Small scale system builder start up

[Dark57ar42]

Hi there everybody! I've been building systems for friends and family for a good few years now, to great success, however I'm now thinking of starting up on a small scale bespoke building for joe public. Has anybody also done this? Would anybody have any advice for me on this? I'd be hugely grateful for any input! Cheers!

[virtuo]

I haven't tried personally, but know 2 people that have (one in IT and one a 10+ year local computer shop owner). General opinion is that unless you can source your parts impossibly cheaply, there's not enough of a margin in it after your time building, and cost of supporting the systems have been taken out. If you could set your systems apart somehow to charge a premium then you might have some luck, but I still don't think there's enough money in it to make a viable small business.

[Dark57ar42]

Yeah, this is what has put me off from doing it a long time ago... :s

[AGTDenton]

Don't forget you effectively become responsible for the system for 1 year. So genuine hardware failures are your responsibility, costs of getting it shipped to manufacturer for replacement/repair or cost of a replacement part could soon add up. And regardless of whether you want to or not, you'd be fielding calls similar to "my computer wont boot", 8/10 its virus or human error rather than failing parts. You'd either have to offer a paid for IT support service or have a diagnosis fee.

As a 1 or 2 man band suddenly the novelty wears off...

[Dark57ar42]

Yeah, I've taken that into account... Does seem like a potential minefield though...

[RobbieRoy]

That means you need to think of a good business plan, to take into account the servicing risks that the trade would entail. As AGTDenton pointed out, you'd end up with two business lines - one building to a given spec, and the other providing support and hardware guarantees. You'd certainly need the right professional indemnity insurance (I'd recommend talking to Hiscox - I get my contracting PII from them). In addition, have you looked whether you can obtain parts on a cheaper basis, due perhaps to bulk buying?

[Dark57ar42]

Cheers for your comments guys! Certainly food for thought!

[Saracen]

Don't forget you effectively become responsible for the system for 1 year. So genuine hardware failures are your responsibility, costs of getting it shipped to manufacturer for replacement/repair or cost of a replacement part could soon add up. And regardless of whether you want to or not, you'd be fielding calls similar to "my computer wont boot", 8/10 its virus or human error rather than failing parts. You'd either have to offer a paid for IT support service or have a diagnosis fee.

As a 1 or 2 man band suddenly the novelty wears off...

1 year? If only. You are responsible, as a retailer, for up to 6 or 7 years (depending on whether in Scotland or the reat of the UK).

There are (legal) ways round some of that, Dark57ar42, but the problem will be finding market share if you do.

I have done some of this as PART of another business. I regularly had people asking for advice on exactly what machine spec suited them, and where to get it. Often, the answer was "custom build". The next question was "will you build it for me?" And sometimes, I did. And sometimes I'd get the parts for it, on behalf of the person wanting it.

BUT .... what I was providing was advice, and a service, NOT supplying the machine. My contract made clear that my service was consultancy, and assembly. And that any parts bought were bought on behalf of the customer with me acting as their agent, not as a retailer. Their bill consisted of the parts bought, AT COST PRICE, supported by the invoices for purchase. I did not make a profit on the parts, and the customer could source, buy and provide parts themselves if they wished.

So I was liable for my advice, and for anything I did wrong in assembling the parts, but not for hardware failure of the parts. I was supplying advice, and a service, and was happy to be held liable for that, but not for parts themselves.

The problem is finding customers prepared to pay for that advice, and service. Some small businesses are, but my experience is that most (and I stress, MOST) domestic consumers aren't. They want you to provide the moon on a string, but to pay peanuts, or less, for it.

In my case, this started when a consultancy customer (the other part of the business) happened to mention what he'd paid for a part fitted to his office server. I gasped, and stuttered "how much? Bleep me!"

He queried what I meant, and I somewhat reluctantly told him the component he's paid £990 (plus VAT) for, I could have bought for £110 (plus VAT).

That was a long time ago, and those days have gone. But when I subsequently got parts for him, he was paying me for expertuse in knowing what to get, where to best get it, and the time and expertise to fit it, NOT for the part itself.

What you need to do, therefore, is find people prepared to pay for time, experience and expertise, etc, as a service. They do exist, but they will mainly be people for whom time is money, and that understand time and expertise has value. Which, largely, is businesses. And then, very small businesses are often either cash-strapped, or still in a consumer mentality. And big businesses tend to be so hide-bound with proceedures, buying offices, tendering procedures, etc, that they're not worth dealing with.

So, you need to find that sweet spot in the middle. THEN, the tricky bit, you need to convince them that the expertise and service you offer is, first, something they need, and second, value for money. I find that next-to-impossible if going in cold. It is possible if you already have an ongoing business relationship, which is why I did it as part of another business.

All told, as a business model, what you're proposing is barely plausible. As other have said, the margins, and potential market, don't exist to make it viable, IMHO, unless it's merely one more string to your bow, and you have a viable USP.

Consider .... most members on this forum are capable of spec'ing up a PC, sourcing the bits, and building a machine. If you're going to sell that as a service, it's a VERY common skill-set these days, and you're competing with big box-shifters (like Dell) on the one hand, and any reasonably tech-literate 15 year old, like my niece or neighbour's kid, on the other. Why would I pay you?

Building for friends or family is one thing, because it's usually be either for free, or for a few beers. Find out how many, even of those family and friends, would have paid a commercially viable rate for you to do it? My bet is, not many.

[Dark57ar42]

This is the advice I was after! Thank you! I understand the need to have a USP and currently, that is being able to build better than the box shifters... I guess I'll have to keep plugging away at my other projects and see if I can get anyone interested in a build soon. You're spot on with what I'm intending to do though... Perhaps I could make this into an reasonable side project... I'm about to make a start on a desk build for myself... When that's done, perhaps I'll get more outside interest... Cheers for taking the time to reply... your thinking is exactly what I was thinking

[Pob255]

Thanks Saracen, I think that's a great way to go about it
But yes it would be more of a sideline than a full business, trying to pitch it to a "bespoke" market would probably be your best bet, however that market is small and very picky.

[Saracen]

You're welcome.

That USP, that way in, could be very varied, by the way. It could be professional expertise that gets you before the right type of business boss anyway. That's my niche.

But it could, theoretically, be almost anything. It could be that you're a skilled carpenter making customised, one-off, quality PC furniture and that that gets you before niche buyers with the budget to pay for custom installs. Though, in that case, I'd question whether the return justified spending your time building PCs when your expertise was high-end carpentry. Probably not.

There are likely countless "USP's" that haven't occurred to me, and if you've got one, great. Keep it to yourself, though.

Almost anything is possible IF you have the right offering, and IF you can get it to the right customers. A friend, well, acquaintance of mine does high-end sound installations. One recent project was a £100k project putting high-end AV systems into a client's new indoor pool house. You don't want to know the the house AV system cost.

That was about contacts. I don't think I could have even got in front of the client for 5 minutes to pitch the idea. He could, And did. He also has more work available than time to do it, and so .... waiting list.

His USPs are, first, quality of work,, but second, both access and reputation. There are, as the saying goes, many ways to skin a cat.

Make no mistake, though, what you're proposing, unless you have some edge, is NOT going to be easy, as countless people have found out when they tried it.

[Saracen]

Thanks Saracen, I think that's a great way to go about it
But yes it would be more of a sideline than a full business, trying to pitch it to a "bespoke" market would probably be your best bet, however that market is small and very picky.

Indeed. I'm more or less retired from that now. If someone beat a path to my door and, on bended knees, waved bundles of crisp twenties under my nose, I could be induced to give it a go. But even years ago, it certainly wasn't my bread and butter. It wasn't even the jam. It was the dollop of Cornish clotted cream, on top of the jam.

As a 'string to my bow', it was a source of income. As a primary way to make a living .... much, MUCH harder.

[peterb]

Saracen has pretty much hit the nail on the head. Unless you can build in sufficient quantities to absorb the inevitable problems that will occur, your subsequent support costs can quickly eat into time - and as a one man band, time spent sorting out a problem is time not spent on building another machine - and customers will expect support on things that you might not be directly responsible for - like problems with the OS. They will say "its not working" you'll say "its not my fault" They'll say "but you supplied it". so either lost time/revenue or lost goodwill. Servers are another matter - they tend to just run in the background with little direct end user involvement, but if they are mission critical, if it does fail within a warranty period..

So while you may be able to make some pocket money out of it, making a business with all the overheads is less easy, and will involve a lot of hassle and the returns may not be as high as you hoped. Selling a service is probably a better prospect than selling a product.

[Dark57ar42]

Fantastic stuff there, really well put... I gotta say, as a forum n00b I'm impressed by the quality of responses to this question cheers again!

[Kumagoro]

Even making money doing repairs now is hard. People generally don't want to spend more than 100 quid.

[Pob255]

Almost anything is possible IF you have the right offering, and IF you can get it to the right customers. A friend, well, acquaintance of mine does high-end sound installations. One recent project was a £100k project putting high-end high AV systems into a client's new indoor pool house. You don't want to know the the house AV system cost.

That was about contacts. I don't think I could have even got in front of the client for 5 minutes to pitch the idea. He could, And did. He also has more work available than time to do it, and so .... waiting list.

His USPs are, first, quality of work,, but second, both access and reputation. There are, as the saying goes, many ways to skin a cat.

Make no mistake, though, what you're proposing, unless you have some edge, is NOT going to be easy, as countless people have found out when they tried it.

That's pretty much the sort of thing I meant by "Bespoke" custom stuff for people who have the money, understand the value of time and expertise and are willing to pay for it.
There is a market for it but it's small and generally more demanding.

At one point I was thinking about trying to do moded case custom builds, but I've realised I don't have the experience to produce the level of quality mod I'd need to try doing it professionally.
And even then I found out that for many "professional" moders moding itself doesn't pay the bills, they make money from it but it's not their main source of income.