Launch Plan for Electronics Repair Shop
Launching an Electronics Repair Shop requires significant upfront capital and a long runway to profitability Initial capital expenditures (CAPEX) total approximately $100,000, covering leasehold improvements, specialized tools, and a delivery vehicle Your financial model shows the business requires a 25-month runway to reach the breakeven point (January 2028) The minimum cash required to sustain operations until profitability is $598,000, peaking in February 2028 In 2026, the strategy focuses on Repair Service Fees (80% of revenue) at an average rate of $75 per hour Variable costs start high at 255% (Parts, Fleet, Processing) Success depends on scaling service volume while reducing Customer Acquisition Cost (CAC) from the starting $50 down to $35 by 2030
7 Steps to Launch Electronics Repair Shop
| # | Step Name | Launch Phase | Key Focus | Main Output/Deliverable |
|---|---|---|---|---|
| 1 | Define Service Mix and Pricing (Month 1) | Validation | Service mix shift and pricing | Finalized pricing structure |
| 2 | Calculate Fixed and Variable Costs (Month 1) | Modeling | Establish initial cost base | Confirmed cost structure |
| 3 | Establish Initial CAPEX Needs (Month 2) | Funding & Setup | Secure $100k asset funding | Capital secured for assets |
| 4 | Model Initial Staffing and Wages (Month 2) | Hiring | Finalize 25 FTE salary load | Approved Year 1 staffing plan |
| 5 | Determine Breakeven Volume (Month 3) | Pre-Launch Marketing | Hit volume for Jan 2028 goal | Target job volume set |
| 6 | Define Customer Acquisition Strategy (Month 3) | Pre-Launch Marketing | Budget $15k to lower CAC | Marketing plan to drive volume |
| 7 | Develop 5-Year Cash Flow Forecast (Month 4) | Launch & Optimization | Ensure runway past Feb 2028 | Approved cash reserve plan |
Electronics Repair Shop Financial Model
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What specific repair niches and customer segments offer the highest lifetime value (LTV)?
B2B service contracts charging $90 per hour will offer higher lifetime value (LTV) than high-volume consumer repairs at $75 per hour, provided the business secures stable contracts.
B2B Contract Value Drives LTV
- The $90/hour rate for B2B services directly surpasses the $75/hour consumer rate.
- SMBs needing consistent IT support offer predictable, recurring service revenue streams.
- For founders planning this structure, understanding the foundational requirements is key; review What Are The Key Steps To Write A Business Plan For Your Electronics Repair Shop? to formalize these segments.
- Securing these contracts defintely boosts long-term yield per client relationship.
Consumer LTV Levers
- Consumer segment volume offsets the lower $75/hour billable rate.
- LTV is enhanced by ancillary revenue from selling refurbished electronics.
- Revenue also comes from protection plans and accessories like screen protectors.
- If customer onboarding takes 14+ days, the risk of immediate churn rises significantly.
How many billable hours per month are needed to cover the $19,192 average monthly fixed overhead?
To cover the $19,192 average monthly fixed overhead, the Electronics Repair Shop needs approximately 344 billable hours per month, assuming a manageable variable cost structure; understanding this volume is step one before you formalize your approach, so review What Are The Key Steps To Write A Business Plan For Your Electronics Repair Shop? seriously. If your actual variable costs approach the stated 255% rate against the $75 hourly charge, the business model is fundamentally broken because you'd lose money on every hour booked, defintely. Here’s the quick math showing the required volume based on achievable margins.
Break-Even Volume Calculation
- Fixed overhead stands at $19,192 monthly.
- Assuming a workable 25.5% variable cost rate (CM 74.5%).
- Contribution per hour at $75 is $55.88.
- Break-even requires 344 hours ($19,192 / $55.88).
Variable Cost Reality Check
- The stated 255% variable cost rate is critical.
- Variable cost per hour equals $191.25 ($75 multiplied by 2.55).
- This creates a negative contribution of -$116.25 per hour.
- You need to price services 155% higher than costs just to break even.
What is the realistic timeline for hiring technicians to meet demand without exceeding the $598,000 cash minimum?
Hiring 10 more full-time Repair Technicians by 2027 requires the Electronics Repair Shop to generate substantial, sustained profitability well before that date, as doubling staff risks depleting the $598,000 cash minimum if revenue doesn't scale proportionally. To understand the operational pressure this hiring plan puts on cash flow, you need to track service quality closely; see How Is The Customer Satisfaction Level For Your Electronics Repair Shop?
Hiring Timeline Risk
- Scaling from 10 to 20 FTEs means 100% headcount growth in 2027.
- This doubles fixed labor expenses overnight, straining the $598k cash buffer.
- You need to prove the 10 current technicians are fully utilized now.
- If current utilization is low, you’ll burn cash waiting for demand to catch up.
Revenue Alignment Check
- Calculate the exact revenue needed per new tech to cover salary plus overhead.
- If average revenue per tech is $150,000, you need $1.5M in new gross profit annually.
- Focus on driving Average Repair Value (ARV) through accessories sales first.
- If onboarding takes 14+ days, churn risk rises, defintely impacting that 2027 target.
What capital structure and contingency plan will mitigate the risk of needing $598,000 over 25 months?
To cover the required $598,000 over 25 months, you need a blended capital structure, likely favoring low-cost debt initially, but you must set clear financial checkpoints tied to the 45-month payback projection.
Capital Structure Choices
- Debt, like a term loan, is cheaper interest-wise but demands fixed payments start immediately.
- Equity means giving up ownership but defers repayment pressure if initial sales are slow.
- If you secure $300,000 in debt, the remaining $298,000 should be structured as preferred equity to offer flexibility.
- This blend helps the Electronics Repair Shop manage immediate cash flow while preserving runway.
Payback Trigger Points
- Set a hard review point at Month 18; if gross profit hasn't hit 40% of the total funding need, activate the contingency plan.
- If the projected payback extends past 45 months, you must immediately halt non-essential CapEx (Capital Expenditures).
- This extension signals a need to execute the pre-agreed equity raise tranche, even if it means more dilution.
- These milestones ensure you don't burn through the $598,000 without a clear path to return on investment.
Electronics Repair Shop Business Plan
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Key Takeaways
- The electronics repair shop requires a minimum cash reserve of $598,000 to sustain operations through the initial high-burn period.
- Financial projections indicate a 25-month runway is necessary to achieve the breakeven point, targeted for January 2028.
- Initial operational success is heavily dependent on managing a high starting variable cost rate of 255% against the $75 average hourly repair fee.
- Long-term profitability is driven by shifting the service mix toward higher-margin B2B service contracts priced at $90 per hour.
Step 1 : Define Service Mix and Pricing (Month 1)
Price Point Validation
Setting your initial pricing validates the entire model. You must confirm if charging $75 per hour for technician labor is sustainable against local competitors for smartphone and laptop fixes. If this rate, which yields an average $11,250 monthly revenue based on 15 hours billed, is too low, you risk under-recovering fixed costs immediately. This decision defintely sets the tone for profitability.
Service Mix Adjustment
Focus on migrating revenue mix now, even if the 30% target is years away in 2030. Track the contribution margin difference between a standard repair and a refurbished sale. Currently, refurbished sales are 20% of revenue.
Build tracking so you can actively push higher-margin accessory sales and scale the refurbished inventory pipeline to hit that long-term 30% goal.
Step 2 : Calculate Fixed and Variable Costs (Month 1)
Cost Base Setup
Getting your initial costs straight is non-negotiable before you take the first repair job. You need to know what you spend just to keep the lights on versus what moves with each repair ticket. We confirm the baseline here. Your non-wage fixed overhead lands at $5,650 monthly. This covers rent, insurance, and software—the stuff that doesn't change if you fix one phone or fifty.
Variable Rate Check
The variable side demands immediate attention because it’s high. Your initial rate is 255% of revenue, covering Cost of Goods Sold (COGS), fleet expenses for on-site work, and payment processing fees. If revenue is $100, costs are $255. You must aggressively manage part sourcing and fleet efficiency right away, or you’ll burn cash fast.
Step 3 : Establish Initial CAPEX Needs (Month 2)
CAPEX Lock-In
This upfront capital expenditure funds your physical presence and mobility, which are critical before Month 3 operations begin. Securing the full $100,000 now dictates if you can launch with the intended service offering. If you can't fund this, the launch date shifts.
You must prioritize the physical build-out and the mobile fleet immediately. Allocate $25,000 specifically for Shop Leasehold Improvements to make the space operational. Also, earmark $30,000 for the Delivery / On-site Repair Vehicle; that unit enables your core convenience value proposition.
Spending Discipline
Treat this budget as fixed before any revenue hits the bank. The $55,000 dedicated to the shop and vehicle must be spent strictly according to plan. Any overrun here directly reduces the working capital buffer needed for parts inventory and initial payroll.
Delaying the vehicle purchase means you cannot offer on-site service, undermining your UVP right away. You must defintely lock in vendor contracts for these major assets before Month 3. This spend is non-negotiable for the stated operational model.
Step 4 : Model Initial Staffing and Wages (Month 2)
Staffing Plan Finalized
You need to lock down your people count now, in Month 2. Staffing decisions set your baseline operating expense for Year 1. If you over-hire now, you burn cash before revenue stabilizes. The plan calls for 25 FTEs total headcount. This structure must support the projected volume needed to hit breakeven in Month 3. Getting this right is defintely critical for runway management.
This headcount must cover all operational needs, from the Owner managing strategy to the 05 Admin staff handling intake and scheduling. This initial staffing model is the foundation for your fixed cost structure moving forward.
Wage Cost Control
The budgeted annual salary cost for these 25 FTEs is fixed at $162,500. This is your primary fixed operating cost tied to personnel. You must map the Owner, Lead Tech, and 05 Admin roles against this budget first. Ensure the Lead Tech salary reflects market rates for certified expertise, as quality directly impacts repair success rates and warranty claims.
Calculate the monthly run rate: $162,500 divided by 12 months is roughly $13,542 per month in gross salaries. This figure excludes payroll taxes and benefits, which you must add when calculating true cash outlay.
Step 5 : Determine Breakeven Volume (Month 3)
Hitting Monthly Cover
You must cover your fixed burn rate before scaling marketing efforts. Month 3 is when you prove the unit economics work against the baseline overhead. Your current average fixed overhead is $19,192 monthly. If you don't cover this, you are simply burning capital waiting for the January 2028 breakeven target. This calculation sets your immediate operational minimum.
The goal is simple: generate enough gross profit from repairs to zero out the overhead before factoring in growth investments. We need to know the minimum volume required to stop the bleed. This number dictates how aggressively you push sales immediately after launch.
Required Repair Volume
We calculate this using the average job value against the fixed costs. With an average repair revenue of $1,125 per job (15 hours at $75/hr), we must determine the contribution margin. Assuming the variable cost rate is 25.5%—a necessary adjustment from the stated 255% to maintain viability—your contribution per job is $838.12.
Here’s the quick math: To cover $19,192 in fixed costs, you need 23 jobs monthly ($19,192 / $838.12 contribution). If onboarding takes longer than 14 days, churn risk rises, so focus on hitting 23 jobs by the end of Month 3, defintely.
Step 6 : Define Customer Acquisition Strategy (Month 3)
Marketing Spend Allocation
You must use marketing funds now to drive volume past the breakeven point, which requires covering about $19,192 in average monthly fixed overhead. Your starting Customer Acquisition Cost (CAC) is high at $50 per customer. Deploying the $15,000 Year 1 budget immediately buys you 300 new customers at that initial rate.
This initial acquisition push proves your model works outside of word-of-mouth. If you wait until Month 6 to spend this, you risk running out of cash before you build necessary density. You’re buying market presence right now.
Budget Deployment Plan
Allocate the $15,000 budget directly against high-intent local searches related to device repair. If you spend $15,000 and maintain the $50 CAC, you get 300 customers. That’s not enough to sustain operations long-term, so you must track performance closely.
Your goal is to lower the CAC to $40 or less quickly. To achieve a $40 CAC using the same $15,000 spend, you need to acquire 375 customers. Defintely focus on conversion rate optimization on your landing pages to make every marketing dollar work harder.
Step 7 : Develop 5-Year Cash Flow Forecast (Month 4)
Runway Requirement Check
You need a clear picture of how long your initial capital lasts. This cash flow forecast maps projected losses against available funding, identifying the peak funding gap. It’s not just about covering next month’s rent; it’s about surviving the high-burn period. If you run out of cash before hitting breakeven in February 2028, the business stops, no matter how good the idea is.
Forecasting Month 4 means looking past immediate setup costs like the $100,000 CAPEX. We are now projecting cumulative operational deficits based on the $162,500 annual salary base and the initial marketing spend. This is where founders find out if their seed round is big enough.
Securing the $598k Buffer
The model shows you need a minimum cash buffer of $598,000. This amount ensures operations continue smoothly until the business becomes self-sustaining. This figure accounts for the cumulative negative cash flow generated by 25 FTEs and $5,650 in base fixed costs before revenue catches up. If onboarding takes longer than expected, churn risk rises defintely.
This reserve must be in the bank before the burn rate peaks, which the model pegs around January 2028. If you plan to raise capital later, ensure this $598,000 covers your entire runway plus a six-month contingency buffer. That buffer protects you from unexpected delays in hitting the required volume of repair jobs.
Electronics Repair Shop Investment Pitch Deck
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Frequently Asked Questions
Initial capital expenditures (CAPEX) total about $100,000, but the cash flow model requires a minimum reserve of $598,000 to sustain operations until the January 2028 breakeven