dying industry, needs direction ideas please

[TomSmith27]

I'm in the computer industry selling desktop computers and moving out of building laptops but the industry in my view is dying. The margin gets smaller every month, supply problems, and the margin you make when doing volume just isnt enough to really offer a good level of service and make worthwile profit.

laptops and all in one computers are slowly replacing the desktop and these items really can only be sold pre built out of the box which means zero margin.

I can see ways to grow the business by value adding and I still think it has another year or two years before the desktop really starts to decline sharply but i dont see the point in spending another two years of my life working so hard on something which is in decline.

The obvious route would be to move into services like calls outs, repairs etc but I just really dont fancy going that way.

I can't just quit and walk out to do something new as we have big guarantees with the bank.

I dont want to start something brand new then lose focus on the original business which could then end up in problems with the bank wanting to call in the security.

I cant see anyone buying it as the they will know as it stands now the industry doesnt have less so who ever took it over would need to turn it into something different and due to it's size they would not only need to pay for the business but also take over the bank security.

So I see my only option is to turn the business into something else which has a better future..but I cant think of anything that is doing something so different that you would need to not focus on the main business.

Anyone have any ideas? many many thanks!

 

[LicensedToTrade]

How about instead of making desktops, you destroy them? Let me finish! With the new WEEE directive, electrical recycling companies are emerging across the country. You could set up as an electrical recycler.

 

[directmarketingadvice]

I can't just quit and walk out to do something new as we have big guarantees with the bank.

There's your problem.

If you're doing something with no future (I have no idea if there really isn't a future, but let's assume you're right), continuing to do it isn't going to get you anywhere.

You'll earn less and less and what then? How will you make a living? How will the bank get its money back?

Steve

 

This is a classic situation for MAPS - Mission and planning session. It is a bit of a speciality of mine which I originally developed because I got too many Interim assignments where there was a problem to sort out but no thought had been given to the required answer. I have since used it very successfully to refocus businesses.
Send me a pm if this would be of interest and we can go into more detail.

 

[oldeagleeye]

LTT.
You seem to be on many of the threads that I have been on recently. On one of them I came across a member whose company do decorative brickwork and I thought I had bookmarked his site. Seems not. Any idea of the members name.

Sorry to go off thread OP. Robert

 

[Christine Hough]

I keep thinking of new and novel things that could be done with computers.

But not at all sure whether there is much potential in them as a small operator.

As you say if it is a mass market then it will always go towards mass production methods.. sealed units and low profit margins.

I suspect there might be a potential in very customised computers only.

 

[oldeagleeye]

Tom
Ment to mention. I think these Media Centre are the way to go but the prices seem really compeitive that it might be just as well going back to basics and sell the cases.

You can get some awesome ones these days and if you got one of those mini-spray guns and some stencils make up your own and enjoy a better margin than on building a computer. Take a look at these.

http://www.cyberpowersystem.co.uk/LandingPages/megaspecial/xmas09/default.asp

 

[LicensedToTrade]

LTT.
You seem to be on many of the threads that I have been on recently. On one of them I came across a member whose company do decorative brickwork and I thought I had bookmarked his site. Seems not. Any idea of the members name.

Sorry to go off thread OP. Robert

I used the advanced search tool on here and couldn't find any topics that I have posted in that used the word 'brick' or 'decorative' in them (apart from the proverbial brick wall ). It does sound vaguely familiar to me though. :|

 

[saxondale]

this guy - http://www.ukbusinessforums.co.uk/forums/showthread.php?t=127852&highlight=walls




O/P - could you do something to optomise the infrastructure? half the patch panels I see on a day to day basis are shocking

 

[oldeagleeye]

Thanks Saxon and you LTT. That is the man.

Robert

 

[FireFleur]

The margin has always been small in the computer building and components industry, it is very much a race to the bottom.

The only way I think, is to specialise at the top end, and to give really good after sales support and to express the value in that.

You can just focus on business as well, and build top end servers. General consumer market is very dominated, and if anything the profit is being made on side items, so they can keep the price of the main items as competitive as possible.

 

[sysconfig]

Just a quick thought really...

One area comes to mind, where desktops will not be replaced by laptops: offices.

If the margins in hardware and repairs are too small, you need to find a way of adding value. For offices, it may be office network management, business servers (M$ Exchange etc.), printers, copiers, scanners, fax, phones, hardware maintenance... A lot of stuff that can be done on-site. And offices are usually either repeat customers or commit on a contract basis to your services. They need continuity rather than the cheapest available prices.

 

[Jheath]

A growing niche for the future has to be ultra low energy hardware. If there was a range of desktops but built like laptops with the focus on low power consumption there would be almost endless customers. There needs to be development far exceeding what's currently available, and a "leading light" will emerge to be the Low Energy PC Guru - it could be you!

 

[TomSmith27]

Thanks for all your feedback!

Value adding and up/cross selling Is the only way forward I see but I still see this with just a year or two left all in one computers are getting better and cheaper and even one of the biggest manufactures for components in the world Asus sent out a mail shot to resellers saying that within 3 years they planned to stop making components so they could focus on all in one systems so the time will come when a desktop wont be the cheapest option as it would include the cost of a 3rd party company to build it and it would need a big case and screen when you could buy a cheaper monitor with the PC built in.

There's your problem.

You'll earn less and less and what then? How will you make a living? How will the bank get its money back?

Steve

Yeah thats the problem. Thats why I'm looking to grow the business into which can take over the desktop side.

Tom
Ment to mention. I think these Media Centre are the way to go but the prices seem really compeitive that it might be just as well going back to basics and sell the cases.

You can get some awesome ones these days and if you got one of those mini-spray guns and some stencils make up your own and enjoy a better margin than on building a computer. Take a look at these.

http://www.cyberpowersystem.co.uk/LandingPages/megaspecial/xmas09/default.asp

Media Centers are not actually a big seller, they really should be but MCE isnt good enough and to get it to do what it should do means spending hours of time, buying addons, patches which can end up costing more than the PC just to make it work correctly and then when it does its such a dodgy mix of programs its not stable and easy to use. For the price of the extras such as the tv card you could get apple TV which does everything and works right out of the box. So I never see this being mass market.

How about instead of making desktops, you destroy them? Let me finish! With the new WEEE directive, electrical recycling companies are emerging across the country. You could set up as an electrical recycler.

Its good idea but I cant really see a big future in it...the margins are better than new but still low.

Maybe my only way forward is to move into services, repairs, contracts etc (Which I dont want to do) but with a view of then having something better that someone would like to buy then we can move into a brand new industry with a new start

 

[lincolncomputers]

what about offering computers running linux (ubuntu etc). You could sell them on features, such as less viruses. Or whynot recondition old computers (new case,hard drive, more memory etc), and install ubuntu.

 

[movietub]

The obvious route would be to move into services like calls outs, repairs etc but I just really dont fancy going that way.

This is surely your best option though? Possibly you could focus on IT solutions for small shops/offices wishing to join the 21st centuary. That would be quite interesting I would think. How about offering local shops a set price service to build a bespoke till computer, complete with EPOS and stock control software. This would combine hardware and service. You could even transfer their paper inventory system to the computer and add all the product barcodes/supplier info etc. And provide soe training.

The problem is that the only reason anyone ever went to a small local company to get a desktop built was the 1-2-1 customer service and support. Thats all independants have had going for themselves for the last decade. But now you're probably right, its crunch time. Your strength is still in quality of service, if you cannot compete for long on the product side then you must, by default, adapt and move over to the service only business model. At least this is a market that is bound to continue growing for some time.

I think the reality is that computers are now mainstream enough to be mass produced at a lower price than anyone in your shoes is able to compete with for long. I used to perfer buying desktops built by local companies due to the friendly service and helpful support.

But now I find it easier to simply buy a high powered laptop every 2 years. Hardware is now so well supported and capable (I remember when the latest software ALWAYS seemed to require an upgrade to run...) that upgrades become less important. For that reason having a desktop becomes less important. Also the computer industry is not so geeky these days, its cool. Gadgets are suddenly sociable acceptable, even girls have 'smart phones'! When I got my first smart phone the ladies, they did laugh at my brick

All these reasons combine to suggest you are right, the industry is dying - or at least changing rapidly.

 

[vvaannmmaann]

OP could you do your computers "part-time" and get a job using your knowledge working in IT for someone else?

 

[TomSmith27]

Thanks for that movietub...I agree with what you say and think without leaving the industry it looks like the only real option...the reason I wasnt keen on going down that route was that because of the size of the business now and the number of staff working so if we were to slowly move into the service we would need to be like geeksquad and target the bigger market within our city or national on the phones but still keep a high level of 1 to 1 service but with a team fo people.

I guess i'll have to give it some thought. many thanks

 

[TomSmith27]

OP could you do your computers "part-time" and get a job using your knowledge working in IT for someone else?

Not sure if OP was for me? but this wouldnt be an option as the bank holds a lot of money in security and we have a team of staff with jobs to keep.

 

[vvaannmmaann]

Not sure if OP was for me? but this wouldnt be an option as the bank holds a lot of money in security and we have a team of staff with jobs to keep.

Tom, OP= Opening Post/Poster

Didn't realise you had staff to think about.I am meeting a friend tonight who is in this field.I will gently and subtley pick his brains for you!

 

[Matthew_28]

Hello Tom,

Have you considered software support, a thought i had a while ago was to provide software support/consultant (telephone and one-to-one) to shall we say the more "mature" end of the market who may not be as computer 'savvy' as the younger generation who have been brought up with computers in schools etc. Again, i'm not sure what level of profit you could generate doing this. Or perhaps you could look at maintenance and repairs as someone already said, or perhaps maintenance and repairs to laptops and mobile devices? Mobile phone/devices apps/software dev?

Just a couple of thoughts, it's a difficult one without changing industry.

Regards
Matt

 

[K.C.Leblanc]

[qIf you're determined to stay in the pc building game I would look at going into specialised markets. Get googling for the idesk, it's basicaly a desk with a PC build into it. They sell for about a grand each, I'm sure they must have higher margin's then a standard ATX pc. You need to start thinking about situations where you need a computer, but a normal ATX box won't cut the mustard.

Maybe think about some situations where at one time people would have had to use a proprietory closed box machine they can now use an adapted PC. Vending, Car park ticket machines, that sort of thing. After al modern cashpoints are just personal computers (but Dell don't make them).

 

[DaveSUK]

How about HTPC's as well as Desk tops

 

[TomSmith27]

I've been looking at remote support (without the onsite side which is what we didnt want to get into) we already have everything for it..office space, staff, phone system as we do it for the systems we sell but looking around the only serious competition I can find are the tech guys and geek squad but they are both owned by big chain stores who i imagine are pushing it like crazy to people who buy new hardware in store and that you without that you would struggle to get people to pay a subscription for remote support and if your working on a similar margin £80 a year its not a lot.

business users i think would pay more.

Any thoughts on this?

 

[oldeagleeye]

Where is your location Tom because that obviously affects your options.

 

[thebigIAM]

Hi Tom. Is there any software that you or your staff are particularly impressed with? I know someone who runs a similar biz to you who is also capable of holding tuition workshops on using various software: In Design and Photoshop being two of them. Printer calibration too.

 

[UKSBD]

There must be more of a market for support/maintenance but you have to
be hard nosed, have a minimum price, a fixed 1/2 hour rate, and stick to it.

I called in to my local PC shop today, where it used to have a large,
display area with half a dozen systems on display, a few printers etc.
It's now sectioned of to about quarter the size, has one system on display
(but spec sheets for others)

The rest of the shop is now sectioned of behind screens and they
concentrate more on building bespoke systems and repairs.

As they have been supplying their own systems for at least the past
10 years, I would think there is a big market for repairs, upgrades and
general tidying, and most the systems they are doing are ones they
probably supplied in the first place.

 

[TomSmith27]

Hey,

Thanks for the feedback. I've been on the retail side and its really a lot of stress and hardwork on a low margin. The service side repairs, training etc I think will be around for a long time and this is ideal for small shops and stuff but we are internet based with 10 full time staff and another 8 part time thats why I'm thinking remote support by phone to cover all over the UK but i'm thinking without having the ability to go out and do site visits i'd have a hard job trying to sell people monthly subscriptions for phone support.

geeksquad are charging to home users £8 a month but I imagine 99% of the subscriptions they have are by strong sales pitch when you buy a new laptop or phone from carphonewarehouse.

A business I can see would pay monthly for good reliable support but without the onsite part which they may need at some point I think they would just go with someone local who offers phone and onsite.

I then thought I could use another company or local reps to do it but I know the problems and bad rep you can get from doing it like this on a national scale.

Whatever direction it moves to it has in the long term got to be able to support all the staff unless I downsize which isnt an easy option unless turnover/profit stayed the same or went up.

So really i'm clueless on where to move forward.

Maybe my only option is to try and find a buyer or at least try growing it in a new direction (not one that i want to be in) but one that a buyer would want and take over.