At a Crossroads

[SilverLeaf]

It appears that I’m at a crossroads before I even get out of the driveway My intention was to start out of a home office/shop and do (mostly residential/SOHO to start) on-site/pick-up & delivery combined with remote support service. However, it seems this may not be practical for the following reasons:

• Lack of reliable internet service at home. See this thread:http://www.technibble.com/forums/showthread.php?t=35047 This issue has gone from bad to much worse (frequent outages and lost connections) with no viable alternatives.

• Gas prices continue to climb, with little relief in site.

• The area I was intending to service is centered about 20 miles away from home.

Although I really wanted to avoid the added expenses just starting out, I started thinking about office space centered in my intended service area. Here’s my dilemma: Storefront of office?

I have found a small (400sqft) retail storefront in a high-visibility little strip mall located on a very busy stretch of road in the “high-end” residential part of town. This location would add about $800 (which is substantial at present) to my monthly overhead. The property owner, however, will accept a short-term lease (6 mos), which somewhat mitigates my financial obligation should I fail miserably.

On the other hand, I could spend half as much on a small office space tucked into a side street in the commercial part of town.

Obviously, as a solo operator, the storefront would greatly limit my on-site availability, but the location and visibility is tempting...but is it worth the extra expense, especially just starting out? Or, would the flexibility of not maintaining a storefront in favor of being available for on-site work be of more value?

Thoughts, advice, and any experiences you would care to share would be sincerely appreciated.

 

[MotzTech]

Could you get better internet service at the office location?

 

[SilverLeaf]

Yeah, one of the first things I did was to check broadband availability. No problems there at all.

 

[Mr.Mike]

I'm a mobile tech that faces the same challenges as you (without the spotty internet service) and I much prefer not having the overhead of a store. I service a 25 mile radius of customers with the average being about 10 miles away. I write off a portion of my home utilities and the mileage for my car. These are by no means the only benefits of being mobile.

If you've already decided you have to have a store. I truly wish you the best of luck. Others here can tell you about choosing locations, etc. Cheers.

EDIT: Have you considered alternative service providers for your internet?

 

[MotzTech]

Well from the info you gave me here is what I would do

First, examine the market area around where the retail shop is. Are there any other computer shops/electronics stores? Or would you be the only one in that area? The retail aspect could bring in a lot of money, but it also has a lot more upfront cost/risk. Besides having to pay the rent, you may have to pay to have the shop setup the way you want, plus utilities. You would also need to front the money to buy a good inventory. Not to mention moving costs and other misc costs. If you have the money to set this up and your market research suggest that you would pull a steady profit, then this may be the best option for a consumer repair shop.

Now, on the other hand, the office option would be less upfront cost but still allow you to maintain a professional image and get better internet service. Personally, I would go for the office. However, I focus more on managed services for small businesses. If you want somewhere for people to drop of computers, that may not be the best option.

 

[FoolishTech]

I would go for the store front to increase your visibility to potential customers. Having an office space you are relying on advertising alone to get you started. I would think that the amount of walk-ins from a highly visible storefront should more than compensate for the extra monthly overhead.

I have a friend with a successful business in an office space, but that's because he had a storefront on Main St. for many years prior, so he established himself and now has a lot of customers that stayed with him in his transition to an office space. Otherwise they would never have known he was there.

 

[14049752]

There are a number of things we have to guess about, so take this advice for what it's worth.

First, $800 a month for a highly visible storefront isn't very much for what it will actually end up doing for you. Depending on your prices, that could end up very easily paying for itself each and every month, simply because it is so visible.
That's not to say that a store front is going to make you instantly successful...there are a lot of other things you have to do right and account for...but once you're in the business for a while you'll see that $800 is pretty small change.

Concerning the on-site work, you could set aside your mornings (Like from 8:00-12:00) to schedule appointments and then work in the office the rest of the time. Or alternate days. I have a friend that does that and it seems to work well for him...though I admit that I'm not clear on specifics of his case.

 

[YeOldeStonecat]

8 hundge is a big nut to jump into....heck we don't even pay that for our office space (3x suites) and we're a 4 employee place.

Will electricity and heating be included in this?

To take advantage of a storefront/retail space...you'll need to do signs..there goes another couple of thou.

I don't know the demographics of your area....but without knowing more details, my gut reaction is...8 hundge is a bit steep of a nut to tackle for your first launch. Going for residential...visibility is good (We focus on business so we don't need retail frontage). But don't forget.....depending on other variables...your first several (at least) months will be slow to start, you'll be digging yourself out an investment hole.

 

[14049752]

Going for residential...visibility is good (We focus on business so we don't need retail frontage).

There's the key difference. To you, rent is basically just for the utility of having a work space. For residential/walk in repairs, that rent money also doubles as advertising. $2/ square foot a month, (depending on variables) is pretty good if it's in a good location.

Otherwise, I'm with you...there are too many things we don't know to give a good answer. Things like competition in the area, population, impressions (from signage) per day, etc. These are things that the OP needs to seriously consider, rather than input from forums.

 

[RichmondTech]

I started off mobile only and graduated to an office space. Sure I have to advertise to get traffic into my location, but it's more flexible on hours than a storefront is and the lower overhead is a plus. Our plan is to run out of the office for the year while we get the things we need for a store (staff, cabinets, signs, etc). My wife and I are already able to put in a full set of hours even with me running onsite appointments and we already have benches and storage cabinets to put customer machines in. This will help minimize the cost of moving into a retail store.

If you from straight from mobile to retail you have higher rent, a full set of hours to manage, and additional costs to make the location retail ready. If you have some cash in the bank to use on these costs, great! If not, an office might be a good starting point.

 

[Cornerstone Technologies]

Will electricity and heating be included in this?

This is a big one that I wouldn't overlook. Electric deregulation is a big issue in much of the US, and is causing electric prices to more than double in many markets. My shop has electric heat, and during the winter, I would estimate that my heater cost me $50 - $100 a month set to 61F, the lowest setting. And this was a very mild winter. The last shop I worked for routinely had an electric bill of over $1200, but managed to sustain itself with wiring from the turn of the last century.

To take advantage of a storefront/retail space...you'll need to do signs..there goes another couple of thou.

Visibility is huge, and signage can cost money, even if you go with office space. My signs and car lettering cost around $1000 which was a pretty good deal because I worked with a person who was local and was able to trade some services for a discount.

 

[SilverLeaf]

Will electricity and heating be included in this?

Yes, that figure includes my best estimate for utilities as well

Otherwise, I'm with you...there are too many things we don't know to give a good answer. Things like competition in the area, population, impressions (from signage) per day, etc. These are things that the OP needs to seriously consider, rather than input from forums.

Its a small rural college town with about 18k living within the city limits. Competition in town is limited to a big-box office supply, one other storefront (no web presence), and a few part-timers. There are others in the next towns further down the road, 20+ minutes away, however, that do offer service in the area, but they don't seem to be aggressively pursuing it at the moment.

 

[PCX]

There are a lot of good posts and questions here, all that you should take into consideration. As many have already said, without knowing more about your areas demographics and your financial situation, its hard to weigh in on this matter. With being said, I will tell you how we started.

In a nutshell.

Me = Going to school full time to be a teacher (7 classes per semester). Full time Mr. Mom, changing both diapers. Working part time as a tech and in construction.

My wife at the time was working part time with a decent pay check, but she still did not make enough for me to not work part time, which really was full time with the tech work I did on the side.

I had been going to school for about 2 years and the last 6 months of that time I had decided to start doing more tech work on the side. I did repairs and refurbished and sold lots of laptops. It finally got to the point where I had so much traffic coming in and out of my house, that I had to get an office.

Got an office (hole in the wall), then got 2, then in 3 months got a whole suite, then in one year, got a store front location.

Its been 2.5 years and we have grown very quick.

Anyways, my point is it can be done. While an office space is not ideal as a permanent location, its not a bad starting point. Build your name and your client base and grow into that location. Once you feel that you start outgrowing your location, start looking into other locations. I took about 6 months before I choose my location, its not a decision you want to make rashly. If there is not a location that you are completely happy with, see what you can do to make the office space work. Build shelves, get racks, knock down walls (if allowed, we were) do what ever it takes to make your work space more efficient until you can get out of there. Keep in mind that you have an opportunity to get a short term lease and probably renew it for another 6 months if need be or even leave if you have too.


Start putting money away for when you do get a store front, because you will need it. There are a lot more initial cost involved when getting a store front vs an office: signs, remodeling (if needed) furniture, fixtures, etc.

Finally, regardless of what you do, do not make this decision in vain. Do what ever you have to do to keep this business growing. It is always better to keep growing than to have to take a step back because you made a rash decision and bit more than you could chew. Make sure your family is on board. I had to explain to my wife that the money I was making was not money to get more cloths or whatever. I reinvested everything I made back into the business until it was self sustaining. Now, its been over about 2 years, and my wife had not had to work a day. The initial sacrifice is well worth it.

 

[callthatgirl]

Mobile life = very busy, little time to do marketing and other stuff when you're driving. = Lost business opps

Office life = You can get more work done in volume and do business stuff at the shop.

Here are my thoughts on your ideas.

I have found a small (400sqft) retail storefront....
That is fairly expensive, but it's a strip mall. I pay $400 for a 400 sqft office in Minneapolis (big town) and $400 for a 400 sqft storefront in a small town, and $600 for a 400 sqft solo building in a middle sized town. Strip malls from my experience are usually double. It's almost instant clients, so if you do that place, I would only have "computer repair" on your sign and make it as large as you can.

As for the lease, I would sign a 6 month, but don't think about it, otherwise failure will be on your mind. I took my first lease without the money coming in knowing I would do what it takes to pay that rent. I seemed to market harder because I knew that expense was there. That's unfortunately how I make decisions though lol. I say screw it and risk it all. So far, so good!

On the other hand, I could spend half as much....
I would actually take this risk before the other one. Unless you have strong brand recognition and are prepared to totally man a store. I didn't as I did a lot of home visits when I started out, so my "office" was a drop off office and that's when I started remote jobs too more and continued home office. Nothing wrong with "by appointment only"...lets you grow at your speed.

 

[YeOldeStonecat]

This is a big one that I wouldn't overlook. Electric deregulation is a big issue in much of the US, and is causing electric prices to more than double in many markets. My shop has electric heat, and during the winter, I would estimate that my heater cost me $50 - $100 a month set to 61F, the lowest setting. And this was a very mild winter. The last shop I worked for routinely had an electric bill of over $1200, but managed to sustain itself with wiring from the turn of the last century.

And don't forget...we have lots of computers running all the time. Our own workstations. Our own bench workstations. In our case....we also have a full sized server cabinet about 1/3 full with rack mount servers...running 24x7. Two internet connections, a 1u dual Xeon server for our edge appliance/firewall. We often have at least a couple of customers rigs running overnight doing something (kick off malware cleaning scans, or cloning drives, or chkdsks, data recovery, etc). In this field...we usually have brutally high electric bills.

So if AC is included...great for you. If the lease has you paying your own electricity....hurts you more. If it is included in the rent...you should mention to your new landlord that you will have lots of computers running...just out of courtesy. Else, when they see their electric bill go up 150 bucks a month after you move in...they'll be having a nasty talk with you.