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How To Start A Computer Repair Business

How To Start A Computer Repair Business

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How To Start A Computer Repair Business

How To Start a Computer Repair Business

If your computer gives you an error message – or worse, a black screen – do you see it as a challenge? If you find technology fascinating, are talented in troubleshooting and fixing problems, and are knowledgeable about all of the latest technology and updates, then starting a computer repair business might be for you.

In the digital age, where technology is integrated into every aspect of our daily lives, businesses that offer solutions to tech-related problems are poised for success. A computer repair business can be an ideal venture for individuals with a knack for diagnosing and fixing computer issues.

However, establishing a successful computer repair business requires more than just technical skills. From researching the market to registering your business, finding the financial resources to start, and more, there are numerous steps to navigate on your journey. In this guide, we’ll go through the steps, providing you with an understanding of how to start your very own computer repair business.

Business Overview

Computer repair businesses help customers to both fix and maintain their computers. Often, these businesses are tasked with troubleshooting and fixing computer problems, but that work can extend to setting up and maintaining networks, offering in-home visits, and selling computers and accessories. Some of the most common services include virus removal, data recovery, system upgrades, and security updates.

Some businesses focus solely on commercial services, while others focus on PC repair. Some businesses offer a combination of both options. Additionally, while most repair businesses have a storefront, some may offer in-home or in-business visits, especially when it comes to setting up or maintaining networks.

Industry Summary

The computer repair industry falls within the larger IT services industry. This sector covers an array of services, including IT consulting, software support, and computer hardware repair & installation, among other services. According to the market research firm IBISWorld, the computer repair industry in the United States is expected to generate $21 billion in 2023.

The industry has experienced a decline of 1.7% over the last five years and can be attributed to a number of factors. First off, as computers and other electronics are increasingly more affordable, fewer people are deciding to have their electronics repaired, and are instead choosing to replace them when they break. Businesses have also followed this trend and often invest in high-quality equipment and get rid of old, outdated, or broken equipment.

While these statistics may seem discouraging at first glance, repair business owners who stay on top of current trends and customer needs can still run successful computer repair businesses.

The overall computer repair industry may be declining, but there is an increased need for certain services. According to Repair Desk, because computers and technology evolve so quickly, computer repair technicians need to keep pace with this technology. When a customer walks in with a problem involving a new software update or new version of an operating system, a repair technician will need to be familiar with these products and able to help the customer.

Experimax notes that computer repair increasingly crosses over with cell phone repair. As smartphones become more and more like computers, computer repair technicians are beginning to offer cell phone repair services, too. From screen repairs to virus removal and general troubleshooting, there are many opportunities for a technician to expand their services beyond just computers. And, because of the increasingly high cost of cell phones, customers are more likely to repair a $1,000 phone than they are to repair a $300 computer.

There’s also a growing trend toward sustainability across all industries, and the computer repair industry is no exception. Repairing and upgrading computers rather than replacing them contributes to reducing electronic waste, making computer repair an inherently green industry. Some businesses are taking it a step further by recycling old parts and using energy-efficient practices. With this trend, mobile computer repair is increasingly in demand as people stay at home more and want the convenience of in-home repair, especially removing viruses.

Target Market

A computer repair business’s specific target market will depend on the business model and services offered. A business specializing in personal computer repair will market to local computer owners who invest in more expensive machines worth repairing. A business specializing in computer maintenance and networks to businesses may only market to businesses of a certain size or those that use a particular technology.

Computer repair businesses sometimes specialize in working on certain types of computers, like PCs versus Macs. This may also affect the target market of the repair business.

Checklist To Start A Computer Repair Business

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If you’re thinking about starting your own computer repair business, there are a few things you should keep in mind. Here is a checklist of the essentials to get started.

Step 1: Research the demand for a computer repair shop

Before going through the time and trouble, our first step should be to gauge whether there is enough demand for a computer repair business. There are a variety of resources to do market research, a few of which include:

Online Research: The internet is a powerful tool for conducting initial research. You can start by doing a quick search of existing computer repair businesses in your area to assess the competition. Websites like Yelp or Google Reviews can give you an idea of the number and size of competitors, as well as the services they offer and their pricing structure. While researching the competition, you may also want to look at what type of repairs they offer and look to specialize in a different niche.

Local Business Directories: Local business directories and the local chamber of commerce can give you a sense of the number of businesses in your area that might need your services. Many businesses, especially small and medium-sized ones, often require IT support and computer repair services.

Local Government Data and Statistics: Your local government’s economic development office can provide valuable information about your community’s demographic data. You can use this information to ascertain whether the population and business density in your target area can support another computer repair business.

Networking: Never underestimate the power of personal interactions. Attend local business networking events, trade shows, and community gatherings to get a feel for the local business climate and the demand for computer repair services. These events are also great opportunities to meet potential customers and ask them directly about their needs.

Existing Customers (If Applicable): If you’re already in a related field or have previous customers from freelance work, ask them about their needs. Their feedback could be invaluable in determining whether there’s enough demand for a full-scale business.

By using these resources and methods, you can start to paint a clear picture of your local market’s needs and demands. It’s crucial to compile and analyze this data thoroughly to make informed decisions about starting your computer repair business.

Step 2: Create a business plan

Writing a business plan is essential for any business, including a computer repair business, for a variety of reasons. A well-crafted business plan helps clarify your business idea, defines your long-term objectives, identifies potential challenges, and outlines the strategies to overcome these challenges. Additionally, a business plan is a vital tool when seeking funding from investors and lenders, as it demonstrates the viability and potential profitability of your business.

While all sections of a business plan are important, there are certain areas that hold particular significance for a computer repair business seeking funding:

Market Analysis: In the computer repair industry, demonstrating a clear understanding of your market is vital. Investors want to see that you understand the local demand for computer repair services, your potential customers, and your competition. This section should highlight the potential growth of the market, your business’s unique value proposition, and how you plan to set yourself apart from existing competitors.

Operational Plan: This section outlines the logistics of your business operations, including location, facilities, equipment, supply chain, and workflow management. For a computer repair business, demonstrating your ability to handle and repair a wide variety of computer problems efficiently and effectively is crucial. This could include showcasing any unique equipment or techniques you’ll be utilizing, your turnaround times for repairs, and any partnerships with suppliers or other businesses that could give you a competitive edge.

Financial Projections: This section is particularly important for funding. The plan should include sales forecasts and cash flow projections. For a computer repair business, this could also include a pricing strategy for your services and the projected return on investment for equipment or advanced training. Proving that your business is profitable and can reasonably repay its debts is key to securing funding.

A robust business plan serves as a roadmap for your computer repair business. Not only does it guide your operations, but it also serves to attract potential investors by proving that your business is a promising and profitable venture.

Related: How to write a business plan

Step 3: Choose a location

Finding the right location is likely the next step in starting your computer repair business, and the best option largely depends on your specific business model. If you’re planning to operate a mobile computer repair business, you might not need a dedicated office or storefront at all. Instead, your focus should be on securing reliable transportation and equipment to conduct repairs at customers’ homes or businesses.

On the other hand, if you’re planning a traditional storefront, you’ll need to find a location that is easily accessible and visible to potential customers. Look for areas with high foot traffic, such as shopping centers or business districts. However, it’s important not to rush into signing a lease or purchase agreement before securing funding, as should the funding be delayed – or declined – you could be left with a space and no business.

For entrepreneurs considering operating remotely from home, you will need a dedicated workspace that can accommodate your repair equipment and any inventory you might need. Keep in mind, however, that you should check with local zoning laws to ensure a home-based computer repair business is permitted in your residential area.

In each of these scenarios, you should also consider any necessary renovations. This could include installing additional electrical outlets for your equipment, creating a customer-friendly area in your storefront, or setting up a secure storage area for customer computers and parts at your home. Estimating these renovation costs upfront is critical, as they can significantly impact your startup budget. Therefore, be sure to factor these considerations into your decision-making process as you find the best location for your computer repair business.

Step 4: Secure funding

Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a computer repair business is another. Even though the cost to start a computer repair business is usually low, it can be difficult to get a loan if there are a lot of costs tied up in building renovations and inventory.

Personal savings are often the first line of funding for small business owners, allowing you full control over your business decisions without the need to repay interest or answer to investors. Even if seeking a loan, the borrower(s) will need to have good credit and personally invest 15-25% towards the total start-up costs to get a small business loan.

Besides personal savings, many entrepreneurs also turn to friends and family for initial capital. Borrowing from friends and family can be a flexible, albeit potentially complicated, source of early-stage funding.

Loans from banks or credit unions are another commonly utilized source, but if the bank feels the loan is too risky, banks can utilize a Small Business Administration (SBA) loan guarantee to proceed with a loan.

Last, business credit cards can be used to manage cash flow and finance smaller, day-to-day expenses. They can also provide benefits such as cash back, travel rewards, and the ability to build business credit. However, they should be used responsibly, as interest rates can be high if the balance is not paid off each month.

Remember that each source of funding has its advantages and drawbacks, so it’s essential to carefully consider your business’s needs and circumstances before making a decision.

Related: Finding the money to start a business

Step 5: Register the business

When starting a computer repair business, there could be several requirements to get it properly registered and legal is essential. Each state has different rules and regulations for starting a business, so it’s important to do your research. Here are some common steps to follow:

Choose a Business Structure: The first thing you’ll need to decide is what business structure is best for your business. This could be a sole proprietorship, a partnership, a limited liability company (LLC), or a corporation. Each of these structures has different implications for liability, taxes, and administrative complexity. Many computer repair businesses opt for a Limited Liability Company (LLC) structure. An LLC provides protection from personal liability for business debts and claims, a feature that can be particularly beneficial for a repair business dealing with customers’ valuable equipment.

Related: Comparison of business structures

Business Name Registration: After registering the business structure, you may need to register your business name. It’s important to choose a meaningful and memorable name for your business, as this will be your brand for the lifetime of your business. This process will vary depending on what business structure you pick. Sole proprietors and partnerships will often be required to register a “Doing Business As” (DBA), while corporations and LLCs register with the state during the formation process.

Related: Tips and ideas for computer repair business names

During this time, it’s also a good idea to check if the name you want is available as a web domain, even if you’re not ready to set up a website yet.

Related: Finding a domain name for your business

Obtain Business Licenses and Permits: The specific licenses and permits you need can vary significantly depending on your state and locality. Some states require licensing for businesses that repair electronics. In addition to computer repair licenses, there are also general local, state, and federal business registrations, such as a sales tax permit, sign permit, Employer Identification Number, and Occupancy Permit, among others.

Related: What licenses does a computer repair business need?

In addition to registering the business, it may be worth obtaining certification in certain technologies. Some of the more common ones include CompTIA A+ Technician Cisco Certified Network Associate (CCNA), Certified Information Systems Security Professional (CISSP), Microsoft Certified Systems Engineer (MCSE), etc. Having certifications tell customers you have the technical expertise and be the factor that gets your company hired over other computer repair shops.

Understand Legal Obligations for Dealing with Customer Information: As a computer repair business, you’ll likely be handling sensitive customer data. Make sure to understand and comply with all laws regarding data security and privacy. You may want to consult with a legal professional to ensure you’re fully compliant.

Step 6: Establish partnerships with suppliers

Another important step in setting up a computer repair business is finding reliable suppliers for parts and equipment. Here are some things to look for:

Identify your Needs: Before you start your search, have a clear understanding of what you need. This includes computer parts like hard drives, memory, motherboards, power supplies, and other peripherals. You might also need tools such as screwdrivers, anti-static mats, diagnostic software, and more.

Start Local: Check for local suppliers or distributors in your area. These suppliers can provide faster delivery times and lower shipping costs. Plus, building a strong relationship with local suppliers can often lead to better deals and discounts.
Expand to Online Wholesalers: If local options are limited or expensive, look to online wholesalers. Many businesses use suppliers like Alibaba, Newegg Business, and Ingram Micro. While these often require bulk purchases, they usually provide parts at a lower cost per unit.

Consider Manufacturer Direct Purchasing: For certain parts or high-end components, it might be beneficial to buy directly from manufacturers. Companies like Intel, AMD, and Samsung often have programs for businesses to purchase directly from them.

Vet Potential Suppliers: Once you’ve identified potential suppliers, vet them thoroughly. Look for reviews or references, check their delivery times, return policy, and see if they offer warranties on their parts. The cheapest supplier is not always the best option if their parts are unreliable or they have poor customer service.

Build Relationships: Building a strong relationship with your suppliers is crucial. Good relationships can lead to better pricing, priority for new stock, and even help in making your business successful. Regular communication is key to nurturing these relationships.

Plan for Backups: Always have a backup plan. If your primary supplier runs out of stock or goes out of business, you need to have secondary suppliers to ensure your business can continue operating smoothly.

Finding and maintaining good supplier relationships is a key aspect of running a successful computer repair business. Take the time to find suppliers who are reliable, have quality parts, and understand the needs of your business.

Step 7: Develop a marketing strategy

A computer repair business can effectively market itself by implementing a combination of both traditional and digital marketing strategies. The right strategies will vary depending on the business model, but some general marketing ideas for a computer repair business can include:

Traditional marketing methods, such as local newspaper ads, radio spots, or flyers bulletin boards at libraries, restaurants, retirement communities, and apartment offices, can still be very effective, especially in smaller, more localized markets. Participating in local events or sponsoring local clubs or organizations can also be a great way to increase your business’s visibility within the community.

On the digital front, establishing a strong online presence is crucial. Creating a professional, user-friendly website that clearly outlines your services, pricing, and contact information can make your business more accessible to potential customers. Search engine optimization (SEO) can also increase your website’s visibility in search engine results. Utilizing social media platforms like Facebook, Instagram, LinkedIn, or Twitter can help engage with your local community, provide updates, and promote your services. Also, online reviews and testimonials can also be extremely influential, so encourage satisfied customers to leave reviews on platforms like Google My Business or Yelp.

Moreover, offering a referral program can be a powerful way to attract new customers. People are more likely to trust recommendations from friends or family, so incentivizing your current customers to spread the word can be beneficial.

Last, consider forming strategic partnerships with other local businesses. For instance, a partnership with a local electronics retailer could be mutually beneficial, providing them with a trusted repair service to recommend to their customers while driving business to your shop.

At the end of the day, the best strategy for any business will depend on the local market, the target customer base, and the resources available. The key is to be consistent, creative, and customer-focused in all your marketing efforts.

Related: Low-cost ideas to market a new business

Step 8: Hire & train employees if needed

Building a team is a critical step in scaling your computer repair business. While you may have started as a one-person operation, as demand grows, so will your need for additional help. Hiring the right people can not only increase your capacity to serve more customers but also bring in a range of skills to improve the quality of your service.

Common roles in a computer repair business include computer repair technicians, customer service representatives, and sometimes a store manager. The median pay for computer repair technicians is around $65,000 per year, but this can vary significantly based on experience, location, and the complexity of the work.

Customer service representatives, who handle client relations, appointment scheduling, and light support typically earn less, with a median annual wage of about $43,000.

A store manager, overseeing operations and staff, will often upwards of $60,000 annually, depending on the size and success of the business.

Remember to also budget for additional expenses that come with hiring an employee, like workers comp insurance, paid time off, and health insurance contributions.

Related: State guides to hiring your first employee

Step 9: Prepare to launch your computer repair store!

Starting a computer repair business is a big undertaking that involves several steps. While we have gone over many of the common steps, each business is different and there are likely several other steps that are needed. A few steps to consider include:

Business Insurance: Business insurance is critical in protecting your investment. In a computer repair company, General Liability Insurance is essential as it covers damages if a customer’s device is accidentally damaged in your shop. Professional Liability Insurance is also common, which can cover claims of poor workmanship or negligence.

Related: What types of insurance do computer repair businesses need?

Bookkeeping: Good bookkeeping practices are essential for the health of your business. Consider investing in accounting software such as Wave Accounting (FREE) or Quickbooks to keep track of your income, expenses, taxes, and payroll. Hire a professional bookkeeper or accountant if necessary.

Contracts: It’s important to have contracts in place to protect both you and your clients. These could include service agreements that outline the terms and conditions of your repair services, or waiver of liability in case a repair goes wrong.

Seeking legal advice to ensure these contracts are legally sound and comprehensive is best, but you can also look to RocketLawyer and Law Depot, who have free and inexpensive templates. 

Bank Account: Open a business bank account separate from your personal account to maintain clean financial records. A business credit card can also be helpful for managing expenses.

Payment Methods: Offering multiple payment options, including credit cards, can make it easier for customers to pay for your services. There are several merchant services providers such as Square or Stripe that can equip your business to accept credit cards both in-store and online.

Grand Opening: Plan a grand opening event to attract potential customers. Advertise it well in advance, and consider offering special promotions or discounts to attract more attendees.

The specific needs of your computer repair business will depend on a variety of factors, including your location, market, and personal business goals. However, addressing these common areas can provide a solid foundation as you launch your new venture.

This material is property of StartingYourBusiness.com

Greg’s Tip: Customer service plays a crucial role in setting a computer repair business apart from the competition. Unfortunately, many computer repair businesses are notorious for providing subpar customer service. By prioritizing excellent customer service, a computer repair business can differentiate itself and build a strong reputation.

Greg's Business Tip

Common Questions When Starting A Computer Repair Business

How much does it cost to start a computer repair business?

The cost to start a computer repair service can vary greatly depending on several factors, such as your location, whether you choose a physical location or a home-based operation, the cost of equipment, and licensing fees. On average, you could expect the initial startup costs for a computer repair business to range from $10,000 to $50,000.

A significant portion of your initial expenses will go towards securing a location if you choose to operate a storefront. The cost will depend on the size and location of the property, and whether you’re renting or buying. Keep in mind that you’ll also need to budget for any necessary renovations to make the space suitable for your business.

Acquiring tools and equipment is another key expense. Depending on the quality and quantity of the tools you buy, you could expect to spend anywhere from $500 to $2,000 or more. You’ll also need a stock of common computer parts for repairs, which could run another $1,000 to $5,000.

Business licensing and insurance costs will vary by location, but generally, you can expect to pay a few hundred dollars for these combined. Additionally, budget for marketing and advertising costs to promote your new business. This might include the cost of a website, business cards, and local advertising.

It is also crucial to set aside three to six months of operating expenses as a buffer. These expenses can include rent, utilities, salaries (if you have employees), insurance, marketing costs, and more. Depending on your particular situation, this could range from $5,000 to $30,000.

Please remember that these figures are estimates and can vary based on a number of factors. It’s always best to do your own thorough research and calculations before starting your business.

How much can a computer repair business owner make?

The income of a computer repair business owner can significantly vary based on numerous factors such as location, competition, pricing, customer base, and the specific services offered. On average, computer repair businesses charge between $50 to $80 per hour of labor.

Here’s a simple formula to help estimate potential annual income:
(Estimated hours of labor per week * hourly rate * weeks per year) – annual expenses.

Let’s say you can bill 40 hours per week, charge an average of $75 per hour, and operate 50 weeks a year. Your gross income would be:
(40 hours/week * $75/hour * 50 weeks/year) = $150,000
If your annual expenses (rent, utilities, insurance, salaries, marketing, etc.) add up to $50,000, your estimated net income would be:

$150,000 (gross income) – $50,000 (expenses) = $100,000

This is a very simplistic calculation and actual income can be higher or lower. It doesn’t account for downtime, unpaid administrative tasks, variations in weekly work hours, and many other factors that can affect income.

How should I price my computer repair services?

There are several factors to consider when setting prices for a computer repair business. Here are a few of them:

Cost-Based Pricing: Begin by determining all your costs, including overheads such as rent and utilities, equipment costs, employee wages, and other business expenses. Then, add a margin on top of these costs to ensure you make a profit.

Competitor Analysis: Research your competitors’ pricing for similar services. You don’t necessarily have to match their prices, but understanding the range can help you price competitively.

Value-Based Pricing: Price based on the value you provide to the customer. For instance, a complex repair that saves a customer from having to buy a new computer has high value and could warrant a higher price.

Market Demand: Be aware of the market demand and adjust your pricing accordingly. If there’s a high demand for a particular service, you might be able to charge a little more.

Pricing Models: Consider various pricing models. Some businesses charge a flat fee for certain services, while others charge an hourly rate. You might also consider a tiered pricing model for different levels of service.

Remember to review your prices regularly and make adjustments based on changes in your costs, the market, and your business goals. Importantly, ensure that your pricing is transparent and communicated clearly to your customers to maintain trust and satisfaction.

What skills are needed to run a computer repair business?

You don’t necessarily need a business degree to start a computer repair business, but having certain skills and experiences can increase your chances of success as a business owner.

Computer Repair Experience: It goes without saying, but extensive experience in computer repair is a must in this profession. Many computer repair technicians have taught themselves the technical skills they need, but structured courses are available to supplement existing knowledge of hardware and software.

Customer Service Skills: Customer service is a big aspect of the computer repair industry. A business owner will need to be able to provide prompt service and have computers ready on time. Great interpersonal skills are also important, especially since customers may be upset and frustrated with their computers before they even walk in the door.

Organization Skills:  Good organization is important both in tracking equipment in the store and parts that need to be ordered, but also in keeping parts organized when taking a computer apart or replacing a piece.

Attention to Detail: A good computer repair business owner needs to have great attention to detail. This is one important quality that can make computer repair easier and can make a technician good at their job.

Problem-solving Skills: The ability to quickly identify and solve problems is essential in this industry. Repair technicians use creative problem-solving daily, so this is a must-have trait for any business owner.

What is the NAICS code for a computer repair business?

The NAICS code for a computer repair business is 811212.

The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.

Related: What is a NAICS code?

Resources:
Association for Computing Machinery
Association of Computer Repair Business Owners

How To Start A Computer Repair Business

How To Start A Computer Repair Business

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