Starting Your Own Computer Business

I decided to replace my introduction to the book with some text from the conclusions, saves you from flipping to the end if you buy it:-)

Plan your business start-up to fit your financing and skills. Don't spend all of your savings and mortgage your house in order to start on a grand scale. If you can't make it on a small scale first, committing tens of thousands of dollars to a fancy storefront or the best equipped training center in town isn't likely to help. The infrastructure required to start a computer business is truly minimal. All of the industrial racking, test benches and office furniture you might see in an established competitor is a convenience, not a necessity.

Managing money is not "one of the things" you need to do to be successful in the computer business; it's THE thing. If you are accustomed to running your life with credit card debt, you better find a partner or a spouse who is willing to handle the business side of your business and treat you as an employee. The main expense you face when going into computer business is replacing the salary you're losing by not working for somebody else. This is a far tougher nut than any start-up expenses, and it goes on forever. The temptation to "spend money to make money" is as strong for grizzled business veterans as it is for rookies, but you have to be sure that the money you're spending will generate returns. When business is slow, it's common to throw money at advertising without really analyzing why business is slow. When business is strong, it's easy to lay out money on new pipe dreams of getting rich quick. Just because you start making money with your right hand is no reason you should start blowing it with your left. Ignore wide-eyed friends and salesmen who encourage you to "roll the dice, it's all or nothing." Building a computer business is not all or nothing, it's a slow process that takes most people years to get where they're comfortable with what they've built.

One of the most risky paths to starting a business is to get help from people who make their living from helping you start a business. There are honest and successful franchisers in the world, but there are probably more individuals who make their whole income by selling the franchises as opposed to sharing in the profits from successful new locations. Any franchise that can't guarantee you customers isn't even worth looking at. Business consultants who promise to help you "put systems in place, establish good practices and enhance profits" are often nothing but parasites. You're a smart person, so read a couple more books, and learn how to do these things yourself. Once you get started in your computer business, you're going to find out that you know more about your business than anybody else, and if you need specific advice, stick with accounting or legal professionals who charge by the hour.

My favorite tax deduction is retirement savings. You get to lower your personal income tax, and the money remains yours. The only other good deductions are those that increase your income through productivity gains, like an electric screwdriver, or that are plain necessary to conduct your business, like rent or insurance. It's important to run a tax efficient business, so you should really make an effort to become familiar with the tax forms, even if you're going to pay somebody else to do the filing for you. Add-ons to small business software, such as Quickbooks, can provide one-stop shopping for pretty much all of your financial needs, including credit card processing, payroll and taxes.

You can be too trusting when starting a new business and you can easily get burned so bad that you'll never recover. When your business or your personal credit is on the line for a big deal, don't be shy about hiring a lawyer and having a contract drawn up. Check out the finances of the other party, and don't be afraid to ask embarrassing questions, like, "Is it true you've filed for Chapter 11?." The same caution goes for employees. Always request references and always check them. There are lots of serial business killers out there, who ruin one small business after another with their high salaries and negative contribution. One warning sign of a deadly employee is somebody who acts in the interview like they're doing you a favor by even considering employment.

It's tough to go wrong istarting a computer service business following the old formula Primum non nocere: First do no harm. Before you start tearing down somebody's PC or installing new software, ask them when they did their last backup, and make sure they understand that they might end up needing it. The most important step in the troubleshooting process is finding out what the problem is, and the best place to start is by asking the customer what's wrong. When dealing with non-technically oriented customers, the next question should always be, what's right, i.e. what works? You'll be surprised how many computers you can troubleshoot over the phone that way.

You need good customers to succeed in the computer business. Good customers buy goods and services you can make an honest profit on and they pay on time. Bad customers, such as those who think you owe them unlimited support because they bought a mouse from you, can ruin you if you don't stand up to them. The natural reaction in all service business is to oil the squeaky wheel, but this often amounts to favoring your bad customers over your good customers. Make sure you take care of the customers who are paying your bills, even if they aren't demanding. Always return phone calls and e-mails, and when you make an appointment, be on time. Don't be afraid to say "I don't know." Just make sure you do know before you see them the next time.

If your business employs more people than just yourself, make sure that everybody knows who should be dealing with customers for what issues. A customer once told me about a salesman who forced a video card into an old-style memory slot while trying to cover service calls. By the same token, you don't want your cracker-jack tech thinking he can quote prices on the spot by adding ten bucks to a price he saw in a magazine. Whether the job at hand is fixing a PC or preparing a complex quote, you and your staff need to finish jobs 100% whenever possible. Procrastination costs you money, customers, and eventually your beauty sleep.

Chapter 1 - Your first sale - A case study
Chapter 2 - From Hobby to Self Employed
Chapter 3 - Buying and Selling Hardware (excerpt)
Chapter 4 - Selling Service (excerpt)
Chapter 5 - Product Development (excerpt)
Chapter 6 - Business Infrastructure (excerpt)
Chapter 7 - Accounting and Taxes (excerpt)
Chapter 8 - Business Psychology (excerpt)
Chapter 9 - Growth and contraction (excerpt)
Chapter 10- Grey Areas (excerpt)

If It Jams Home | Starting a Computer Business | Contact