Business partner?? Feedback? (long post)

[John Prophet]

Im just gonna throw out some stuff here and see what kind of feedback I get.

I am an A+ certified comp tech. For about 6 months I have been working on my own selling comps and doing tech work out of my apartment.

Of course, at this point I have no license and I dont think there is any way to get a retail license to sell out of my apt in the city.

So basically I am at the point where I need to get a location and get my license issues straight and "go into business".

Well, that is a huge decision as far as "getting a location". We all know that to be successfull a retail store needs a great location. Of course one guy cant run a great location either, lol.

So my thinking at this point is to possible rent space in the new Small Business Development center which isnt a great location as far as cars drving by seeing your store, but it is decent as far as it being in an expanding area where there are no other comp stores for miles. (town and surrounding county are about 60-75000 peeps). We are talking about renting a one room for like $225 month which includes 512k cable access and possibly utilities. Then I suppose I would need to put up one of those little false floor standing partitions to cordon off a little tech area and parts storage in the rear half.

My theory is to start really small and basically keep doing what I am doing now except have my licenses and that way I can be a little more agressive with my advertising.

I am still a one man show so I dont know if I would have to advertise "call to make an appointment" or what, lol....cuz I dont see one person running a store 9-5 or whatever with customers walking around and repairs needed and tech service calls to be made.

Ok, now the interesting part.

A guy I know called me and said he heard I was interested in starting a business. Well he wants to meet with me and talk about being a "partner". His pitch is that he isnt really strong technically (on comps etc, he uses comps I suppose but has no clue about how they work etc)...but he feels he is good with people and he is finsihing up a business degree or cert program with some marketing blah blah. He feels he has the ability to manage peeps and bring things together. He has done some managing I think in the past. I have known the guy forever but never really close, just thru some church friends etc.

I dont have a clue what to tell the guy. Its like asking me what to pack to climb Mt Everest...uhh, I have no clue, Ive never climbed everest, or any mountain, and Ive never been in business by myself, let alone with a partner.

Part of me says....man, freak that, I am just looking forward to some independence and the chance to put my own thoughts and ideas into practice, why would I want to shackle myself right from the start and have to clear everything with someone who doesnt even know much about comps.

Another part says...yeah, but you could use some help with bookkeeping and sales and youre not really a super outgoing people person so the guy could be a good assett.

Here are some more specifics. I am 35 and white, he is 56 and black, lol. It would be kind of an odd couple. He and I both are Christians so that gives us a similar background and value system to work from. I suppose the demographics of the town I am would show increasing number of black residents so I guess having a little diversity couldnt hurt. Lots of the black people do lots of the renting...we rented a lot in the store I used to work in..its great money but its sort of a hassle to have to go repo the comps, lol.

I dont know what all the dude has done for a living. I know he has been involved in running a local "Goodwill" store (sort of like salvation army) for years. When I asked him what all he has done thru the years he said "too much". I suppose he means he hasnt really had anything youd call a "career". He told me he is getting too old to waste much more time and that he wants to get "something positive going". When we spoke on the phone and he said that, it kinda hit me as desperation or at least "vagueness". Which I cant really fault him for cuz I myself only have vague ideas about exactly what I am doing, lol.

Anyway, I would be interested to know what any of you think about any of this. How can I decide if I need the guys help? One snag is that if I am a sole proprietor then I probably wouldnt really be taking a "paycheck" but if I had a partner we would have to both have some sort of pay situation happening...which complicates things cuz I would be glad to work for cheap just to get my business going but Im not sure what he would work for.

Any thoughts? Any questions I should ask him or ask myself? lol.

What do you think of the whole situation? With only a couple years of comp experience should I go ahead and go it alone as I am doing or should I go back to working for someone else to get more experience? I would feel weird doing that cuz I would feel like I am helping someone else's business get stronger and plus I would probably be holding back my good ideas and supliers etc, lol.

I feel that if I can start slowly and manage to break even and just keep my head above water, that I will be fine.

I guess I envision what I want to do at the start as sort of a cross between a store owner and an independent contractor.

Any feedback??

JP

[John Prophet]

One added wrinkle is that the guy is probably a homeowner and can get a loan easier than me, lol. (Im a little shy on capital)

JP

[Zotzmein]

I would avoid the partnership and stick with the sole proprietor ship. I know of a guy in my area, who was in the same boat you find yourself in now about three years ago. He rented a small office like you suggested and focused his efforts/advertisement on the concept of “on site” sales, service and repair.

He rented computers and or sold them but as a value added service to separate him from the competition he included regularly schedule service on rentals and a one years worth of once a month servicing on computer purchases. Most of the visit involved nothing more than running scan disk/defrag or cleaning up their browser. Often this visit resulted in ancillary sales of accessories, software and upgrades.

Jim also offered discounted “in home” classes on various applications for his retail customers and would as a part of his class allow them to invite a friend to sit in on the session. This allowed him to give out his business card and network himself to more people. He volunteered to teach “free” Internet classes at the local library and various civic groups, once again he could usually make some contacts that would result in sales.

Today Jim has a two thousand square foot store and three full time employees. He has at least a dozen corporate clients who essential pay the bills and everything else is bread and butter.

Warmest Regards,
Zotz Mein

[John Prophet]

Well thats some of what I have in mind too, cuz this town has lots of peeps who would be 1st time buyers etc..and tons of peeps who are scared of comps cuz they dont think they can learn to use em.

When I was in the comp store, nearly EVERYONE who bought comps wanted lessons. So there is a definite market there.

JP

I've never had a small business like that, John, so can't really give an opinion. But that's never stopped me before , so here goes.

I'd stick with your original idea if I were you. What you need is not a partner, but a good business plan. I have a mate who was laid off from his high profile newspaper job because of illness, so when he recovered he started a copy/print shop. He was very sucessful, mainly because he went to some government agency here and asked, "how do I start a business?". They sent him to a free course which helped him construct a business plan, including how to get loans and stuff. His business flourished; he eventually sold out, then went back into a better newspaper job.

Dunno if there is anything like that around for you, but I'd be contacting a business center or something to find out what's available. Even a book or on-line course would be better than flying blind.

The majority of small businesses fail because of lack of planning, they say here.

I'd tell your friend thanks, but not now. If he can wait a bit until you have established what it is you're aiming for, and most importantly, how you are gonna get there, then you mght find he will possibly come in handy. But set it up first, and get it going. With a plan.

My thoughts. Hope they are useful.

Cheers
Mick

[John Prophet]

I agree, and yes I just visited the local Small Business Development center and got some counseling...basically the guy went over my options and we determined I need a location to be able to get my licenses to go further with it. He gave me some sheets to work on feasability issues etc and I will meet with him again soon. I also have a good older friend who has been an entreprenuer forever now and who also happened to do comp business in my town a while back..I will definitely run it all by him.

And I am also hitting the local libraries reading all their "start your own biz" books.

I guess deep down I have to agree that I really want to get my own thing solid first. Otherwise its almost the same as working FOR someone else...having to filter ideas thru this other guy.

JP

[NeoStarO1]

Hi John,

On the partnership issue, that is something you would really have to think about, If I was in your shoes I would most definatly want to get to know the prospective partner a bit more. Their are some advantages of having this type of business as well as disadvantages. Main issue would be trust in one another, there have been too many instances of one partner screwing out the other. My father went through this first handly by a parnter totally screwing him out for the benifit to himself and then when he wanted out he called the IRS and stated that my father was doing illegal activities. Unfortunatly it was not my father but my father ended up paying hell for many years because he could not prove otherwise but his partner (the one doing the illegal activies wihtout my fathers knowledge) got off scott free.

So to say if you have a partnership make sure its with someone who you can trust wholly because not only are your assets are at stake his are too. So in the best intrest of the both of you I would take time to get to know each other and find out about each others backgrounds before jumping into a partnership business.

On other aspects of the business my first piece of advise I usally give is to do these things in the following order.

1. Get your liences
2. Open a Business checking account
3. Purchase your start up business equipments and other stuff.

I can not stress the importance of doing this stuff in this order upon starting a new business. It will save you TONs of headaches later expecially with the accounting.

Other items that need to be discussed is where do you want the business to go? How do you want it to grow. Do you want to focus more attention to building and repair computers? Or do you want to focus attention on the retail aspect of the business? Or both? That I think is important to have a clear picture of what you want to see happening in your business.

Other items is location. Sometimes having a offbeat location with minimal competition can be your best location as often times many people don't want to be driving a fair distance to drop thier equipment off to be repaired and sometimes when looking in the phone book will go to the shop that is closest to home to get a quick fix on thier computers.

Other times location can be your biggest drawback. What is the parking like in the location you are looking at. Is it busy all the time? Is it hard to get in and out of the place? Will people opt not to go to your business because of a parking issue? Those are some things to consider with your location. Also as you mentioned expanability in the building itself? Is thier room to expand later in the building if another tenant moves out and your business is ready to expand?

Is thier room to have your business name on the building? Prehaps on the roof on a big billboard? or is it just the window? an A-Frame works well too provide it does not obstruct pedstrians and cars going by, meaning sometimes business place a A-Frame business sign and cars trying to go out from a side street to the road and the sign reduces visablity for drivers seeing the road. Is it easily visable to passerbys as well as leaving a clear view of traffic? (this only applies if you are on a corner)

Next is how do you want to promote your business? How much are you willing to spend a month on advertising? What method of advertising do you want to do? Remember that advertising is one of the best ways to promote your business. their are many avenues a business can use. However its fairly expensive at most. But critical for promoting your business.

You mentioned that this person has no experience with computers. How do you feel about that knowing that customers are going to be coming in and asking computer related questions? How will he handle that if you are in the middle of a task that can not be left alone? When he is selling a computer to a prosepective client how will he handle the questions? Some people come in and say I want the best gaming machine there is. How will he explain what features they would want in a system as versas a system that is mainly used for business applications?
It would not be good for your business if you have someone trying to bullcrap thier way through a sale with possible misinformation. I think you have expereince enough of that to probly know you don't want that for your own business.

Where do you plan to get your starting capitol? You meantioned that he has a bit more captil than you and has the ability to get loans. Relize that loans are payables and are considered a liablity and therefore while the loan is still outstanding that the bank who gave your business the loan and first priority in rights against your and your partners assets.

How much of a loan are you willing to stake your business on and your own personal assets? What will the intial loan cover? Salaries, rent, equipment, advertising?

Best to analize what and how much of a loan you want and to do that is to analyze what your intial start up cost will be, plus advertsising and then to support the shop for at least the first year.

I have also advised not to think about a paycheck for at least the first year of business. Firstly because you are new and have no idea what kind of business you will generate, unless of course you account some of the loan to cover first years salaries. Typically a business is in the net loss from anywhere from the first 6 months up to 5 years of business. The larger the loan you have the less total net income you will have untill the balance of the loan is paid off.

Also how do you want to handle transactions for your business? Do you want cash only business or cash, and accounts recievables? Do you want to have a layaway or a lease to own computer options for customers? the latter carries risk and so do any type of accounts receivables.

Best advise I can give you is not to jump the gun too soon. Do your research and look into it. There is nothing worse than getting into a situation and finding out something you wish you knew before you opened up.

Im sure there is more I can ask. I'll post back if I think of more. Their is a lot to a business that many first time business owners are shocked to learn about.

Good luck and post back on your decisions and i'll help out whereever I can.

[Brainchild]

I think you answered your own question JP.
I would go it alone and hire some 18-19 yearold geek/geekette to mind things part time if needed.That would free you up to do the tech,most of the time.
Someone that can't say I can do this,this and this (meaning having done it before,and confident in themselves) prolly isn't going to be a big asset to you IMO

Good luck

[NeoStarO1]

Originally posted by John Prophet
...basically the guy went over my options and we determined I need a location to be able to get my licenses to go further with it. JP

All you need is a physical address, You do not need a business address. You can use your own phyical living address to obtain your liences.

Some landlords require you to submit your business lience number before renting a building.

Im in more or less agreements with Mick about the partnership. As I said in my earlier post trust will be an issue.

[Gutter Ball]

You could always take him on as a "silent" partner. He just gets you the needed capital, but totally lets you run the show for a percentage of the profits. When your business is successful enough, you can buy him out.