# Starting Repair / Consulting business



## WRXMarcus (Mar 20, 2012)

Hello Gents,

I've been perusing this forum for a few hours today, whilst gathering information about starting an IT business. I'm looking to make some additional income on the side to supplement my full-time position as a SQL Database Analyst (SysAdmin duties included! Oh, do small business rock). 

My current plans are looking like this:

- Order my business cards (need to decide if i'm going to do consulting or repair, before I order them, of course)

- Post on Facebook that i'm offering these services now, and give 3 or so cards to close friends and family to disburse for me.

- case when @businessType='Residential Repair' then print 'Looking to charge about $50 an hour for the first hour, then perhaps 35$ after that, with a maximum of 3 hours. Negotiations are expected, if the additional time was due to my own initial misdiagnosis.'  end

- when @BusinessType='Consulting' then print 'I''m not sure if this type of business will be possible with my current 9-5 position. I think this will be my biggest obstacle. I understand that having a few business clients with a month-to-month recurring maintenance fee could easily turn into a full-time salary.'

Do you guys think either of these businesses are do-able? If so, which, and how can I work it around my full-time position?


Best regards,

Marcus:smile:

-


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## BosonMichael (Nov 1, 2011)

WRXMarcus said:


> - case when @businessType='Residential Repair' then print 'Looking to charge about $50 an hour for the first hour, then perhaps 35$ after that, with a maximum of 3 hours. Negotiations are expected, if the additional time was due to my own initial misdiagnosis.'  end


That's awfully cheap. $35/hr equates to about $75 per year, and that's working 40 hours per week, leaving no time for billing, advertising, or maintenance.

For what it's worth, I charge $100 per hour for the first hour as well as for every hour thereafter, with a minimum of one hour and no maximum. My first hour is just as important as my last. Isn't yours?



WRXMarcus said:


> - when @BusinessType='Consulting' then print 'I''m not sure if this type of business will be possible with my current 9-5 position. I think this will be my biggest obstacle. I understand that having a few business clients with a month-to-month recurring maintenance fee could easily turn into a full-time salary.'


Hard to say. The hardest part with either is being able to be on site when emergencies arise... and you're stuck in the office. Remote support is certainly possible in some instances... but... is that fair to your current employer?


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## WRXMarcus (Mar 20, 2012)

BosonMichael said:


> That's awfully cheap. $35/hr equates to about $75 per year, and that's working 40 hours per week, leaving no time for billing, advertising, or maintenance.
> 
> For what it's worth, I charge $100 per hour for the first hour as well as for every hour thereafter, with a minimum of one hour and no maximum. My first hour is just as important as my last. Isn't yours?
> 
> ...


True. Well, I've heard that Geek Squad takes forever to fix PC's, so if I can get to picking the PC up etc, after work, then it should be fine, right?

Indeed, I wont be able to do remote support during my working hours. Not really sure what I can do. I'm stuck inside a small company, with really not much room for growth. I suppose if I found another job that paid more, I wouldn't have to worry about working after 40hrs a week, haha!

How do you manage to do remote support, etc, when you work full-time as well (to my understanding) ?


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## BosonMichael (Nov 1, 2011)

WRXMarcus said:


> True. Well, I've heard that Geek Squad takes forever to fix PC's, so if I can get to picking the PC up etc, after work, then it should be fine, right?


Depends. People live in a "microwave cooking" society; they want it fixed now now NOW. They don't want it fixed tomorrow. This is particularly true for businesses that rely on their computers being up to remain productive and profitable.



WRXMarcus said:


> Indeed, I wont be able to do remote support during my working hours. Not really sure what I can do. I'm stuck inside a small company, with really not much room for growth. I suppose if I found another job that paid more, I wouldn't have to worry about working after 40hrs a week, haha!
> 
> How do you manage to do remote support, etc, when you work full-time as well (to my understanding) ?


Most importantly, my hours are somewhat flexible. If I come in sometime between 7a and 9:30a, leaving sometime between 4p and 7p, it's all good (provided I've worked approximately eight hours, that is!). I certainly can't come to work three hours late, unannounced... but if I have to leave for a couple of hours during lunch, I either take an hour of PTO or work late that night.


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## WRXMarcus (Mar 20, 2012)

True - mine is relatively flexible as well. I could do a similar act, as I either do 9-6 or 7:30 to 4:30. There has to be a way to make money on the side doing repairs, even though I work full-time.


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## BosonMichael (Nov 1, 2011)

WRXMarcus said:


> True - mine is relatively flexible as well. I could do a similar act, as I either do 9-6 or 7:30 to 4:30. There has to be a way to make money on the side doing repairs, even though I work full-time.


Absolutely! The only problem would be in making the jump from your full-time analyst job into a full-time IT services job, if that is your intent. Customers won't neatly fall into a lunch hour (or two) each and every day from Monday to Friday, and even so, that's only 10 hours. Plus... either your PTO will run out or your boss's patience will run out. At some point, you'll either have to be content to let your side jobs be extra money or take the scary step of leaving before you have a full stable of regularly paying customers. 

If you do decide to go the full-time IT services route, I would not charge different rates for residential service and consulting. Either your time is worth a certain amount or it is not, right?

The rule of thumb that I've always been told is that you need to charge enough so that you are making what you want to be making after you have worked 20 billable hours (or, approximately 50% of your full-time capacity), leaving you another 20 hours for maintenance (sales, billing, collections, etc.). That means charging $35 an hour would net you $35,000 per year (20 hours per week x 50 weeks = approx. 1000 hours). I'm guessing you might already make more than that as a database analyst. Plus, you will also need to pay self-employment tax - the part of your social security tax your employer currently pays... so $35,000 in a consulting job isn't the same as $35,000 earned from an employer. Plus you will have to pay any expenses (most importantly, gas) that you incur. These things will need to be taken into consideration when setting your rates so that you do not price yourself out of your dream.


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## WRXMarcus (Mar 20, 2012)

True. I'm thinking $70/hr an hour, since my car doesn't get that great of mileage  Also, i'll just make it clear to my clients that i'll get it back to them hopefully by Friday - if not, then Saturday. I think that as long as I tell them up front, and don't just leave them hanging, i'll be okay picking the PCs up.

Input? 

Yeah, I only get 35k for DB analyst here... *sigh*


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## BosonMichael (Nov 1, 2011)

WRXMarcus said:


> True. I'm thinking $70/hr an hour, since my car doesn't get that great of mileage  Also, i'll just make it clear to my clients that i'll get it back to them hopefully by Friday - if not, then Saturday. I think that as long as I tell them up front, and don't just leave them hanging, i'll be okay picking the PCs up.
> 
> Input?
> 
> Yeah, I only get 35k for DB analyst here... *sigh*


$70/hr, in my opinion, is a completely fair rate to charge. It doesn't make you look desperately cheap, yet it gives you enough money to survive and gives the customer a good bargain. Most IT consulting and service companies charge anywhere between $100 and $250 per hour. 

I would recommend that you don't promise them ANYTHING. Instead, just say that you will get back to them and provide services as soon as possible. Most days, I would guess you will be able to field calls within an hour, and can give them service the same day or the following day. On cases where you absolutely can't, most customers will be understanding as long as you tell them when you CAN come out.

Home clients will be willing to have you come over at night or on weekends... business clients, not so much. You'll probably need to creatively schedule those around your "real job" responsibilities.

The last bit of advice I would give is to NOT give a maximum of x hours. If the job takes 20 hours, it takes 20 hours. By all means, you can certainly negotiate a discounted rate for extended service, or when something occurs that is your fault, you can offer a discount. But I wouldn't have that be your "written standard". Keep it simple: $70/hr, with a one hour minimum. The one-hour minimum will help to mitigate your travel costs - at best, you finish the job quickly, and at worst, you've made $70 for a full hour of work.


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## ncralex (Mar 25, 2012)

WRXMarcus said:


> Hello Gents,
> 
> I've been perusing this forum for a few hours today, whilst gathering information about starting an IT business. I'm looking to make some additional income on the side to supplement my full-time position as a SQL Database Analyst (SysAdmin duties included! Oh, do small business rock).
> 
> ...


Marcus,

Even though I'm new here -- this is my second post -- I can give you a bit of advice on your idea. 

These other posters have given some good morsels of advice. I am running a repair/consulting business, so I'd like to give you a few morsels from what I've learned.

Due to the nature of the job, it is my only source of income. I work mainly with small businesses that cannot afford an IT department. That means I have to have 8 to 5 available for them. It will help immensely if you can devote that time block to your business. I do residential too, but I don't prefer it. I don't like being in people's houses and I don't like carrying cash around town. There's no telling what's behind people's front doors: exotic animals, wild children (common), marijuana (common), pornography, etc. And if you're around something illegal, then it's a judgement call. I'd rather not deal with those issues.

Unless it's a simple install, avoid printers. They are a pain. People expect them to be tough as nails. Most are made to be thrown away.

Explain all your fees up front. This is why I prefer to work with small businesses. They understand why you have to explain your fees. Residential, not so much.

Get a Square account. People like to pay with debit and credit. Square charges you a fee for the transaction, however. It is illegal to tell people they have to pay more for using a credit card. If Visa, MasterCard or especially Amex finds out, you could be in trouble. It IS legal to offer a cash/check discount. That's why sometimes you see at the gas station that gas is $3.99 credit/debit or $3.90 for cash. You'll need an iPhone or Android phone/device for that.

Separate your business and personal accounts. The IRS will give you just so much leeway, but if they find you are co-mingling funds, they'll be after you and they can take the money out of your account without your permission. There's also a benefit here: when you have a problem and you call as a business, you get faster answers and a much higher likelihood of speaking to someone in the USA. :grin: And, you may get a tax write-off if you use your residence as your office.

Get a website and a support ticket system. Document everything. You will be surprised how many times you leave a client and then they "unfix" something then blame you and want a refund. This is common when children are present.

Network as much as you can especially if you are sales-shy (like me). Word of mouth is the most effective way to get your name out there. It's the most reliable but the slowest method. For every network event you attend, take a lot of business cards. The goal is to leave with no more cards remaining. Order at least 500 to 1,000. Gotprint.com does a fantastic job for me.

Get another phone line. A prepaid cell line works nicely. T-Mobile has prepaid 4G and so do other companies. It may not ring a lot right in the beginning, but eventually it will and it is simply irritating when people call your personal line with a computer problem. Let those calls and emails go to your other phone. 

If you can, get a professional mailing address. It gives you a bit more prestige and you may pick up small business customers.

Fix the problem, bill them and move on. Believe it or not, I don't think it's a good idea to ask how things are after the repair is done. You might get a complaint. Business or residential, people don't want you to linger.

Whatever you promise the client, you have to deliver. Under promise, over deliver. Everyone will be happy. Learn to love the future conditional tense: may, might, should, would, could, perhaps, etc.

There's room for all of us out there, but you may have to tweak your service radius. When I first started, I tried to have a radius of 100 miles. One 60 mile trip in a car with a V6 ended that. Now my radius is 15 miles. Anything outside of that gets a fuel fee (that includes family). I wish I owned a Prius right now.

Ironically, you might find yourself always being the second person called. Staples and Best Buy tend to really screw up people's computers, then they come to me. I love it! :thumb: Whenever I hear "Staples", I can see the money coming in. I heard rumors that Best Buy may go out of business and take Geek Squad down with them. As a consumer, I'd miss Best Buy's semi-low prices. As a competitor, I would not miss Geek Squad at all.

Sorry if that was long and slightly off-topic; I have a lot of advice. Now if only I could get these ports unblocked...

Alex


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## ncralex (Mar 25, 2012)

BosonMichael said:


> Plus, you will also need to pay self-employment tax - the part of your social security tax your employer currently pays... so $35,000 in a consulting job isn't the same as $35,000 earned from an employer.


Not necessarily. If he runs his business as a loss, his tax burden is greatly decreased. Insurance, local fees and taxes and property tax (depending on where he is) can all eat into profit and leave his net earnings very small -- small enough where they won't tax him. There's a form for that. (Sounds like a commercial...)


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## BosonMichael (Nov 1, 2011)

ncralex said:


> Not necessarily. If he runs his business as a loss, his tax burden is greatly decreased. Insurance, local fees and taxes and property tax (depending on where he is) can all eat into profit and leave his net earnings very small -- small enough where they won't tax him. There's a form for that. (Sounds like a commercial...)


There's one HUGE problem with that... the part where he makes money rather than loses money. :whistling:


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## ncralex (Mar 25, 2012)

BosonMichael said:


> There's one HUGE problem with that... the part where he makes money rather than loses money. :whistling:


You're not understanding what I'm saying. If he makes $100,000.00 but spends $100,001.00, that's a loss. 

$100,000
-$100,001
========
-$1

That's what the form is for. Other scenarios exist as well. :facepalm:

operating business as a loss - Google Search

I have clients that are... wait for it... tax analysts.

:banghead:


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## BosonMichael (Nov 1, 2011)

ncralex said:


> You're not understanding what I'm saying. If he makes $100,000.00 but spends $100,001.00, that's a loss.
> 
> $100,000
> -$100,001
> ...


You're not understanding what I'm saying. If he makes $100,000 but spends $100,001, then he *has no money for food, shelter, or clothing*. :facepalm:

Sometimes, the answers are so obvious, it is hard to see them. :thumb:


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## ncralex (Mar 25, 2012)

BosonMichael said:


> You're not understanding what I'm saying. If he makes $100,000 but spends $100,001, then he *has no money for food, shelter, or clothing*. :facepalm:
> 
> Sometimes, the answers are so obvious, it is hard to see them. :thumb:


*He's working TWO JOBS:* his regular one plus his repair business. That's how you do it. 

His regular one pays $35,000 per year. He puts that on his taxes.

His second one pays him $100,000 for the year. But he spends more than that on it, so he can either leave his EI as $35,000 or *SUBTRACT* the net loss of his business from his EI. It lowers his total tax burden.

If he was only working his comp repair and had more expenses than income, that does not necessarily make him a zero earner. His food, clothing and shelter *may be deductible expenses if they are used for the benefit of his business*. 

In simple English: *he can use his business account to pay for these expenses.* Entertainment, FOOD, travel, CLOTHING (ie uniforms, etc.) can be written off. 

I've done it before with my one income and the IRS had no problems. My tax returns speak for themselves. :facepalm:


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## BosonMichael (Nov 1, 2011)

ncralex said:


> *He's working TWO JOBS:* his regular one plus his repair business. That's how you do it.
> 
> His regular one pays $35,000 per year. He puts that on his taxes.
> 
> ...


If I'm making $135,000, the last thing I'm doing is spending $100,000 to keep from paying taxes on $135,000. :rofl:

Anyway, this is diverging far from the original point of the thread, so I'll just let this rest here.


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## ncralex (Mar 25, 2012)

BosonMichael said:


> If I'm making $135,000, the last thing I'm doing is spending $100,000 to keep from paying taxes on $135,000. :rofl:


You'll never be near the 1% if you don't understand basic business math. It's called expenses and overhead. Something tells me you are not self-employed. :nonono:


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## BosonMichael (Nov 1, 2011)

ncralex said:


> You'll never be near the 1% if you don't understand basic business math. It's called expenses and overhead. Something tells me you are not self-employed. :nonono:


I do understand basic business math. But this forum post is neither the time nor place for discussing it.  Or did you not pick up the subtle hint when I said that I was going to "let it rest here"?


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## artemus_tsf (Jan 27, 2011)

So, back to the prospect of startup repair services, I'm curious about the one post that subscribed to 'fix it and move on". I understand no answer is absolute but does anyone share my view that, especially if your service radius is relatively small, you'd find value in building a standing relationship with the SMBs you're servicing? Scheduling techs and service to the client would be better managed, you'd enjoy repeat business, your client would be able to concentrate on their core business and leave all IT related sppt/ issues to you, your sppt business could grow as other SMBs became aware of you're consistent and reliable service... I am aware that in most analysis, IT is considered overhead but applied with imagination, it can be a component that supports faster growth and profitability for the core business. This approach requires monitoring, tech use training, established procedures and meeting realistic business miIestones. Granted, I've been told I'm overly optimistic but I'd like to see your responses. 
Signed: naive-tech-guy-building-lasting-relatuionships


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## artemus_tsf (Jan 27, 2011)

Sorry for the dbl post, getting used to the iOS app...


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## BosonMichael (Nov 1, 2011)

artemus_tsf said:


> So, back to the prospect of startup repair services, I'm curious about the one post that subscribed to 'fix it and move on". I understand no answer is absolute but does anyone share my view that, especially if your service radius is relatively small, you'd find value in building a standing relationship with the SMBs you're servicing? Scheduling techs and service to the client would be better managed, you'd enjoy repeat business, your client would be able to concentrate on their core business and leave all IT related sppt/ issues to you, your sppt business could grow as other SMBs became aware of you're consistent and reliable service... I am aware that in most analysis, IT is considered overhead but applied with imagination, it can be a component that supports faster growth and profitability for the core business. This approach requires monitoring, tech use training, established procedures and meeting realistic business miIestones. Granted, I've been told I'm overly optimistic but I'd like to see your responses.
> Signed: naive-tech-guy-building-lasting-relatuionships


Yep, I follow this customer-relationship-building approach as well. In my opinion, if you're good, it works.


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## Lockheart (Nov 18, 2011)

I found some interesting articles on PCWorld.com about starting a new business on a small budget. As they say, failing to plan is planning for failure.

How to Start a New Business on the Cheap, Part 1 | PCWorld Business Center

How to Start a New Business on the Cheap, Part 2 | PCWorld Business Center


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## vruyes (Mar 30, 2012)

I'm anewbie here. It's a good Idea. I too have the same idea.


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## WRXMarcus (Mar 20, 2012)

Awesome - I've created some business cards. I live in a very large apartment complex, so I was thinking about trying to design some basic fliers and spread them about. I'll have to do everything after 4:00PM during the week, and some on weekends if necessary.

Any suggested sites that have business plans or models that I should follow?


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## BosonMichael (Nov 1, 2011)

WRXMarcus said:


> Awesome - I've created some business cards. I live in a very large apartment complex, so I was thinking about trying to design some basic fliers and spread them about. I'll have to do everything after 4:00PM during the week, and some on weekends if necessary.
> 
> Any suggested sites that have business plans or models that I should follow?


Make sure you get permission from the complex manager before distributing the flyers. Many complexes have strict rules against soliciting, and that includes solicitations from tenants. You don't want to find yourself with an unexpected rent increase... or worse, legal trouble.


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## WRXMarcus (Mar 20, 2012)

True. I've also heard that you can pose it as a value added service, and offer a 10% off for complex residents. What do you think about that?


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## BosonMichael (Nov 1, 2011)

WRXMarcus said:


> True. I've also heard that you can pose it as a value added service, and offer a 10% off for complex residents. What do you think about that?


Doesn't matter what I think about it... it matters what the manager thinks about it. 

As long as you are profitable by offering 10% off, it's certainly worth doing!


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## jenae (Jun 17, 2008)

Hi, develop a business plan have someone who understands accountancy have a look over it , remember you are selling your knowledge and expertise ( a large part of which comes from experience).

Initially, you are attempting to work a full time job and do this on evenings and weekends (the only time you have available). So you need to take this into account, you may have all the knowledge and ability in the world, if however, no one knows this, then you are going no where.

The most important thing is to learn how to market yourself and once you have clients how to keep them.

For example rather then view your limited availability as a minus emphasize the fact you are available evenings and weekends, when the disruption to the business operation will be at a minimum OR when visiting private residences ALL parties to the computer are available so they might benefit from your expertise.

Look at producing simple user guides with screen shots on how to do things ( even AV ), and offer regular maintenance contracts, your ability and knowledge are the key, so bone up, places like this are good for solutions, offer a security suite. For many years (on our client machines) the right side of the desktop contained only security related shortcuts and each one came with detailed instructions on how and why to use.. at one stage all state schools used these manuals to educate students, we wrote them for commercial reasons, soon had an educational effect, business went through the roof.

Be honest, no BS, if you don't know, find out "do no harm" and maintain integrity whilst others may not, it pays in the long run.

Develop a good working relationship with your suppliers, as soon, you will be supplying systems to your clients, even though you had not intended to, if they trust you they will want you to provide everything.

Unless you try you will never know, I started with a small business and retired with more money then I could possibly spend. Good Luck.

EDIT:- there are some good points in the post from 1800Geek however you would be far better served by doing your own thing, I do not recommend you throw your lot in with someone else, have confidence in your own ability, otherwise you may as well stay where you are.


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