Profile No.

: 136 NIC Code: 95111

COMPUTER HARDWARE SERVICE CENTRE

1. INTRODUCTION

Computers are most essential for all type of business. Small retailers, traders, doctors,
hospitals, call centres, even nowadays vegetable shops like wholesale, reliance-fresh need
computers to maintain inventory, credit/debit card payments, billing, maintaining customer
database, appointments, and customer’s history/cases. Some of institutions have large
number of computers operating under various departments like accounts, inventory, billing,
marketing etc. Schools and colleges have separate labs having hundreds of computers
operating at same time.

2. SERVICE AND ITS APPLICATION

Computer hardware service centre is one such centre which provides services to above
mentioned institutions that have computers for their business. Some of them need repair
and maintenance for large number of computers at the same time. They also need upgrades
on time to time basis. This centre will provide services to such customers for assembly of
upgraded hardware, repair of faulty parts, upgrade of processors and software and also
provide external components like mouse, speakers, key-boards.

3. DESIRED QUALIFICATION FOR PROMOTER

An entrepreneur with computer engineer background is required which will helpful in

procurement of right materials and components as per customer’s specifications and also
can understand customer’s requirement in upgrade and assembly of computers.

4. INDUSTRY LOOK OUT AND TREND

The technology industry is always in flux. Frequent new products and category innovation
define and redefine the sector’s constantly shifting landscape. But lately we have seen even
greater volatility than usual, and it has begun to affect the makeup of hardware and
software companies themselves. Increasingly, technology firms are re-examining the
structure of their businesses and taking bold steps to squeeze out better financial
performance.

This volatility is manifested in a flurry of attempted and consummated mergers, acquisitions,

and divestitures. In the early fall of 2017, for example, multiple major business publications
reported that Hewlett-Packard was in talks to purchase storage equipment maker EMC,
primarily to improve scale and cut costs. Both sides refused to comment on any possible
deal, and none occurred. Then, in November, HP announced that it was splitting in two,
separating its computer and printer hardware business (HP Inc.) from its enterprise
hardware, software, and services units (Hewlett-Packard Enterprise). HP’s goal for the split
is to allow both units, which will each generate more than US$50 billion in revenue and be
Fortune 50 companies, to become more nimble and focused on their respective markets and
competitors. With this breakup, the two companies will have to find ways to improve the
performance of slow-growth businesses struggling to maintain decent profit margins. 

5. MARKET POTENTIAL AND MARKETING ISSUES. IF ANY

The market for computer is expanding day by day to due to rapid computerization of offices
for accounts, inventory, sales, correspondence and communications in all walks of life. The
demand for computer continues to grow. Even though there are big competition in
computer assembling the servicing of computers and providing quality networking services
are in very poor shape even in metros. The small manufacturers have to compensate this
tough competition with their better quality services. Government as well as private offices
need dedicated team of expert to service as well network their whole functioning on service
contract basis in most reliable fashion. This project serves this grey area of activity.
As of 2010 there were over 550,000 people employed in the maintenance and repair sector
in the United States, and employment was expected to grow through 2018. More than 70%
of those people work in small businesses of less than 5 people; another 20% work for
companies with less than 20 people. While previously the industry had been primarily
focused on fixing and upgrading business computers, most of the companies now do more
than just maintenance and repair. Over the course of the 1990s, repair services were able to
cope with more reliable and cheaper computers hurting business by replacing components
instead of repairing them, using new diagnostic tools, and offering other services such as
disaster recovery and virus protection.
 6. RAW MATERIAL REQUIREMENT

Sr. No Description of the item Quantity Cost/Unit Total Amount

1 Processor, motherboard, 2 sets – for assembling 35,000 INR 70,000 INR
monitor, keyboard, Hard Disk, 2 computers
DVD writer, SMPS, RAM,
Speakers and UPS.
2 Accessories for networking and 1 set of equipment 15,000 INR 15,000 INR
other spare hardware
frequently used.

7. SERVICES PROCESS OUTLINE

The maintenance of computer involves various skills like assembly of electronics and
electrochemical sub-assemblies, peripherals and integrating them into a computer unit. In
present market scenario it will be difficult to face competition from big names. Mostly the
project model involves earning through servicing; however few computers will be assembled
too to supply to the trusted customers. As per design the motherboard, and display device
will procured as per demand. The other sub-assemblies like hard disk, CD drive, cabinets,
SMPS will be readily available. For assembly of PC the motherboard along with other sub-
assemblies are mounted in cabinet and interconnected before testing for various
performances with help of dedicated software.

There are basic 2 services will be provided by service centre.

1. New computer assembly according to the customer’s requirement
2. Old computer repairing/ replacement of particular devices.

8. MAN POWER REQUIREMENT

SR. No Designation Salary/Month Number of Employees according to year

1st Year 2nd Year 3rd Year 4th Year 5th Year
1 Supervisor ₹ 13,000.00 1 1 1 2 2
2 Technical Skilled Worker ₹ 10,000.00 3 5 5 7 7
3 Semi-Skilled Worker ₹ 8,000.00 2 2 2 3 4
Total 6 8 8 12 13

9. IMPLEMENTATION SCHEDULE
The project can be implemented in a period of 3 to 5 months by performing the various
activities in a systematic manner and simultaneous application of various common activities
as mentioned below:

SR. No Task Description Duration

1. Preparation of project reports 15 Days (1st Month)
2 Essential registration 15 Days (1st Month)
3 Site Selection 5-10 Days (1st Month)
4 Arrangement of Finance/ loan 30 Days (2nd Month)
5 Arrangement of ranted accommodation 30 Days (2nd Month)
6 Machinery and Equipment purchase 10 Days (3rd Month)
7 Recruitment of staff and labour 10 Days (3rd Month)
8 Installation of Machinery 10 Days (3rd Month)
9 Trial Operation 4th Month
10 Commercial Operation 5th Month

10. COST OF PROJECT

Sr. No. Particulars Amount in Rs

1 Fixed investment amount ₹ 1,18,650.00
2 Working Capital Margin (3 Months) ₹ 3,94,050.00
Total Cost of Project ₹ 5,12,700.00

(a) Fixed Investment Calculation

Sr. No. Description QTY Amount

1 Computer Testing System (HDD, 2 ₹ 70,000.00
Motherboard, Processor, Printer, Keyboard,
Mouse etc.)
2 Tools for making internet connections and LS ₹ 15,000.00
other essential tools for assembly and
service activities
3 Software LS ₹ 12,000.00
4 Office Furniture LS ₹ 16,000.00
5 Electrification and other charges for -- ₹ 5,650.00
installation 5 % of plant & machine charges
Total ₹ 1,18,650.00
(b)Working Investment Calculation

Sr. No. Description Total

1 Salary ₹ 59,000.00
1a Supervisor ₹ 13,000.00
1b Technical Skilled Worker - 3 @ Rs 10,000 per Month ₹ 30,000.00
Sr. No. Description Total
1c Semi-Skilled Worker – 2 @ Rs 8,000 per Month ₹ 16,000.00
2 Raw Material ₹ 58,000.00
2a Computer assembly equipment kit ₹ 38,000.00
2b Accessories for networking and other spare hardware ₹ 20,000.00
 frequently used.
3 Utilities ₹ 1,150.00
3a Power ₹ 1,000.00
3b Water ₹ 150.00
4 Other Expenses ₹ 5,200.00
4a Advertising/Marketing/Social Media ₹ 800.00
4b Stationery ₹ 500.00
4c Telephone ₹ 700.00
4d Transportation ₹ 1,200.00
4e Insurance ₹ 500.00
4f Consumable Stores ₹ 1,000.00
4g Misc. ₹ 500.00
5 Rent ₹ 8,000.00
Total ₹ 1,31,350.00

11. MEANS OF FINANCE

Sr. No. Description Percentage Amount (Rs)

1 Promoter's Contribution 25% ₹ 1,28,175.00
2 Term Loan/Bank Finance 75% ₹ 3,84,525.00
Total ₹ 5,12,700.00

(a) Cost of Operation

Sr. No. Particulars Amount in Rs

Variable Cost
1 Raw Material and Other direct inputs ₹ 63,200.00
2 Salary (60%) ₹ 35,400.00
3 Power (70%) ₹ 805.00
Variable Cost 1 Month ₹ 99,405.00
Total Annual Variable Cost ₹ 11,92,860.00
Fixed Cost
1 Overheads ₹ 8,000.00
2 Salary (40%) ₹ 23,600.00
3 Power (30%) ₹ 345.00
Sub Total ₹ 31,945.00
Total for 12 Months ₹ 3,83,340.00
4 Interest ₹ 46,143.00
5 Depreciation on Equipment @ 10% ₹ 6,865.00
6 Depreciation on Furniture @ 20 % ₹ 9,000.00
Total Fixed Cost ₹ 4,45,348.00
Total Cost of Production ₹ 16,38,208.00
 (b) Turnover

Sr. No. Description Unit Unit Revenue Monthly Amount (25

Price per Day per Day Working Days)
1 Service Charge for 500 12 6000 ₹ 1,50,000.00
Hardware Repair and
Upgrade
2 Profit Margin on 5000 6 30000 ₹ 30,000.00
selling assembled of
Computers
Total Revenue per Month ₹ 1,80,000.00
Total Revenue per Annum ₹ 21,60,000.00

12. WORKING CAPITAL REQUIREMENTS

Working capital is based on the expenses this centre does par month to work and provide
the services. We have given following list for working capital requirements.
 Raw material : Computer assembly equipment kit and networking devices
 Manpower: this centre required one supervisor, 3 skilled workers and 2 semi-skilled
workers on initial stage.
 Utilities: basic utilities – water and electricity (Power) are required must.
 Basic other expenses are also included in working capital like telephone, transport,
rent, stationery, insurance and more according to the business requirement.

13. LIST OF MACHINERY REQUIRED

Start-up with computer hardware centre, following machinery required on fixed investment
basis as well as on monthly basis.

 Computer Assembly kit

 Motherboards
 Mouse
  Keyboards
 LCD Screens/Monitors
 CPUs
 Wire-less routers
 Other small computer repairing components
 Connection and network devices like cables, USB, hard disk and other specific device
according to the requirement.

All the machines and equipments are available from local manufacturers. The entrepreneur
needs to ensure proper selection of product mix and proper type of machines and tooling to
have modern and flexible designs. It may be worthwhile to look at reconditioned imported
machines, dies and tooling. Some of the machinery and dies and tooling suppliers are listed
here below:

1. Impressive Computers
Hasan Ali House No. 4/41-A,
Noor Baug, Umerkhadi,
Mumbai - 400009,
Maharashtra, India

2. Computer Planet
Shop No. 1, Shaniwar Peth-53,
Opposite Amruteshwar Mandir,
Amruteshwar Co Operative Housing Society,
Near Shaniwar Wada,
Pune – 411030,
Maharashtra, India

3. Visicube Technologies Private limited

Door No. 1-8-315,
Begumpet, Opposite US Consulate,
Hyderabad - 500016,
Telangana, India
 4. Micon Automation Systems Private Limited
A-814, Siddhi Vinayak Towers,
Behind DCP Office, Makarba,
Ahmedabad - 380051,
Gujarat, India

5. Adaptek Automation Technology

No. 13, F- 3, 2nd Floor,
Main Road, Adyar Nehru Nagar,
Near H.D.F.C. Bank A.T.M.,
Chennai - 600020,
Tamil Nadu, India

14. PROFITABILITY CALCULATIONS

Description Amount

Net Profit (Turnover - Cost of Operation) ₹ 5,21,792.00

Net Profit Ratio (Net profit * 100/Turnover) 24.16%
Rate of Return (Net Profit * 100 / Total Cost of Project) 101.77%

(a) Profitability Projection

At Full
Sr. No. Particulars UOM Year Wise estimates
Capacity
Year 1 Year 2 Year 3 Year 4 Year 5
1 Capacity Utilization % 30 40 50 60 70 100
2 Sales Rs Lakhs ₹ 6.48 ₹ 8.64 ₹ 10.80 ₹ 12.96 ₹ 15.12 ₹ 21.60
Raw Materials &
3 Rs Lakhs ₹ 3.58 ₹ 4.77 ₹ 5.96 ₹ 7.16 ₹ 8.35 ₹ 11.93
Other Direct Inputs
4 Gross Margin Rs Lakhs ₹ 2.90 ₹ 3.87 ₹ 4.84 ₹ 5.80 ₹ 6.77 ₹ 9.67
Overheads Except
5 Rs Lakhs ₹ 3.83 ₹ 3.83 ₹ 3.83 ₹ 3.83 ₹ 3.83 ₹ 3.83
Interest
6 Interest Rs Lakhs ₹ 0.46 ₹ 0.46 ₹ 0.46 ₹ 0.46 ₹ 0.46 ₹ 0.46
7 Depreciation Rs Lakhs ₹ 0.16 ₹ 0.16 ₹ 0.16 ₹ 0.16 ₹ 0.16 ₹ 0.16
Net Profit Before
8 Rs Lakhs -₹ 1.55 -₹ 0.58 ₹ 0.38 ₹ 1.35 ₹ 2.32 ₹ 5.22
Tax
9 Profit % -23.95% -6.77% 3.54% 10.41% 15.32% 24.16%

The basis of profitability calculation:

This unit will have capacity to repair 4320 hardware (12 units/day) and sell assemble
computers 2160 (6 units/day) per year. Warranty terms will be decided according to
hardware condition and primary diagnosis of the system by the technical skilled worker.

The cost of selling product (assembled computer) will be defined by the manufacturing
company, but the approx margin of profit/unit will be around 5000 INR/unit. With the
repairing services the range of the service will be 500 INR to 900 INR depends on the
requirement. (This includes the basic repairing; some spare-part replacement would be
charged extra).

Energy Costs are considered at Rs 7 per Kwh and fuel cost is considered at Rs. 65 per litre.
The depreciation of plant is taken at 10-12 % and Interest costs are taken at 14 -15 %
depending on type of industry.

15. BREAKEVEN ANALYSIS

Sr. No. Particulars UOM Value

1 Sales at Full Capacity Rs Lakhs 21.60
2 Variable Costs Rs Lakhs 11.93
3 Fixed Cost incl. Interest Rs Lakhs 4.45
4 Break Even Capacity % of Installed 46.05
BEP = FC/( Sales -Variable Cost) *100 Capacity

16. STATUTORY / GOVERNMENT APPROVALS

Bureau of Indian Standards (BIS) is operating Compulsory Registration Scheme (CRS) for
Electronics & IT Goods as per the provision of Chapter IVA of THE BUREAU OF INDIAN
STANDARDS RULES, 1987 for the product categories notified by MeitY. Visit official
government website (Bureau of Indian Standards) for notice about products on:
http://crsbis.in/BIS/ Entrepreneur may contact State Pollution Control Board where ever it is
applicable.

17. BACKWARD AND FORWARD INTEGRATIONS

It is assumed that the unit will be viable at 75% efficiency on single shift basis considering 5
working days or as per demand of area per week.
The rate of interest in the scheme is taken at 11.5 % for both fixed and working capital.
Due to liberalization and competition among banks, lower rate of interest is possible in
future.

The prices of machinery and equipment are approximate which are ruling locally at the time
of preparation of the project. When a tailor-cut project is prepared the necessary changes
are to be made at the local level.

The cost of staff and labour is approximate which is ruling locally at the time of preparation
of the profile. When a tailor-cut project is prepared the necessary changes are to be made.

18. TRAINING CENTERS AND COURSES

There is no specific course in repairing and assembling services, but the most authorized
centre is government authorized “ITI” available in all the cities across the country.
India Training institute of computer technology conducts various technical courses in
different cities to enable students to make a bright career. Most of our vocational programs
are job-oriented with which students can start earning the day they finish their training or
can learn them as a hobby. Students can join for any of these in vacations as all these are
short-term certificate courses.

Udyamimitra portal (link : www.udyamimitra.in ) can also be accessed for hand-holding

services viz. application filling / project report preparation, EDP, financial Training, Skill
Development, mentoring etc.

Entrepreneurship program helps to run business successfully is also available from Institutes
like Entrepreneurship Development Institute of India (EDII) and its affiliates all over India.

Disclaimer:
Only few machine manufacturers are mentioned in the profile, although many machine
manufacturers are available in the market. The addresses given for machinery
manufacturers have been taken from reliable sources, to the best of knowledge and
contacts.  However, no responsibility is admitted, in case any inadvertent error or
incorrectness is noticed therein.  Further the same have been given by way of information
only and do not carry any recommendation.