Computer Repair Service Startup Costs
Initial startup costs for a Computer Repair Service in 2026 require a significant cash cushion, peaking at $818,000 in February 2026 to cover capital expenditures (CAPEX) and working capital Upfront CAPEX totals around $108,000 for equipment, vehicles, and initial inventory Fixed operating expenses (OPEX) start at $5,050 monthly plus wages The business model shows strong unit economics, allowing for breakeven in six months (June 2026), but requires strict management of the $120 Customer Acquisition Cost (CAC) in Year 1
7 Startup Costs to Start Computer Repair Service
| # | Startup Cost | Cost Category | Description | Min Amount | Max Amount |
|---|---|---|---|---|---|
| 1 | Diagnostic Tools | Equipment | Estimate $8,500 for specialized tools needed before January 1, 2026. | $8,500 | $8,500 |
| 2 | Service Vehicle | CAPEX | Budget $25,000 for a vehicle to support 25% On-Site Support demand in Year 1. | $25,000 | $25,000 |
| 3 | Office/Workshop Setup | Leasehold Impr. | Allocate $15,000 for office setup and workshop fit-out, done by February 28, 2026. | $15,000 | $15,000 |
| 4 | Initial Inventory Stock | COGS | Plan $18,000 for parts inventory to cover 180% hardware COGS in Year 1. | $18,000 | $18,000 |
| 5 | Pre-Opening Overhead | Operating Expense | Budget $5,050 monthly for fixed costs like rent ($2,500) before revenue stabilizes. | $5,050 | $5,050 |
| 6 | Initial Staff Wages | Payroll | Account for six months of the Owner/Lead Technician salary ($75,000 annual). | $37,500 | $37,500 |
| 7 | Working Capital | Liquidity | Secure $818,000 cash reserve to cover losses through the growth phase ending June 2026. | $818,000 | $818,000 |
| Total | All Startup Costs | $926,050 | $926,050 |
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What is the total capital required to launch and survive until cash flow positive?
The total capital required for the Computer Repair Service to launch and reach its projected cash flow positive date in June 2026 is a minimum of $818,000, a high number you need to plan for, especially when considering the underlying profitability dynamics; for context on service sector returns, see Is The Computer Repair Service Business Currently Generating Profitable Returns? This figure bundles initial spending with the working capital needed to cover operations until profitability hits, defintely a high number to secure.
Capital Stack Breakdown
- Initial Capital Expenditure (CAPEX) is set at $108,000.
- The total requirement includes all pre-opening Operating Expenses (OPEX).
- A significant working capital buffer is baked into the ask.
- The target date for reaching cash flow positive operations is June 2026.
Drivers of the $818k Need
- The $818,000 total capital is the minimum cash requirement.
- This amount must sustain operations for 2+ years until breakeven.
- Growth must accelerate quickly to avoid burning through the buffer.
- If operational milestones slip past June 2026, cash needs increase linearly.
What are the three largest non-labor startup cost categories?
The three biggest non-labor cash sinks for launching the Computer Repair Service are the minimum working capital buffer, buying service vehicles, and stocking initial parts. If you're digging into whether this model makes sense overall, check out Is The Computer Repair Service Business Currently Generating Profitable Returns?
Working Capital Drain
- The minimum required buffer is substantial and non-negotiable.
- This cash covers operational gaps before revenue stabilizes.
- The required minimum amount is $818,000.
- This capital protects against immediate, unexpected cash flow shocks.
Tangible Startup Assets
- Vehicle purchase is the second largest non-labor outlay.
- One service vehicle costs $25,000 upfront.
- Initial parts inventory needs $18,000 set aside.
- These costs are defintely upfront capital expenditures you must fund.
How many months of operating expenses must be covered by working capital?
You must secure enough working capital to cover operating losses for six months until June 2026, which pushes your minimum required cash balance to $818,000 by February 2026, accounting for upfront capital expenditures.
Months of Runway Needed
- Working capital must cover projected operational losses through June 2026.
- This target means securing funding for six months of negative cash flow.
- The total minimum cash requirement hits $818,000 in February 2026.
- This total figure incorporates all necessary upfront capital expenditures (CAPEX).
Calculating Minimum Cash
- The $818,000 target is the sum of initial CAPEX and the cumulative operating loss.
- Founders need to know their monthly cash burn rate precisely to manage this runway.
- For a Computer Repair Service, understand the market context before finalizing the raise: Is The Computer Repair Service Business Currently Generating Profitable Returns?
- We defintely need tight control over variable costs until profitability hits; if onboarding takes 14+ days, churn risk rises.
What combination of funding sources will cover the initial $818,000 need?
You need a strategic mix of funding sources to cover the $818,000 initial capital for your Computer Repair Service, balancing fixed asset purchases with the working capital needed before subscriptions stabilize. Since vehicles and diagnostic equipment are essential, secured debt makes sense for those specific items, but the bulk of the funding will likely require equity or venture debt to manage initial payroll and marketing spend; this is why tracking every dollar is critical—are You Monitoring The Operating Costs For Your Computer Repair Service?
Asset vs. Cash Allocation
- Use secured debt for tangible assets like service vans and high-cost diagnostic gear.
- If $250,000 covers vehicles and initial inventory, debt handles that portion first.
- The remaining $568,000 is pure working capital for salaries and customer acquisition.
- Working capital must be covered by equity or unsecured/venture financing sources.
Choosing The Right Capital Source
- Owner equity means you keep control but absorb all initial startup risk.
- Venture debt is faster than equity but often includes restrictive covenants or warrants.
- If you need $400k in pure cash runway, aim for a 60/40 split of equity to debt if possible.
- If onboarding takes longer than 60 days, cash burn accelerates defintely.
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Key Takeaways
- The paramount financial requirement for launching this Computer Repair Service is securing a minimum cash reserve of $818,000 by February 2026 to cover initial capital expenditures and six months of operating losses.
- Initial upfront capital spending (CAPEX) for essential equipment, vehicles, and initial setup is estimated to total $108,000 before the business opens for revenue generation.
- The business model shows a relatively fast recovery timeline, projecting the service will achieve breakeven status six months after launch, specifically in June 2026.
- Successful management of high variable costs, including hardware parts inventory (180% of revenue) and a $120 Customer Acquisition Cost (CAC), is essential for maintaining profitability past the breakeven point.
Startup Cost 1 : Diagnostic Tools
Diagnostic Gear Estimate
You need $8,500 for diagnostic equipment, software, and basic tools before launching your repair service on January 1, 2026. This is your entry ticket for accurate troubleshooting.
Cost Breakdown
This $8,500 covers specialized diagnostic equipment, software licenses, and basic repair tools needed before opening on January 1, 2026. You can't start without these.
- Source specialized diagnostic hardware
- Secure necessary software subscriptions
- Inventory basic hand tools
Tool Cost Control
To keep this initial outlay low, consider certified refurbished diagnostic units to potentially save 30%. You defintely want to check for startup pricing on software licenses. Don't overbuy basic tools.
- Source certified refurbished gear
- Negotiate annual software terms
- Avoid premium tools initially
Timing the Spend
Getting these tools ready by January 1, 2026 is crucial because they support immediate revenue generation from remote support. Allocate this $8,500 before budgeting for the $15,000 office setup.
Startup Cost 2 : Service Vehicle
Vehicle Budget Lock
You need $25,000 cash ready by January 15, 2026, to buy the service vehicle. This asset is non-negotiable; it directly enables the 25% of your Year 1 revenue expected from on-site support jobs. Don't delay this purchase, or field service capacity immediately shrinks.
Vehicle Cost Allocation
This $25,000 covers the capital expenditure (CAPEX) for the necessary transport asset. It’s the second major outlay after diagnostic tools. You must ensure this amount is available within your $818,000 working capital reserve, as it hits before initial revenue stabilizes in mid-2026. It’s a fixed requirement.
- Covers vehicle purchase price.
- Needed before February 2026 operations.
- Part of the initial $103,000 in hard asset spending.
Managing Transport Spend
Buying new isn't the only way to meet this requirement. Since this vehicle supports service delivery, explore certified pre-owned options to reduce the initial cash hit. Leasing might also be an option, though it shifts the cost from CAPEX to operating expense (OPEX). That’s an important distinction for your balance sheet.
- Evaluate certified used vans or trucks.
- Compare buying vs. leasing costs.
- Avoid expensive customizations initially.
Service Readiness Check
If you wait past mid-January 2026 to secure this vehicle, you cannot service the projected 25% of demand requiring physical presence. That delay directly cuts potential revenue from your most critical early service channel. Plan the acquisition timeline tight, because service starts right after.
Startup Cost 3 : Office/Workshop Setup
Physical Space Budget
You need to budget exactly $15,000 for the physical space required to run the repair operations. This covers essential furniture and the initial workshop build-out. Make sure this capital expenditure is finalized by February 28, 2026, before inventory arrives. That’s the baseline number for physical infrastructure.
Setup Cost Breakdown
This $15,000 allocation covers the fixed assets creating your service hub. It includes desks, chairs, and the specialized layout for the workshop area. Since diagnostic tools cost $8,500 and the service vehicle arrives mid-January, finishing this fit-out by February 28, 2026 keeps the workflow clean. You can’t service clients without a functional base.
- Office furniture and seating.
- Basic workshop shelving.
- Utility connections setup.
Managing the Fit-Out Spend
Don't overspend on looks early on; focus only on functionality. Many startups overbuy new office equipment when used or refurbished items work just fine for the first year. If you wait until March, you might save a bit, but that delays work after inventory arrives. A realistic target saving here is 10% by sourcing used desks.
- Buy used desks and chairs.
- Prioritize secure storage.
- Avoid custom build-outs now.
Timing the Physical Space
Because this setup is scheduled after the $25,000 vehicle purchase, ensure the physical space can accommodate the service van for loading parts. This cost is small compared to the $818,000 working capital reserve, but delays here push back the start date. It’s a critical, non-negotiable step, defintely.
Startup Cost 4 : Initial Inventory Stock
Inventory Cash Requirement
You need $18,000 cash ready in March 2026 specifically for initial parts stock. This investment is crucial because hardware costs will run high, hitting 180% of revenue from parts sales in Year 1, so having components ready avoids service delays.
Parts Stock Details
This $18,000 covers the essential hardware components needed to fulfill initial repair jobs booked right after opening. Since hardware parts COGS is projected at 180% of revenue in Year 1, stocking up early prevents service stalls. This capital outlay must be secured before you start generating revenue.
- Covers core components inventory.
- Needed before revenue stabilizes.
- Budgeted for March 2026 launch.
Managing Parts Spend
Don't tie up too much cash in stock that sits on the shelf. Focus on just-in-time ordering for the most expensive components, even with the high COGS projection. Use your Diagnostic Tools budget first to confirm precise needs; overbuying common parts is a defintely common mistake. You want enough stock to cover immediate demand, not six months of it.
- Negotiate supplier volume discounts now.
- Track component failure rates closely.
- Keep slow-moving parts offsite initially.
Inventory Timing Risk
Delaying this $18,000 purchase past March 2026 directly impacts your ability to service the On-Site Support demand budgeted for Q1 2026. Running out of stock means you quote a fix but can't deliver, damaging client trust immediately when you need positive early reviews.
Startup Cost 5 : Pre-Opening Overhead
Fixed Monthly Burn
You must budget $5,050 per month for fixed operating expenses before the Computer Repair Service starts generating stable income. This cost is non-negotiable overhead required to maintain compliance and basic operations while you ramp up client acquisition through Year 1.
Overhead Components
This $5,050 estimate covers the essential fixed costs necessary to operate legally and securely. These expenses hit your bank account monthly, regardless of how many diagnostics you run or subscriptions you sell. They run concurrently with staff wages until breakeven is achieved, which is projected for June 2026.
- Rent commitment is set at $2,500 monthly.
- Insurance coverage requires $450 per month.
- Accounting and legal services budget $800 monthly.
Managing Fixed Costs
Since these are fixed operating expenses, the primary management lever is reducing the duration you pay them, not the amount itself. Avoid signing long-term commitments for rent or services right away; aim for month-to-month flexibility if possible. This helps conserve your working capital reserve. It's defintely better to pay slightly more monthly for flexibility early on.
- Challenge all fixed service costs immediately.
- Ensure rent negotiations allow short-term exits.
- Minimize pre-opening setup time to cut burn.
Impact on Runway
This monthly overhead directly erodes your available cash reserve. If you require six months of operational runway before reaching profitability, this overhead alone consumes $30,300 ($5,050 x 6). This must be factored into the $818,000 minimum working capital requirement.
Startup Cost 6 : Initial Staff Wages
Fund Pre-Breakeven Salary
You must budget for $37,500 in Owner/Lead Technician wages covering the first six months of operation. This salary expense occurs entirely before the business expects to reach profitability in June 2026. This is a non-negotiable pre-revenue cash outlay that must be covered by initial capital.
Wages Calculation Detail
This line item covers the Owner/Lead Technician's salary for January through June 2026. Based on the $75,000 annual rate, this requires $37,500 in cash reserves before revenue stabilizes. This wage is a fixed operating cost built into the initial Working Capital requirement.
- Role: Owner/Lead Technician.
- Annual rate: $75,000.
- Cash needed: $37,500 for six months.
Managing Owner Pay
To manage this initial burn, structure the first six months' salary as a deferred draw or owner equity contribution if possible. If not, ensure the $818,000 Working Capital reserve fully absorbs this $37,500 outlay. A common mistake is underestimating the months until positive cash flow.
- Defer owner draws initially.
- Confirm cash reserve covers the gap.
- Watch startup expense timing closely.
Impact of Schedule Delay
The June 2026 breakeven projection is critical because it dictates how long you must fund this fixed salary without offsetting revenue. If service ramp-up takes longer, say until August, you defintely need two extra months of salary funding, increasing the working capital need by another $12,500.
Startup Cost 7 : Working Capital
Reserve Target
You must secure $818,000 in liquid cash now. This reserve covers all planned capital expenditures and projected operational losses until the business reaches stability in early 2026. That number is your minimum runway buffer.
Funding the Burn
This reserve directly funds all upfront capital needs and the initial operational deficit. Inputs include $66,500 in fixed asset purchases (tools, vehicle, setup) plus $18,000 inventory. You also need to cover six months of pre-opening overhead ($5,050/month) and initial owner wages before June 2026 breakeven.
- $8,500 for diagnostic tools.
- $25,000 for the service vehicle.
- $15,000 for the workshop setup.
Cutting the Runway
Managing this reserve means aggressively shortening the time until June 2026 breakeven. Focus on immediate subscription sign-ups to lock in recurring revenue early. Avoid scope creep on the initial workshop fit-out; keep it defintely lean. Still, you must budget for the full six months of wages.
- Push subscription sales immediately.
- Decline non-essential initial overhead.
- Negotiate payment terms on parts inventory.
Runway Risk
Falling short of $818,000 means running out of cash before reaching profitability in June 2026. Any delay in vehicle purchase or inventory stocking directly threatens your ability to fulfill the 25% on-site demand. This reserve is your operational safety net.
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Frequently Asked Questions
You need access to $818,000 in minimum cash reserves by February 2026, covering $108,000 in initial CAPEX and six months of operational losses until breakeven;