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Thread: Starting a Computer Business?

  1. #11
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    Does anyone know where I can get a market/industry standard or typical rates for computer services.

    A friend of mine wants to start a computer business and needs to have an idea as to what to charge for services.

    A list of the services he want to offer are:
    Digital Photography (developing/taking/restoration/corrections etc.)
    Stationary Creation (Flyers, posters, business cards, event programmes etc.)
    Graphic Design (Logos, T-shirt graphics etc.)
    Website Design
    Custom Programming and Application Development (Small Database Systems, Accounting Sheets:Excel etc.)
    Networking
    Point of Sales System Installs (includes training etc.)
    Computer Repair (Hardware, software, antivirus/spyware)
    And of course Training (Basic Internet Skills, Networking


    Customers will be homes users and very small businesses.


    I know the cost and prices vary in different areas and special regards to quality but I want to get a general idea of what people charge for these services in their areas.
    Business will be based in Florida and The Bahamas.

    Btw, |3lack|ce why did you get out of the business and what do you do now? If you don't mind me asking.

  2. #12
    Super Moderator: GMT Zone nihil's Avatar
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    Well, there is no answer really: I would suggest:

    1. Get copies of local newspapers and check prices.
    2. Call visit a few local shops and get pricelists from the competition.
    3. Decide if you are going to work onsite or from a base. Will this be home or rented?
    4. Employing staff?.............how much will they cost?
    5. Taxation?
    6. Professional services?
    7. Overheads (insurance, electricity advertising etc............)
    8. How much does he want to pay himself?

    Build a business plan............that will tell you what you have to take. Work out how many customers you expect and divide that into the first figure, and that is how much you will have to charge each one, on average..............will your customer volume and business mix handle that?

    You then have to find the finance to start the business...............

    And remember you will probably be competing with part-timers with no overheads
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  3. #13
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    Originally posted here by nihil
    Well, there is no answer really: I would suggest:

    1. Get copies of local newspapers and check prices.
    2. Call visit a few local shops and get pricelists from the competition.
    3. Decide if you are going to work onsite or from a base. Will this be home or rented?
    4. Employing staff?.............how much will they cost?
    5. Taxation?
    6. Professional services?
    7. Overheads (insurance, electricity advertising etc............)
    8. How much does he want to pay himself?

    Build a business plan............that will tell you what you have to take. Work out how many customers you expect and divide that into the first figure, and that is how much you will have to charge each one, on average..............will your customer volume and business mix handle that?

    You then have to find the finance to start the business...............

    And remember you will probably be competing with part-timers with no overheads
    Well there should be some standards with regards to pricing a range for e.g.
    Antivirus and spyware=50-75$
    Data recovery= 60-100$
    Web Design= $500-1000$ for general construction and 30$ an hour for enhancements (Flash, graphics etc.)

    Many of the services intended to offer aren't available/offered in the market in the Bahamas (an Island there) like the data recovery and digital photography and networking services.

    As far as financing and building both are secured. the building is personally owned and the finance has a limit of about 40,000$ (initial capital)

    The business plan is being created this is why he was inquiring about services cost and prices.

    Well, thank you for the input given I am sure he will be very grateful.

  4. #14
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    My suggestion - a not-so-quick formula that will work.

    Take the cost of producing the item, including paying yourself and paying your electric bill for that *one item's* manufacture. Multiply that cost by 100. In retail this is called a "100 percent markup" and is normal. For services, price near your competition. Since you're just starting out, you'll want to charge a bit less than they do so customers will have incentive to try you.

    good luck and hope that helps!
    Even a broken watch is correct twice a day.

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  5. #15
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    Originally posted here by |3lack|ce
    My suggestion - a not-so-quick formula that will work.

    Take the cost of producing the item, including paying yourself and paying your electric bill for that *one item's* manufacture. Multiply that cost by 100. In retail this is called a "100 percent markup" and is normal. For services, price near your competition. Since you're just starting out, you'll want to charge a bit less than they do so customers will have incentive to try you.

    good luck and hope that helps!

    Thank you very much sir! Just to make sure i understand u clearly: You're saying that if producing/printing a photo

    1. Paper cost .50 per sheet
    2. Ink = .50
    3. Electricity= .50

    Equals= 1.5$

    Then the customer will be charged 1.5$ * 100 =150$??? Or do u mean twice the cost of producing the item in this case 1.5$ * 2=3.00$?

    And u never answered my question in the beginning...Why did leave the business and what business are u in now if u dont mind me asking.

    Thanks again.

  6. #16
    They call me the Hunted foxyloxley's Avatar
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    I'd HOPE he meant add 100% or DOUBLE it ...........

    if he DID mean x by 100 :

    I think we can work out WHY he got out of the business
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  7. #17
    ********** |ceWriterguy
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    100 percent markup... double it. If it costs $1.50 to make, charge $3 for it, or higher if the market will bear the price. Sorry, my error on the previous post...
    Even a broken watch is correct twice a day.

    Which coder said that nobody could outcode Microsoft in their own OS? Write a bit and make a fortune!

  8. #18
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    |3lack|ce,

    Rereading this post, I have a question regarding how you dealt with a particular issue. You said:
    Tell them you'll stand behind the work you did, but if something goes wrong in a different area, you'll have to charge them for it.
    In my experience, the difficulty here lies in explaining exactly what is and what is not a "different area", since you are essentialy doing the work because your customer doesn't know the difference. The same problem is faced by auto mechanics who, after solving one problem with your car and finishing a job order, bring to light a problem that wasn't evident before.

    For example, my car has just failed emissions testing (mandatory in my neck of the woods). When it failed, I was told that the oxygen sensor needed to be replaced because of high carbon monoxide emissions, so I replaced it. When the car was retested, it failed because of nitrogen oxide emissions, likely caused by a faulty EGR valve, which was not evident until the oxygen sensor was replaced. Fortunately, I have had training as an auto mechanic and somewhat understand the principles behind why my car failed the second time. Now, if I were a total automotive "noob" who couldn't tell the tailpipe from the steering wheel, I might infer that I had already paid the shop to repair the problem, which they failed at, and demand that they fix the problem as they had already claimed they would. (was a little technical here deliberately to make the point).

    All disclaimers and warnings aside, it would be my understanding that they are fixing the emissions system, which I had already paid for. Therefore, any further problems must be their fault. Explaining this to a person who did not understand and refused to pay for additional repairs could become quite a headache, and possibly a legal battle as well.

    To apply the problem to a computer, let's assume I install antivirus for you and clean your system of viruses. A month later, a virus appears on the system. Since I have cleaned the system AND installed the AV, you could easily infer that my work was therefore unacceptable. This is a rather simple scenario, but I'm sure you get the point I'm trying to make.

    How then can one extricate him/herself from this situation, assuming a customer who cannot and will not understand the principles, with the lowest chance of losing that customer?
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  9. #19
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    Hey Hey,

    Striek...

    You've posed an interesting and quite valid question...

    This what fine print is for (from a legal perspective)... and sales skills (from a keeping the client perspective)..

    You should have a very clear set of policies defined... If you are using a full sheet of paper to do reciepts, then your policy should fit on that sheet.. Systems are warrantied for X number of days/months; Installed Components are warrantied for X number of days/months; Sold Components can be returned for a full refund for 7 days and for store credit for 30 days, however a lot of places have a clause that says they won't refund on an internal component if you attempt to install it yourself (this is big with RAM and Processors).

    One of the key points when I was running my company was that yes I stood by my work but I had limits. You're going to have key tasks...

    Install software
    Clean malware/viruses
    Reformat/OS Install

    Those will be the primary software tasks people will bring in their PC for..

    Have a policy on each one, attach it to the reciept/contract they get when they drop their PC off and make sure they sign... explain and answer any questions they may have.

    Install Software: This covers the installation of the software and that it will be fully functional when you return home. Tech support is provided by the software manufacturer and our store is not responsible for any lost or damaged data due to user error.

    Cleaning: This covers problems evident with the machine at this point in time, due to the nature of viruses and other nasty buggers we cannot warranty the work once the user starts using it again. However, in order to keep you, our customer, happy, we will provide 1 (ONE) additional cleaning within 30 days of the original if you are unhappy with the operation of your computer.

    OS Reinstall: The cost of the reinstall is labour only, the user must provide their own media or purchase the media from us. The OS manufacturer is responsible for tech support for any problems that may arise, and additional support from our company will incur additional costs. We will verify that all device drivers are installed and operational and that all updates are installed on the system as of the day of work completiton, beyond this point it is the users responsibility to maintain their system.

    If a policy similar to this is explained to the user before hand, and you have them sign off (always have them sign if you're doing any work... and be sure to include a clause that you are not responsible for any lost, damanged or modified data, software or system files) you'll have nothing to worry about... especially little things like the 1 additional cleaning in 30 days... You'll find they'll most likely bring it back to you... It doesn't take much of your time to clean it... start a scan and go do something else, another scan do something else, update and done.. They think they're getting a 2 for 1 deal and they've now been to you twice... you've got them hooked and they'll keep coming back.

    Peace,
    HT
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  10. #20
    ********** |ceWriterguy
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    I actually learned the trick of setting a 'verbal contract' from my phone tech support days, then refined it a bit to fit my onsite service:

    Before any work is done, discuss with the client precisely what is to be done to their machine.

    If the job is taking a bit of time to do, keep the client updated on what you're doing and what you've accomplished. ("Things are going great, Mrs. XYZ, I've replaced the video card like we discussed, and now I'm doing the computer cleanup as you requested.")

    After the job, sit down with the client and go over exactly what you did. This is best done with your invoice in hand so you can go over that with them as well, line by line.

    Since the client now knows exactly what you did to which, they're aware of exactly what is covered by your 'stand by my work' guarantee. If they call you out again on it, and it's something else, you can bill accordingly.

    [edit]HT was spot-on with his 'policy system' as well. In fact, I like that better than my own, but my business was a lot more informal since I'm in a rural area and my clients were my neighbors as well.[/edit]

    [moredit]As for the AV scenario you gave - it's simple to handle really. At the time of install you tell the client that you stand by your work, not the work of the software manufacturers, and that no matter the levels of protection they get, they still might get a virus. Take a moment or two to teach them good computer hygeine during this as well to help them protect themselves further, or better yet, print out a sheet on the order of 'ten commandments for healthy computing' for them... make it light and fun, and easy to understand.

    Hope all that helped![/moredit]
    Even a broken watch is correct twice a day.

    Which coder said that nobody could outcode Microsoft in their own OS? Write a bit and make a fortune!

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