Entrepreneurship in ICT – SS3 Computer Hardware & GSM Repair Lesson Note (Second Term)

Entrepreneurship in ICT means running your repair skills as a business that solves customers’ problems for a profit. To do this, a technician works out the total cost of each job, sets a price that covers those costs and gives a profit, writes a business plan, and spends profit with discipline so that the shop can grow.

Behavioural objectives

By the end of the lesson, students should be able to:

• state the difference between direct costs and indirect costs (overheads);
• calculate the total cost of a repair job;
• describe cost-plus, competitor and value-based pricing;
• list the key parts of a simple business plan;
• explain why a business owner should pay himself or herself a salary, re-invest profit and keep records.

From technician to business owner

You have learned how to fix phones, set up networks, and manage servers. These are great skills, but they are only half of the story. To succeed, you must move from being a “worker” to being a “business owner”.

A great technician who does not understand money will soon close their shop. This lesson shows how to make sure your skills put profit in your pocket, and how to plan for a successful future.

What is costing?

Before you tell a customer a price, you must know how much the job costs you. If you do not calculate correctly, you might be losing money while working.

Two types of costs

1. Direct costs: These are things you buy specifically for a job. Example: the cost of a new iPhone screen, solder wire, or transport to go and buy the part.
2. Indirect costs (overheads): These are the bills you pay whether you have a customer or not. Example: shop rent, electricity (Nepa), data subscription, and generator fuel.

The golden rule: Your “total cost” is not just the price of the spare part. It is the part + your time + a small portion of your rent and electricity.

How do you set a price?

Pricing is an art. If you are too expensive, customers will run away. If you are too cheap, they might think you use “fake” parts or that you are not a professional.

Popular pricing strategies

• Cost-plus pricing: You take the total cost and add a fixed profit (for example, cost + 30%). This helps you cover your costs and make a profit on every job.
• Competitor pricing: You look at what other shops in your street or city are charging and stay close to that price.
• Value-based pricing: This is for experts. If you are the only person in town who can fix a “dead” MacBook, you can charge more because your skill is rare and highly valued.

Note: Always include a “service charge” (labour). Your brain and your hands are not free.

What is a business plan?

Many people start a business by just renting a shop and waiting for customers, and many of them fail. A business plan is a simple document that explains how your business will survive and grow.

Key parts of a simple business plan

1. Executive summary: What is the name of your business (for example, “Yusuf’s Tech Hub”)? What do you do?
2. Market analysis: Who are your customers? Are they students, teachers, or big offices? Who are your competitors?
3. Services: List exactly what you offer (software flashing, screen replacement, networking).
4. Marketing plan: How will people find you? Will you use Facebook, WhatsApp status, or flyers?
5. Financial plan: How much money do you need to start? How much do you expect to make in the first 6 months?

How do you manage your profit and growth?

Once the money starts coming in, the biggest temptation is to spend it all on personal things such as new clothes, food, or fun. The following advice helps you avoid this.

• Pay yourself a salary: Do not take all the shop’s money. Set a fixed amount for yourself each month. The rest belongs to the business, to buy more tools or better furniture.
• Re-invest: Use your profit to buy the oscilloscope or microscope you have always wanted. Better tools let you do harder jobs and charge higher prices.
• Keep records: Write down every naira that comes in and every naira that goes out. Use a simple notebook or an app on your phone.

Evaluation

1. Imagine you bought a laptop screen for 25,000 Naira. You spent 1,000 Naira on transport and 500 Naira on fuel for the generator. If you want to make a 5,000 Naira profit, what should be your final price to the customer?
2. Why is it dangerous to think only of the cost of the spare part (the direct cost) when pricing?
3. List three things you would put in the “Marketing” section of your business plan.
4. What is the benefit of paying yourself a fixed salary instead of just taking money from the drawer whenever you need it?