Opening shop for the first time

[Joe The PC Doc]

Hey all technibble readers,

I am a regular reader and sporadic poster to Technibble. I really enjoy the great ideas and suggestions I get from this site every time I read it, and I was hoping to get some ideas and suggestions from you technicians you may have gone through starting a shop in your area for computer repair.

I've been running a home-based, on-call computer repair business now for about ten months, and although it hasn't been as profitable as I had hoped so far, I would say it's been successful to the point where I think it's time for expansion.

I am in the planning process now to open a shop/store front in my area. I have read some good articles on the subject here at technibble and at other sites, but what I am really looking for is real life experiences from fellow technibble members about their own experiences starting a store front. Things like unanticipated expenses, what (if any) increased customer response you may have received after opening, Do's and Don'ts of a shop, equipment requirements, budget considerations, hiring employees, anything really that might have surprised you or impressed upon you after you opened shop.

Any comments on the subject would be really appreciated, there are alot of successful business owners on this site, and I hope to join your ranks one day soon!

Thank you!

 

[bagellad]

a few things to consider are is the increase in business from a brick and mortar store going to cover the expenses of rent and hiring an employee to look after the shop while you are going out on calls? I don't know how many people just bring in their computers although I suppose it does happen. What are you planning to sell? What are you hoping the store will bring you? Foot Traffic? more Recognization? Space to work?

 

[seedubya]

Hey Joe

Think carefully about this. It might seem like a good idea but is it really? You say that your business is not as sucessful as you would like. How exactly will an exponential increase in your cost base without ANY guarantee of increased revenue make it more profitable? Just wanting or even believing it to be so will not make it so. No buiness, regardless of size, should expand (i.e. take on more cost) without a full growth plan in place.

Most repair guys move into a shop in the belief that the increased visibility will bring in more business. Mostly this is true, however it is mostly also true that this doesn't lead to increased profits Why? Because the extra business brought in does not compensate for the costs in both time and money of a shopfront. If the guy is lucky he manages to get out of his lease and move back home without too much loss of face or loss of custom.(That was me 2 years ago) If he's unlucky or too proud to admit his mistake he goes under.(That was me 10 years ago and it took me two years to recover)
But hey, don't pay any attention to me, I'm a bit slow on the uptake.

If you want a more profitable business then invest (and I do mean invest) in marketing yourself they way you are now. I run a €250,000($375K) / year business from my converted garage, on my own. Are you billing 30 hours a week? Are you charging enough? Are you cross-selling/upselling your existing customers? Are you constantly marketing and networking to acquire new customers?

When you have done all of the above and you are approaching maximum capacity and profitablity in your current guise then you will have the luxury of both money and experience to expand.

 

[TimeCode]

Wow!

I run a €250,000($375K) / year business from my converted garage, on my own.

Ok... What marketing are you doing to get that kind of income!?!?!

 

[markr]

Hi Joe,

If you really feel like doing it - go for it. I think that you'll feel much worse if you won't give it a chance, just make sure you plan your steps and watch your expenses carefully.

Try to think what will make people buy specifically from you... be different, provide good customer service, make your customers happy so they'll want to come back, hire employees carefully, use high quality parts (even if they cost more), spend time to analyze your status on a weekly basis and learn from your mistakes...

Good luck!

Mark

 

[wall2000x]

My journey

I owned a vacuum cleaner and sewing machine shop for 17 years. I recently (Sept 07) moved to Cape Cod where there was an established million dollar vac store. I have been repairing computers (remember Apple IIs) for about thirty years. I decided to repair computers for a living. I started with a Craigs list ad (free), some business cards from Vista Print ($9.00), and a couple of magnetic car door signs ($19.00).

I made my first sale/client yesterday. He saw my Craigs listing. Got him up on the internet with Dlink wireless setup for an old Thinkpad and an old Ipaq. Charged him $80 (all labor) for about two hours work. I know how to hustle and make a buck. I have been running my own business since I was 21, I am now 50.

If you aren't attracting customers w/o a store, you aren't going to make it with bricks and mortar because you are thinking backwards. People who open successful stores usually do because they have outgrown their mobile operation.

You may gross $1,000 a month for the first 6-12 months with a bricks and mortar setup. My suggestion is to take $6,000 and invest it into $1,500 inventory, & $4,500 advertising. I could give you a few ideas about advertising. Contact me at wall2000x@gmail.com.

 

[thecoldone06]

I could give you a few ideas about advertising. Contact me at wall2000x@gmail.com.

Could you post them for all of us? I'd like to hear your ideas to.

 

[seedubya]

Ok... What marketing are you doing to get that kind of income!?!?!

None to be precise. In the beginning (about 4 1/2 years ago) I marketed heavily from my first day (back) in business, I had a marketing plan and I stuck rigorously to it for about 18 months. By the end of that time I was so busy that I stopped marketing and every client I have gotten since has been either by referral from an existing customer or via BNI (of which I am no longer a member). Stopping marketing was a BIG mistake BTW, because now I'm stuck where I am with no pipeline of new customers and too busy maintaining to grow.

Also, €250K is not profit. I took home about €70k after taxes last year. This year's shaping up about the same. Most of of my turnover is sales of software and hardware. Only 1/3 is labour.

 

[wall2000x]

It costs....

It costs somewhere between $30 to $200 to get a customer. Think of a bricks & mortar outfit, signage, yellow pages, etc. What brings in the customer? The sign? Yellow pages? Word of mouth?

First, you need to be doing five marketing concepts to be successful, because one or two ideas may not draw the right or any customer to you. My ideas:

1) Theme marketing or brand marketing...make yourself a brand. Postcards, brochures, business cards, signs all with the same logo.

2) Develop a internet site with your logo and coupons.

3) Focus on one or two money making ideas, maybe a small ad in the local newspaper or pennysaver: "Make your computer sizzle with blinding speed. Only $49."

4) Join some community organizations, the PTO! Maybe toastmasters. I honestly hated the Chamber of Commerce, too many bankers & insurance salesmen. Write a small column for the local newspaper with Q&A, weekly.

5) Do not be afraid to sell used, but make sure your client knows it is a used laptop or RAM memory, "End of lease laptop great for Emailing the family and spending pictures. Only $199."

Again, some ideas to create buzz.

 

[NWPhotog]

None to be precise. In the beginning (about 4 1/2 years ago) I marketed heavily from my first day (back) in business, I had a marketing plan and I stuck rigorously to it for about 18 months. By the end of that time I was so busy that I stopped marketing and every client I have gotten since has been either by referral from an existing customer or via BNI (of which I am no longer a member). Stopping marketing was a BIG mistake BTW, because now I'm stuck where I am with no pipeline of new customers and too busy maintaining to grow.

Also, €250K is not profit. I took home about €70k after taxes last year. This year's shaping up about the same. Most of of my turnover is sales of software and hardware. Only 1/3 is labour.

$100k US a year income before taxes is pretty decent no matter how many hours you are working!

 

[TimeCode]

Interesting ratio.

Also, €250K is not profit. I took home about €70k after taxes last year. This year's shaping up about the same. Most of of my turnover is sales of software and hardware. Only 1/3 is labour.

Interesting. My billables are about 80% labor/time and 20% hardware. And then for those sales its generally a new windows OS, a couple PCs or a server. I do very little repair but a lot more networking, server management and desktop support.

I really need to create a marketing plan. I just don't know where to begin.

 

[seedubya]

I really need to create a marketing plan. I just don't know where to begin.

When I started out first 11 years ago, I lasted 4 years and went bust shortly after moving into premises. I then worked for someone else for almost 2 years saved some money and bought a Computer Troubleshooters franchise. They handed me a basic marketing plan on a plate. laid out over 10 weeks repeating ad infinitum. I stuck with it for 18 months.

CT was great in the beginning.....

 

[Bumper Bender]

I have 2 "Brick and Mortar" shops and one thing i love to tell my clients is by having that shop as a base then we are more professional and will be there for the client needs, easy to find (not just a cell phone#), when people don't know you that's what gives them a little trust

of course this is just an individual perception and in some ways correct and others not, just depends on the person

there are too many shoddy back yarders around which helps this perception

I'd better mention that there is also a lot of good techs based out of home or part time to

Look at your wages + staff, the rent for the shop, telephone + internet, stock, break-in costs 3 attempts in 6 months on my shop, power, advertising/marketing, fridge, vacuum clearer, air compressor, signage, location (is it better than competitors sites, does it tie in with surrounding business?) non profit organisations wanting donations, your cost of getting to the shop, suppliers terms, How many $$ you have now, have you been making a profit after wages? does your computer work currently pay your house hold expenses?

Last note in my country we are in a bit of a recession and the computer shop down the road from me (in a better location than me) is trying to sell and after seeing the figures for the 2 years that it's been in business it wasn't even able to pay his wage at all only the worker who was minimum wage and subsidized. At best his business is only worth me buying it for the client base and to prevent another shop opening and to be honest it is only in the 5k region for that! and that is a business that he started from home in 2000 which was going a good 3 years before i started my shop in a small office located in the centre of a small single story building, which is a lot of effort for not much $$

 

[basic]

I think you should rethink or more carefully consider what you are about to do by expanding. "Not as profitable as I have hoped..." is a bit vague. But, if it's not something that you are sure you can afford, I would hold off a bit longer. Definitely take a look around and see what it would cost to rent space and basically the initial costs for equipping your store. If you are able to barely afford it then I would highly recommend against it. Any income you are seeing now isn't guaranteed and you may dig yourself into a deep hole. If things are going well enough as it is then I'd say why spoil something that is working for you. Once you see a significant cash flow...then you should think about expanding. Don't confuse growth with quantity. You want quality growth.

 

[The Birddog]

CT was great in the beginning.....

Please expand on this...

 

[seedubya]

Might be a subject for a different thread. I've hijacked Joe's a little too much already. However I'd be more than happy to recount my experiences with Computer Troubleshooters if anyone's interested........

 

[NWPhotog]

Might be a subject for a different thread. I've hijacked Joe's a little too much already. However I'd be more than happy to recount my experiences with Computer Troubleshooters if anyone's interested........

Would love to hear about your experience.

 

[focuz]

I would also like to hear from anyone that has went the franchise route,

I'm also in the same situation. If I can't find the a decent amount of clients now, then I don't think a storefront is going to be better. While I do understand the storefront is advertising in itself just by having a sign on the road, is it really going to be enough to cover the rent and hidden expenses like having the internet at the office and a full inventory that I might not be able to sell.

Also you would have to hire someone just to watch the store when I'm on calls, while I'm sure the wife would watch it and be able to run the register, you need someone technical there to be able to answer questions and help clients make a clear purchase.

 

[The Birddog]

Might be a subject for a different thread. I've hijacked Joe's a little too much already. However I'd be more than happy to recount my experiences with Computer Troubleshooters if anyone's interested........

me too please

 

[seedubya]

Grand. I'll write it offline. Keep an eye out for a post entitled CT Franchise Experiences.