How to Make More by Saving More in the Computer Business

save-money

Computer Technicians and small business owners alike are so caught up in the endless game of wanting “more” that they often forget how to shift into a mindset of “less.” More marketing, more customers, more income, more leads, more everything. But what if I told you that there is a good chance you are losing out on a good chunk of profit each month just because one category has been overlooked? That large gaping (sometimes invisible) profit hole is thanks to none other than: expenses. There are a handful of tips for saving money in the Computer Business.

Sure, going after more customers is a tried and true way of keeping profits high. But if you haven’t evaluated where lost profits are going in the form of expenses, you are dumping what could be large sums into items you either don’t need, could downsize, or find a complete substitute for altogether.

I started my technology consulting company FireLogic over a year ago on a tight budget, a small yet loyal customer base, and the notion that most core services/subscriptions could be kept fully in the cloud. One year and six months into the business and I’ve yet to backtrack on a majority of the initial founding decisions I made. I’ll tell you exactly how I save good sums each month on items many fellow computer business owners simply overlook.

Phone Service

Phone service is one utility that any smart company would never drop. But that doesn’t mean you shouldn’t be critical about what kind, and how much, service you need. Telco providers are notorious for overcharging customers, as proven by Gartner Group which says upwards of 80% of businesses are overspending on their phone (albeit wireless) service. Shocking? Not so much. For many in the States, the name Ma Bell still rings true in this regard.

If your company has a physical office and still uses analog telephone service, you ARE likely overpaying every month for the simple fact that newer VOIP services are leagues cheaper than what analog providers can offer. For businesses in the US and Canada, a good first choice has always been Vonage Small Business. For only $50 a month, you can equip your office with a single line that features unlimited local and long distance, a dedicated fax line, and functionality called Vonage Extensions which creates “virtual” extensions to any other phone at no extra charge. Comcast and other ISPs offer similar VOIP plans with varying pricing per location, but you catch the drift. The days of expensive landline service are over.

If you are a mobile company (like mine) or just an independent tech, your options are even more appealing. My phone service setup looks like this: I have Tmobile for my primary cell phone, which handles personal calls on one number and I take all of my incoming business calls (and texts – yes, texts) on my Google Voice line which routes to the same Blackberry. Tmobile service costs me just under $70 a month for mins/texting/data, and my business line on Google Voice is completely free. Yes, free as in no charges, no caveats, free. I can take and receive business calls to my company number and text with clients at no cost. It works well, and I can customize voice mail greetings for different groups of clients, send all calls right to VM after a certain time of night, and archive my history of calls and voicemails and texts nearly forever.

It’s one of the best decisions I made and it has been working well. You can now also port numbers into Google Voice which is a godsend for those who have established numbers. Voice is a free app available to Google Apps users which works on the web and on nearly any smartphone. And I won’t take up any space in this article raving about Google Apps – my company runs its entire email system and leverages online document collaboration through the service at a cost of $0 per month. My previous article on Apps went into depth about why I think Google Apps is a hands-down must-have for any small tech business.

Servers

Servers are another expensive piece of hardware that most small outfits can likely do without. If you are an independent tech, the case for keeping a server up and running is even less justifiable. Think about it: unless you are leveraging a server for what it was made to handle (AD, detailed file sharing security & ownership, or web services) then you are keeping a machine running that is wasting money in every direction. Servers not only take up space, but require a fair amount of electricity, likely proper Windows licensing, good AV protection, and a contingency plan for when parts fail. For the curious out there, a NAS box consists of only hard drives, a small circuit board, and 1-2 fans; the footprint for possible part failure is a lot smaller. For mobile outfits like mine, this is all just money in the hole as far as I’m concerned. This is why I went with a simple NAS box that sits on my network and acts like a full blown file server (which is what most of us need anyway) for a fraction of the price.

I bought my setup years ago, but a current-day equivalent goes something like this: purchase a QNAP diskless NAS shell for $350, slap in two hard disks for a safe RAID 1 array such as these 1TB Seagate disks for $50 each, and you have yourself a $1500 file server for roughly $450. The benefits? No licensing, no malware problems, and it sips electricity like a champ. I’ve had my unit running for over 4 years now and it still churns without problem. The only maintenance work I had to complete on it was replace a failed $15 fan and run the occasional firmware update. My time is precious and time I can’t bill to clients is time wasted.

Mobile Internet

Need mobile internet access for your laptop on the go? If you are subscribing for an aircard month-to-month from your cell provider, you are wasting serious money. I personally use a product called Tether in order to use internet on my laptop for the few occasions each month I need internet access on the go and wifi is non-existent. Instead of dumping $50+ each month for a little aircard I seldom need, I bought Tether for my Blackberry 9780 on sale for a mere $25 roughly a year ago.

I simply connect my Blackberry to my laptop and launch the app on both sides and like magic, I have mobile internet at pretty good speeds (usually about 1.5-2.8Mbps) given the pinched circumstances. It was a one time fee and to be honest, the software has paid for itself many times over. Android users can also purchase the same software from Tether, and iPhone users have built in Personal Hotspot functionality now which is nice but comes with some hefty restrictions from carriers and Apple. Either way you look at it, the options are out there.

Fax Machines

If you are one of the few dozen computer techs left that need a fax machine, consider dumping that physical machine and unnecessary second line. Between the cost of the actual line, any minutes you get charged for, and replacement ink/toner for that fax unit, it’s money going down the drain. Invest in an alternative setup, such as a plan from a cheap online faxing service like MetroFax. Their cheapest SMB plan is $7.95 per month and you can even get a toll free fax number for just an extra dollar per month. Your incoming and outgoing faxes are all controlled through a clean online interface accessible anywhere (meaning you don’t have to be home or at the office to get/send faxes). Ingenious and cheap.

Printing Costs

If you’re not printing double-sided these days with a duplex printer, you’re outright wasting precious money on paper stock. Any good inkjet or (my preference) laser printer comes with a built in duplexer which means you can print on two sides of a page. Do the savings add up? They sure do. The current cheapest ream of paper at my local office supply chain Office Depot is $8.79 and most people buy reams in packs of 3 or 5. In a best case scenario, a duplex printer will save one half a ream for every conventional printer’s output for the same single ream. Across a box of 3 reams, that’s 1.5 reams saved, and a box of 5 reams comes out to 2.5 reams of paper saved. Add that up across however much you purchase a year in # of reams, and you can see the cost savings.

Canned Air

Canned air still your dusting tool of choice? This is probably one of the most egregious wastes of money of all time. Take for instance this 6 pack of canned air from Office Depot. A whopping $30 plus tax for enough air to dust out perhaps 24-30 systems at best? Spend another $20 and instead get yourself a nice 2 gallon portable air compressor for a mere $50 plus tax/shipping like this unit from Home Depot. I’ve been using one for about a year now and have to say it’s one of the best “tool bag” investments I’ve made in some time. No more air cans or weak cleaning power – this puppy packs a punch and you can clean a whole office of 5-10 machines in 30-45 minutes for the price of a few watts of electricity. There’s no maintenance generally and these suckers last for years (I’ve read). Some environments may be prone to experience water build-up in the air tank which is easily solved by a $25-35 filter add on that keeps the water separated from the air hose and can be drained off after a period of time.

Fuel

Gas is expensive and could be creeping upwards even further if continued global economic unrest and supply problems get worse. There are many things you can do, however, to ensure you are paying the least amount you need to for gas. For starters, stop believing into the myth that your vehicle absolutely NEEDS premium gas. More than likely, it doesn’t; even the United States FTC formally advises against this gasoline myth. Per the FTC website, unless your car experiences knock or “ping” when using low octane gas, you can likely use the lowest grade which is generally regular in the States. This is a good 15-20 cent savings per gallon right off the bat.

Another way to save money on gas? Find the cheapest station in your area using your phone! There are so many smartphone apps out there now I can’t possibly name them all. I personally use Poynt for Blackberry but there is an Android and iPhone version as well. It gives me the cheapest per-gallon price in my area and can be sorted by each octane grade and station location among other things. Some days I’m filling up for a good 15-20 cents less per gallon and traveling a mere extra 3-5 minutess outside of my “comfort zone” to get gas. A worthy investment to save some decent money. All of the other common vehicle tips are also advisable. Get your oil changed on a regular basis (with synthetic, if you can afford it); change tires when necessary; keep your tires inflated at recommended levels for your vehicle.

Of course, I could keep going in all of the ways that a small business or independent technician could save money, but the list is nearly endless. The above are some of the largest money wasters I notice in this industry and can personally attest to the financial benefits associated with them.

What are your expense-cutting tips?



Derrick Wlodarz

About the Author

Derrick Wlodarz
More articles by me...
Derrick Wlodarz is an IT Specialist that owns Park Ridge, IL (USA) based technology consulting & service company FireLogic, with over 8+ years of IT experience in the private and public sectors. He holds numerous technical credentials from Microsoft, Google, and CompTIA and specializes in consulting customers on growing hot technologies such as Office 365, Google Apps, cloud hosted VoIP, among others. Derrick is an active member of CompTIA's Subject Matter Expert Technical Advisory Council that shapes the future of CompTIA exams across the world. You can reach him directly at derrick@wlodarz.net.

Comments (22)

  • Wilson Parks says:

    I agree 100% with Google Voice, awesome tool for small businesses, synchronizes perfectly with Android also. This little gadget might be worth mentioning in that vein..
    http://www.amazon.com/OBi110-Service-Bridge-Telephone-Adapter/dp/B0045RMEPI/ref=dp_cp_ob_e_title_1

  • Michael P. Talev says:

    Nice article though one thing that was not mentioned was trading services with other companies. In my business I save cost by trading (Bartering) services with a Attorney, Sign Maker\Printer, Mechanic and etc. This helps my company save thousands yearly in cost I would have otherwise need to pay full price for.

  • Steve Westrop says:

    Great article, despite the US-bias on services :-) Have been using (and reselling) VOIP and VirtualFax services for sometime in UK,and also now working with a fantastic multi-utility company to drive down costs for other businesses. It does amaze me, though, that so many techs are still using old and expensive technology to run their business rather than taking advantage of services such as this.

  • Justin says:

    I heard that using an air compressor could mess up computers with the water vapor. That’s the only reason I have still been using compressed air. Is that something to be concerned with? Thanks

    • Benjamin S says:

      Justin this is true if you don’t take precautions such as letting the air out everynight (they have quick release valves usually located on the bottom of the tank to release air/water/moisture) I leave mine open all night to let it dry out.

    • Jim Ross says:

      Like Benjamin says, just drain your tank. I have an old compressor from my construction days that I have used for computers for years with no issues. I have never lost a computer as a result of using a compressor. You can also get a centrifugal filter as Derek suggests.

    • Luis says:

      I use a portable blower. No condensation and it pays for itself compared to the throw away cans. It’ll fit in your bag better than the compressor (IMOHO)

      Metro Vacuum ED500 DataVac 500-Watt, 0.75-HP Electric Duster $49.99
      http://www.amazon.com/gp/product/B001J4ZOAW

      The tips in this article and the posters are great!

  • Your Friendly Neighborhood Computer Guy says:

    Some great tips. Thankfully I seem to be doing most of them (out of necessity since I just started running my business full-time and have no capital to spend yet).

    Some of these seem to only save a couple bucks here and there, which is okay, but not going to make a huge difference in a business that can swing hundreds of dollars in either direction depending on the kind of customer load you have.

    I think we should always concentrate on getting enough customers to keep busy on a consistent basis. After that, if profits still aren’t keeping your head above water, put a magnifying glass up to your expenses.

  • Javier Stevens says:

    I’m a one man wrecking crew over here, so I’ve implemented most of these out of necessity. Google voice has proven to be a great tool for making me accessible to my clients without spending a fortune on phones and lines.
    I have to partially disagree with the section regarding gas though. Being a full-fledged gearhead, I would highly recommend using the fuel the manufacturer recommends. The ping/knock sensor on most vehicles is kind of like the oil pressure warning… if you’re seeing it, something is probably already badly damaged. From a purely business pov, the risk/reward balanced is heavily skewed for this one; replacing a motor is an expensive lesson to learn.

  • Brian says:

    Another alternative to the compressor is the ED500 DataVac – http://www.amazon.com/Metro-Vacuum-ED500-500-Watt-Electric/dp/B001J4ZOAW/ref=sr_1_1?ie=UTF8&qid=1314637908&sr=8-1

    I bought a small 3 gallon air compressor and hardly use it due to the noise (I got an oiless one so it’s super loud). I also did not like how under sustained spraying that the tank would deplete fairly quickly. In that vein I saw another TN member mention the DataVac. After looking at one of the review video I saw, I bought it and found it to be very useful. It’s hand portable, unlike my compressor though it’s about as loud as a hair dryer. But I found that it cleared dust better than the compressor due to not having to wait for the tank to refill itself.

  • Bay Geeks Computer Services says:

    I actually came here to post the link Brian did. Not only is it more portable, it’s an anti-static compressor. You won’t get the condensation that you would with the version listed in the article. I might use that one in the shop, but as a mobile tech… http://www.amazon.com/Metro-Vacuum-ED500-500-Watt-Electric/dp/B001J4ZOAW/ref=sr_1_1?ie=UTF8&qid=1314641068&sr=8-1

    Is the way to go. imo

    • qingpool says:

      Nice device! Still, i have never charged my loyal customers from the “dusting service”, since they pay a monthly fee for my help. True, it doesn’t include cleaning the computers from the dust, but i throw that in for free. However, i buy compressed air in packs (this is where i save) and charge my client full price for them.

      I would love to have this device, but that would mean no more income from reselling compressed air. Of course, that would mean saving my clients money, and thats what i’m all about. Decisions, decisions…..

  • Chuck Romano says:

    Great examples Derrick! I like how you mention that if your phone carrier has a building you are paying too much! Isn’t this the truth and pretty much why brick and mortar companies are struggling and dying (Borders anyone?) Currently I am going a step further by having a just a regular cell phone and an iPod touch. I still can’t justify the extra monthly cost of a smartphone just yet (this could change). The cell and iPod touch (which is basically an iPhone without the phone, yet can be a phone using Skype or facetime) are serving me just fine right now.

  • Computer Repair Gardena CA says:

    Its good to know how to save. That was interesting . I love your finesse that you put into your writing . Please do continue with more like this.

  • Doug Warkentin says:

    Google Voice unfortunately only works in the US. Saving money is OK only so far as it goes. It does little to boost the money making part and should not have a lot of time spent on it because “time is money”. Find other ways to make money such as what my company decided to do. We do onsite computer service and so are tied to when and if calls come in. We’ve added another opportunity called video security installations. These can typically make good money alongside your computer business as it can both utilize the current customer database, offering clients (businesses especially) video security from someone they know and trust, and then there’s the new clients for video security that might just become your client for computer services. It’s more than a win-win.

    By the way, do you have clients who are businesses that would not mind having your business cards in a card holder on their reception desk? It’s also a known technique to get more business. That’s what it’s all really about, making money, not just saving it!

  • Fortaleza Computer Doctor says:

    Quickest way to save money on a daily basis? Bring your lunch in a paper sack!

  • Rob Mitchell says:

    Good tips, Derrick. We use a small shopvac that’s only used as a blower instead of the air compressor, but Vonage has been great – and it forwards easily to the answering service when needed.

    For file server in the office, we have a small server built on commodity hardware for about $350 – 8GB RAM, ASUS motherboard, 1TB HDD, running free Xenserver. One of the virtual machines is a Resara community version server. Resara is an Ubuntu LTS server distro with Samba 4 installed, and it is an Active Directory domain controller. Samba 4 is beta software – I don’t think it should be deployed to clients, but it’s fine for in-house use by geeks. In addition to the file server we can set up VMs as needed for testing or other purposes – like a dedicated desktop for electronic discovery indexing. We can delete the entire instance when the project is done and boot to a clean machine image for the next project.

    We have deployed Xenserver to a number of client sites and virtualized existing servers onto a new Xenserver platform – this provides a very quick and painless hardware upgrade and provides the VM machine image plus backup for a quick disaster recovery solution. Xenserver’s free tool converts physical to virtual very efficiently and at no cost – Virtualization thus has real potential in the small business space.

    Our client config and other docs are in a free Dropbox folder we can get to from phones or field PCs, so we’re never scrambling for client info, and our helpdesk is on an Amazon small instance that is always available everywhere. We use the open source OTRS ITSM version which tracks tickets as well as a comprehensive CMDB of all the inventory at our clients. It’s a bit complex to implement but rock solid stable and offers great functionality.

    And I like Fortaleza’s reminder that a sack lunch equals savings! Lunches can be hugely expensive!

  • Derrick Wlodarz says:

    Thanks for all the great comments everyone! Some general responses to those who asked about certain things…

    * My article was meant to address many different areas of waste when it comes to managing a small computer business. While I agree that expanding your customer base is the best way to continue increasing revenues, there is much wasted when you are throwing money out the door on senseless expenses that drain your company’s pocketbook every month. Not all suggestions are meant to work for everyone, but in general, many of them can be applied to your business.

    * I think the comment about bringing a bagged lunch is an excellent example! Completely overlooked it.

    * The comments answering the question regarding water in a compressor are spot on. My observations about water in the tank are that I personally have not gotten it much, if any, but others will depending on your area and type of tank used.

    Any other comments about ideas you may have are always welcome. Remember: this is a collective learning experience and I never considered myself the sole expert on reducing expenses. These are all many ideas I’ve taken from others on the forums here :-)

    • Great advise says:

      Great topic Derrick.

      We have a small refrig for the guys to bring lunch and water cooler so they bring packets of crystal light which is added directly to a 20 oz water bottle so they can have nice refreshments. I buy a case of soup for emergencies which i keep when the guys are broke. I also supply romun noodles for 19 cents a pack. We used to supply soda but cut that with the recession. Now I buy a case of beer about once a month when we hit goals. I give the guys a turkey for T day and ham for Xmas.

      We put up a recycle sign and get free parts, free working monitors, free keyboards, free mice and even free duel core workstations and servers. So we refurb, clean off data and reload these and resell them for an extra source of income. We keep the HD’s, Memory, CD/DVD’s from non working recycles which we use to fix other non working recycles when we refurb them.

      We have not had to buy for our use a server, a workstation, a printer or monitor in 7 years. We even get plenty of ink and toner cartridges turned in with old recycle stuff.

      You’d be surprised as to what some people will recycle or throw away. Their dispose is my treasure. I’ve recycled quad core servers. I usually sell the best stuff as I don’t need that level of server. When good recycled equipment comes in without a COA, we put Ubuntu on it and use it as our workstations or server in house.

      We upgraded all our vehicles to get 35-38 mpg so our fuel costs us about 10 cents a mile to do out calls. Techs may use their own car if they prefer but I only reimburse them the 10 cents a mile that it would cost if they use my company vehicles. Unless they are required to use their own car for some reason then I give them about 50 cents a mile.

      Few years back, I needed $5500 worth of dental so I called about 11 dentists before I found one who needed network/workstation support and we did 100% trade outs for the last 7 years. I figure this is worth about $3-4k per year as he does myself, my girlfriend(manager) and both my sons.

      I trade out with an Electrician, restaurant, roofer, painter, car mechanic, auto painter, auto detailer, tires and even insurance agent.

      WE have always answered our phones 24 hrs a day. WE take turns forwarding the phones when we close to our owner, manager and top tech. About once a month on average we get a $400 call by doing this. We also capture at least $200-400 worth of work each week. People who don’t need us to respond after hours but stop shopping for a tech once they talk to us and agree to come in tomorrow morning. So I recommend this to all IT companies. Look at it this way, you are only bothered by phone calls when their is money to be made, so its not like you put yourself out for nothing.

      We cut our yellow page ads which were $3300 per month, in half. We are in both major books. WE also are starting to spend the savings on Web SEO and Google.

      We are keeping our prices a little on the high side but we are offering outstanding service, warranty and outrageously good service. Same day 90% of the time. For those who really want a lower price we offer them 25% discount for getting it back to them in 2-3 days rather than same day. This allows us to keep our high value customers and still not loose many regular customers due to our higher prices.

  • Nathan says:

    Some days I’m filling up for a good 15-20 cents less per gallon and traveling a mere extra 3-5 minutess outside of my “comfort zone” to get gas. A worthy investment to save some decent money

    I think not. Driving out of you way to purchase fuel is a false economy. At $100+ per hour a five minute drive just cost me $20 or so round trip, the cost of the vehicles is about $0.50/mile TCO so two miles each way is another $2. All that to save $0.10/gal for 20 gallons or even $0.20 is false economy.

    Know where the discount fuel is and plan your re-fueling as part of your regular driving routine. I drive a diesel Mercedes with a 25 gallon tank and a 600 miles range so fuel once a week is plenty. My primary stop is on the way to church on Sunday, my secondary is near the bakery we frequent, and the third is on the way when I visit my mother.

    The other is use public transportation on days you don’t have visit customers, or leave your vehicle at work. For me two days of not driving the 17 miles ($34 at TCO of $0.50/mi.)pays for a monthly pass.

  • Nathan says:

    Compressor… $39.95 on sale at Harbor Freight all time with a coupon (I get mine in the Sunday paper), and they let you use the 20% off coupon on top of that making the compressor about $32.

    A coiled air hose is $4.99 and an accessory kit is $7.99… don’t forget to clip more of those 20% of coupons.