Building and Selling Computers for a Living

I decided to replace the online chapter about your first sale with some conclusions from the book because it's been plagiarized all over the web.

Most business deals are negotiated. When you first start out, you're going to have to shop around the prices people quote you for goods and services because frankly, you have no way of knowing what they're really worth. Once you do know what things are worth, at least to you, you're in the position to start negotiating. That doesn't mean that vendors will sell you things at the price you want to pay, but you certainly don't have to pay the price they want to charge. The hardest part of being tough is remembering to be fair. You aren't going to become successful by getting either your vendors or your customers to hate you. Try to find the middle ground where the deal is fair for both parties. Whether you're naturally aggressive or you learn it through practice, you have to be careful not to push people around. You can profit in the short run by being tough as nails, but in the long run, it's being fair that will get you where you want to go.

If selling PCs is a big part of your business, you need to quickly settle on a limited number of vendors and build relationships with them. Unless you're building high performance custom systems, you'll save a lot of headaches if you buy pre-built bare-bones systems that you can finish up at your shop. When you do a lot of business with one or two vendors, defective parts returns and technical support becomes much smoother and the time you save will more than make up for minor price differences. You still need to shop around occasionally to keep your prime vendors honest, but it's as much in their interest to have steady customers as it is in yours to have reliable suppliers. Mid-tier vendors aren't going to rush to extend you credit, but if you do enough business with them, it will accelerate the process.

Selling cheap PCs is a problem for a number of reasons, but primarily because you won't earn enough money per unit to justify the support and warranty service you'll be expected to provide. Whether you build inexpensive PCs yourself or buy them through the channel, they end up being less reliable and shorter lived than PCs built with higher quality components. Quality doesn't mean the best or most expensive, but the cheapest stuff is unlikely to be even mediocre. If some customer walks in out of the blue and wants discount pricing for multiple machines, don't do it unless all the machines are being ordered at once.

Unless you have a retail location, you have no excuse to buy anything in quantity for stock except the lowest priced components, such as keyboards or mice. Inventory is like a live piggy bank with a slow digestive track. Would you feed a pig hundred dollar bills for safekeeping? Computer components all lose value with time and even the parts that seem safe, such as cases, become obsolete when power supply standards change. For the same reason, you should never procrastinate returning failed hardware. Every day it sits in your shop it loses value, and you're less likely to be able to find the paperwork to get an RMA, even if it's still under warranty.

The idea of going into business for yourself is not to replace one bad boss with another. Accepting responsibility for your actions is a must, but there's also such a thing as being too hard on yourself. Don't let the job turn into fourteen hour days, seven days a week. If you aren't opening a retail shop, try working out of your home, at least to start. Sure, there are drawbacks, but you'll save a ton of money and there are plenty of benefits as well. If you take yourself too seriously, you'll catch your customers and employees laughing at you behind your back. A small computer business doesn't have much in common with a Fortune 500 company, so don't get caught up play acting. A lack of realistic goals will prevent you from ever winning.

If you aren't happy with what you're doing, odds are your customers and employees aren't really all that happy either. While there's no single cut-and-dry factor that spells the difference between happiness and misery in a financially successful business, keeping it interesting would have to be near the top. For some people, keeping it interesting means never preparing a quote until five minutes before it's due so they can drive like an idiot to get there on time. That sort of challenge is a bit artificial for most of us, who keep it interesting by learning new things and perhaps teaching them as well. Create a website, write a book, develop a new product or add a whole new specialty to your business. If you are too busy to learn something new, it's time to step back and reassess what you're trying to achieve. Just don't forget what pays the bills. As long as you can differentiate between optimism and ignorance, there's no reason to fear new directions.

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