I am thinking about opening a COMPUTER store.....give me your thoughts please.

[HansHurt]

Ok, I have an opportunity to open a computer store in my locale here. It's kind of a small community, and it lacks a store like this. The people out here have quite a lot of money to spend, so I am seriously considering it. I have plenty of experience w/ part specs. pricing, and building computers(as many of you do I am sure), and can diagnose/solve 90% of common Windows related problems w/o much effort. The rent would not be that high..say around 750/mo. Cdn for a real nice place in the highest traffic area. The only competition is in the neighbouring town(10-15 minutes away), but he is overpriced. It is also 10 min. away from the US border, and the little town of Point Roberts, WA....they have no comp store there either.

My question is this...do you know what sort of profits are to be made typically, are there a lot of headaches involved. Do you know any really good suppliers?(I know a few, but need more for comparison). What would a technician expect in salary to work in this environment if I were to hire one? Throw some ideas, and thoughts out; it would really help.

It would probably named after my surname "Trimark Computers"

Did I mention that I am pretty much obssessed w/ computers...like most of you so I doubt I would get bored.

 

[amdskip]

Risky but sounds like a possible market. How big of towns are we talking here, population sizes?

 

[HansHurt]

35,000+ in the actual town w/ the store, 50,000+ in the neigbouring town(pretty much connected), and Point Roberts,WA is real small...not sure.


BTW Pt. Roberts is on a Peninsula, and the only way out is through Canada, and this town.

 

[Rio Rebel]

The average salary (average, not high end) for tier I/tier II help desk support now is about 38,000 usd. To get a technician who you could depend on and who would actually solve problems, I'd expect you'd need to pay them at least 45,000. If you just need more of an assistant with a little technical knowledge, I'm sure you could get one for much less.

I've seen several people start up small computer businesses, and they all seem to inevitably either raise prices once they see the profit margin necessary to maintain their business, or move to the service/consulting side. The average consumer knows much more about where to look for competitive prices nowadays. But I'm positive there's a market for someone who can actually install some of those parts at a reasonable rate. Many customers are beginning to realize that they don't have the skills to install that Radeon they bought from Best Buy.

Best of luck to you. The one thing I know I wouldn't do is try to establish a business on only selling new systems. There's just no room to build in profit now.

 

[Hapless]

a little mom and pop computer store opened up in my town, alot like yours only smaller, they're doing really well, a good idea is to have 7 or 8 computers open and rent them out for like 6 bucks an hour, parents see it as cheap babysitting, let the kiddies play quake

 

[HansHurt]

RioRebel,

I agree...systems would be more of a secondary thing on a as needed basis. Primarily, it would be a source for cheap parts; the customer finds what he wants on the website, and comes in knowing exactly what he needs. The store itself would be nothing major, the website would be the storefront essentially, w/ a detailed catalog, and up to the minute pricing. You would not believe what they try to charge in my area here. Currently London Drugs, and there small/expensive comp. dept grabs most of the sales...they are always busy, and you can see the frustration in the consumer faces. This place is known as a retirement town, so there may be some business in actual system buiding as well. Don't get me wrong there is an increasing number of 20 something's here to, so it should appeal to them also. The funny thing about these particular towns is that people don't like to drive to downtown Vancouver, and will pay much more just to avoid the hassle(I do it all the time)...there is a real community spirit out here. I guess that's what I would count on...I know I would frequent the store I am envisioning.

Then again, I am realalistic, and would not dive into this if there is a good possibility of failure. I think one of the difficulties as you said, would be to maintain a low price if business were slow...among other things. The key would be a good supplier, and low overhead.

Edit- The two towns Ladner, and Tsawassen are almost diametrically opposed as far as population ages etc. the former being more populated, and younger..the latter has less pop., and more retirees(lots of money)

 

[Bellgoody]

Define "opportunity."

Hung out my shingle last year in a Northern California village. Sales are increasing roughly 35% each month this year from last. I work 6 days a week and crash on the 7th. I'd be glad to help by sharing my experience but I need to know a few things about your business plan, e.g., specific demographic research you've done, your marketing strategy, advertising budget, inventory capitalization, etc. Most importantly - what do you intend to sell and WHY?

I make a comfortable living (thus far) and have two full time employees in an city with 8,400 inhabitants, 4,300 of whom are incarcerated in the Pelican Bay State Prison. If I can make it with such a small population, there's no reason why you can't make a go of it with four times as many people.

PM if you like.
Good Luck

 

[Bellgoody]

<< Primarily, it would be a source for cheap parts; the customer finds what he wants on the website, and comes in knowing exactly what he needs. >>



Ouch, if you go for the bottom feeders, you're headed for trouble. The only way I can compete with Dept. Stores, the Dell's and Gateway's of the world, and every Intenet hack who can reach fleabay, is to offer the best product in the world, hand delivered and installed in my client's home or office. SERVICE, SERVICE, SERVICE!!

67% gross sales June - custom computers. 11% repairs. The rest - Internet rental stations, classes, espresso, and peripherals.

What are you going to offer your customers that they can't get cheaper some where else? You must provide them with a unique opportunity unavailable from anyone but you. IMHO.

 

[noninterleaved]

I think it would be worth your time and money to talk to a lawyer about starting a business.

There are many different types of businesses you can start with different pluses and minuses when it comes to taxes and liabilty. That would be a good place to start. Most lawyers have helped to start many businesses, so he or she will be able to give you a really good idea of how much money you are going to lose. You will lose money at first, it is just a question of how much, and how much financial backing you can get to survive the first couple of years.

 

[HansHurt]

Thanks Bellgoody that is helpful, and YHPM


Opportunity in this case means someone would be willing to throw 100-200k into it.


I need to know a few things about your business plan, e.g., specific demographic research you've done, your marketing strategy, advertising budget, inventory capitalization, etc. Most importantly -what do you intend to sell and WHY?

Research = Me living out here for 9 years, and analyzing the situation. Demographics as I said in my thread, is interesting in that there are two towns pretty much connected..one with well to-do retirees, the other w/ middle-class 20 something's, and middle-aged folk. The closet place to get real deals is a 25 min drive away w/ horrible traffic etc. The people out here are adamant about buying locally as well, so that may be a benefit here.

Marketing Strategy = Simply letting people know the place exists w/ a flood of penny flyers, and adds in the local paper that serves these communities &quot;We want to be your source for quality low priced computer supplies in Ladner/Tswassesn&quot;. A website as well w/ a detailed catalog, and up to the minute pricing.

What do we intend to sell = Computer parts, PC Games mostly at a low cost compared to other merchants in the area, of which there is only one to speak of(drastically overpriced/no selection). Why? to fill a need I think is present(in my mind anyway) in this area.

I was just presented w/ this opportunity today so no serious research has been preformed as of yet, but I am starting here at AT tonight


Thank you for your response


I think it would be worth your time and money to talk to a lawyer about starting a business.

noninterleaved, that is a good idea as well..thankyou

 

[pulpp]

bellgoody, intreasting post, i always wondered about those classes they offer at some ISPs and computer stores, do you design those classes yourself? or is there is some kind of standard, or based on a book? just curious....

 

[Bellgoody]

Pulpp - We are fiercely independent. I teach &quot;Basic Computer Obedience Training 101.&quot; Our clients learn how to make the computer fetch, rollover, and heel. The easiest to teach, no matter what the age, are those who have a year or less of computer experience. The hardest to teach are those who have been at it for 2-3 years - they know it all, just not well.

We also teach Adobe PhotoShop and will begin Web Design soon. We keep the classes small, no more than 4 students of comparable skill levels, and they are relatively non-structured but focused. We start them with the appropriate &quot;Dummies&quot; books. More advanced texts and individual tutoring are available as well.

I offer a free classes with every computer sale. We want the customer to enjoy their new system with a minmum of aggrevation and/or fear.

 

[Bellgoody]

The Twelve Certainties of Owning a Retail Tech Store

· Utter abandonment of the life you now lead. Your new business owns you 24/7.
· If you think your taxes are high now, multiply by a factor of 6 with a new business.
· EVERYONE is determined to steal from you, either through ignorance, greed or design.
· Every dime you earn for the foreseeable future is reinvested in your business. Your ?profits? for the first three years (minimum) must be reinvested back into the business.
· You cannot survive on 30%. Bare survivability requires 50% gross profit. (How you plan to achieve this selling components cheaply is beyond me, but I wish you luck).
· If you do not advertise properly, i.e., a balanced mix of broadcast, print, signage, etc., your business will die before you are out of the gate.
· You must have a bookkeeping system in place with someone you trust with your life.
· You must employee a least one competent A+ Certified Tech who knows more than you do. ALWAYS HIRE INDIVIDUALS WHO KNOW MORE THAN YOU DO. Pay them whatever is necessary to keep them from stealing from you or worse, learning everything you do and starting a competitive business across the street.
· The cheapest deal is often the most costly.
· You must provide the customer with a reason to buy from you. If you live by the price point, you will die by the price point.
· The customer is RARELY right. If they knew what they were doing, they wouldn?t be in your store. It is your job to perpetuate the false myth otherwise while relieving him/her of whatever disposable income they have in their pockets and making them feel as if they have received value.
· One out of ten of everything you buy is bad out of the box. This truth is valid no matter how much money you spend or from whom you purchase.

 

[HansHurt]

Excellent Bellgoody,

Those are some pretty sobering certanties there


Maybe, I'll just open a Adult Video Store


· Utter abandonment of the life you now lead. Your new business owns you 24/7.

Life....what life? I might have to throw a bed in the back of the store, and just move in

· If you think your taxes are high now, multiply by a factor of 6 with a new business.

Yes, too true, altough this is one of those areas where I do have first hand experience. I found that tax benefits, and write-offs here in Canada, ALMOST outweigh the disadvantages.

· EVERYONE is determined to steal from you, either through ignorance, greed or design.

Can't argue w/ that one....turn the tables on that, and I am guilty of the same.

· Every dime you earn for the foreseeable future is reinvested in your business. Your ?profits? for the first three years (minimum) must be reinvested back into the business.
· You cannot survive on 30%. Bare survivability requires 50% gross profit. (How you plan to achieve this selling components cheaply is beyond me, but I wish you luck).

Good point. I will have to consider this carefully, and get an accurate picture of profit margins on the products I would be selling in comparison to operating costs. I guess the saving grace here would be the sheer amount of capital available to me initially.

· If you do not advertise properly, i.e., a balanced mix of broadcast, print, signage, etc., your business will die before you are out of the gate.

Agreed

· You must have a bookkeeping system in place with someone you trust with your life.

My sister will do nicely


· You must employee a least one competent A+ Certified Tech who knows more than you do. ALWAYS HIRE INDIVIDUALS WHO KNOW MORE THAN YOU DO. Pay them whatever is necessary to keep them from stealing from you or worse, learning everything you do and starting a competitive business across the street.

This part scares my pocket book The technicians salary...owch!

· The cheapest deal is often the most costly.

I like that...that is some good wisdom

· You must provide the customer with a reason to buy from you. If you live by the price point, you will die by the price point.

Again, good words of wisdom.
· The customer is RARELY right. If they knew what they were doing, they wouldn?t be in your store. It is your job to perpetuate the false myth otherwise while relieving him/her of whatever disposable income they have in their pockets and making them feel as if they have received value.

Muhahaha! Yes...you suckers, welcome to my store *cough* *web*

· One out of ten of everything you buy is bad out of the box. This truth is valid no matter how much money you spend or from whom you purchase.

Yea, tell me about it.


Thanks again Bellgoody; very helpful indeed...lots of things to consider there.

 

[damocles]

Most new businesses fail within two years

The margin on computer parts isn't that flash. In order to do well in this regard you will have to keep minimal stock and have a high turnover. Some businesses never recover from a mistake made with their initial inventory. Remember your entire inventory is devaluating at an alarming rate.

As has been said, service is your primary margin puller. Your service must be superb, this is what brings in your supplemental income and makes customers return to you. If you have to stay to midnight to fix some quirk in a $500 PC, which you quoted to fix for $30, then that is what you must do. If your service is poor then word gets around very fast.

Beware the geek community that will magically be drawn to your shop. They tend to scare away regular customers. A long haired, facially challenged youth screaming 'I'm gonna frag yo ass' and drooling coke over himself has scared away many legitimate customers. Geeks will make up less of your sales than you think, many will buy elsewhere if they can find it cheaper. Then again many will also work cheaply and efficiently if handled correctly