Brainwave Computers Calls It Quits After 22 Years

Joe:

I just wanted to write you and thank you for our conversation last week. We talked about the deadlines my company Brainwave Computer Services was facing, and the possibility we may have to close on Monday. You were very concerned first and foremost about me, and how I was coping, and that meant a lot to me. Without hesitation, you wanted to help and offered great advice. You volunteered to seek the help of your business associates and to contact elected officials to see what could be done.

I explained at that time, that with the number of factors facing me, that I felt it was too late to try to stave off the inevitable. But, first and foremost I needed privacy and the time to think about my future. You agreed, and promised to allow me to break the news to the public first in my own words. I thank you for that.

Over the weekend, after much soul searching, I decided after 22 years, it was just time. I'm tired and worn out, so many 80++ work weeks, so much stress with so many people depending on me (and 1 or 2 employees), and the financial burdens of trying to run a business in today's economy. It breaks my heart to not be there for the public. There are not many options in the area for quality computer repair. You have the couple of big box stores that offer "pc tuneup", generally by relatively inexperienced techs. Most of the other computer service companies cater to large businesses. We never found ourselves without plenty of work to be done.

So, people want to know: WHAT HAPPEND? Well, the problems we ran into are these:

1) Rent is so very high in Salisbury. Anywhere along 13 in Salisbury is generally in excess of $3,000 a month. Bundle that with electric, telephone, high-speed internet, alarm service, trash removal, etc. and your initial overhead is just too high for nearly anyone to survive.

2) Taxes & Insurance. Payroll taxes, Sales & Use Taxes, Unemployment insurance, Workers' Comp Insurance, Business Liability Insurance, Property Insurance. Then your big one Health Insurance. In order to retain quality employees you have to offer health insurance, and our rates TRIPLED under Obama, it was our 2nd biggest expense per month behind rent. We were at least lucky to be in a pocket that while surrounded by Salisbury, was actually in the county for tax purposes, so we were saved from paying inventory taxes, I can’t imagine!

3) Credit & Inventory. It's very hard to obtain lines of credit, and the interest rates are quite high. Yet, with technology, everyone wants "IT" RIGHT NOW. You have to stock products they want, or they will just go online and buy it. Even though we could consistently beat online and local competitor prices, and offered a full year warranty vs. maybe a 14-day warranty, time and time again, you would drive by the local big box nationally owned chains and see them packed with "our" customers. Paying more money to support a big national chain vs. buying from the locally owned business. People would come to us for advice on what to buy, then drive up the street and buy it from a competitor or online. People actually had nerve enough to call us from within our competitor stores and ask us what to buy. Then bring us a computer obviously bought elsewhere to fix when problems arose! We used to stock over $100,000 of inventory, but had to continually downside because of lack of loyalty. Then people were upset that they couldn't walk into any store in Salisbury and find an item they needed right away. It's hard to pay high interest on inventory, stock it for a couple months, then sell it at 12% markup, and many times our business customer's wanted us to give them free NET30 terms, so then we became a bank, without making interest on our money.

4) Perception of Value. We spend generally about 6 hours with every computer that came in for repair, sometimes even more than that. We found the market would only bear about $99.95-$119.95 for our time. $16 to $20 an hour. Now yes, we would work on 5 or so computers at a time, but think about what a tech's wages are, think about the matching payroll taxes, the insurance and the overhead. Not really much profit left there for the company to survive. Why 6 hours? Well, you have to visually and electrically inspect the system internals, clean/dust the system, run diagnostics on the hard drive, memory, cpu, temperatures, etc., then there's cleaning up of all the junkware, then multiple virus/spyware scans, then updating of drivers, and Windows (or MacOS) updates, perhaps even upgrade to Windows 10 or latest MacOS, all of this before sometimes even troubleshooting a software issue that's had. You can't really skip any of those steps and do a quality repair, if you try to "just fix the problem" the customer will be back in just a couple days with more issues. Many times the problems are caused by the junkware, malware or virus, so simply those steps can't be skipped. - - - here's the problem, the perception is "all you do is click a couple buttons and you're charging me $100!?!" followed by "well I can buy a whole new computer for that!" (I'm still trying to find where all of these $100 computers are) Customer's don't realize how much time they have put into installing programs, setting up their internet and email connections, installing printers, setting up everything just so - we were able to retain all of that for a cleanup, if you by a new computer you're starting over, even before you think about the amount of data to backup. Realistically, a repair should be $199+ but there's no way anyone would/could pay that.

5) New technology. You could say our business was effected some by the fact that most everybody now uses a smartphone as their tech device of choice. So yes, that did affect our sales of new computers and laptops. But there was still plenty of business left in repairing and selling computers and laptops. The bigger problem for us was, back when 85% of computers were desktops, then it was a lot easier for us to stock parts for same day repairs. All hard drives, cd-drives, video cards, etc, were generally interchangeable among models. We were more affected when the ratio flipped to 85% laptops. Now, every brand and model of laptop uses a different keyboard, a different power jack, multiple types of screens, and being carried about meant more broken plastic housings that were unique to each model. All of these parts had to be special ordered, which meant 3 business days to get an item, a day or two to install it, so it increased repair times. Also, we had to pay shipping on each individual item, vs. buying in bulk.

I wanted to be honest and blunt with everyone. Everyone talks about wanting to support local businesses, but in the end everyone is guilty of being swayed by advertising or big bright box stores. It's more convenient to stop to one place and buy a jar of pickles, a pair of pants, a quart of motor oil and pick up your prescriptions. But think about what you are doing to our local economy every time you do this. Please, in talking with other business owners, bankers and elected officials, I was one of the healthier businesses in Salisbury, there are many more that are on the brink of failure. Please consider supporting small local businesses. Perhaps you have to drive a bit further, or make an extra stop to get everything thing on your weekly checklist, but you're helping your neighbor, not Wall Street. There is this generally false impression that small stores are more expensive than a big store. At least in my case that wasn't true, we could beat most any competitor price. So, if it means you're going to go elsewhere to buy, try asking for a slight discount, but please also keep in mind what our overhead is. It's worth a few extra cents. Also, be sure you're comparing apples to apples. Perhaps something looks cheaper elsewhere, but is it the exact same quality? What about warranty? Service after the sale?

So, in the end there were a couple of key financial deadlines that we couldn't meet, but it also was just time I believe. It was a great 22 years and I thank each of you for your support. Perhaps, once things settle, I'll reopen in some fashion, and I hope you will be there once again to support me. 

Take care, 

Cliff