A Few Business Questions

Discussion in 'Et Cetera, Et Cetera' started by D_Roderick Beresford Stiffington IV, Mar 3, 2007.

  1. D_Roderick Beresford Stiffington IV

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    As a 22 year old with not much to do lately I've been thinking about selling my services. Sucky sucky 5 dollar!? Haha not quite those services. Within my circle of friends, family, friend's of friends, etc people come to me to fix more or less all their computer problems. I see people in Circuit City or someplace like that spending $1200 on a shitty Dell computer where for $800 I could order the parts and assemble a computer built to smoothly run the latest games, etc.

    Anyway I had an idea to advertise some of my services, to either build or repair computers. The unique part of my services are that I'd offer to go to them and fix it on the spot, or for those uncomfortable having someone come to their home they could always bring it to me. I met someone the other day who took their computer to a local shop and paid $300 for some guy to spend 30 minutes reinstalling Windows.

    Theres a few legal questions though, do I technically need permits to do this and need to be an official business? Or could I just freelance my services like I want to. I know I can't use the same Windows XP disc to reinstall all the computer I work on, but I know where I can buy bulk OEM discs that are very inexpensive. At this point in my life I don't care to have an actual business, I just want to start making a little money for doing what I've been doing for free for many years now. If I could properly advertise my services I'm sure I'd get some interested people, because retail stores like Bestbuy, Circuit City, etc are so overpriced, along with the fees local computer shops charge for their services.

    LPSG is not only the home to the biggest dicks on the internet but some of the brightest people as well. Help me out people, how should I go about this?
     
  2. dong20

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    I do this here in the UK, well that bit reather less than I used to, now I focus on consulting and infrastructure, far more money and less whining. In the UK the margins on desktops are so tight it's simply not worth the effort, at least at the entry levels, more so when you factor in after sales (remember of some that price differential goes into that). You build or upgrade a PC for someone (often as a favour) way cheaper than retail then months later when they get a virus or spill coffee down the back or their kid dismantles something they phone you at 11pm on Sat and expect an immediate fix......:rolleyes:

    These days I'm focussing on Laptop refurb, amazing what peep will hand over for a easy repair or pay for a competent machine even one several years old.

    It never ceases to amaze me what some people will pay for what to me anyway is as easy as breathing....not complaining though.

    Depends, here in the UK there are no real restrictions, basically if you can do it you can charge for it, or quite often (it seems) even if you can't do it!! Make sure you comply with OEM restrictions, essentially OEM software must be supplied with hardware, which while in spirit should be a PC can be, quite legally an old keyboard, a mouse or any other such trivia. Be careful about tax and insurance liabilities though, especially if you don't put it on a business footing.

    Best of luck, who knows where it may lead.
     
  3. Full_Phil

    Full_Phil New Member

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    The biggest problem any new business owner has is credibility. Will this person screw me, not provide what is promised, etc--- At 22, you face this problem almost by default, and this is saying nothing about you as a person. I would find an established business that would love to have someone in their shop that does what you do, and ask them to sublet space to you. You'll be able to function under their umbrella of trust while you gain yours.
     
  4. D_Roderick Beresford Stiffington IV

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    No one needs to know how old am I do they :tongue:? My casual style of dressing makes me look like I'm in my upper 20's, early 30's anyway. As for how to go about advertising myself I was going to just put up flyers with the cuts on the bottom with my phone number for people to take, and also ask that the countless people I've helped for free keep me in mind when people they know need help with computers. Just word of mouth advertising. I'm not doing this to support me so it doesn't have to be a huge success, just some extra cash flow.
     
  5. SpoiledPrincess

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    The problem with fixing things for friends and acquaintances is that if their computer EVER
     
  6. SpoiledPrincess

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    whoops random clicking there - if it ever goes wrong again guess who they'll blame and if you replace for instance a hard drive they'll expect it to last for 20 years. The hassle of doing jobs for friends is they think you owe them for the pleasure of letting them do it on the cheap for them.
     
  7. dong20

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    My point exactly. It's a strange phenomenon.
     
  8. headbang8

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    From what I understand, you don't need to register a business or anything. But...
    1. You need to keep records. If the IRS discovers you have unreported income (through noticing things like, maybe, you haven't taken enough money out of your bank account because you've been living on your cash sideline) then you'll be screwed. Declare your income--better safe than sorry.
    2. If you're serious about building computers and such, many people will want to pay with a credit card. You might not need to make arrangements to take credit cards, but a PayPal merchant account may be handy.
    3. You'll definitely want some kind of liability insurance. If you fry someone's hard drive and it has important financial or other info on it, then they can demand you pay for it, plus damages for their inconveninece or loss. Or, worse, you could be in someone's house, tip over a lamp, and burn it down. This insurance is not cheap.
    Most important, don't underpay yourself. In order for it to be worth your time, think about how much you would expect to make if you did it full time.

    Let's assume an entry-level computer pro of your sort would make around $45K p.a. (on the very low side of average salary in NYC). Take away four weeks of his time for vacation, and you're left with a working year of 1920 hours. That's about $25 an hour, to round it up.

    Rule of thumb in many businesses is that you add 100% to 125% for overheads--travel time, promotion costs, admin costs, benefits, that pricey liability insurance, and taking into account that you won't be able to work flat out for forty hours of a forty-hour work-week. (You might argue that your business model doesn't have those overheads, but don't sell yourself short.)

    That pushes the cost of your time to the owner of your business (that is, you)up to about $50-$60 an hour. Then, most businesses expect to make a profit margin, say, 15-20% gross. After a while, you can see why the professional geeks charge so much.

    If you charge $75 an hour, that's pretty much what your own time costs you, in reality.

    It also shows that the computer-building idea might not be the best use of your time. If you build someone a $1200 computer, and it costs you $800 in parts and three hours ($225) of your labour, then the cost you'd need to charge your customer is beginning to approach a store-bought one, with a warranty, that you can buy on a credit card.

    I'm not trying to discourage you, but bear in mind that you should not feel bashful about charging what your services are worth.

    HB8

    P.S. If you repaired computers in the nude, that would be another story entirely...
     
  9. D_Roderick Beresford Stiffington IV

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    I wouldn't mind charging a flat fee to make it more economical still. Also in my example. The $1200 circuit city computer is a piece of trash compared to the one I could build for $800. I could do a retail priced computer for 500-600 easily. Building a computer takes an hour, two max. I could just charge a flat $100 fee or something along those lines.

    As for warranty of parts and them expecting it to work. I was thinking of offering a free repair for any problems that occur a month after me repairing it initially. And half off for any problems that arise within 3 months, it would make them more comfortable I think. As for parts working, I'd likely order my stuff from NewEgg.com, they're very reasonably priced and I've personally spent thousands there. They'll replace any parts that fail under the warranty.

    Insurance wise, I could drop the idea of going to them to protect myself that way. Also before even touching the system I can find out how important any data is and work to back it up if necesary. Some very good advice out here. Thanks guys.
     
  10. Rikter8

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    I do it on a non-advertise basis.

    I made myself some cards, and pride my work on word-of-mouth only.
    It keeps me swamped.
    Being that im getting more and more customers, I may apply for a small business license and take advantage of the tax writeoffs (Like power consumption for your business, etc).

    I made myself a database of customers with Microsoft Access. Simple, cheap. If you want something a bit more professional, you can step up to QUickbooks or the like.

    My advise to you, is make sure you have the TOOLS to do the job.
    Software and Hardware.

    I prefer to have the machine at my house. Many times people will have dial up internet connections, and getting updates/tools/utils is a BITCH, and you'll spend hours there trying to get shit to work.

    When you do them, make sure you run a FULL scan on the PC for hardware and software. YOu can head off alot of issues, and Oops...didnt see that errors that way.

    I charge very little to repair, but the quantity I get makes up for it.
    This years rate for me is $60. People Jump at it.

    Geeksquad and like services are great, but when you get folks like us working on them....people start to see the value. I do alot for that little bit of cash, and I give the people a one on one lesson and explanation.
    Informed consumers are happy consumers. It empowers them to keep things tidy. Repeat customers are great - IF theyre spanned out a while.

    Another tip for you - steer clear of MSI devices. I've gotten burned bigtime by them.

    Let me know if I can help with my experience on hardware, or software.
    Us PC geeks gotta stick together
    NERD ON MAN!
     
  11. Rikter8

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    I do this on a 30 day basis, unless its something more catastropic.

    Be careful after that. Especially if they are on a dirty connection, bugs can quickly infiltrate, and you'll be forever fixing their box.
    Another evil example is a house that has bad RF interference. That's a forever ending problem that will drive you crazy.

    Egg is good, have been for a long time, but dont be afraid to explore others as well. Pricewatch is a good reference point to start shoppin, then go from there.
    Warranty and ease of return are paramount over all else.

    And I know what your saying about cost. A co-worker decided to buy a brand new Dell E520 Dual Core... Its slower than my old 800mhz...and he paid over $1000 for it....
    Guess who's bench its on to speed it up........
    Always better to get home built, due to the quality of the components going in. Better warranty too!
     
  12. Rikter8

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    oooh.....carfuww yung grashappa....
     
  13. headbang8

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    There's your selling point. Handmade powerful gaming machines. You may have a bigger business idea than you think.

    I'd be a bit careful, there. You should check the Better Business Bureau or whatever state or city business authority you live under. There may be some legal minimum warranties you need to provide. Especially if your're manufacturing a product and not just providing a service.

    Best of luck. I may drop you a line the next time I need a box for home!
     
  14. davidjh7

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    Remember one important thing about doing computer repairs/builds/upgrades/whatever for people, for a price--they will expect you, for free, forever, to provide advice/work/parts/whatever on any system you have touched, forever, and if you don't, will completely trash your reputation. I have known many people who have tried this, and it has always turned into a nightmare for them. COnsider ALL the consequences carefully. Good LUck!
     
  15. D_Gallely Greenweeny

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    exactly. be careful
     
  16. hypolimnas

    hypolimnas Well-Known Member

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    At this point in my life I don't care to have an actual business, I just want to start making a little money for doing what I've been doing for free for many years now.

    I'd suggest you decide on what you really want. It isn't clear what your motivation is. This is the thing that will tell you what you should do.

    If you offer a service and people pay money for it then you are entering into a contract. This contract exposes you to a lot of risks that you may not be aware of.

    Many people have talents and a desire to help people. Whether they can cover their costs and then make a profit at the end of the day is the question. Many, many small businesses fail annually. Most people overestimate their abilities. Some people just don't like the idea of running a business.

    In this case they should stay out of this proposal.

    If you haven't already, I'd really recommend you think seriously, and do some research about starting a legit small part time business. You might just want to buy a paperback, or read at the library. There is often assistance around for people wanting to start up, and mentoring available.

    Your post suggests you are not feeling ready to make any serious committment right now, and that is fine. The problem for you is that I think customers will know that. We don't always go on price.

    I have dealt with two people in the last few years who are very confident they can do computer services stuff for less etc etc. Even though I like them and know they have the skills, I would never choose to use them because I don't have confidence in their committment to deliver 24/7 all year around.

    I still have to cover my butt even if I thought they could do the job. The risks if anything went wrong are of the magnitude and "likelihood of occurance" that I don't want to deal with them in a business transaction.

    Some people at your age do start great little businesses while they pursue a salaried career as well. Start small, build up your client base, find a partner if you need one to ensure continuity of service. If you want to donate your profits to a chosen charity then you can decide on that later.

    If you can find a niche in the market, build on your services and products, you could find that in ten years time life is very sweet indeed. If you do it right you can partner with or employ others to help you run it well.

    The key is to do your research and planning, start small, limit the risks and have a clear idea when to bail out. If you don't want to do it legitimately then I think that is a sign that you don't have the commitment or will to make this work for you at this time.

    Even if you invest a few hundred dollars and develop a business plan it could be a good start. You need to find out about all the regulations to comply with, but that won't be hard. Chances are some regulations won't kick in until your turnover reaches a certain point. Just do your homework and commit to some goals. Good luck.

    If you need an expensive recreational activity there are other things that can be more fun.
     
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