Jeez, what can I add (I'm sure I'll think of something).
Doc, wizofid and shahani all have given great advice, as always

.
I started up my SMALL shop a year ago. I have made probably every wrong business desicion since

so that it with a grain of salt.
My business has been primarily word of mouth and a small ad in the local weekly paper (when I remember to put it in). . I live in a tiny town but have found that the word of mouth has brought me business all the way into Albany (an hour and a half away).
I always make house calls. When a customer calls with a problem and I get a feel for what it is, I set up an appointment to take a look-see. I charge $30 for a house call - flat rate. I waive that fee if I fix the problem in 15 minutes or less. I do this because when these people are ready for a new computer or upgrade, they usually call me.
I try my best not to charge by the hour for anything other than instruction (everyone has thier own learning curve

). By the time I get called most of the computers need a format and I explain it to the customer up-front that the fee that I charge for it is $150. At first they may balk at the price but I explain to them what that entails - data backup, format, reinstall Windoze, all thier extra software, internet connections, all the tweaking that I do to the o/s, etc. I then set them up with a loaner computer for a day so they can e-mail all thier buddy's, chat, whathaveyou and return thier computer within a day. I also make it a habit of Ghosting the drive before I return it in case they call again in the furture to save them $150

.
Up front I tell anyone that if they have AOL installed (or ever have) on thier machine, I charge double than what I normally would i.e. $60 for a house call. I don't get a whole lot of AOL business anymore as they don't have a local dial-up number in our area. When I do get them it's after the customer installed it and used it for the free 700 hours and get next months telephone bill for $400

. I have been trying to avoid repair for the most part and do it when needed.
I gear my business to custom built computers. This is where I have made a whole lot of mistakes. If you want to go this route, request at least half down of the quoted price with the balance due at delivery. I have 5 brand new computers collecting dust in the boxes from orders that people placed and then decided to wait for whatever reason

. You really don't want that kind of inventory on-hand (something like 5 grand). This also includes people that you have already built systems for before - I learned that just this week. A doctor in Tampa that I built a computer for last winter call me up and wanted me to order him up a laptop for his wife. It was perfect timing as I was ordering up 3 other ones. I took him at his word, ordered it up and when I got to Tampa last week he said that his wife didn't want a laptop. I won't even put that mad face after that as it doesn't really relay how I feel.
Problem customers are (IMO) the ones that you build them a computer and then they feel as if they can get free tech support via the phone for a lifetime. When I first started, I offered free tech support for 30 days. I don't even do that anymore. It's amazing that people will call at 12am to ask what "error 404" means, ect. On my answering machine it states that if you are calling with a technical problem, please note that Byte ME Computers charges $25 per hour or incident, whichever is the lesser amount for phone technical support. I would (and have) charged my own mother that. I don't do this part time - this is my living so they need to understand that.
I think that the reason I do pretty good at this is personality. People like to laugh and I'm pretty good at it. When I get most calls, the customer is pretty stressed that thier computer won't boot, etc. I tell them not to worry. They like confidence and are pretty relieved when all it was is a bad battery (which is free of charge)...........I just wish it was always that easy

.
Finally, I DO mark up some of the parts. I buy 98% of my computer parts on-line. I have a working knowledge of what memory (installed for free), video cards, etc., are currently being sold in the stores and by my local competition and always charge a whole lot less while still making a profit. A local competitor just charged a freind of the family $350 for a 20GB slave drive install

- amazing that they paid that (they deserved it for not calling me

)
'kay, I'll shutup
Mike