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Author Topic: Starting my own service co. Any suggestions? Sean McKinnon Phenomenal Film Handler Posts: 1712 From: Peabody Massachusetts Registered: Sep 2000 posted 06-24-2007 07:27 PM                        After recieving a decent inheritance from my beloved Grandmother I decided to go buy a scope RTA, Spotmeter, tools, and everything else you could think of. I got a parts dealer who gives me a substantial discount and will ship parts through my DHL acct so it looks like I have a huge wearhouse. I got a 3 million dollar liability policy, Federal and state tax ids, bank accts etc... Im a DBA right now but I should be a corporation in a few days. I am also working out a contract with another service co to provide back-up emergency service if I am busy or need time off. I have very low overhead as I have a meilbox and a car, all my parts I dont store on hand (except critical tech stock) I feel I can offer better service at a much much lower price than the big guys. My service contracts are 50 a screen a month and includes emergency service, pm's, follow up labor, and 1 free "upgrade labor" per year. Also where others will charge for going out on a call just to change a xenon lamp I include that. I dont want to take over the world I just want to pick up 100-150 screens. My only overhead is my car, cellphone, insurance, and paying for my back-up contract. Anyone have any advice or suggestions? Im not looking to steal accounts from people but to pick up the theatres that cannot afford a service contract with the big guys. I offer the first month free and a discount for chains with 5 or more locations. I offer 4 pm visits a year and unlimited EM and follow-up labor. I am just not out to grab every demand dollar I can get I include things like B chains and stuff I think almost anything should be cpvered under contract. Also, I dont plan on using an answering service I plan on having a live tech answer the phone at all times. So again anyone have any suggestions? And again I am not out to steal accts from anyone I just want to offer theatres that cant afford the other guys a chance to get good service cheap! I dont even plan to mark up parts unless I absolutely have too. I just want to live comfortably and do the work I love.  |  IP: Logged Mark Gulbrandsen Resident Trollmaster Posts: 16657 From: Music City Registered: Jun 99 posted 06-24-2007 10:28 PM                     quote: Sean McKinnon My only overhead is my car, cellphone, insurance, and paying for my back-up contract. There is alot more hidden overhead in running a buisness than what you've got listed there and it'll take several years for you to get a grip on everything thats involved. The first thing you need is a good accounting program and you need to know all the ins and outs of it. You also need an accountant that knows the program you decide on inside and out... in case you get audited and to be sure that all your taxes are paid on time. There are many other "hidden costs" in running a buisness that will find you sooner or later especially if you incorporate. A car rarely suffices for doing any serious service work! Weather conditions in your area in winter might dictate a different type of vehicle all together... customers have to keep the show on the screen! I didn't incorporate until I started doing really large jobs! If you're just doing service work incorporation probably isn't absolutely necessary if you have good insurance... and not all insurance is good, be careful there. If you burn down someones theater because you hook up something wrong they will still also come after you anyway. Don't give your services away! Instead offer some services that the other dealers in your area don't/can't offer... be unique and do the best work around. Word will spread and that will get you unlimited customers and the best ones to have! quote: Sean McKinnon I offer 4 pm visits a year and unlimited EM and follow-up labor. I just don't see that much profit in that much work offered for that amount of $$ per screen unless everyopne is in a 20 mile radius. If we offered unlimited EM visits we'd go out of buisness in short order. Also 4 PM visits is for many theaters too much. After the second visit you won't be finding much to tweek or out of adjustment. Most of our customers do two PM's a year and some only do one... some only run on weekends! Although there is one largish chain we service that needs to see three visits a year. You will also find other situations that drag down the profits as well... inexperienced manager/operators is one good example. You might be calling some of those your home away from home! Mark  |  IP: Logged Mike Blakesley Film God Posts: 12767 From: Forsyth, Montana Registered: Jun 99 posted 06-24-2007 10:51 PM                        quote: Sean McKinnon I dont even plan to mark up parts unless I absolutely have too. Sean - this is a terrible idea. Why should you go to the trouble of ordering, stocking, packing and shipping parts when you make no money on them? No decent businessperson will deny you a fair profit. But unscrupulous ones WILL take advantage of you if you offer a deal that's too good to be true. You must remember, you're selling stuff that the theatre can't go and buy at the Wal-mart. Just don't gouge...that'll put you out of business just as fast as no-profit will.  |  IP: Logged Steve Guttag We forgot the crackers Gromit!!! Posts: 12814 From: Annapolis, MD Registered: Dec 1999 posted 06-24-2007 11:25 PM                     Never mind that you will also be fronting the cost of the parts to the end user...that is...they won't be paying quite as fast as you will HAVE to pay if you want to still have access to those parts. You show me a dealer for parts and I'll show you a dealer that has a receivables column on the ledger that doesn't have all the money in the bank from those sales...and the taxes...they are due on what you should have received, not what you have received. Then their is the cost of freight...your time to process the order...the screwed up shipments (even if it wasn't your fault). The dealer always ends up eating it. You are planning to become what we call in the industry a "trunk slammer." That is your office. While your intentions are honorable...you will find yourself taken advantage of and will lower the standard of living for most everyone else in doing so. There are not that many techs or companies doing phenominally well with the more established rates that are notably higher than the ones you are stating. It is also unrealistic to think that you will be able to keep up with 100-150 screens at that rate with unlimited EMs...after all it may be an emergency to the theatre when their own personel don't know what they are doing....you become a free partner...after all it is included. While I encourage you improve the quality of service for the industry, I don't think you have fully thought it out or have seen just what it takes to perform the services you are planning on offering. Steve  |  IP: Logged Tim Reed Better Projection Pays Posts: 5246 From: Northampton, PA Registered: Sep 1999 posted 06-24-2007 11:25 PM                       quote: I offer...unlimited EM This will come back to bite you. Trust me, if you go in with this, they will have you coming out to fix out-of-frame splices or change work lights.  |  IP: Logged Ron Curran Jedi Master Film Handler Posts: 504 From: Springwood NSW Australia Registered: Feb 2006 posted 06-25-2007 01:54 AM                        I agree 100% with Mike. We don't mind paying good people good money. That's probably why our cinemas can get good service promptly. Conversely, we don't want to be ripped off. Fortunately, that is rare. The only way to put in parts without a mark-up is to get the cinema to purchase them. Then they can have the fun of returnng them for the right part.  |  IP: Logged Louis Bornwasser Film God Posts: 4441 From: prospect ky usa Registered: Mar 2005 posted 06-25-2007 08:59 AM                        Good advice above. I will add only one thing: in your zeal to please and do a good job at a low price, you will attract more than your share of bottom feeders who will pay late or not-at-all. I know, I started just as you in 1974. Later I sent half of my customers away since they only called for trouble, never paying 100%. Louis  |  IP: Logged Dave Macaulay Film God Posts: 2321 From: Toronto, Canada Registered: Apr 2001 posted 06-25-2007 01:19 PM                     Louis hit the nail on the head. There are cinema owners who are amazingly adept at not paying bills. When a supplier cuts them off, they just look for the next sucker. We have several customers who have to meet us at the door with cash - no checks - before the toolbag opens.  |  IP: Logged Brad Allen Jedi Master Film Handler Posts: 688 From: Evansville, IN, USA Registered: May 2000 posted 06-25-2007 01:30 PM                     Sean, stop and take a deep breath. What you really need to do if not already, is find a competant service man you trust to spend a month or two working with him as a helper (for free if need be) to get a feel for what your going to be doing. And as others have said, by all means put a fair markup on the parts you sell. Your probably not big enough to even worry about becoming a Corp. If you don't consistantly act like a corp to the T, and get sued, they'll come after you personally anyway.  |  IP: Logged Mark Gulbrandsen Resident Trollmaster Posts: 16657 From: Music City Registered: Jun 99 posted 06-25-2007 05:36 PM                     I agree with Brad! Leave the corp thing til later when you start doing 14 screen designs and installs. My book keeping never got complicated until I incorporated. If you seriously screw up you will be personally sued either way. I was working on three films a year and doing designs/installs and service work. I had a really good insurance company(Cincinatti) that covered both my buisness policy AND my vehicle insurance and my premium cost was dictated by how many years I'd been in the buisness. My driving record which was good anyway did not matter on the vehicle premium. I could speed to my customers and get all the tickets in the world but my policy premium would not increase. I can only remember getting one ticket back then on my motorcycle. I can only say good things about Cincinatti... they even covered electric motors that were stolen off of a pair of DP-70's that I had purchased but had not yet removed from the closed down theater's premises. Once I was hit broadside by a deer up near Baraboo WI and the truck was fixed no questions asked... although the adjuster that come out had no questions he remarked that he could tell that the deer hit me and that I didn't hit the deer. First time he'd seen that. If Cincinatti handles insurance in your area I highly reccomend them. They don't in Utaw or I'd still be with them. Mark  |  IP: Logged Bill Enos Film God Posts: 2081 From: Richmond, Virginia, USA Registered: Apr 2000 posted 06-25-2007 08:11 PM                     During the 27 years I serviced office machines there were always a couple guys working out of their cars trying to get business based on very low service rates, too inclusive service contracts, etc. None survived more than a year or two. Most just cut their own financial throats by working too cheap. Larger companies know what it costs to operate a business and are suspect of quotes that are too low and will ask to see your facilities and the parts inventory that you claim to have and the trunk of your car with the promise of fast delivery of parts from somewhere else won't cut it. Everybody big and small pays slow.  |  IP: Logged Louis Bornwasser Film God Posts: 4441 From: prospect ky usa Registered: Mar 2005 posted 06-25-2007 09:57 PM                        Better to do top quality work and charge properly for it. THAT's something your competition cannot do!!!! Louis  |  IP: Logged Michael Moore Expert Film Handler Posts: 188 From: Dover, DE / USA Registered: Jun 2006 posted 06-25-2007 10:14 PM                        After reading his post I think all he wants to do is live decent and do what he likes: service and even if he makes no money. Maybe the inheritance is so big he can live off of interest and do what he wants with out real income. I have no clue what he wants, but if I had a choice to live off an inheritances and do what I like i would do it and not care about making much more money. but that's just me. Mike  |  IP: Logged Sean McKinnon Phenomenal Film Handler Posts: 1712 From: Peabody Massachusetts Registered: Sep 2000 posted 06-26-2007 01:44 AM                        Thanks for all the great replies especially Mark and Steve. Its too late I already incorporated, got a 3 million dollar lliability policy, am getting a toll free number and I bought the domain name. Bye no overhead I mean office or stocking parts I have a vender who gives me a good price and ships with my DHL acct so it appears to have came from me I only carry the crucial shit. I am just saying thst I will only sell part at 5-10% over what I pay. I know 4 pms is a lot but I plan to spend one focusing on sound, then picture, then lamphous/power supply, then platter and also do thier trouble list well im there. I worked for the former National Cinema Service and they offered 3pms and unlimited ems and follow up. for around 75-100 a screen so I want to give the guys that cant afford NCS (Strong) a chance to have a service contract instead of just letting everything go unsligned and unmaintained. I am very good with Microsoft money and have a great bank. I have a friend whoes a good accountant. I just want to live comfortably and do the work I love without bieng run by a corporation. I want to be able to do the best for the customer not what will raise the stock price 0.01.  |  IP: Logged Tim Reed Better Projection Pays Posts: 5246 From: Northampton, PA Registered: Sep 1999 posted 06-26-2007 11:59 AM                       quote: I worked for the former National Cinema Service and they offered <snip> unlimited ems All the major service companies have done that... but only for certain accounts; who either pay extra for it, or are large enough to make it worth the company's while financially. It's not free. An individual will get pulled under with that. And if you're going out to change bulbs, too, you'll be on the run a lot. That $50 a month will soon go into the red and quickly take your cash from the other screens with it. On fuel alone. Plus, you live in Mass., where taxes and the cost of living are very high. Maybe you're seeing something I'm not, and I sure wish you luck, but I don't understand how you're going to be able to turn a profit.  |  IP: Logged

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