Computer Repair business plan for starting your own shop

Starting a computer repair business is undoubtedly a profitable venture. In this era, computers have become an integral part of offices, industries, organizations, institutes, and even homes. Any enterprise that uses computers to manage its operations also needs some authentic computer repair services to timely maintain, repair, and upgrade the computers.

Thus, if you are thinking about starting this business, you don’t need to worry about the scope and opportunities. Just focus on how to open a computer repair business. For that, you will need to make a business plan for computer repairs, as the first step. In case, you don’t know how to create a comprehensive business plan, we are providing here the business plan for a startup, PC Fix.

Executive Summary

2.1 The Business

PC Fix will be a licensed and registered computer repair business startup. The business will be based in Boston. The business will provide computer repair, maintenance, and upgradation services to individual customers, and small and large business setups.

2.2 Management of Computer Repair Shop

Computers can get software and hardware problems anytime. Therefore, if you want to start a computer repair business you must have adequate staff. So that you can provide your customers with instant support.

While you decide your strategy about how to set up a computer repair business, you should start gathering a skillful workforce. To manage your business, you will also be needing experienced supervisors to monitor all aspects.

2.3 Customers of Computer Repair Shop

Before researching how to start a computer repair business you should explore who will be your customers. Knowing your customers will help you in amassing the equipment and staff that could meet their demands.

PC Fix identified its customers as individuals who possess their personal computers, small and large businesses, educational institutes, and government organizations.

2.4 Business Target

Our aim is to become the most renowned computer repair business within a year of our launch. Our financial targets to be achieved over the next 3 years are demonstrated in this table.

3 Years Profit Forecast - Computer Repairs Business Plan

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Company Summary

3.1 Company Owner

Steve Wayne will be the owner of PC Fix. Steve has an Associate Degree in Computer Science. He has worked as a computer support specialist for three years at Boston Finance Commission.

3.2 Why the computer repair shop is being started

Steve gained extensive experience in his field during his job. After three years he realized that he can earn multiple folds by becoming an entrepreneur. Considering his knowledge area he decided to start computer repair business.

3.3 How the computer repair shop will be started

Step1: Plan your business

As a first step, you should plan everything about your business and write it in your computer repair business description. If you don’t know what to include in a business plan you can take help from this computer repairs business plan example. In this computer repair business plan sample we have listed everything about PC Fix including market analysis, sales business strategy, personnel plan, and financial plan.

Step2: Define your brand

After creating your business plan, it’s now time to acquire the required licenses and setting up your physical presence. Meanwhile, you should also define your business values and aims to make people feel associated with your goals.

Step3: Start the recruitment

The next step is to initiate your hiring process to find the most competent employees.

Step4: Get ready to promote & market

After you’ve concluded all the above-mentioned steps, you should go for promoting your services.

Step5: Establish a web presence

These days, whenever people need any type of service, they search for it on Google. Therefore, it is very important to establish a strong web presence. It will enable you to come in top searches. And it will also allow you to attract more people by showing them others’ feedback.

Startup Cost - Computer Repair Business Plan

Start-up Expenses  
Legal $252,800
Consultants $0
Insurance $33,000
Rent $26,000
Research and Development $28,000
Expensed Equipment $54,000
Signs $4,100
TOTAL START-UP EXPENSES $397,900
Start-up Assets $322,000
Cash Required $333,000
Start-up Inventory $54,000
Other Current Assets $200,500
Long-term Assets $225,400
TOTAL ASSETS $1,134,900
Total Requirements $1,532,800
START-UP FUNDING
Start-up Expenses to Fund $397,900
Start-up Assets to Fund $1,134,900
TOTAL FUNDING REQUIRED $1,532,800
Assets
Non-cash Assets from Start-up $1,510,900
Cash Requirements from Start-up $367,500
Additional Cash Raised $54,000
Cash Balance on Starting Date $34,000
TOTAL ASSETS $1,966,400
Liabilities and Capital
Liabilities $29,000
Current Borrowing $0
Long-term Liabilities $0
Accounts Payable (Outstanding Bills) $44,000
Other Current Liabilities (interest-free) $0
TOTAL LIABILITIES $73,000
Capital
Planned Investment $1,532,800
Investor 1 $0
Investor 2 $0
Other $0
Additional Investment Requirement $0
TOTAL PLANNED INVESTMENT $1,532,800
Loss at Start-up (Start-up Expenses) $360,600
TOTAL CAPITAL $1,893,400
TOTAL CAPITAL AND LIABILITIES $1,966,400
Total Funding $1,532,800

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Services

Before owning a computer repair business you should decide your services. Through this, you will be able to purchase the right equipment and hire the right staff. In this computer repair business plan template we are listing the services of PC Fix.

  • Hardware Repairs/ Maintenance/ Upgradation

We’ll also provide computer hardware repairs. Hardware issues are very common in computers. People often complain about screen freezes, blue-screen, file corruption errors, and abnormal shutdowns. They are all in actual hardware issues.

Along with it, we will provide regular maintenance and upgradation services on an instant basis as well as on monthly and yearly contracts.

  • Software Repairs/ Maintenance/ Upgradation

We will troubleshoot and resolve software problems and faults. When hired on a monthly or yearly contract, we’ll ensure regular maintenance and upgradation of software.

  • Computer, Laptop and Mobile Accessories

We will also offer computer and cellphone accessories such as network interface cards, batteries, speakers, headsets, USB flash drives, etc.

  • Database Management System Development

Our last service will be for businesses, institutes, and organizations. In this, we will develop a cost-effective database management system for them to manage large and irregular datasets.

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Marketing Analysis of Computer Repair Shop

Before starting computer repair business it is essential to carry out a detailed marketing analysis. Marketing analysis allows you to identify ongoing and forthcoming market trends. That will eventually enable you to recognize

  • The customers that may be directly or indirectly interested in your services.
  • The unoccupied opportunities to serve your target customers.
  • The ways that can best capture the attention of your target customers.
  • The product prices that can help you draw customers as well as earn profit.

Marketing analysis should be done systematically. If you don’t know what to include in a marketing plan, you can take help from here. In this blog on how to write a business plan for computer repairs, we’re providing the marketing analysis done for PC Fix.

5.1 Market Trends

In the United States, almost everyone possesses a personal computer, laptop, or cellphone. Along with it, to manage large data sets and to work on research areas, government organizations, educational institutes, and businesses use computer-based labs and systems. With these electronic gadgets, come their hardware and software issues. Therefore, a computer repair business is needed more than ever.

Currently, more than 41k computer repair businesses are running in the U.S. according to IBISWorld. The market size until 2020 is reported to be $18 billion. Moreover, the industry has also acted as a source of employment for more than 124k people.

5.2 Marketing Segmentation

Before opening a computer repair business, you should identify the groups of your target customers. Doing this will enable you to recognize their expectations, needs, and purchasing capabilities.

As computers are used in nearly every field now, the customers of the computer repair business belong to various walks of life. The major groups of customers as identified by PC Fix are given below.

Marketing Segmentation - Computer Repairs Business Plan

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5.2.1 Individuals

The first group of our target customers comprises people and students who have their personal computers and laptops. This category gets really worried on encountering any faults/ problems with their devices. Therefore, we expect them to visit our shop frequently for hardware/ software repairs and also for purchasing electronic accessories.

5.2.2 Small & Large Businesses

The second group of our target customers will be businesses. Nowadays companies use computers to monitor their business, cash flows, and to perform their work. Thus, they are expected to avail of our services on a contract basis as they need regular maintenance and upgradation.

5.2.3 Educational Institutes

Our third category comprises educational institutes that have established computer labs for study, research, and management purposes.

5.2.4 Government Organizations

Last we also expect government organizations based in our city to be our customers for their computer repairs and upgradation.

 

Market Analysis
Potential Customers Growth Year 1 Year 2 Year 3 Year 4 Year 5 CAGR
Individuals 27% 31,000 32,000 33,000 35,000 37,000 10.00%
Small/ Large Businesses 30% 34,000 35,000 36,000 37,000 38,000 10.00%
Educational Institutes 25% 24,000 25,000 26,000 27,000 28,000 10.00%
Government Organizations 18% 19,000 20,000 22,000 23,000 24,000 11.00%
Total 100% 108,000 112,000 117,000 122,000 127,000 10%
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5.3 Business Target

In your computer repair business model you should clearly define your business targets to be achieved over a specified time. This can help you in directing your workforce and your resources towards a common goal.

PC Fix aims at

  • Earning a net profit margin of $28k per month by the end of the third year
  • Earning an average rating above 4.65 by the end of the first year
  • Maintaining a CSAT score above 90%
  • Achieving a customer retention rate of 90% by the end of the first year

5.4 Product Pricing

Our prices are slightly lower than that of our competitors. This is because we want to get introduced to a large number of people as soon as we get launched.

Marketing Strategy

To capture the attention of your target customers amid huge competition, it is necessary to have an efficient sales strategy. In this computer repair business proposal we are providing computer repair business marketing plan of PC Fix. So that you can learn what can be done to stay competitive and successful.

6.1 Competitive Analysis

  1. We have extremely skilled and collaborative staff.
  2. We are highly client-oriented and are willing to go the extra mile to satisfy our customers.
  3. Customers can book our services through our website.
  4. Only we in our vicinity are providing computer and cellphone accessories. And that is something that will help us draw more customers.

6.2 Sales Strategy

To attract our target customers, we will:

  • Establish a strong web presence by making it SEO
  • Advertise our services through Google Local ads service
  • Provide a 40% discount on all of our services except PC accessories for the first 3 months of the launch
  • Provide a 30% discount to organizations, businesses, and institutes on a 6-month maintenance contract.

6.3 Sales Monthly

Sales Monthly - Computer Repair Business Plan

6.4 Sales Yearly

Sales Yearly - Computer Repairs Business Plan

6.5 Sales Forecast

Unit Sales - Computer Repair Business Plan

Sales Forecast      
Unit Sales Year 1 Year 2 Year 3
Hardware Repairs/ Maintenance/ Upgradation 41,000 43,460 46,068
Software Repairs/ Maintenance/ Upgradation 40,000 42,400 44,944
Computer, Laptop and Mobile Accessories 32,000 33,920 35,955
Database Management System Development 12,000 12,720 13,483
TOTAL UNIT SALES 125,000 132,500 140,450
Unit Prices Year 1 Year 2 Year 3
Hardware Repairs/ Maintenance/ Upgradation $48.00 $55.68 $64.59
Software Repairs/ Maintenance/ Upgradation $40.00 $46.40 $53.82
Computer, Laptop and Mobile Accessories $42.00 $48.72 $56.52
Database Management System Development $36.00 $41.76 $48.44
Sales
Hardware Repairs/ Maintenance/ Upgradation $1,968,000.00 $2,419,852.80 $2,975,451.00
Software Repairs/ Maintenance/ Upgradation $1,600,000.00 $1,967,360.00 $2,419,065.86
Computer, Laptop and Mobile Accessories $1,344,000.00 $1,652,582.40 $2,032,015.32
Database Management System Development $432,000.00 $531,187.20 $653,147.78
TOTAL SALES $5,344,000.00 $6,570,982.40 $8,079,679.96
Direct Unit Costs Year 1 Year 2 Year 3
Hardware Repairs/ Maintenance/ Upgradation $46.00 $51.00 $60.00
Software Repairs/ Maintenance/ Upgradation $36.00 $41.00 $47.00
Computer, Laptop and Mobile Accessories $39.00 $45.00 $51.00
Database Management System Development $33.00 $38.00 $44.00
Direct Cost of Sales
Hardware Repairs/ Maintenance/ Upgradation $1,886,000.00 $2,216,460.00 $2,764,056.00
Software Repairs/ Maintenance/ Upgradation $1,440,000.00 $1,738,400.00 $2,112,368.00
Computer, Laptop and Mobile Accessories $1,248,000.00 $1,526,400.00 $1,833,715.20
Database Management System Development $396,000.00 $483,360.00 $593,260.80
Subtotal Direct Cost of Sales $4,970,000.00 $5,964,620.00 $7,303,400.00

Personnel plan

When you write business plan computer repair shop, you should also include a list of required employees in it. Through this, you’ll be able to define a criterion to select the most competent employees. Moreover, make sure that you also throw light on their average salaries for at least 3 years in your personnel plan.

7.1 Company Staff

Steve will be the CEO himself. However, to run his business he will hire the following people.

  • 1 Co-Manager/ Supervisor to procure equipment & see overall operations
  • 8 Computer Repair Technicians
  • 1 Software Developer to develop management software & company’s website
  • 1 Accountant to maintain financial records
  • 2 Sales Executives to promote the company and negotiate contracts
  • 1 Store Manager (to manage accessories display and sales)
  • 1 Receptionist
  • 2 Drivers

7.2 Average Salary of Employees

 Personnel Plan      
Year 1 Year 2 Year 3
Co-Manager $13,000 $14,300 $15,730
Computer Repair Technicians $75,000 $82,500 $90,750
Software Developer $11,000 $12,100 $13,310
Accountant $9,000 $9,900 $10,890
Sales Executives $9,000 $9,900 $10,890
Store Manager $10,000 $11,000 $12,100
Receptionist $8,000 $8,800 $9,680
Drivers $14,000 $15,400 $16,940
Total Salaries $149,000 $163,900 $180,290

Financial Plan

A considerable amount is needed to build a computer repair business. If you want to make sure that your investment group to business plan doesn’t go waste, you must do accurate financial planning before you actually start your business. An accurate financial plan includes cash flow tables and diagrams, projected profit and loss, gross margins, and balance sheets. Combined, all these segments provide you with the idea of how to cover any unexpected financial loss. Or how much to keep in reserve etc.

Here, we are providing the financial plan made for PC Fix, so that you can take a general idea of computer repair finances.

8.1 Important Assumptions

 General Assumptions      
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 8.19% 8.22% 8.28%
Long-term Interest Rate 8.39% 8.41% 8.47%
Tax Rate 23.78% 24.33% 25.02%
Other 0 0 0

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8.2 Brake-even Analysis

Brake-even Analysis - Computer Repairs Business Plan

 Brake-Even Analysis  
Monthly Units Break-even 5341
Monthly Revenue Break-even $131,600
Assumptions:
Average Per-Unit Revenue $233.00
Average Per-Unit Variable Cost $0.65
Estimated Monthly Fixed Cost $163,100

8.3 Projected Profit and Loss

 Pro Forma Profit And Loss      
Year 1 Year 2 Year 3
Sales $5,344,000 $6,570,982 $8,079,680
Direct Cost of Sales $4,970,000 $5,964,620 $7,303,400
Other $0 $0 $0
TOTAL COST OF SALES $4,970,000 $5,964,620 $7,303,400
Gross Margin $374,000 $606,362 $776,280
Gross Margin % 7.00% 9.23% 9.61%
Expenses
Payroll $149,000 $163,900 $180,290
Sales and Marketing and Other Expenses $124,000 $126,000 $127,000
Depreciation $2,230 $2,340 $2,450
Leased Equipment $0 $0 $0
Utilities $2,900 $3,000 $3,190
Insurance $1,900 $2,000 $2,100
Rent $3,200 $3,300 $3,400
Payroll Taxes $35,000 $37,000 $39,000
Other $0 $0 $0
Total Operating Expenses $318,230 $337,540 $357,430
Profit Before Interest and Taxes $55,770 $268,822 $418,850
EBITDA $55,770 $268,822 $418,850
Interest Expense $0 $0 $0
Taxes Incurred $11,154 $53,764 $83,770
Net Profit $44,616 $215,058 $335,080
Net Profit/Sales 0.83% 3.27% 4.15%

8.3.1 Profit Monthly

Profit Monthly - Computer Repair Business Plan

8.3.2 Profit Yearly

Profit Yearly - Computer Repair Business Plan

8.3.3 Gross Margin Monthly

Gross Margin Monthly - Computer Repairs Business Plan

8.3.4 Gross Margin Yearly

Gross Margin Yearly - Computer Repair Business Plan

8.4 Projected Cash Flow

Brake-even Analysis - Computer Repairs Business Plan

 Pro Forma Cash Flow      
Cash Received Year 1 Year 2 Year 3
Cash from Operations
Cash Sales $56,000 $60,480 $65,318
Cash from Receivables $17,000 $18,360 $19,829
SUBTOTAL CASH FROM OPERATIONS $73,000 $79,570 $85,936
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
SUBTOTAL CASH RECEIVED $74,000 $80,000 $86,000
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $35,000 $36,000 $38,000
Bill Payments $18,000 $18,500 $19,000
SUBTOTAL SPENT ON OPERATIONS $53,000 $54,500 $57,000
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
SUBTOTAL CASH SPENT $54,000 $58,320 $62,986
Net Cash Flow $14,800 $15,600 $16,500
Cash Balance $24,000 $25,000 $27,000

8.5 Projected Balance Sheet

 Pro Forma Balance Sheet      
Assets Year 1 Year 2 Year 3
Current Assets
Cash $271,000 $303,520 $333,872
Accounts Receivable $24,000 $26,880 $30,213
Inventory $4,100 $4,592 $4,900
Other Current Assets $1,000 $1,000 $1,000
TOTAL CURRENT ASSETS $290,000 $324,800 $365,075
Long-term Assets
Long-term Assets $10,000 $10,000 $10,000
Accumulated Depreciation $18,000 $20,160 $22,680
TOTAL LONG-TERM ASSETS $22,000 $24,640 $27,720
TOTAL ASSETS $293,000 $328,160 $369,180
Liabilities and Capital Year 4 Year 5 Year 6
Current Liabilities
Accounts Payable $18,200 $20,384 $22,912
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
SUBTOTAL CURRENT LIABILITIES $15,200 $17,024 $19,135
Long-term Liabilities $0 $0 $0
TOTAL LIABILITIES $14,000 $15,680 $17,624
Paid-in Capital $29,000 $30,000 $30,950
Retained Earnings $54,000 $58,860 $64,746
Earnings $193,000 $210,370 $231,407
TOTAL CAPITAL $276,000 $300,840 $330,924
TOTAL LIABILITIES AND CAPITAL $290,000 $328,160 $369,180
Net Worth $279,000 $304,110 $334,521

8.6 Business Ratios

 Ratio Analysis        
Year 1 Year 2 Year 3 INDUSTRY PROFILE
Sales Growth 7.22% 8.00% 8.86% 3.00%
Percent of Total Assets
Accounts Receivable 9.20% 10.19% 11.29% 9.80%
Inventory 5.38% 5.96% 6.60% 9.90%
Other Current Assets 2.10% 2.33% 2.58% 2.40%
Total Current Assets 149.70% 152.00% 152.00% 158.00%
Long-term Assets 11.34% 11.44% 11.57% 12.00%
TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%
Current Liabilities 4.91% 4.95% 4.99% 4.34%
Long-term Liabilities 0.00% 0.00% 0.00% 0.00%
Total Liabilities 7.58% 7.64% 7.71% 7.38%
NET WORTH 100.90% 101.71% 102.64% 110.00%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 94.88% 97.44% 100.17% 99.00%
Selling, General & Administrative Expenses 94.30% 96.85% 99.56% 97.80%
Advertising Expenses 1.53% 1.57% 1.62% 1.40%
Profit Before Interest and Taxes 41.09% 42.20% 43.38% 33.90%
Main Ratios
Current 34 35 36 32
Quick 34 35 35.875 33
Total Debt to Total Assets 0.18% 0.18% 0.17% 0.40%
Pre-tax Return on Net Worth 73.49% 74.70% 75.59% 75.00%
Pre-tax Return on Assets 94.79% 99.53% 104.51% 111.30%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 33.04% 34.06% 35.12% N.A.
Return on Equity 54.99% 56.69% 58.45% N.A.
Activity Ratios
Accounts Receivable Turnover 7.7 7.8 7.8 N.A.
Collection Days 100 100 100 N.A.
Inventory Turnover 31 32.55 33 N.A.
Accounts Payable Turnover 15.1 16 16.8 N.A.
Payment Days 27 27 27 N.A.
Total Asset Turnover 2.5 2.5 2.6 N.A.
Debt Ratios
Debt to Net Worth -0.04 -0.03 -0.04 N.A.
Current Liab. to Liab. 1 1 1 N.A.
Liquidity Ratios
Net Working Capital $233,400 $246,470 $260,273 N.A.
Interest Coverage 0 0 0 N.A.
Additional Ratios
Assets to Sales 0.86 0.87 0.87 N.A.
Current Debt/Total Assets 1% 0% 0% N.A.
Acid Test 29 29.04 29.09 N.A.
Sales/Net Worth 2.2 2.3 2.3 N.A.
Dividend Payout 0 0 0 N.A.

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