PC Business Questions

The published version of Start Your Own Computer Business can be direct from the publisher, from online bookstores, or ordered through your local bookshop.

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Starting a Computer Business

Laptop Deals and Repairs

Computer Repair

Questions? Comments?

Both questions and answers ar composites drawn from my archives.

Question) How do you know when you're ready to open? I've spent 6 months preparing to start a part-time PC service business. I've set up a corporation, accounting software (Quickbooks) and signed with strategic partners. I'm worried about getting out there and selling though.

Answer) There's no magic formula for how much time it takes a given individual to prepare for business. Some people literally fall into it with no preparation at all. They do their accounting on napkins, screw up their taxes the first time around, and don't worry about liabilities because they don't even know they exist. I know too many adults who watch the years go past thinking they could have been a contender to discourage anybody from trying a new business based on the technicalities. What I focus on is trying to help people separate between the reality of being in business and the dream. You do have to be able to sell if you want to go into business for yourself. Selling is at the core of capitalism, you cant get away from it. If you need a salesman to do your selling for you, you've already moved away from the shoestring startup model I talk about to something else. It doesn't mean your business wouldn't work, it just means you'll be gambling more than if you were able to go it alone.

Q) I recently took a management job at a computer company that looks to be in the exact death spiral you've described. I've already fired half the staff and moved the storefront from a prime $8000/month location to something more reasonable, but the debt load looks to be insurmountable. We're on credit hold with all of our vendors, including Tech Data and Ingram, and the techs have started cannibalizing finished builds to make service calls. I'm thinking of copying the customer database so I'll be able to set a service business to support the old customers once we go under. Any advice on how to go about contacting those customers?

A) The customer list of a business is often it's most prized property and is protected by law. It's common practice for employees whose work is coming to an end for any reason to copy the Rolodex, but that doesn't make it ethical. If the situation is truly as bad as you describe, you may be in the perfect position to offer the owner (who will be one or more creditors) a small sum for the customer base once the business truly goes belly up, it's not really worth anything to them. Now, if you've spent time working for the company and you haven't signed any non-compete type agreements, there's nothing to prevent you from contacting the customers you are familiar with when you no longer work there. I don't know enough about the exact situation to reach some sort of ethical judgement, but you might become familiar with the majority of the customers for legitimate reasons.

Q) Why are you so dead set against adult volunteers in businesses? I've volunteered to work for several computer repair business in return for references to help me land a real job. I also fix PCs for my family and friends for free. It's hard to get a job these days and I'm not a real competitive guy, so having a resume is the best chance I see for myself.

A) I'm not against volunteering from the standpoint of the volunteer for very reasons you mention, as long as you're intelligent enough not to get abused for you kindness. I am against business accepting volunteer help, with the exception of family. There are several reasons, starting with liability and the fact the people who are volunteering in a commercial field instead of working in it are usually doing so because they aren't really qualified, but those aren't the main issues. When you're running a business, you bear a responsibility for the actions of the people working for you, whether they are paid or not. If you, as a volunteer, mess up a computer in the shop or get a little fresh with a pretty secretary when dropping off a PC for the business on your way home, it's the business owner who's in for trouble. Building a small business is just to hard to take chances with free help for questionable returns. Big corporations can afford to run background checks, do employee orientation, etc, but babysitting volunteers is a risky proposition for a mom-and-pop shop.

Q) Everybody says Ingram Micro is a great vendor and I signed p with them, but I don't see any bargains on their website. Where can I get small quantities of computer hardware cheap?

A) Ingram Micro is great for business that do enough volume. They will extend credit, they have a great RMA department, they even have internal technical and sales support. However, they have very little to offer a small start-up until you get to the point that your volume will bring down the pricing, get you free shipping, etc. For start-ups, you can go to the same Internet vendors as retail customers, such as newegg.com,, dirtcheapdrives.com, or you can just go to pricewatch.com and spread your business around a bit until you find somebody you like. However, nobody is going to treat you like a business customer if you're always shopping them for the lowest price, and all the shipping charges will add up as well. You also get much more junk from the fly-by-nights than buying brand name hardware from big name vendors. The bottom line is that trying to compete on price in the PC business is insane, your customers will always be able to find better deals on the Internet.

Q) I want to build computers with legal Microsoft software. How can I get cheap operating systems without pirating? Do I have to buy a new copy or license for every PC I build?

A) Most small PC business get legal Microsoft software by buying it from OEMs (Original Equipment Manufacturers). Microsoft changes the exact working of their agreements from time to time, but they've always had programs in place which allow hardware wholesalers to include legal copies of Microsoft operating systems with certain components. There that it didn't appear to make any difference what the component was and vendors were selling new operating systems with a $4 mouse, but you want to double check that it's legitimate before taking one of those deals. It's more normal to buy OEM operating systems with the motherboard. If the price you're offered is cheaper than the going rate every other legit place is charging, than they are most likely selling you pirated software. It's best to by with a CD that you can give your customers, but in some cases, all you'll get is a sticker, a EULA (End User Licensing Agreement) for the user and a master CD for installing the OS in your shop.

Q) I can't tell if you're tying to encourage people to start a PC business or make them flee screaming from the room. I'm convinced that it's nearly impossible to compete with Dell and the other big names on systems, but I intend to focus on selling peripherals, plus me services. Do you think it can work?

A) Of course it can work, but it's all up to proper execution. The days of low hanging fruit in the computer business are all over, your local Staple or Office Depot is likely to carry all the peripherals most customers would want at prices you'll have a hard time competing with if you want to make a living. It depends greatly on your location (and the location of the nearest discount chain competition). Services, on the other hand, are always in need everywhere, you just have to be good at it and know to leave your customers happy. Word of mouth is everything in the service business, but some techs have trouble getting the ball rolling with those first few customers, so you still need a marketing plan.

Q) I'm trying to decide between starting up a computer business on my own or buying a Computer Troubleshooter's franchise. I was quoted a little over $10K for the franchise, which included several days of training and some expert consulting but no business leads. I did speak to some other franchisees, as you suggested, and they were positive, but it sounded like they were really supporting each other. Do you think it's worthwhile buying a computer franchise, or should I just try on my own first?

A) TRY ON YOUR OWN!!!! The only value in a franchise is the leads. The training, group support and marketing materials you can get anywhere at a fraction of the price. See my article about computer repair franchise scams.

Q) I'm planning to start a new computer business but I don't want to go it alone. I want somebody who will work with me from day one to build the business, somebody with lots of experience and who has my people and technical skills. How can I find this person, and does it make more sense for me to get an employee or a partner.

A) Try working in front of a mirror:-) Seriously, you want to find somebody just like you, with your entrepreneurial drive, and you think that person will pour their heart and soul into your business as an hourly employee? Maybe if you hire an illegal immigrant, but otherwise you're looking at a partner. The real question then becomes, what do you have to make you attractive to this partner, as opposed to their going it alone and hiring an employee? It's just not enough information for me to go on, but hard to see why you're rushing into a multi-person operation before you've sold or serviced your first PC.

Q) I'm thinking of getting A+ certified and I'm wondering if it will help me get a job or go out on my own?

A) It will help you in the eyes of human resource departments if you look for a job, it won't help you if you go out on your own. When you're self employed, nobody asks you for certifications, degrees, etc. They are calling you to do a job because some marketing you've done or word of mouth from a happy customer of yours has convinced them to give you a shot. If you do the job right a price they can live with, they'll ask you back again.

Q) I'm planning on opening a computer business here in England, but my Government advisor keeps telling me it can't be done. If I wanted to a pessimistic view, I'd just ask my Mum:-) Do you have any statistics on sales or profits on a typical computer business I can present to the advisor?

A) We don't have government advisors here in the States, so I'm a little confused. Do you mean like an unemployment counselor or something? In any case, you can make up the numbers yourself if you know where you want them to come out (oops, I didn't really say that). For a retail shop, you aren't going to stay in business unless you mark up your hardware by 20 or 22 points, and you'll find this means you have to compete on customer service because that sure won't get you there on price. Start with the amount of money you need to live on, treat that as the profit and add the taxes you'll have to pay on it, then multiply the total by 5 or 6, and you'll get a notion of how much hardware you'll have to move to make a living.

Q) I'm starting a computer business and I want to know what laws and regulations I need to obey.

A) Business laws are primarily on the state and local level in the US, in terms of licenses, etc. I'm not aware of any special laws or regulations pertaining to the PC business, the only government regulations related to computers are FCC standards for interfering with radio frequency broadcasts, and I've got to tell you that most small PC builders settle for buying a case with a sticker on it and ignore the letter of the law.

Q) In spite of your book, I'm still planning on opening a computer business:-) I'm 65 years old I see it as both a hobby and a potential source of income. Can I hire you for some consulting to help me start out?

A) No, I don't sell my time, and I don't think it makes a whole lot of sense to start a business if you're really looking for a hobby.

Q) I'm starting a computer business and I want to be able to finance systems for customers. Can you point me to a financing company that will work with customers who have bad credit?

A) No, that sounds more like a loan shark operation than a financing company. I don't want to sound overly negative (yes I do) but working with customers who have bad credit is not a pretty business, and I'd stay away from it when your product is as time dependent as PCs. By the time you reposes them, they'll be no value left.

Q) I'm getting an Electrical Engineering degree and I'm thinking of starting a computer business. Any advice?

A) Try getting a real job first. If you've put in the four years getting an engineering degree, you may as well try to put it to use before you take up turning a screwdriver and hitting "enter" for a living. Trust me on this one, I have two EE degrees:-)

Q) Can I buy parts to build computers for resale with my personal credit card?

A) If you haven't been in business long enough to build up a line of credit at a bank and with vendors, it's the only way you can buy parts, unless you want to pay cash on delivery. Almost everybody in the business these days works on credit cards, except for the big time vendors like Ingram, Tech Data, etc.

Q) I'm trying to get into the reseller business, selling computer hardware at shows and on the Internet. Can I get volume pricing from one of the big distributors and compete?

A) No. The only way to compete on pricing at shows or on the Internet is to buy direct from a large importer or to be in the import business yourself. Some of the show vendors are just out-and-out crooks, selling factory seconds and rejects as new, or stuff that fell off a truck. The legit importers, both at shows and on the Internet, can sell stuff that they buy by the container load incredibly cheap, in fact, they pretty much have to, in order to do the volume that allows them to get the lowest prices. It's a tough, tough, business, and most of the people who are successful at it have very good contacts, often family, in the countries they import from. On the Internet, you often get domestic vendors or OEMs dumping stuff that they are overstocked on or that they purchased to make up a minimum order to achieve a pricing level. In any case, it's all about volume.

Q) I've been getting free business advice from S.C.O.R.E and unemployment office about starting a PC business, and they keep telling me I need to get a job to build up a nest egg and a decent credit rating. I'm willing to start on a shoestring, working out my house, but they are very disparaging. Do you think it's possible?

A) Sure, it's possible, but if you don't have any cash or credit, it's a tough row to hoe. You have to consider the source any time you ask people for business advice. If their experience is strictly from the corporate world, then it's very difficult for them to put themselves in the shoes of somebody who runs a business without a revolving line of credit at a bank, not to mention a staff:-) On the other hand, it's extremely difficult to be in business selling computer products if you lack the cash or credit to obtain those products in the first place. If you're talking about opening a computer service business, focusing on software issues, like training, virus protection and spyware removal, then you don't really need any capital to set up, provided you have a way of marketing yourself that doesn't require money. One thing you really do need these days if you're going to be in the service business is a notebook computer for downloading software that you can't get with your clients PC while it's in the dumps.

Q) Will you please publish "Start Your Own Computer Business " as an E-book? I have a reading disability and it's a lot easier for me to use a software reader.

A) I did recently publish an e-book version, though not for the reason you mention, which I'll have to admit never occurred to me. I kept getting requests from people in Australia and New Zealand who were faced with high shipping costs and a long wait from Amazon if they ordered the paper version, so I did an e-book version that can be downloaded immediately and printed one time a year.

Q) If I was going to fix PCs on a desert island and could only bring one book, which book would you suggest?

A) Well, you don't mention what level you're on. For teaching a new tech how to approach PC repair problems, I like the book I wrote for that purpose, "Computer Repair with Diagnostic Flowcharts", but if you're looking for a big reference book, the best by far is Scott Mueller's "Upgrading and Repairing PC's", currently in it's 16th edition.

Q) What do you do when you're working on a customers PCs and you encounter a problem you don't understand?

A) Tell the truth. There's no faster way to dig a grave than by lying, and most people are smart enough to spot lies anyway, we're built for it. I actually err to the other side, I'll say "I don't know" more often than I probably need to, but I always follow up with, "Let's take a look on Google and see who else has encountered this problem" or something to the effect. You might run into the occasional customer who expects you to know all the answers, but I think most customers are actually flattered by the idea that the "computer guy" doesn't know either. If you walk in and say, "Al you needed to do was..." you can make people feel pretty stupid, which is hardly the way to build good relationships.

Q) Most kind and gracious sir. I would like to purchase a copy of your book but I am living in, India/Nigeria/Pakistan/Bangladesh etc, so please send me one for free.

A) I receive a couple of these requests a week. Years ago I was flattered an sent out a few free books (postage cost more than the books) but now I tend to believe that these are all scams, and I've stopped cold.

Q) My goal in the PC repair business is to make $50K my first years, and I've been looking at a "Computer Troubleshooters" franchise. I talked to them on the phone and they were very positive about my plan, but other techs I talked to, including some who had their franchise, were making closer to $25K a year and working seven days a week. They'll only give the details of their marketing plan if I actually buy the franchise, and I'm wondering if you think it will be worth it.

A) Well, I've never seen their marketing plan and I don't know how much money they are asking, a plan is just that and I would never buy anything on terms like that, especially a big ticket item like a franchise. I'm against computer franchises in general, but I'm aware that some individuals really feel they need the sort of corporate identity that a franchise offers. My advice to people looking at franchise is always to invest the money and time to visit talk to some random franchisees, and talk to them about their actual numbers. I'm talking about the franchisees at the bottom of the food chain, not the ones at a higher level who may get bonuses for signing up new guys. Once you have all the information about what the franchiser will provide, price it all separately, keeping in mind that if you hire local businesses to provide you with marketing materials and help, you'll get the advantage some local buzz. Finally, if you are dead set on a franchise, get a decent business lawyer to advise you before you sign anything.

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U.S. residents can order the 161 page paperback direct from the publisher for $14.95 plus $2.25 shipping and handling (media mail - normally 4 to 14 business days). The book can also be ordered through any retail store by the title "Start Your Own Computer Business" or ISBN which is: 0-9723801-0-8. Massachusetts residents charged 5% sales tax on direct sales.

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