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Subject:
From:
"Twyford, Justin" <[log in to unmask]>
Reply To:
PCBUILD - Personal Computer Hardware discussion List <[log in to unmask]>
Date:
Fri, 12 Feb 1999 12:23:57 -0800
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Just to put in my $0.02 worth....

As a small supplier of systems, you may not have enough markup to operate a
viable business, at least in the short term.  At least in my area, this is
an EXTREMELY competetive business, and I simply can't compete on price.  My
advise is don't quit the day job - start as a sideline, and take the profits
to reinvest in the business.  Develop ties to suppliers and financial
backing and then consider doing it full time.  If you are serious about the
business....

I suggest you put together a business plan, including your expected customer
base, your costs (including future costs, because it is onlikely that you
will be wanting to build computers in your garage forever!  Especially when
you have 6 or 7 systems on the go!) and future expansion goals.  Consider
what your competitive advantage will be (assuming you have one).  If you go
for price, what volume will you need to sell to compete with the local
discount stores, and what kind of financing would that require.  If you go
for specialized systems (high end gaming, CAD, etc.) is there sufficient
demand.  My opinion on the best place to differentiate, is on service - but
there is a fine line there too!  Build into the price quote a margin
sufficient to have you go to someones house and setup the computer, provide
some training, and start by identifying the needs of the user (not just,
here, take this setup because a) I have the stock or b) it's the best that's
out there - email doesn't require a VoodooII! ).  My big caveat - people
will take advantage of good service and call to waste you time with dumb
questions - you must strike a careful but firm balance of "free" and pay for
service!  It's tough when you first start up, but worth it!

Also you must consider marketing.  Most people only buy a computer every 2/3
years.  You will need a LOT of customers to make a viable business.  Word of
mouth really won't cut it, and you must advertise.  Customers will have
questions about warranties and you staying in business - particularly if you
are working out of a home <would you buy from yourself?>.

There are some business plan templates available on the net, or visit you
local bank - they usually have information.  If you have any specific
questions, feel free to contact me off-list (I am an accountant by
profession and can possibly help critique your business plan).

Good luck...

Justin Twyford
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