel that if i wanted to open a shop, now would be the best time for it. If i don't open it and a year later someone else opens a store in the area (and is actually busy) i would hurt myself!

But then if i open up, and the business doesn't do too well, i would hate myself for getting into this mess in the first place.

Ugggghhh I'm stressing so much over this ****! Someone help please.

OK don't stress. If there are computers in the area then you can make money fixing them. If you don't do this someone else will. Do it.

Go to tech tools on this site and read what and how many of us are using tools to make our lives more productive, go to marketing and get some ideas.

Good luck.

Tony_Scarpelli
08-01-2011, 04:53 PM
I got so excited to answer you I didn't even read the rest of the posts till now. Sorry to repeat what others have said.

One last bit of advice. I am a generous person and I always want to pay my friends and family top dollar for everything. Thing is that you really need to pay what the market requires not what you want to pay.

I recommend paying market wages for a Jr tech to your bro in law. Around here we pay about $8-$8.50 per hour and $7.25 is minimum wage. A 3 year experienced bench tech might make $11-12.

Being a self employed owner, you need to practice being a little stingy to preserve cash. Once you have allot more cash you can always do something nice for people who help you get there.

n3rdism
08-02-2011, 06:18 AM
$650 PER MONTH??? Woah! You will not find anywhere is Sydney for less than $1000 per month, and even then it would be in a very crappy suburb, hidden behind trees and probably infested with termites.

The $20000 loan will cover the first 3 months of rent, electricity, insurance, phone and internet. It will also pay for paint, any electrical work, signs, furniture, computers, printer, surveillance installation, website/hosting, cards/flyers/promotional stuff, advertising, some basic stock and some left over cash if needed.

It would be quite hard to do it without the loan i think.

Yeah I'm oz too my store is nearly $650 a week, need any more advice on starting in a shop, I've done two so far

Joseph@Dagon
08-02-2011, 01:35 PM
Yeah I'm oz too my store is nearly $650 a week, need any more advice on starting in a shop, I've done two so far
Hey mate, great to hear! Where is your shop?
How busy are you guys? And do you find it tough with the $650 rent?
That's the thing scaring me the most. I've never paid rent in my life.
According to my calculations, to pay off my rent, electricity, phone, internet and insurance, I need to make $110 per day. I will be open 6 days a week. My virus removals cost $130. Callouts to home are $90/h and businesses $130/h.
Does this look familiar to yours?

andcorptech
08-02-2011, 01:40 PM
I recommend paying market wages for a Jr tech to your bro in law. Around here we pay about $8-$8.50 per hour and $7.25 is minimum wage. A 3 year experienced bench tech might make $11-12.
.

You forgot we in Australia have laws which screw us. I just put on a casual and checked with the fair work authority and his casual wage is $19/hr minimum. I pay any less than that and i can be sued. He is 23 though so not a junior

Knightsman
08-02-2011, 02:26 PM
you have done a great job in your research and pulling this all together. But I CAN NOT stress this enough.

You need to have capital for at least 6 months, if not a year. Some people can start with nothing, but most businesses fail with this model.

Every wise business Man or Woman that I have ever spoken to states having 6 months. Because it might not be the first 2 or 3 months that's hard, it might just be the 4th or 5th when the dazzle of the new store goes away, then its your brand that keeps the income coming.

Joseph@Dagon
08-02-2011, 03:09 PM
you have done a great job in your research and pulling this all together. But I CAN NOT stress this enough.

You need to have capital for at least 6 months, if not a year. Some people can start with nothing, but most businesses fail with this model.

Every wise business Man or Woman that I have ever spoken to states having 6 months. Because it might not be the first 2 or 3 months that's hard, it might just be the 4th or 5th when the dazzle of the new store goes away, then its your brand that keeps the income coming.
That's great advice. The loan will cover the first 3 months atleast. I already have another 2 months worth of capital in my account. I should be covered for atleast 5 months, possibly 6 if i dont use all of the loan up.

Quick question for those who own a shop. How many computers on average would you work on in a week?

sedigital
08-02-2011, 07:06 PM
We work on an average of 30-40 computers per week, in addition to this we have about 5-6 managed services agreements for a total of between $4000-6500 in monthly service revenue. In addition to this we've been averaging about $20,000 in monthly hardware revenue at 30% markup for an extra $6000 in gross profit.

Our expenses are $1500 for lease (1,800 sq ft.), $400ish for phones, $200 for internet (got two ISP's into the building), $3400 for wages (not including my own), and then we have a $20,000 operating line (which we're usually not far into). Plus there's always things that popup, so I'd say there's about an extra $1000 a month that get spent on things like paper, toner, unforeseen things, marketing/advertising, etc. Also, most businesses around here like to charge on account and then pay you back so that $20,000 line comes in pretty handy.

We are not in a major urban center, but we are in a town of about 15,000 people and we're right on the main st.

Here are some things I want to change... I want parking for my customers - being on a main strip allows for virtually no parking for our customers. I want better building visibility - currently because we're on a main strip we kind of look like a hole in the wall that everyone whips past in their vehicles. I want more efficient use of space - we are in an 1800 sq ft space that is only 15.5' wide, 116' long (I figure if we had something more like 35 x 35 that would be much better).

Hope some of that helps. I would probably start by making sure that there's a revenue stream before opening a retail store front as well - test the market.

Joseph@Dagon
08-03-2011, 01:28 AM
We work on an average of 30-40 computers per week, in addition to this we have about 5-6 managed services agreements for a total of between $4000-6500 in monthly service revenue. In addition to this we've been averaging about $20,000 in monthly hardware revenue at 30% markup for an extra $6000 in gross profit.

Our expenses are $1500 for lease (1,800 sq ft.), $400ish for phones, $200 for internet (got two ISP's into the building), $3400 for wages (not including my own), and then we have a $20,000 operating line (which we're usually not far into). Plus there's always things that popup, so I'd say there's about an extra $1000 a month that get spent on things like paper, toner, unforeseen things, marketing/advertising, etc. Also, most businesses around here like to charge on account and then pay you back so that $20,000 line comes in pretty handy.

We are not in a major urban center, but we are in a town of about 15,000 people and we're right on the main st.

Here are some things I want to change... I want parking for my customers - being on a main strip allows for virtually no parking for our customers. I want better building visibility - currently because we're on a main strip we kind of look like a hole in the wall that everyone whips past in their vehicles. I want more efficient use of space - we are in an 1800 sq ft space that is only 15.5' wide, 116' long (I figure if we had something more like 35 x 35 that would be much better).

Hope some of that helps. I would probably start by making sure that there's a revenue stream before opening a retail store front as well - test the market.

Great advice! The more and more i read into this, the more i understand that i may not be ready for a shop.

I think I will focus more on the mobile side of things for now, but target the area where i was planning on opening a shop. If business is good for the area, then i am definitely opening a shop, no second thoughts.

Tony_Scarpelli
08-03-2011, 02:11 AM
You forgot we in Australia have laws which screw us. I just put on a casual and checked with the fair work authority and his casual wage is $19/hr minimum. I pay any less than that and i can be sued. He is 23 though so not a junior

Ouch! I know a lot of techs here who would come over there for a job if they could.

pceinc
08-03-2011, 03:11 AM
If I had it to do all over again I would not open a store-front. At the most I would have a commercial office. I was 21 when I opened my store-front. I lived there 7 days a week. Eventually I wanted a life and started dropping hours. I'm now open M-F 9-5. As my focus changed to primarily support business clients I quickly realized the store-front is like a ball and chain. People expect you to be there. On the other hand, businesses expect you to be available. I have not taken a proper vacation in 4 or 5 years.

At the end of the day it all depends on what client you want to support and what is important to you. If it's business, a store-front is not necessary. If it's residential, a store-front gains trust among clients and provides a barrier between family and work.

TechLoopPC
08-03-2011, 06:06 AM
... As my focus changed to primarily support business clients I quickly realized the store-front is like a ball and chain. People expect you to be there. On the other hand, businesses expect you to be available. I have not taken a proper vacation in 4 or 5 years.

I just opened a store about 2 months ago and couldn't agree with this more. If you have someone to run your store this is not and issue...but if you're a one-man shop like myself you have to make the choice between service calls and store hours. Thankfully, I hate doing on-site service calls so I enjoy being at the store and avoid service calls like the plague. When I work at the store I have a full set of tools at my disposal and I feel less-rushed. I do get a lot of customers that like to hang around and talk when they pickup their system, but that's not always a bad thing (unless were really busy) - it keeps me in-touch with the world and gives me a chance to up sell other services that might interest them. I also feel like I spend half of my day answering the phone - I have learned to keep conversation very brief and do everything possible to get them to physically show up to your store, that's the only way you're going to make money.

My setup sounds much smaller scale then what you're proposing (I'm in a small town on main street, 1,100 population).

Make sure your math makes sense (as far as number of profitability, at the current rate I'm going I could never make a realistic living, but I'm a part-time college student so it works out fine for me and no other job could offer this kind of flexibility.

n3rdism
08-03-2011, 12:01 PM
If you hire a junior technician as a trainee can be around $9 an hour and is 17 years of age

andcorptech
08-03-2011, 04:10 PM
If you hire a junior technician as a trainee can be around $9 an hour and is 17 years of age

True, but 2 things stop me from doing this. In the area we are in, the majority of 17 year olds that are available to work the hours I need are not skilled or to put it bluntly not "working" material. And secondly , to now put someone on as a trainee you need to have a formal agreement which is registered and pay for them to have the correct training at an approved institution ie TAFE.

To pay someone $9/hr to diagnose and repair computers PROPERLY is not exactly going to attract anyone decent in my opinion, as they can earn more than more than that at your local supermarket.

I know many business owners who just pick a pay rate and pretend that its the fair and legal one for that job, and many employees just work at that rate with no problems. I also know at least one business that did this and ended up having to close after his employees took him to court and ended up in owing over $25000 in backpay. For this reason I have been pretty diligent in checking the appropriate rates for my employees, even to the point of calling Fairwork Australia twice to see if the same info was provided.
On top of this, after gathering all the information I could from Fairwork Australia, I find out that as I require my employees to open up and close without supervision at times, they move to level 2 in their award which is then an even higher payrate

Tony_Scarpelli
08-03-2011, 07:10 PM
If I had it to do all over again I would not open a store-front. At the most I would have a commercial office. I was 21 when I opened my store-front. I lived there 7 days a week. Eventually I wanted a life and started dropping hours. I'm now open M-F 9-5. As my focus changed to primarily support business clients I quickly realized the store-front is like a ball and chain. People expect you to be there. On the other hand, businesses expect you to be available. I have not taken a proper vacation in 4 or 5 years.

Ok a few things you can do to have a life

Open 9am rather than 7 or 8.
Close 6pm rather than 8pm
M-S six days a week.

You can do this with two people. SO if you are just opening, you can do it yourself and soon as you have a single trusted employee, or a wife or girlfriend who can work for you split the hours.

It is not required that both people are techs. One person can actually watch the store, check in computers, give information and let customers pickup repaired computers and take payments.

Or One manager/owner and one Jr Tech can run the store those hours. I have each employee work 41 hrs a week. The manager often works 45. The opening shift is performed by a manager/owner. Goes to lunch and does out call appointments when the 2nd person comes in. When he returns the 2nd person can take their lunch. so the store can be open 9 hrs a day six days a week, while both people only work an 8 hr day and 5 days.

Saturdays and wen. are the slower days so one employee can take Wens. and the owner can take off Saturday. Saturdays are just to clean up whats left from the week in most cases. As you are more successful there are weeks that you might not take a day off mid week to catch up.

The retail business and even the business to business has seasons and it is often easy to predict slow weeks. Every year since I began 17 years ago, July and Aug have been dog ass slow. So that is when I take family vacations. Prior to 2008 recession I would hire an account temp tech to backup and be supervised by my full time employee but keep the store open. As of late I have decided to just post my vacations 3 weeks out and close for holidays and vacations.

When I cannot get a temp employee, I often have my brother or mother baby sit my store and employees. They simply spell my tech for lunch and if my employee doesn't want a bunch of over time that week, we close that Sat.

My business clients are more likely to miss me so what I do with them and call my larger accounts and tell them I am going out of town is there anything that needs attention before I go?

On the other hand Sept, Oct, Nov, Dec, Jan and Feb are my high months and if I take a vacation then, I do need a 2nd productive tech or at least a non tech baby sitter who can handle all the phone work so the tech can be more productive. Even my jr techs can bench 6 machines a day and at $180-200 ea that is $1000-1200 per day and that is high season for me. Even though I have days of over $3000, they are not the norm.

I just opened a store about 2 months ago and couldn't agree with this more. If you have someone to run your store this is not and issue...but if you're a one-man shop like myself you have to make the choice between service calls and store hours. Thankfully, I hate doing on-site service calls so I enjoy being at the store and avoid service calls like the plague. When I work at the store I have a full set of tools at my disposal and I feel less-rushed. I do get a lot of customers that like to hang around and talk when they pickup their system, but that's not always a bad thing (unless were really busy) - it keeps me in-touch with the world and gives me a chance to up sell other services that might interest them. I also feel like I spend half of my day answering the phone - I have learned to keep conversation very brief and do everything possible to get them to physically show up to your store, that's the only way you're going to make money.

My setup sounds much smaller scale then what you're proposing (I'm in a small town on main street, 1,100 population).

Make sure your math makes sense (as far as number of profitability, at the current rate I'm going I could never make a realistic living, but I'm a part-time college student so it works out fine for me and no other job could offer this kind of flexibility.

I found that even with 3 people in the store there are times we cannot handle every call, so I have a sign to put in the window that says out for 15 minutes for immediate service call xxx-xxxx. Then We actually close the store long enough to go pickup a computer. Wichita is 330k population so that is not small but we can get anywhere in under 10 minutes. So if working alone or my manager is working alone and gets an out call we do one of three things, schedule it to be after work today at 6pm, or tomorrow morning before 9am or if we have too, we close the store long enough to go see it, diag it and pick it up if necessary.

When we are this busy I just visit the client, diag the problem on site and then offer to bring it back to the shop for a repair at reduced rates. If I stay on site it is $120 per hour, back in the shop its $60 per hour so most jobs over 1 hr, they would rather me take it back to fix it anyway.

Avoid time wasting phone calls: First don't give parts prices over the phone. Your business is not selling for $1 profit to gamers who will end up buying on line. I specifically do not carry game parts or video cards for this reason. I am almost rude to young male, gamer callers as they will kill your productivity. You are not going to sell them parts at a reasonable market, you are not going to fix their stuff with very few exceptions, they are not your customer.

Likewise, I am not bestbuy or walmart so i do not want to have a half hour conversation with a customer on the sales floor about which hd, video, or power supply to buy. When asked, I inquire how it will be used, make my recommendation and then give some body language which indicates ok lets go, that is is, pay for it. I could fix another computer while wasting time with tire kickers in the store.

On the phone to an inquire I basically say "We do a free checkup and virus scan" Our minimum charge is $39.99 for the first 30 minutes and $59.99 per hour beyond that. We stop at the 30 minutes and call you for authorization if it requires more attention that that.

To the how much does it cost if questions I simply say lets address that when we get there. Keep it short and sweet.

bagellad
08-03-2011, 09:27 PM
don't bite off more then you can chew, if you have to take a loan to start the business it sounds like you don't have the customer base to support yourself. This business is cheap to start and run, it is not like a restaurant or industrial business where you would need some special technology. I would stay home based for now if possible.

n3rdism
08-07-2011, 02:34 PM
True, but 2 things stop me from doing this. In the area we are in, the majority of 17 year olds that are available to work the hours I need are not skilled or to put it bluntly not "working" material. And secondly , to now put someone on as a trainee you need to have a formal agreement which is registered and pay for them to have the correct training at an approved institution ie TAFE.

To pay someone $9/hr to diagnose and repair computers PROPERLY is not exactly going to attract anyone decent in my opinion, as they can earn more than more than that at your local supermarket.

I know many business owners who just pick a pay rate and pretend that its the fair and legal one for that job, and many employees just work at that rate with no problems. I also know at least one business that did this and ended up having to close after his employees took him to court and ended up in owing over $25000 in backpay. For this reason I have been pretty diligent in checking the appropriate rates for my employees, even to the point of calling Fairwork Australia twice to see if the same info was provided.
On top of this, after gathering all the information I could from Fairwork Australia, I find out that as I require my employees to open up and close without supervision at times, they move to level 2 in their award which is then an even higher payrate

Very good advice, we do pay proper rate and I disagree you might find a nice kid with right attitude wanting get into industry . I put a fair bit of time into making sure get good skills , and most residential in-house repair jobs don't need big skill set . And I give my guys payrises fairly often make sure still keep interested in work.

Keep sharing these stories, etc really help people going into a store in oz. Fairwork was a great point really need check with them we do regularly .