I found an interesting thread on a forum the other day. The thread begins with a young man nicknamed “clutch” asking the forum members for their advice on the steps necessary to prepare for a new computer repair business. He proudly lists some things he’s considered acquiring before he beings, things like spare parts, repair tools, boot disks. Soon thereafter one of the seasoned vets of the forum, “Prime Suspect”, gives him this piece of advice:
“I hate to be so blunt about it, but discussing and planning and thinking and nailbiting doesn’t get a business to be successful. Every second that you spend planning it and asking for advice is wasted time. ”
You can read the full thread here.
A bit of a harsh statement, but it reaffirms something that I recently discovered. I, too, had a lot in common with “clutch”, spending hours gathering information and formulating plans. While I think some planning is necessary, and a new business is not the sort of thing to jump into blindly, too much preparation can also be a hindrance to forward progress.
I came to this realization a few months ago. I was constantly looking for things to implement so I’d be ready to roll when I started my business: tax software, accounting software, invoice templates, logos, websites, tool kits, boot disks…hell I even considered getting shirts with my business name on them so I could look like the Comcast guy when I rolled up to my first customer. After feeling overwhelmed and frustrated with all the preparation, I had an epiphany and realized that I could spend the rest of my life preparing for every little thing that may come my way. Upon closer scrutiny, I found many of the tasks that were causing me so much greif to prepare could wait until after I started my business and gathered a decent customer base. At the rate I was going, I would be planning my business indefinitely, instead of going out there and making things happen. Last I checked, planning doesn’t pay the bills.
The truth is, it’s easy to over-prepare when reading horror stories about people who got into trouble because they didn’t take certain steps when implementing their business. Yet there’s no standard advice on what “prepared” actually means. Honestly, it’s probably not even possible to be “fully prepared”, becuase there are too many intangibles when starting a business and what works for one business may not work for another.
That’s why I’m really excited about my test drive approach to starting a business, and I feel it’s a good way to go for computer consultants. There’s nothing stopping me from moonlighting as a computer repair tech. I’m starting small with friends, family, and neighbors and slowly, through trial and error, I’ll figure out what else I need.
I’ve taken time to list some things that I feel I will need at some point in my business. The list is broken down into items I feel are essential to have in place before I begin, things that I’m choosing to wait to implement, and things that I don’t plan on doing until years down the road.
What is essential?
- Simple Business Plan – You don’t need anything complex at the beginning. For my business, Jiffy-PC, I simply have a brief description of my company, the services I’m going to provide, and the prices I plan to charge. That’s it. I will add more stuff later, but for now that’s really all I need.
- Business Name – It’s good to settle on a business name early and get it out of the way. Read my Business Name Blues series to see what I went through to get this accomplished. It’s a good idea to put some thought into this initially since you will, hopefully, be keeping this name indefinitely.
- Toolkit – I’m only going to start with the bare essentials. For computer techs, a simple computer repair tool kit, like this one, is all we should need to get started. If I find that I need a wider assortment of tools, I’ll buy them as the need arises. I don’t want to be stuck with 20 doodad’s only to find that all of my initial services call primarily for thingamajigs.
- Small assortment of marketing material – This is up to you, but you don’t need to go overboard. I plan on ordering a couple hundred business cards, printing some fliers, and doing some networking to get the ball rolling.
- Proper Licenses – Some jurisdictions require you to have a license to provide certain services to the public. For computer techs, this is usually not an issue, but make sure you check just in case.
- Basic understanding of tax responsibilities– This one is really important. Make sure you read up on tax responsibilities for your business. One of the biggest problems for small businesses just starting out is not keeping records of spending and withholding, which will, without a doubt, bite you it the butt later on. They aren’t so complicated once you get the general grasp of things. Ask your local tax preparer to help you out. This is one area where your money will be well spent up front. I’ve recently enlisted the help of a financial advisor, more on that in a later post.
- A drive to succeed– Above anything, you need unwavering determination and passion about your business venture. It’s going to consume your life, and you have to be ready for that. Don’t smother that fire in your belly with too much red tape and paperwork.
What can wait?
- Complex Business Plan – If you want to skip the test drive approach and dive into your business full-time, you’ll need to do a little more planing, especially on the financial side. Later on, I plan to incorporate a break-even analysis, market research, competitive analysis, budget forecast, and more into my business plan. These are going to be crucial if my business ever becomes my sole source of income.
- Registering Your Business – Again, this is only necessary if you’re going to be diving head first into your business. I registered my business more for symbolic and motivational reasons than any real tangible reason. You can do some part-time computer work, even do some freelancing with companies like computerassistant.com, without registering your business.
- Website – Unless your business is web-based, there’s no real reason to get your website up BEFORE your start working. In fact, I would argue that you should do a few months of work in your business first, service a few customers, and get a feeling for what your customers will be looking for, before you design your website. I may design a quick website to throw up on my domain in the beginning, but I believe a strong website is crucial. Good websites, I’ve noticed, seem to be lacking in the computer consulting industry. So I’m going to make sure I spend some money to get a professional, clean, easy to navigate website built as soon as possible. Since my business is going to be entirely self-funded, with no loans or investors, I’ll need to wait until I’ve earned some cash before I can afford to pay for a good website design.
- Spare parts – It’s not a good idea to buy a bunch of spare parts when you first start your business. Because the turn-over rate for new computer hardware is so quick, after a year you may find yourself stuck with a bunch of out of date parts that you can’t even GIVE away. I’m going to go ahead and buy parts on an as-needed basis. Although I will start accumulating things like spare mice, cables, and adapters that I can quickly sell to a customer since these things take a lot longer to become obsolete.
- Software – It’s definitely a good idea to have some freeware diagnostic tools handy, but as far as purchasing it, I’m going to wait to see what kind of software I’ll need for my customers before I go crazy with buying this stuff.
- Ads – Good advertising costs money. The best kind of advertising is a satisfied customer, so before I become overwhelmed with more customers than I can handle, I’ll start with a few folks and give them REALLY good service. They will tell their friends about me…and that beats any ad in the newspaper or listing in the phone book.
- Market Research – The great thing about starting my business part time, is that I can afford to play around in different markets and take the time to figure out where my customers will be and how my competition stacks up. Therefore, it’s probably not necessary to spend the time and money to do in-depth market research right away, but there may be a time later when it becomes more essential.
- Logos on stuff – It was tempting for me to start printing T-Shirts, making bumper stickers, ordering customized pens and stamps, and just going all out with my business branding. That stuff will have it’s place later on down the road, but right now, with my limited funds, it’s not a necessity.
What is overkill?
- Lawyers – As I’ve said before, I think small business lawyers are a bit overpriced for my needs.
- Accountants – I’ve hired a personal finance advisor for the time being. Again, a full time accountant is not something I feel is worth the money at this point, but will probably be necessary later on down the road.
- Employees – This is going to be a solo operation for a while. I’m going to need to develop clear and efficient processes for the things I do before I could hope to hire someone else to help me. But, again, hiring employees will probably be something I will do some years in the future, when my business becomes too much for me to handle on my own.
- Business Loans – I’m bootstrapping it baby! My business funding will be entirely self-contained, meaning only the money that I make from the business will go back into paying business expenses. I’m going to try avoiding using money from my day job as much as possible, and no loans or lines of credit. This may change later if I ever want to expand my business or move into an office or store front, which brings us to…
- Office or store front – For computer consulting, a home office will work just fine at first. If I ever want to expand my business into other areas, like sales, or if I end up taking computers off-site, I may consider an office or store. Office/store space can be quite an investment, so for now, and the near future, I plan on doing all my work on-site at the customer’s home.
This is my take what I think will be necessary to build a good foundation on which to launch my business part time. Everyone’s situation will be different, but hopefully, if you are planning a business, this post will help remind you to take a moment, step back from your business planning, and consider what items are truly essential for you to begin. I find that having a birds-eye view of any plan, and not spending too much time crawling around in the weeds, is usually a good thing and will probably be an essential part of a successful start to my (and your) business.
I’m curious to know how much preperation you think is necessary? Are you someone who tries to plan every last detail about things in your life or are you more likely to wing it?