This post was great!
https://www.technibble.com/forums/threads/startup-questions.74129/#post-589313
Your question number 10 should be your first question. Have you put together a business plan? People do not plan to fail, they fail to plan.
I strongly disagree with this. If you've been in the repair biz running a shop for a while, you already have the business plan formed as habits. You know what pricing model will work, etc etc. Some people enjoy that side, some don't - you can SURELY start a repair shop without one. (As I did, and probably over 50% of the folks here)
Some are saying he's getting too defensive - it's easy to do when you think people are saying you can't do what you had your heart set on. OP - just read all the advice and prepend it with "in my experience this is what happened" - and know that it won't 100% apply to your specific case of course. People want to save you from making a mistake they made, and probably some think their fate was unavoidable and you'll end up the same. I don't.. You can do it
Everyone has a different risk tolerance, and some here are technicians that happen to be in business, some are business people happening to own a computer repair biz - these are totally different personality profiles. Some 20 yr old probably doesn't care about the same things as a 60 yr old shop owner about to sell their business.
As for the $35k being enough to start out, I started on much less - like first store I probably invested $5k. It only had a 400sq foot "showroom" and the rest was bench/shelving in the back. You could easily spend 100k making a large store with lots of retail look awesome, but an example to get a super small store setup might look like;
- $500~ 8'-16' of slot board and shelving - https://www.uline.com/Product/Detai...gclid=CJGW0eKrzNICFZFcfgodO0QNOw&gclsrc=aw.ds
- $1000 cool display case - used - might have to paint/etc (example https://seattle.craigslist.org/sno/fuo/6028807340.html )
- $3000 - A couple laptops and parts to sell (2x hard drives, 10x sticks of ram, some power supplies, etc etc)
- $500 - paint the place
- $200-$2000 nice outside sign
- $300 - some cool posters for the shop decor
- $500 for tools - you might already have them though
- $99/mo for RepairShopr
- $300 - receipt printer, label printer, spare paper
- $100 - cash drawer
- $300 - some monitors for the back workbench
- $100 - nice LARGE power strips for the back
- $700 - synology nas for software tools/backups/etc
- What else? Should we wiki this?
Other ppl said don't expect to hit those revenue numbers in first months - totally agree. LOCATION is major important, and even in my good locations I had months that only made like $1500. I'm pretty sure my first 18 months were like; (in thousands) 1,3,2,5,2,3,5,7,3,5,3,9,5,3,10,5,etc eventually leveling out at like 12k/mo at that store for a couple years. There are totally some stores that pop up and just hit 10k/mo, I've seen it, but it wasn't my experience and I don't think it's common. You could totally be fine with a revenue pattern like this, but I would expect lumps like this.
I’ve always deemed insurance companies as corrupt and dishonest and many are a total waste of money. Business insurance, on the other hand, I will still look into. Many things like data loss could be covered in signed documents. If a tech destroys a customer’s system, would insurance cover something like that?
I also dislike insurance companies in general - and if you have absolutely no assets and don't mind the risk, it's kind of up to you. Some leases will require it, don't be surprised if you run into that..
Some businesses use eSignatures, not a problem. Anything to better organize and save time should be preferred.
Yeah, you can be paperless except for credit card receipts probably. When you said "paperwork" above I was thinking like; state/federal taxes, payroll, all that fun stuff you get stuck doing - it's mostly electronic now - and a good bookkeeper can actually do all of this for you.
We've had bookkeepers that couldn't do any of it well, but when our tax lawyer recommended hers - they are awesome and can do payroll/bookkeeping/etc - you can basically just look at QB once a month and be fine. Some people here will disagree and say you need to look at financials daily, but when just starting out - and if you aren't interested in that stuff - you can make it (like I did) just watching the bank account and having a feel for the margins at first while you get used to everything.
I didn't really understand a P&L (or care at all about it) until after like 5+ years doing it.
Which exit strategies exist? Before even starting one, I was considering the possibility of potentially selling the business. Whoever would buy it if they lack the skills, they wouldn't be as successful though. Question would be is to how to value a business for sale.
I sold my shop for like 1x "gross profit" - there are lots of ways to value the business, but they all have one thing in common - good documentation, good customer database, logs, records. If you use (something like) RepairShopr it'll basically give you 100% of what you need to pass the business on to the next person. Nobody wants to buy a business that's just a dropbox folder full of invoices made in MS Word. (It happens!)
If you get the business up to like 200k revenue, and pay yourself like 50-100k, you could probably get someone to pay you anywhere from 50-300k for that business - depending. I'd bet money you'd sell it around 100k though.
This is all about the buyer and the seller, and can swing pretty far based on circumstance, how much money the buyer has, how savvy they are, how badly you want to sell, etc etc.
I was aware most business fail, and I can completely understand why after managing some. It's my opinion most fail due to bad management and staff. Considering past experiences, I have a hard time imagining losses would happen. At the same time, revenue should be flowing in. Realistically how high could expenses be: rent, insurance, marketing, labor, parts, tools, etc.? Is $35k not enough? It's my impression getting up to speed would be far more important than what one has initially saved. The one person I'm going to hire is considering possibly moving out of state. Paying them $2,000-2,500/mo doesn't seem like a lot. If that person leaves, then labor cost would then be zero.
Yeah, I agree it's mostly bad management and staff - although you've probably seen an awesome business go into a super bad location and just never go anywhere and then close. I would say it's management+staff+location. My one piece of advice here is try to sign the shortest lease possible even if the location is 100% proven to work - it's the worst to try to get out of a commercial lease. (worst experience in my business career for me for sure)
7: Finances: should I get a separate bank account, credit card, etc. with my business name?
If you are starting out mobile or from home - you don't "require" all the business stuff like bank account/etc - but it's only like $100 to register your business and bank accounts are basically free - you will basically require it if/when you have employees/contractors - and it makes getting a merchant account way simpler. I'd go through the hassle to set it all up either way - but especially if getting retail/commercial office.
(side note, people talk about using a business to limit your liability - imo it's mostly BS and no matter how awesome your LLC is setup people can still individually sue you at will. A lawsuit doesn't just get thrown out because you have an LLC, a judge/jury can still hold you personally liable for a million different reasons. I wouldn't do it "just for the liability part" - but it'll make taxes easier, lots of good reasons there, go get a free consult with like 2-3 CPAs and ask them this question. That'll be fun.)
Anyway - fun post - I could type here all day
