Computer Shop Business Model is Fundamentally Flawed

Computer Shop Business Model is Fundamentally Flawed

If you are starting a small computer shop, you need to understand an important reality – you can’t build your business on short-term services and one-shot deals if you want to stay profitable.  You need to focus on ways to attract the attention of those prospects that will be interested in long-term services if you really want to build a profitable, sustainable business.

Many that start small computer businesses get it all wrong. They think they need to emulate huge companies that provide services to tens of thousands, or even millions of customers and clients per year in order to stay in business.  These misguided retail start-ups focus on quantity of customers rather than quality clients, and find themselves with incredibly price-sensitive short-term customers and very low profit margins. As a result, these shortsighted newbies struggle to make ends meet and eventually go out of business.  Now if you want to succeed as an owner of a small computer shop, make sure you focus on long-term relationships with clients that will pay you high rates for on-going services and appreciate your level of expertise.

Why? Because the traditional business model for computer retailers frankly hasn’t been viable for a very long-time. Clinging to this fundamentally flawed approach to operating your business can be very hazardous to your long-term… even short-term survival.

The following 3 tips can help you fulfill the important needs of steady, high-paying clients as you build a business plan for your computer shop.

  1. Focus on Proactive Maintenance Services. Are you tired of hearing from your customers only when something breaks … and finding out the problem had to be fixed yesterday?  If you want to really fulfill the needs of clients that will be with you long term, you must get out of fire extinguisher mode and move into the role of proactive network manager.  This means you need to build your shop around proactive maintenance services rather than just dead-end, low-margin one-shot deals.
  2. Explain the Real Cost of Downtime. Before your prospective clients can really be sold on the value of long-term relationships and on-going maintenance, you will have to help them estimate and understand the real cost of their downtime.  Your computer shop should be armed with the skills to calculate downtime realities for each and every client.  To figure out this cost, simply take a prospective client’s net income or bottom line last year, then divide that figure by roughly 250 business days and 8 hours per day.  So, as an example, if your small business client had a net income of $1,000,000 last year, your client will lose $500 ($1,000,000 divided by 250 business days, divided by 8 hours per day) in net income for every business hour of downtime…. or $4,000 per business day or $20,000 per business week. And a $1,000,000/year small business is a relatively small business. When you present these numbers to your prospective clients, they will be far less likely to object to a small investment each month to keep you on call and protect them against technology emergencies that can leave them high and dry.
  3. Weigh Costs vs. Benefits. As you start your computer shop, be ready to weigh the costs of downtime and the benefits of on-going relationships. Properly planned, designed and installed networks are generally very reliable.  But as you try to sell a potential client on the benefits of proactive network maintenance, you need to steer the conversation towards a cost/benefit analysis.  First, quantify the concrete benefits you’ll provide to your clients – i.e., proactive planning and maintenance, emergency and after-hours service at no additional cost, etc.  Then present a monthly recurring cost based on your estimated labor billing and required service margins.  As an example, you might be able to profitably deliver services at $500 – $1,000 per month based on a two-year commitment.  The real deal clincher will come however when you start to discuss the cost of doing nothing to prevent downtime (you can go back to that quick calculation in tip #2).  When you’re talking about even as much as a $1,000 per month investment from your client and they know they stand to lose thousands of dollars a day if they don’t have a reliable computer professional on call, they will see clearly how hiring you will still make them come out ahead.  And don’t forget to bring along your testimonial letters and case studies that validate your marketing message.

In this short article, we talked about 3 tips to help you base your computer business on fulfilling the needs of steady, high-paying clients.  Learn more about how to start a computer shop and attract great, steady, high-paying clients now at http://www.ComputerShopSecrets.com

Copyright (C) ComputerShopSecrets.com All Rights Reserved

Watch the video related to computer shopping tips

Independent Consumer Reporter Jeanette Convene (sp?) is here to give some great tips on how to become an online shopping master during the holiday season. Originally aired December 4, 2001 on TechTV.

Help answer the question about computer shopping tips

Tips for shopping this Black Friday??
I want to get a laptop from walmart this Black Friday. I here they will be about $398 for a HP ze2308wm Notebook….Last year walmart did this and swarms of ppl crowed the store and they ended up being pepper sprayed……I want this computer….so any tips would be nice…

sorry if i put this in the wrong spot i just wanted a lot of ppl to read it…..

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11 Responses to “Computer Shop Business Model is Fundamentally Flawed”

  1. PACERzx says:

    I really liked your channel and this video. If you need any help getting this video exposed I use a site called tubeviews.(net) It has really helped like 20 of my main videos get to the top in position. Its nice.

    I like what i watched.

  2. A nerd who needs help says:

    Just like any business, you need to define your target market and determine how to effectively reach them. Some possible target markets include:

    - Small business owners, who more often than not do not have a dedicated employee for computer repair needs. Most of small businesses also would rather outsource the repair and maintenance of their computers rather than spend too much time away from their core business to do the repairs needed.

    - Home business owners and one person businesses whose computers are extremely essential to the operation of their business

    - Retired baby boomers are another important possible target market for this business. Most of the old folks will not drive to town to get their computer fixed. Plus, many of them are not willing or do not have the technical know-how to do even simple fixes or installs.

    For additional information, read the following books:

    Computer Repair Business Lessons Learned by Daniel Hand
    How to start and run your own computer repair business by Joe A. Wisinski
    Start Your Own Computer Business: Building a Successful PC Repair and Service Business by Supporting Customers and Managing Money by Morris Rosenthal and Reva Rubenstein

  3. Brian W says:

    no but scrubbug is a great place to visit!!!

  4. JayB says:

    Try to stick to one site to avoid spending a lot on shipping. Go to newegg and make sure every item you get is either a combo item or has free shipping. I saved 80 dollars by using combos for every piece of my latest rig. Sink most of your money into a video card, I would go EVGA if you are getting an NVIDIA card. They have a step up program so that if something new comes out within 90 days of your purchase you can upgrade by paying the difference between how much you paid versus the new card. Adds a lot of life to your computer for only 30ish dollars. You can go cheap on the case as long as it gets good airflow. AMD Phenom 2s are the best for the money atm, Intels are more powerful but the platform will cost you a lot more. Don't go cheap on a power supply, and make sure you get ram from a decent brand (Corsair, OCZ, GSkill). Get a nice after market heatsink too, this can greatly increase your performance through overclocking.

    Have fun, I love building budget computers.
    Here's an example, remember you can save a lot of money by re-using old pars (HDD, CD-DVD drive just depends what is compatible.)

    LITE-ON 24X CD/DVD Burner Black SATA Model iHAS324-08 –
    Item #: N82E16827106291

    Thermaltake Strike Mx VI6001BNS Black SECC Steel ATX Mid Tower Computer Case
    Item #: N82E16811133069

    Western Digital Caviar Green WD6400AACS 640GB 7200 RPM SATA 3.0Gb/s 3.5" Internal Hard Drive

    MSI 770-C45 AM3 AMD 770 ATX AMD Motherboard –
    Item #: N82E16813130228

    EVGA 896-P3-1258-AR GeForce GTX 260 Core 216 SSC Edition 896MB 448-bit GDDR3 PCI Express 2.0 x16 HDCP Ready SLI Supported
    Item #: N82E16814130441

    OCZ StealthXStream OCZ700SXS 700W ATX12V / EPS12V SLI Ready CrossFire Ready Active PFC Power

    G.SKILL 4GB (2 x 2GB) 240-Pin DDR3 SDRAM DDR3 1333 (PC3 10666) Dual Channel Kit Desktop Memory Model F3-10666CL8D-4GBHK

    AMD Phenom II X3 720 2.8GHz Socket AM3 95W Triple-Core Black Processor Model HDZ720WFGIBOX –

    Scythe SCKTN-3000 92mm Sleeve "KATANA3" 3Heat Pipes CPU Cooler

    Copied from newegg it was 705.00 without shipping. All of these parts can be scaled down by the way. Just make sure you get a good video card!

  5. Rony A says:

    You can't limit it to a certan amount of time with out special softwhere which you will need to buy and install, but you can however make your comuter shut down at a certan time of day by pasting

    '@echo off
    title Scheduled Shutdown Batch
    color A
    echo Enter Time To Shutdown (Use 24 hr format, eg 21:35)
    set /p stime=
    cls
    at %stime% ""shutdown -s -t 00"" >nul
    echo Your PC Will Auto Shutdown At %stime%
    echo Press Any Key To Exit
    pause >nul
    exit '

    into a notepad doccument and saving it as .bat , then when o click it you can input the time you wish it to shut down.

    Hope i helped =)

  6. bri0987 says:

    Your initial tables need to be :
    components (id int(6) primary key auto_increment, description varchar(35) unique key, type_id int(6), obsolete int(1) default 0);
    component_type (id int(6) primary key auto_increment, type_descn varchar(35) unique key);
    client_selection (order_id int(6) not null, component_id int(6));
    orders (id int(6) primary key auto_increment, user_id int(6), Order_date date);
    Coupled with a client table using an auto_increment id field and carrying each user's details you can link each build to the client, and an order. A client can make hundreds of orders this way, the data is linked by id, and each build can be distinguished from previous orders. A quantity order could be created using an additional table for build_1, build_2 etc, including a quantity field, the primary key id from this can be used to link groups of components to each of a different machine on the same order. You would then add a field to the client_selection table to identify which part fits in which machine. Keep the fields in each table to a minimum, use id links to identify data to it's client, machine, order, build etc. A price table listing prices against component id allows for simple costing updates, a table for prices at date of order against component id on the order could mean selling at one price today, increasing the price tomorrow and building the machine next week without upsetting the client. He gets billed what he was quoted. Small amounts of data and linking makes the system flexible, don't be afraid to modify tables as required during testing.

  7. Casey S says:

    There are screw extractors out there, but for a low torque application like this the best way is probably to take a toothpick, cut part of the tip off so it fits flush into the circular hole, put epoxy on it and tape or support it there overnight while the epoxy cures. Should come right out after that. I wouldn't recommend superglue, it is too brittle.

  8. Hambone says:

    There are lots of good cameras out there. Anything 5 megapixels or above will be fine. I like the Canon A series cameras.
    Here are some things to consider
    Camera size, do you need a really small and thin camera?
    Do you want rechargeable battery or easily obtained AA?
    do you want to make video?
    Do you need a high optical zoom or is 3x enough?
    Memory card type. SD is pretty much the standard and new computers all have SD slots. Sony cameras use memory sticks and they have had compatibility issues.

    hope this helps.

  9. stesud22 says:

    Everyone knows that Windows computers can sometimes slow down over time. While not an exhaustive list of solutions to problems, this collection presents some ways to speed up a computer.

    1. De-Fragmenting
    Over time, the data on your hard drive gets scattered. Defragmenting your hard drive puts your data back into sequential order, making it easier for Windows to access it. As a result, the performance of your computer will improve.
    a) Right click of C Disk.
    b) Click properties.
    c) Click tools tab.
    d) Click "Defragment now".
    e) Click Defragment.

    2. Uninstall Unneeded Programs
    Removing programs that you no longer use can free up space on your computer and speed up your system's performance. However, you need to uninstall the programs properly to see much improvement; deleting them is not enough.

    3. Stop Programs from starting on Windows boot
    One way you can speed up your computer is to prevent programs from launching themselves at start-up. Not only do the unwanted programs delay the start of Windows, they also continue to slow down your computer since they use system resources.
    a) Open your Start menu.
    b) Click Run
    c) In the command screen type "msconfig.exe"
    d) In the "system configuration utility", click either "service" or "startup" tab
    e) Uncheck all programs that you are no longer using.
    f) Click "OK"

    4. Check for Spyware and Adware
    Spyware is software that allows companies to monitor what websites you visit or even access your computer. Adware is software that displays advertisements. Both use system resources and slow your computer down. Detecting and removing the programs will improve system performance.
    Get the best one from: <–http://toptenantispywareviews.com to scan your pc

    5. Clean your Registry
    Microsoft Registry Problems = Slow Computer!
    Use the tool: <–http://downloadlk.com/themosteffectiveregistrycleaner.htm
    Learn more information "why is my computer running so slow": <–http://downloadlk.com/WhyIsMyComputerSlow.htm

  10. angelsgurl_06 says:

    take your own pepper spray

  11. Kyle Griffin says:

    The first time that i tried overcloking over a year ago, my CPU got overheated and got fried….

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