Business Details - How to Start a Home-based Computer Repair Business - page 98

are you going to be a part of? Before you commit to a particular service line, consider the
following factors while deciding what to offer your customers.
It's time to develop a baseline model price for your labor charges and use that model
throughout your business. But how do you determine your hourly labor rate?
Since you're focusing on service, and you will need to charge for that service, you should
post your hourly rate on your website and in your quotes when needed. The amount of your
labor rate should be fair and reasonable and within the market standards. Many computer
businesses that are starting up from home may be able to offer a lower cost per hour to their
customers because overhead is low.
For example, starting from your home office, you can calculate how much you need to get
paid per hour to keep your personal finances in check while making money to grow your
business. If you need to make $20 per hour to survive, then you'd choose an hourly rate
that is more than that and offer it to your customers.
There is a limit, however—you can't simply state “My hourly rate is $250 per hour,” be-
cause you'll never get any clients by charging outrageous prices. This is a balancing act
between you and your expenses. Charge too little and you'll never make it. Charge too
much and you'll never make it. You need to find the sweet spot that attracts customers and
keeps your cash flowing.
Marketability
It won't matter what services you sell if your customers aren't in need. Before considering
what lines to offer, determine how you'll reach the market that you want to sell to. Once
you know what kinds of customers you want, then you'll be able to determine their needs.
A broad range will capture a larger audience, and the plan is to have enough customers who
need your services to sustain your business. Your service selection doesn't have to appeal
to all of the population but it should be something you can convince a large percentage of
consumers they need.Take it from me, if you're going into the computer repair business,
there's a lot of need.
Profit Margin
In a typical retail setting, selling big-ticket items is generally more profitable. When you
look at the price of the services, don't forget to calculate direct and indirect costs (like over-
head) of selling your goods. If you think you can sell ten iPod screen repairs a day for $100
each and the part costs you $50 each, it may look like you have a profit of $500 per day.
But when you factor in your overhead expenses, that might average $400 per day, and you
may find your profit isn't sufficient even though sales are good. Go after the highest profit
margin services possible to give your business an edge that it needs.