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Start a Computer Store From Scratch
An Intro to Everything You Need to Open Your Own Computer Repair Store
Tyler Von Harz
Copyright © 2022 Tyler Von Harz
All rights reserved.
This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or another professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought
This book is dedicated to my dear Ma and Pa, my little sister, my faithful coworkers and employees, and my cat, who sat in my lap while I wrote a significant portion of this book
The Lore Behind Computer Repair
I wrote this book for several reasons; first to catalog everything I have learned running a computer store and package it into a nice format that someone else can take and try to replicate or just enjoy for fun. Second, because I noticed there aren’t many options for someone who wants a modern take on how to start a computer repair business; the only existing books I could find were at least 10 years old, and in this field, there are a lot of aspects that can change drastically in that length of time.
The books on the topic that do exist, seem to leave out some essential topics such as what tools an entrepreneur in this business can use, what software and hardware to buy and where to buy it, how to source computers and parts, and how to resell and recycle equipment. There are already a plethora of vastly superior books on the topics of small business, business planning, accounting, financing, sales, advertising, and marketing, and I have compiled a lengthy list of additional reading that includes those books in the sources at the back of this book. When I started my business I learned a lot of this stuff as I went and just from experience, often doing things incorrectly at first until I figured out a better way.
First, let us discuss the type of business with which we are to discuss in this book. When you hear ‘computer store’ what do you think? Is it the Apple store, with its huge gleaming windows, neat and orderly tables sparsely populated with brand new, high-end merchandise, and an abundance of clean-shaven staff in matching uniforms? Or is it something as simple as a retail stand in a shopping mall with a man boxed into a small area surrounded by parts and cheap accessories for sale, soldering away on some small repair under a magnifying glass? Perhaps it is not a physical presence at all that you may think of, but an online store–the type of business the world has become much more accustomed to in recent years.
Computer stores can take many forms, but it is not the big business corporate form of a computer store that sells only its own brand name merchandise that we are going to discuss, nor is it the web-based store that maintains its only physical presence as a warehouse from which to ship its goods out of. We are going to take a first-hand look at what goes into the small ‘mom and pop’ computer repair store, where you can walk into and find a variety of computer equipment and accessories for sale, such things as refurbished computers, components, desktop parts, maybe even other electronics like TVs, radios, and video games. It could be located in a small town or a large urban center, perhaps in a shopping center, and we’ll even briefly touch on the topic of running a home-based computer repair service.
A Short History of Computer Stores
Ever since the advent of the personal computer, there have been businesses that sprung up to service them. In the early days, the computer was sold mainly through mail-order catalogs. Computers first began to be sold in stores in the mid-1970s with RadioShack’s TRS-80 and the Altair 8800. The Los Angeles-based “Computer Store” created by Dick Heiser was the first of the retail computer stores. It mainly sold the Altair 8800 and was selling over 10,000 units a year after about a year in business. The Byte Shop created by Paul Terrell in 1975 was the first computer store to sell the all-new Apple 1. After finding success, Terrell began franchising the Byte Shop “and it was the largest chain of franchise computer stores for some time. The company later changed its name to MicroAge. The stores typically carried Apple II, IMSAI, Northstar, and Altair computers.”(Daniel Knight, LowEndMac.com). Computerland was started shortly after in 1976 and grew to 800 stores by 1985. It was one of the outlets chosen to release the IBM PC in 1981.
There were two distinct types of businesses that were repairing computers throughout this time; the OEM or original equipment manufacturer, and the TPM or third-party maintenance company. The TPM is any store, large or small, that is in the business of repairing computers, and this is precisely the business that is the focus of this book. This type of company experienced its first massive growth shortly after early computer retailers, as personal computers took over the world. “As demand for computer maintenance and repair surged in the 1980s and 1990s, TPM companies developed new strategies to address the lower cost and increased reliability of computer hardware. First, TPM firms reduced repair time by replacing components instead of repairing them. Next, they developed remote diagnostic software to minimize the need for costly on-site service. Finally, they expanded their services to include installation and software maintenance, including virus protection, Internet connectivity, and site-authoring services by the late 1990s” (Referenceforbusiness.com).
As the first decade of the 21st century came and went, the world of computers saw a massive change. Laptops became increasingly slimmer and more powerful, cellphones and tablets became more widespread and practical, and the cost of entry on computer systems, in general, came down drastically. With the explosion in popularity of laptops came such now-familiar models as the Lenovo ThinkPad, Dell Inspiron, Apple MacBook, and Toshiba Satellite. In 1984, less than 10% of homes in America had a personal computer, but by 2016, that number had grown to almost 90% (Statista.com).
The History of My Store
The history of my own computer store is similar to the history of many other computer stores. It is not the exciting world of the tech startup that we witness in a business like this, but something more along the lines of your typical service-based business: observing a need in your community that you can fill with your own abilities. The only tools I went into my business with at the start were a foundational knowledge of computers one might gather from only a few short years of daily use of a computer for basic everyday tasks such as homework, gaming, and social media, and a bit of rudimentary business experience from experimenting in small businesses as a youngster.
The first of these businesses was providing a trash collection service to my apartment complex, where I would go door to door on a daily basis and offer to bring whatever amount of garbage one had down to the local dumpster, for a small fee of fifty cents per bag. With almost a hundred apartments in my community, this gave me plenty of early experience with outside sales and service and more disposable income than I knew what to do with at least for the age of ten. My second business was less labor-intensive and involved dealing in collectible coins at the local flea market, which gave me much joy since it was also a passionate hobby of mine.
By the time I reached adulthood, I had been thinking of how to continue making an income without having to seek employment from someone else’s business. I had been starting to enjoy repairing computers in my own time, as it was easy to find broken computers on the local online marketplaces for cheap, and easy to find the parts and tutorials on the internet on how to repair them. I can recall the first computer I flipped from the free marketplace Craigslist was an Asus netbook, which only needed its operating system reloaded, and which I sold within a couple of days during the holidays for a $100 profit. It was then that I realized the viability of this as a business, and less than a month later I had filed a DBA (doing business as) and created my first official business.
The next four months consisted of replicating that first deal and growing an inventory of different computers so that I always had what someone was looking for. If you were looking for a cheap laptop for under $100, or an Apple iMac, I tried to have at least one of everything that was possible for me to get. At this time, my only business presence was from my bedroom in my parents' house, and my only advertising was through Craigslist. I bought and sold everything entirely through Craigslist and eBay. The only bottleneck to my business at this point was the fact that I had to set so many appointments for customers to pick up computers from my bedroom, that it was becoming a hassle for my family to deal with. Before long I realized the growth that would be possible with a brick and mortar location.
Finding a retail space to lease when one is 18 years old and with no business or personal credit history is a challenge, and it would have been much easier had my business had at least a couple of years of success already, and if I had built up a solid income so as to assume less risk. I owe finding my first retail space after just a couple of months of searching to the fact that I had a close relationship with a local music store owner, who just happened to be downsizing his store in half, and could introduce me to the landlord to talk about renting the other half of it. My family support was also critical, as I did not yet even have a license nor my own car to drive me back and forth to work in those early days.
I chose a small town just a few miles from my hometown to open my first store since the location appeared ideal after doing a bit of research on the local competition. The town was at the junction of two major roads, and just between two larger cities that already had their own computer stores. The area in between these two cities, however, did not have a computer store at all besides a Radioshack which offered computer repairs and parts. In my case, the market for a store specializing solely in computers was already tested, it was only missing one at this point since the last computer store owner had retired and closed his business just two years before mine opened. The existence of the Radioshack encouraged me even more since my experience in dealing with them was that their attitudes were rather abrasive, their competence lacking, and their prices easy to beat. It became one of my unwritten long-term goals to beat them at computer repair and run them out of town. After several years that did end up happening to some extent, although they just moved further down the street and downsized a few years after Radioshack as a corporation filed for Bankruptcy. They now provide cell phone repair services, which is the one thing my business never offered.
Once I opened my first store, I began discovering all the ways a computer store could flourish outside of simply refurbishing old computers, as well as all the difficulties that come with being responsible for a physical location. The first two years involved endless learning in all manner of topics. I was now being faced every day with new challenges to solve. In my haste to start a store, I had overlooked creating a business plan, a financial plan, a marketing plan, or setting up any sort of system to deal with taxes or hiring employees. It is best to have a strong foothold on these things before one jumps in headfirst, and I was now making up for it by having to get organized as quickly as possible. One of the reasons I did not need these to start my store is that it was funded strictly by the income that the business was immediately generating from day one. In other words, there was no investor or bank that needed to be wooed with traditional business plans and marketing strategies in order to get funding. The downside to this is that the early days were very lean; on opening day I had an inventory of only a dozen computer systems, a small box of old parts, and about a thousand dollars for operating capital. I spent most of the money I had saved up from the first few months of the business to build out the store and move in and counted on growth continuing as it had. This is to say it can be done, but it was for the most part a leap of faith.
Shortly after opening, I tackled the pressing issue of finding a part-time employee. Hiring employees is a dangerous proposition when you are a young business, and its importance should not be underestimated. A new hire has the potential to make or break your business, and consume all of your time in the process. I was at the point where all of my time was being consumed with working IN the business, and not ON the business as a manager should. I felt that growth was plateauing because of this and hiring an employee was worth the risk. The computer repair store is a dream job for a lot of young men with a fascination for computers. I found myself with different people coming in and offering to work for me every other day, and thought it reasonable to forego traditional hiring methods such as posting an ad on an online job board or newspaper. I eventually ended up finding someone through a close friend, whose resume was similar to mine: no previous job experience but a love for computers. Luckily this worked out well since this person has been with my business up to the present day.
After setting up a website and expanding our marketing strategy to involve more than just Craigslist posts, the next couple of years saw a slow and steady growth. There were many times I was haunted by the idea that computer repair stores were no longer relevant, due to the apparent push toward mobile devices such as smartphones and tablets. Again and again, this idea was squashed as I continued to see newer and newer computers brought in time and again for similar repairs. There was no end in sight for the personal computer, and new versions of software and newer computers just brought in different versions of the same old issues. After 2 years in business, I began to look into the next upgrade for my business: a better location. It is said that location is everything for a brick-and-mortar business, and I saw having the perfect location as a goal of the utmost importance.
My first store was situated in a rather low-traffic strip mall, between a music store that was going out of business, and a tobacco shop. I noticed the only time we saw walk-in traffic was from the tobacco shop's customers. At this point, most business still came from online ads and most revenues came from the sale of refurbished computer systems. Just down the street from my store was a much nicer shopping plaza, the biggest in town, and all of the most popular local businesses were located there: the pizzeria, hair salon, department store, dollar store, and a few others. I knew this was the spot for me. I had been cultivating a relationship of trust with the owner of this shopping center for over a year by renting out a roadside billboard from them, so when they had an opening space for lease, I was approved to move in with just the deposit.
It was in this location my business saw much more rapid growth in computer repair, as opposed to just refurbished system sales, and with the new success and experience, we expanded to provide onsite service for business clients. We set up networks and equipment for offices and other local small businesses. Dealing with this type of client required a higher level of professionalism. I made sure our branding was matching and elegant, from the logo on the website, to just making sure the business card matched the magnets that I placed on the side of my car during a service call. I even paid some attention to the dress code, creating matching blue polos. In this business, one can never stop learning, as your expertise is the most important asset you have. It doesn't matter if your shirts match if you don’t know what you are doing. In this respect, every day on the job was a learning opportunity, especially when dealing with a business client.
The Future of Computer Stores
We have discussed the history of computer stores and of my own computer store as well, but the bigger question is what is the future of the computer store? As long as there are computers there will be businesses that are around to offer repair services. Although online computer dealers are far more prevalent these days than retail showrooms, there is still the preference among a large part of the population to buy their computer systems locally, and with a face and a name behind the business. An immediately apparent difference between an online business and a physical computer store is the ability to help someone who simply does not know what they want when they come in seeking to upgrade or repair their equipment. The guidance that the staff at a physical store can offer cannot be outdone by documentation and tutorials on the internet when it comes to someone who does not know where to start and has no basis of knowledge in technology.
The great differentiator between the small computer store and the big box computer showrooms such as the Apple Store and Best Buy is highly evident as well. In these larger stores, the customer may get a more impersonal relationship due to the simple magnitude of the business and the fact that far-reaching corporate policy keeps employees bound to a scripted and somewhat robotic attitude when dealing with their clientele. In a small computer store this attitude is absent, and in its place is found a warmer, more empathetic nature and a closer sense of dealing directly with a more integral part of the local community.
New technology is constantly being released and the world of computer hardware and software is always evolving. With this evolution comes a crashing wave of new problems and defects with every release. Throughout the past twenty years as computers and electronic devices became more popular and widespread, they became cheaper and designed to be thrown away and replaced if they broke down. The combination of lower equipment costs and less repairability of some devices correlated with a decline in the retail computer store as well as the repair service. The increase of a phenomenon known as planned obsolescence has changed the computer store of the 21st century. Planned obsolescence “is a business strategy in which the obsolescence (the process of becoming obsolete, that is, unfashionable or no longer usable) of a product is planned and built into it from its conception, by the manufacturer. This is done so that, in the future, the consumer feels a need to purchase new products and services that the manufacturer brings out as replacements for the old ones” (Kem-Laurin Kramer, User Experience).
There are four types of planned obsolescence: contrived durability, software updates, perceived obsolescence, and prevention of repair. Contrived durability is simply the low quality of parts, especially on the cheapest computers and devices, that causes them to break prematurely. With computer components, this may be something that is an easy but annoying fix. The first thing that comes to mind in my personal experience was a particular model of newer Dell Inspiron, that had a DC jack designed in a way that it would break if pushed in just a little too hard by the end-user. The fact that this component would only last a year meant that we would see this issue repeatedly, and would have to tell clients with a heavy heart that it was due to a seemingly intentionally ill-designed DC jack.
Software updates are another way to bake in planned obsolescence, and I can think of many examples, mostly Apple, and particularly with their mobile phones. It is typical for major updates to be released and slow an otherwise well-specced system down with each iteration until eventually, a software block simply disallows the user from upgrading any further. Perceived obsolescence is simply the clever marketing of manufacturers to make their latest devices continue attracting buyers even when their old devices are still working fine. In computers, this may be the addition of a couple of minor features or a minor cosmetic redesign.
Prevention of repair can come in many flavors. Although most repairs cannot be completely guarded against, manufacturers find ways to make the replacement of simple components such as the battery or the hard drive more difficult for the end-user than they need to be. My store will often see customers who were used to repairing their older computers but felt uncomfortable taking apart their newer devices for repair due to the increased complexity. Such a thing is becoming more commonplace with most laptop batteries being glued to the inside of the machine and hidden away behind plastic and tape instead of being exposed on the bottom and removable with the push of a switch. All manufacturers are guilty of this at the current time, the only systems that seem to defy the trend to some degree are the computer models aimed at business clients such as the Lenovo ThinkPad and Dell Latitude, among others.
The end-user often has not the time or patience to deal with servicing and maintaining their devices. This is especially true when it comes to a business or organization. Though some businesses get their IT support through the vendor or manufacturer where they purchased their hardware, there are always those small businesses who turn to other small businesses to source their IT support. The small computer repair store is often the provider of managed services for these businesses. Providing managed services is a topic of discussion that we will get into later in the book, as it is often a natural next step after outgrowing residential-only services. This segment of the business is expected to grow from a 152 billion-dollar-a-year industry in 2020 to over 272 billion in 2026. (statista.com)
The mobile repair industry has also experienced massive growth in the past decade and is expected to continue to grow slowly over the next decade. A computer store that offers cellphone and tablet repair services will never be lacking for business due to the widespread popularity of smartphones and the delicate nature of their construction.
The computer store that solely focuses on personal computer repair services for residential clients does not have the numbers on its side; according to IBIS World, from 2014 to 2019, the electronic and computer repair services industry has declined at an annual rate of 0.7 percent. This does not mean that this business model is dying a rapid death, and my own business, which never went into mobile repair or managed services, is proof that one can find steady growth in a decaying industry as long as you can adapt to change and follow the trends. In my professional opinion, a business that combines onsite and in-store computer repair, and in-house computer refurbishing and system sales, can find the right level of diversification to succeed in a changing world.
Really, don’t do it!
To jump headfirst into starting a brick-and-mortar business in an industry that has seen a slight but steady decline per year since 2014 is going to take a lot of confidence in one's abilities and a lot of passion for what you do. There are parts of the business such as mobile repair and managed services that are experiencing growth but you are going to realize quickly that this is not the type of business to start if you are following the money and looking for the next big thing to make you rich quickly. However, if you can learn and create a business that can pivot and adapt to a changing environment, you will find great success.
This is not a business for the absentee owner or turnkey investor, but more on the levels of a project of passion, that if done right, can provide a decent and fulfilling living. It is the perfect business to start if you are the type of person who is never far from a computer, and who knows the ins and outs of technology with an ever-present curiosity to learn more. Computers are extremely empowering; in other words, they are the gateway to a world of knowledge and a limitless pool of possibilities. When you are aware of this to its fullest extent and not just the fact that you use a computer to check Facebook or watch Youtube videos, then you may be confronted with a million different ideas about how you can make a living using a computer. This could be in the form of becoming an app developer, software engineer, network engineer, data scientist, cybersecurity expert, and many other countless possibilities. Often, being a computer repair technician is seen as a gateway to some of these seemingly more prestigious and profitable careers. However, starting a business revolving around the repair of computers thrusts one into a mosh pit in which they find themselves playing the role of many different people: technician, manager, salesman, marketer, consultant, even janitor. With the right mixture of skills and ambition, you can turn a computer store into a wildly profitable business that you can rely on until whenever you are ready to retire.
Education and Enthusiasm
Does education matter when starting a computer store? Absolutely not, if we are speaking of formal education or vocational training. However, it is important to have a thorough knowledge of what you are getting into. There are numerous ways to learn how to go about solving any problem under the sun when one has access to the internet and you can learn as you go in most cases. Although it is unwise to experiment on a client’s equipment, you should definitely practice on whatever equipment you are able to acquire for yourself.
The most valuable asset for self-teaching computer repair is Google. Quite simply, one can look up the model of the computer you are working on and a couple of words to describe the issue you are attempting to fix, and most of the time a reliable result can be found easily. To break it down further, most of your tutorials and guidance will come from Youtube and iFixit.com. Anecdotal advice for more obscure problems is more commonly found on the Microsoft or Apple support websites or forums such as Reddit. Over time, you will see the same problems coming up again and again in your business, and will reach a point where you will no longer need to research the solution.
The need for technical certifications when you are employing yourself in your own business is up for debate. The information that one needs to learn in order to pass a certification test is absolutely valuable and worth learning, however, the cost of taking the test may be too much for your pocket when first starting out. It can be handy to have a few certifications on your wall or on your desk to show to a prospective client who is not trusting of your skills or when dealing with a business client who wants to see third-party verification of your abilities. In my opinion, it is worth grabbing a few certifications once you are up and running but it might not be a good investment for your first few dollars.
The most basic of the technical certifications are offered by CompTIA. CompTIA is a company “focused on providing research, networking and partnering opportunities to its 19,000 members in 89 countries. In 1993, in response to the need for vendor-neutral, entry-level PC certification, the company created the A+ Certification”(Glen E Clarke, Ed Tetz, 2007). The study materials for the A+ exam are very much like the knowledge you will pick up in your first few months in the business if you were to learn as you go. The main focus of the material is the foundations of networking, troubleshooting, and security, obviously very valuable knowledge to have in your toolbox. According to the CompTIA website, the exam covers the following:
- Demonstrate baseline security skills for IT support professionals
- Configure device operating systems, including Windows, Mac, Linux, Chrome OS, Android, and iOS, and administer client-based as well as cloud-based (SaaS) software
- Troubleshoot and problem solve core service and support challenges while applying best practices for documentation, change management, and scripting
- Support basic IT infrastructure and networking
- Configure and support PC, mobile, and IoT device hardware
- Implement basic data backup and recovery methods and apply data storage and management best practices
Other certifications from CompTIA that could provide you with potentially valuable expertise are the Security+ and the Network+, both of which demand a more developed knowledge of security and networking respectively. Both of these certifications will come easily to someone who has been in the business a couple of years, but may not be worth acquiring too early on in your career. In my experience, learning as you go provides a more solid foundation of knowledge than attempting to learn from books and lectures before diving into the business.
Arguably more important than expertise is enthusiasm and the willingness to learn. When running a computer repair store you will find yourself heavily invested, not so much with money, but with your time and mental capacity. You will have some kind of challenge on your plate every day, and you want to make sure you are in a position where it seems less like work, and more like getting to tinker on your own projects all the time. If you have the enthusiasm and the love of not only technology but solving problems with computers and people, you will find you never have to work a day. There will be fun problems, such as building gaming pcs or taking apart some computer you have never seen before and figuring it out piece by piece, and there will be mundane problems such as helping someone set up their accounting software. Both of these types of problems have their merits and provide opportunities to learn something new.
Equally as important as your enthusiasm is the patience you must possess. You may encounter clients who are difficult to deal with or computers that are difficult to troubleshoot in ways you could never have imagined, and it is in these times that you must have the patience to slowly and calmly work towards a solution. Without patience and enthusiasm, your work will turn into a stressful job and you won’t enjoy it for long.
Setting Goals for Success
Where do you want your business to take you? Do you want to create a job that you can work in until you are retired or are you hoping to exit before too long to move on to something else? It is important to consider things like this from the beginning and how you are going to measure your success. You want to set goals that are realistic in the short and long term and figure out what metrics show that you reached them.
It is best to start off by considering your long-term goals. Where do you want the business to be in three to five years? Your long-term goals can usually be grouped into four categories. According to Maria Marshall, a researcher of small and family-owned businesses, these categories are service, social, profit, and growth (Setting Business Goals, Inc.com).
- Service – Goals related to improving customer service satisfaction or customer retention
- Social – Goals that focus on giving back to the community, through philanthropy or volunteer organizations, for example.
- Profit – Goals set to increase profits by a certain percentage.
- Growth – Goals related to the expansion of the company, through new employees, for instance.
The best way to start working towards your long-term goals is by breaking them down into smaller goals. Figure out actionable steps you can take to get closer to your goals every day. Break your long-term goals down into quarterly or monthly milestones, and break those down further into weekly or daily deliverables that will bring you to your goal. You may have heard of the SMART acronym before for goal setting. This means making your goals specific, measurable, achievable, relevant, and timebound. You want to make your goals specific by outlining exactly what you will measure your success by. For instance, take the following goals:
- Find more clients
- Find 20 more clients over the next month within your service area by advertising locally
The second one is specific! It is also measurable since we specified that we want to find 20 clients instead of just ‘more’ clients. Is it achievable? In my professional opinion, I think finding 20 more clients is fairly realistic, so yes it is achievable. It is relevant, since finding more clients should be one of your main goals starting out. And the fact that we specified that we want to find 20 more clients over the next month, makes it time-bound. Setting goals like this will set your business up for success!
Different types of business entities
It is absolutely possible to start your business activities before forming any sort of official entity. You can buy and sell used computers on the side and maybe even do some repairs for friends and family just to start gaining experience, but before too long you will need to consider creating a business entity so that you may operate in a fully legal capacity. In my own business, I first operated casually with no entity for just a month before filing a DBA (doing business as), which automatically made my business recognized as a sole proprietorship, which I operated for a little over a year before deciding it was in my best interest to form an LLC (limited liability corporation). You may find it reasonable to do the same, but if I could make a suggestion, it would be to simply create an LLC right away as it provides the best tax and legal benefits for your business and is simple and inexpensive to do. However, there are other business entities that may prove to work better depending on your specific situation.
The most basic thing you can do is to file a DBA. This simply registers your business trade name and provides you with some benefits such as being able to conduct business under your trade name and to file for a federal tax ID number or EIN. With a federal tax ID number, you may also open a business bank account. If you take no further action to file an entity, the state will automatically recognize your business as a sole proprietorship. The sole proprietorship is the most common type of business entity in the United States due to its ease of creation and low cost. However, a sole proprietorship is not a separate entity from yourself, so there is no protection from liability, and your assets and liabilities are not separate from your business.
Another type of entity is the LLP or limited liability partnership, which is a good option if you are considering starting your business with a partner. From the Small Business Association’s website: “Limited partnerships have only one general partner with unlimited liability, and all other partners have limited liability. The partners with limited liability also tend to have limited control over the company, which is documented in a partnership agreement. Profits are passed through to personal tax returns, and the general partner — the partner without limited liability — must also pay self-employment taxes.”(SBA.Gov).
The LLC is the business entity that my own business operates as. It provides you with a separation of business and personal assets, which can prove valuable if your business is ever faced with a lawsuit or bankruptcy. You also have more tax advantages than other types of corporations such as a C-corp or S-corp. According to the SBA website “Profits and losses can get passed through to your personal income without facing corporate taxes. However, members of an LLC are considered self-employed and must pay self-employment tax contributions towards Medicare and Social Security.” In my professional opinion, an LLC is an answer for most computer stores, however, I will briefly introduce the other business types so you may be informed.
A C-corp is a corporate structure that is a completely separate entity from the business owners. This has some advantages and disadvantages. The advantage of complete separation means the owner has the most protection from legal liability and is also able to raise funds by issuing stock and taking the company public. The business can keep on operating no matter who owns it. However, corporations must pay income tax. Since the owner must also pay income tax, this leads to a higher tax liability than with some other entities. An S-corp is a slightly different type of corporation with the main advantage being avoiding the tax liability of a C-corp, but with a few criteria that must be met and some extra paperwork.
Funding Your Business
How to finance your business is one of the first big problems you will have to solve. In my experience, finding funding for any small business is a tricky undertaking if you are asking banks or formal channels for loans. Unless you have an extensive personal credit history and enough personal assets to secure a loan, this path is out of the question. Asking family and friends to back your business financially may be easier. You could also bootstrap your business and finance it off of your savings or sell anything you don’t need. If you can live cheaply during the startup phase of your business and carefully manage your cash flow, this may be the best route to take.
The first part of the funding question is to break down exactly how much you will need to get started. You need to consider such things as your own living expenses and how you are going to provide for yourself in the early months. My suggestion is to save up to six months of living expenses from your job before you get started if possible. If that is not possible, you can still provide a living for yourself right away if you play your cards right, but it may be an extra layer of difficulty that you will have to work with.
If you are starting your business from your home, you will have the luxury of minimal startup costs. A brick-and-mortar store comes with a whole host of additional expenses that you should be well prepared for. Starting your business and testing your business model by running it out of your home at first is the best way to make sure you are prepared to move your business to its own space. If you go about it this way, you can use the proceeds from your early sales to cover all of your startup costs as you go. In my experience, this is the most prudent method.
Seeking funding from an outside source will require you to make a business plan and financial projections for the next few years. You will need to have a tried and true business model and show a track record of success as well as have excellent personal credit in order to personally guarantee your loan. If you are successful in acquiring a loan you will have much more financial cushion to expand quicker, but you will have the additional overhead of loan repayments. It is not a decision to take lightly.
Some expenses to keep in mind when starting out are things like your tools and workspace, computer equipment needed to run diagnostics, initial advertising, online and print advertising, internet and phone set-up, and purchasing your initial inventory. You can build your inventory of used computers from scratch slowly up until you have enough to keep sales flowing daily. There is no need to buy more than you know you can sell. You can scale up your advertising budget and monitor it over time to know if you need to add to it or trim it back. You may already have the tools needed to get started fixing computers, and if not, you can find most things for very cheap. The fact is, a computer repair business has a very low financial barrier to entry, and in my opinion, bootstrapping it yourself is the best way to go about financing it.
By funding your business out of your own pocket it may take a while before you are able to move to a physical store since doing so requires a significantly larger lump sum investment, but it is still very possible depending on where you are and your ambitions. Moving to a brick and mortar location carries with it a lot of expenses, such as rent and security deposit, taxes, remodeling and building out your space, setting up electricity, business internet and phone, waste management, and additional advertising to let people know that your store is there.
Making a Business Plan
It may be rather hypocritical of me to suggest creating a business plan before going into business since it is not something that crossed my mind in the beginning, but after a few months in business, I looked into creating a business plan for my own personal records and realized the benefits that came along with making it. You get all of your ideas down on paper and gain a bird's eye view of what your business operations will look like. You can see how each part of your business fits into your financial goals and how each activity does or does not help you get there. Even though business plans are mainly for the purpose of showing to potential financial backers to convince them of the validity of your idea, I suggest making a business plan no matter how you are financing your business, for the sole reason that you really are able to flesh out what works and what doesn’t and validate the idea to yourself. By making a business plan, you grow to understand your business even more.
The critical parts of your business plan can be broken down into several categories, as follows:
- An introduction to your business and your mission: What is your business all about? For a computer store something along the lines of “computer repair store specializing in refurbished computer sales and offering service and support to local clients.” A brief history of your business and any progress you have made so far would be a welcome addition to this section.
- An assessment of your competition, or market research: What do the other local computer stores look like? Have you checked out what kind of pricing and customer service they offer? Gather your findings and put them into writing so you know what you’re dealing with.
- What kind of expertise do you already possess and how you are going to use your skills to advance your business. Are you well versed in computer repair already or will you be learning on the job? Do you have experience in customer service and management or office administration, or perhaps web development and search engine optimization? Write out your plan to educate yourself if you are lacking in any areas that you think you will need to succeed.
- What is your long-term strategy? Such questions as to how long do you expect it to take before your business is profitable and provides a steady income, and do you have an exit plan of some sort, whether it be creating a job to work until you retire, or grooming your business for an eventual sale?
- Your financial plan: How much money will it take to get started? How much will you need to spend on your lease, your inventory, and your advertising? What are your sales projections based on what you have done so far? What has been your cost per client thus far and how will you bring that number down?
Once you are armed with a business plan you will be able to go into the launch of your business with a much clearer understanding of your goals and your business in general. The research necessary to make a business plan will fill in any gaps in your knowledge related to your market and competition and will make you sit down and take a long hard look at your financial projections to make sure they are realistic and attainable. If you seek outside funding, making a business plan will be a major factor in whether you get that funding or not, and even if you do not seek outside funding, you will have a major accomplishment already just by making your plans clear and concise.
Researching Your Market and Competition
Assessing your competition and determining what kind of market exists for your service is an even more important step to take than creating a business plan or even getting funding. If you are in an area where the market is oversaturated or you are in a rural area where there is a small customer base, these are things you need to look out for. On the other hand, if you are in a densely populated area with only one or two computer repair services and they seem to be busy all the time you may be sitting on a gold mine. Doing research on your local market is a critical step to determining if it is worth going into business at any particular location.
The first step to researching your competition is heading to Google and seeing what is out there. Look for any existing computer repair stores in the area. If you are in an urban area you can limit your search to just a few miles, or just your city and the surrounding towns. If you are in a rural area, you may have customers looking you up from 50 miles away or more. I know from experience, having my store in a very rural area, I would sometimes have customers look me up online and make the drive from over an hour away, just because there was no other business nearby that offered our services or had our selection of inventory. If you are in a rural area, you need to give your distant clients a reason to make the drive, by building up a strong online presence of great reviews and showcasing a unique inventory with competitive prices. If you are in an urban area with stiff competition, you need to figure out how you can provide a better service and outshine your competitors so you are always the first choice.
A Google search is simply not enough when you are researching your competitors. Check out their websites, see what kind of services and prices they offer, and what their weak points appear to be. Can you see any points of weakness in bad reviews? Perhaps they have limited hours or a limited service range. You can gather all of this information and figure out how you can do their job better. Call your competitors, pretending to be a client, and see how they behave on the phone. Do they seem knowledgeable and excited to help you? Or do they seem tired and annoyed that you are calling? Take it one step further and pay the competing shops an in-person visit to see what they are like. Bring a computer in for a repair, perhaps a tricky problem to test their expertise. Test their honesty by bringing in a desktop computer with the hard drive cable unplugged to see if they will quote you for something outrageous or simply plug the cable back in for you.
Your customers are also a wealth of information regarding your competition. I would often hear from my customers how they felt about a particular store without me even asking. One local competitor often got a lot of criticism for things like rudeness or incompetence. Another competitor on the other hand would receive glowing reviews, but I would find out their customers only came to me because that shop had gone out of business. By listening to what your clientele is saying about your competitors you can take note of what you need to improve on for your own business. Keep an eye on your social media as well. Competing shops may or may not have a presence on sites like Facebook, and if they do you can watch it to gauge how they handle their online presence and how you can do it better. If they seem to be doing something that is working, you can copy it and improve upon it. If they are doing something that is not working, you may be able to tell, such as certain posts or ads not gaining a lot of traction. They can be your guinea pigs so you can know what not to do.
Determining if there exists a market for your services can be done at the same time you are researching the competition because their business will often give you clues to the state of the market. If there is one shop nearby that is busy all the time and has a lot of reviews, that can be a sign that there is much more room in the market for another business. You can check out Google Maps and see how far the other stores are from the most popular neighborhoods or urban centers. If it looks like there is a spot with a sizable population, that is well connected to major roads and has lots of commercial activity, that may be an untapped market. If you are going to try to grow relationships with business clients, then an area with a lot of office buildings or industrial activity would appear to be a great spot to set up shop.
A great tool for seeing how much demand there may be for your services is Google Keywords. Also known as Google Trends, this is a free tool developed by Google to show the popularity of search terms over a specific period of time and in specific regions of your choosing. You can input terms such as “computer repair”, and “refurbished laptops”, among many other things to see how often people are looking these terms up in your area. You can post some ‘test’ ads on free online marketplaces like Craigslist or Facebook just to see if you can get any bites. This is a good way to test different regions. You may get a lot of responses to a post in a certain area while getting no response to a post in another. Another simple way you can look into the demand for your business is by asking the locals, such as the people at the grocery store, the bank, or the post office, or when you are at any kind of local gathering. You can also check out Facebook groups for your local area and ask there.
Working From Home and Onsite Service
I have already touched briefly on operating your business from home, since I believe it to be a great way to start out, and test your local market to determine if there is demand for your business, but what exactly is involved in doing this? The first step is determining if you are able to have clients come to your house or if you are going to offer onsite repair service only. If you want clients to come to you, determine if your house is in an easily accessible area for people, and does it have enough space to accommodate people while they wait, or will you expect people to drop their computers off at your house and leave?
Working out of your house should not be a permanent solution, but if you are going to get started with it, I suggest focusing on staying organized and focusing on outgrowing your setup as soon as possible, so you may upgrade to a commercial space before too long. The most crucial part of your home-based business is going to be your immediate work area. I will discuss work areas in more detail in another chapter, but with a home-based setup, you are going to find some unique challenges, such as cramming every function of your business into your immediate vicinity. Your desk may be your workbench, as well as your business and accounting department, and shipping and inventory storage, so keeping it organized and tidy is vital. You won’t have any space to display any inventory of refurbished computers so you must rely solely on online listings to sell them. You won’t have foot traffic from neighboring businesses like you would with a commercial space so you must focus that much harder on your online advertising campaigns to bring in business. You will have to decide such things as if you will have set business hours or if you will operate on an ‘appointment only’ basis. At this time you will also most likely not have a business phone or internet account so you will have to decide if you will post your personal cell phone number in your ads or if you will set up a Google voice number strictly for business purposes.
If you offer onsite service, you can conceal the fact that you don’t yet have a professional working space, plus you bring the added convenience to your clients of coming to them. All you need is a portable toolkit, some basic software utility software on a flash drive, and a car. To project an image of professionalism when performing onsite repairs try to get custom polo shirts made with your business name on them, and make sure to arrive on time and freshly groomed. Your clients’ houses may smell bad, but that doesn’t mean you should too. Many companies offer screen printing services to provide you with custom shirts and uniforms. You can also get magnets made to put on the side of your car to look even more professional.
What should you charge for onsite service? This hinges on a variety of factors, such as your service area and how far you are traveling, the demographic you are dealing with depending on where you are (is it an upper-class city with a high cost of living or the opposite?), whether you are charging for an estimate or not, and what level of service you are offering. I would also be mindful of the pricing practices of the competition and try to offer a similar rate but with more perks, such as a wider service area or faster turn-around time. The best pricing model that worked for me was charging a set hourly rate of $50 per hour in the beginning, which I increased once I got busier to $75 per hour. I charged a travel fee of $50 if you were anywhere outside of 10 miles but not more than 40 miles. This universal fee saved me from having to calculate gas costs and travel time and just charge the same no matter the distance.
When you are basing your business out of your home you tend to either stay in work mode at the end of the day or struggle to get out of sleeping in and staying home mode at the beginning of the day. The fact that your home and business are in the same place may work at first, but it will quickly strain your sanity. John Thaler, author of ‘Elements of Small Business’ said it best, that “running a business from home can blur any sense of separation and boundaries. The expression ‘taking your business home with you’ takes on a whole new—more literal—meaning. And, while running down to the office at 2:00 a.m. to get a brilliant idea into the computer may seem like a great idea, I guarantee you that your spouse and your children will be less enthusiastic about it.”
There are many benefits of staying home-based, such as not having to pay rent or taxes on a commercial space, not having to commute to work, and you can even get a small tax write-off depending on how much of your home is used for your business. You are also more in control of your working schedule and can stay in your home office from the wee hours of the morning to late at night if you please, or only work for an hour a day if you are not feeling up to it at a given time; you don’t have to stick to a strict schedule that comes with running a brick and mortar store.
However, the cons may outweigh the pros for staying home-based. Your expansion is limited, your foot traffic is non-existent, and if you are renting or living in an HOA (homeowners association) controlled community you might not even be allowed to run a business. Even if you are allowed to run a business you most likely won’t want to publish your address on any advertising media, and you probably won’t be able to put out any signage to let people know there is a business there. All of these are excellent reasons to consider moving to a commercial space when the time is right.
Moving to a Commercial Space
There are numerous benefits to moving to a commercial space and some slight disadvantages. The main point of discomfort when considering whether or not to move to commercial space is the expense. You may look at it as overhead that you don’t need to spend and could save for growing the business in other ways. In my opinion, thinking like this is overlooking the fact that unless you are solely doing onsite service, you are severely limiting your growth by staying home. You may have to deal with a commute depending on how far away your store ends up being from your house, and you may have to get dressed to go to work, but the payoff is well worth it.
Your main advantages to working in a commercial space are going to be having a larger, dedicated space to work, getting foot traffic from neighboring businesses, having a professional and trustworthy image, and getting to point customers to your business address from your website, social media, Google Maps, and any other form of advertising you do. You can have regular hours and a better separation of your business from the rest of your life. Once you have been in business long enough, people will just know you are there and show up during your regular hours. Current customers can refer more customers, and it will create a ripple effect where you will be getting a new client, who was referred by someone else 6 months ago, who was referred by someone else 6 months before that, and so on.
You’ll now have more room to stock up on inventory and parts, create separate workspaces for your repairs, create space to showcase your computer inventory, and you’ll have the ability to hire employees to come in and take off some of the workload. We’ll discuss the matter of hiring employees shortly, but for now, let’s talk about the process of searching for and moving into your first actual store.
What type of commercial property is best for your first store? There are many types of properties out there and many possibilities of what you could make work, such as office building or industrial space, a store in a small strip mall, a spot inside a retail mall, I have ever seen some successful computer businesses run out of flea market booths. If you want the best bang for your buck you may consider space in an industrial area, where you can get the highest square footage for the lowest price. This may have the disadvantage of not being in an ideal location or having enough traffic. You may consider space in an office building, where you can also get a reasonable amount of space plus an assortment of amenities. Operating inside a retail mall (the type that has things like JCPenney and clothing stores) provides a lot of foot traffic, but customers often won’t want to walk through a mall with their computer to get it fixed, and may not be receptive to buying a refurbished computer in such an environment. The cost is also much higher for this type of space. The best combination of all of these types of spaces is probably the regular old strip mall, the kind of place where you will see a row of businesses all accessible from the outside, and all with ample parking. Around the back of the building, you will typically see a loading area and a place to have a dumpster.
Location is the first thing to take into consideration when you have decided what kind of property you want. Have you ever heard the saying Location, Location, Location? There are a lot of factors that go into finding the perfect location for your business. Once you have decided on the general region or town that you want to operate your business in, you need to start looking for spaces that meet the following criteria:
- Traffic and ease of access from surrounding areas. Does the spot you are looking at have good visibility from the road, and neighboring businesses to bring in foot traffic and passersby? Is it easy to find the address on the map and get there from surrounding towns, and is it close to a highway or major route? Is there adequate parking for your customers and is there space to take in deliveries? Are you close to critical services? How far are the bank and the post office? You will most likely need to frequent these spots.
- Local population and demographic. What kind of neighborhood is your spot in, and what kind of businesses are close by? Is the population sufficient enough for your business, and is there any kind of business that you might not want to be too close to, such as a liquor store or a strip club? On the flip side, if you are close to a school or church, you will get the bonus of having their traffic regularly passing by. I chose to locate my store in a strip mall that provided foot traffic from a hair salon, pizzeria, and a dozen or so other businesses, all of which were complementary in some way to mine. There was also a gas station and a church across the street, so people were always looking over and seeing my business.
- Reasonable rent and maintenance policies. The most important question for you is going to be if you can afford the spot you are looking at, and how much it is going to cost you between rent and maintenance. Will you have to spend a lot of money getting it move-in ready, or is it polished and ready to go? What is the landlord’s policy on things like maintenance?
- How far is your spot from competing businesses? Having no competition nearby can be a good thing, but keeping your competition close by can also have its advantages. When I opened my shop, I was only a 2-minute walk to the other local computer repair store. When customers left that business dissatisfied for any reason, we were close by and welcomed them in. You can also keep an eye on your competition to know what they are up to. There is a quote by Wayne Calloway that you could keep in mind: “Nothing focuses the mind better than the constant sight of a competitor who wants to wipe you off the map.”
The best way to search for a space to rent is to get out there and drive around. You are bound to see some available space in your neighborhood. A sign will often be posted in the windows with the real estate broker’s phone number. You should be able to drive around your town in a few days and research potential spots, gathering information for later. Look at each space and make sure it matches your criteria, then call the broker and request an appointment to look inside and get more details.
Perhaps it will be the property owner who shows you the property if it is a small place being listed independently, but most of the time it will be handled by a commercial real estate agency. Make sure to be prepared when you meet up, with questions such as:
- How much is the rent and what is included? This figure may even be something you already knew, but it is important to understand everything that is included.
- What kind of lease is it? This is an important question in determining what you will be responsible for paying, as different types of leases have different costs associated with them. A Triple-net lease, for example, means you will have to cover all maintenance and taxes on the property.
- What is the length of the lease and what are the policies for rent increases? You don’t want to get a one-year lease and find that the rent increases by a lot each year, but you also don’t want to get locked into a long-term lease in case business does not work out. Most commercial leases are 3 to 5 years in length. You also want to figure out what the terms are if you have to terminate the lease early for some reason. Can you sublet, reassign, or terminate the lease, and if so what are the conditions?
- What are the CAM charges? CAM stands for common area maintenance and means things such as mowing the lawn, plowing the parking lot in the winter, and fixing potholes in the pavement. It may also include common area lighting and signage depending on the building.
Make sure to get any verbal agreements and promises in writing before signing a lease. Most commercial leases will be upwards of 50 pages long, and you should pay a lawyer to go over each part with you to make sure you are getting a favorable deal. The lease will mainly consist of outlining the terms of what is included in the rent, the amount of rent, the description of the space and both parties that the agreement is between, acceptable uses and prohibited uses of the space, insurance, termination clauses, arbitration clauses, and subletting clauses. It is important to have a good understanding of the lease before signing.
Move-in Process, Costs, and Remodeling
Let’s get down to the brass tacks: what will your move-in costs be and what does the process of moving in look like? Not only should you have all the money you anticipate needing to move in, saved up and ready to go, but you should have a few months of expenses as well. This is money that you will need in case you run over budget on your move or business does not pick up right away upon opening, so make sure you run the numbers correctly and have a backup plan to get through the early months.
Your first expense is going to be paying the lease and security deposit. On a space with a monthly rent of $2000, for example, you will probably be expected to pay the first and last month’s rent plus a security deposit of one month’s rent.
Your next expense is going to be building out the space to fit your needs. Is your space finished and does it have all the wiring for your needs such as enough power outlets, cable, ethernet, and phone lines? In my case, when I moved into my second place, my space was almost finished, it just needed paint, flooring, and counters built. I did not hire professional labor but instead had family and friends assist me and just paid for the materials. If you are hiring a professional installation, just double this estimate to account for labor. My costs broke down as follows for my 1500 square foot location:
Custom counters: $500
Commercial 12-outlet power strips: $120
Shelves to display computers: $300
You will also need to account for signage. Most places will need signage for above the door, which is typically just a translucent board with lettering on it, signage for out by the street, which is known as a pylon sign, and perhaps lettering for on your windows. You also want to make sure your signs are all well lit and have functioning light bulbs in them. In my case, I paid a sign company to make my signs and lettering and install them. This broke down as follows:
Above door sign: $400
Pylon sign: $400
Window lettering: $150
Open sign: $50
You must also account for costs of setting up services such as internet, phone, and waste management. These should be fairly minimal. These things will also be monthly expenses as well so it is important to negotiate as best a rate as possible, perhaps by paying annually or trimming out services you don’t need. The first month in my case broke down as follows:
Internet 100mbps: $90
Business phone: $35
As you can see here, the totals I came up with are rather lean; they represent the minimum you will need to come up with for each move-in expense. You will easily find areas that run over the estimates you come up with, and it is important to make sure you leave money aside for anything unexpected that comes up.
When you sign the lease you will be given a date that you can start moving in, either at that time or at some point in the near future. At this point, you may begin the process of building out your space before you open. The first steps you will take after getting the keys look something like this:
- Set a date for your grand opening and start advertising it. You want to give yourself a deadline to complete the move in process and set your grand opening date for a week or two after. You should be ready to open at least a week before this date, and this is the point where you can do a “soft opening” to iron out any kinks in your processes.
- Get services set up. You want to schedule appointments for the internet and phone to be hooked up as soon as possible as your provider might not get to you for a few days, so this should be done first.
- Any major remodeling. You want to make sure the space is finished and ready before moving in any equipment or merchandise. Get a start on this while you are waiting for services to be turned on.
- Once your space is ready, start laying out your furniture and display fixtures. Set up your service computers and work areas. Make sure everything works.
- Set up your product displays and make sure everything looks good. This is something that will continue for a while, as you should expect to expand your merchandise offerings continuously after you open.
Once your business is open you can make tweaks to your product offerings and displays, tweak your service agreements depending on if you need more or longer terms, and continue making improvements to your shop as you see fit. It is an evolutionary process that you will find is quite fun. I will discuss things such as advertising in more detail shortly, but for now let's discuss some boring topics that you want to make sure you have a handle on before getting too busy.
One of the most important things to keep in mind is that you want to protect yourself from all forms of liability with an insurance policy. There are several different types of coverage you will want to have for your business to protect you from the risks of a customer getting injured in your shop, loss of customer data or damage to equipment, theft, data breaches, worker’s compensation, and general misfortunes such as damage to your shop or anything in it. It is better to have some kind of insurance policy in place rather than risk it by trying to save money and hoping nothing bad happens.
The most basic type of insurance you should look into is general liability insurance, which is designed to protect you from lawsuits over damage to a client’s computer or if a client was to be injured while in your shop. There is always the possibility that you could damage a very expensive computer accidentally, or someone could trip over a power cord while holding a heavy computer, drop it on their foot, and have some expensive medical bills. Anything is possible, and you want to be protected from the unexpected. Another form of coverage is call errors and omissions insurance, which is designed to protect against lawsuits for loss of data or an error made during repairs. If you are storing any sensitive client information on your computer systems or being trusted with such information as passwords and logins you should consider cyber liability insurance, which is designed to protect you in the event a client affected by a data breach decides to sue your shop.
Worker’s compensation insurance is vital if you have employees, and as of this writing is mandated to carry it by every U.S. state besides Texas. This protects you in the event an employee is injured on the job and you have to pay out for medical bills or lost wages. General commercial property insurance should be the keystone of your insurance policy, covering things such as fire, floods, or if your shop was to be looted and all of your inventory stolen. You can set limits according to the value of your shop’s merchandise and any improvements you have done to the property. Most insurance companies will bundle all of the coverage you need into one policy, and it is often one of your lower expenses, but one of the most worthwhile.
Ideally, the goal of your business is to generate an income, and in order to do that, you need to manage your finances appropriately. This means keeping track of your expenses and sales in order to report them for tax time, making a budget for your business so you know exactly how much money you can allocate to each department, and paying all of your bills and taxes on time. Keeping organized in this area is very important. Keeping track of your expenses will save you money since you will be able to take deductions and lower your tax burden. Speaking of taxes is not an area I have much experience in, so I will leave this section short, however, there are many books I can recommend toward the end of this book if you want to read up on the topic in depth. The most important suggestion I can make concerning taxes is to find yourself a good accountant. A good accountant will know precisely how to file your federal, state, and local income taxes, as well as handle filing your monthly sales tax.
Sales tax is something that varies by state, but paying it works similarly no matter where you are. In Pennsylvania, where my business is located, sales tax is 6%. This means that you need to collect 6% on top of whatever you charge the customer for sales or services rendered. This 6% you will set aside and set up to pay to the state on a monthly or quarterly basis. A good accountant will be able to file this for you and can set up automatic withdrawals. All you need to do is make sure you are collecting the appropriate percentage and have it ready for when the time comes.
Making a budget and projecting your cash flow is an important step. Create a spreadsheet with your income and expenses on each side. Your income should be derived from how much your income was in the previous months, but also a projection of your increase in income based on how much income has been increasing thus far. Make sure to paint a realistic picture. Figure out what your income goals are based on what expenses you need to meet and what kind of increase in business you expect to generate from your new store and advertising campaigns. Total up all of your expenses such as utilities, services, payroll, advertising, lease payments, and inventory. Every month review your expenses and income and create a document to save for tax season. This is known as a profit and loss statement. It is not unreasonable to take a loss in the early months, but ideally, your business should start providing a decent, livable income within two years.
Figuring out what type of payments to accept is another crucial part of managing your finances. You want to accept as many different forms of payment as possible to maximize your business. This can include cash, credit and debit cards, Apple Pay and Google Pay, and maybe even cryptocurrency. Accepting cash is simple; all you need is a cash register. Accepting credit and debit cards is also fairly straightforward; all you need is a card terminal and a card processing provider. There are multiple ways to go about this. You can start off using a service such as Square, Stripe, or Paypal to accept cards, but these types of providers are typically the most expensive, with fees around 2% per transaction. If you are taking payments while on service calls, you will want the mobile card scanner that comes with dealing with these businesses, so the extra fee may be worth it. However, a brick-and-mortar business is best served by getting a full-sized card terminal and merchant processing service either from their bank or a third-party processor. In my experience, I have found that small local banks offer the best rates for card processing. Most of the time, small local banks offer the best customer service and support compared to third-party processors.
You will be confronted with the question of buying, leasing, or renting a card terminal and point of sale system. Typically, buying the equipment outright will provide the best bang for your buck, although it will be the most expensive option at the moment. Some processors allow you to bring your own card terminal, provided it is up to date and not locked to any particular account. This is the best option if you are able to do it, since you can often find reasonably priced used equipment online that will save you a lot of money over buying directly from the card processor.
Before too long, hopefully, you will find yourself with more business than you can possibly manage. If you did everything right in bringing in business, you will be so swamped with repair jobs and refurbishing computers that you will be up from early in the morning until late at night toiling away to get things done in time. It is at this point that you should consider hiring an employee. This is something that can save you a lot of time and make you much more money, but if not done right, can be a source of great cost and frustration.
The first step in hiring employees is to figure out exactly what you plan to delegate to them and figure out what a job description will look like. Figure out things like what duties you expect them to perform, what kind of hours they will work, and what kind of responsibilities they will have. Do some research into what similar positions are being compensated for online by looking at online job boards. Once you figure out how much you will be compensating your new employee you can go ahead and craft an ad to post in online job boards, local bulletin boards, social media, and of course post a help wanted sign in your business. Your ad should at least include the following details:
- A description of your company and where you are located
- If it is full or part-time work
- The title of the position
- The responsibilities of the position
- Skills that an applicant must have
- Skills that would be nice for an applicant to have
- A potential salary range
Finding a new employee is a very time-consuming process. However, you should not neglect the process and attempt to rush through finding the perfect candidate, as it is much more expensive to invest time into training someone new, only to have to terminate them and find a replacement if they don’t work out. It is well worth it to weed out any bad hires early in the process by making sure your expectations are clearly laid out and your interview process is thorough.
The main purpose of your interview process should be to determine if your candidate is a good fit for you. Having a good resume is less important than possessing the willingness and eagerness to learn and having the same passion for the work as you do. You should take into consideration such things as education and background to some extent, but more importantly, you should consider things like personality and compatibility with you and your business goals. It does not matter if your candidate is vastly more educated than you and extremely experienced technically if they are a personality clash and difficult to work with. Making sure a candidate possesses the competence to appear confident and the personality to get along with your clients is very important, since they make up the face of your business. As Steven D. Strauss puts it in the Small Business Bible: “Employees help set the tone, do the work, deal with customers, and are the ones on the front line. If they blow it, they give you and your business a bad name, and conversely, if they do things properly, you all win.”
Some questions you could ask in your interview:
- What are your goals and plans for the future?
- What is your history of working with computers?
- What is your history of working in a customer-facing role?
- How do you learn about new technology?
- How do you go about solving an unfamiliar problem?
- What does your troubleshooting process look like?
- How would you break down a technical problem into non-technical terms?
- Are you working on any computer-related projects in your spare time?
Of course, you can also add in some boilerplate interview questions such as “what are your strengths and weaknesses” and “what makes you the best candidate for this position” but this type of question doesn’t really give you the unique, open-ended response that you should be looking for. You want to find out what kind of person you are working with, not just how well they are at interviewing. You can also add in some technical questions as you see fit to gauge your candidate’s technical prowess. I think this is necessary, since you don’t want someone with a very minimal understanding of how computers work, but you also don’t need an expert as long as they are coachable and willing to learn.
There are a few different classifications of employees, according to the IRS, that you will have to keep in mind: the independent contractor, the statutory employee, and the common law employee. An independent contractor is an independent person who offers their services on an as-needed basis and handles their own taxes so that there is no withholding on your end. This would be something like a lawyer, real estate agent, or trade professional, and is typically not what you are going to be classifying your employees under. If an employer-employee relationship exists, then you are not dealing with an independent contractor and should not classify your employees as such, as there are stiff penalties for doing so. A statutory employee is an independent contractor who is treated as an employee, by statute, for purposes of tax withholdings. There are few situations where this classification would apply unless you have a sort of relationship where you provide an individual with materials and goods to work at home at your specifications. Typically, you will be dealing with a common-law employee.
You will need to pay at least minimum wage, even if you are not offering a very competitive salary in the beginning. You will also need to find a payroll provider to process your checks, social security and medicare tax withholding, and any other taxes. Before your new employee begins work you need to make sure you have the following documentation:
- The W-4 form includes personal information about the employee such as marital status and number of dependents for the purpose of determining federal income tax withholding.
- The W-2 form needs to be filed every year and includes such things as what income, social security, and Medicare tax were withheld.
- The I-9 employment eligibility form, needs to be completed by every new hire to document verification of the employee’s identity and their authorization to work.
- Proof of worker’s compensation insurance.
Using payroll software, manually filing your own payroll, or having your accountant handle it all for you is a question that will undoubtedly come up at this point. In my opinion, I think it is important to realize that filing your own payroll manually is a time-consuming process and you run the risk of payroll errors if you are not well versed in the tax codes for your local area. This is an option I would only consider if I had an excess of time and lower revenue. At some point, you will want to graduate to using a payroll program or having your accountant take care of it for you.
As of 2022, there are a few different payroll programs competing on the market. I am familiar with the most popular ones from my experience dealing with my small business clients and discussing what payroll programs they use and what they like about them.
Gusto: This is the program I use personally. It tracks and files all taxes and offers direct-deposit. As of this writing, it costs about $45 per month.
Paychex: They have a program called Paychex Flex which I have heard both good and bad reviews on, but it is very similar to Gusto in its features and the cost is about the same.
Intuit Quickbooks: This is a program that is very easy to use and has a few different pricing tiers, starting at $45. I have never used it personally but haven’t heard any bad reviews from my clients.
My technique personally is to use a payroll program to set up direct-deposit and generate reports. This way I can log in on a weekly basis and enter the hours my employees worked and have the program handle the rest. I use the reports that the program generates to send to my accountant on an annual basis for filing my taxes.
Once you have chosen your candidate and have all your paperwork in order to onboard them as an official employee, the fun begins. You’ll be faced with new challenges every day when dealing with a new hire, and how you go about solving each one reflects directly on your business.
Clearly documenting responsibilities that you are delegating is the first step, but you want to make sure there is clarity in everything that you are asking. Communication in the early days is vital. Having written processes for everything you are asking for is helpful, but even more helpful is providing demonstrations and being around at all times to offer feedback and support. You will find that you are spending more time training your new employee, that it feels as if having them around is costing you more than it is making, but making the investment in properly training them will soon pay off. Create documentation that breaks down things like standard repair procedures, how to sign a client’s drop-off into the computer, and how to handle any other repeatable processes. There may be times when you are busy and cannot be around to answer a question that pops up. For times like this, you should ask that your employee document their questions and come to you at a certain time.
Having your employee simply watch as you deal with clients, track information, and perform repairs is the simplest and most effective thing you can do, and this is known as shadowing. Encourage your employee to ask questions and be inquisitive while shadowing, and give them the confidence they need to be successful by allowing them to take the reins when they feel ready. With enough time spent shadowing you, they will quickly pick up on how you go about the daily procedures and how you run your business. Having a culture of positive reinforcement and open communication will make sure that your employees are always learning and never afraid to ask for help when they need it.
Benefits and Retirement
There may come a time when you consider retirement; this may not be for many years, but ideally, it should be on your mind as soon as your business is stable and has been running for a while, and once you have attracted and retained quality employees for some length of time, so that you may start making plans early. First I will discuss benefits that you may want to provide to your employees, and then some benefits you can provide for yourself.
The most basic benefits that you must provide to your employees are a minimum wage, worker’s compensation insurance, and time off to serve in the military or vote. Nothing else is mandatory. You should offer some kind of additional incentives in order to retain quality employees, such as offering bonuses, a retirement account, paid time off, life insurance, and health insurance.
Offering bonuses is the simplest and easiest thing you can do, and there are a few ways to go about it. First, you may define a goal for the business such as hitting a sales target, and offering a bonus when that goal is hit. You could also offer bonuses based on specific levels of employee performance, like positive feedback from clients or a certain number of sales or repairs hit. This works best if your employees handle a lot of sales, but less so for repairs, as you don’t want to encourage sheer quantity of repairs over quality. You may create some kind of customer satisfaction survey where you offer a certain bonus to your employees after a number of satisfied customers. Another nice thing you can do is offer birthday and holiday bonuses, which are always appreciated.
Beyond offering more money, you can offer PTO (paid time off). This can include things like parental leave, sick days, holidays, and vacation time. Providing plenty of time off will make sure that your employees have time to unwind and refresh when they need it and is one of the key benefits to retaining employees as it keeps them happy to stay working for you.
Health insurance is another potential benefit you may want to look into, although it is typically cost-prohibitive for most very small businesses to offer. I do not offer it in my own company due to the expense and the good fortune I happen to have where my employees can get their health insurance from somewhere else, such as their spouse or family. However, a lot of people won’t be this lucky and may require their job to provide health insurance if they want to stay there long-term. As of 2021, the Affordable Care Act requires companies with over 50 employees to offer health insurance. There are several types of health benefits you can look into, such as a defined benefit plan, a defined contribution plan, a health savings account, or a flexible spending account, each of which has its own advantages and disadvantages.
Retirement accounts require more planning and paperwork. The most common form of retirement account you can offer as a small business is the 401k. There are a few types of 401ks: the regular 401k, which allows employees to make pretax contributions to their account, but taxes any withdrawals made, and the Roth 401k, which allows employees to make contributions with their after-tax income but does not tax the withdrawals. There is also the Safe Harbor profit sharing 401k, which requires employers to contribute to their employees’ accounts, and the simple 401k, which is only for businesses with fewer than 100 employees and also requires the employer to contribute to the account. In a simple 401k, the contributions must also vest immediately, unlike other types of accounts that may operate on a vesting schedule.
Setting up these accounts for your employees requires finding a provider, usually one of the major investment companies, such as Charles Schwab, Edward Jones, or Fidelity, among many others. After finding a provider, you must create a 401k document that outlines the details of the retirement plan and sets up procedures to ensure that the document is followed. Once the plan is set up you need to maintain records of employee contributions and any employer matches for tax reporting purposes.
There are options for the business owner as well if you are not interested in offering retirement accounts for your employees but still want something for yourself. There are owner-only 401ks and IRAs (individual retirement accounts). The solo-401k, also known as the self-employed 401k, allows you to contribute as both the employer and employee. This type of account can be set up just like employee accounts, with a regular or Roth designation for tax purposes.
The IRA is ideal for the business owner with no employees, or if you are not planning on ever including employees in your company’s retirement planning. There are several types of IRAs: the SEP-IRA, the Simple IRA, the Roth IRA, and the traditional IRA. The first two mentioned are strictly for business owners, and allow you to make larger contributions than you would with a traditional or Roth account, although beyond that they share more similarities than differences. No matter the type of accounts you pick for yourself and your employees, it should be something that you think of doing sooner rather than later, so as to give yourself as much time as possible for your investment returns to compound and not leave money on the table.
Making An Advertising Plan
You will probably start advertising in one way or another before your business is ever off the ground. Getting the word out about your business is really one of the first things you do whether you realize it or not. It does not matter how good of a job you do or how well you know your stuff if nobody knows about you. So in order to bring in any business at all, you need to advertise in some form. This can be as simple as telling your friends and family or sponsoring local events that show your signs and posters. There are many forms of advertising which we will get into in the following pages, but one of the most important things to remember is to diversify your advertising plan to include a healthy balance of all of them.
Identify your main products and services: The first thing to do when determining how to go about advertising is to look at your products and services and find out what is most profitable and what is most commonly requested by your customers. If you are offering software repairs you may find that things like virus removal are particularly profitable and commonly requested, much more so than anything else you offer. You would take this service and focus your advertising plan on it.
Don’t try to market everything: You may offer a plethora of products and services, more than you can list, but this does not mean you should advertise all of them. You want to focus your advertisements so as to not overload your audience with information or lose peoples’ interest. You also don’t want to appear as a jack of all trades but a master of none. Once you get customers in for your most profitable products, you can expose them to other elements of your business.
What are your competitors doing and not doing: When crafting your advertising plan, you can see where your competitors are advertising and also where they are not advertising. If they have a long-standing ad in a particular publication, it is probably because it has been a successful ad, so it would make sense for you to publish there as well. If you find places where your competitors are not advertising, it may be an untapped market, or it may be a sign that it is a medium to avoid. You will need to do some experimenting in order to find out.
Understand your demographic: By knowing your demographics for each medium you are advertising in, you can craft an ad that takes full advantage of the chosen medium. Print ads will typically target older audiences, social media will typically target younger audiences, billboards and signs will be a complete mixture of all of your local area, and targeted online ads can be customized to whatever demographic you chose. Older clients may experience a lot of malware and pop-ups on their computers and not know what to do about it. Younger audiences may not have this problem so much, but someone without much money and about to start college will be interested in buying a cheap refurbished computer to save money. By understanding your demographic you can place different ads in different mediums that make the most of each.
Set a budget: Having a set amount set aside for advertising is important because you don’t want to spend too much or too little at the wrong time and set yourself up for failure. By knowing exactly how much you can spend at any given time you can avoid spontaneous buying decisions and more precisely trim or add to individual advertising campaigns as you experiment. It is also important to know that there is no guarantee of seeing returns in any particular medium for any length of time; you must experiment and slowly discover what works best for you.
Understand your own business goals: What do you plan to get out of your advertising? This should be something specific, such as more sales of your prime products and services. How will your advertising plan help you reach the more long-term business goals you have set and what will it take to make sure you get there? Advertising should be on your mind every day, whether it be tuning into your demographics, modifying your budget, or crafting new ad campaigns.
Figure out how you are going to track results: For some types of advertising medium it will be difficult or impossible to track if you are getting results, but you will want to figure out ways to measure success as much as you can. This can be in the form of simply asking customers how they heard of you, or offering a coupon and requiring that it be presented or mentioned to be used. For online mediums, it is much easier to track results, since many online ad platforms offer metrics on click-through rates and impressions. Your website can have more complex analytics set up that show how many visitors you are getting, where they are coming from, and how much time they are spending on your site.
Remember these points when crafting your advertising plan and be aware that advertising is a critical part of your business that you will have to tend to and nourish just like any other. In order to see success, you have to know where you are headed and what success means to you by setting goals. You will know if you have reached these goals by setting metrics and tracking results. You will see results easiest if you create a focused advertising campaign that spotlights your most profitable and in-demand products and services, and this campaign will be most successful if you understand the demographic that you are targeting. Let us move on to discussing some different forms of advertising.
Making a business card is one of the first things that should cross your mind, and is incredibly simple to do. When I first started my business I used a basic business card template and some pre-cut business cards that fit into my printer. This way I could experiment with what looked good and I was able to print out just a few at a time as I needed. Using homemade business cards such as this has its disadvantages though, such as looking a bit unprofessional and even feeling cheap to hold in your hands. I would suggest graduating from this method before too long. Hiring a professional to print bulk quantities of business cards for you will give you a better quality result and allow you to distribute more of your cards. There are many different companies that you can easily find online to print and even design your cards for you such as Vistaprint, PsPrint, Staples, and many others.
When designing your card it is important to remember what to leave in and what to leave out as far as what information you provide. A business card is often a new customer’s first impression of your business, so you want to be sure it is a good one. Your business card should include the following details:
- Business name and logo
- Phone number
- Website address or email
- Address of store
- Hours of operation
- Tagline or short description (just a few words)
- Small graphic or eye-catching design
Your business card should not be crowded with information. As long as you can tell what your business does and how to get in touch, that is enough. You could consider making your business card double-sided in order to maintain enough blank space and aesthetic appeal, by including the most important details such as business name and phone number on the front, hours of operation and a short list of common services, business description, or tagline on the back. The material your business card is printed on can also play a role in setting the first impression of your business. If your card is printed on paper that is too thin or flimsy it can make your card seem cheap and your whole business seem questionable. A business card printed on thick and glossy card stock will make a good first impression and set the right tone for your business.
Word of Mouth and Referrals
The most effective form of organic advertising is word of mouth, and this starts building the moment you get your first customer. You can make sure you have good word-of-mouth marketing by simply doing quality work. For the most part, word will spread itself; if a client is satisfied with your work, they will end up telling their friends and family about you if it comes up in conversation. The only downside is that it takes a long time to build up, and you won’t reap the benefits of word-of-mouth marketing in any meaningful quantity for at least a couple of years in business. However, once you do, you will find that you are getting new clients all the time who were referred by your past clients, and it will dwarf all of your other forms of advertising in terms of effectiveness.
Online reviews are one form of word-of-mouth marketing that you can take steps to accelerate. Studies have shown that people trust the reviews of strangers on the internet almost as much as they trust their own friends and families when it comes to making buying decisions. You can accelerate growth in this area by actively encouraging your clients to leave reviews and making it easy for them to do so. You can provide step-by-step directions for how to leave reviews on your receipts or email notifications, and remind clients when they are picking up their equipment after you’ve repaired it, that you would appreciate an honest review. Although you want to make it easy for a client to leave a review, you never want to incentivize them to leave reviews by paying them or offering free products. This is not entirely ethical and could backfire on you.
The best online review platform in my opinion is Google. The reason is that it shows up for everyone when they search your business and they don’t have to dig through other websites to find your reviews; they are simply presented to your clients along with the rest of your business details, pictures, and directions to your business. Facebook is also a reliable platform for reviews, and it is easy for a client to tag your page in their status for all their friends to see. They can also visit your business’s Facebook page and leave a star rating and a comment, which will show up for everyone who visits your page. I would avoid using paid review sites such as Yelp, Angie’s List, and Home Advisor, among others, as these tend to have manipulative review practices, lower conversion rates, lower visibility, and higher costs associated with them.
Getting your existing clients to refer their friends and family is crucial to building word-of-mouth momentum. People are more likely to talk about your business negatively if you did a bad job than talk about you positively if you simply did an average job. The key is to try and give each customer an outstanding experience and go above and beyond their expectations. You don’t want to scrape by doing an average job and hope that your clients talk about you. Under promising and over-delivering is one way to ensure that you always wow the customer so much that they are inclined to speak highly of you to everyone they know. Don’t set expectations that you can not deliver on, and try to go the extra mile with each job.
By far the most lucrative form of advertising to rely on outside of word of mouth is online. There are many ways to go about advertising your business online, from using free online marketplaces, social media, search engine listings, pay-per-click ads, and of course your website. Putting your energy into crafting a strong online presence will pay off better than almost any other form of advertising. In my experience, relying on a combination of word of mouth and online marketing is what brought in almost all of my business.
Free Marketplaces: the local classified section in the newspaper has been replaced with free online marketplaces. The most recent player in this arena is Facebook Marketplace. Craigslist has also been around for a while and is a great avenue for posting ads for your refurbished computers and to a lesser extent, your services. There are dozens of other apps and websites as well, such as OfferUp and Decluttr, but the key to these websites is they are typically used for people selling their unwanted items on the secondary market. It is an untapped resource if you can provide a quality ad and maintain your presence without overpowering other small local sellers.
The disadvantage to these avenues is the time investment required. You will often get a lot of responses to your ads in the form of people asking questions without buying your product. You will also need to consistently post and renew your ads. If you have the patience to weed through the time wasters and to stay on top of your posts, you can acquire customers for a very low cost. Some of these customers may also become long-term clients of your business when they need repair services. You will also be able to use these contacts to accelerate your word-of-mouth marketing. All in all, it is often a good use of your time to post your products on these free online marketplaces.
Social Media: Having a social media presence is a very important aspect of your advertising plan. You can use it to promote brand awareness and to collect and showcase your good reviews. Social media goes hand in hand with your website, in that it should be used to drive new leads to your website or to your contact page so they can get in touch and hopefully visit your store. One particular advantage of social media is that you can maintain brand awareness at a lower cost than any other form of advertising. This is done by simply providing value in the form of consistently posting educational or interesting material, as long as it has something to do with your business.
Facebook is probably the first network you should consider for your business, and with good reason. It is the largest social media network with over 2 billion users, and it makes it extremely easy to create a profile for your business, with a wide array of tools for marketing and creating ads. Facebook allows you to create ads that encourage messaging your page directly, so you can chat with leads efficiently. Creating an ad is as simple as filling in a template, uploading a design if you have one, and selecting your audience. This can be your local area within a certain mile radius, people who have certain topics under their likes, or people in a certain age group. The best part is you can tweak your ad settings on the fly without having to wait to create a new ad; this can be great for experimenting with your audience settings.
To a lesser extent, Twitter and Instagram can also be used to promote brand awareness and create advertisements. Twitter is ideal for posting short, frequent updates about your business, and Instagram is for posting relevant pictures. You can also consider networks such as LinkedIn for creating a business or professional profile. Linkedin can be great for seeking out other business customers and also has its own advertising tools and messaging system similar to Facebook.
Search Engine Listings
Creating a quality search engine presence is vital to your advertising plan. When people need anything, their first action is to look it up on a search engine. If your business is easy to find on the internet, you are creating a lower barrier of entry for people to bring their business to you. Most customers are not going to go through too much effort to find the business they need, and if you are one of the first few options that they find, they will most likely go to you. Focusing on SEO or search engine optimization will pay dividends for making sure your business is front and center when someone is looking for your services.
Once you have a website and a social media presence, search engines will begin indexing your business and over time you will begin to show up organically in searches. You can accelerate this process slightly by making sure your website is optimized properly. This means that your site loads fast and with no errors and has the correct accessibility tags and fall-backs in your code to be compatible with older web browsers. If you use a website builder to make your site, you can’t really check on this to make sure everything is as optimally configured as possible, but for the most part, website builders will use tried and tested code that is as optimized as it can be. If you built your site from scratch, however, you will have to make sure everything is perfect here before you go live, or you will suffer the consequences of low search engine optimization. Crafting quality relevant content for your business to post on your website, and updating it frequently is one thing that you can do for your SEO to make sure you rank higher in search results. Black hat hacks such as stuffing your website with keywords, or hiding keywords on your site do not work anymore and may backfire on you.
Google offers a free tool called the Google Search Console for learning more about your website and how it can be optimized further. You can register your site with Google and see such things as your web and query traffic, what keywords people are searching to get to your site, where your traffic is coming from, and if Google has any problems accessing your site. There are other tools for checking the quality of your website for SEO purposes such as Moz.com and Semrush.com.
When someone searches for your services online (on Google) it is crucial that your business appears in what is known as the local 3 pack. This is where the first three businesses that are most relevant to the search are showcased with a headline, a picture, and business information prominently displayed, often alongside a map when on mobile. Not to be mistaken for Google ads, which appear at the top as well, these are the three most valuable pieces of online real estate for local businesses. If there are only two other competing businesses in your area, then each one of you may show up in the top 3. If there is stiff competition, however, you will have to do something to make sure you are on the list. The most important thing to make your placement more likely is to have a Google My Business profile and have all of the information filled out and updated frequently. The next most important thing to guarantee your placement is to have a lot of reviews, preferably good ones.
Google Ads: One way to cheat your way to the top of search results is by simply paying for Google Adwords. Adwords lets you buy ads that will show up when a user searches for certain keywords. You can buy ad space for a whole list of keywords or just a select few, and the best part is that you can start with very little money. Starting small allows you to tweak your ad campaigns as you discover what works best. With Adwords, you are not charged a flat fee to create and display your ad, but instead, you pay each time someone clicks on your ad. The amount you pay for each click depends on what bid you set yourself. That can be anywhere from a few cents to a few dollars. If your bid is not high enough, and a local competitor has a higher bid, their ad will be displayed before yours in search results.
Google Adwords doesn’t just refer to listings in Google either. When you start a campaign, you can choose whether you want to advertise only within Google, or within a search network of Google's partners. You can also set your ads to be displayed as banner ads on other websites, however, in the case of a small computer store, this may not yield the best results. In my opinion, sticking to local search engine listings will yield the best results.
Making a Website
Making a website is, in my opinion, one of the first things you should do. It is easy enough and inexpensive enough that the barrier of entry is very low, and it is something that will evolve over the life of your business, so it is best to get started early. A lot of questions may come to mind when thinking of making a website, such as how to go about building it, how to manage and update it, how to make sure people can find it, what to put on it, and so forth. Determining whether to build your own website from scratch, use a website builder, or hire the services of a professional web designer is a question of how much time you have, what your own abilities are, and what your budget is.
Building your website from scratch: if you want to be hands-on in your approach and have as much control over the design of your website as possible, this is the way to go. However, you need to have deeper knowledge of what goes into developing your site, design layouts and formatting, hosting, and deployment in order to consider this path. If you don’t know what you are doing, this could be the most time-consuming route to take, and if not done properly could end up costing you in the long run as opposed to paying for a website building service or a professional designer. The easiest way to go about creating a website from scratch that involves as little coding as possible is to use WordPress and use a prebuilt theme for your design. Once you pick a theme, you simply fill in the blanks with all the relevant information.
The next step to getting your website online once you have the content and the design down is to make sure you have a quality domain name and that the one you want is available. You can check the availability of the name you want and register it typically very cheaply. I recall paying about $10 for my domain name. After buying and registering your domain name you will need to set up web hosting. There are so many hosting companies out there to choose from, but you will want one that has a proven track record of reliability and can handle the traffic that you expect your website to generate. Once you have your domain name and hosting set up, you will connect it by following the steps laid out by your domain registrar and web host.
Using a website builder to create your site: Using a site builder is probably the quickest way to build your site and get it online. Builders such as Squarespace, Vistaprint, Wix, or Weebly, among others, typically provide an all-in-one experience. That means they will take care of registering and setting up your domain name, hosting, and security. However, this comes along with having less freedom in your design and less ability to update or migrate your site if you ever want to upgrade. They will often own your domain name and design, so if you ever want to leave, you will have to recreate your site from scratch. The costs of using a website builder are also higher per month than you would pay if you build your own site.
Inbound and Content Marketing
This is the concept of providing valuable information in the form of blog posts, social media posts, ebooks, podcasts, and videos without asking for anything in return. By informing and entertaining your prospects without having any expectations, you are strengthening relationships with your customers and becoming an authority in your field. Instead of pressuring your customers into buying something right then and there, you are focusing on providing information and nurturing a long-term relationship, that way when they are ready to make a buying decision, they will recall your business as a trusted resource.
What sort of content should you create and where should you put it? My suggestion would be to figure out what questions your customers commonly ask you and answer these in the form of blog articles on your website, posts on social media, perhaps even videos on Youtube. As long as you are consistent with it and provide entertaining and informative posts, you should see at least a minor increase in web traffic that leads to a few sales down the road. With a social network, people who like your page or follow you will get your latest updates consistently. With a website, however, this is not the case, since visitors come and go. When you are trying to gain a readership of your blog posts, this can present a challenge.
One way you can continually nurture leads to your website's blog posts is by creating a newsletter. This means collecting email addresses from your site’s visitors and emailing them new posts whenever you make them, along with additional material such as coupons and offerings for your business. Make sure to provide more content than advertisements when you do this, as you can easily scare your prospects away with too much advertising.
Direct mail: Print advertising may not be what it used to be thanks to the internet, but if I had to pick one form of print advertising that was the most effective, it would have to be direct mail. Direct mail can be letters, coupons, or postcards. List brokers provide a wide range of detailed demographics that you can peruse, allowing you to get extremely specific with who you want your mail to go to. If your area is smaller, it may make more sense to simply mail to everyone in one or two zip codes.
Direct mail can often be effective with just one mailing, whereas other forms of advertising need to be repeatedly seen by prospects in order to make an impression. You can use this to your advantage by having direct mail campaigns only at certain times of the year when the time is right. One major disadvantage to direct mail, however, is the cost. You will need to be prepared with a minimum of a couple of thousand dollars to mail within your local area. This cost is divided up between buying a mailing list, designing and printing your mailer, and postage.
Newspapers: The form of advertising that has been hit the hardest in the past two decades is definitely the newspaper ad, yet it is still worth mentioning since the typical newspaper reader is older, much like the typical computer store client in a lot of cases. Advertising in newspapers can be a cost-effective way to build brand awareness, provided you are consistent with your ad placement and the length of time that you run your ad. Simply purchasing the cheapest spot available for one month or less is not going to be effective, and in fact, would be quite a waste of money. The effectiveness of your ad will be increased the longer you run your ad, and the more times people see it over time.
The ideal spot in a newspaper or magazine is on a front or back cover, but when this is not possible due to cost, getting a smaller spot on an inside cover will do just fine. More important than the exact placement of your ad, is the consistency with which it is shown. Most print applications will give you a discount for signing up for a six-month or longer term. One way to validate if your ad is truly working is to create a coupon-style ad with a dashed border that encourages being cut out and brought into your store for a discount. This way, your potential customers will be motivated by a discount, and you will know exactly how many people found your ad and decided to act on it. With this information, you can figure out your cost of conversion and decide if it is worth it to continue running your ad.
Yellow Pages: The Yellow Pages are still a trusted source for finding local businesses for a lot of people, particularly the older client. A lot of the older demographic places a lot of trust in the Yellow Pages, much like a newspaper. Even though most of your clients will come from online sources, it is still worth it to have some sort of presence in your local Yellow Pages. If your competitors have listings in the Yellow Pages, you can assume it is at least marginally effective for them and should consider getting a placement next to them.
Since most of the demographic that reads the Yellow Pages are seniors, it makes sense to create an ad with bright colors, with large and sharp text. Get straight to the point in your ad and leave out anything that is not one of your main services. A minimum requirement is having an ad that draws more attention than your competitor. As long as your ad is listed under the correct category with a nice, bold heading, and bullet points listing what your business provides, you can count on your business receiving at least a few calls a year from interested clients.
Coupon publications: Another form of direct-mail advertising, coupon publications usually come in the form of a magazine or pamphlet that is delivered to every house in a certain area. Depending on where your business is located, you may have one or many local publications where you can place an ad.
Costs range from several hundred dollars on the low end to several thousand dollars on the high end, depending typically, on the size of your ad and the length of time of your advertising agreement. Creating an ad in the form of a coupon is a great way to bring in those potential customers who are always on the lookout for a good deal. If your call to action is good enough, and the deal you are offering on your coupon is competitive, you are bound to get at least a small response from your ads. The key is building awareness of your business by running your ad for a longer length of time, this way, when someone has a need for your services, they are already primed for doing business with you thanks to the brand recognition built by repeated exposure to your advertisement.
Flyers: The classic single-page flyer should still have a place in your marketing arsenal thanks to its highly locally targeted approach. A simple flyer with a call-to-action hung up in your local grocery store or church, can gain a surprising amount of traction if you are clear and concise in your offerings. When I first started my business it was one of my go-to forms of print advertising because of the low cost.
Placing your flyers can be done in a few different ways. You can locate bulletins in your local businesses to hang them up so that foot traffic passing through these businesses has eyes on them, or you can print massive quantities to place in mailboxes, on windshields, doorknobs, floormats, or anywhere else that someone may pass by. Make sure you provide multiple ways to contact your business and be as specific as possible when describing your business’ location.
Billboards: Any form of signage located outside of the business can be called a billboard. Whether you are thinking of the classic roadside billboards which come in massive sizes, or the tiny yard signs that you often see used for real estate, billboards can be an effective way to get eyes on your brand and build awareness.
The cost of a billboard is one of the limiting factors that keep most businesses from using them. Billboards can be prohibitively expensive, and depending on the area they are located, can run into the tens of thousands of dollars per month. Even low-traffic areas still command into the thousands. This is a large investment to make, and it is difficult to quantify your results. Even so, billboards can be a great way to get in front of your local market and build brand awareness.
When designing a billboard, it is important to keep your message short and your text as large and simple as possible. Your audience is typically going to be driving past and will only have a brief moment in which to glance at your billboard, so you want to make sure you use these few seconds to make a good impression and get your point across.
With billboards, you want to keep in mind your local zoning laws and regulations on outdoor signage, as you don’t want to get in trouble with your local authorities and start racking up fines. In my case, and as is the case in most towns and cities, I was required to go to my local township office and provide the details of my billboard plans in order to get a permit. Costs for a billboard permit are usually based on the size of your proposed signage; the bigger the sign, the bigger the fee. It is important to make sure you are on the right side of the law when putting up a billboard since any fines you get for non-compliance can quickly negate any profits brought in by the billboard.
Other forms of advertising: There are countless other forms of physical and print advertising that you can consider. Printing ads on the back of receipts can be profitable in some cases. Putting an ad on a placemat at a local restaurant can be effective. Although I have never done it personally because the cost just did not make sense for my marketing plan at the time, it is worth looking into to see if it makes sense for your business.
Sponsoring a local event can be a good way to get eyes on your business. Your local high school will often have sponsorship opportunities for things like sporting events or competitions. Churches and charities are other places that may have sponsorship opportunities. These types of events usually draw a decent portion of your local demographic, and you may end up being talked about at the event when attendees see your signage or posters. It can be difficult to quantify results from these types of marketing efforts, but most sponsorships can be quite inexpensive, and therefore worth a try, if nothing more than to build a little more brand awareness.
Your current customer base can be a gold mine of repeat business if managed correctly. If someone has a good experience with your business the first time around, they are bound to return to you when they need something else. Knowing this, you realize that one of the most effective forms of marketing is simply doing your job well. If a customer is pleased, they will return again and again.
Even though happy customers are often repeat customers, you don’t want to leave it up to chance that they will return of their own accord. Collecting data such as email addresses and phone numbers allows you to reach out periodically to check in with them and offer your services. When reaching out to an existing client, it is important that your focus is on the relationship, not on simply advertising to them. If you are always in selling mode, you will scare away clients from wanting to deal with you. No one wants to get marketing emails or texts constantly, so keep your messages short and sweet with a focus on just checking up on them and asking how things are going.
No matter what your marketing efforts amount to, they will mean nothing if you are not there to answer the phone. If you are hard to contact and hard to find, your advertising will be for nothing. Make sure you keep your phone on and get back to your clients immediately if you should ever miss a call. Your cost to acquire each client goes up with every lead you let get away, so having a system in place to assure you never miss a call is of the utmost importance.
Figuring Out What Services You Will Offer
The most important asset your business has is you. What you do with your time and what you prioritize will set the course for your business’ success or failure. One of the difficult things you will have to do in the beginning is narrow down your focus to things that give you immediate returns, while still cultivating the seeds for future returns. How is this done? The easiest way is to figure out your strengths and weaknesses, both in terms of what you are good at and what is the most profitable use of your time.
When you are in the business of repairing computers, you will very often see the same types of issues again and again. You will have things such as virus removals or cleaning up pop-ups that are very predictable and seem to afflict everyone. With every computer on the market, the repairs for these types of things are going to be almost identical. The same can be said about a good majority of hardware repairs such as screen replacements and hard drive installations; for the most part, the cost of parts will be similar and the labor time estimates you end up quoting will be the same. You may rely on your memory to figure out how much each thing typically costs you and what kind of profit margin you can expect to get out of it, but the intelligent computer technician will begin creating a repair services menu.
It creates a little bit more trust when you have a paper already printed out with pricing, so it doesn’t seem as if you are coming up with prices on the fly and perhaps overcharging them based on some uncontrollable factor (such as a potentially rude client or if you are having a bad day). What you put into your repair menu is up to you. After a couple of months of being in business, you should have a good idea of your most popular services compared to the sort of oddball services that you don’t see much. If you find yourself doing a particular task for a client more than a few times a week, it is probably deserving of being on the repair menu. You will always have new issues coming in your door that you have never seen before, or people calling to request an estimate before you have seen what they have.
I will introduce the tools required to perform the majority of services briefly followed by going into more detail on those services that I think are most important to offer. My shop did not offer repairs on all electronics, or mobile devices such as most phones and tablets, although you may find that you want to offer some additional services such as stereo, television, and video game console repair. You may find that your shop thrives on that business, however, in the following pages I am only going to discuss computer repair. There are some other services outside of repairs that are logical for a computer store to offer as well, such as copying, faxing, and desktop publishing services, and these I will discuss briefly as well. Just remember that it is important to specialize; to find your niche or area that you do particularly well, and expand on that.
Should You Offer Free Diagnostics?
You can’t have pricing figured out for every little thing in advance but it helps to have as much as possible already figured out. For the rest of your repairs, you will have to have a look at the computer or device before you know how much you will need to charge for its repair. Often, you will be confronted with an issue that does not readily appear to have a solution and must be figured out first. There are some times when you will have to invest time before knowing you will get paid for it. In times like this, you should have a very clear diagnostic policy.
Will you offer diagnostics for free, or will you charge for them? If you charge money upfront for a diagnostic you will guarantee that you always get something for your time, but you may lose the trust of your client, and it may appear that you are taking in jobs that you know you can’t fix, simply to collect the diagnostic fee. You can offer to take the diagnostic fee off of the final cost of the repair, which gives an incentive for the customer to get their computer fixed at your shop once they know how much it will cost, as opposed to not fixing it or taking it to another shop. The best course of action on the other hand might be to give away your time as an investment in client trust by offering diagnostics completely free and with no obligation. You may spend time figuring out an issue just to end up not getting paid for it, however, you will find your customers are much more excited to take a chance leaving their computer with you if they know you are not going to charge them just to look at it. This small investment of your time will lead to much more business and satisfaction from your customers.
Quality Control and Safeguarding Client Property
Quality control is an important thing to take into consideration when you are offering repairs. You don’t want to break someone’s computer or lose some piece of hardware, and you certainly don’t want to risk data loss. These things can be guarded against in several different ways.
You can keep a record of what client property you have in your custody in many ways, from simply taking a note and attaching it to the equipment, to implementing a barcode system that is connected to your database. The method I have personally employed is simply recording the client’s contact information, and affixing a sticky note with their name to whatever equipment they drop off. You may take it a step further by having your client sign a form stating that they are dropping off their equipment and specifying exactly what is included. The important part is that you are not losing any of your clients’ property or misplacing it in your own storage. This is achieved easiest by simply maintaining a clean workspace and an organized shelf or locker that keeps client computers separate from your own.
As for client data, it is important to make it known that data loss is a possibility with everything you do, which is especially true when working with hard drives or data storage medium that is old or worn out. In many cases, hard drives that have been working inside a computer for many years may fail the moment they are removed and plugged into another device, which sadly creates a situation where it appears the technician is at fault. You should make every effort to encourage your client to back up their own data first, and if that is not possible, just make them aware that data loss is a possibility if their hardware is very old or being brought in for some kind of malfunction.
Client data is also very sensitive, and you don’t want to be looking through peoples’ files if you are tasked with recovering it. Simple backup software such as Recuva or EaseUs will perform most of the backup and recovery jobs that are possible. You want to maintain a backup of all your clients’ data as you are working on their machine, as you will often be faced with repairs that require new hard drives or operating system reinstallations, in which case it is very handy to have a backup premade. Setting up a computer in your shop for the sole purpose of data storage is wise, as you don’t want to use a computer that has other purposes or is connected to the internet, mainly because client data will often contain viruses and malware.
Contracts and Service Agreements
You never want to finish up a job and have the client complain that it costs more than you originally quoted them. You never want to finish up a job and hand the client their computer only for them to claim that it is the wrong computer! This last one has happened so many times, and every time it has actually been the client’s computer. We have been forced to show our security camera footage to a client when they simply could not believe the computer we were trying to give them was indeed theirs. They could not recognize their laptop after we installed a new screen and thought we were trying to rip them off. Most client disagreements like this can be prevented in advance by simply having a basic contract or agreement of service.
You’ll want to have a specific agreement drawn up that you reuse with every client. You’ll want to have something that you can print out and show to your clients and collect a signature. This agreement needs to make clear exactly what work you will be performing on their computer, what work you will NOT be performing on their computer, the cost of this work (take payment in advance where possible), and the length of time this work is expected to take. You should also record the serial number of the computer and perhaps attach a picture as well (in the event of a forgetful client who does not remember what their computer looks like). If you are providing any kind of warranty it should be precisely detailed in this agreement.
Having a lawyer briefly review any documentation you come up with is a wise choice, and often worth the cost. In my experience, having a local professional attorney review some contracts is well worth the cost of under $200. It can save you a lot of time and headaches to get all your ducks in a row before you have any client disagreements.
Arranging Your Workspace
Your workspace is where you will spend the majority of your time in your business, at least until you begin delegating work to your employees and focusing more on growth. The passionate technician will always be drawn back to their workbench even after they find success. Even after all these years, I am still excited to sit down at my workbench and take apart a new computer for the first time. Having an environment that makes you excited to return to time and time again is very important for maintaining your professional enthusiasm. Your clients don’t want a tech who hates their workspace and hates taking apart computers. So how can you make sure that you fall in love with your working environment and the work in it?
You may already have a space set up where you work on computers. A simple desk with some basic tools is really all you need to get started; enough space to take apart a laptop, a basic screwdriver set, and a computer available for you to research problems and run diagnostics on hardware.
When you move into a commercial space and start dealing with dozens of repairs a day and a large backlog of repairs of varying levels of difficulty, you will need to make sure you have an upgraded workspace to deal with the increased traffic. The retail showroom of your store we will discuss in another chapter, but as for the layout of everything behind the counter, this is considered your workspace and can be broken down into the following categories:
- Counter space for taking in client repairs and providing support face to face with your client. This should be the first place your eyes go to when you walk into the front of your shop, and it should be natural to walk straight there. This space you should keep clear and ready to receive new jobs. The only things that you should dedicate any real estate to here are a cash register and a computer to take down peoples’ information when they drop something off.
- A space for your diagnostic computer and backup systems. You want to have a computer available at all times to run diagnostics on things such as hard drives, or perform data recovery and back up clients’ files.
- A neat and tidy network equipment area. You want your network equipment easily accessible and organized in the event you need to troubleshoot something. A computer store without internet is barely a computer store, so you want to make sure you have quality equipment and can get to it when you need to. Make sure your modem and wireless router are tidy and connected to an uninterruptible power supply. You can also connect things like a network storage device or server in this area.
- Space for your most commonly used tools. Perhaps have a cabinet or shelf where you keep all of your most accessed tools such as screwdrivers, spudgers, proprietary tools, multimeters, cable testers, etc. For my setup, I have two long shelves under my counter space, about 10 feet long apiece, that contain sets of drawers in varying sizes from large enough to hold cables, to small enough to be sufficient for holding all different types of screws.
- A space to work on computers. This should be spacious and well-lit. Depending on the size of your facility you may be able to have separate spaces to work depending on the nature of the problem and the type of equipment. For instance, my shop has separate spaces for working on client laptops vs store inventory laptops, motherboard replacements, and full laptop disassemblies, desktops, and all-in-one desktops. Each area should have plenty of outlets available as well as ethernet cables so you can wire a device to the internet in a jiffy if you need it.
- A space to securely store your client's equipment. This should be divided up into jobs that just came in and need attention, jobs that are waiting on parts before being repaired, and jobs that have been completed and are awaiting pick up. You need to make sure all work is labeled and kept together. You should never lose track of a client’s charger, laptop bag, or other accessories because it wasn’t labeled.
- Space to keep your inventory. Have an area where you store your incoming inventory awaiting refurbishment and a space where you keep your stock of computers ready to sell. You may have custom orders or systems that you list online to sell, the key is to keep this area organized so you can access what you want quickly. Have your parts and accessories perfectly organized by category, brand, price, etc. so you always know where to find everything. A quality system of shelves comes in handy for this purpose.
- A space to manage any shipping and receiving. You’ll want to have a spot available for opening packages since it can be messy if you are getting boxes full of peanuts and packing materials every day. You’ll find a dedicated spot to pack and ship will be handy since it is something you will most likely find yourself doing if you do any kind of online sales.
I like to have different surfaces for laptops and desktops, each one being perfectly equipped for the expected hardware. Laptops will have chargers neatly organized on shelves close by, and a multitutde of screw drivers and most commonly used laptop tools like spudgers and usb media. For the desktop area, I hook up a 4-port KVM switch with VGA and USB, with a secondary monitor available with DVI and Displayport, and yet another monitor with HDMI. With this setup, I can work on many desktops at once for maximum efficiency.
Tools of the Trade
When working in your computer store, you are not very powerful without your tools. In fact, you are almost powerless when it comes to having to do any sort of hardware repair. I personally started doing repairs with nothing more than a screwdriver, and over the years built up an arsenal of tools, acquiring them as the need arose.
Screwdrivers and Opening Tools
You should keep a set of precision screwdrivers that have Phillips head and Torx bits at the least. The 3-point or 3-wing screwdriver, and the pentalobe bits are also crucial for working on most Macs. The triangle, hex, and flathead also come in handy for a lot of things. You can find screwdrivers that are manual or ratcheted, as well as electric models, which may be of use if your wrist ever gets tired. A typical set of manual precision screwdrivers will usually run you no more than 10 or 15 dollars. I also recommend having an Allen wrench set, though you will seldom run into computers that require it.
A magnetizer/demagnetizer is a small item that will prove valuable to you when your magnetic screwdriver starts to lose its potency, or when you need to demagnetize your bit for working on a particular piece of equipment. These can be had for just a few bucks.
A smart wrench and metric wrench set: can be useful for some projects. A smart wrench is simply a wrench with adjustable jaws. A set of metric wrenches can be had for just a few bucks and is similar to the smart wrench, but they are individually sized wrenches instead. A set of precision pliers is also good to have in your toolbox.
A set of spudgers and openers: you can find very inexpensive sets of plastic spudgers for pulling apart most smaller computers. Many of today’s computers require some kind of spudger stick or wheel to open up. One of my go-to tools is an old debit card. For some computers that have removable glass pieces, you will also want a set of suction cups. You will sometimes get a complimentary set of these suction cups along with your replacement parts depending on where you buy them from.
An X-acto blade or precision knife is something I use every day for opening very fine items or making precise cuts. Getting one of these is highly recommended as you will always find a use for it in some way or another. You most likely already have scissors but I suggest getting a few different sizes and types; one for small cuts, one for packing, and one more because scissors always seem to get lost and you want to have a spare.
A wrench, set of pliers, and wire cutters are a few more things I would suggest keeping on hand in this category. Finally, tweezers are invaluable when working on tiny components.
Safety and Organization
ESD mat and antistatic wrist strap: This is something I have to recommend although I must admit that I am guilty of not using them most of the time since most repairs I end up working on are not that sensitive. But if you are disassembling a laptop, building a computer, or handling any high-priced equipment, it pays to make sure you don’t zap it. My technique, personally, is to have faith in the fact that I don’t have very conductive flooring and typically touch something that is grounded every other minute, but I can’t in good faith say that is the best idea (although I have never damaged anything from ESD yet).
Organizing screws: there are two things for organizing screws that I use every day. The first is a set of small plastic storage drawers, a very inexpensive solution to keeping all different kinds of screws separate and organized. You can find these online and in most hardware stores. I keep every extra screw I find and sort it by type in this set of drawers. You would be amazed at how many screws seem to just turn up out of nowhere, and after a little while, you will have more screws than you will ever be able to use. The second thing I use often for keeping screws organized is a magnetic screw mat. This is a magnetic pad about 8 inches by 8 inches with a grid pattern printed on it, that comes in handy when you are taking apart a computer with a lot of screws. Simply place each screw on this mat and you will never have to deal with losing screws halfway through a project. Most of these organization mats are also a dry erase surface so you can write on them with a dry erase marker in order to label each screw as you work. I purchased my screw organization mat from Ifixit.com but they can be found in many different online stores. For the inevitable dropped screws, I also keep a magnetic screw collector, which is simply an extendable stick with a magnet on the end of it for picking screws up off the floor.
Some additional organizational tools I use every day are things such as cable ties, zip ties, and rubber bands. Velcro straps are also very useful for things such as wrapping wires. You will often use cable ties and zip ties when tidying the inside of a freshly built computer. Rubber bands have a hundred different uses as well and they are a critical part of my organizational system. Keeping your tools and inventory organized allows you to work faster and ultimately make more money, so it is not an area I would neglect.
Air duster: very important for cleaning computers. A compressed air duster is perfect for its intended use, cleaning keyboards and the inside of computers. Make sure to never point the can down as liquid will come out. I have heard vacuums and air compressors recommended for cleaning. These can work but are less ideal; a vacuum could generate static electricity, and air compressors are loud and can build up moisture inside.
Alcohol: Isopropyl alcohol is great for cleaning residue off of most devices, particularly removing the thermal paste from a processor when you are replacing or reapplying the thermal paste on laptop and desktop processors. There is a particular brand of adhesive remover that I have used since day one called Goof Off. It is a mixture of glycol ether and benzyl alcohol among other ingredients that work very well for giving a dirty old computer a brand new look. It is only for exterior use, and you should never apply it directly to the computer, rather apply it to a cloth or swab first.
Microfiber cloths are ideal for cleaning the exterior of computers, while cotton swabs and toothbrushes come in handy for the finer details. I typically use a dry microfiber cloth for cleaning a computer screen, and a different microfiber cloth dampened with alcohol to clean the rest of the exterior. Cotton swabs are used for cleaning delicate internal components, particularly wiping old thermal paste off of a processor in order to apply new.
A digital multimeter: this is essential for checking to see whether a certain device has current flowing through it and how much. You will see four categories of multimeters, each one designed for testing different types of devices. Category 1 is what you are looking for. These multimeters can test for things such as AC and DC current and voltage, resistance, capacitance, and continuity. You can find something simple with the functions you need for under thirty dollars. There are also devices that test the equivalent series resistance of electrolytic capacitors, which determines if a capacitor is working as intended. These are separate devices from multimeters and come in handy if you are doing motherboard repairs.
Power Supply Testers: you can test a desktop power supply by simply plugging its cables into one of these devices. This provides you with a quick and certain answer when you suspect a desktop to have a bad power supply.
An IR thermometer is useful for being able to point at something and pull the trigger to get an instant temperature reading. It is something I use often in my shop for checking the temperature on various parts of the computer while it is on, although I more commonly use it to play with my cat, as she likes to chase the laser.
Digital caliper for measuring small parts and screws. Button cell battery selector for figuring out the size of a button cell battery.
An outlet wattage tester is a device that you plug into an outlet between a device and it will show you how much wattage that device is drawing. I don’t use this too often, but they are very inexpensive and nice to have.
If you are offering soldering services it is crucial to have a quality soldering station, rather than just a simple soldering iron. The soldering stations I recommend are offered by Hakko, and a decent entry-level station such as the FX-888D can be had for around $100. Hakko also makes much higher-end soldering stations and other equipment such as smoke absorbers and fume extractors. I do not recommend using a soldering iron, which is a simple device that plugs directly into an outlet and has no control over temperature.
Heat Gun: for loosening glue and opening devices that are sealed. This can also be used in some soldering applications. It looks like a hairdryer on steroids. The more dedicated solution is a hot air rework station, but due to its expense, this is only necessary for the much more prolific soldering professional who frequently needs hot air.
The main supplies you should have on hand are solder, solder wick, flux, and something to clean your soldering tip. All of this is very inexpensive and can be found online at Amazon.com or Ifixit.com or in some hardware stores.
I would suggest having an ethernet crimper and punch-down tool as well as an ethernet cable tester if you are making your own ethernet cables or if you find yourself having to repair ethernet cables.
A magnifying glass or magnifying lamp is invaluable for seeing the small details.
Thermal paste is crucial if you are doing any processor replacements or find yourself having to remove a computer’s processor when cleaning or reapplying paste in order to get lower operating temperatures.
Superglue is very useful for repairing plastics when they are cracked or chipped. You will probably run into many situations where you will wish you had some superglue, so I suggest having it on hand. Though if you do literally get it on your hand, having isopropyl alcohol, as I mentioned earlier, is perfect for removing it.
Tape (double-sided, electric, duct, scotch, packing). You will use a lot of tape in your computer store and I recommend always having a selection of it on hand.
USB DVD drive. Useful for booting when a computer does not have an internal disc drive and when you can’t use a USB flash drive for whatever reason.
Your software tools are just as important as your hardware tools when working on computers at any kind of scale. Eventually, you are going to need to check the health of a hard drive, ram, or another component, or repair some system files. The software can do most of the heavy lifting for you when it comes to a lot of tasks. Over the years, I have built up an arsenal of software tools that help me become a superuser when it comes to getting repairs done fast.
One thing that I find myself doing a lot of, is reinstalling operating systems. No matter if it is Windows XP or Windows 11, there is always a computer in my shop that is getting a fresh install of the operating system, even Macs are no exception. It is handy to have the proper installation media for multiple operating systems, this way you are always prepared when the inevitable need arises. I like to keep both DVD and USB boot media on hand for Windows 11 all the way back to Windows XP, with both 32-bit and 64-bit versions. For Macs, I go a different route depending on the operating system version, since there are so many. For most newer versions, I simply use a USB loaded with the installer, but for older versions of Mac OS, it is faster to clone the operating system off of a preinstalled hard disk. For times when I need to clone an old MAC OS, I simply boot the Mac from this disk and select the operating system I want to run.
Rescue Kits and Antivirus
With new versions of Windows, performing resets and reloading the operating system is so quick and efficient, it is usually the route I will take when repairing a software issue. However, sometimes it is more desirable to not reload the operating system and instead fix the underlying issues provided they are not very serious. This is especially true when the customer has important programs on their installation that they don’t want to lose. There are a variety of repair utilities, rescue kits, and bootable applications you can load to repair a Windows installation or recover files.
I have tried many programs over the years while searching for the perfect bootable repair software, and the best application I have come across so far is called Trinity Rescue Kit, or TRK. TRK is a free live Linux distribution aimed at providing recovery and repair operations for Windows and Linux machines. I often use it for it’s built-in password reset tool, cleanup tools, and virus and rootkit detection. TRK can be downloaded at trinityhome.org.
Other programs I have tried in the past and can recommend as well are Medicat USB and Hyren’s boot CD. Both of these provide dozens of useful tools and utilities very similar to TRK.
For end-user antivirus software, I typically provide the client with a brief education on user Windows Defender and installing an ad blocker on their browser. This is enough for most clients to keep their computers clean and keep their peace of mind. For those who demand a more powerful scanning and removal tool, I usually point in the direction of Malwarebytes. Malwarebytes can run as a standalone application just fine, but what makes it seem especially lightweight is that it scans files using batch processing, as opposed to scanning all open files at once. This makes it so that the computer’s resources are largely unaffected and the user notices no drop in performance during a scan.
Malwarebytes is particularly attractive to resell in-store as they offer a very reasonable partner discount. Buying premium licenses to resell in-store allows you to offer an upsell to a paid antimalware software while still maintaining a generous profit margin and providing the customer a discount from what they would pay on the Malwarebytes website. It is a true win-win.
Back-up and imaging
I find myself cloning hard drives all the time in the shop, and I have different tools of choice depending on the operating system. For Windows, my cloning software of choice is Macrium Reflect, which has a reliable free version. For Apple computers, I have used a free program called SuperDuper for many years with no issues.
Hard Drive Testing
Testing hard drives and solid-state drives is a task I find myself doing multiple times a day, and it would be nearly impossible without a decent drive-testing application. When figuring out if a hard drive is good or bad, I like to see a report showing how many hours of use the drive has had, how many healthy or failing sectors are present, a temperature reading, and all S.M.A.R.T values. My favorite program for testing drives is Hard Disk Sentinel, which has a free and a premium version. This program is not compatible with Macs, unfortunately, unless you are interfacing with the drive via USB.
For testing storage devices on Macs, and especially newer models where it is very labor-intensive to remove the drive for connecting it to a USB interface, I like to use another free program called DriveDX. This shows a very similar report to Hard Disk Sentinel, but it is compatible with Mac.
The hardware I use for connecting a drive to another computer for the purpose of testing is a simple USB to SATA interface. I recommend buying an interface that has additional power for testing both 3.5” and 2.5” disks. There are also adapters for connecting IDE drives as well as M.2 and PCI disks.
Although I wish I could list all of the software I have ever found useful, it is one of those tasks that almost can’t be done. There is always a new problem being born and new issues being discovered. If I encounter a problem frequently enough, or even once, I am compelled to look for a tool that would make solving it easier and more systematic.
Ninite. This is a program that has come in handy during the refurbishing process when I want to install multiple programs at once. When refurbishing a computer, one of the final steps in the process is setting it up for the end-user. This involves installing a handful of programs such as Google Chrome, and perhaps a media player like Itunes or VLC. Ninite makes this task easier by batch-installing all of your favorite programs at once.
Space-sniffer. There are occasions when a client comes in with a peculiar problem: their hard drive is completely full and they have no idea what is taking up all of the space. Space sniffer saves the day in this situation by quickly auditing the storage device and generating a report showing exactly where the free space is being taken. This allows you to provide a fast solution to this issue and leaves you with a happy client and more money in your pocket. For a free program, it is superb at what it does. WinDirStat is a similar program that I have used to accomplish the same thing.
Speccy. One of the first things I check, particularly on custom builds and gaming computers is the temperature. High temperatures can cause all sorts of issues, from programs crashing, to the whole system shutting down. Speccy is a program for showing detailed specifications on the whole computer, but it is especially useful for showing the temperatures of individual components.
Recuva. There are many times when you will come across a hard drive, especially from Windows systems, where they are not accessible to your file explorer, even if they are detected by the computer. This is common when a device is failing, and typically plugging a Windows drive into a Mac will get it to show up, but not always. When you need to recover data from a drive, this is bad news. Recuva is a program that has saved me from this mess numerous times. It can scan failing partitions and extract data fairly reliably, and for the price of free, it is a great deal.
For creating bootable media, such as a Windows or Mac OS installation disc, there are two options I prefer to use: Power ISO for optical media and Rufus for USB media. Both of these are free, although Power ISO offers a premium version as well.
For extracting RAR files and other formats, I can suggest both WinRAR and 7zip. Both are free, tried, and true.
Although I don’t use it much since the end of Windows 7, Driverpacks is a program I often relied heavily on for installing drivers on freshly reformatted computers. Driverpacks contains a massive library of almost every driver out there and saves a lot of time when getting old computers online.
For office software, you may find a lot of clients don’t want to pay to play. Microsoft Office is the go-to for most business users, but home users typically want to do the same thing without paying. This is where free office software comes in handy. My personal favorite to recommend to people is Google Docs. The cloud backup and revision history features are second to none amongst free office applications, and being able to sign in on any system and start working without having to download anything is great. For those who wish to have locally installed software, I like to recommend LibreOffice.
A cornerstone of any computer store’s income should be its sales. You may run a computer store that only offers service and support, and that is fine. You may be able to stay busy with this and not want to expand into offering any more than just the basic products, and for a lot of computer stores, this works out great. In my experience, however, sales from refurbished computers accounted for more than half of my shop’s income, and it is how I got my business off the ground before offering any repair services at all.
There are many who will argue that selling computers will rob you of a lot of time since you will be stuck servicing them and supporting them for life. To them I say, you are just not going about it the right way. Successfully building your business refurbishing computers is a mixture of focusing on the right hardware, honing in your refurbishing process, and properly setting expectations with your customers. Ideally, you want to sell a system, service it once or twice over a 3 or 4 year period, and repeat with the same client every few years. If you can show that your service is punctual and infrequently needed, you will maintain the same customers for life.
Offering refurbished computers for sale in your shop is very simple, but there is much more to getting started beyond setting aside a spot to display your inventory, fixing up a few old computers, and putting them out there. This next section will focus on what is involved to make sure your computer store is the place to go for your clients not only when they need a repair, but when they are looking to buy an entirely new system as well.
Selling New Computers Vs. Refurbished
You may be wondering; why would I sell refurbished computers if I could sell new computers? That is a great question, and you may often get clients who insist that they want a new computer and won’t possibly entertain the idea of buying a refurbished system. There are a lot of things I have against reselling new computers for the following reasons, so I may be biased in my recommendation that you should not sell new computers at all. Firstly, new computers will not be found at any kind of wholesale discount for you unless you are buying in such massive quantities as to qualify as an authorized reseller of whatever manufacturer you choose. This may be $200,000 worth of merchandise per year or more, which is simply not possible for most small computer stores to support. If you wanted to offer multiple brands, you would need to be selling several hundred thousand dollars worth of new computers per year, and make sure that you are meeting the quotas to stay compliant as a partner with each manufacturer.
Furthermore, the incentive offered on these new systems still does not leave much room for profit, and you will find that you need to price your systems higher than such competition as BestBuy, Staples, and Walmart. Not only will you need to sell more systems to maintain your partnership contracts, but you will make far less profit on each sale compared to refurbished systems. Selling new computers means you will also be limited to providing the manufacturer’s limited warranty as opposed to your own, which may come as a hindrance to providing ideal customer support when it is needed. You may need to tell your clients that they need to mail their system to the manufacturer if there are any issues, whereas you could offer repairs right there in store if they had bought a refurbished system from you.
Sourcing Refurbishing Computers
If you’re not going to offer new computers, then where will you find refurbished computers? This is a question you will have to figure out the answer to depending on your own unique circumstances and your local market. You could find broken systems on sites like Facebook Marketplace or Craigslist, and fix them up to resell, or you could find computers in your local area by visiting flea markets and yard sales, but this method has a limit to how much merchandise you can bring in and you will soon run out of computers. If you want to be able to consistently resell refurbished computers, you need to find a consistent source of them.
By far the most helpful site for my business, in the beginning, was eBay. With eBay, you can find sellers of exactly the computers you need and can see such statistics as to how many of them have sold and what kind of feedback was received. Finding reliable sellers on eBay is as easy as doing business with a handful of them until you find one who meets your expectations as far as product quality, shipping speed, response time, and price. Once you find a seller who satisfies your needs you can add them to your saved sellers list. I like to have a saved seller who specializes in each thing I need, for example, someone who offers the best refurbished Macbooks, someone who offers the best refurbished gaming laptops, someone who offers the best deals on bulk used ram or other parts, and so on. Even as your business grows larger, you will find eBay remains a reliable source of many different things for you.
Before your business graduates to a level where it demands more systems than eBay can support, you should start diversifying your supply sources. One way to bring in more systems to refurbish is by running ads in your local community offering to buy systems. With my business, I approached this from a few different angles: first I would make posts in local Facebook groups, where I could interact with people and answer any potential questions. This often led to buying at least a dozen systems a month, and often someone would have a lot of old equipment and parts they wanted to sell or simply give away. Besides posting in Facebook groups, I would also post ads on my local Craigslist and classified sites. This generated less traffic than any other method but was worth the price of free.
You can also create a Google ad to run alongside the rest of your Adwords campaign. Though you will need to invest more time and money into researching the perfect ad and getting conversions, this method could consistently pay off. In my experience, Google Ads had the highest cost per customer but consistently provided me with at least a few good deals each month from locals looking to sell their old computers quickly. Once you have a well-rounded ad campaign up and running and word of mouth starts spreading from your existing customers, you will find that your business becomes the go-to place when someone in your area has a computer to sell.
By far the most lucrative way to acquire computer systems to refurbish is directly from the source: from offices upgrading their computers. You can often find businesses that want to get rid of their old computer systems and buy new ones at the same time. This is a much harder market to tap into, especially in the beginning when you might not have very strong buying power, but it is still worth it to look for office cleanouts and reach out to companies that might be looking to upgrade. You can sometimes get lucky and stumble upon an ad that a business has posted online to get rid of their old systems, but in my experience, the best results came organically. Since my business was known as the place to sell old computers, previous clients would often spread the word to local offices and businesses and I would end up getting a phone call offering for me to come to pick up a bunch of old computers.
Another method I have had success with is cold calling local businesses. This way takes significantly more time and patience, as most businesses are just fine with their current computer setup, but eventually, you will run into managers who may have contacts at another business and can set you up for a meeting. Cold calling is a numbers game, and you would be best served to call businesses that are known to deal with computers, such as donation centers, scrap yards, and recycling centers. These types of businesses often end up with more computers than they know what to do with from their clients dropping them off. If you can make them a good deal and pick them up, you may find yourself with a consistent new supplier of systems to refurbish.
My best piece of advice for finding a consistent stream of used hardware to refurbish is by building a relationship with a local recycling center, specifically one that specializes in electronics recycling if possible. If you have the buying power to show you are serious, you can establish a contact at a recycling center to get broken computers at far below market value. Most of these places get hundreds of pieces of equipment every day and have a very far reach with the infrastructure in place to be able to get equipment from all over the region. Once you have built a relationship with a recycler you can visit them on a regular basis to pick up old computers to fix up, and drastically lower your bottom line.
Chromebooks, Linux, and Windows
Aside from various strains of Linux and Ubuntu, there are only two systems that your customers will trust to run their computers, Mac OS or Windows, and both of these have their pros and cons from the reseller’s perspective. There is also the Google Chromebook to take into consideration. The reason I ignore Chromebooks completely is because of their very short support life cycle, which, at least in the world of refurbished computers, is simply too short to leave room for any used sale. If Google drops support for a device after five years, then the next person to buy it is not going to get much use out of it. Selling many Chromebooks would lead to many unhappy customers once they found out they could not get any updates.
The enticing marketing by Google in support of their Chromebooks and the temptingly low price make it very easy for a lot of potential laptop seekers to set their hearts on buying a Chromebook. A large portion of my laptop buying customers confides in me that they had been considering a Chromebook, which leads me to give my professional opinion on the matter; yes Chromebooks are great in that they are very fast and inexpensive, however, there is a critical shortcoming. The fact that Chromebooks are not ideal for gaming, multitasking, or video-editing, and that they are equipped with minimal storage and also need an internet connection at all times, is more than just an opinion.
If I am planning to risk buying a Chromebook, I need to make sure it has at least a few years of support left from Google. My source for determining whether a Chromebook is supported or not and when its support will end is the Chrome auto-update policy website (which I will include a link to in the references at the end of this book).
Windows computers are much different. The only limitation to most Windows computers is their hardware. Even a 15-year-old PC can technically run Windows 10, and although it may run slowly, there is no artificial limit imposed by Microsoft. Most of the computers you encounter in your shop will probably be running some flavor of Windows. This includes just about every brand under the sun, and there is such a wide range of system configurations that you can sell one system for light web browsing, and another for intense gaming, and they will still be running the same version of Windows.
All this compatibility comes at a price though. When dealing with a Windows PC, the range of potential bugs and issues is much wider and more time-consuming to troubleshoot than in any Chromebook or Mac. Most of the computers I see in my shop for repair are Windows PCs. This is great when you are only offering repair services, but when selling computers, this can become a problem for you over time. You may not be able to avoid bugs in the software that creep up over time and cause people to bring their computers back for service, but you can adjust specifically what models of Windows PCs you sell, in order to minimize potential issues. Software issues are inevitable, especially those caused by user error, but hardware issues can be reduced if you sell only those systems known for their reliability and ease of repair.
What I mean by this is the following: there are some systems that are more prone to hardware failure than others. A few examples I can think of are certain models of Toshiba laptops which, due to a poor case design, begin to separate and crack near the hinge, leading to total failure. There are also certain models of Dell Inspiron laptops that, due to a very foolish implementation of the DC jack enclosure, are known for repeated failure of the DC jack. There are certain brands that I try to avoid entirely, due to the cost and difficulty of finding replacement parts. For the most part, this includes Samsung, Gateway, and most “Gaming” laptop brands.
Trimming down my available selection of Windows PCs to just those brands and models that have given me the least trouble overall, has proven very effective in minimizing the time I spend doing warranty repairs. This leads to more and more happy, repeat customers.
The beautiful thing, in my opinion, is that you don’t have to go out and buy all kinds of different systems to figure out which ones are prone to major issues; you will find out soon enough by observing what people bring in for repair service. Typically, most of my customers bring in computers that are newer than what I have for sale in my shop. This allows me to get a preview of which computers and models to avoid buying over the coming years. If I see a certain model in my shop with the same problem multiple times, I add that to my mental library of computers that I will never sell in-store.
Why Business-Grade Computers Are Great
Mainly, the models I can recommend selling are business PCs. These are things such as Dell Latitudes, Lenovo ThinkPads, and HP Elitebooks. There are multiple advantages to specializing in refurbishing these models in particular. The first is the serviceability and the ease of finding replacement parts. These are models that are intended to be repaired, and the design reflects that. The cost of parts is often cheap because they are available in such large quantities thanks to corporate clients. Another advantage to these models is the cost to performance ratio, which is often much better than on consumer models such as Dell Inspiron, HP Pavilion, and Toshiba Satellite.
The business-grade laptop is tremendously easy to acquire in bulk as well. Finding business-grade laptops cheaply is very easy thanks to corporate clients buying in bulk and upgrading every few years. “Off-lease” deals can often be found online starting with eBay. Most sellers on eBay who sell off-lease computers will typically sell in greater bulk for a better discount on their websites or directly.
Become a Mac Source
Over the years there has been one brand of computer that has consistently been profitable for me and has also left me with satisfied clients and minimal tech support issues. I am of course talking about Macs. Although I love working on Windows PCs and I appreciate the repeat business they bring me, I find that Macs keep the customer happy and productive for a much longer period of time before I get any tech support requests. When you spend a large part of your time performing warranty repairs on your computers or helping someone through a technical issue over the phone, you want to find equipment that can minimize some of this time and let you get back to growing your business. In the words of Apple, Macs just work.
Before you start thinking of all the ways I am wrong in saying this, yes Macs do have their share of problems. Let me explain why this should not deter you from reselling them. What makes me love Macs, and why do I want my customers to buy more Apple computers and fewer PCs?
Firstly, software installation is incredibly easy and license activation is not a concern whatsoever. I have the installation process down to a few clicks with Windows, but with Mac, it is even more straightforward. Since there is no need to worry about buying the proper license for every install, I can keep a cloned image on hand of all the popular Mac operating systems, ready to install at a moment’s notice. Since the hardware is almost the same as far as a decade back, the latest and the oldest Macs have a very similar installation process.
Most of the hardware is extremely similar as well. There are common points of failure such as batteries and chargers, but since there are so few variations in them, it is easier to keep large quantities in stock for quick repairs. I will admit, that the latest Macs are not very friendly when it comes to replacing batteries or other internal components, but for the most part, they are very predictable and easy to service.
Due to the hardware similarity across different models, I rarely see any truly peculiar or unique issues. For the warranty requests I do get, it is often a simple problem I have seen before, allowing me to speed through troubleshooting and solve the issue quickly. For the rare case when a client machine is deemed unfixable during the warranty, I can swap their system out with an identical one from the models I have on hand. Even for unsupported issues such as accidental damage or liquid damage, I can troubleshoot and replace a computer within minutes if need be.
In most cases, it is not fiscally responsible for me to repair a machine with a bad logic board or screen. In other words, it is not worth it. When this happens with a client’s computer, they are overjoyed to find that I can sell them a replacement system cheaply, thanks in part to the fact that I have a bulk quantity of Macs on hand that I acquired for a very low rate. For the models that are worth fixing, the good news is that there is an abundance of repair manuals online to figure out how to do it, and often a good selection of parts systems available on eBay to cannibalize components from.
Most of the Macs I get in stock to refurbish require a few simple things: a new install of the latest operating system, a new battery and charger, and a new hard drive if they are older than 2013. For Macs older than 2013 (making them 9 years old at the writing of this book), there are often some choice upgrades you can do to make them run like new, such as a solid-state drive and ram upgrade.
For the latest Macs, unfortunately, there is nothing you can do to upgrade them besides performing software upgrades. This makes repairs easier to an extent but also causes difficulties in selling the computer, in that it can be a challenge to explain to someone that they are not able to upgrade their computer before or after they buy it. Saying it is Apple’s fault does not make you look any better, however true it may be. People want an upgradeable computer. An interesting side effect to this is that older Macs provide an easier selling proposition; everyone wants to know they can upgrade their own hard drive and ram right?
The Refurbishment Process
The refurbishing process is the secret sauce to your operation. This is where you turn a slow, dirty, old computer into a high-performance machine without a sign of use. You want to balance your refurbishing process in order to maintain your profit margins carefully. Spending too much on parts in a low-end system will lead to very thin profits, which can quickly be eaten up if you provide any kind of warranty. Skimping on replacement parts and buying low-quality components to save money is also a bad idea because it will only come back to bite you. Refurbishing computers with your warranty in mind will help you hone your process to fit your business perfectly.
If a client has to come back to your store to fix a computer they bought from you, they won’t be happy, even if it is covered under warranty. Unbelievable right? Who can complain about a free repair? The thing is, it is not a free repair for your client, since they still have to take the time out of their day to be there. Even though it is a major advantage to them that they can bring their computer into your store in the first place, most people will tend to focus on the negative aspects of the situation, such as having to worry about their computer at all.
You want to craft a worry-free experience for your customer when you refurbish a computer. To truly iron out every possible problem is frankly not an option. There will always be some unforeseen issues that will pop up, but doing all that you can at the start of the process can make issues less likely. Doing things like replacing failed components and properly cleaning inside and out is just the start!
Let’s follow a computer through the refurbishing process:
Step 1. Wiping. The most important thing to do is remove the previous user’s data. Most of the computers my store refurbishes get new hard drives anyway, but you want to take every precaution to ensure you are not being careless with client data. Short of buying an industrial hard drive shredder, the best thing you can do is wipe hard drives using software, and then take them to a facility with a hard drive shredder. Most electronics recyclers have one on hand, as buying one yourself can be cost-prohibitive, with basic models commanding $20k or more.
Step 2. Testing. The next step in the process is to go over the whole computer and figure out what works and what doesn’t. Carefully test each component, such as the USB ports, card reader, keyboard, webcam, speakers, and touchpad. Use diagnostic software to test the internal components. I like to remove the hard drives and ram at this point for upgrading. At this point, memory is cheap enough to justify upgrading just about every computer out there.
Step 3. Cleaning. It is extremely important that your refurbishing process pays meticulous attention to the cleaning step. This involves taking the computer completely apart to remove dust and debris, as well as cleaning inside and under all of the fans. Sticker residue and external marks can be removed with solvents and cleaners, and dust can be removed with compressed air and cotton swabs. Once a computer is cleaned, it is ready for new parts.
Step 4. Upgrade and replace. This is the most exciting step for the computer. This is where you will install shiny new parts such as a solid-state drive, ram upgrade, new cooling fan, or maybe a clean new keyboard or a fresh new screen. Sometimes, I will replace a part simply because it has gotten too dirty or scratched. This is especially true with laptop keyboards and cooling fans. A new part can breathe new life into a computer and make it look newer and fresher.
Step 5. Final testing. A computer is not done being refurbished when you think it is done. More tests must always be done. Updates must be installed periodically while it is waiting to be sold. You can never be too sure of a computer’s functionality unless you are always testing it.
The Refurbished Computer Warranty
A lot of computer techs will be divided when it comes to the topic of warranties. Some will argue that providing a warranty is a waste of time and will only lead the end-user to come back and haunt you. These techs are not aware of the simple fact that the end-user WILL come back and haunt you, warranty or no warranty. Having a warranty policy in writing helps you come to terms with that fact and help you profit from it, and it also provides your buyers with the peace of mind, knowing that you will be around to fix whatever problems arise with their refurbished computer.
Warranties come with an added expense for sure, from the cost of ordering replacement parts to the labor involved in performing repairs. If you think you can’t stomach the added cost of including a warranty for free with each computer you sell, you must look at it from a different perspective. Not all computers will come back to you during the warranty period. If your refurbishing process is flawless, you will find that very few computers come back during the warranty period. For those that do, you can bake in the cost of repairs with every computer you sell. For example, if I am selling a laptop, I will make sure I am leaving enough profit margin on the table to replace the most high-risk components such as fans, batteries, and drives, and still leave me with a profit after performing a warranty repair. Even if I had to perform a warranty repair on every computer I sold, I would still make a handsome profit. This may lead to inventory being more expensive than the used market, but the quality of the warranty will justify the price.
What to cover and what not to cover in your warranty is a great question, and something you should make extremely clear in your written policy. In my store, I do not provide coverage for accidental damage such as broken screens and liquid damage. Everything else, from software to batteries, is covered under my warranty. That makes it easier for both me and the client if a need for repair ever arises. I can look at the screen and if it is broken, I know they will be paying for it. This makes it so much easier for the client to make a buying decision as opposed to the warranties that come with new computers, which are often vague and have a long list of exclusions.
The positive word-of-mouth advertising that one can generate by simply performing a warranty repair without making a fuss is not something to be overlooked. When you hem and haw and try and make the customer feel guilty as if they did something wrong in order to get them to pay you, they tend not to remember you in a positive light. However, when you quickly fix their issue without trying to pin it on them, they will remember you fondly.
The truth is, deep down, most people think it actually IS their fault that their computer broke down, and they are just hoping you don’t figure out that it was them. Your warranty should be so hassle-free and no-fuss, that people think they are ripping you off.
Managing Old Inventory
Where does a computer go if it doesn’t sell? What do you do with old computers nobody wants? You can’t just buy a bunch of computers and expect each one of them to sell quickly for your asking price. There will be equipment that sits on the shelf for so long that it starts to gather dust. If you’re short on space in your store, this can end up getting very costly.
There are opportunity costs of having too much product to display. When you have more products than you have room to display, you must make a decision: which of these products will I display, and which of the products will I put in the stock room. If it is not out and in front of your customer’s eyes, then the only way it is going to sell is if it is listed online, or if it is so desirable that people come into your store specifically looking for it.
In my experience, there are many different products that are ok to hide. Meaning, that you can comfortably put them in your stock room and on a shelf, out of sight, without fear that they won’t sell. These are things such as laptop chargers, batteries, parts, and power adapters. Most of the time customers will ask you directly if you have these items as opposed to taking a moment to look around your store. Other types of products such as computer systems, monitors, and printers are best placed where people can view them leisurely without having to inquire.
If you end up with a computer that no one is buying, and you have given it your best effort in marketing it, pricing it, and trying to sell it when someone walks in the door, the next step to take is either parting it out for your own use or selling it for parts. Computers that are over 10 years old have a difficult time moving even for parts value, and if you have no luck here, you may have to take it to the end of the line: scrap.
Scrapping and recycling are very similar. They are both viable solutions for old computers that have no value as working systems. Recycling typically costs money in the form of paying an ISO certified recycler to properly dispose of your equipment and ensure data destruction usually at an extra fee. Scrapping, on the other hand, is the inverse of that. Scrapping is my main method for getting rid of old computer equipment and it has not let me down over the years. Instead of paying to have someone take your equipment, you charge them money to take it.
Absurd as it may sound, especially if you have ever paid for recycling, there are many companies and individuals out there who will gladly pay to buy your old computers in the hopes that they can fix them up or recover precious metals. The only part of this process that you have to take care of is ensuring proper data destruction. Leaking client data accidentally is not something that you want to be known for, and the best way to prevent this from happening is to make sure to remove hard drives from any old client computers when you get rid of them.
What about abandoned client equipment?
You can throw it away, recycle it, resell it, or whatever you please. Just know that its owner is out there somewhere, and they may come back someday. This isn’t always the case, and some computers just aren’t worth picking up for some people. Just make sure you draw a clear line about your policies and make it known in writing. Most repair shops I have seen will practice getting rid of someone’s computer after 90 days of not hearing from them. There are some with more generous policies up to six months or a year.
I live by the philosophy that the client will always come back, even if it takes them a lifetime. If you get rid of someone’s computer after the typical 90 day period like most repair shops tend to do, then you are missing out on any future business that particular may bring, including word-of-mouth. If someone comes back to your shop to pick up their computer after a long period of time, they are almost always hoping you still have it. Most of these people would have picked up their computer if they had the chance, but life gets complicated sometimes, and computers become the least of our troubles. Putting yourself in the client’s shoes in this situation can pay off. Every time I have had a missing client show up again after six months or a year to pick up their computer, they are always ecstatic that I did not throw it away, and they are more than willing to pay a storage fee.
Now imagine if I had thrown their computer away? Or worse, what if I decided earlier that week that I was going to resell it, and it was out for sale in my shop that very moment that they were asking where it is? I would instantly look like the bad guy. There is no doubt that they would not want to do business with my store in the future if I had gotten rid of their computer. Keeping everyone’s computer forever seems like the best decision unless you have a severe shortage of space. In my case, I think a line should be drawn after a few years. You don’t need to take their computer to the grave, but you should at least let it gather dust for 2 to 3 years on the shelf before you throw it away, because you just never know.
With the decline of the repair industry as discussed at the beginning of this book, you may find yourself financially motivated to change the core of your business, such as phasing out residential services and only serving business clients, or transitioning to a consultancy model. Perhaps you will adapt your business to not involve computer hardware at all. You may go where the money takes you to an extent, but at some point, you may find the work becomes less fun and more of a job.
What keeps me in residential repair? Why don’t I transition to being a managed service provider or something similar? For me personally, it is all about the laid-back atmosphere and the interesting clientele. Everyone is different and everyone has a story to tell. You meet some wacky people in the day-to-day business, and there is always something interesting going on. The stakes at this level are very low and in turn, work-related stress is very low. In my opinion, preserving the low-stress atmosphere is more important than cranking up the money printer. This is different for everyone. Would you rather make half a million dollars a year but have to be in the shop from 7 am to 7 pm with high-strung corporate clients blowing up your phone all day? Or would you prefer to stroll into the shop at 11 am and wrap up the day just after lunch with time to work on the fun projects or spend time with family, in exchange for an average salary? To me, the life of a computer store owner brings me everything I need without feeling like a job, and this is priceless.
Starting a computer store is fairly easy, but making it a success can be quite difficult. Every time you make a decision when figuring out how to run your business you are at a turning point. Make enough wrong turns and you will end up extremely lost. With the right guidance, you will find it easy to make the right moves, but with the wrong guidance, you will be in for a world of frustration. It is my hope that this book is the right guidance for you if you are hoping to open your own computer repair store. My only real wish with this book is that I could go back in time to give it to myself when I first started this business. It sure would have been an entertaining read back then!
Sources and Further Reading
Below you will find a short compilation of books and related materials for further reading. If you are reading this on paperback and are not able to view the links, please visit my website tylerthetech.com for an additional reference. Some of these books, especially the business books, were legitimately helpful in forming my understanding of the inner workings of how to run a business, and I hope they can be of help to you as well.
Resources about computer repair
Arter, Ryan (2013). How to Start a Home-Based Computer Repair Business
Press, Marcia, and Barry (2004). The PC Upgrade and Repair Bible
Glen E. Clarke and Ed Tetz (2007). CompTIA A+® Certification
ALL-IN-ONE DESK REFERENCE
Paul C. van Oorschot (2021). Computer Security and the Internet, Tools and Jewels from Malware to Bitcoin
Chromebook Update Policy website: https://support.google.com/chrome/a/answer/6220366?hl=en
History of computer stores
The byte shop
Resources on the legal aspects of starting a business
IRS Starting a Business
Fred S. Steingold, Ilona M. Bray (2005). The Legal Guide for Starting & Running a Small Business
Peter Wilson, Sue Bates (2003). The essential guide to managing small business growth
Blackwell E. (2004) How to Prepare a Business Plan
Berry, Tim (2008). The Plan As You Go Business Plan
Resources on marketing and advertising
Goldstein B. (2007). Ultimate Small Business Marketing Tool Kit
Strauss, Steven D. (2005). The Small Business Bible
Thaler, John (2005). The Elements of Small Business
Fleischner, Michael H. (2020). SEO Made Simple 2020: Insider Secrets for Driving More Traffic to Your Website
Fray, David (2003). The Small Business Marketing Bible