Computer Repair Service Running Costs
Running a Computer Repair Service requires balancing high fixed overhead with fluctuating parts costs Your initial monthly fixed expenses (rent, utilities, insurance, etc) start around $5,050 in 2026 Payroll adds another $6,250 for the lead technician, totaling $11,300 before variable costs Variable expenses, including hardware parts (180% of revenue) and software licensing (40%), will consume about 22% of your sales initially The business is modeled to hit breakeven by June-26, just six months into operation, which is defintely fast To achieve this, you must control your Customer Acquisition Cost (CAC), which starts at $120 This guide details the seven core running costs you must track to maintain profitability and secure the $818,000 minimum cash required by February 2026
7 Operational Expenses to Run Computer Repair Service
| # | Operating Expense | Expense Category | Description | Min Monthly Amount | Max Monthly Amount |
|---|---|---|---|---|---|
| 1 | Payroll & Wages | Labor | Labor costs start at $6,250 for the owner, rising to $8,125 when the first technician is hired in July 2026. | $6,250 | $8,125 |
| 2 | Office Rent | Fixed Overhead | The dedicated physical space requires a consistent fixed monthly cost of $2,500. | $2,500 | $2,500 |
| 3 | Hardware Parts Inventory | Cost of Goods Sold (COGS) | This cost scales based on revenue, starting at 180% of revenue in 2026. | $450 | $2,500 |
| 4 | Customer Acquisition (CAC) | Marketing | The annual marketing budget is $24,000 in 2026, which is $2,000 per month. | $2,000 | $2,000 |
| 5 | Accounting & Legal | Professional Services | Essential compliance and accounting services require a fixed monthly outlay of $800. | $800 | $800 |
| 6 | On-Site Vehicle Costs | Variable Operations | Fuel and vehicle costs for on-site support are modeled as 60% of revenue in 2026. | $450 | $2,500 |
| 7 | Business Insurance | Fixed Overhead | Liability and property coverage requires a fixed monthly expense of $450. | $450 | $450 |
| Total | All Operating Expenses | $13,000 | $18,875 |
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What is the total monthly operating budget required to sustain the Computer Repair Service for the first 12 months?
The baseline monthly operating budget for the Computer Repair Service, covering fixed overhead and initial payroll, totals $11,300 before accounting for variable expenses tied to service volume, which is a critical factor when you Have You Considered The Best Strategies To Launch Your Computer Repair Service Successfully? To sustain operations for the first year, you need at least $135,600 to cover these core non-variable expenses.
Core Monthly Burn Rate
- Fixed overhead costs are established at $5,050 monthly.
- Initial payroll commitment for essential staff is $6,250 per month.
- Your fundamental monthly operating base, excluding variable costs, is $11,300.
- This figure represents the minimum revenue needed just to cover overhead, defintely.
Budgeting for Service Volume
- The 12-month projection for fixed costs alone reaches $135,600 ($11,300 multiplied by 12).
- Variable costs, such as parts inventory or travel expenses, scale directly with service volume.
- You must calculate your required Minimum Viable Revenue (MVR) target.
- MVR is the revenue needed to cover the $11,300 base plus the projected variable expense percentage.
Which recurring cost category represents the largest percentage of total monthly expenses in Year 1?
Payroll is the largest known recurring cost category in Year 1 for the Computer Repair Service, exceeding fixed overhead expenses, which is a common structure analyzed when comparing owner compensation versus operational costs, similar to what you might see when researching How Much Does The Owner Of Computer Repair Service Typically Make?. Variable costs related to hardware parts, however, could defintely dominate total expenses quickly depending on service volume and pricing structure.
Payroll vs. Fixed Overhead
- Monthly payroll starts at $6,250.
- Fixed overhead runs at $5,050 per month.
- Payroll is currently about 23% higher than base overhead.
- This difference shows where management focus needs to be early on.
Variable Cost Exposure
- Variable Cost of Goods Sold (COGS) is driven by hardware parts.
- Parts cost is cited at 180% of the related service revenue.
- If service volume increases, this variable cost will quickly outpace fixed payroll.
- Watch margins closely; high part costs crush profitability fast.
How many months of operating expenses must be secured as working capital to cover the minimum cash requirement?
You need to secure at least 6 months of operating expenses as your working capital buffer, which translates to roughly $79,800, separate from the $818,000 minimum cash target set for February 2026. This buffer ensures you can manage unexpected delays, especially when considering the initial costs involved in setting up a Computer Repair Service business, like those detailed in How Much Does It Cost To Open A Computer Repair Service Business?
Operational Safety Net
- Monthly fixed/SGA costs are $13,300.
- A standard buffer is 6 months of burn.
- This equals a required cash cushion of $79,800.
- If onboarding takes longer than planned, this cushion is defintely critical.
Managing the $818k Target
- The $818,000 is your minimum cash requirement goal.
- This large figure must cover startup expenses plus runway.
- Your 6-month buffer is part of this total capital stack.
- Aim to keep initial fixed overhead below $10,000 if possible.
If revenue targets are missed by 20%, what specific variable costs can be immediately reduced to cover the shortfall?
If the Computer Repair Service misses its revenue goal by 20%, you must immediately attack the two biggest levers: discretionary marketing and parts cost structure. Since Hardware Parts COGS is running at 180% of revenue, that cost line needs immediate surgical review, alongside cutting the $2,000 monthly marketing spend. You can learn more about typical owner earnings for this type of business here: How Much Does The Owner Of Computer Repair Service Typically Make?
Cut Discretionary Marketing
- Stop the $2,000 per month marketing outlay now.
- This is the fastest variable expense to halt immediately.
- Pausing non-essential campaigns frees up $24,000 annually.
- This covers a portion of the shortfall defintely.
Fix Parts Cost Structure
- A 180% COGS means you lose 80 cents on every dollar of parts cost.
- This signals a failure in procurement or service pricing strategy.
- Push vendors for better volume discounts starting today.
- Re-evaluate services requiring high-cost components immediately.
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Key Takeaways
- The initial monthly fixed overhead totals $5,050, which must be supported by starting payroll costs of $6,250 for the lead technician.
- The business is aggressively targeting a breakeven point within six months of operation, specifically by June 2026, to ensure rapid financial stability.
- Controlling the Cost of Goods Sold (COGS), driven primarily by hardware parts representing 180% of revenue, is the most critical variable expense to manage for profitability.
- Securing the minimum required working capital of $818,000 by February 2026 is paramount while maintaining a disciplined Customer Acquisition Cost (CAC) target of $120.
Running Cost 1 : Payroll & Wages
2026 Labor Step-Up
Your 2026 payroll starts low but jumps mid-year when you add staff. Labor expenses begin at $6,250 monthly for the Owner/Lead Technician, increasing to $8,125 in July when the first 0.5 FTE Computer Technician joins. This hiring decision directly impacts your initial burn rate.
Initial Staffing Cost
This payroll figure covers the base salary for the Owner/Lead Technician for the first six months of 2026. To project this accurately, you need the expected annual salary for the Lead Technician and the planned start date for the first hire. The $1,875 difference between the two payroll tiers represents the fully loaded cost for that half-time role.
- Base salary input needed.
- Burden rate estimate.
- Hiring timing matters.
Managing Wage Growth
You can control the timing of the wage increase by delaying the Computer Technician hire past July. Since this is a 0.5 FTE role, ensure the workload justifies the expense before committing to the $1,875 monthly increase. A common mistake is over-hiring support too early.
- Delay hiring past July.
- Use contractors first.
- Review technician utilization.
Burn Rate Impact
The mid-year payroll step-up is a critical cash flow event in 2026. If revenue generation doesn't accelerate to cover the extra $1,875 in fixed labor costs by Q3, your runway shortens quickly. Plan your cash reserves defintely for this July increase.
Running Cost 2 : Office Rent
Fixed Space Cost
The dedicated physical space for the Computer Repair Service locks in a consistent monthly fixed cost of $2,500 for office rent. This expense hits your profit and loss statement before you sell a single service ticket. You need this location to handle hardware intake and specialized repairs. That’s a non-negotiable baseline cost.
Rent's Role in Overhead
This $2,500 rent is pure fixed overhead. It doesn't move if you service 10 customers or 100. For context, your initial payroll starts at $6,250 monthly in 2026. Rent is about 40% of that starting fixed labor cost. You must cover this rent regardless of immediate revenue volume.
- Fixed monthly cost: $2,500
- Covers: Dedicated physical space
- Impact: Must be covered monthly
Managing the Lease
Controlling this rent means locking in favorable terms upfront. Avoid short, month-to-month arrangements that invite immediate increases or instability. If you can commit to a 3-year lease, you might secure a better effective rate than a 1-year deal. Honestly, check common area maintenance (CAM) fees hidden outside the base rent.
- Negotiate lease length aggressively.
- Scrutinize CAM fees in the lease.
- Benchmark local industrial rates.
Fixed Cost Weight
The $2,500 rent is a major component of your baseline fixed costs. Combined with $800 for accounting/legal and $450 for insurance, your minimum monthly fixed burn rate starts at $3,750. You need sufficient gross profit generation just to cover this base before paying technicians or buying parts.
Running Cost 3 : Hardware Parts Inventory
Inventory Cost Shock
Hardware parts inventory costs are your biggest immediate hurdle. In 2026, Cost of Goods Sold (COGS) for parts hits 180% of revenue. While scale helps drop this to 130% by 2030, you are losing money on every part sold initially. This means service fees must cover the gap.
Parts Cost Inputs
For this computer repair service, COGS covers all physical components used in repairs, like replacement hard drives or laptop screens. To calculate this, you need supplier invoices and track component usage per job type. If revenue is $100k in 2026, parts cost $180k. This high initial ratio suggests you might be buying parts at retail prices.
- Supplier unit pricing.
- Component failure rates.
- Inventory holding costs.
Cutting Parts Expense
You must aggressively lower parts cost to survive the 180% ratio. Negotiate volume discounts with two or three primary distributors right now. Also, shift service emphasis toward labor and subscription revenue, where COGS is zero. If you can cut the parts cost ratio by 30 points, that’s $30,000 saved for every $100k in revenue. This is defintely achievable.
- Establish vendor minimums.
- Prioritize subscription revenue mix.
- Use certified refurbished stock.
Scale Dependency
This inventory structure means your business is fundamentally upside down until you reach significant volume. The 50-point improvement between 2026 and 2030 relies on securing better supplier terms based on higher purchasing commitment. If volume lags, this negative margin will burn cash fast.
Running Cost 4 : Customer Acquisition (CAC)
CAC Target
Your 2026 marketing plan allocates $24,000 annually, or $2,000 monthly, to acquire new customers. Hitting the target CAC of $120 means you need about 17 new paying clients every month to justify this spend.
Budget Allocation
This $24,000 covers all paid marketing efforts for 2026, setting the monthly spend at $2,000. To validate this investment, you must acquire roughly 16.7 new customers monthly, assuming the $120 CAC holds true. This spend funds digital ads and local outreach efforts.
- Monthly marketing spend: $2,000.
- Target customers needed: ~17.
- CAC benchmark: $120.
Reducing Acquisition Cost
Since hardware parts cost 180% of revenue in 2026, keeping acquisition costs low is vital for profitability. Focus heavily on referrals from existing subscription clients. Word-of-mouth is nearly free marketing, which defintely improves your margin profile fast.
- Prioritize referral programs.
- Track cost per lead closely.
- Use free local listings first.
LTV Check
If your average subscription customer stays for 10 months, their expected Lifetime Value (LTV) must exceed $1,200 to support the $120 CAC comfortably. If the average repair job is the primary driver, ensure its margin covers the acquisition cost quickly.
Running Cost 5 : Accounting & Legal
Fixed Compliance Cost
Accounting and legal compliance are fixed overhead costs you must budget for immediately. For this service, expect essential professional services to cost $800 per month right from the start in 2026. This covers necessary filings and basic legal structure maintenance.
Budgeting the $800
This $800 covers your baseline accounting needs, like monthly bookkeeping setup, and minimum legal compliance required to operate. Compare this to other fixed costs: it's less than rent ($2,500) but more than insurance ($450). You need this locked in before the first service call.
- Covers basic tax prep.
- Ensures legal registration.
- Fixed monthly commitment.
Managing Legal Spend
Don't overpay for compliance early on. Start with a fractional CPA or a service focused on small business setups rather than a full-service firm. If you scale fast, you might need to increase this spend, but you defintely shouldn't hire internal staff until payroll exceeds $15,000/month.
- Use software first.
- Delay complex audits.
- Review contracts annually.
Fixed Cost Pressure
Because this cost is fixed, it puts pressure on your gross margin until you secure enough recurring subscription revenue. If your variable costs (like parts at 180% of revenue initially) are high, this $800 fixed cost hits harder. You need consistent client volume to absorb it.
Running Cost 6 : On-Site Vehicle Costs
Vehicle Cost Trend
For your on-site computer repair service, vehicle and fuel expenses are initially high, set at 60% of revenue in 2026. You must plan for this significant outlay until operational density improves, bringing the cost down to 40% of revenue by 2030.
Cost Inputs for Travel
This category covers fuel and vehicle maintenance required for technicians driving to client sites for hardware repairs. Since it’s 60% of revenue, the dollar cost scales directly with your on-site job volume. If your 2026 revenue forecast is $300,000, you must budget $180,000 for this alone. That's a defintely large initial spend.
- Ties directly to on-site service volume
- Requires accurate revenue forecasting
- Includes fuel and upkeep expenses
Reducing Travel Burden
To drive down that 60% initial ratio, you must maximize technician density per service area. Push clients toward remote support for simple troubleshooting to eliminate driving entirely. Also, structure service zones tightly around your office rent location. You want techs completing multiple jobs per route, not driving long distances for single, low-value repairs.
- Prioritize remote support where viable
- Geographically cluster service calls
- Increase jobs per technician route
Margin Pressure Point
That planned drop from 60% to 40% relies heavily on achieving scale and route maturity by 2030. If your initial on-site volume doesn't justify the vehicle expense, this cost will remain a major drag on your contribution margin well into the forecast period.
Running Cost 7 : Business Insurance
Insurance Fixed Cost
You need a fixed monthly spend for insurance to protect your operations as a computer repair service. This covers liability if you damage client property or property damage while performing on-site repairs. Budgeting exactly $450 monthly keeps you compliant and protected from day one, regardless of sales volume.
Inputs for Coverage
This fixed outlay covers essential liability and property insurance for your tech service, protecting against claims from on-site visits. Inputs needed are quotes based on your service scope—remote vs. on-site work—and the value of inventory held. It’s a non-negotiable fixed overhead, unlike variable costs like parts inventory.
- Liability for client site visits.
- Property coverage for shop inventory.
- Fixed monthly outlay of $450.
Optimizing Premiums
You can’t skip this, but you should shop around aggressively at renewal time every year. Bundle general liability with professional liability if possible for better rates. Avoid the mistake of underinsuring expensive tools or client data recovery equipment. A 10% quote difference is worth the effort when negotiating.
- Shop multiple brokers annually.
- Ensure coverage matches service area risk.
- Review limits when payroll grows.
Fixed Overhead Weight
This $450 insurance payment hits your fixed overhead immediately alongside rent and initial payroll. Considering initial fixed costs are $2,500 (rent) plus the owner’s starting wage of $6,250, this insurance represents about 5% of that initial fixed base. You must drive revenue fast to absorb this drain.
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Frequently Asked Questions
Fixed operating costs total $5,050 monthly, plus payroll starting at $6,250;