Starting a Computer Business

Computer Repair with Diagnostic Flowcharts

The Laptop Repair Workbook

Copyright 2013 by Morris Rosenthal

All Rights Reserved

Business Psychology (Topics Covered)

  • Growth and Contraction
  • Flexibility and Changing with the Times
  • Computer Technician Hiring and Firing

Hiring and Firing A Computer Technician (Book Excerpt)

I've interviewed and hired people for full-time work only as an employee for others. I mention this just to push the point that if you can avoid having employees, especially while you're still learning the business, you'll save yourself a ton of grief. Regular employees require workers compensation insurance (workers comp), matching social security payments, payroll tax deductions and the associated accounting, and unemployment tax contributions. Employees also make it more complicated (i.e. expensive) for you to implement a Self Employed Pension Plan (SEP) which can save you thousands of dollars a year on your taxes. Throughout this book I've emphasized that if you can avoid taking on employees, you'll save yourself a big headache. Even if you stick to hiring independent contractors, you may be liable to special reporting requirements. For example, in Massachusetts, my home turf, all employers, regardless of size or type of business, are required to report new hires to the Massachusetts Department of Revenue within 14 days of hire. They use this information to catch people who aren't paying their child support, and you may be re-quired to garnish wages for the DOR, even for an independent contractor.

If you are successful in business, you may find yourself forced to choose between expanding and turning down new customers. If you resist expansion, you may even start losing customers who want one-stop shopping for all of their needs. So, if you've gone as far as you can using contract (1099) help and strategic relationships with other businesses, you might just have to bite the bullet and start hiring. The first step is to get an Employer Identification Number (EIN) by filing Form SS-4 with the IRS. This nine-digit number is for use on tax forms specifically where it's asked for by name, it's not just a substitute for your social security number. You can get an EIN immediately by applying over the phone to Tele-TIN (search the web for the phone number for your region of the country).

If you do have to hire employees, start with part-timers. You can do worse than sticking with a combination of working moms for the mornings and students in the afternoons. I've had reasonable luck hiring co-op students from universities, something I support in part because I was a co-op once myself, but there are so few engineering students available these days that you may be unable to attract any, or have to pay too much. On the other hand, you may find business students, or even political science majors, who are decent computer techs from having grown up with it as a hobby, and who have impressive inter-personal and sales skills.

At first blush it might seem that the only route to go is part-timers. After all, you'll save on unemployment insurance and any other benefits, they're much easier to fire and you can sample a larger number of prospective employees. An often overlooked advantage with part-timers is that you can schedule several of them to work at the same time, turning your business into a four or five person concern at peak retail hours or during big installs. However, part-timers also have their drawbacks, primarily that it's just not a career for them. A full time employee is far less likely to quit in order to go on Spring Break or to take a fling at some other interest. Also, the overhead of constantly training and managing new part-timers can eat seriously into the time you hoped to save by hiring them. Finally, customers like a sense of stability, particularly when dealing with small businesses, and they don't want to have a different person show up every time they call for service.

When hiring technicians, the main thing I look for is initiative. In other words, if I'm interviewing somebody and I have to ask all the questions, I'm not going to hire that person. I don't worry much about experience unless I'm looking for a senior person, and I don't give a hoot for certifications because I've never had a field service call where the customer needed help filling out a multiple choice test. I want somebody who can tell a story about some problem they solved, whether it's computer related or not. I also believe in paying above average wages, but it only makes sense if you're careful about finding above average people.

The chances of an employer/employee relationship working out improve when both parties get what they want. Don't hire somebody who wants full time work for a part-time job, and don't promise on-the-job training to an aspiring technician who you really want as a receptionist. Make sure you get a feel for whether or not a management candidate wants responsibility. One time, when I was brought in to help straighten out a foundering computer company, their tech manager plainly said, "I just want somebody to tell me what to do." The guy was a fine technician, but he was in over his head as a manager, and he was clearly telling anybody who would listen. Unfortunately, and not surprisingly, the management problems in the company didn't end with him.

If there is one exercise you can go through that might save your business down the road, it's to look into the eyes of each person you are thinking of hiring and ask yourself, "Could I fire this person if things get tight?" If the answer is no, don't make the hire. For starters, make it clear to new employees that they are being hired on a trial basis, so they shouldn't sell their house and buy one next door to you. Although it may sound funny at first, one of the most important things you can do when it comes to protecting yourself from your own employees is to prepare and distribute a company handbook that includes a written termination policy. Termination policies usually include immediate dismissal for criminal behavior such as theft, violence, harassment, etc.

Give employees clear warnings if they aren't living up to your expectations. Be specific, as in, "I won't be able to send you out on service calls if you make that mistake again," or "If I have to tell you again that I want it done this way, I'm going to have to let you go." Some businesses even give multiple written warnings. Have a bulletproof explanation prepared and don't allow the occasion to become a bargaining session. When you decide somebody must go, send them home with the stuff in their desk (if they had one), and pay them whatever is coming to them. This is one of those occasions where you might want to pay for a bit of lawyer time up front just to get it right, because there are lots of lawsuits in this area, and even if you win, you lose time and legal costs. The person you let go may feel they have nothing to lose by suing you, and their legal costs might even be paid for by the State or Federal government if they accuse you of discrimination or a labor law violation.

The 161 page paperback book "Start Your Own Computer Business" is available through your favorite bookstore or you can order through Amazon.com for $14.95, or buy the instantly downloadable PDF version for $11.95.

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