Advice on starting a little side business

[KALSTER]

Hey guys I would like your kind and boundlessly knowledgeable help!

I have been thinking of starting a little side business where I'll be building up systems for customers as well as some basic hardware and software troubleshooting.

What I'd like to find out about is what I'll need to start it and what kind of jobs I could expect. I'll number a few points to be raised:

1)I don't expect too much business, so I don't think I'll need a premises for it. As it is a side business I wouldn't care much if it didn't make any money in a particular month.
2)What do I need to do to be able to buy stock at dealer prices? Judging from the PC shops around here, I would be able to make profit even if I bought most of my stock from e-tailers, but I would very much prefer to gain the extra margin by buying from dealer suppliers. Who are good dealers by the way? I know about Rectron and Axis, who else?
3)Would I need to register as a CC? Is that expensive?

I think I have grown pretty good at suggesting systems based on the person's requirements and budget (if you don't think so, please feel free to put me in my place. No hard feelings! ). I really want to provide a good service and will rely quite a bit on word of mouth for new business. I will place weekly ads in the local newspaper, maybe a few pamphlets as well, and I think I might have a few contacts that would be willing to recommend me to their friends.
What I will offer in my ads are the sourcing of cheap hardware and their installation (I will beat any quote and if I can source from the dealers, then that won't be a problem), the building of systems from the ground up, minor hardware and software fault identifying and fixing (with payment only after it is fixed and with a 30 day warrantee on the problem that was fixed), I will install internet equipment and do setup at much cheaper than Telkom prices, etc (please suggest anything more).

I have done installations before, I have a fairly up to date knowledge of current technology (well as much as is needed to build systems), I have a fairly good understanding (I think) of basic fault identifying and fixing like basic hard drive data recovery, Windows and other software problems etc, I have the wealth of information available on the internet.

So, am I overestimating my abilities? Am I underestimating the demands of the market?

Any advice would be very much appreciated!

[Koko_Lion]

Firstly is building and selling computers going to be your main focus? Reason I say is it might get difficult to compete with the big box stores like Makro, Game etc. Especially with their specials. You need to also protect yourself if a supplied part goes faulty while under warrenty. So you need to make sure you made enough money to transport the item back and forth.

Most suppliers you will need to be a registered CC, which I think is about R100 a year or something. Not sure what the registration costs are. For about R800 or so you can get a local accountant who will handle all that for you. Again costs might be different for you. Try maybe find a friend who is already a CC and registered and get supplies on his account. Obviously give him something back as a thank you gesture.

I would also maybe have a chat with your current employer about your idea. Maybe also read your employment contract carefully as well. You don't want to start something nasty that could bring down your rep.

Working from home should be fine, as long as your working in a clean environment, work benches the right tools etc.

To improve your chances of getting a sale, try do something extra for the client. Free delivery and introduction to the PC, offer to install their apps for them. Help them get on Skype or whatever. State you will do these things in the quote. They will be impressed, but also protect yourself financially, add a bit extra to the quote. This is how you win a sale over big box stores.

Try leave a good few business cards in public places like pubs, restaurants and gyms. Word of month and social networking are still the most powerful means to get yourself known. So interact a lot with people.

Very brave and exciting decision, hope it all works out for you

[KALSTER]

Thanks Koko_Lion!

Firstly is building and selling computers going to be your main focus? Reason I say is it might get difficult to compete with the big box stores like Makro, Game etc. Especially with their specials. You need to also protect yourself if a supplied part goes faulty while under warrenty. So you need to make sure you made enough money to transport the item back and forth.

It will be my main focus, yes. Here in the hart of the country I only really need to compete with the local PC shops and Game. From what I have seen from Game, I don't think I'll have much trouble beating their prices. Their systems always come with an internet contract as part of the deal. Without it the systems are like R1500 more. The local PC shops might provide a bit more of a challenge, but judging from how online prices compare to theirs, I should be fine.

Most suppliers you will need to be a registered CC, which I think is about R100 a year or something.......

I think I'll have to do that then. I have a bit of extra money at the moment, so I have that covered.

I would also maybe have a chat with your current employer about your idea.

I already spoke to him. He has no problems with it. In fact, he might give me a bit of business as well.

Working from home should be fine, as long as your working in a clean environment, work benches the right tools etc.

I have a nice work bench in the kitchen with good lighting. As far as tools go, I'll maybe get one of those kits? Don't think I'll need much more for the work I'll be doing?

To improve your chances of getting a sale, try do something extra for the client. Free delivery and introduction to the PC, offer to install their apps for them. Help them get on Skype or whatever. State you will do these things in the quote. They will be impressed, but also protect yourself financially, add a bit extra to the quote. This is how you win a sale over big box stores.

Good ideas there, thanks! I am also in negotiations with my boss so I can do a few IT courses through the company, just to fill in the gaps (big or small) and to add a bit of credibility to my name.

Very brave and exciting decision, hope it all works out for you

Thanks a lot for your encouragement! I think the beauty of this endeavour of mine is that I don't need a big monetary inset to get it going and also don't stand to lose much if it doesn't work. All it has is potential!

[Koko_Lion]

I started my business with just R9.00 in my pocket

I treat every one of clients like gold. From a R50 job to R50 000 job, they all get equal support from me. I jump through hoops for my clients, although they can really frustrate me sometimes.

[KALSTER]

I treat every one of clients like gold. From a R50 job to R50 000 job, they all get equal support from me. I jump through hoops for my clients, although they can really frustrate me sometimes.

I can relate. Learning how to swallow your pride instead of punching a client in the face takes experience! Also, that R50 customer knows where to come for further business when you give great service. My motto in my current environment is to give good service and the money will take care of itself.

[KALSTER]

I found a company that can order from dealers in your stead without you having to sign up for any of them and without you needing to submit CC documents or anything. That includes Rectron, Axiz, Mecer, etc, etc. Very cool indeed. You only pay a small monthly fee and they offer cheap delivery rates. AND I can trade as a sole proprietor, which means no need to register the business or anything. I am set!

[Koko_Lion]

Yup, I have heard of companies that do that. Just remember that you need to pay them a monthly fee, and I'm not sure about the fine print in their contracts. Try keep your expenses at an absolute minimum when starting up.

Maybe try ally with a another I.T shop who can sell you parts at a very big discount. I know that sounds weird, but I have good relations with all the other I.T shops in my area who support me just as much back.

[KALSTER]

Hey Koko, I have registered with those guys. At present my monthly overheads are R171 pm, which is nothing. I struck a deal with my employer where he gets 15% of the profits in return for me being able to basically use my office and time during working hours to deal with enquiries and orders. Assembly and ordering will be done from home. Pretty good deal I think! Now let’s see how things go. My trading name is, rather predictably, Kalster Computers. Thanks for the help man!

[Koko_Lion]

Thats a very cool boss you are working for. I guess the 15% is fair. The bigger you get, you will start to find that your full time job is becoming a distraction, that's one sure sign that you are ready for self employment

Be ready for a few frustrating months. Stick with it, it only gets better.

Good luck