Starting a business - and funding it!

jatos

Hi

I want to start a business I have decided, providing IT services such as computer repair and maintenance of computer systems and networks, as this is something I am quite good at.

Only problem is, funding it.

Firstly, I need to take a driving crash course, as I will need to drive to run this business.

Then I need to buy some basics such as (kind of obviously given the above sentence) a car, and I will need to buy some marketing material. Physical tools required will be quite limited, basically some screw drivers. I will also need to fund liability insurance, which is going to be hard for me as I previously been declined an income protection plan on the basis of been diagnosed with Aspergus Syndrome (Autism spectrum disorder).

I will need some cash aside to cover myself when things go wrong, which is pretty much a given if I do enough of certain kinds of work, for example, if I was to repair a lot of laptops, as you only learn through experience what to expect when repairing these! Fortunately, I already have some of this experience...

Anyone got any ideas where to go with this?

Thanks,
Jamie

PasturesNew

You could: Get a part-time job to fund the driving lessons .... while building up your contacts/local advertising to do this stuff evenings/weekends (when people are available and want help) .....

You can work locally in the first instance - and check out alternatives to owning a car, such as a moped and trailer. I bet even a taxi and a good luggage trolley of tools would get you about cheaper/easier than owning a car in the first instance.

I'd then also keep an eye out for a local business that wasn't using all its space and try to cut a deal for renting their corner space. e.g. a small phone shop, or an office stationery shop.... something that's kind-of-related, but not.

Annisele

Are you certain there's a market for the services you'd provide? Unfortunately lots of people are fairly good at maintaining computers, so however good you are there isn't always much profit in it.

Can you find some ways to test the market before you start putting serious money into the business? It sounds like all you really need to get started is some screwdrivers (which I'd guess you already have) - can you find any work local to you?

Insuring a car for business use for a new driver won't be cheap, so if you could stay local (at least to start with) that would make your life much easier.

jatos

Does seem to be actually. The one thing I found is people don't just want their (particularly desktop) computers repaired, in fact they often want other services as well.

I also found there are a lot of people who can do basic repairs, but aren't so good at anything out of the ordinary. Its like someone I have known for a while got a new GF, quickly brought his GFs sons laptop to repair. Needed a new screen - nought hard if you know what your doing (which I certainly did), so I repaired that for him.

I also had people from work previously come to me with phones (such BlackBerrys with dodgy buttons) and the like they wanted repairing. Got all of those working. Did discover a few potential problems in the process though.

I know a lot of IT guys who actually know what they are doing - that is say can do more than slot a few parts into a computer and install a few off the shelf tools (e.g. CCleaner) charge now it seems in the region of £65 an hour!!! I can easily undercut that by some way.

For me though the liability insurance is a must as is having some money just to cover when things go wrong. I do expect to have at first spend some money replacing parts after things no going as I expect.

Also I currently employed, but my income barely covers my expenses!

Two4Tuesday

My advice - like Annisele says, is concentrate more on getting an income (sales) before concentrating on how much you're going to spend. Don't start a business just because you think you are good at something - make sure that there are enough people out there who are willing to pay to make it worthwhile.

Work out what your costs will be each week (include your own necessary living expenses) and multiply that by 3 (to cover taxes, other unforeseen expenses, and generally underestimating costs)

Then work out how many computers you would have to repair or other services you would have to sell per week to cover it.

Only if you're certain that you can make enough sales every week to cover this, then go ahead and start the business. Otherwise you're doomed to failure, unless you get very very lucky.

jatos

Here is the problem, I don't how many sales I will make till I try!

I only have anecdotal evidence to suggest I will be able to get quite a bit of business if I try hard enough, but I can't see a way of accurately predicting my success once in business.

Annisele

jatos wrote: »

I also found there are a lot of people who can do basic repairs, but aren't so good at anything out of the ordinary. Its like someone I have known for a while got a new GF, quickly brought his GFs sons laptop to repair. Needed a new screen - nought hard if you know what your doing (which I certainly did), so I repaired that for him.

I also had people from work previously come to me with phones (such BlackBerrys with dodgy buttons) and the like they wanted repairing. Got all of those working. Did discover a few potential problems in the process though.

Did those people pay you? And if so, did you do it for "mate's rates"?

Lots of people will happily take advantage of a friend's skills; doesn't mean they'd shell out a penny to actually pay for a repair.

I know a lot of IT guys who actually know what they are doing - that is say can do more than slot a few parts into a computer and install a few off the shelf tools (e.g. CCleaner) charge now it seems in the region of £65 an hour!!! I can easily undercut that by some way.

Are you certain? If you can only get one job a day at an hour a time, that's £325 per week. Once you've factored in costs, you're at minimum wage levels.

I get that a consistent 'one job every working day' is more fun than 'slogging away for 40 hours a week' for the same money - but it'd be a precarious existence. I think Two4Tuesday is spot on with the advice to work out how much you need to make and then multiply by 3.

Annisele

jatos wrote: »

Here is the problem, I don't how many sales I will make till I try!

I only have anecdotal evidence to suggest I will be able to get quite a bit of business if I try hard enough, but I can't see a way of accurately predicting my success once in business.

Do it part time - evenings and weekends, or (if your job is flexible) on your annual leave days. If nobody is interested at those times, nobody's interested full stop.

Before you do that, do check your current employer allows it - some employers don't like their staff moonlighting.

Mistral001

jatos wrote: »

I will need some cash aside to cover myself when things go wrong,

This is very important in every business, which makes me think that the OP might have a fairly clear view on how to run a business. Whether IT/computer repair is going to make the OP enough money to turn it into a viable business is another matter.

PS. If others are charging £60/hour, do not undercut them but aim at providing a better service than they are providing for the £60. If you can do that you, in my view, you might have a chance

jatos

Mistral001 wrote: »

This is very important in every business, which makes me think that the OP might have a fairly clear view on how to run a business. Whether IT/computer repair is going to make the OP enough money to turn it into a viable business is another matter.

PS. If others are charging £60/hour, do not undercut them but aim at providing a better service than they are providing for the £60. If you can do that you, in my view, you might have a chance

I am certainly not totally ignorant when it comes to matters with running a business. I would expect a few other parts of my post also suggested that. I have to say something else, if I can't see nothing going wrong, my first thought would be, what is wrong that I am missing? Everything fine and problem free would be a very much new experience to me to be frank.

Anyway, like I say, my main issue is funding. I am pretty sure I am get the business to be honest, but from what I can gather the less saturated market is for work that costs less. Plenty of IT consultancies out there that serve the needs of businesses with some money in the pot - those the people paying the £60 an hour as a rule. I think generally the amount of business I could from the £60 an hour market now would be limited. I am quite confident though there are many far smaller businesses and individuals that would benefit from high quality services but could not afford thus rate.

If I target a domestic market, I definitely think I can be pretty assured that the vast majority of those won't pay for work that is effectively charged at £65 per hour. I have known many gawk at this rate!

In any case, once I have worked out a way I can actually fund the business, it just a case of coming with a solid business plan and making it happen. I don't think the banks are my best bet for finances, but nor do I think private investors purchasing shares are in my case (aside from anything, I will be acting as a sole trader at first, not an LTD).

One thing I looked at is crowd funding, but I have yet to find a crowd funding platform that gives me quite what I need.

Savvy_Sue

Have a look at this thread on the Small Biz board ...