Would that 10k cover actual hardware inventory? Or do you plan to order everything without any stock handy (such as swap RAM, etc.)?

Would that 10k cover actual hardware inventory? Or do you plan to order everything without any stock handy (such as swap RAM, etc.)?

I think you need to hold off until you have raised your credit score and have saved up some money. That could take some time, which you can use to polish your business plan and network like crazy. While networking, you can meet people who can give you advice, and you can find out about talks by local businesspeople and such. If you have never worked at a computer shop, you could consider getting a job at one. That way, you'd learn a lot about the computer shop biz.

Btw, I moved this to Business.

If you have never worked at a computer shop, you could consider getting a job at one.

Very very true. Learn the ropes of the trade from your future competitors. Let them spend the money for your learning.

This applies to game development as well. You'll notice many indies are actually coming from inside of the business where they've learned a lot while being salaried (not taking the risks).

Why do you need the retail location if you are only having 2 computers at once? assuming you do sell 2 computers a week that's only 1600 a month profit. Have you looked at how much a retail location will cost per month, electricity, heat, advertising. These kinda costs add up quicker than you know. What's stopping you from building these computers and selling them on ebay/craigslist or just making your own web store to sell from.

Have you written up a business plan? does it show how your going to make money? If your answer is no to this then I would suggest looking up how to write a business plan cause your not going to get a business loan from the bank without one that on paper shows you will be profitable. Banks are only interested in making money.

I'd suggest start selling them on craigslist and ebay first, then if you start getting more demand you can think about opening a retail store.

Also just something else I was curious about are you selling these computers with an operating system?

In addition to the above, consider looking into what government programs for small business start ups may be available to you. It's also possible that a bank might have some sort of small business program.

I want to start a small, local computer shop selling custom made computers

I'm having 2 models of computers and am ordering two of each, meaning all the parts. If I run out of those 4 computers in 1 week, I will have to take special orders.

Isn't that contradictory? Custom-made but you only have 2 models to choose from?

It sounds very risky indeed if you only expect to sell such a small amount.

Why do you need the retail location if you are only having 2 computers at once?

There's a certain demographic of people who will only trust retail locations, and don't like to buy things online. When it comes to a computer and an unknown merchant, that probably goes for almost everybody. When you have a retail location, and you know you can find them, there's less of a risk, and the quality and service guarantee means more.

He should find somewhere he can operate a small desk within a larger store though; operating his own location will involve too much overhead. All he needs it a little corner to himself to build and see walk-in customers.

But what kind of store should he partner with? That's an important question, and asking it will take a bit of legwork.

Somewhere with reasonably high traffic, but transient traffic (where people don't hang around for a long time), so it's not too crowded/busy, but you get a lot of people each day seeing what you have.

And, of course, somewhere that doesn't sell computers. And that has a bit of extra space to rent.

Maybe an icecream parlor?

Think outside the box, and look for anybody who has more space than they need which could be partitioned into a little computer shop in the corner which can benefit from the traffic.

Try to give them a percentage of sales, rather than a fixed rent to reduce your risk. I'd start with 10% of profit, but go up to 50% if you need to, traffic means a lot.

Remember, the customers have to come back (and will probably buy more icecream or whatever) a couple days later to pick up the computer, and in that sense you are benefiting each other (the customers don't mind picking it up as much, and the location gets a repeat visit).

You could also make a deal where if anything is wrong with the computer and they need to get it fixed (free), they might also get a discount or freebee at the other business while they wait.

Also, as another mentioned... don't limit yourself to two models. You're building these things; differentiate yourself by making them to order. With a good location, you could be selling two or three a day. Keep the rest of your parts stock at home.

And don't forget the importance of product image.

If you worked by an icecream parlor (for example), there's a certain demographic you'll probably be building for (largely kids, looking for gaming rigs, and parents looking for good controls)- offer what nobody else can.

Tailor your offerings to whatever demographic you're getting exposure to. Get the right kinds of cases, or even contract a local artisan or printer to customize those too. Install software for the parents to monitor online activity, etc.

You could also try a hair salon, barber, or something like that. Senior citizens are another important demographic where you can offer service that few others can or do.

Look at what areas have the traffic for the demographic you want to serve.

I sold my Stars Wars toys on ebay to supplement my income when I first started my business.