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
41 comments:
So sad to hear. They have helped me off and on over the years with little things that no one else could.
I for one will miss them.
Such a loss for the community.
Back in 2007, the Maryland legislature stuck computer services with a 6% sales tax rate. The tax was quickly rammed through the legislature in a special session, without public debate, and signed into law by Governor Martin O'Malley. This triggered an immediate backlash from businesses and everyday citizens. Public officials who supported the computer services tax backpedaled and soon caved. It was repealed just a handful of months later.
But the "Blood was already first drawn by your adversary - Maryland Legislature".
Unfortunately, the Governor O'Malley and some in the Maryland legislature seem to have forgotten the lesson.
If Cliff ever decides to open up a computer services business again, may I offer him some advice - and I recommend for him to open-up North of Maryland line. Delaware has a much more welcoming environment - something that Maryland has habitually abused.
Nice letter. Sorry to hear.
Great! Another business in Salisbury/Wicomico are bites the dust. Overhead too high. Rent is unreasonable. All the usual suspects. Maybe Jake Day should worry about matters that really matter to people instead of putting Section 8 housing all throughout downtown, creating another thug-filled slum.
I bought a bunch of stuff from them - before the sales tax went up...thanks to governor O'Moron for that.
Haven't shopped this side of the border for much since.
Sorry to see them go - hope everybody understands why they're gone now.
The recent elections at the national level will not see the required changes implemented fast enough to help businesses like these while elections at the local level still have not fostered the change mentality at all!
Still too many dumbocrats in positions of authority in our way!
Cliff is a great guy and I wish him well. I've bought many parts for both home use and business from him over the years and he's always done me right. When I worked for both the City of Salisbury and other organizations I always made it a point to buy local and Brainwave was always first on my list. Now it seems that there will be a few remaining repair places left like Advanced Computers and Samuel's Computers by the Shell station past the Centre.
Thanks for being there Cliff! If I had an opening I would certainly welcome you on the team.
Thanks for your honest appraisal of the situation, Cliff.
THIS is what the people running the city and county need to see-- the TRUTH about what their policies are doing.
It would be great to see some of the other business owners chime in here.
Good luck to you, Cliff.
I'm surprised you survived this long. So expensive! But hopefully Trump will fix that! You are correct that box stores are inexperienced. I worked for the Geek Squad in Salisbury and I was so shocked when I first started because I quickly found out that none of the techs were certified. I was the only one! SMH. Good luck to you.
This story is so informative, yet sad. If he decides to open another store at a later date, please let us know. Unfortunatley I wasn't familiar with him before, but would definitely use him now.
Great local company and great people. Will be missed.
9:13, When I spoke to Cliff he brought up the possibility of moving to Delmar but his concerns at the time were if people would drive the extra 3 miles.
Let me add, the key reason I published this story is the fact that we have MANY small businesses in Salisbury that truly depend on local support. Take Bruce's Billiards, just as an example. He too spends tens of thousands of dollars in inventory, including pool cues and hundreds of other accessories. All too often local people come in for advice, (including Brainwave) and ask for their expertise and then go to Amazon to make their final purchase to save a very minimal amount.
Mind you, billiards are a luxury item, I get that. Brainwave is a serious loss for multiple reasons. One, many of us completely depend on this 22 year long business and we used their services because of their long term reputation. I can tell you I have never heard one bad thing about that business.
If we as Americans continue to shop for the very best price, we're going to watch more and more businesses close their doors. I'd rather depend on someone like CLIFF then have to depend on some yahoo from Best Buy.
Just my thoughts.
Sure we would drive 3 miles. No problem. Please open back up Cliff.
Brainwave the most reliable place for repairs. I've not had to use them often but they were wonderful when I did. I will miss their service. And Joe, I would certainly drive to Delmar.
So sad to hear I really only trusted them to work on my computer.
I used to use them often. Service was great. I even had them order parts instead of buying online.
I had to stop when he started closing at 5pm
I do hope cliff re-opens. Wish him nothing but the best.
If gov Carney gets his EPA head Delaware will be like Maryland with environmental regs up the ying yang and building will come to a halt.
guess they rode the WAVE as long as they could.......
all waves come to an end .........thank the democrats
Someone please tell me where I can get my computer
fixed now ,
Best Buy won't fix it because I am with VERIZON.
Actually I did the reverse to buying online. I needed a part and found it online. Then I went to Brainwave and showed him what I needed and the price. He matched it and I had what I needed that day.
From that day on, I always went there knowing I could get what I needed from him.
cliff great letter I am guilty as charged you opened up my eyes to this business world and when you reopen I hope I will be one of your customers plus I live in Delmar so get it up here
When my business was located in Maryland they were the only company I trusted to work on our computers. They always provided great service and a price to match. Congratulations on 22 years and I hope you have Much success in your future endeavors.
These people really know how to fix a computer, and I have come to rely on them, and I am always confident that they will do the job right. I will gladly drive the extra distance if you re-open elsewhere, AND I HOPE YOU DO! We all know that Maryland is a crap state, and has run countless businesses into the ground, so just move to Delaware, and your customers will stay with you!
Spot on about the prices of rent in smallsbury. Sperry Van Ness has a monopoly and they charge prices that are seen on the other side of the bridge. I moved out of salisbury and pay basically the same amount of rent money I did there as I do now. However the difference is the average household income within a 3 mile radius of my business is over $100,000 per year. Much more expendable income. If you want to know why there are so many vacant buildings on Delmarva ask Sperry Van Ness. There are but a handful of buildings along Route 13 that they do not control. Smaller businesses just can't compete in rent is one of the major problems. In business you should shoot for 15% of your gross to be rent. With many of my small business owner friends I found the rate in Saulsberry was closer to their 50% mark. Add in payroll as the second highest and it is a disaster for any business. Payroll should be your largest expense.
Lol don't worry Trump will bring back your job
There are many local services that are forced to lower profit margins due to online competition. It's sad, because you lose the expertise that you get with a local person and they speak your language.
Strangely, I was going to stop by there this week to get an iPad looked at.
Anyone know where I should go now - besides the Geek Squad?
Best of luck to Cliff and his staff. I get it. And it's a shame. Much of blame is because of our lackluster economy. People have less money to spend and local businesses, who don't have scalability, take the brunt.
We went to Brainwave when they were located in Delmar, DE, on alternate 13 years ago. We were pleased with the work they did and the assistance provided to novice computer users.
When they moved to Salisbury, we no longer used them; further away from us (we lived in Seaford, DE) and the sales tax to boot. Never understood their move to Maryland with all the taxes in place there.
If memory serves me, Brainwave started in Delmar and moved to Salisbury so Cliff should be able to get back on his feet if he chooses to do so. I'll gladly keep doing business with him too.
As far as the Apple product user is concerned, you can always try the laptop shop in Delmar. If not then Call Atlantic Technology Services and see what they can do for you.
Companies like Advanced Computers and Brainwave have always had experienced Technicians and that is way worth any extra cost in the long run.
The Geek Squad at Best Buy have very limited knowledge and they are often not allowed to do more than run their software to fix a PC. If their software cannot fix a problem then they will inform you that the only other option is to format and reinstall your operating system. This is not the proper way to fix a PC. A real Tech can get into the system and repair the problem without having to erase your whole system and reset it back to factory settings.
I to remember when Brainwave was in Delmar De. and I hope Cliff gets back on his feet. He has always been a decent guy and its sad the community did not support the service he provided.
If Advanced Computers is still around then I strongly suggest people go to them. Often if Brainwave was to busy they would refer customer's to Advanced and Advanced would do the same. Both small business' working together to survive in this economy. You will get actual real Technicians who have a lot of experience and not only will give quality service but also quality products.
I realize that overhead walks on 2 feet, and we all must have a life outside of work.
However, the hours at Brainwaves were not compatible with the working stiff like me. When they closed on Saturdays I was both shocked and disappointed as I could not get there anymore when they were open.
Now that I'm retired I could except that I moved away and he's going OOB. A shame, they were a class act.
Oh no!!! I haven't been able to work on computers in the last couple of years due to health issues; but Cliff and all of his staff were always so helpful to me in determining issues and getting parts. I don't know where I will go if I do ever regain my health to try to resume working on computers. I do hope you are able to reopen and would gladly send customers to them if they move to Delmar! Good luck, and thank you!
Very information letter. Brainwave has kept me going since 1999 and I thank you. I would be willing to go the distance to support you in DE
I am hesitate to mention that I had a horrible experience with a local business. I have always believed in supporting locals when possible. A large appliance store I went out of my way to purchase big ticket items from was a big disappointment. I'm speaking from start to finish. There were problems with wrong products delivered, delivery employee's had no business in public and after problems with water on the floor from the refrigerator, service was difficult. I was surprised and will never go back. You ask did I talk to them about my experience?, they were not in the mood to help.
Really great little company. They did very good work. Sorry for this news
Could not agree more. Spot on.
Unfirtunately, they will only increase market share as the area's slide weakens the market further and there is more consolidation.
This was a great company offering a great service.
I just learned yesterday that G & M Sales (poultry equipment supplier) in Delmar has retired and closed their doors. They had been around for a long time also. Best of luck to both former business owners.
Companies need to leverage their resources. When you fail to innovate, you fail to exist. A simple transition from hardware to software solutions could have made all the difference for your establishment. Sure legislation and taxes suck...but...for all the local businesses who fail to compete by closing prior to 10pm, don't be surprised when your customers pivot to an alternative provider. With so many free youtube tutorials online and cheap parts on Amazon, everyone and their mother could have predicted shops similar to yours would lack demand come 2020. It's not you, it's the market. And for those of you who may be next, take some time and evaluate your product or service market fit. Will folks need my product in 3 years? If not.....Pivot and persevere my friends.
I'll continue to use Brainwave if they relocate to Delmar or even Laurel.
Brainwave bailed me out more times than I can remember. My wife published a magazine and completed her Master's and by default, I became the home/office IT tech. I guess we're stuck with geek squad and they have failed me more times than I should have allowed. Good Luck. Thanks, Brainwave!
clueless wallflower. What is your enduring success?
sad to see you go great business just picked my cpu up last week also sorry to here you blame Obama. is it his fault people want insurance.does one or two employees cost that much to be a factor? but I do understand the challenges you face with everyone going to the big chains I never do, I also support local and Black owned business even if i have to spent a little more or drive a litter further.I thank you for the service to the community.Regardless of our different political views I wish you well.
I would drive 3 miles Cliff! We sent many clients to cliff and purchased many items over the years. Will be a sad and missing hole in salisbury now.
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