So You Want to Start Your Own Business?
The Rise and Fall of Computer Joey: Part Three – The Finale
The first two chapters of this story recounted how I ended up owning and running a computer repair shop and the problems that went along with it. This chapter will tell you how I got out.
One major omission in the first two chapters that I really want to address is business clubs. A business club is a group that you pay money to join and the purpose is to give and receive leads. On paper it sounds like a great idea, but if you factor the prerequisites, they don’t work out for a lot of small business owners. The first issue is that you have to be an established business (I managed to get around that when I joined my first group because I knew somebody in the club). This in itself is a problem: there are a few foundation professions in each of these clubs – a lawyer, a realtor, an accountant, for some reason a chiropractor, usually some kind of printing press person, and then unique small businesses. You can be the only person of your profession in the club, so there is no competition within the club.
Here is the problem: if you are starting a business, you usually need a lawyer, an accountant, and probably have worked with a real estate agent already. You have the foundation of your infrastructure (and most businesses have a computer guy already that knows their set up). Matt and Anthony have a huge network of friends that are willing to do freebies or favors for them, this is a huge part of the reason we managed to stay in the black. They had a great network of people I started to consider friends; there was no way I was going to give someone else business over them. So I didn’t give leads and never got any, and I was getting charged 350 – 400 dollars per quarter (If you are curious, the clubs I joined were BNI and LeTip). They usually meet at a diner or small restaurant really early in the morning or for lunch which was hell on me due to my day job.
Leads not coming from the clubs were a source of frustration to Anthony. He questioned my “sales” ability at the meetings, but he never did come to a meeting when I asked him to go and see what it was like for himself. That caused a little bitterness because I think if he attended he wouldn’t have wasted any more of our money. After a year or so of fruitless meetings, we both agreed it was time to stop.
As 2005 ended and we entered into 2006, I started to have a renewed passion for my day job. I had finally gotten some backup and I wasn’t on call 24/7. This allowed me to do a little networking and figure out that I didn’t want to be technical much longer (working at the store probably had something to do with it as well). Meanwhile Computer Joey became more of a chore. Anthony was pushing me to build and sell computers on the cheap, but Dell was running a deal where you can get a computer, monitor, and printer for $322 (and there was support, sure it was in India, but if you wanted to call someone you would eventually get help, not the case if you bought a CJ special). There was no way in hell I could build a computer with a Windows Operating System for under 400 dollars and make a profit (raw materials cost me about 270 – I refused to buy total crap – and windows cost about 88 dollars – toss in shipping and you are at 380ish). At some point I gave up and ended up building 5 or 6 systems and Anthony built out a nice display area in the front of the store. They sold ok, but again, I made like 40 dollars on the computer and if the customer had an issue, I lost any profit we made.
My customers and pricing were always a soft spot for me. Berlin, NJ has a decent size elderly population and I guess they are technologically active. Quite a few old timers came into the store with their PC’s. Once I got talking to them, I knew they were on fixed incomes and would either drastically reduce the price or just do the work for free. Honestly, I wasn’t making any money at the store, so a good deed was about the only satisfaction I was getting.
Freebies for the elderly were one thing, but I had quite a bit of friend-of-friends that wanted their computer’s worked on and had ridiculous expectations. I can’t tell you how many times somebody I wasn’t very close with would stroll in and drop the computer off and say – can I pick it up later today? It was like getting kicking in the balls twice. If you were a friend of the store, I wasn’t going to charge and people definitely took advantage of that situation.
The building frustration, lack of income, and time vacuum was coming to a head with Anthony. I was actively telling him I wanted out and was setting exit dates. First was March; it came and went. We all had a camping trip in April, I decided that weekend would be the end; Bill opened the store while we were gone. Anthony had formulated that we could potentially sell the business for some kind of profit. I was skeptical, but was all ears. After some mild inquiries, an elderly gentleman expressed interest. He came in the store and worked with me for a few days. I could tell he was a little overwhelmed and I was trying to coach him on some of my techniques and short cuts. After a week or two, he agreed to buy the business from us. I was overjoyed! I was finally free….
Two days after my exit, Anthony called me to tell me the guy backed out. I can say I was surprised but I wasn’t, and a part of me was glad that the guy didn’t pay money to figure out the lesson I had learned the hard way (there is no money in computer repair). The good thing was – I wasn’t coming back. We started to call our customer based and told them we were closing and to pick up their systems (some people would drop their computers off and leave them there for months or in some cases years – we put a sign on the front of the store and a note on the invoice that after 90 days it was our property – but it didn’t stop them from trying to reclaim their system 18 months later).
In the end, Computer Joey didn’t go out with a bang; it just faded slowly out of my life. To Anthony’s credit, once the business was out of our lives, he definitely went out of his way to show me everything was cool. It took me some time to get back to me pre-CJ grove with him, but now I call him every couple of days to check in. Shortly after the store shut down, Matt got engaged and moved to upstate New York. I am going to his wedding at the end of September and I cannot wait.
While I did not make much money from my entrepreneurial experience, I certainly did learn a lot. The first thing is how some clichés are true: Don’t ever go into business with family (and I will add friends to that as well) – they know you too well and know how to push the right buttons. I can be the most ferocious person at my day job, but Anthony could make me feel like a clueless 11 year old kid in 15 seconds. I subscribe to the “always being a lion and never the lamb” philosophy, so don’t be meek unless you want to be. Accounting is so important. Anthony’s wife handled the books the first year and I just did not pay attention, she did a great job, but a business owner needs to understand his or her cash flow and what product is moving. I didn’t take the time to look for trends.
Coming out of this experience I will tell you that if I ever do go into business for myself again, I will never maintain another physical location. I could have done so much better working out of my basement and taking house calls at a higher rate. While I am burnt out on the computer repair scene, I can see myself being a private consultant at some point in my future (and get out of the tax-hell that is New Jersey).
If you are serious about starting your own business, the most important thing is to be passionate about it. That passion will infect your customer base (and if you aren’t, they will catch that too). One thing to remember: Hobbies are not passions, learn to tell the difference. Another thing I would recommend is to try to get a part time job in the business you are trying to start (if you don’t already work in it), you will see first hand what your customers expect and what the job entails. If you have a dream, try it out and go for it, just have an exit plan just in case. Set reasonable goals and if you don’t meet them, say goodbye.
On that note, I will say goodbye to you my readers. I hope you found this tale entertaining and at least a little informative. Good luck with all you plans and ideas and don’t be afraid to get your hands dirty!
