With the increasing popularity of electronic devices all over the world, electronics repair businesses are becoming an appealing venture for people knowledgeable and enthusiastic about electronics. Considering our dependence on electronic devices, the growth potential of this business is enticing, not to mention the diversity of its market segments.
However, despite the lucrative appeal of this venture, remember that it takes more than just a good idea to succeed in business. Like most other businesses, electronics repair businesses require significant planning and setting up before any operations can begin. Here are some crucial steps you should follow when getting started with your electronics repair business
Plan Your Business Adequately
Having a feasible plan is paramount to achieving success in entrepreneurship. A clear plan will map out the nuances of your venture while helping you strategize for optimal business performance. The following are some critical areas you should consider when planning for your electronics repair business.
- The Total Cost of Starting the Business
You will typically incur lower costs when starting this business compared to other businesses. This is because you can choose to handle all business operations from your home or provide remote services to reduce your expenses further.
Among your biggest expenses will be the initial purchase of testing equipment and other tools. Diagnostic software and tools, for instance, can cost between several hundred and a few thousand dollars.
Also, depending on the location of your business, you may have to pay for a license. If you intend to provide remote services that entail entering the business premises and homes of your clients, then you may also incur liability insurance costs.
- The Target Market of Your Business
Ideally, your target market should comprise environmentally and economically conscious customers who want to maximize the utility of their devices before replacing them. You can also target small business owners and busy professionals not capable of affording full-time IT personnel.
- The Ongoing Expenses of Your Business
The following are some of the expenses you will routinely incur:
- Buying office supplies
- License and insurance costs
- Paying staff salaries
- Vehicle maintenance costs (if you will provide remote services)
- Tool maintenance and replacement costs
- Buying spare parts for repair, e.g., tantalum capacitor, motherboards, housing and frames, etc
- How the Business Will Make Money
Typically, your earnings will come from charging customers a fee for the labor and other costs involved in repairing their devices. To increase the earning potential of your business, you can also buy second-hand electronic devices like smartphones, gaming consoles and laptops for refurbishing and reselling at a profit.
- A Suitable Name for Your Business
Even though many entrepreneurs never put much consideration into this, you should give your business a good name. More importantly, check if the name is usable as a web domain so that your website’s name matches the business name.
Make Your Business a Legal Entity
Forming legal business entities is among the best ways entrepreneurs can protect themselves from personal liability when their businesses get sued. Depending on your needs and preferences, you can choose to make your business an LLC, Corporation or DBA. For purposes of privacy and staying compliant, you should consider completing this step via a registered agent.
Register for Taxes
Like other businesses, you will have to register for various state and federal taxes. Before registering for taxes, you will need an Employer Identification Number (EIN) that you can easily apply for on the IRS website free of charge.
Open Dedicated Business Bank Accounts and Credit Cards
Having separate business bank accounts and credit cards is necessary if you wish to protect your personal assets. Using your personal bank account for business transactions puts your personal assets, e.g., car, home, money and other valuables at risk should your business get sued.
Besides separating personal assets from company assets, and providing personal asset protection, having a separate bank account for your business will make filing taxes and accounting a lot easier. Having a dedicated credit card for your business will consolidate all business expenses in one place and separate them from personal expenses.
Additionally, a dedicated credit card is useful for building your business’s credit history, which can come in handy when seeking investor funding in the future.
Set Up Accounting Systems
Implementing sound accounting practices will help you understand how your business performs financially by keeping track of all expenses and income. A sound accounting system will also simplify the annual tax filing process.
Obtain Permits and Licenses
Operating without the required permits and licenses is simply asking for a hefty fine or business closure. The permits and licenses needed to run this type of business vary by state. To fully understand your state’s licensing requirements, visit the Small Business Administration’s (SBA) website.
Also, you will need an Electronics Repair License from The DCRA (Department of Consumer and Regulatory Affairs) to charge clients for fixing their electronic devices. If you intend to refurbish and sell second-hand electronic devices, then you may also require a second-hand dealer license.
Obtain Business Insurance
Insurance helps protect your business from financial loss in case an insured peril occurs. There are various kinds of insurance policies suitable for different purposes and businesses, given the different risks inherent to their operations.
If you are not certain about the potential risks your business could face, obtain general liability insurance for a start. This insurance policy is the most popular and comprehensive for small business needs. Also, if you intend to hire employees, then you should obtain Workers’ Compensation Insurance.
Establish a Web Presence
Nowadays, having a dedicated website is a bare minimum for most businesses. Consider a business website as the virtual face of your company where clients can learn about your business and the services you offer. Also, consider creating business accounts on various social media platforms to maximize the potential of attracting new customers and interacting with both current and potential customers.
What Skills Do You Need to Succeed in the Electronics Repair Business?
- Troubleshooting skills to identify and address potential problems
- Analytical thinking to determine the best approaches and solutions for different issues
- Sourcing skills to acquire quality parts and devices, e.g., tantalum capacitor, smartphones and laptops for repair and refurbishing at the lowest cost possible
- Communication skills to satisfactorily answer customer queries
- IT skills to use the necessary monitoring computer systems and diagnostic software
Is This the Right Business for You?
You will find great satisfaction in this business if you are eager to learn about technology and restore damaged electronic devices to usable conditions. This line of work can enable you to conserve the environment by reducing e-waste while helping clients recover their valuable devices and data.