Peanuts to Profits With Thor Schrock
Peanuts to Profits With Thor Schrock

From time to time I do some consulting for computer repair companies outside Schrock’s local trade areas.

Typically these take the form of phone calls about trends or marketing ideas, but York Computer Repair is a whole different story.

Yesterday I received an unexpected thank you letter (yes the postal mail kind) from York Computer Repair’s Owner, Walter Oakhem. Here is what he wrote:

Thank you for all of the help you have given me with starting York Computer Repair.

I especially appreciate the information and advice you have provided, and the contacts you have shared with me.  Your assistance has been invaluable to me during this process.  I just wanted to say an extra thank you for your mentoring and kindness.

Again, thank you so much.  I greatly appreciate your generosity.

What Did I Do to Deserve Such Kind Words?

I have never really talked about Walt, his company, or what I have done to help him get things rolling in York, PA.  Even my employees don’t know the details of what we discussed.  In one of our calls Walt suggested I document our conversations because he felt other computer repair company owners might benefit from them.

I am going to preface this by stating that no consultant, no home study course, and no business model can bring you success unless you are willing to implement it.

From day one, Walt has had a flame of passion that I have seen in few others over the past few years. While this post will name off some of the suggestions I gave to Walt, by no means am I trying to take any portion of the credit for his work.  Anyone can talk, but only an entrepreneur can transform talk into results like Walt has in Pennsylvania.

The Meat & Potatoes of Three Phone Calls

Over the course of our three phone calls we covered topics raging from starting up to scaling to a retail location and everything in between.  Walt and I discussed:

• The absolute NEED for a sales model (and how easy it is to make one)
• How to target a small niche in your marketplace and expand outward from there
• Yellow Pages advertising techniques that are proven to bring in hundreds of new customers each month
• How to build an inventory of repair components for next to nothing
• How to hire employees as inexpensively as possible in the first few months
• How to value your time and get your customers to pay a reasonable price for it
• Every reason you should NEVER try to be a low-cost leader
• The need for a work flow management system and where you can get one specifically designed for computer repair shops
• How you can create brands for your physical products and service products and why it is a VITAL step than is often skipped causing others to fail
• Who the key low-cost hardware providers are and how to do business with them (if you think NewEgg is your best value, think again)
• The need to continually remind your customers how wise they are to choose to do business with you

Walt paid me my normal $200 an hour rate over the course of three calls.  With the information he had, he was able to accelerate the growth of his new operation, and had the best month of his company’s history in June.

How Can Just Talking Help a PC Repair Business?

Walt first heard about me and Schrock Innovations from a podcast I did with PodNutz about starting a computer repair shop.  In that podcast I stressed that most PC repair technicians try to penetrate a market as a low cost leader.  That approach dooms them to failure.  I spoke about the need to charge a fair price for your service, not just the hardware you are selling.

Walt heard that podcast and called me for followup.  Because of our three phone conversations his PC repair shop is rapidly growing.  His Q4 marketing plan looks like a home run, and even if it under performs his larger population base in PA will make it a bigger success than the 162 new customers Schrock gets every month by following that same model.

I have made a lot of mistakes, learned form them, and modified my techniques to gain the best return on my efforts.  It is entirely true that another person can learn the same lessons I did the same way I learned them.

However, it is also true that if a person like me existed 10 years ago when I started Schrock Innovations we would have cut 5 years off our growth curve, had an easier time doing it, and would have earned tens of thousands of dollars more.

Does Your PC Repair Shop Need Some Fresh Insights?

In the coming weeks I will be blogging about the bullet points I covered with Walt.  Subscribe to my RSS feed to make sure you don’t miss any of the topics.  If you need more immediate or involved assistance give me a call at 402-212-5393 and let me know what challenge you are facing.  I might be able to give you the piece of advice you have been missing!

I never imagined that I would be writing this, but I actually agree with the ACLU on something.

I am used to the ACLU defending the indefensible and taking ridiculous positions on issues that inflame public opinion.

But this video is as scary as it gets.  If Obama digitizes health care records as part of his overall socialization of the US health care system, this could be a reality more quickly than you might think.  Way to go ACLU for getting one right this time.

Local Insight Yellow Pages is informing its advertisers that their contracts are being forcibly extended – at their existing monthly rates – for three additional months. 140 of the company’s 900 directories are being delayed.

While the company says the move is to allow time to install new printing equipment, it is also obvious that the delay will prevent advertisers who wished to cut back their ads from doing so.  In Lincoln, the billing of yellow page directory advertising is linked to your telephone service.  If you refuse to pay the bill, Windstream will cut off your phones.

In effect, the delay will allow Local Insight to delay what would most certainly be cuts in small businesses yellow pages advertising budgets.

A few weeks ago I received a letter form Local Insight Yellow Pages informing me that they were delaying the release of their 2010 book by three months.  Instead of its normal release in November 2009, the 2010 book was being pushed back to February of 2010.

Printing Equipment Delay Does Not Make Sense

The delay of the 2010 book and the subsequent contract extensions from the 2009 book is explained by Local Insight as the need to install modernized printing equipment to print the directories.

However, a January 2008 press release from Quebecor, the company that prints over half of Local Insight’s phone books, indicates that they just upped their printing volume in January of 2008.  Since the Lincoln, Nebraska directory is printed in October, that means that no Lincoln directory has been printed under the new agreement with Quebecor to date.  Why replace equipment you have never used to print a book?

A more likely explanation is that they needed stable revenue and earnings to complete the merger of their Local Insight directory and regatta online directory into their other division, the Berry Company.  Without adverting contracts, a yellow pages company is worthless.

Yellow Page Advertising is Dying – Faster Now than Ever

Yellow page advertising has been losing ground rapidly to the host of online alternatives that are available to potential customers, the need for businesses to advertise online, and their failure to assemble any meaningful online presence themselves.

Local Insight specializes in phone book sin smaller markets like Lincoln, NE.  These smaller markets have been impacted by the recession to a lesser degree, which has helped Local Insight avoid some of the revenue losses that other, larger phone books are encountering.

However, as the recession deepens and extends into those smaller markets, Local Insight stands to lose massive revenue if small businesses cut back their ads or remove them all together to opt for less-expensive online options.

A 90-day delay allows Local Insight to gain an additional fiscal quarter of revenues that business owners based on pre-recession information.  Lets put it this way…  If Local Insight expected businesses to spend more money on the next book, would they delay its publication by 3 months?

What You Can Do To Protest

As I mentioned before, if you are still in business, you have little choice but to pay the bill.  In Lincoln, NE is you fail to pay your yellow pages advertising bill, Windstream will simply disconnect your phones.

In an interview on bizjournals.com, Cincinnati business owner Vicki Bezak said:

“I think they’re really in trouble. The phone book is a dinosaur, and nobody’s using it any more,” said Vicky Bezak, exclusive marketing agent for Satisfaction Yacht Charters Inc. Bezak estimated the directory delay would cost her company $300 a month – if she pays it.

“I’m going to call Cincinnati Bell and tell them that my contract with (Local Insight) terminates on June 1, and I’m not paying the ad costs listed on my current bill because I didn’t renew it,” she said.

Ms. Bezak’s approach might be hit or miss depending on how the telephone company handles the complaint.  Local Insight also has a toll-free number that they invite any customer who fells “they are not receiving value” from their yellow pages advertisement to call.  It is not clear what the company plans to do for those customers.

If you want to give it a whirl anyway, you can call Local Insight’s toll-free number at 888-237-8570.

On Friday I had a small oral surgery to correct a birth defect that has been a problem for the past 2 years.

Oral Surgeon Dr. Andrew Glenn implanted a small titanium screw into my upper jaw yesterday to act as an artificial root for a tooth that Dr. Chris Haag will be crafting and mounting to the screw in about 5 months.

Why Did Thor Have a Hole in His Grill?

I have a genetic defect that results in a missing tooth right beside my right canine. With no adult tooth to push its way through, I had a baby tooth in mouth for over 30 years.

Right before the filming of Next Internet Millionaire, I broke the tooth on a TicTac.  Dr Haag slapped a temporary CERIC tooth on what was left of the baby tooth to get me by for the filming, but we both new it wouldn’t last.

2 weeks after coming home, I lost that false tooth to an Arby’s Classic Italian Sub.  I was battling with my food, and for the time being the food was tearing me up!

Dr. Haag later extracted the remaining piece of tooth, and issued me a device called a flipper.  Its basically a retainer with a tooth facade on it.  This way if I had any important meetings, I would not look like a toothless idiot.

What Does the Implant Do?

The implant that Dr. Glenn dropped into my jaw acts as an artificial root – an anchor to give the ceramic tooth that Dr Haag will install some biting strength.

The implant was screwed in place with a small torque wrench using only local anesthesia.

After 5 to 6 months of healing time, the implant will be evaluated to ensure my body is not rejecting it, and then a tooth will be placed over the top.

Did the Implant Hurt?

As is the case with most dental procedures, the anticipation of the pain was far worse than the actual event.  In fact, I honestly did not feel, taste, or smell a thing.

Dr Glenn and his staff were awesome and had me in and out of the chair in less than 20 minutes.

He told me Motrin should be all I needed for pain, but I already take a lot of that for my back and since the weekend was around the corner, he wrote me a prescription for Vicodin just in case I needed it.

The good news is that after the Novocaine wore off I am experiencing less pain than I have experienced with many cavity fillings in the past.  This guy is GOOD.  He drilled a hole in my skull and then stuck a screw in it and I was playing Frisbee with my son the next morning.

Nicely done!

Only 2 days remain to get Schrock Innovations‘ Preventative Maintenance Checkup on sale for only $19.99!  This is the FINAL maintenance checkup sale of 2009, so it you miss this one its a long wait until 2010!

We are “officially” launched the sale on last weekend’s Compute This radio show, and our staff has done an amazing job keeping up with the workload.  Unlike the previous sale, our turn around times are very reasonable (3 days or less).

A PC Maintenance Checkup is a complete head-to-toe examination of a computer that takes between 8 and 12 hours of bench time to complete.  Our Maintenance Checkup is normally a great deal at its usual price of $60, but for next week only we will be discounting that price to an amazing $19.99.

During a PC Maintenance Checkup our trained technicians will:

• Scan your computer’s memory (Vital for Vista users)
• Blow dust and debris out of cooling fans
• Check fan rotation speeds and cooling effectiveness
• Ensure your installed Antivirus is effective and updated
• Test all drives
• Check hard drive for masked bad sectors
• Clean computer exterior if needed
• Repair errors in the Windows Registry
• Perform an advanced hard drive cleaning
• Install critical system support software
• Scan for and removes malware
• Scan for viruses and Trojans

Even accomplished PC users should see the value in this offer at an amazing $19.99 price

A recession is a massive opportunity for a small business that is willing to take a few calculated risks for a big reward.  While your competitors are petrified by fear – real or manufactured – about what the future holds, your business needs to seize the present.  By moving aggressively with calculated marketing moves you can snatch customers and marketshare for your company while your competitors’ fears become their reality.

Over the past few months I have written about:

• Yellow Page Advertising Strategies for a Start-up Business
• Radio Advertising Strategies that Work Fast
• Why a Recession is the Best Time to Lead Your Industry
• How to Use Dunn & Bradstreet to Identify & Target Weak Competitors

I know these strategies work because I employ them in my computer repair company, Schrock Innovations.  Schrock was started in 1999 and controls a commanding share of the Lincoln and Omaha computer repair marketplace.  We have zero debt, great cash flow, and we are taking in an average of 162 new customers each and every month in 2009.  We are GROWING in a recession.

People Get Scared, Businesses Can’t Afford To

Fear is a devastating handicap that can paralyze you fatally in life.  Small businesses are owned by real people, and real people can get spooked by a down economy.

To overcome personal fear you have to learn to compartmentalize.  You are a person and your business is another person.  Your objective is to make a living and get a return on your investment.  Your business’ job is to compete, deliver products and services, and satisfy its shareholders (you) by generating a return on investment.

While this advice may seem silly at first, the peace of mind it will give you is enormous.  That peaceful space is what you need to make broad, calculated, and aggressive movements to grow your business.

Think back to a time in your life when you were genuinely scared – primally scared.  Would you have been able to make a business decision, or even decide what you wanted for dinner later that day?  You were probably so focused on the problem at hand that you couldn’t step back and make any sort of objective decision.  If your business is scared, it can’t function properly either.

Recession Creates Opportunities

In November 2008 I pulled the trigger on an expansion plan that had been in the forks for over 6 months at Schrock Innovations.  At that time, the auto companies were failing, AIG went bust, the credit markets froze, and businesses everywhere went into a holding position to see what tomorrow brought.

We elected a very liberal president and the Congress was with him.  President Bush was bailing out anyone with a hangnail.  There is only one place where this can go over the course of 4 years.

No matter what your political leanings are, more government involvement in business means slower decisions, unpredictability, and lower ROI in the long term.  Jobs were going to bleed from the economy for more than 2 years.

All of this sounds pretty bad unless you step out of your business and look at this from an ROI perspective:

• Increased unemployment means your employees are less likely to go elsewhere.  This lowers your training expenses
• A business downturn means TV, radio, and newspaper advertising gets much less expensive – especially if you commit to the long term
• Tight credit markets mean your competitors’ ability to match your moves will be slower.  No credit means they will wait to see how you do before they jump in.
• Low consumer confidence means your larger competitors will press prices lower and fund the decrease with service level cuts
• Everyone else is scared to buy a stapler, let alone a new piece of productivity equipment

Take this example:  During the onset of the economic downturn McDonald’s could not get financing to buy their new fancy coffee equipment.  As a result, small coffee shops across the country had a three month window where they knew exactly what McDonald’s was going to do and how they planned on doing it.

A smart coffee shop owner would have protected his local market share by communicating some facts about McDonald’s coffee to their customers.  For example:

• Did you know that many of McDonald’s coffee products come from a base syrup – like soda does?
• The training manual to make McDonald’s coffee is less than a page, but there are wall posters on how to package it nicely
• Fries and coffee don’t mix

An entire guerrilla marketing campaign could be assembled around these three points, communicated in various ways over a three month period, and a barrier to McDonald’s entry in a small trade area could be erected.

Aggressive Does Not Mean Stupid

Being aggressive is easy in most cases.  Being aggressive in an intelligent way is more difficult.

I am not suggesting you blow an entire year’s budget on one big thing hoping it hits home – it probably won’t.

The way you do everything inside your business should have changed in 2009 because of the economy.  Your advertising cost should have gone down – if you asked for it.  Your rent or lease may have dropped – if you sought the decrease.  Your people are probably more productive, meaning a better ROI.

What I am suggesting is taking those gains and spending them instead of banking them as profits.  Spend them to buy even more advertising, increase your productivity, or retire debt.

By making smart moves your business will become stronger, your ROI will increase over time, and your competitors will wonder how on Earth you are able to afford all of this in “this economy.”

Remember the gold old days when you could get a free computer as long as you agreed to pay a monthly dial-up provider like AOL $30 a month for slow, overpriced Internet access?

Well grab your credit cards and put on your bifocals!  The deal has returned courtesy of Best Buy and Sprint, but this time the screen is a bit smaller.

ZDNet is reporting that the two companies are partnering to offer a Compaq-branded HP Mini 110c netbook for only 99 cents when you sign a two-year 3G Internet contract.

These free computer offers are REALLY tempting because consumers in a recession-battered economy get what they want right now – a new computer – by signing a promise to give more money later.

Breaking Down the Numbers

Under this deal, you get the $389 retail value netbook for only $.99.  The contract costs about $60 a month, so if you multiply that by 24 months, you would find that the contract will cost you $1,441 over its two year term.

Obviously the Sprint 3G connection is portable, so you are paying a price premium on your Internet connection to be able to take it with you anywhere you go.  Additionally, there are limits to how much Internet connectivity you can use before additional charges get lumped in.

For the sake of comparison, the cost for you to buy this netbook and use it on a budget cable modem or DSL connection would be much, much less expensive.

Try $20 a month for the DSL Internet connection and $389 for the netbook.  The total cost over 2 years is only $869 – a savings of $572 over two years (nearly $24 a month).

No Home Networking With Sprint 3G?

Some consumers may try to fudge the numbers by ditching their traditional internet service provider (ISP) for the Sprint 3G device.  Doing so would bring the numbers in line with what you are paying now over a 2-year term, but it would also introduce other issues.

While the hardware exists to do it, sharing the internet connection from your 3G device between multiple computers on a home network would result in dial-up like speeds for many applications and most likely additional bandwidth charges.  Forget YouTube, torrenting, file sharing, and always-on connectivity.

This could work if you plan on only using one computer at a time in your home and also don’t depend on any home network connectivity (wireless printers, home media servers, or shared network resources).

But this scenario is unlikely considering the fact that a netbook is not intended to replace your main PC (it adds portability to your computing portfolio).  It is a pretty safe assumption that most netbook owners will have more than one PC in their home.  Typically, owners who have more than one PC have them networked so they can share printers and internet connections.

Kim and I used a 3G connection on AT&T while we were on vacation at Disney World, and uploading a 4 minute video to YouTube took over an hour.  Even the YouTube upload page timed out as if to say, “your connection is so slow I am not going to justify it with an “upload complete” page because it would take me all day.”

The Bottom Line – Don’t Do It!

Netbooks are cool.  Portable 3G connections are cool.  A 24 month contract that locks you into both is not cool.  If you truely have the need for a protable 3G Internet connection (or are paying for one already) grabbing a free netbook out of the deal might be a smooth move.  After all, you are already paying the bill for the portability.

(Keep in mind that this deal is only available for new Sprint 3G customers and you may incur a penalty for leaving your current 3G provider early to switch)

On the other hand, if you really USE your internet connection this could be a $24 a month albatross around your neck that you don’t need and shouldn’t burden yourself with.

My botom line is this is some really slick marketing, but not a deal you should jump into unless you have some really specialized needs.

Schrock Innovations’ web development division started off in 2001 with just one website – its own.  We hooked up with a company in Lincoln called Binary.net that handled hosting for all of the websites we would come to manage flawlessly.

Schrock is a high-service providing company and our web customers expect us to be there when they need us in the capacity that they need us.

Schrock Moves Hosting to Rackspace

To help meet that service expectation, we decided the time to move our hosting infrastructure to another company had arrived. We moved all of our servers to Rackspace Hosting about 4 months ago, and we haven’t looked back since.

Rackspace was voted one of the best Fortune 500 companies to work for in 2008, and I can honestly say I have never had a bad experience dealing with them over the phone or email.

24/7 Digital and Human Access

I own a local business and whenever possible I try to use other local businesses for what Schrock needs.  Unfortunately, there isn’t a local hosting company in Nebraska that could do these critical things for Schrock:

• Provide us with control pannel access
• Give us the ability to set up email accounts after hours
• Provide bandwidth usage tracking
• Some SPAM filtering without hours of training a Barracuda filter

Rackspace was not a local solution, but they gave us everything we needed from the above list and did it with a super happy smile for about the same price as Binary.net had in the past.

What the Move Has Meant to our Customers

Whenever you move over 100 websites from one server to another that is running a different O/S you should expect a few setbacks along the way.  Brad and Adam did their best to get Schrock customers ready for the move and make it as painless as possible.

Now that we have had everyone up and running for a few months, here are some of the benefits of our move:

• We can be more responsive to the after-hours needs of small businesses
• We can move clients to our server in less than a day
• We can set up email auto-responders for clients on a whim
• We can compartmentalize access to the server so clients can manage their own control panel (if they want to)

Rackspace is HIGHLY recommended

I have no problem HIGHLY recommending Rackspace for your hosting needs.  Everyone local told me we would never find what we were looking for, so in that respect Rackspace is a diamond in the rough!

Schrock Innovations might be closed today, but we are celebrating Independence Day by supporting a fund raiser for children our US service men and women.

The “Golf for the Troops” charity golf tournament is in its third year and has raised more than $25,000 locally in Lincoln to fund scholarships for our troops’ children.  Schrock will be contributing a gift card to the list of prizes available to those who participate in the tournament.

My wife was an Air Force Brat, so I have an understanding for some of the stresses that military families go through between multiple moves, long deployments, and time lost.

Our armed forces take on these stresses in a selfless desire to serve, and this event shows our local military members that Lincoln cares about their sacrifice and appreciates it.

The tournament consists of two 18-hole rounds of golf, a silent auction, couple of meals and many prizes.  The tournament is scheduled for July 9th at the Wildreness Ridge Golf Course.  Contact the golf course for information on how you can enter and be a part of a great cause.

Have a safe and fun July 4th weekend, and thank you to all of the men and women who have served over the years to keep the US a free and safe place for everyone.

I have been playing around with a solid state hard drive for the past few weeks to get a better understanding of how they improve my notebook’s performance under different operating systems.

While I certainly don’t look like Goldilocks, my solid state drive experience was a lot like the classic children’s fairytale.

Windows XP on a solid state drive was fast, but at times too fast.  With XP, my notebook booted so fast that I could log in, and open Firefox just to have it fail because the system had not negotiated an IP address yet.

Windows Vista was not much faster than a traditional hard drive.  I got a serious case of heartburn thinking I had just spent $450 on a 120 GB solid state drive when a $60 drive would have done the same job.

Then there was Windows 7.  It booted in seconds.  Response times were amazing.  Windows 7 was JUUUUST RIIIIIGHT!

Why is Windows 7 So Fast on a Solid State Drive?

Flash drives became fashionable when Windows XP as around, but only as a backup medium or for temporary storage.

Nine years later, a bundle of super speedy flash drives can be teamed up to create an entire hard drive with no moving parts.  Lower failure rates, faster access times and no defragging.

It sounds like a match made in heaven, except that XP and Vista were hard-coded to treat all drives like they spin.

That means that unnecessary operations happen all the time on a solid state drive that tie up valuable resources and sap the power of this expensive performance booster.

That is, all operating systems except Windows 7.  Windows 7 is the first Microsoft operating system that was specifically designed to detect if it is operating on a solid state drive or a rotating disk drive.

Windows 7’s secret is a technology Microsoft calls TRIM.  TRIM allows Windows 7 to detect

• Enhancing device wear leveling by eliminating merge operation for all deleted data blocks
• Making early garbage collection possible for fast write
• Keeping device’s unused storage area as much as possible; more room for device wear leveling.

Is Solid State Worth the Cost?

That all depends on what you are using your computer for.  We just build a kick-butt Vista system for one of our customers who runs a video production company.  The solid state hard drive cut his video rendering in half, allowing him to recoup his investment quickly by increasing his business productivity.

If you are just using your computer for casual things, a solid state drive might be a bit pricey for you still.  The 120 GB drive I put in my notebook set me back $400.  The largest solid state drives are only 250 GB, so if you have a mass-storage need, solid state is not the way to go – yet.

Additionally, we have seen solid state hard drives reduce the instance of hard drive failure in laptops that are used in mobile applications.  A bouncing car is not a big deal for a solid state hard drive.

If you are in an environment where performance is important to your productivity,

When Will Solid State Be Available as a Standard?

With pressure being applied to reduce the costs of PCs and laptops, manufacturers have little incentive to add solid state hard drives to their economy models right now.

With that said, Schrock Innovations has a PC model that could include a solid state drive in research and development now that could be released in Q4 2009 if everything continues to go well in testing.

In my opinion, solid state drives will not become a viable technology for economy PCs until Q4 of 2011.