Computer Leasing as a business? Anyone get into that, or work for a company that does it?

[VirtualLarry]

Thinking about doing it locally for a small number of SOHO customers. Sort of a consumer MSP.

 

[lxskllr]

Sounds like a real hassle for little money.

 

[VirtualLarry]

Better than the less than zero money I'm making (losing) now, building PCs, giving them away for little / no money, and still doing tech-support.

Armchair (or real) lawyers, teach me about the issues of liability. Should I be creating an LLC for this? How hard is that?

Edit: I don't have investors, nor more than a shoe-string budget. Just trying to eek out a few more bucks (like $2K/year) over what I get from my disability, and I have a lot of PC parts, and tech-support experience.

 

[IronWing]

We lease the computers we use for field projects (one-two month duration). The vendor provides computers, peripherals, printers, network gear, and specified software preloaded. We take them out of the boxes, plug them in, and go to work. When we're done with the project, we put everything back in the boxes and ship them back. The key is that everything has to just work, no f'in' around with setup or configuration on our part. In the fifteen years we've been doing this I've never had to call the vendor's tech support for an issue. For my industry, this is the level of service we expect from a rental outfit. We work in incredibly dirty, dusty conditions and I would be surprised if the vendors got more than two years out of any of the equipment they provide. Of course, the vendor charges a bunch for their service and for us, it's worth it.

tl/dr: The competition provides everything, including software licenses; hardware doesn't last long, customers are accustomed to perfection in execution.

 

[VirtualLarry]

tl/dr: The competition provides everything, including software licenses; hardware doesn't last long, customers are accustomed to perfection in execution.

That sounds really good... and also, above my pay grade. This would be aimed primarily at SOHO (Mom and Pop and Grandma and Grandpa) users, that don't know that much about PCs, but would like some hand-holding from time to time, to copy files, connect a network/wifi/printer, install a program, etc., and get PC maintenance included.

Yeah, it does sound like a lot of hassle aimed my way. And I wouldn't be charging a lot, but over a 3-year period, I might make twice or slightly more what the PC costs me in parts. Not a horrible investment, 200% (potential) return over three years is way better than any savings account these days, I think. I don't know about the stock market.

It would also be a way for those on a fixed-income (I live in an apt. complex with "oldies", many of whom I suspect are on a fixed income, as am I) to afford a fairly new-ish PC... if they cared about such things, I suppose.

 

[lxskllr]

Sounds like you're trying to find a way to justify computer hoarding. If it were me, I'd quit buying parts, and concentrate on support. Computers have been 'good enough' for a long time now. A 15yr old c2d is still a viable platform for average users, and they'll be hard to convince otherwise, nor should you for someone short on money.

 

[darkswordsman17]

I really don't see how you think you'll make twice the cost of the computers out of it, let alone in 3 years to that market. And I really think you're making a mistake by focusing on PC and not smartphones or iPads.

I think your best bet would be just to offer a teaching/support service and skip the hardware entirely.

 

[VirtualLarry]

Here's how I was figuring things:

Total ARV (Approx. Retail Value of PC). If I build it myself, I'm paying myself $50 for assembly, and $50 for software install. So say $500 PC, on $400 worth of parts.

Divide by Upgrade Option Period, in years (1-3, that's all I offer). Go with 3 years, for lowest lease monthly cost.

So $500 / 3 = $166.66. Add $100 / year (lease term would be for a year) for tech-support services (works out to $8.33 / mo, per leased PC).

That's $266.66. Divide by 12 months. That's $22.22. Add $5/mo "Administrative fee". That's $27.22/mo. Round up to the nearest $5 amount, that's $30/mo (because I don't like dealing with "small bills, and change").

So, @ $30/mo lease payments, for a $500 ARV PC, that's $360 / year. If they lease the same PC for three years, that's $1080 over 3 years, or slightly over twice the ARV of the PC, that cost $400 in parts.

Edit: Compare and contrast, with putting a $500 PC on a Credit Card, that charges 19.99% APR.

Edit: Granted, my idea was a straight-up lease, not "lease to own". They would NOT own the PC at the end of the lease. But assuming a straight-line depreciation of the PC over 3 years, one could probably sell them the PC at a decent price at the end of 3 years worth of leases, and it would make sense to sell it cheap.

Edit: And the person leasing the PC, gets a new-technology entry-level ($500) PC, for only $30/mo outlay. One of which may be possible, or more possible, on a fixed income, and one may not be, which is WHY they're still using a Core2Quad PC from 15 years ago, and their grandchildren complain when they come over that they can't play Apex Legends on there with their online buddies. Plus, they get the peace of mind, knowing that someone will (likely) answer their questions when they call, to find out how to get their document to print, or copy a file. And if the PC breaks down, someone will come to their place to fix it. (Well, depending on the current condition of the "Shelter in Place" order, in my state. I wonder if PC techs are considered "essential services"?)

 

[lxskllr]

I just bought a dell i5 refurb for $250. Fast pc, and almost no money.

 

[Red Squirrel]

Would be hard to get into, companies who do it are not going to be willing to go with a small business they will go with the big ones like IBM, Dell, HP etc. Personally I think leasing is a waste of money, but companies are weird. They prefer reoccurring costs instead of one time costs because it comes out of a different budget and other weird reasons like that.

If you do want to get into the business you might have a better chance getting into managed services, where you essentially manage their infrastructure. Whether or not they lease they still need someone to set it up and maintain it.

 

[DigDog]

uh, this used to be a thing in the 90s, but today? Who doesn't have *some* form of pc in the home?

Also, dont factor in the tech support, unless you are forcing people to buy it. Who would you be leasing to? Gamers won't do much with a $400 PC, and office workers, while they might, if they dont have a pc at all and are ok with a $400 pc, then they are probably not very tech savvy, that $100 of tech support will translate in many a callout.

 

[ultimatebob]

I used to be in this business, supporting IBM Global Financing. It was super profitable... they basically charged most of the total price of the servers that we leased in monthly payments over 3 years, and then got the equipment back and sold it for 50 cents on the dollar. Pure profit, baby.

I'd imagine that they're hurting now... why pay for your physical servers monthly when you can rent them by the hour from AWS?

 

[PowerEngineer]

If you do decide to go into this business then forming an LLC is probably a good idea. The primary benefit is protecting your personal assets from company liabilities. Rules vary by state, but registering an LLC is pretty straightforward. You will need to purchase some business liability insurance and there may be state taxes to file (federal tax goes through your 1040).

As for the business idea, I see risk in investing in assets that become obsolete in just a few years. As others have suggested, I think you might be better off selling your SOHO clients on the idea of a multi-year service contract that includes "free" hardware. Good luck whatever you decide to do.

 

[Red Squirrel]

That's one thing I wish we had here is LLCs. We don't. You either do sole proprietorship where all liability goes to you and they can go after your personal assets, or do incorporation or corporation (I'm not really sure the difference tbh). Basically when you do inc or corp you need a board of directors and other key persons and it is quite a huge ordeal to setup. Taxes get really complicated too. Need a full time CPA.

 

[DigDog]

I used to be in this business, supporting IBM Global Financing.

what center did you work out of? Boulder?

 

[Fanatical Meat]

@VirtualLarry I worked for a large VAR 2013(ish), making money selling PC leases was next to impossible. As in for every $5k in business I would net around $100 and that was typically incentives from a vendor like Lenovo. My actual commission was zero nearly all the time with leases. Very, very competitive field to go into. Many of your small business targets are not going to have the money to spend and see no value in leasing something when their 6 year old Best Buy purchased machine still does what they need it to do.
I hate to poop on the idea but I don't want to see you set yourself up to fail.

I have zero knowledge of this however I bet you could do a few thousand per year. Do some Tutoring, I am sure you have good math skills, I know you know hardware and networking and programming. Sell tutoring time on FaceBook or thru friends you know that have kids. Get a few people to recommend your skills then you are set. Advantage of this is there is little up front cost.
Tips for you:
Your time has value
No discounts but sensible barter is okay
No accepting promises to pay or referrals if you discount. That shit never works out.
You don't work for free, you expect people to keep their commitments by being on time or prepared or simply having money in hand.

 

[BUTCH1]

I just bought a dell i5 refurb for $250. Fast pc, and almost no money.

And those are fine as long as you can live with the fact they are not very upgradeable, PS don't fit or Dell has their own custom connectors, memory upgrade slots are limited or none at all.

 

[lxskllr]

And those are fine as long as you can live with the fact they are not very upgradeable, PS don't fit or Dell has their own custom connectors, memory upgrade slots are limited or none at all.

They don't really use proprietary parts anymore. If you wanted to turn it into a budget gamer, a gfx card and maybe a new psu would do it. It's already got 16gb ram. Besides, we're talking about granny here. The c2d she has is fine. It's already waiting on her to issue comnands. An i5 would die of boredom :^D

 

[mikeymikec]

Better than the less than zero money I'm making (losing) now, building PCs, giving them away for little / no money, and still doing tech-support.

Not trying to be nasty, but I think if you're having trouble with the business principles of building a PC and selling it for profit, then leasing is far too complicated.

How are you having trouble with building PCs for profit? I simply build on demand, recommend a standardised spec with room for upgrades, and I have a standard fee for my time for the work on top and the customer pays for parts and P&P. I've added a couple of slight complications in the last year to iron out the wrinkles, but that basic formula has worked for me for about 15 years. I suggest fixes for 30-second problems (ie. if I was in front of the PC I'd fix it in that time) over the phone/email, but the rest I go out for and charge (unless I made a mistake to directly cause the problem).

I've also considered the possibility of having a build ready to go but desktop PC building is not the core of my business and I think there's too great a potential for 'what can go wrong will go wrong' with having a build ready to go, and I think the frequency of desktop build requests is too sporadic to warrant it.

 

[DAPUNISHER]

Edit: I don't have investors, nor more than a shoe-string budget. Just trying to eek out a few more bucks (like $2K/year) over what I get from my disability, and I have a lot of PC parts, and tech-support experience.

Given that small amount of money in profit is all you are looking for, there is a biz model, perfect for you, where you would do better than that.

You need to volume purchase those cheap refurbs you are buying. You throw the guts in a case with a bunch of RGB unicorn vomit lighting (RGB sells PCs), add a entry level vid card, and sell them as gaming PCs on ebay. There are a couple of companies using this formula, killing it there right now. And, with a bit more aggressive pricing, and slightly superior specs, you would start moving them as fast as you can build and ship them. You offer 120 day warranty with tech support, and have upgrade pricing for every component. Just look at the listings on ebay and copy what they do. The key is more aggressive pricing, meaning lower profit margin. Since you are not looking to make a living off of it, you will do really well. Certainly there will be issues and hassles, but that is how a business works. No way you will lose money like you do now.

Definitely do the LLC and get your EIN, and also research local, county, and state regulations regarding your biz. Start up cost will be comparatively low, and once the first batch of PCs are sold, you should have that investment back and then some. I would offer extended tech support for a fee too, support is where the money is at. Offer a discount if done at time of purchase.

 

[Fanatical Meat]

Given that small amount of money in profit is all you are looking for, there is a biz model, perfect for you, where you would do better than that.

You need to volume purchase those cheap refurbs you are buying. You throw the guts in a case with a bunch of RGB unicorn vomit lighting (RGB sells PCs), add a entry level vid card, and sell them as gaming PCs on ebay. There are a couple of companies using this formula, killing it there right now. And, with a bit more aggressive pricing, and slightly superior specs, you would start moving them as fast as you can build and ship them. You offer 120 day warranty with tech support, and have upgrade pricing for every component. Just look at the listings on ebay and copy what they do. The key is more aggressive pricing, meaning lower profit margin. Since you are not looking to make a living off of it, you will do really well. Certainly there will be issues and hassles, but that is how a business works. No way you will lose money like you do now.

Definitely do the LLC and get your EIN, and also research local, county, and state regulations regarding your biz. Start up cost will be comparatively low, and once the first batch of PCs are sold, you should have that investment back and then some. I would offer extended tech support for a fee too, support is where the money is at. Offer a discount if done at time of purchase.

I like this idea, a lot.

 

[ultimatebob]

what center did you work out of? Boulder?

I was at the financing HQ in Armonk. It was a pretty cool building... it had a giant greenhouse as a lobby and a funky modern art sculpture garden in the middle of it with fountains. A lot of that got shut down when they went into cost cutting mode and started outsourcing everything, though.

 

[darkswordsman17]

Given that small amount of money in profit is all you are looking for, there is a biz model, perfect for you, where you would do better than that.

You need to volume purchase those cheap refurbs you are buying. You throw the guts in a case with a bunch of RGB unicorn vomit lighting (RGB sells PCs), add a entry level vid card, and sell them as gaming PCs on ebay. There are a couple of companies using this formula, killing it there right now. And, with a bit more aggressive pricing, and slightly superior specs, you would start moving them as fast as you can build and ship them. You offer 120 day warranty with tech support, and have upgrade pricing for every component. Just look at the listings on ebay and copy what they do. The key is more aggressive pricing, meaning lower profit margin. Since you are not looking to make a living off of it, you will do really well. Certainly there will be issues and hassles, but that is how a business works. No way you will lose money like you do now.

Definitely do the LLC and get your EIN, and also research local, county, and state regulations regarding your biz. Start up cost will be comparatively low, and once the first batch of PCs are sold, you should have that investment back and then some. I would offer extended tech support for a fee too, support is where the money is at. Offer a discount if done at time of purchase.

I'm not trying to be mean, and I actually like what he's trying to do and I think that is actually the impetus behind it more than anything (the part about helping elderly and/or low income persons with technology), but I think you should be more aware of his situation.

 

[darkswordsman17]

Thinking about this more, if you're deadset on hardware side of things, I think you should look to get into the tinkerer market (stuff like Raspberry Pi), where the hardware costs are quite low, but honestly versatile enough for the people you're looking to help. And you can learn a lot of stuff. Its also small enough that it'd greatly cut down on the clutter. I think you'd get better margins on hardware, and not end up in the situation that you have. Plus you can repurpose that stuff pretty easily.

 

[DAPUNISHER]

I'm not trying to be mean, and I actually like what he's trying to do and I think that is actually the impetus behind it more than anything (the part about helping elderly and/or low income persons with technology), but I think you should be more aware of his situation.

Thanks for being so civil, much appreciated. And I know Larry a little, which is why I made the suggestion. Larry is too nice, and to philanthropic by nature, for the biz model he is proposing, IMO of course. He will get run over by the people he helps locally, just like he posts about. Even when he sells them stuff, he ends up losing out too often in the long run, by his own admission.

The model I proposed keeps the relationship much more impersonal. It also will fulfill his addiction to buying tech stuff. No hyperbole, Larry is a junkie for this stuff. Not that it is a bad thing, but he loses money most the time the way he does it. This would scratch the itch, but make him some extra bank.

Larry, I hope you know by now, I would never purposely offend you. If I crossed a line here, let me know. Simply like to be open and honest in my dealings.