How to Start a Computer Repair Shop
How it all Started
So you would like to know how to open a computer repair shop. Well, let me tell you my story about when I decided to start a computer store to refurbish and repair computers...
It all started in 2007 while I was homeless and broke. I owned a car but could rarely afford gas for it. Sometimes I would volunteer at a local computer recycling center where I often had the opportunity to buy computers fairly cheap. I would refurbish these computers and then sell them. Occasionally, I would be able to sell a laptop on craigslist, but not very often, so I went to a bunch of computer stores offering to sell them refurbished computers for resale. I only found one place willing to do that and I only made a few sales each month. I never made more than $20 or $30 profit on a computer though. It was enough to put gas in my car but not much more. I was mainly surviving off of food stamps. One day while making a sale to the store, I noticed a laptop I had sold them for a $100. It was sitting on his counter with a $300 price tag. I remember him telling me earlier that he could easily sell a laptop every week even though I could only get him one or two a month for refurbishing from the recycling center. I thought to myself, that is a potential $800 profit every month, just on his laptops. I also knew he sold several desktops with almost as much profit.
About a week later, I was walking somewhere (couldn't afford gas to drive), when I noticed a small empty storefront in an old building. It had a for rent sign with a phone number. I took a look inside through the window and could see it had a bathroom and a small room in the back. It had been empty for over a year and I realized it might be perfect for starting a business. I called the owner and he told me that he wanted $550 a month to rent it out. There was no deposit required.
How I financed it
I had family that would sometimes loan me money. I had always made it a point to pay them back even if I had to go hungry to do so. But I had never borrowed more than a hundred dollars and nobody in my family could afford much more than that except one person. That was my younger sister who was living in another country. She had started an import business and I heard she was doing quite well with it. I decided to take a risk and ask her for a sizable sum of money. I wrote a half page business plan and emailed it to her. I asked her for $3000. I honestly expected her to come up with an excuse and say no. Asking for that kind of money, just wasn't done in my family. I felt totally embarrassed for asking. I was in shock when she wrote me back and agreed. I received the loan via check two weeks later.
I started in early July of 2007 by giving the owner around $1000 which paid the rent till the end of August. I wanted to be ahead on the rent in case things started out slowly (which they did). I drew up some plans for some furnishings, calculated the amount of lumber needed, then went to the hardware store. I bought the lumber and wood screws I needed, rented a truck and brought the stuff to the store. I borrowed some power tools and began putting it all together. I arranged to get a phone, internet service, and power (in my name, it was already on). There was an eight by ten foot storage room in the back where I set up a foam mattress to sleep on at night. There was also a bathroom where I could easily give myself a sponge bath. I was fairly optimistic now but also scared. I had never tried anything like this before. What if nobody came? I forced myself to work as hard as I could and I was ready to open with three days.
I had bought four computers and refurbished them. I bought a cheap $15 digital camera for my ads on craigslist. Finally I was ready. I opened the doors. I hadn't planned for a sign, so I bought a dry erase board, wrote on it,and stuck it on a chair. I was already making mistakes. Would I succeed or go down in flames? The first day went by with no sales...then a second and third day. I was starting to worry. Finally a phone call and my first customer showed up. He looked at the computer, we talked for a while, and I made my first sale. I used that money to buy another computer to fix up for the next sale.
War and Serendipity
I spent hours every day running ads on craigslist. There were a couple of other people in my area also trying to sell computers from home and they started a flagging campaign against me. I started keeping my ads in text files so that I could easily repost them. I learned HTML code to start making my ads look better. Knowing HTML code helped in my battles to keep my ads up and near the top. One guy started using HTML code to search craigslist for ads with my phone number and then show all my ads in a post where he would ask people to flag me. Studying his code, I saw its weakness and countered by inserting invisible tags between the digits of my phone number. It was a constant technological battle, but I wasn't going anywhere, and I was persistent. I was still barely making enough sales to cover my overhead. Another problem occurred when the place that I bought computers from discovered that I had opened a computer store and they didn't want any of their computers resold (recycling politics - a whole other story), so I was banned from buying any more. I solved that problem for about a month by paying some of my friends to volunteer their time and help get me more computers.
Eventually some unexpected help came my way. A friend of mine was going through dumpsters looking for aluminum cans when he came across a place that had gone out of business. In a huge industrial dumpster in the back were about 50 old monitors, half a dozen computers, tons of printers, and all sorts of useful stuff that had been cleaned out of an old telemarketing place. He told me about it and I made about a dozen trips collecting stuff. A lot of it I returned, but much of it was useful. Other people started bringing in stuff that they found that they thought I could use. There were a lot of people that wanted me to succeed. I was separated from my wife and when I showed her what I was doing, she wanted to help out. She started coming around and making the place look a lot nicer, plus I discovered that she was great with the customers. A couple of guys stopped by my store and said that they were in the recycling business, selling a lot of their computer stuff for scrap metal. I was able to start buying a lot of my stuff from them, allowing me to let go of the recycling center. A few people started donating old computers that had quit working or were old. I was able to fix them or strip them for parts.
Things started to come together. I slowly started getting repairs. A couple of laptops needing power plug repairs was extremely labor intensive, but I charged a hundred dollars each. The money was desperately needed. My customers were surprised when I would have their computers fixed in just a day or two, apparently my competition would take weeks for that kind of work. Computers with malware or corrupted hard drives would start showing up. I started a $100 flat refurbishment service where I would wipe the hard drive, reinstall XP, download the drivers and install them. Their computer would often run better than when it was new (new computers are often loaded with adware which slows them down, a clean install doesn't have that problem). I also started a free diagnostic service and wouldn't charge anyone for little things (like the guy who somehow moved his power supply switch to 220 volts instead of 110 volts) that only took me a couple of minutes to diagnose and fix. People started coming in from referrals from other people.
For the next several months or so I was fairly busy running ads on craigslist. I also built a web site that I put all my service rates and current computers for sale. I often linked to the site from craigslist and slowly I seemed to be spending much less time trying to make sales. The number of repairs seemed to double about every two months. I was originally open 12 hours a day from 9 AM to 9 PM every day of the week, but I eventually changed my hours on Sunday to 1 PM - 9 PM. I continued to live in the back of the store the next year, mainly to save money, but also to guard against burglary. I paid my sister back her money before the year was up and I expanded inventory. I even started building high end gaming computers and pre-installing a few games for customer testing (I ran internet to all my computer stations). I started getting a lot of World of Warcraft people that liked the fact that they could play test the computer before buying it.
Around the end of the first year, I broke a hundred repairs in a single month. I was still charging $100 each, with an additional $50 for data recovery where I had worked out a system that would only take me about another hour even if the hard drive was corrupt (I removed it and hooked it up as a slave). I had so much business, that I started paying another homeless guy $10 an hour cash to help me out. I discovered he had a degree in computer science and actually knew a lot more about computers than I did. Unfortunately, he suffered from severe schizophrenia and couldn't hold a normal job. I was use to dealing with people like that from being homeless myself and I understood that he had both strengths and weaknesses. Near the end I was pulling in over $10,000 on repairs and earning another $1000 profit on sales. My overhead was about $1000, labor cost about $500, and I spent about $1000 for decent fast food to keep everyone happy. I figured I earned around $9000 the last full month we were open, although I spent a lot of that on increasing inventory.
I hope that this hub is of help to anyone out there who is planning to open a computer store. I have included both my mistakes and successes. Obviously, if you want to open your own store, you have to be very good with computers. You not only should be good with computers, but you need to love working with them too, because you will soon be sick of them. The next thing is dedication and a lot of hard work. I started out at 84 hours a week, maybe even more since I often worked late to get a troublesome computer working. The other thing though is knowing that it takes about a full year to ramp up to decent revenue. You should have plans to survive till that point is reached. If I decide to start up another store, I plan to save up enough money to cover the rent for the first six months. This experience has changed my perception about a lot of things. It was a tremendous learning experience and I feel much more confident in trying new things. Last of all, if you do decide to do something like this, I can tell you that the price for success is definitely worth it.