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Building Up a Small Computer Business?
Hogg asks: "I'm a senior in high school, and feeling very industrious over the summer, I started a home business. Basically, I go onsite and service computers and charge far less than what the 'pros' with the MCSEs and so on do. It's been going fairly well so far, but I wonder if Slashdot has tips, advice, or pitfalls to avoid?"
Speaking as someone who has started a small home computer business few years ago (and have failed miserably -- now I'm a bankrupt) I can only advise you to not spend your investors money on hookers. I know, it seems to be a great life style at first and the girls are amazing, but trust me, you really need those money to buy hardware, because otherwise your investors (and the bank) will be really pissed off.
The pros charge so much to pay for their insurance. What happens when somebody's computer breaks a month down the line, and they think it's your fault? Are you going to buy them a new computer, or let them sue you?
Make sure you bring condoms for all those times you bump into lonely ladies out there in computer land.
I am so not kidding.
Always have a disclaimer form that releases you from liability should something go wrong. If my customer won't sign the form, I won't touch the PC. That way, the user can't blame you if he screws up and loses everything from his drive a few weeks after you've done your thing.
"All universal moral principles are idle fantasies." -The Marquis de Sade
When people ask "OK, now how much do I owe you?", you say: "I dunno. What do you want to pay me?"
If the people where you live are anything like the ones around here, you'll end up getting paid more than you would if you set a price ^_^
Unless, of course, you were GOING to have them pay you 50$ an hour. I only charged 15.
Sometimes I'll show up at someone's house, and they'll have fixed the problem themselves, but then they give me 20$ just for the trouble of riding my bike a couple blocks to their house.
Don't expect too much, though. I only made 300$ this summer (half enough to pay for my new computar!). But for the amount of work I did, that wasn't bad. Far better than bagging groceries, anyway.
My kybard sucs tody.
Duct tape, XML, democracy: Not doing the job? Use more.
Usually, you should start out with a business plan.
For good examples, check out pretty much any slashdot thread. Example:
1) Ask slashdot how to start a business and what slashdot users want
2) Buy a nice leased line and set up a webserver on it (preferably heavily driven by databases and dynamic content)
3) Advertise said site on slashdot
4) Prof...
5) Buy a new webserver
6) Declare yourself bankrupt
With business', you can build up a really good regular customer base by demonstrating that you trust and care for them. Carry a set of spare components (hard disks, ram, maybe an optical drive or two, etc) with you all the time. If some hardware is acting flaky - and you can't fix it immediately - lend them a replacement and/or substitute. Most business' will be used to lazy, pushy & expensive IT guys, and the mere act of lending them a replacement stick of ram for a week or two will boggle their brains.
Write long, pointless articles and have them mentioned on the slashdot front page.
Programming can be fun again. Film at 11.
Watch out for problem customers. i.e. the one's who call you every week and try to be cheap about paying you. Don't accept food for work. Don't accept checks until you have verified their ability to pay you. i.e. never take a check on the first couple visits. If they bounce a check on you, terminate future business with them until they pay you for the check they bounced plus interest. Always charge them per hour the same rate.
...
Invest in the tools you are going to need. It's going to be expensive. You need to be a pro and recover almost any data and fix dead systems. Therefore, you are going to need spare hardware and a ton of software tools such as Winternals Admin Pak, etc. ($699 license) XP & NTFS is the need for this cost. NTFS is a real pain to mount and work with there are no decent free toolsets for NTFS. You can get around it but believe me, you need the AdminPak it has saved my bacon a bazillon times already and it's worth every damn penny! A really good laptop and possibly a small miniture desktop system so you can pull an IDE hard disk and mount it in your own semi-portable system, etc.
Not everyone has broadband, start building CD-R's full of drivers, etc. You may have to stop by a customer site and do a survey to find out what hardware they have so you can then go back to your office and download everything to CD because they have a 28.8kbps modem and it's barely working.
The reason the pro's charge so much is they have had to buy insurance to protect them against lawsuits. They have to invest in training and tools both hardware and software. They have rent and taxes to pay. Remember, in the USA you have to file tax returns quarterly with Uncle Sam even for a small consulting business.
I know a whole lot of kids and others who did what you are contemplating for a few years. Few made any money at it and most burned themselves out in less then 3 years; finally saying screw this and getting a real job. (something better then bagging groceries). Once you are out of High School and you get a real job, you will see how futile it was.
It's good training to put your feet to the fire and you will get a ton of experience. But watchout! One customer with a lawsuit and you are toast! Then get tagged by the IRS because you are dealing under the table and not paying taxes, etc.
You will have to deal with complete idiots who have 4 or 5 computers, broadband, and the boxes are full of spyware, trojans, viruses, etc. The user will have run ethernet cable outdoors and literally used two patch cables connected with an RJ45 splitter and wrapped in duct tape! This was hanging outside the house in Connecticut! It will be exposed to temperature extremes (contraction & expansion) and his connection will come and go, plus it will corrode (not gold plated). When I got there all of his boxes were so full of crap, viruses, trojans, and I am pretty sure they were all hacked and spending spam! It took me 2 weeks to rebuild everything and restore all his data, change all his passwords, install a firewall, and updated NAV licenses. I also offered to rerun the ethernet cable with a single run of cable rather then his mickey mouse patch cables + duct tape solution! Meanwhile, I had to contend with his Jesus Freak rhetoric and being happy about the end of the world!
Bottom line, get insurance (all it takes is for you to break something simply by accident, it happens to the best of tech's), get bonded, get the tools, get a car and not a bicycle, get a whole lot of patience, and be prepared to turn away customers who are trouble! Don't give anything away for free. Charge less then the competition but don't undercharge too much! Look for small business outfits rather then home consumer users. Start your own business rather then run under the table.
Oh and get a gun permit and carry a box of condoms!
Yeah, I've made house calls to horney woman and I've shot rats the size of small dogs in dirt floor basements. I've also met some very very weird people. Think, Silence of the Lambs weirdo's! Bodies in the basement, etc. Be prepared to show up and walk or run away quickly!
I know it sounds strange but be very strict about billing. Many small businesses are too trusting and too nice and allow other businesses to walk all over them.
Make sure you bill promptly and accurately and be sure to charge late charges on accounts. If a customer becomes past due do not perform further work for them. You can't work for free and make a living.
Also, don't charge *too much* below what the MCSEs charge. It's stupid but people will automatically think that you are of lesser quality. You have to have an air of confidence, and charging "high" prices shows that you feel you are worth that much.
Greg
There\'s no place like ~
If you do a good job and get repeat calls from the same businesses, offer to let them keep you on call 24/7 for a moderate montly retainer. Then, if you continue to do a good job you will be raking in big bucks from multiple customers for little actual work.
Make agreements with other quality people doing the same work in your area to cover for each other. Then if several of your customers have problems at the same time you can take care of them all with the extra sets of hands. And you will be able to go on vacation without losing customers due to bad timing of the latest worm release.
Vonnegut was right: Of all the words of mice and men, the saddest are, "It might have been."
My only advice is: don't be afraid to turn a customer that you feel will be problematic down. If you can avoid that small percentage of people who will cause a large percentage of your trouble, great!
Also, try to get a Reseller tax ID and accounts with some of the online distributors (techdata, ingram micro), etc. They can't always beat the online shops like newegg, but sometimes the deals are really sweet and they do actually have service.
I have been doing this for the past 2 years as a part time job, assembling PCs for people, repairing, antivirus use, spyware removal, windows reinstall, Internet software install and the likes.
Tip # 1: On slashdot NEVER call MCSEs pros. I know many people who got their MCSEs during the Windows NT4 days and dont know how to use MS excel. Maybe you meant A+
Tip # 2: Never provide a warranty, and make sure they understand that. They cannot come back 6 months later with a bad driver and ask for free service because you didnt fix it right.
Tip # 3: Do not service Pentium1 and lower computers.
Tip # 4: Do not hand out drivers and ghost images of the users data. Let them come back to you with future problems. Learn something from microsoft.
Tip # 5: Build a reputation. When you have to install firewalls and servers in office locations, use Linux or BSD. You can put that on your resume.
Tip # 6: Dont rely on it as a major source of income. Get a degree, get the real certifications and years of experience, then tell all your clients you no longer work for them.
"Give orange me give eat orange me eat orange give me eat orange give me you." -Nim Chimpsky
1) Don't underestimate elasticity of demand. By this I mean, don't charge too little. People get a sense of security when they pay more for a service. A computer is like your body: when you get sick, do you go to the discount teenage doctor? No, you got to a professional and pay the money, because it is important to you. Make sure you charge your customers throught the nose, even if you know the job isn't very hard. They don't know that.
2) Charge for travel time. Don't even think about leaving the house if you're not getting paid. Don't give into the temptation to give freebies to keep your customers happy. Make it clear from the begining that they're paying you a minimum $100 every time they pick up the phone and ask you to help them out - even if they have fixed their own problem by the time you arrive. This breeds respect. They won't feel they can exploit you.
3) Invoice immediately. This probably should be rule #1. Send out the invoice the same day you do the job. It'll keep you well organized and your customers will appreciate remembering what you did for them when they pay your bill. Also, it keeps you liquid.
4) As mentioned on this thread, get them to sign a disclaimer before you begin.
5) Target small/medium businesses. Private customers are the worst. Don't go near them if you can avoid it. They're a lot of trouble.
5.a) Target branch offices of larger corporations that have their HQs elsewhere. The IT manager in another city will appreciate having a smart person he can call to fix his remote office. He's often under the gun to get things fixed and will probably give you steady business.
6) Don't be afraid to drop customers who don't pay promptly. If they call and haven't paid their bill, tell them to call when they have. Period. A business is in business to make money. If you wanted to waste time, you'd read Slashdot.
7) Find other small partners. You can't be an expert in everything and people will ask you to do a whole range of things. If you're a systems guy, team up with a web developer, an app developer, and a small hardware reseller. Refer business to them. Get them to do the same.
8) Be prompt, courteous and polite. Your word is bond. If you commit to something, you have to do it. Servicing your customer is very important. Simply don't agree to something if you don't think you can or want to do it.
Youre an MCSE calling yourself a 'pro' and feeling threatened by a high school PC repair kid who calls MCSEs 'pros'. And you're I presume trying to feed mouths with your MCSE. I admire that.
I'm an MCSE + MCSD + CCNA + LCA getting an RHCE soon, and still looking for work. And I'm barely a 'pro'. So if you're threatened by a high-schooler, take that as a message.
"Give orange me give eat orange me eat orange give me eat orange give me you." -Nim Chimpsky
Seriously. Before you do anything, find out what an accountant says to you about running a small business. You'll avoid all the hidden expenses that can snag you later when you've already spent your profits, and an accountant can also introduce you to the wonderful world of deductions that you are suddenly entitled to.
For example, Pennsylvania has this inane "self employment" tax for independent contractors and small business owners. It is above and beyond all the rest of the taxes that regular salaried employees pay, but you might not find out about it until they go through your tax return and send you a bill with interest due a year and a half later.
Accountants can help you decide how much of your rent/mortgate/utilities/whatever are permissible for deductions as business expense and whether it's worth it to keep track of them or simply take the standard deduction. Furthermore, they're familiar with local laws that you won't find out about reading a book on national tax law. Philadelphia and NJ, for instance, have a reciprocal tax agreement, the details of which make my head hurt every time someone tries to explain them.
An initial consultation won't cost that much and will, without question, save you headaches in the long run.
I had an argument...with the person here at the university that teaches OS design. I wonder when I'll learn --Linus
My best advice is to not waste your time. I tried precisely the same thing for five years (Yes, five years. I started doing webdesign the year I turned 14. I just turned 19.). You know how much money I've made, gross, on it, total? Probably less than $1000. That's all. No one takes kids seriously in business. It's sad, but it's a fact. You won't make the money you want to make until you're into your mid-to-late twenties or thirties. "He's only a kid; what does he know?" You'll never hear it, but that what they'll think and that's what they'll say.
However, if you are going to try, you'll need to deal with a whole lot of red tape. Vendor's permit. Tax permits (yes, you need to charge tax). You'll have to register your business with several government bodies, make deductions on your pay... You'll be dealing with Revenue Canada/IRS on multiple levels and it's just a bad scene. Then, as someone else mentioned, you'll probably need insurance, in case you send somebody's machine to hell.
Notice that you still haven't set up a website. This is just legal bullshit you have to go through that I never did and I regret not doing. You know why I never did it? I never had the money. I said to myself, "I'll get a vendor's permit after my next contract. I'll register the business after this next contract." You know what? Never happened. Never got the contract.
The most important thing to remember is if you're going to undercut your competitors, don't undercut by very much. Competitive pricing, not psychotic pricing. In a market where the average price is $50/hr, charge... $40. It shows you're serious about business.
Something else you may have noticed -- I haven't recommended getting certifications yet. I do recommend it, but only if you can afford it. They are FUCKING expensive. I only got my CCNA because my high school offered the program. I only had to pay for the certification exam. In most places, though, you'll have to drop $6000-$10000 on the training.. and you may not even get certified.
So, I'll repeat my earlier statement -- don't waste your time. Go out and find a bullshit job, maybe work at a Future Shop or a Best Buy in the computer department, get some money, go to university and when you get out, moonlight this kind of thing until you're confident you can make a living on it. I know it sucks, but I've been there and not making money because no one takes you seriously sucks even more.
Matthew G P Coe
http://mgpcoe.blogspot.com/
I definitely agree on the advice about customers.
Good customer service is a matter of being consistent and providing good service. If you have to bend over backwards for some customer, that's fine, if it's your only customer and they're going to pay you well for it.
The problem I've seen, from little companies to large corporations, is that they'll keep providing "bend-over-backward" service for some clients, to the DETRIMENT OF OTHER CUSTOMERS! That's bad customer service overall.
The power of accurate observation is commonly called cynicism by those who have not got it. - G.B. Shaw
One book I like is by Janet Ruhl, and the info was gleaned from Usenet back "in the day". It's called The Computer Consultants Guide. I found it to have lots of good information on a variety of subjects, although it is a bit dated.
We live in a captalist society and so you must expect someone to undercut you whether they do the job better or not. It's simply called competition.
Besides, this guy has shown some moxy putting forth an effort to learn more and get some experience all on his own. And now he would like some business tips. We should be supportive of any person like this.
What if this were your son?
At midnight, all the butchers And the cafeteria crew Go out and chop up all the cows For beef & guinness stew...
"I'm an MCSE + MCSD + CCNA + LCA getting an RHCE soon, and still looking for work. And I'm barely a 'pro'. So if you're threatened by a high-schooler, take that as a message."
Whats the message? That you paied for all that testing?
I'm a highschool dropout feeding 5 mouths as a sysadmin. Personaly I haven't a need for MCSE + MCSD + CCNA + LCA + RHCE but starting my business in high-school has made me well known in my area as the "repair kid." Plus I'm able to laugh at inexperianced, overcertified, outawork M$ cronnies everywhere.
Ben Franklin, only went to highschool for 2 years and then quit his aprenticeship at 17 to start on his own, with hard work & study he became a very respected business man.
Or it might have just been him printing all those perty $100's!
"Make sure you charge your customers throught the nose, even if you know the job isn't very hard."
Well, that's true... but then again, it isn't. Obviously, if you're charging $15/hour for computer work, you should be charging more. But here's a story that goes the other way.
A client I worked for had a "computer guy" (MCSE, even) who charged $125/hour to fix their network. The thing was that the network was always broken. I really felt like the guy was incompetent, but as their web developer/web hosting company, I wasn't really in the right position to step in and fix their computers as well... I was simply too busy just maintaining and developing their (quite large) website.
Then a friend moved out here from Indiana. He is an accomplished system administrator. As soon as he moved here, I had him interview with 2 of my clients who used the MCSE. My friend looked at the "going rate" for computer work here and found that it was $50/hour, so he agreed to charge that.
Now you might be asking "Why would you tell him to charge $50/hour when he was obviously more competent than the guy who charged $125/hour? Why not charge $125/hour?"
But I knew that a) my clients were uncomfortable getting their computers fixed at home for $125/hour, and b) they were uncomfortable recommending this guy because he was so expensive. So I told my friend to charge $50/hour.
In the first 3 months, my friend billed more hours with these clients than the other guy had ever had the opportunity to. He also made the same amount of money the other guy did. Plus, my clients recommended my friend to all their friends who just needed occasional help with computers at home.
My friend has now built an entire part-time consulting business around these two clients and their friends, friends of friends, and friends of friends of friends. Meanwhile, the other guy is suffering because he's lost several major clients.
What's the lesson? Charge the going rate. If your work is harder than the going rate, or you're getting too busy, don't be afraid to raise your prices. (I had too much web development work at $50/hour, so I upped my rates. Now I have an $800 minimum contract rule and I charge slgihtly more per hour [$60-$75]. It's much more manageable and I still make more money than I was making before.) But don't price yourself out of the market, or you'll miss out on referrals and your clients won't be happy.
Simpli - Your source for San Jose dedicated servers and colocation!
I did the same thing during my senior year of high school. I've seen a few of these on here already, but repetition = reinforcement.
1. Stay organized. I created an Access database with all my clients, computers, and work performed. This was very helpful when a client asked, "How much time/money have we put into this computer?", I could print a report on the spot with all the pertinent info. You may have heard of the drop-dead school of documentation. If you drop dead, there needs to be enough documentation so the next tech can start where you left off before being hit by the senior citizens' bus.
2. Bill early and often. I've seen people say something about billing as soon as the work is done, which is definitely a good practice. I preferred to do bi-weekly billings, as I could sit down and do all my billing in one fifteen minute time. ALWAYS KEEP A HARD COPY OF ANY BILL YOU SEND OUT AND THE DATE YOU SENT IT. I will not go into details, but you'll be amazed how often you hear "We never received your bill". Billing often is necessary so charges don't add up. Sticker shock has driven away many-a-customer. They pay you the same in the end, but smaller doses are always easier.
3. Work Orders. Every time you go to a client site, create a work order detailing what work you are going to perform while onsite. If they ask you to perform other services while you're there, write them on the work order and make a photocopy. MAKE THE CLIENT SIGN THE WORK ORDER. Their signature indicates that they are satisified with the work and goes hand-in-hand with #1.
4. (and most important) Remember you're just a kid. When I was doing this, I was 17. 17 is an older kid, but you're still a kid. In the eyes of the law, you're also just a kid and cannot make contractual obligations. If you're going to be working on production systems in companies that depend on their computers to make money, get a lawyer. On the same note, make sure you don't burn yourself out and keep a few kid-type things in your schedule so life doesn't suck.
I see my shadow changing, stretching up and over me...
Forget It.
If you're in high school, go and do high school things. I'm not saying to go out and get some shitty job flipping burgers, but if you are planning on doing this stuff for the rest of your life (until retirement anyway), keep it as a hobby for now, do open source development, etc, enjoy your life. Then after college worry about getting a job in the industry. Believe me, rushing to sit at a desk all day under artificial light isn't a good idea...