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Setting Up Shop

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July 23, 2002 9:18:31 AM

Well, I realize that this is a forum of enthusiasts, and not entrepreneurs (though there are probably some lurking), but I'm writing this in all seriousness.

I have realized that computers are easy to build and easy to run (not to mention fun to tweak). And I have also realized that most people, at least in 18-24 age group, are willing to learn, especially if they think it will give them an advantage. This extends to computers.

Therefore, while dulling my mind putting round pegs into round holes at work (I work in a factory as a summer temp... please kill me), I thought of the following. Our IT department, due to a campus-wide budget cut, has decided that it will no longer offer any type of software or hardware support/repair, unless it pretains to connecting to the campus network, or other "academic" pursuits. From now on, they will supply us with a list of computer shops and whatnot in the area, which will most likely be 30 miles north of a residential campus, with few cars. See the problem/gold mine?

I just want to build systems, though. I already have built one for a friend, which he has never had to call me for help, which I find very surprising. I have built two for myself, flawless, as well as helped my brother and my father with theirs (forgot to connect the CPU fan on my bro's... big oops... still works, though), and performed countless upgrades. My neighbor is in need of replacing his (cough) P133 with 32MB RAM, trying, pitifully, I might add, to run Office 2K. I'm going to help construct a new machine for him, and he said if that went well, he would have me redo his office computer as well (he also mentioned doing his whole department, but I declined). I have faith in my abilities, and people seem to see that.

I just want to focus on hardware upgrades and system building, building a system per week or so (if I have that many customers). No repair, unless it’s a system I built, or the part of a system that I upgraded, and no software troubleshooting, unless it’s on a system I did. I also want to provide the customer with a kind of maintenance schedule, so that they learn, maybe slowly, that hardware drivers and software patches are important, as is Antivirus protection and defrag. Also, it is my hope that this would reduce the need for technical support.

Now, the question is, of course, how to set things up. I’d be doing it out of my room, and probably advertising with fliers around campus. Should I offer various “pre-built” systems that people are free to modify if they want to, or should I keep it completely freeform, depending only on the needs of the customer (Office/Internet, gaming, etc)? I figure I’ll mostly get students who are running hand-me-downs from their parents (like what I got), so the upgradeability of the current system might be tough, but at the same time, if all they want is a little more speed so that the OS loads faster and programs come up quicker, I need to be able to provide for that. Should I stick to a certain brand of components, or just choose whatever I can find for a good price and good performance?

Too many questions and probably not many answers. Thankfully, I have almost 7 full weeks till school starts back up, so I have time to plan this out.

-SammyBoy

More about : setting shop

July 23, 2002 10:16:34 AM

I like to see people with your vision and entrepeneurship.

I don't know your knowledge of business and its management, but I suggest you start with some numbers and considerations, like costs, time to complete a computer, where you can buy components, avalability of those components, replacement policy, etc. This can take some time, and you can get ideas or missing points whenever you are, so be sure to write down.

You should get an idea of what your "potential costumers" may want. There won't be only one group, maybe 3 or 4 as you have said. Configure some standard computers that solve the needs of every group, but also think about the components you are using (easy to find? always vailable at your computer store? Use to change over time? Easy mantainance? Rock solid?) These decisions will impact in the future and are worth to take into consideration. Don't think about as one or 5 computer, maybe you have build 30! If you put a problematic component, you will pay for that. Also, reputation is important. You don't want ending with more problems than now, right?

If you want to make upgrades to other computers, imo you shuold put an extra price, cause it can give you more headaches (compatibility with hardware, software, underperformance unexplained, etc.). It's 10 times easier to solve a problem in a standard configuration that you know well.

I dont' know if this is what you were looking for. If you need more advice, feel free to ask me.

Good luck.

DIY: read, buy, test, learn, reward yourself!
July 23, 2002 7:18:53 PM

Yeah, the logistics of this will be maddening.

Another question, of course, is if I should be AMD exclusivly (the CPU I've built with in the past), or if I should include Intel boxes as well. The only difference is the motherboard and CPU, and I can easily dig up the best mobo for various tasks.

Well, work calls... again, putting round pegs into round holes.

-SammyBoy
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July 23, 2002 10:27:33 PM

Well, potential customers will be mostly focused on the college segment, namely the ones on my campus. They will either be pretty computer illiterate (beyond what most people know, though), or computer savvy, with apprehension about DIY. So, I'll end up mostly with those who have a computer that was given to them before they went to college, so it will probably be a 600MHz-1GHz machine, most likely an OEM system. I can perform upgrades galore on those. The ones who want totally new systems will probably be those who game, and feel/know that what you can get in a store is probably not the best for the price you pay.

Damn, work calls again. Well, only 8 hours left...

-SammyBoy
July 24, 2002 4:12:03 AM

One other issue that just came to mind... how do I charge. Do I charge by the hour, a flat fee, or a percentage based on the cost of the computer (i.e. 7.5% of total cost). As to upgrades, I should probably do what Best Buy and other places do, and just charge a flat fee. Since 80-90% of all upgrades will go without a hitch (such as adding 128MB of RAM), it wouldn't be right to charge people by the hour, nor would I get much myself... and if I did it percentage-wise, an upgrade to a R300 would get me alot more than a KyroII, even though the problems that can crop up are the same (driver incompatability, IRQ conflicts, etc.), and take the same amount of effort to solve.

My goal is to do a system a week, and do two to three upgrades in the same time period. I think that would be the extent of my time, without sacrificing precious gaming and tweaking time of my own (school will always have its time, but I need "me" time).

Now, I think what would be best for me is to figure out a three-tier guide, so that I can easily find the set of components that I should use, as well as give the customer something to look at in the way of specs. I, though, will not be like Dell or other OEMs, and sacrifice performance to save a buck (SDR SDRAM P4s anyone?).

Well, two more hours of work to suffer through.

-SammyBoy
July 24, 2002 9:05:53 AM

Imo, you can apply some modulation in your custom PCs. You can have 2 combinations of mobo+CPU+memory for Intel and 2 more for AMD. Think that some people may want to stick with one or another company. As you say, the rest of the components are the same, so no additional problems should arise.

DIY: read, buy, test, learn, reward yourself!
July 24, 2002 9:12:32 AM

Personally I don't feel confortable with OEM systems, cause sometimes upgrade those systems can be a headache. It implies you will be buying specific components for each machine, hoping that there aren't are incompatibility. I know IN THEORY this should happen, but we both know that we find in reality.

Anyway, you can try to offer this service and, if you see things aren't running well (to much time or problems), don't offer it anymore. You can also upgrade when you are really sure that there won't be any problems.

DIY: read, buy, test, learn, reward yourself!
July 24, 2002 9:31:34 AM

Here is an option: charge a small mark-up over components' prices and a fix cost for build one PC. For upgrades you can do the same.

From a costumer point of view, I would understand that you have a little higher price for components, and a fixed cost for building a PC seems reasonable cause a P4 1.6 needs the same effort as P4 2.4, isn't it? It's a policy that you can argue in front of everyone. The markup and the fixed cost it will depend on knowledge of your costumers, how easy is for them to go to buy it (quite difficult as you previously said), etc.

Another suggestion: use motherboards that has as much extras as posible, and also rock stable. That way, problems will be less common and you don't have to install, let's say, a LAN pci card. Also, I will use easy upgradable mobos, and make you notice to the costumer. For exemple, a P4 mobo that supports 533FSB even if you put a 400FSB CPU, will benefit the costumer in the future clearly. Tell him!

Also you value added is ADVICE. You know a lot, so explain to people and people will understand and thank you. Like the SDRAM-P4 you have said, I you explain how horrible combination is to a potential costumer he will thank you and probably buy your system feeling confortable (and probably thinking Dell want to steal his money ;-))

Overclocking is not really valued for your cosutmers for what you have said (my guess). So don't spend money and time on it. Also garantees will be gone and that can give you headaches if you have to replace components.

Just some bad news ... if you do it well, you will have more work that just one PC and 3 upgrades per week :-)

DIY: read, buy, test, learn, reward yourself!
July 25, 2002 12:20:38 AM

go for it man! it would surely get you out of that factory. set up a nice little computer shop. but please make it smell good. all too often those computer repair shops smell like cat piss...I wonder why?

Introducing Tapeworms! The new big thing for weight loss!
July 25, 2002 12:06:00 PM

I just want to tell you this.
I already do that kind of work in my neighborhood and I can tell you from experience to use established quality products. If parts break, people will come to you as you built/upgraded the system. You have to protect yourself. I suppose you don't have the means to offer some warranties on parts and workmanship, so think about it. Of course, there's no guarantee that even the best quality product will never fail, but you'll have the statistics on your side.
As for what you should charge, it all depends on your targeted customer base. You have to come up with a fee calculation that's fair to them and to you. I don't suggest to charge a hourly rate as assembling a box may take more time for one client than for the other, and if they know each other, that will translate into trouble for you. Commission on the price is also tricky as computer part prices fluctuate a lot. A flat rate seems logical. For example, you could charge 30$ for assembling the box, 20$ more to setup the OS on a new rig, 15$ to upgrade a component with driver installation, etc. This way, your customer always know in advance how much it's gonna cost exactly.
That's just my two cents!
Hope this helps!

Good luck!


<font color=red>A platform is not an oil rig.</font color=red>
July 25, 2002 6:40:12 PM

Thanks for the insight, guys. I'm currently carrying around a notepad to jot down any ideas I might have regarding this. I mean, I need something to do at work. Well, I hope that I can get something solid before school starts, and that by the end of Sept., I'll be building computers.

-SammyBoy
July 26, 2002 3:35:11 AM

SammyBoy, I hate to burst your bubble but I have to smack you across the face with a reality glove. It may seem all fine and dandy to start a computer reseller/repair business but it is one giant pain in the buttocks for the following reasons:

1) Mark ups: Online vendors like Newegg have huge inventories which allows them to sell at near wholesale prices. It is very difficult to compete with them.

2) Shipping: Unless you have a warehouse which is close enough to pick the stuff up yourself, shipping costs will eat into your profits. God forbid if you have to RMA something. Guess what, you pay to ship it twice! Furthermore, if something needs to be RMA'd after your customer gets their PC home you have to listen to their whining and now your customer will have to wait until you get a replacement. Now your thinking if you have parts in stock you can replace it right on the spot. See 3.

3) Depreciation: Stocking anything is a bad idea. In the computer business prices go down seemingly overnight. This especially pertains to CPU's and RAM (although RAM could go up). Do you ever wonder why there are so many pc vendor shows? They have to get rid of excess merchandise before it depreciates and lose money. If you plan on stocking anything, make sure your weekends are free. You'll be at pc shows all day Saturday and Sunday.

4) Time consumption: Have you ever put together a whole system without running into some sort of problem? If everything goes according to plan (including OS installation) a PC can be put together from top to bottom in about 3 hours. If you put together 4 that's 12 hours. That's if you encounter no difficulties.

5) Customers: People are stupid. They will call you at 3:00am because AOL crashed and they don't know why and they want you to fix it right away. I'm not kidding you. As soon as anything software or hardware related goes wrong, it's your fault. Their house got struck by lightning and they didn't have a surge protector? Your fault.

6) Sales Tax: If you live in a state that has a sales tax, you are required to go through the process of registering your business, filling out the proper forms, etc. A giant pain in the buttocks.

7) Tax headaches: Forget about the 1040EZ.

8) Credit Cards: Computers are still a pretty big ticket item. Most people don't carry around $1000 to plunk down on a new system. They're going to want to pay with credit cards. There goes another 2% of your profits. That may not sound like a lot, but if you sold that $90 graphics card for $100, you just made $8 instead of $10.

Those are just a few reasons not to do this. I'm just tired of typing. However, there is a good way to make money without the headache. Networks. I have a customer who owns a liquor store and wanted to upgrade their server and two workstations. The customer got the hardware from Dell and I set up the rest. I didn't even have to run the wires. I charged for my time. Now if anything happens, the customer calls Dell, not me. If they want to call me, I make a house call and get them for $50 because it's a Dell computer and not a Black Cat computer. Nice, eh?

I could have sold them the server and workstations and made a few bucks, buy why? I just saved myself at least 9 hours of work, I made money anyway, and no phone calls. Your expertise is your ticket to fortune. Make money by charging for your time. No overhead! Set up networks and make repairs. That's the easiest way to make the dough.

I'm sorry to rain on your parade and I certainly would not want to discourage you from carving up a piece of the American pie (if you're even American), but starting a business is something that shouldn't be taken lightly. It is a major commitment. Something to think about.

To start press any key. Where's the "any" key? --Homer Simpson.
July 26, 2002 8:00:21 AM

Well, I don't plan on making this an actual business. Instead, it will be more like the guy down the street who does some woodworking stuff in his basement/garage on the weekends or as stress relief, and then sells them to neighbors and craft shows. This is not going to be some big venture on my part.

I realize the headaches involved, which is why I intend on keeping this a low-profile thing that I do when I have time. I'll advertise sparingly, mostly to the people who are in my dorm. As to taxes and income, while I realize it's "cheating," I would be extraordinariy happy if I was able to build a system a week and upgrade a couple machines, making maybe $50-75 a week.

All the parts will be bought on demand, as some people want things now. So they can pay the extra shipping costs to get it overnight, if they want, and in my state at least, labor is not a taxable income, at least for sales tax (though there is talk about it, but that's not the issue right now).

I know many people don't carry large wads of money. I would hope that like the previous systems I made for people, they purchased the items with their own credit card from the places I specified. That way, there will be little cost to me, and I don't have to worry about receipts.

Now, the tech suppot thing does bug me. I have issues with people calling me up at odd hours to fix a minor problem that could probably be remedied by a restart. Solution one would be to use reputable parts, ones with little in the way of "problems." Another solution, one that I hope to instill in my customers, is a sense of control over the system. They have the power to fix most problems, and to troubleshoot many things on their own. Since I'll be putting all the parts in myself, and testing to make sure it all works, I'll have ruled out most hardware issues. Most everything else would be software, and at that point, I'll be like Dell and other OEMs and say "well, I didn't install that program, and while I'll tell you ways that might fix it, realize it's not my responsibilty, but the software designers." AOL crashes (no one on campus needs it, since we are always hooked up), I'll have them check for hardware issues, defrag the harddrive, run scandisk, reboot, try to repeat the error, etc., but, as is mostly always the case, I can't fix software bugs, and tell them so. Also, I might "screen" my customers, find the ones who aren't too timid to mess around with settings and configurations, as most of the time, those are the easiest to deal with (though sometimes they think they know whats wrong, and just make things worse). In all, I want to build for people who think they can handle most of the day-to-day stuff, and only the major problems are the ones to get help with (i.e. the OS not starting up). Those are the people most likely to entertain the idea of having a computer that isn't bought from a BestBuy or a Dell.com. By not advertising with the idea of offering a lower-cost, higher performing system than the store, I hope I can avoid most of the kind of buyers that get OEMs. I want the semi-enthusiasts: not versed or brave enough to DIY, but interested enought in computers to make a go at the warranty-free computer. I'll offer help, but any warranty will come from the vendor/manufacture, so RMAing is what will be needed.

Time invested is not something I want to worry about. I'm not going to feel pressured into offering my services of building and/or upgrading whenever the customer wants. If I lose some people because I refuse to have a system up and running by the next day, that's okay. This is mostly to get me some extra spending cash to by books with, and maybe upgrade my own rig. Those are the kind of people, anyway, that most retail stores and companies hate to deal with, as it's always me-first with them.

And strangely enough, I have never run into a problem that I didn't cause/induce that wasn't fixed in two minutes. I've been lucky like that. I know that if I start building more and more systems, I'll probably run into a bad apple, and that is why I'm going to keep this low-profile. I want to give a working system to a customer in a timely fashion, but again, I refuse to be pressured by another order, so if I system takes an extra night to get together, I'll let the customer know.

Again, it's not going to be a business, but more of a hobby.

-SammyBoy
July 27, 2002 1:44:00 AM

Well it certainly looks like you've thought things through. Keeping it at a pace you can handle is a good idea especially if you're going to school. You need time to get drunk and make a fool out of yourself. :smile: However, sometimes things start getting out of control. Don't take on any jobs that require you to be a help desk. Be selective of your clientele. You don't want someone who is pc illiterate as a customer.

I would have all your customers go out and buy the hardware on their own as per your recommendation. This way, if there's a problem, your customer can duke it out with the local dealer, Best Buy, etc. Wash your hands clean of that altogether. Just charge for the labor under the table or otherwise.

If your clientele is going to be mostly college students, you probably won't need to advertise much. If word gets around that you're the pc guru on campus, I'm sure you'll get plenty of customers that need their pc up and running to complete papers and research. I wish you the best of luck and hope you make some $$$ for beer. Mmm...beer.

To start press any key. Where's the "any" key? --Homer Simpson.
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