Starting out from home - How did you do it?

[techpitt]

Greetings fellow entrepreneurs! I seek your wisdom as I prepare to begin my journey into home business. More specifically, I would be grateful to anyone who would share with me the story of how they got started, from ideation to implementation of a one-person from-the-basement type of business... and perhaps even clue me into anything I'm overlooking or any pitfalls to avoid.

My idea for starting out is to offer the typical spectrum of on-site PC service for home users and possibly some small businesses (consulting, repair, upgrades, maintenance, malware removal, etc..), and possibly web design\hosting services. I work a full time job and have twin toddlers, so I can only do this part time for now... but the dream of course is to become filthy rich and be able to claim self employment with an army of monkeys doing all the work for me from my basement (yah right)! In all seriousness for the short term, I would be happy to score the tax deductions for my expenses and the sq ft of my house used for business, and maybe earn enough that my SO can quit her part time job and stay home with the twins.

I'm almost to the point where I feel comfortable buying a business license and insurance, and then begins the hunt for clients.

Here's what I've done so far:

• Work Area
  • I have a room in my basement that isn't being used for anything, so I'm in the process of creating a work area. I found some good ideas on TN that I'm incorporating, but some will have to be added as I go since I'm starting with a limited budget and limited time. For now, I have a hodgepodge of spare parts for testing, the typical collection of screwdrivers and screws, an ED500 blower for cleaning cases, thermal paste & paste cleaner, PS tester, USB drives (loaded with tools), USB wifi NIC & smartphone with tethering, SATA/IDE to USB adapter, and my personal computer that will become an all purpose business PC (from book keeping to running AV on slaved HDDs).
• Website
  • I'm nearing completion on a themed & customized Wordpress site with my own domain & e-mail. The site will outline the services/pricing I offer, as well as a host of blog entries I will be publishing on topics from novice/moderate level computer tips and weekly notice of security updates for OS and content viewers/players. There is a subscription form for a monthly newsletter that will contain teasers for the blog posts and info on whatever promotions I may be running. I will also send notifications to my subscribers when important OS or application updates need to be installed.
• Marketing
  • I will encourage customers to sign up for my newsletter and send it to their friends since they will no doubt find it enlightening and call me immediately to schedule service. With this will come some kind of referral incentive. I plan to market myself using the "I work when you don't" slogan I've seen others in my situation tout. As for gaining new customers, initially I'm hoping to augment word-of-mouth with some (cringe) CL ads, local newspaper classifieds, and business cards/flyers/branded ink pens on bulletin boards in other businesses (with their permission).
• Affiliate / Reseller Accounts, Adsense
  • I will be opening accounts with Newegg, Amazon, and a few others as affiliate or reseller to maximize the profit on any hardware replacement/upgrades. My blog posts will also have AdSense ads tastefully embedded, and affiliate links to any purchasable items I may mention.

I'm still hammering out the full list of services and pricing, but intend to undercut the only professional competition (that has a storefront and charges entirely too much for basic service) while staying well above what the pizza techs are charging. It is a natural product of needing additional income but not having much time in which to earn it.

The main things I'm a bit apprehensive about are:

How much insurance does one need? I'm on an extremely limited budget right now (all of my money goes to Huggies Inc. and Highland Farms), so I don't want to over-buy insurance. At the same time, I don't want to be sued out of house and home if something ever goes wrong.

Is it absolutely necessary to hire a CPA? If so, I can count on being in the red. My hope is that between Mhelpdesk and Quickbooks I will be able to keep my own books well enough that I can take them to my tax preparer next year and be in good shape. Accounting scares me, but I'm good at keeping thorough documentation of everything. I've found a few sites with some good ideas on what I should do to cover all of the bases, but in this case I'd really feel better knowing what others have done to keep the IRS happy.

Thanks in advance to anyone who didn't TLDR my post, and extra thanks to those who share their story and/or thoughts on all of this.

Disclaimer: I know there are other threads similar to this, but try as I might I can't find any that are directly applicable. I've been a lurker here for a few months, combed the forums and articles, have bought the TN business kit, and try not to be lazy when it comes to research... but at some point one has to seek help in filling in the blanks and get moral support that they are on the right track.

 

[Kitten Kong]

Quick story of how I started properly.

met my future wife, couldnt afford an engagement ring. Ebay - HUGE job lot of parts. Brought them all home, tested what I could, binned the rest.

Then car boot sales (garage sales), sold everything I had, picked up some contacts from there, more job lots, more car boots.. fast forward a year or so.

Got married, stopped the car boots, started officially in Jan 2005 from a little bedroom. Outgrew that in 2 weeks.

Turfed out my fathers car from the garage, that was now my workshop.

Built a work bench, had my main machine, no internet connection down here, no phone line. 5 power sockets. When ever I needed a file, it was go up to the house, download it from the main machine, burn it to cd, back to the workshop, do the work.

Fast forward 6 months or so, now around 15 power sockets in the workshop, internet down here, 16 port switch. Network cable all over the place.

Had a huge racking system I built out of wood, on one side of the workshop (this held all my spare parts, and I mean ALL of my parts..)

Fast forward another few years to date.. 29 power sockets here, internet, telephone line, 9ft workbench, 6ft racking for parts, 2 3ft work benches on the other side of the workshop. Laptop safe (see my robbery thread in teo, when you can get into it ).

I have only had my website up and running now for around 18 months or so. Never had one before, as I felt that I did not need it. I must of been doing something right, as I was mad busy over the previous years.

Insurance, you will find its split 50/50 here. My own personal view, is it's a must. If you intend on having clients at your premises, and they slip on the stairs on the way to your basement, your at fault. They will claim off you. Speak with a local insurance company / agent, i'm sure they will give you some good advice.

Accounts.
I'm not sure what a CPA is?. If it's an accountant, what you could do, is ask them for advice. A lot of them offer say 30 mins free. If your competent at accounts, and book keeping yourself, then do your books yourself, and as you say pass them to your tax agent at the end of the year. Just remember to keep some money back to pay your tax bill (if that's how it works in the US..

From the sounds of this post, you do have your head screws on the right way, and are going about things correctly.

If you need any further help, just post here, or on any other thread. We are for the most part good guys / gals, and help each other out . Which is what TN is all about.

 

[techpitt]

Thanks for the response, Cadish. I sure hope I have your problem of growing too quickly! The beginning of your story sounds like mine, right down to the ebay/garage sale/ring thing.

I don't plan to have customers visiting my house, but I do plan to get insurance anyway. You're probably right that I won't know the needs/expense until i get with my insurance agency.

CPA is indeed an accountant; that's the title for certified accountants in the states. I'm hesitant to ask for free anything... wouldn't want an accountant calling me for free computer help. ( : Maybe I'll call a few and luck out by finding one agreeable to exchanging services.

 

[coffee]

I started out digging a big hole that Iam finally getting out of. I got taken by a credit card processing company for some major bucks. Be careful on that one. I found technibbles and immediately called out for help in this matter and got alot of advice that eventually ended the nightmare.

I started my buz in the basement. Bought a big used flattop business desk and made a work bench. I have a long history of computers so cobbling up a file server was no big deal. Spare parts abound. I then developed contacts on ebay and other places to buy parts. I dont have any newegg business accounts or anything like that. Most parts are from ebay. There are times I have to buy from newegg but I pass the cost on to the customer. I understand they are now offering business accounts and I might check into that.

Storage! I didnt think I would run out of storage space but man it fills up quick. Im ready to add more.

Customers - Networking, Networking, Networking. Get out and meet people is the best way.

I still have much to do before Iam a bonifide real business but its coming along. Not bad for someone that has no accounting experience.

Keeping track of customers -- > Simpleinvoices on my home webserver. Google=simpleinvoices.

Accounting software? ---> Spreadsheet. Simple and works great for now.

Good luck on your endeavors. Hard work does pay off you know!

 

[RichmondTech]

http://www.podnutz.com/recommends/dansbook/

 

[RegEdit]

anything I'm overlooking or any pitfalls to avoid.

Are you going to have customers coming to your home? I recently had what I'm virtually sure was a paranoid schizophrenic customer. After that experience I stopped having people come to my home. Inevitably you will encounter irrational customers who get angry. I live in a very nice area and I'd say about 1 in 20 are pain in the ass customers.

If you do decide to allow people to come to your home then get an addendum to your home owner's insurance policy to cover if a customer falls and breaks their back, etc. I am with State Farm and it was an extra $66 per year for that addendum.

Doing out calls is expensive for insurance. State Farm quoted me about $1,100.

Is it absolutely necessary to hire a CPA?

For what? You're hardly going to do much of any business from your home. Use TurboTax come Tax Time.

Overall I'd say keep your expenses as low as possible. Aside from the MOST basic, only buy parts if and when you need them. You want to see what kind of business you are going to generate in the first place.

 

[Rosco]

wow your story is very similar to mine.

I started out when i was 22 and my twin boys where 6 months old. now they are 4 and we have a third son that is 17 months. I started out of my house and still am. I like the flexibly to watch and be with the kids.

I started out with a hogpog assortment of tools and supplies. I have build my toolkit and supplies little by little. The one thing i wish i did different you have already down professional paperwork. I made my own but i hear great things about bryces kits.

anyways things are going; well business is building. I have a faithful customer following.

 

[techpitt]

I started out digging a big hole that Iam finally getting out of. I got taken by a credit card processing company for some major bucks. Be careful on that one. I found technibbles and immediately called out for help in this matter and got alot of advice that eventually ended the nightmare.

I hear you on that. I tried to start a business when I was fresh out of high school and had no idea what I was doing, and the only lessons I took out of it were 1) know what the #3!! you're doing before ever trying this again, and 2) CC processing companies are Eevil. The extra E is for extra evil.

Most parts are from ebay. (...)

Storage! I didnt think I would run out of storage space but man it fills up quick. Im ready to add more.

I have trouble trusting Ebay sellers, so any replacement parts will be used parts in my inventory if the customer wants cheap, or new parts from newegg if the customer wants mfr. warranty. I'm lucky in that my workbench room leads out to a 2 car garage that I expect will someday become storage area.

Customers - Networking, Networking, Networking. Get out and meet people is the best way.

Ah yes, I do plan on that but it is good to hear 1st hand. Some posts I've read here extol the virtue of handing out business cards like crazy, so I plan to do that. Also thinking of joining a local "Young Professionals" club to kickstart the networking, and maybe move on to Chamber of Commerce and some of the business networks mentioned elswhere in the forums here. Taking baby steps until I feel confident in my business processes, though. I'll have to look into Simpleinvoices and see how it compares to Mhelpdesk/Quickbooks. I'd considered doing a spreadsheet, but I'm paranoid that I'll end up in IRS audit hell if I try.

Good luck on your endeavors. Hard work does pay off you know!

Thanks for the well wishes and taking time to respond. I appreciate it!

 

[techpitt]

http://www.podnutz.com/recommends/dansbook/

Is that your book or does the author just happen to hail from VA also? Looks like a good read, I'll probably pick it up sooner or later as one of the first reinvestments in my business (hopefully early enough that it'll help me avoid making too many mistakes!)

 

[techpitt]

Are you going to have customers coming to your home? I recently had what I'm virtually sure was a paranoid schizophrenic customer.

Yikes, yeah, I read that post the other day and it actually made me decide against hanging a business sign from my mailbox and inviting customers to drop off their PC's to avoid a travel/pickup fee.

Doing out calls is expensive for insurance. State Farm quoted me about $1,100.

Yikes again. I have state farm for home and auto... hopefully there is a multi-line discount... but i may have to hold off on this until i establish a customer base and know i can break even.

For what? You're hardly going to do much of any business from your home. Use TurboTax come Tax Time.

Hey, don't talk me into quitting before i start! lol... I've never been accused of being an optimist, but I'm confident that eventually I'll round up enough customers to make it worth my while.

Overall I'd say keep your expenses as low as possible. Aside from the MOST basic, only buy parts if and when you need them. You want to see what kind of business you are going to generate in the first place.

Sound advice, thanks. Since I'm starting on a shoestring, I do plan to keep expenses below $50/month until profits justify more investment... so I only need 1 customer a month to meet this goal. The glass is half full!!!

 

[indy-pc]

Is that your book or does the author just happen to hail from VA also? Looks like a good read, I'll probably pick it up sooner or later as one of the first reinvestments in my business (hopefully early enough that it'll help me avoid making too many mistakes!)

Nope. Not his book. The book was written by Dan Hand, the creator of ACRBO (Association of Computer Repair Business Owners). Dan Hand is cmonova here on the TN forums.

Just FYI.

 

[indy-pc]

I've never been accused of being an optimist...

The glass is half full!!!

Doesn't that make you an optimist?

 

[techpitt]

wow your story is very similar to mine.

I started out when i was 22 and my twin boys where 6 months old. now they are 4 and we have a third son that is 17 months. I started out of my house and still am. I like the flexibly to watch and be with the kids.

I started out with a hogpog assortment of tools and supplies. I have build my toolkit and supplies little by little. The one thing i wish i did different you have already down professional paperwork. I made my own but i hear great things about bryces kits.

anyways things are going; well business is building. I have a faithful customer following.

Oh man, I can't imagine doing this when they were 6 months old... things were so rough with them alternately waking up every hour through the night that my day job actually allowed me to work from home for a few months. They're almost 2 years old now and things are easier in some regards, yet way more challenging in others... but I finally think it is manageable enough that I can leave them upstairs with mom without feeling too guilty. Thanks for sharing your story; definitely makes me feel better about having purchased the TN business kit.

 

[techpitt]

Doesn't that make you an optimist?

hahah, you caught the irony! Usually I'd be considered a realist... but I have optimistic tendencies when trying to motivate myself to take action.

Realistically, I know that it will be a while before my business takes off (if it ever does). But if my mantra becomes "work hard and maybe not lose money" I'll lose the will to continue. I just have to keep believing that the service I offer is unique and valuable, and that customers will appreciate that.

 

[Mr.Mike]

Oh man, I can't imagine doing this when they were 6 months old... things were so rough with them alternately waking up every hour through the night that my day job actually allowed me to work from home for a few months. They're almost 2 years old now and things are easier in some regards, yet way more challenging in others... but I finally think it is manageable enough that I can leave them upstairs with mom without feeling too guilty. Thanks for sharing your story; definitely makes me feel better about having purchased the TN business kit.

I fully understand what you are saying. My twins seemed to never go to sleep at night for the first two + years! Now they are 15 and falling asleep in class. It gets easier as they get older, but the are ready for their DMV learner's permit . The Horror!!

One mistake I made starting out was to spend too much on advertizing gimmicks. Just remember that no amount of advertizing will replace your own good hard work, excellent customer service and common sense.

Always be looking for opportunities to find work, be it networking with fellow business owners, holding free computer seminars for users, or simply pounding the pavement and passing out your business card. Keep that up for a couple of years, maybe three, and you'll find that you'll have built a solid client base that sings your praises because you have a good reputation based on your quality of service. Good luck to you!

 

[techpitt]

I fully understand what you are saying. My twins seemed to never go to sleep at night for the first two + years! Now they are 15 and falling asleep in class. It gets easier as they get older, but the are ready for their DMV learner's permit . The Horror!!

Wow, yet another technibbler with twins! This can't be coincidence... I always knew that we geeky types were particularly virile and potent. Ladies beware!

Seriously though, my #1 biggest concern (outside of business related items) going into this was that I'd burn out shortly after takeoff between being super-dad and super-tech. I didn't expect this thread to go so far toward alleviating that concern, but I'm grateful to hear that so many others have overcome this challenge.

Thanks for sharing your advice. I particularly like the idea of free user seminars... it goes hand in hand with my planned newsletters but gives me the chance for actual face time. I'll have to try that if/when I get enough subscribers to make it worth booking a conference/presentation room. Fortunately such things are relatively inexpensive in my neck of the woods

 

[Mr.Mike]

Wow, yet another technibbler with twins! This can't be coincidence... I always knew that we geeky types were particularly virile and potent. Ladies beware!

LOL. Yeah, my friends used to say I must be "double-barreled".

 

[Tech in SC]

Well I have 12 year old triplets, a 13 year old & a 7 year old step-son... all boys!!! Game over, I win... LOL.

Seriously, I have a few things to address:

1. CPA. Ok, sure it is an added expense but before you decide to wait until you can afford it let me get you thinking. I'm not sure what a CPA in your area would charge but my CPA charges me a monthly fee nearly equal to what I charge for a 1 hour service call. I tried to do my own bookkeeping in the beginning but it cost me more time and money doing it myself than to pay my CPA. The time you spend doing bookkeeping is time you could be spending making money! What if you get audited by the IRS, think of the time you will spend on that instead of your business. It will be significant. I have had several times when state or federal tax nightmares came up and all I did was call my CPA and passed it off. He called me when he got it resolved. Your tax offices (local, state or federal) will do things for CPAs they won't do for you.

2. Insurance. I see insurance as a necessary evil. If you're going to get into doing work for businesses then insurance is a good idea. But even if you don't imagine this... you have 8 PCs hooked up and running and you leave for a few hours. While you're gone a thunder storm rolls in and a nearby lightning strike takes out all 8 customer PCs. Do you have money to cover replacing those? Some businesses won't even let you work on their stuff unless you are insured and/or bonded. I've had some corporations bring me in on projects and require a million dollar liability coverage policy before I could start.

3. I had an idea several weeks ago that I'm just now pursuing (and others may have had the same idea). I have approached a couple of NEW small businesses in town about using their businesses as customer drop off/pick up locations for my business. In return, I can offer them (for ex.) $10 per PC they get. If a business gets just 1 PC a day (5 days a week) then that is an extra $200 a month for that small biz owner. This is a great deal for the small biz because it gives them another revenue stream & gets more traffic into their business which can turn into even more money for them. For me it works great because I will have multiple convenient locations that my customers can use to drop off/pick up their PCs for repair. I will also have those businesses "push" my services because they are getting a kickback. One of the local business I'm talking with is a new sub sandwich shop. Imagine how much traffic this guy will have from people coming in to eat and these people will see a sign advertising that they can bring their PCs in there for repair. Remember, people are busy and they like convenience. If you can have multiple locations around that they can use to get their PCs to you then it makes you more accessible & convenient to them. Plus it keeps them from coming to your home which can be a really bad idea. I had to remove my personal phone number from the phone book years ago because people would call me all hours with computer questions. One year I had someone interrupt Christmas morning with my family by bringing their laptop to my home wanting it fixed that day. People can be crazy!

I'm still working out the details so that everyone wins and is protected but I think its a great idea. I also have some surrounding towns/cities that I will expand this idea to if the local idea works out. Why not use other businesses' brick & mortar locations rather than paying for one of my own. Plus I'm not tied down to a store, free to run call outs or whatever else.

4. Bartering! I can not tell you how many times I've bartered my services with other local (and some out of town) businesses. You never know unless you offer it. However you would likely be amazed at the business owners that would rather barter. I personally have bartered with doctors, lawyers, accountants, photographers, exterminators, plumbers, electricians, bakers and more.

 

[Encrypted Existence]

Well I have 12 year old triplets, a 13 year old & a 7 year old step-son... all boys!!! Game over, I win... LOL.

Seriously, I have a few things to address:

1. CPA. Ok, sure it is an added expense but before you decide to wait until you can afford it let me get you thinking. I'm not sure what a CPA in your area would charge but my CPA charges me a monthly fee nearly equal to what I charge for a 1 hour service call. I tried to do my own bookkeeping in the beginning but it cost me more time and money doing it myself than to pay my CPA. The time you spend doing bookkeeping is time you could be spending making money! What if you get audited by the IRS, think of the time you will spend on that instead of your business. It will be significant. I have had several times when state or federal tax nightmares came up and all I did was call my CPA and passed it off. He called me when he got it resolved. Your tax offices (local, state or federal) will do things for CPAs they won't do for you.

2. Insurance. I see insurance as a necessary evil. If you're going to get into doing work for businesses then insurance is a good idea. But even if you don't imagine this... you have 8 PCs hooked up and running and you leave for a few hours. While you're gone a thunder storm rolls in and a nearby lightning strike takes out all 8 customer PCs. Do you have money to cover replacing those? Some businesses won't even let you work on their stuff unless you are insured and/or bonded. I've had some corporations bring me in on projects and require a million dollar liability coverage policy before I could start.

3. I had an idea several weeks ago that I'm just now pursuing (and others may have had the same idea). I have approached a couple of NEW small businesses in town about using their businesses as customer drop off/pick up locations for my business. In return, I can offer them (for ex.) $10 per PC they get. If a business gets just 1 PC a day (5 days a week) then that is an extra $200 a month for that small biz owner. This is a great deal for the small biz because it gives them another revenue stream & gets more traffic into their business which can turn into even more money for them. For me it works great because I will have multiple convenient locations that my customers can use to drop off/pick up their PCs for repair. I will also have those businesses "push" my services because they are getting a kickback. One of the local business I'm talking with is a new sub sandwich shop. Imagine how much traffic this guy will have from people coming in to eat and these people will see a sign advertising that they can bring their PCs in there for repair. Remember, people are busy and they like convenience. If you can have multiple locations around that they can use to get their PCs to you then it makes you more accessible & convenient to them. Plus it keeps them from coming to your home which can be a really bad idea. I had to remove my personal phone number from the phone book years ago because people would call me all hours with computer questions. One year I had someone interrupt Christmas morning with my family by bringing their laptop to my home wanting it fixed that day. People can be crazy!

I'm still working out the details so that everyone wins and is protected but I think its a great idea. I also have some surrounding towns/cities that I will expand this idea to if the local idea works out. Why not use other businesses' brick & mortar locations rather than paying for one of my own. Plus I'm not tied down to a store, free to run call outs or whatever else.

4. Bartering! I can not tell you how many times I've bartered my services with other local (and some out of town) businesses. You never know unless you offer it. However you would likely be amazed at the business owners that would rather barter. I personally have bartered with doctors, lawyers, accountants, photographers, exterminators, plumbers, electricians, bakers and more.

Let me start by saying welcome. I found your post very helpful and informative. I am just getting ready to "officially" start doing business myself and I really appreciate the ideas and info that you shared. Thanks.

 

[techpitt]

Let me start by saying welcome. I found your post very helpful and informative. I am just getting ready to "officially" start doing business myself and I really appreciate the ideas and info that you shared. Thanks.

Agreed, that was an excellent post. Thanks for sharing!

And Tech in SC... holy $#!t!!! Triplets? I have an 11 y/o stepson I failed to mention, but that's the only ace up my sleeve. You win. I can't even imagine dealing with that childarent ratio, especially that close toegether.

Your thoughts on CPAs and bartering have helped me decide to ping a few contacts and see what kind of rate can be negotiated, if not outright trade of services. Quickbooks is attractive, but your perspective made me realize that freeing up the time involved with maintaining my books is worth more to me than what a CPA may charge.

I'll probably end up getting insurance before I open shop. Starting out, I'm looking forward to the tax deductions more than any actual profit anyway, and I'm assuming that insurance would be a deductible expense.... hmm... assuming. Yet another reason to go with a CPA.

I also really like your idea about having drop off / pickup locations with other businesses. How has that been working out for you? I want to maintain my family's privacy (had a few encounters with the crazies myself), but at the same time I would have some concerns about the liability of having a 3rd party receive and handle the customer's equipment.