Starting your own computer repair business can be a very profitable and rewarding business venture to get into, but before you make the jump into self-employment, make sure you consider the following decisions you’ll need to make to startup your company.
Starting your own computer repair business can be a very profitable and rewarding business venture to get into, but before you make the jump into self-employment, make sure you consider the following decisions you’ll need to make to start-up your company.
Pick Your Legal Structure
One of the first things you must decide is what legal entity you want to establish for your business. It’s important that you pick the right one for your situation because choosing the wrong entity structure could cost you thousands of dollars in over (or under) paid taxes, yearly fees, and liability. There are five distinct business structures available in the USA, including Sole Proprietorship, Partnership, Limited Liability Company (LLC), S Corporation and C Corporation. The three most popular are Sole Proprietorship, LLC, and C Corporation. The cheapest entity to establish is the Sole Proprietorship but also provides the least legal protection. The legal fees involved in setting up any of the other 4 vary from state to state. It’s important that you talk to an accountant in your area to determine which is right for you.
Business Model
There are a few different business models you should consider. I teach them all more indepth in my Computer Repair Business In-A-Box, but here is an overview of each:
- Part Time Home-Based Business – The ideal situation is to run this business on the side while working another job. You can schedule appointments around your free time. As your business grows you can slowly transition into running it full time. This is the safest route to take and one that will give you the best chance at success.
- Full Time Home-based business - This is the same as the part time home-business model except you are working full time right away. You can perform all of your work in your client’s homes. You can project a professional image by always going on-site and running your appointments off of a professionally designed website. Clients will never see that you are running everything out of your home and you will save a lot of money in rent and utilities.
- Pick-up/Drop-off – This model is similar to the home-based business model, but instead of performing work in your client’s homes you pick the computer up, take it back to your house, fix it, and drop it back off. If you implement a schedule for picking up and dropping off computers and you group your appointments together, this can be a very profitable business model to establish. Clients won’t have to wait for you to fix their computer in their house. You will also make more money per hour because you will be able to work on multiple computers at one time.
- Storefront – This model is the most expensive of the 4 and one that I suggest not starting with. There is really no need for a storefront when you first start out, because it is going to take you a good 6 – 12 months to establish your client base. In the beginning you will have an empty store and lots of extra bills to pay. At the same time, if you have the financing and want to focus on selling computers, computer parts, and software, than a storefront is a good idea (especially if you are in a high-traffic location). Look into the costs of running a storefront before you make your decision.
Startup Costs
Write down your startup costs and plot out a way to cover your expenses for at least 3 months. When you begin marketing, keep in mind that it takes about 3 months for your marketing to kick in, and you have to consistently market the entire time to start to produce market awareness and generate interest in your company. That means you may be marketing for 3 months without much of an ROI (Return On Investment). So, plan accordingly in your budget. You will also need to cover utility bills, website hosting, email marketing software, business supplies (e.g. – office supplies, business cards, computer repair toolkit, utility software, external hard drive, business forms, etc.)
Business Insurance
Getting insurance is very important, especially when you first start out. You will likely make more mistakes during your first 12 months so it is important that you protect yourself from liability. There are many factors involved in calculating the cost of insurance. It depends on your area and who your client base is. Typically you can get good tech insurance for around $200-$500 a year. Shop around for your options. One place to start is InsuranceForTechs.com
Legal and Financial Assistance
Right from the beginning you’ll want to establish a relationship with an attorney and accountant in your area whom you feel can provide you with advice without breaking the bank. This will make sure you are making the right decisions and covering your appropriate bases from day one.
For a complete A to Z guide to starting a computer consulting business, consider my Computer Repair Business In-A-Box.
Dedicated to your success,
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