How to start a computer repair business from scratch

Starting a computer repair business is a rewarding venture that combines technical expertise in diagnostics and repair with sharp business acumen. The market is worth billions, fueled by a steady demand for hardware repairs and software support from home users, small businesses, and students alike.

This guide will take you through the practical steps of validating your business concept, securing funding, obtaining the right permits, and acquiring equipment to help you launch a successful computer repair business in the U.S.

Step 1: Plan your business and validate your idea

Research your market and competition

Start by mapping out existing repair shops on Google Maps and Yelp. Note their services, pricing, and customer reviews. This helps you find service gaps, like a lack of Mac specialists or data recovery experts in your neighborhood.

With this in mind, try not to compete only on price, a frequent misstep for new owners. Instead, you could focus on a specific niche or offer superior customer service to build a more loyal customer base.

Create your startup budget

Your initial investment will vary, but you should plan for several key expenses. A clear budget prevents surprises and helps you secure funds if needed. Expect startup costs to range from $4,000 to $12,000.

• Tools and Equipment: $2,000 - $5,000 for diagnostic software, hand tools, and a soldering station.
• Licenses and Insurance: $500 - $1,500 for initial setup and annual premiums.
• Initial Parts Inventory: $1,000 - $3,000 for common components like screens and batteries.
• Marketing and Website: $500 - $2,000 to build an online presence.

Speaking of inventory, not stocking enough initial parts is a common oversight. This can lead to long repair times and unhappy customers, so allocate a reasonable portion of your budget here.

Here are 3 immediate steps to take:

• List five local competitors and identify one service they do not offer.
• Draft a startup budget based on the cost estimates above.
• Survey people in local online forums to gauge interest in your proposed services.

Step 2: Set up your legal structure and get licensed

Choose your business structure

Most new repair shops start as a Limited Liability Company (LLC). This structure protects your personal assets if the business faces a lawsuit. It also offers pass-through taxation, meaning profits are taxed on your personal return, which simplifies filings when you start out.

A frequent misstep is mixing business and personal funds. Once your LLC is registered, open a separate business bank account. This maintains your liability protection and makes tracking expenses for tax season much easier. It is a non-negotiable step for financial clarity.

Secure the right licenses and permits

First, get a free Employer Identification Number (EIN) from the IRS website. You will need this number to open your business bank account, file taxes, and hire any future employees. The online application takes just a few minutes to complete.

Your state and city have their own requirements. You will likely need a state seller’s permit to collect sales tax on parts and a local business operating license. Check your city clerk’s office and state’s Department of Revenue websites for specific forms.

• Seller’s Permit: Usually free, required for sales tax.
• Local Business License: $50 - $150 annually, processing takes 2-4 weeks.
• DBA Registration: $25 - $100 if you use a trade name.

Here are 3 immediate steps to take:

• File for an LLC with your state’s Secretary of State office.
• Apply for a free EIN on the official IRS website.
• Search your city’s government website for business license application forms.

Step 3: Insure your business and manage risk

Insurance protects your business from costly mistakes, like damaging a customer's laptop or accidentally wiping their data. Before you take on your first repair, you should secure a few key policies to cover these risks.

Key insurance policies for your shop

General Liability Insurance covers physical risks, such as a customer injury in your shop. A $1 million policy typically costs between $400 and $900 per year. This is your foundational coverage.

Professional Liability Insurance, or Errors and Omissions (E&O), is for service-based mistakes. It covers you if you damage a device or lose data during a repair. Expect to pay $500 to $1,000 annually for $1 million in coverage.

A frequent oversight is getting only general liability, which leaves you exposed to the most common repair shop claims. Professional liability is what covers your actual work, so it is not optional.

Also, look into Inland Marine Insurance. This policy specifically protects customer property while it is in your care, custody, and control. It adds another layer of security for a few hundred dollars a year. For quotes, you might want to check with providers like Hiscox, The Hartford, or Next Insurance, as they specialize in small business coverage.

Here are 3 immediate steps to take:

• Request a quote for a Business Owner's Policy (BOP), which bundles general liability and property insurance.
• Confirm that any professional liability policy you consider explicitly covers data loss and damage to customer equipment.
• Compare quotes from at least two of the recommended providers to find the best rate for your needs.

Step 4: Set up your location and buy equipment

You do not need a large retail storefront to start. A small commercial space of 300-500 square feet is often sufficient. Look for properties zoned for commercial or mixed-use, and confirm with the landlord that your repair activities are permitted before you sign a lease.

Many new owners overspend on a prime location. Since most customers will find you online, you can save significantly with a space that has lower foot traffic. When you negotiate your lease, ask about a tenant improvement (TI) allowance to help pay for a custom workbench or extra electrical outlets.

Acquire your repair equipment

With your space secured, you can outfit your workshop. Focus on quality gear that will not fail or damage customer devices. Some owners make the mistake of buying cheap toolkits, which can lead to stripped screws and bigger problems. Invest in reliable equipment from the start.

• Repair Toolkit: An iFixit Pro Tech Toolkit ($75) has the drivers and prying tools for most jobs.
• Soldering Station: A Hakko FX-888D ($120) is a reliable choice for board-level repairs.
• Diagnostic Software: PC-Doctor Service Center ($400) helps you quickly identify hardware issues.

For components like capacitors and resistors, suppliers like Digi-Key and Mouser Electronics are industry standards. They do not have minimum order quantities for most parts, which helps you manage inventory costs.

Here are 3 immediate steps to take:

• Search commercial real estate listings for spaces between 300-500 square feet.
• Price out a toolkit, soldering station, and diagnostic software from the recommended brands.
• Create an account with a parts supplier like Digi-Key to browse component costs.

Step 5: Set up your payment processing

Choose your payment solution

For individual customers, expect payment immediately upon service completion. For business clients, you can offer Net 30 terms. It is also wise to require a deposit, around 50%, for jobs that need special-order parts. This protects you if a customer cancels.

Many new owners get caught off guard by transaction fees, which often average 2.5% to 3.5% and can eat into your profits. Choosing the right payment solution from the start helps you keep more of your earnings.

For computer repair businesses that need to accept payments on-site or on-the-go, JIM offers a streamlined solution. With JIM, you can accept debit, credit, and digital wallets directly through your smartphone. Just tap and you are done.

At just 1.99% per transaction with no hidden costs or extra hardware needed, it is particularly useful for mobile repairs or quick counter sales. Here is how it works:

• Get Started: Download the JIM app for iOS.
• Make a Sale: Type the sales amount, hit sell, and ask your customer to tap their card or device on your phone.
• Access Funds: Your money is available right on your JIM card as soon as the sale is done. There is no wait for bank transfers.

Here are 3 immediate steps to take:

• Decide on your payment terms for individual versus business clients.
• Download the JIM app to explore its features and low transaction fee.
• Draft a policy for when you will require a customer deposit.

Step 6: Fund your business and manage finances

Most repair shops get started with personal savings or a business credit card. For a larger capital injection, an SBA Microloan is a strong option. These loans offer up to $50,000, with interest rates usually between 8% and 13%.

To qualify, you will generally need a credit score above 620 and a detailed business plan that outlines your budget and revenue projections. Lenders want to see that you have thought through your costs and potential income.

Manage your money from day one

Plan to have at least $6,000 to $10,000 in working capital. This covers your first six months of rent, marketing, and inventory replenishment. Many new owners focus only on startup gear and run out of cash before they build a customer base.

To track your income and expenses, use accounting software from the start. Wave is a free option that handles invoicing and basic bookkeeping well. As you grow, you might consider a paid plan with QuickBooks Online for more advanced features.

Here are 3 immediate steps to take:

• Research SBA Microloan requirements on the official SBA website.
• Calculate your working capital needs for the first six months of operation.
• Compare the features of Wave and QuickBooks Online to see which fits your budget.

Step 7: Hire your team and set up operations

Hire your first technician

Once you consistently handle over 15 repairs a week, it is time to hire. This prevents burnout and frees you up to focus on growing the business instead of just working in it. Your first hire will likely be a Computer Repair Technician.

Look for candidates with a CompTIA A+ certification, which is the industry standard for core skills. Expect to pay between $20 and $28 per hour, depending on their experience. Many owners hire only for technical skill, but this can be a mistake.

Your technician is the face of your business. They need excellent communication skills to explain complex problems simply and keep customers happy. A great repair means little if the customer service experience is poor.

Streamline your daily operations

To manage a growing number of jobs, you might want to use a repair shop management platform. Software like RepairShopr or mHelpDesk lets you create repair tickets, track progress, and manage customer communication in one place, which reduces errors.

With this in mind, set clear financial goals. A solo operator might generate $80,000 in annual revenue. After you bring on a full-time technician, a good target is to push total revenue beyond $150,000 to comfortably cover the additional salary and overhead.

Here are 3 immediate steps to take:

• Draft a job description for a Computer Repair Technician that emphasizes customer service skills.
• Search local job boards for candidates who list a CompTIA A+ certification.
• Sign up for a free trial of a platform like RepairShopr to explore its ticketing features.

Step 8: Market your business and get customers

Build your online presence

First, claim your free Google Business Profile. This is how customers find you on Google Maps and in local search. Fill out every section with your services, hours, and photos of your workspace to build trust.

Next, you will want a simple website. It does not need to be fancy. A single page that clearly lists your services, prices, and contact information is enough to establish a professional online presence for your business.

Engage your local community

You might want to run targeted Google Ads. A starting budget of $15 per day can bring in leads. A reasonable Customer Acquisition Cost (CAC) in this field is under $40, which is what you would spend in ads to get one new customer.

Many new owners focus only on digital ads and overlook local opportunities. Consider partnerships with nearby small businesses or apartment complexes. You can offer to leave flyers in exchange for a referral discount, which builds valuable community ties.

A frequent misstep is not actively managing your online reputation. Make it a habit to ask every satisfied customer for a review on Google or Yelp. Positive reviews are powerful social proof and directly influence new customers.

Here are 3 immediate steps to take:

• Claim and complete your Google Business Profile with photos and service details.
• Run a test Google Ad campaign for one week with a $15 daily budget.
• Draft a simple script to ask happy customers for an online review.

Step 9: Set your pricing strategy

Choose your pricing model

Most repair shops use a mix of flat-rate and hourly pricing. Flat rates work well for common jobs like a screen replacement or virus removal. For example, you might charge a set $120 for a specific laptop screen repair. This gives customers price certainty upfront.

For complex or unpredictable jobs, an hourly rate between $60 and $90 is standard. You might also implement a diagnostic fee of $40 to $60. Many shops waive this fee if the customer approves the full repair, which encourages them to move forward.

Set your parts markup and labor rates

When you price parts, a 50% to 100% markup is typical. If a replacement battery costs you $40, you would charge the customer between $60 and $80 for the part itself. This covers your sourcing effort and inventory costs.

Many new owners underprice their labor, which is a big mistake. Your expertise is the most valuable thing you sell. Confidently charge for your time, as customers pay for a reliable fix, not just the parts you install.

To figure out your local market rates, check competitor websites. You can also call a few shops and ask for a quote on a standard repair, like a data backup and OS reinstall. This gives you a clear baseline for your own price list.

Here are 3 immediate steps to take:

• Decide on a flat rate for three common services, like virus removal, screen repair, and a software tune-up.
• Set your standard hourly rate for custom diagnostic and repair work.
• Call two local competitors to get a price quote for a hard drive replacement.

Step 10: Scale your business and maintain quality

Establish your quality standards

To maintain a great reputation, you need clear quality benchmarks. Aim for a repair return rate under 5%. This means fewer than one in twenty jobs comes back for the same issue. Also, track customer satisfaction and target a consistent 4.5-star rating or higher on review sites.

A frequent mistake is to assume a completed repair is a good repair. You should implement a final checklist for every job. This ensures technicians test all core functions before returning a device to a customer, which prevents simple oversights.

Know when to grow

Growth should be data-driven, not based on a feeling. Once your first technician is consistently busy and revenue surpasses the $150,000 mark, you can start to plan your next move. This could mean hiring another technician or exploring a second, smaller location.

Before you expand, document your standard operating procedures (SOPs). Create a simple guide for everything from customer check-in to parts ordering. This makes it easier to train new staff and maintain consistency as you scale your operations.

Here are 3 immediate steps to take:

• Create a final quality control checklist for technicians to use on every repair.
• Set a specific annual revenue goal that will trigger your expansion plan.
• Document the step-by-step process for one common repair, like a screen replacement.

You now have a solid plan to launch your computer repair shop. Remember that your reputation for clear communication is just as important as your technical fixes. With a focus on customer experience, you are ready to get started.

As you get paid, keep your costs low with JIM. It turns your phone into a card reader, so you can accept payments anywhere for a flat 1.99% fee. Download JIM to simplify your sales from day one.