How to Start an Electronics Repair Business

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At this very moment, around 15 percent of iPhone users are walking around with a cracked screen. Our lives run on technology, and when something goes wrong, someone needs to fix it. In truth, we dump a lot of money into our tech problems. Consumers have spent a whopping $10.7 billion on broken iPhones since the product was introduced to the market – and that's just iPhones. In other words, electronics repair is a big business.

Jumping into the world of tech repair doesn't require a huge upfront investment. This is one business that's easily scaled, meaning you can start small and work toward a larger end game. If you have a passion for tinkering with tech, these tips can help you transform your hobby into a profitable business.

Identify Your Target Audience and Business Model

Jumping into the world of tech repair can feel rather daunting because there are so many different types of electronics repair shops. When it comes down to it, your business will likely be a mix of four different options: hardware or software repair and a business-to-business or business-to-consumer business model.

A B2B electronics repair shop works with businesses and services enterprise and corporate technology. B2C operations serve your average consumer – the person who walks in with a shattered iPhone screen, a broken desktop or some glitchy software. In other words, you’ll be dealing with both the middle-aged mom who can’t load her pictures onto her computer and the self-employed contractor whose business is halted because of a complicated tech issue. Either way, you’re going to need a lot of patience.

There are many small business ideas for electronics repair shops that serve a wider range of clients, but your best bet is choosing a smaller target audience and narrowing your scope before expanding. According to Brian Gill, who launched Gillware Data Recovery 15 years ago and has since fixed over 100,000 broken storage devices, a niche can make or break a business.

“[You] need to fully understand who [your] target audience is,” he said. “Are you going to tie down the local small town chamber of commerce and local rotary club to target all the white collar businesses in a single town? Are you going to tackle a specific vertical like IT support and hosting for veterinary clinics nationwide?”

Once you find out who your customer is, write it down in your electronics repair business plan. You’ll also want to figure out your company structure. Are you doing the tech repair yourself, or do you need to hire employees? Will you have a dedicated customer service team? What about an office manager?

Consider the Pricing Models for Electronics Repair Shops

An important part – if not the most important part – of launching a business is how you’re going to get paid. In an electronics repair business, customers are typically charged per project or per hour. Ben Taylor, who’s been freelancing in the IT world for the last 14 years, doesn’t think charging hourly is the best deal for smaller businesses that don’t have a lot of employees.

“Obviously, there may be situations where [an hourly rate] is the only logical way to charge, but doing it all the time means capping your income,” he said. “After all, there are only a certain amount of hours in each week. If instead you charge a fixed rate for a laptop repair or an upgrade, there’s nothing to stop you from working on several machines at one time.”

Choose Your Location

There are a number of small business ideas for electronics repair startups, but it typically goes one of two ways: either you go to your customer or your customer comes to you. You may offer some light tech support on the phone, but either way, you’re going to have to figure out where you’re going to work.

“Most people that start tech repair/support businesses love computers, love technology and love tinkering,” said Gill. “They usually are introverted and may not spend enough effort on a marketing game plan. They may not spend the appropriate amount of time and money researching whether or not to have a retail location. If you hang a shingle in a [bad] part of town or a part of a city with huge competition, you may lose quickly. If [you] start spending on rent but aren't immediately and aggressively launching a search engine presence, that can also be a dream killer.”

You don’t necessarily need a retail location, but if you do want a brick-and-mortar electronics repair shop, you should cautiously scope out the competition. Make sure your niche is unique. You won’t be fixing many iPhones next to an Apple Store unless you undercut their prices. If you don’t immediately have the funds to rent a location, the good news is that you can probably work right out of your home office. Opt to go to your customers, and launch a brick-and-mortar store once you have a solid base of repeat customers.

Get the Proper Licenses, Permits and Insurance

Depending on your location, you might need a license to perform tech repair. For example, in New York City, tech repair businesses need an Electronic and Home Appliance Service Dealer License. You can apply for this as well as a regular business license at your local municipality. If your business model involves going directly to consumers, you’ll also probably want to invest in liability insurance and bonding. If you don’t have the proper licenses, permits and insurance, you can wind up with huge fines that bankrupt you before you even get off the ground.

If you haven’t yet, this is the stage when you need to form a legal entity. Most smaller businesses tend to operate as an LLC, which allows them to hire employees and organize their tax structure. You can form an LLC in a few simple steps online. Solo IT freelancers can also operate as sole proprietors until they need to hire additional employees.

Get the Equipment

In order to successfully repair electronics, you’re going to need to invest in some basic equipment. What you need depends on your niche. For example, if you’re fixing Samsung phones, you might want to get some lithium batteries that don’t explode. Jokes aside, you’ll probably need things like testing equipment, heat guns, scrubbers, screwdrivers and plastic wedges that help you remove phone screens without damage. Diagnostic equipment doesn’t have to be a large upfront investment. You can opt for software as a service diagnostic services, which are typically cloud-based and charge a monthly fee. You can opt to purchase a cash register, though many small business owners are turning to Square to save cash. Square transforms a tablet into a pop-up cash register and point of sale system.

Many of the most successful small business ideas for electronics repair shops involve upselling. This means you may suggest additional nonessential services to customers or sell accessories and smaller electronics in addition to doing tech repair. In that case, you should purchase your retail stock. Lots of tech repair businesses choose lower-cost items like cell phone cases, screen protectors, chargers and cleaning kits.

Launch a Website With a Marketing Plan

One of the most important steps to launching a tech repair business is having a solid website and marketing plan. Gill believes a solid website that functions on mobile and a great online presence can be the key to bringing in new customers. In order to get that, he says you’ll have to “do the dozens of little things a savvy web marketer will do.” This includes everything from website SEO and Facebook posts to monitoring Yelp and Google reviews. He recommends setting aside a “fixed budget for a search engine marketing company” so you can focus on customer service and repair. In order to get the word out about your company, you might also choose to offer a range of promotions, such as a loyalty program.

Just Do It

There’s one thing your electronics repair business plan doesn’t tell you: that starting a business can be frightening. Sal Medrano, who co-owns Boston Reboot, a tech support company that specializes in Apple products, believes the best way to get started is to ditch your inhibitions and just do it.

“When I left Apple, it was because I wanted more freedom to do things outside of work. I didn’t have the confidence to start my own business,” he said. “It’s extremely scary. I had a lot of questions and self-doubt. How would I get clients? What if I don’t know the answer to advanced questions? What if I cannot fix the issue in front of me? What I learned is that you need to dive in head first and work your way through it. I found that anytime I didn’t know something, I was in a better position to figure it out than my customer.”

References

About the Author

Mariel Loveland is a small business owner, content strategist and writer from New Jersey. Throughout her career, she's worked with numerous startups creating content to help small business owners bridge the gap between technology and sales. Her work has been featured in publications like Business Insider and Vice.