Do you run your own computer business?

Discussion in 'Green Room' started by chaos945, Dec 5, 2009.

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  1. Suck it up for now.

    20.0%
  2. F%UCK a hat you unreasonable bastard!

    80.0%
  1. chaos945

    chaos945 Moderator

    Messages:
    934
    I have a problem I'd like to get some feedback on.

    I live in a small town surrounded by small towns. Our population is 3000 and the surrounding small towns are all in the 10-20000 range. The nearest neighbor is 80km away. This means that the availability of advertising space is pretty limited. We have one tiny mall with 5 or 6 stores in it. Including one electronics store.

    When I first moved here I worked for that electronics store as their computer tech. They weren't paying me enough so I found other work, but continued to accept customers needing their computers repaired from this electronics store for some extra cash.

    For the first few months I got all the cash, then the owner of the store decided he wanted 50%. I figured since I basically just had to sit back and wait for customers to come from this store without much effort from me 50% was very high, but acceptable. Afterall I still have my own customers coming in from other sources of advertising around town. My own customers of course I received all the profit.

    Lately I have been expanding my advertising budget. I had a 3'x4x sign made up with by business logo and number on it. I contacted the owner of the mall and we agreed that $50 a month to display the sign was reasonable. However, because of the nature of business of the electronics store in the mall, the landlord wanted to get his feedback before agreeing to put my sign up.

    Now here is where it I am in indecicion. Basically the owner of the electronics store has said he is not comfortable with the sign going up. Therefore the owner of the mall won't be letting it go up...

    Because the electronics store is high profile and has been around a long time, lots of people go there to ask where to get their computers fixed. If I don't accept repairs from there anymore it creates an opportunity for customers to come directly to me. Business I get from this electronics store is about 70% of my total repairs. That is huge even at a 50% loss. This is why my advertising budget has been expanded. Based on research the reason most people go somewhere else is because they don't know about me.

    I think ethically not letting me put my sign up is wrong. But understandable, I am a large easy profit gain for the owner of the electronics store, he gets free cash for doing nothing. The mall has said because he is a tennant they are unable to accomodate competitive business entering the mall.

    My hard decision is, do I:

    1.) Find another place to put my sign and continue accepting work from the owner of the electronics store. Keep some profit but lose customers and 50% of all repairs.

    2.) Find another place to put my sign and tell the owner of the electronics store to go FU%K his hat. Lose 70% of my current sales, but possibly allow customers to come directl to me.
     
  2. Dark Atheist

    Dark Atheist Moderator Political User Folding Team

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    Location:
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    tell the electronic store owner to kiss your ass, say you wont repair any pcs for him, keep the 50% per fixed computer and have signs put up around town.

    "The mall has said because he is a tennant they are unable to accomodate competitive business entering the mall."

    sue them for anti competitive practises
     
  3. Aprox

    Aprox Moderator Political User

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    Location:
    California, USA
    I'd speak to the business owner and try to negotiate some new terms. Tell him you would like the split to be 70 / 30 or 75 / 25 since you are in fact doing all the work. In return you wont undermine his business by competing directly (this assumes cutting ties) and perhaps you can also send other business his way through software/hardware purchases while doing your repair work.

    If the business owner is smart they will see the value giving you more rope, since you are basically free income to him. If you threaten to go your own way and directly compete for business he might think twice.
     
  4. chaos945

    chaos945 Moderator

    Messages:
    934
    Basically as soon as I quit working there I went and got my own license and advertising for my own business. He only gets 50% if the customer contacts his store first, otherwise they are my customer.

    It is a difficult decision for sure. If I can't advertise effectively and go my own way I will lose business. Thats why I wanted the sign up in the mall so bad. With the sign up where I want it I effectively cut him out of the deal.

    I think I'm going to phone the mall owner again and try to convinse him to let me put my sign up anyways. Also I will see if the mall is actually liable to stop competitive business from entering.
     
  5. ElementalDragon

    ElementalDragon The One and Only

    Messages:
    3,159
    Location:
    Lehighton, PA
    Several times i thought about starting my own business for custom PC's and such...... but living in eastern PA.... there isn't a whole lot of people who are into that whole thing as far as i'm aware. Pretty sure most people here are more interested in the store-bought "Gaming" PC's. I was wandering through Best Buy one day, and noticed someone buying one of those quite nice, yet heavily overpriced, Gateway FX systems. Very pretty system... but could have been built for much less. Even worse i think he was using it for an office PC or something.
     
  6. chaos945

    chaos945 Moderator

    Messages:
    934
    Yeah retail is a pain thats why I decided to have a service based business. I will do custom built pc's for people if they ask, but the margins are so low I don't like doing it.

    The areas I deal with primarily are:

    1) Residential Customers
    - 25-30 age group too busy with work/school and want to play their games/email
    - 40-50 age group kids f'ed it up < best repeat business
    - 60+ age group they f'ed it up but are interested in learning < best paying business

    2) Commercial Customers
    - small businesses primarily as large businesses tend to pay for remote support from large tech firms who gouge the crap out of the business
    - there is potential for yearly paying clients, but most of mine still tend to be hourly
    - home business owners who need their computers running again ASAP
     
  7. American Zombie

    American Zombie Moderator Staff Member Political User

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    Location:
    Seattle
    As far as I am concerned it was not very smart to give him anything in the first place.

    Someone who sends you business instead of fixing the product themselves just can not do the repair in the first place so that is why it was sent to you.

    This owner got it over on you good as he is getting money for nothing. :pirate:

    I wonder why you are messing with a sign when a nice website will most likely get more business since customer testimonials on a site are good for future business. Print out business cards with your URL then pass them out and you would be surprised how much business you get.
     
  8. chaos945

    chaos945 Moderator

    Messages:
    934
    Certainly business cards and a website are a part of my advertising campaign. (www.crbcomputers.com)

    Everything is themed to the website. I hand out fridge magnet business card too, people love those. I have hats and mouse pads too, but those are for special events mostly. I was thinking of getting a large banner made up too to put outdoors somewhere.

    The reason for the sign is although I can hand out business cards to absolutely everyone, people still arent' getting the message. Word of mouth in my experience and according to 'experts' is the best way to create new business and it has been sucessfull. I think my large sign will further send the message.

    If this mall location falls through I'm thinking of finding a heavy traffic area and put it up on the road. I originally intended the sign for this purpose but I suspect the sign will only last there for a couple of weeks at best before it is removed by the municipal... Long enough hopefully to gather some new clients. But I'm going to be looking for a new permanent location if I can find one.
     
  9. American Zombie

    American Zombie Moderator Staff Member Political User

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    Location:
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    If you would have never started giving them money then you may have already had their spot in the mall as they may have went out of business.
    Good luck to you.
     
  10. Aprox

    Aprox Moderator Political User

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    Location:
    California, USA
    I still think being aggressive and renegotiating new terms would be a wise decision.
     
  11. roirraW "edor" ehT

    roirraW "edor" ehT Builder/Installer

    Messages:
    529
    I think a renegotiation would be the smart thing to do, too. Do you already have a written contract?
     
  12. falconguard

    falconguard Carbon based lifeform Political User Folding Team

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    SoCal
    Renegotiate, The sign thing might be a moot point, as there is usually a clause that won't let two stores get competing signs up. dependent on the older business.
     
  13. X-Istence

    X-Istence * Political User

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    Location:
    USA
    First off, make sure your website CRB Computers is up, since I can't reach it at all.

    Second, renegotiate, get better terms for yourself. 50% is not something I would have agreed to EVER. Especially when it is a 100% of my time to do the actual work I am getting paid for.

    Third, word of mouth and business cards work better in the long run than a single sign that is put up. Since you said it is a small local community see if you can take out some ad time on TV.
     
  14. Dark Atheist

    Dark Atheist Moderator Political User Folding Team

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    You still having problems seeing the site X as its up here (just checked)
     
  15. chaos945

    chaos945 Moderator

    Messages:
    934
    Well to give an update. The Electronics store owner has said no thus no sign is going up in the mall due to the competing clause. However I have contacted two other specialty electronics stores who own their own buildings and one has replied and agreeed to put the sign up facing the street in a prime location for nothing! I am waiting on the other store still and perhaps I'll get that spot too. Going to have to order another big sign!

    I only have a verbal contract with the electronics store owner and will be attempting to renegotiate down to 25/75. If he does not agree I am increasing my rate for his customers and laging repair by a week! :)

    Trouble with TV out here is everybody is on satellite. It'd be hard to target my region I think. I am going to look into radio. As we have owr own station here and since broadcast is limited pretty much everyone listens to the same 2 stations.

    Site is up and running for me.
     
  16. roirraW "edor" ehT

    roirraW "edor" ehT Builder/Installer

    Messages:
    529
    Good to hear. I think personally that you can write your own ticket within reason since I assume it would not be to the store's benefit to send customers to someone other than you, and since they can't do the repair work themselves anyway.

    IMHO, I would think 10% would be something "standard" for a referral fee, and 15% would be plenty. Increasing the rate for customers through the store, as long as it's not too ridiculous, would be okay but perhaps intentional lag wouldn't be best but use your best judgment.

    Continued luck to you.
     
  17. X-Istence

    X-Istence * Political User

    Messages:
    6,498
    Location:
    USA
    Okay, I can get to your website now.

    As for delaying customer machines by even a week or so is generally bad for business. Just renegotiate, or stick with the old terms and start talking to customers and have them come directly to you for business, explain how without a middle man you can get the work done faster and you don't have to revenue share thereby having them help you, give them a discount to help provide incentive.
     
  18. batteryready

    batteryready OSNN Junior Addict

    Messages:
    15
    Location:
    China
    Oh man,electronic store owner just like a Vampire,Like Dard said let the electronic store owner kiss your ass:eek:, i am getting mad about this things.
     
  19. Bootsy

    Bootsy Huh?

    Messages:
    1,124
    Location:
    Miami, Fl
    Hey Chaos I feel your pain. I have a 9-5 as an IT director but I do consulting on the off-hours as well. Mainly my business (did consulting solely for 2 years before this) came from word-of-mouth recommendations and basically networking around the community. Speak with any office managers, building owners, even maybe take a page out on the good ol' newspaper.

    As far as the electronics store owner, sit down and talk to him and tell him exactly your dilemma... he can either agree to work with you, or he can be dumb and create unneeded competition... bet you he goes for the 75/25... If not you can also pay kids to distribute flyers in front of his store for your business!
     
  20. LeeJend

    LeeJend Moderator

    Messages:
    5,291
    Location:
    Fort Worth, TX
    Rural area - think radio, not TV. Cheaper ad development and ad pricing and better target marketing.

    You're after the local small businesses for higher margins so if they are agri business get ad's during the farm reports, etc.

    PS Ditto, screw the Mall SOB's. No extortion for referals!

    You are taking the entire liability for repairs, lawsuits, etc on the repairs you do. If the mall guy was taking responsibility and guaranteeing the work he could justify a percentage, but taking 50% for a referal is extortion, not business.

    A thought... :) Pay some of the local mall rats a few bucks to hand out brochures to everyone they see going into the electronics shop. There may or may not be city ordinances forbidding handing out pamphlets at the mall but in small town USA I doubt it. Be advised, as soon as the Mall owner gets a complaint from the electroncis store owner they will go to city council and possibly the cops to try and stop you.

    Business expansion opportunities - training classes.
    Application usage
    PC 101 care and feeding
    Advanced concepts - data backup and recovery, off site storage, etc.
    My favorite - Smart Electronics Shopping - How to cost effectively buy electronics. Design a free intro class around how to web shop for electronics, how to negotiate lower prices from the local brick and mortar (SOB). This becomes less frightening to your rural customers since an experienced tech is available in the area. Contact the local YMCA, Seniors groups, youth centers, hell even the 4H clubs might jump at having you in. SUPER SIZE your word of mouth! Try the local schools.

    In short your local electronics guy has p'd me off. I'm mad and you're not going to take it any more.

    References: The last time a business pissed me off I bided my time until an opportunity presented itself. I managed to cost them $45 million in lost sales by developing an alterante source for their products. :) Make this SOB hurt for messing with an OSNN member!

    PPS Bootsy - Negotiation 101. Only negotiate from a position of strength. When you have established a viable threat to the store owners business model you can negotiate a reasonable deal. Suggestion - He pays you 10% for each person he sends to you for you to give them prefered treatment (faster service, instore pick up, etc.) His alternative is business failure if he looses his marginal customers to the internet as a result of your "consumer education classes".

    EDIT Ok, I had a brain food snack and came up with another public service idea for free advertising. "Reduce your electric bill through smart product purchasing." Put together a pamphlet with your company name / web site on it and and try and talk the local electric co-op or utility into including it in their monthly mailing. At least get them to link to you off their web site. Talk about buying laptops that use 1/3 the electricity of a desktop, compact flourescent bulbs, point out that flat screens use twice the electricity of the older tube type TV's. Google for other ideas to include like tips on protecting your equipment during electrical storms (modern equipment is always on, quality surge suppressors, unplug, or use a switched power strip when big storms are coming in).
     
    Last edited: Dec 21, 2009