Backbreaker, I want to open a store.

[iqqi]

Give me advice! I heard you were the man.

 

[OfficeSpace]

Yeah backbreaker is da man.. He seems to be financially stable if what he posts is true about his life!

Hey man.. I've got a better idea... Let's open a bank... at night!!

just kidding..

Hey what kinda store you talkin about here? computer store? what? That would probably be helpful!

 

[iqqi]

I was going to wait to hear his vague reply before getting specific, but here is some detail.

I have been hustling on Ebay since last summer and I have evolved into a Powerseller selling high price, cool name brand clothing (new with tags). Ebay is hit or miss, and nobody wants to pay retail there, still I have been making more money then I ever have in my lower class, poverty ridden life!

So now I want to open a B&M (translation: store in real life). I live in a rich college town, rich college kids here would not think twice about paying retail price for these brands I am selling in my Ebay store at half price.

I don't know too much about making that transition, coming from where I'm from, there aren't alot of people who even have a job, let alone a business, to ask the more detailed questions.

I know that rent downtown is extremely high for businesses, but if a used record store can sell enough to stay afloat, I know my $200-$400 clothing items could sustain my little spot. I have a little knowlege from the Ebaying, and from asking a realtor, but I have so many more questions.

Any advise so far? Hey, is it advise or advice?

 

[backbreaker]

just walked in the door (at 5:30 in the morning) and decided to check and see if I had any PM's before I go to sleep

People actually lie to people they don't even know online? That's pathetic.

Everything I say is 100% true. I mean, if I was making stuff up I wouldn't admit that I still somewhat have a jones for my old oneitis (thoose damn legs!!)

anyway, lets talk business. My speciality is computers. It didn't happen overnight.

I am living proof that a willingness to endure will get you anywhere. Two times in my life I have been told to give up on a dream I had, and both times I just fought threw the adversity, even when times I personally started to doubt myself (my computer business and actually making a living betting horses)

My computer company started off on ebay... god I hate ebay with a passion. They might be the worse fortune 500 company there is.

What type of company can you just plain CAN'T CALL. Paypal is worse. I refuse to use paypal under any circumstances, even when I am buying ****. I hate paypal that much.

I know B&M stands for Brick and Mortar (come on now, gimme some credit )

First things first. YOU have to understand every freakin detail of your business before you can explain it to yourself. The worst thing that can come out of your mouth is "I don't know"

I assume you are selling clothes? What kind? Who are your vendors going to be? Do you have any sort of credit?

Your first step is to create a business plan, if for anything, for yourself.. you will end up answering any type of questions you might have. Take 10 bucks and go to Barnes and Noble and buy a how to guide on it. That's pretty much what we did.


I love talking business (you see i am still up), any questions you might have, feel free to ask.

I will tell you three things from personal experience.

1) If you get a business partner, which I recommend, but that's 100% up to you (my business might have actually taken off quicker without one in hindsight, but work got done a hell of alot faster, and it's great for motivation) GET SOMEONE WHO YOU CAN TRUST.

My ex business partner had a drive to succeed like none other. He would stay up 2 nights in a row if something had to get done. He pushed himself every day.

On the downside... he wasn't the most financially prudent person on earth to say the least. That I can deal with, espically after you start to have some income coming in.

What was worse is he had horrible self esteem problems... good looking guy, and i'm not gay... He was so bad with women, I seriously considered brining him here. He took his secratary to PARIS and spent like 5k on her.. AND DIDN'T HAVE SEX.

The cake was, he came in late one day because he was outside of her house, well apartment one night, because she had "company" when he tried to stop by.

I can go on and on but watch your back in that regard.


2) Business can be hit or miss. You are going to have some ideas that you think are 100% foolproof that are going to fail. It's going to happen. you are also going to have some plans that are iffy that will make you look like a genius.

The best Idea for our company I came up with, and that's my strongest point, I am very very very creative, tanked. Not because of anything I did wrong.. it just so happened, out of the blue, that Dell had came up with seemingly the same idea that we did at the same freakin time. That was 2 months of research down the drain. It wasn't so much as the same idea, they even used the same freakin case we did for that particular unit.

I had two ideas that were just freaking unreal. One reason we were successful was because I was the king of keeping overhead down. We on an average day, had 15 employees on staff, and could churn out about 60 PC's a day (could and did are two different things), with an average sold of about 40ish and the average sale being right at $760, profit margin 17%.

That's unheard of in this our industry. What made it even better was, all of our units were custom built by hand, which isn't spectular, but it is considering we weren't selling 5k alienware units.

Instead of haivng one person build, install and put on software, I came up with this "Pod" system.. there were 3 techs at a pod, and all specialized in installing/putting in one thing.

A gaming comptuer could be built in about 10 mintues... every hour and a half, we had one software tech install windows on all the PC's, using a KMV

I don't want to get too deep, becuase it took us about a full year to fine tune our process, but damn once we got the ball rolling.

The second unreal Idea I had was by far the thing that put us on the map. We had a little money at the time, but we didn't have a huge marketing budget. So I had, or set out to figure out a way to get customers without spending too much money.

Dell pays Overture, a PPC company, for about 25k clicks a day, which is a ****load. Their avg click price was about 1.50 cents. We would be broke in one day trying to afford that.

So instead, I went to google adwords, and I locked myself in my office for 2 weeks and proceeded to make a 25k keyword list. Sounds like a lot. it's not. It's a hell of alot.

But we didn't have try to outbid the bigger compaines any longer, and our avg click was like 10 cents, which was google's min, meaning we were the only company to put in that much work in making an expanded keyword list.

The day after this, no, two days after I submitted them, our sales tripped. I had never been so proud of myself than that day, becuase if I wouldn't have done that, our company would have not have grown.


Last thing. Merchants. I delt with them alot, becuase selling computers online is high risk.

You aren't high risk, but take this advice and run. If you can, any way possible, get one of these two merchant accounts.

Nova Merchant Systems
Wells Fargo Merchant Solutions

They are heads and sholders above anyone else. It's not even close.

Nova is better because the money gets to your account a day quicker.

However, I like Wells Fargo.. why did I like wells fargo so damn much? Oh, becuase it's easy as **** to sign up, can do the entire process in like 5 mintues on their website, and I could call them and do anything I needed to do without talking to anyone. I could call and know the exact amount, to the penny that would be in my accuont in the next day.

nova is the same way. I knew if we had a batch close on Wednesday night, we weren't getting the money until Monday.

Monday=thursday
Tuesday=Friday
Wednesday=Monday
Thursday=Monday
Friday=Monday
Saturday=Wednesday
Sunday=Wednesday

clockwork. Never held money up for any reason whatsoever. The only problem I ever had out of them was we processed more than we were supposed to for one month and they wouldn't let us process anymore. I called them and within 10 mintues they gave us a credit raise so we wouldn't have to switch merchants.


anyway, let me go to bed. I will be back tomorrow, any questions you might have, feel free to ask them.

 

[bbestar]

$5 g's spent on one girl... Im in shock.....

I think the Most my father has spent for my mom was the cost of the wedding. That was 22 years ago, and they are still married.

 

[Bible_Belt]

Holding inventory is the biggest pain in retail. Michael Dell made so much money by streamlining Dell so that they could minimize the amount of inventory sitting around at any given time. Excess inventory costs you money.

Also, I have seen new business owners go broke because they thought that they had to have the best and biggest of everything. It's better to be small, simple and profitable than to try to have the trendiest and most impressive store.

 

[STR8UP]

I am not going to try to talk you out of doing this, because:

1) Sometimes (most of the time) you have to learn things like this on your own. It sounds like something you need to "get out of your system". I certainly did.
2) For all I know you could be the next retail billionaire. Business is the hardest way to make money, but it also happens to be the BEST (highest potential) if you are the kind of person who has what it takes.

That said, if you don't do some research and learn a little more about the REALITY of what you would be getting yourself into, you could be in for a lot of disappointment. It took me about 8 years to realize that I was just spinning my wheels with business. Don't let this happen to you. If it isn't for YOU, and you aren't setting and reaching goals, GET OUT.

Okay, so are you scared yet?

Anyway.....here are a few things to keep in mind if you are considering transitioning from a one man garage type operation to something with employees, inventory, and overhead.

1) Employees-

Are you good at dealing with people? Are you a good leader? Being a businessman is ALL about leveraging other people's time. You pay one employee $8 per hour, and you pocket $.50 abover and beyond that (these are just numbers thrown out for argument's sake). A one employee business might make you a small profit, a ten employee business might make you more money, being the largest employer in the world has even more potential.

My point is, if you aren't good managing employees you had better find a trustworthy partner who is. A small operation has limited potential. A larger operation requires more employees which equals more headaches? Are you prepared to deal with this?

Also, owning a retail store will give you status. Good when you are picking up women, BAD when one of your employees gets a wild hair up his ass and decides to sue you for something stupid because "he can afford it, he owns a business".

The fact of the matter is, even if you are good at managing employees, it takes a lot out of you. It's VERY difficult to find good help, and you as the owner will have to pick up the slack. I own a retail store, and I have a good friend and a brother in law who both manage well known retail stores in the mall. By talking to them I can tell you that they face the same incompetence and dishonesty issues that I do. It unfortunately comes along with the territory when you have emplyees.

2) Inventory-

It takes a good amount of cash or credit to stock a retail store. Do you have the ability to raise the capital?

You have to watch your product like a HAWK. Shoplifting can be a problem, but I'll tell you right now that I have lost 100x more stuff to employee theft that shoplifting. Are you prepared to install an effective security system? What happens when you DO catch an employee stealing from you? It WILL happen.

I have had to spend HOURS watching video footage to catch an employee in the act. He KNEW he was on camera, but he did it anyway, and I busted him. Another time back in the days where we installed products in people's cars I installed a hidden camera in a car to catch an installation employee stealing money out of the glovebox. Are you prepared to deal with these things?

3) Overhead-

Do you have any idea what it costs to rent commercial storefront? Do you know how much it costs for electricity? How about advertising? Payroll?

Here's a rough idea of what my 3000 sq ft. retail store costs per month (major expenses)

Rent- $4,600
Electric- $800
Phone/internet/security- $500
Payroll- $6,000
Advertsing- $4,000

This is just the tip of the iceberg. As you can see you are going to have to sell a lot of product just to keep your head above water.

What I am trying to say here is that expanding doesn't always equal a profit increase. Sometimes you will find that you make WAY more money and have fewer headaches by keeping the operation basic.

If you are going to follow through and build a BRAND, not just a store, make it profitable and expand it, then by all means go balls to the wall. Just make sure you know what you are getting yourself into, and re-assess your position in relation to your goals OFTEN. It's easy to fall into a comfort zone and before you know it you've killed YEARS just spinning your wheels.

 

[djbr]

STR8UP is spot on about the employee issue. People love to rant about how the employer is unfair and yadda yadda nag nag stuff. At least here in Brazil that's all they talk about, how they keep all the money and treat their employees like crap.

Not linked to reality, I say, at least in my own experience. Employees take the MOST and give AS LITTLE AS THEY CAN. And they have all laws on their side (again, at least here in Brazil).

I was all about business, but now I really consider going to other types of investment, such as real estate and stocks, cause I just can't face some attitudes of people. Dishonesty is the worse, I always believed that if you treat people with respect and honesty they would do the same to you. Wrong big time.

I reforce what STR8UP said: if you want a business, BE SURE you like dealing with people, ESPECIALLY the HARD part. When you have those pointless law suits against you for things you KNOW they don't deserve but still are able to claim, you'll scream.

 

[backbreaker]

$5 g's spent on one girl... Im in shock.....

I think the Most my father has spent for my mom was the cost of the wedding. That was 22 years ago, and they are still married.

I can tell you that was one of the many "problems" he had. I could write a pretty interesting book on our relationship and his problems.

ONe day he "figured it out".. women like cool cars! Yeah, he was going to get a cool sweet ride. Which i have no problem with.. execpt he used the compaines money, not only did he do that, he did it without telling me. That's the straw that broke the camel's back in my case. I couldn't trust him anylonger, and I decided to get out while we were still profitable

 

[backbreaker]

Holding inventory is the biggest pain in retail. Michael Dell made so much money by streamlining Dell so that they could minimize the amount of inventory sitting around at any given time. Excess inventory costs you money.

Also, I have seen new business owners go broke because they thought that they had to have the best and biggest of everything. It's better to be small, simple and profitable than to try to have the trendiest and most impressive store.

exactly. At first inventory kicked our ass. I mean REALLY kicked our ass, but it wasn't much we could do about it, just had to take our lumps.

However, over time once we saw what sold, what didn't, what was profitable, what wasn't, it became alot easier.

Then we finally built up enough trust with a couple of our main vendors to let us get a net 30 account, which was awesome.. which is when ebay REALLY came in handy. The stuff we didn't didn't use, we just sold on ebay to make sure we at least broke even. However, I had the tendency to under order, so that was hardly a problem.

Dell used what we called a 0 day inventory. In other words, they didn't even keep a regular "inventory" like your best buy would. When you ordered it, they ordered it.

We did that for a while, and for our custom built units we kept doing it for the most part, but we wanted to cut down turnaround time on our "prebuilt" units (which weren't prebuilt, they just weren't customized)

Hence why it takes so long to order a PC from dell. It will take every bit of a month, at least when I was still in business, to get your PC if you got it from alienware

 

[backbreaker]

I am not going to try to talk you out of doing this, because:

1) Sometimes (most of the time) you have to learn things like this on your own. It sounds like something you need to "get out of your system". I certainly did.
2) For all I know you could be the next retail billionaire. Business is the hardest way to make money, but it also happens to be the BEST (highest potential) if you are the kind of person who has what it takes.

That said, if you don't do some research and learn a little more about the REALITY of what you would be getting yourself into, you could be in for a lot of disappointment. It took me about 8 years to realize that I was just spinning my wheels with business. Don't let this happen to you. If it isn't for YOU, and you aren't setting and reaching goals, GET OUT.

Okay, so are you scared yet?

Anyway.....here are a few things to keep in mind if you are considering transitioning from a one man garage type operation to something with employees, inventory, and overhead.

1) Employees-

Are you good at dealing with people? Are you a good leader? Being a businessman is ALL about leveraging other people's time. You pay one employee $8 per hour, and you pocket $.50 abover and beyond that (these are just numbers thrown out for argument's sake). A one employee business might make you a small profit, a ten employee business might make you more money, being the largest employer in the world has even more potential.

My point is, if you aren't good managing employees you had better find a trustworthy partner who is. A small operation has limited potential. A larger operation requires more employees which equals more headaches? Are you prepared to deal with this?

Also, owning a retail store will give you status. Good when you are picking up women, BAD when one of your employees gets a wild hair up his ass and decides to sue you for something stupid because "he can afford it, he owns a business".

The fact of the matter is, even if you are good at managing employees, it takes a lot out of you. It's VERY difficult to find good help, and you as the owner will have to pick up the slack. I own a retail store, and I have a good friend and a brother in law who both manage well known retail stores in the mall. By talking to them I can tell you that they face the same incompetence and dishonesty issues that I do. It unfortunately comes along with the territory when you have emplyees.

2) Inventory-

It takes a good amount of cash or credit to stock a retail store. Do you have the ability to raise the capital?

You have to watch your product like a HAWK. Shoplifting can be a problem, but I'll tell you right now that I have lost 100x more stuff to employee theft that shoplifting. Are you prepared to install an effective security system? What happens when you DO catch an employee stealing from you? It WILL happen.

I have had to spend HOURS watching video footage to catch an employee in the act. He KNEW he was on camera, but he did it anyway, and I busted him. Another time back in the days where we installed products in people's cars I installed a hidden camera in a car to catch an installation employee stealing money out of the glovebox. Are you prepared to deal with these things?

3) Overhead-

Do you have any idea what it costs to rent commercial storefront? Do you know how much it costs for electricity? How about advertising? Payroll?

Here's a rough idea of what my 3000 sq ft. retail store costs per month (major expenses)

Rent- $4,600
Electric- $800
Phone/internet/security- $500
Payroll- $6,000
Advertsing- $4,000

This is just the tip of the iceberg. As you can see you are going to have to sell a lot of product just to keep your head above water.

What I am trying to say here is that expanding doesn't always equal a profit increase. Sometimes you will find that you make WAY more money and have fewer headaches by keeping the operation basic.

If you are going to follow through and build a BRAND, not just a store, make it profitable and expand it, then by all means go balls to the wall. Just make sure you know what you are getting yourself into, and re-assess your position in relation to your goals OFTEN. It's easy to fall into a comfort zone and before you know it you've killed YEARS just spinning your wheels.

He know's his ****. Listen to the man.

I can honestly say, I didn't too much deal with employees. I cut checks and had the final say on how much someone got paid. That's pretty much it. My business partner dealt with the rest in that regard.

Not that I couldn't have, it just wasn't my job to. If I went to work at 7:30 and got off at 4:30ish, I may have been actually in the office for 2 of thoose hours. Now I wasn't being lazy, I was doing my job. I would go to banks, take care of inventory, pay bills, research new parts, new systems, compitition, work on new marketing plans. But i had this thing about working outside. I loved to work outside, so alot of times I would go to Barnes and Noble and just sit out there.

Even when I was in the office, I was usually in the conference room.

As far as women goes, my old oneitis came inches close of actually dating me (glad she didnt') simply because of it. You will get women who can "smell money", as did she.

lol, you definatly aren't lying about the inventory. My business partner and I had a converstaion and basically said hey... we are a candy store to our techies.. they are going to take SOME things, but as long as they are doing their jobs, and as long as it's within reason, we can manage.

but it got out of hand. WAAY out of hand. So I niped that **** in the but quick. I had a fingerprint lock installed on the inventory door with only 3 people being able to enter... Myself, my business partner and the lead tech. If something got stolen, I automatically knew who did it and he would be fired. Didn't have a problem after that

But a retail store you can't do that. I worked at best buy as a teen and they actually had a budget for stolen items, it was called shrink. Plus every employee there has stolen at least ONE thing from Best buy.. it's too easy


We got a hell of a deal on our building. I think it was like 4100 SQ, in the best part of little rock, for $3200 a month

Phone/interent/security was more like 1k a month.. Take that back, more like 2k a month if you include cell phones



Not saying it can't be done, but the man is right. It takes a different type of breed to be sucessful in business. I mean REALLY successful. You have to pretty much buck trends all along the way. MOre times than not I ended up doing exactly what I didn't want to do. (i.e go home early=stay at work late)

If at all possible, I would recommend getting a mentor. I would also recommend NOT selling any of your company to get startup capital if you can do it yourself. If you can't, then do what you have to do.

 

[STR8UP]

Another point to keep in mind....

Everyone thinks business is all about "the idea". That ain't the case. Business is A LITTLE BIT about the idea, and A LOT about the implementation. If you know how to be a good businessman, it doesn't matter if you are selling peanuts or renting prostitutes (don't do that!), you can make money. If you aren't good at business, even a GREAT idea will lose you money.

Read The E-Myth Revisited. It touches on how so many "business" people get so caught up in running an operation that they neglect to run the business. Don't let it happen to you!

 

[newbie81]

Isn't the hard part of the business buying the goods?

finding a wholesale supplier that provides you with what you want to resell?

 

[diplomatic_lies]

I loathe business partners with a passion. Especially friends-turned-partners.

 

[backbreaker]

funny enough, my ex business partner and I couldn't stand each other in high school... Well, i had no problem with him, he irked me, but I had no problem with me, but he hated my guts

 

[AB500]

You guys seem to know a lot about business. More then I do. Me and a close friend are both thinking about opening up a computer repair business. We figure people break their computers all the time, they get spyware, hard drives crash, and things generally **** up. Spare linux and some of the far out stuff I do I haven't come across a problem I wasn't able to fix within a few hours in the last couple years with most of them being simple 5 minute jobs. My friend has pretty good technical skills but he has a few things I won't have for a while, mainly a car and the ability to open bank accounts and the such. We are writing out a business plan and have to deal with the following issues:

-Liability
-How to go about replacing parts
-Payment
-Where we should preform the services
-How we are going to do advertising

Do you guys have any tips as to how we can get this thing off the ground, we are designing a logo soon and hope to get serious.

PMs are fine, contact me on AIM at EHB Andrew if you want to talk, I realize I'm kinda hijacking this thread so I will start a new one if nessasarry.

 

[backbreaker]

being a computer tech before owning my company, I can tell you at 16 there wasn't a problem i couldn't fix, and if I couldn't fix it, I could find out how within mintues by using the internet.

I worked at best buy fixing pc's for a year, that's when I got the idea to start my own company. Good money in it. Better money in fixing/reselling laptops

As far as the logo, better off going to elance. We got our company logo that we never changed, for I think 35 dollars, and it was very nice. We made variations on it later for different things we wanted to promote but the logo itself was very nice

I have to go but I will come back later and answer the questions in more detail that you asked

 

[AB500]

Thanks man, I appreciate the time your taking on this forum to help people like me. As for the logo I'm pretty fluid in photoshop and website design. A recent site I designed is for the brainchild of me and a few friends, the Pink Latte Club (a very open, mens only society I helped create in our community).

http://pinklatteclub.com

My main site is at http://www.theabworld.com/ but there isn't a lot of stuff on it due to the face I don't have time to design a full site with school and stuff. Everything on those sites I designed myself, minus the phpbb install. I figured since we are going to start in the local community a web presence isn't too important but helpful.

Better money in fixing/reselling laptops

The worse thing about laptops is just about everything besides the HDD, ram, and CPU is costomized and specific to the laptop, therefor you end up going on ebay for every little part instead of just grabbing one off the shelf. Keyboards dead? Go order a new one. Screen is dead? Go order a new one. Motherboard is dead? Go order a new one.

 

[backbreaker]

and?

The point is, not everyone knows or wants to know how to fix laptops, yet laptops are extremely popular.. I mean, people are still buying 500MHz laptops, but when is the last time you seen anyone with a 500MHz desktop that wasn't hidden in someones hosue like a red headed stepchild?

I can replace any part on a laptop, LCD, Keyboard, MB if need be.. more times than not people just look at it and say "well, it's broke, time to resell it" and it just needs like a new screen or something like that, and can be resold.

I know becuase It was one of my hobbies when starting my business.. over time i had at least 6 laptops I bought that were broke and ended up fixing.. I bought one for like 75 bucks and sold it, becuase after all.. I had like 6, in the newspaper for like 450. The rest I gave to family members and donated to charity

 

[STR8UP]

Laptops are like GOLD.

I don;t know of any other piece of electronic equipment that you can beat on for two years and turn around and EBay it for a few bucks less than you originally paid for it.

I have often considered placing an ad in the local paper offering to pay cash for used laptops. Offer someone $300 for it and sell it for $450 the next week. Don't know if it would be feasible, and I certainly don't have time to do it, but I'm sure there's a business opportunity there somewhere.