Shop Owners, some questions for you

[kato]

I'd eventually like to open my own computer shop. I'm so tired of working for someone else. I wanted to see if I could get some answers for a couple of questions that I have.

1.) what was your initial investment to get the business off of the ground. Once the wedding is over in sept, I will be able to start saving money again and will fall under my honey's health insurance. How much do you need to get started.

2.) distributors! I've had a resellers liscence before and tried the online auction route, but the distributors only had really good prices buying in bulk. I could find better prices on pricewatch as an end user, than I could buying from D&H or Ingram Micro. Evertek was my main staple for online auctions, but because inventory there always changes it's bad for someone who wants to be a systems builder. Are the discounts only there for people who buy 1000 mainboards at a pop?

3.) competing with Dell and others. How do you all do it? How do you manage to offer a system comparable to this <a href="http://www.dell.com/us/en/dhs/products/model_dimen_1_dimen_2200.htm" target="_blank">http://www.dell.com/us/en/dhs/products/model_dimen_1_dimen_2200.htm</a> for $619. and make any money at all. We have a mom and pop shop in our area that manages to stay afloat by ripping people off with trade ins and installing illegal OS software. I don't want to go that route! If I do this I want it to be legitimate and ethical.

any and all input would be greatly appreciated.

[MacGyver]

I do not have my own computer related business, however I have considered starting one. If I were to start today, I would focus on customer service rather than selling products. You will never be able to beat the big retailers like Future Shop, Circuit City, Best Buy, etc, on price. But you can easily beat them at customer service because their priority is selling whatever for the lowest price.

I would also NOT open a storefront. Having a storefront means all sorts of expenses, like rent, staffing, and probably the worst of all, insurance. Imagine the insurance premiums on a computer store! The other problem with stocking stuff is that you'll wind up having obsolete hardware and software if you can't sell it fast enough. Learn something from Michael Dell, he realized that lingering inventory of outdated computers would kill his company.

What I would do is run the business out of my home. In Canada, you can claim all sorts of tax deductions and exemptions if you run a business out of your home. Don't know what incentives are available in the USA, but check with the IRS. I would get a cell phone and use that as my business number, and have my home phone unlisted so I can take time off without people pestering me day and night. That way you can make house calls for clients and still get all your calls.
TIP FROM SOWULO: get a PO box somewhere and use that as your business address so people don't come looking for you at your house!

You can also focus on assembling custom built machines for clients on an as-required basis, then charge a nominal fee for assembly and your own trouble. Giving this kind of personal service will set you apart from those too big to care, and get you a loyal client base.

Once you have this going, you'll hopefully be able to save up some money. Then, If business picks up, you can consider opening a storefront.

God bless you on all your future endeavours!

[The Rifleman]

I owned a shop here locally, and I agree with MacGyver. Go for the Home Office.
I purchased the business I owned from a very good friend, all I had to pay for was what was on the shelves. I ran it long enough to get a good customer base and now work from home. I lost alot of my customers due to a poorly planned phone number change, but I'm doing as much advertising as possible (as cheap as posible) and if I get most of my business back I will take a $1000 per month payraise (from rent) and another $1000 per month raise (from other bills, i.e. telelphone)
The telephone company is one of the biggest rip offs. I paid $700 per month on my phone bill, here locally they charge for EVERY incoming and outgoing minute local or not, just because it is a business line. I also had ALOT of yellow page ads, WHICH THEY MAKE YOU PAY FOR EVERY MONTH YOU HAVE YOUR PHONE.
It really sucks to have a store front, get a license for your home and set up a small shop there.
As for being able to compete with Gateway and Dell and the such.
There is no competition!!! I build a much better system!
You get what you pay for in this world, and if you want a GOOD computer then I will build it for you. If you want a cheap computer, go get a Dell or whatever. My systems are normally about $100-$150 more than a comparable Dell or Gateway. People who want quality, don't see $100 to be very much money compared to the $600 they could posibly be wasting if they are not satisfied with their brand new Gateway.
Also, I don't really make much more on a system than about $100, But for every system I sell, I normally make two new customers.
Service is where the money is... Nobody really likes a format and reinstall, they always have something "hidden" off to the side that they forget about and consequently lose. So there are ALOT of people that are more than willing to pay 3-4 hours labor for you to get Windows resurrected without formatting. At $35 p/h in-shop that adds up quick. Especially with an 8 port KVM! !
As for the address and phone number, I give all my customers my home phone, home office phone, and cell phone number. I don't want them to think I'm hiding or something. I also tell them I am a full time baseball dad and a part time computer technician, they all seem to understand and I have never received any calls at any unwanted hours, nor have I had more than 6 calls to my home line in over a year.
Alot of the problems that Techs have with customers is they don't call the customer enough. If you call them to let them know what is up and tell them when you will call back, your phone should only ring with new business.

Good luck in whatever you decide, but if you are in it for the money, and to satisfy customers, I'd say stay at home.

[Radical Dreamer]

Here is a quote from one of my friends in the appliance repair business. "Treat your customers right and you have a customer for life"

[Ruslan]

As an co-owner of big repair shop, I also started from customer service.
So, MacGyver is absolutely right here.
As always. <img border="0" title="" alt="[Wink]" src="wink.gif" />

We started from doing PC repairs, selling cartridges for printers,diskettes,cables an so on.
It is not requires a lot of money at first times.
Now we're selling a lot of custom-build PCs.

I've got a lot of customers fixing their computers on component level (i.e. IC/transistors). Of course, I do have good educational background for that - university degree in radioelectronics (as well as my companions), and more than 6 years of experience working as professional electronic engineer.
It's very important thing to be professional in that business...
But once customer will believe in Your professional skills (if You sucsessfully repaired their PC (monitor,printer,harddrive - it doesn't really matter))- he will be Your customer forever...
He will ask You for advise, will buy stuffs You recommend him. People likes to be ensured from the problems...
Of course, "there are no rules without exeptions" - that's why I would also recommend to follow MacGyver's advise about cell phone/post box...
Good luck and God bless You!

[BuLkHoGaN]

I have owned my own computer store since 98 and it was started home based with really no investment.
I had the luxury of a wife who worked and made good money while I worked on building my dream. We worked out of the house for about a year doing 90% of the repairs at the customer’s location. We were cheap $29.00 onsite labor per hour and we went anywhere. I was heavily involved with the local chamber of Commerce and went to all the networking events. We focused mainly on repair but did build a few PC's in the process. We did no advertising it was all by word of mouth and giving great customer service.

In mid 2000 a store owner of 7 years was getting out of the business and selling his store. We got a small loan and took over with a good customer base immediately. Since we have bought 2 other companies either looking to sell there store or go out of business and that, along with our focus on customer service has kept us successful. We make sure when we buy them out that we get the customer database and the Phone number!

I think if you focus on customer service then that will make you successful, oh and don’t open up near us !!

Jamie
Mega Micro Systems