Update: We Sold Our Retail Stores, Went All-In On B2B, And Just Hit $1.2M/Year

Matt McCormick

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Published: November 12th, 2022

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Matt McCormick

Founder, TechUnwreck

$120K

revenue/mo

Founders

Employees

TechUnwreck

techunwreck.com

from Chicago, IL

started July 2007

$120,000

revenue/mo

Founders

Employees

Discover what tools Matt recommends to grow your business!

Discover what books Matt recommends to grow your business!

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High Output Management Andrew S. Grove

Poor Charlie's Almanack: The Wit and Wisdom of Charles T.... Charles T. Munger

The Effective Executive: The Definitive Guide to Getting ... Peter F. Drucker

The 1-Page Marketing Plan: Get New Customers, Make More M... Allan Dib

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Want more updates on TechUnwreck? Check out these stories:

1. How Cracking My Screen Led Me To Build A $2.7M/Year Business (2021) ➜

This is a follow up story for TechUnwreck. If you're interested in reading how they got started, published over 2 years ago, check it out here.

Hello again! Remind us who you are and what business you started.

My name is Matt McCormick. I founded a company in 2008 to fix broken cell phones, tablets, and computers. The business was called Jet City Device Repair and focused exclusively on the B2C market (mostly fixing cracked screens on phones). That changed drastically this year (more on that later).

Today our company name is TechUnwreck and we focus almost exclusively on fixing iPads & Chromebooks for K-12 schools. That part of our business has gone from about $50K per year in 2014 to $1.2 million this year.

It’s been an exciting few years and a testament to what can happen if you keep your eyes open when a new opportunity presents itself.

Lots & Lots of Broken Devices Arriving from Schools all over the USA

Tell us about what you’ve been up to. Has the business been growing?

We decided to go all in by selling our B2C retail stores and focusing 100% on the K-12 mail-in business.

A year ago our business was divided into two divisions with 4 locations: Three B2C locations doing in-person, walk-in repairs (mostly cracked iPhone screens) and a mail-in only location focused on fixing iPads & Chromebooks for schools all over the USA.

In 2022 we sold all our B2C, in-person retail stores.

Here’s the thing about the B2C device repair business: customers don’t break their devices regularly. Even when provided with an amazing service (which we did), there is a good chance we’ll never see them again because they won’t break their device again. Contrast this with the B2B business, where a school with 2,000 take-home Chromebooks will break 200 devices per year - every year!

In other words, the B2C business is mostly a single transaction model whereas the B2B business is a recurring revenue model.

Now add a pandemic that sent 50 million K-12 students home with devices for virtual learning, and it’s easy to see that a better business model plus a massive spike in potential customers present a rarely-seen-in-a-lifetime opportunity. We decided to go all in by selling our B2C retail stores and focusing 100% on the K-12 mail-in business.

There’s another big benefit of the B2B business: marketing spending. For our B2C business (where we fix a single device for a customer), the gross margin is about $50 on a repair. That significantly limits the money you can spend to acquire a customer.

In the B2B business, however, a single customer could represent $100K per year in revenue. That means spending $1-$2K on marketing to acquire a single customer makes sense. And there are many more marketing opportunities when you can spend 20-40 times the amount to gain a customer.

From a pure numbers standpoint, this doesn’t all seem obvious. We did over $3 million in sales in 2021, and our B2B business will do “just” $1.2 million in sales in 2022. But here’s the thing: those three B2C retail stores represented 60% of our staff, large lease obligations, massive amounts of time, and the majority of issues (problems) that had to be dealt with. By selling those retail stores, we simply have more time & resources to rapidly grow our K 12 device repair business.

And how are we going to use the extra time & resources? On marketing! We are in the process of launching several new marketing initiatives:

A new content marketing strategy to provide K-12 technology administrators with highly useful information. This will include a podcast, Youtube channel, regular blog posts, and a newsletter. One key area of focus is trying to show schools why buying bulk device insurance is such a bad idea.
Trade show marketing. We have done this in the past with some success and are now drastically increasing the number of TechEd conferences we attend.
Cold outreach to potential clients. We are sending some of our top prospects a shipping box and offering a completely free trial of our service (where we’ll fix any single device for them at no cost).

Our goal in all of these efforts is to take our business from $1.2 million / year in sales to $3-$5 million by the end of 2023. It’s an aggressive goal but now that we are 100% focused on this area of our business, we think it’s achievable.

What have been your biggest challenges in the last year?

The biggest challenge so far in 2021 has been selling our B2C stores while still providing solid support for our B2B business. It turns out that finding a buyer for your business is hard, completing the sale is harder, and helping with the transition after the purchase is the hardest. It’s been an incredible amount of work and time to sell all three of our stores (they were bought by two different buyers in separate sales).

That lack of time has made it hard to push ahead on our marketing plans. The solution to that was to promote one of my technicians to a new position that is 100% focused, for now, on running 3 different marketing experiments. While we work together on the planning and strategizing, he has taken almost 100% of the lead in actually getting things done and has been great.

We’ve also hired an outside consultant for 20 hours a month to help us with our content marketing strategy. He spent years working at a successful company that did online education. He is very familiar with producing content and marketing it. In addition to being good at his work, he is also good at holding me accountable to get things done.

That last point is an important one. As an owner/operator of a business, it’s very easy to overcommit and finds yourself getting nothing done (or nothing done well). Having someone hold your feet to the fire is a great way to both get things done and start saying no to the extra stuff people are always asking for.

What have been your biggest lessons learned in the last year?

There is not enough time, so commit to a few things and do them well. If there are more important things to do, then hire or contract someone else to do them. And ask yourself if it is important. A great little exercise is to ask yourself what will happen if you never do this thing. It is surprising how many things we think are critical simply aren’t (like answering emails promptly - turns out that isn’t that important to do most of the time).

I recommend every entrepreneur reads The Effective Executive by Peter Drucker. Yes, it’s a bit dated, but its basic premises still hold. In particular, effective executives stay hyper-focused on the most important issue facing their business and delegate or simply ignore everything else. Once that thing is done, then they move on to the next most important thing and just keep repeating. Do NOT try to do your top 3-5 things at the same time. It just won’t work.

What’s in the plans for the upcoming year, and the next 5 years?

With 50 million K-12 students in the USA, we estimate the device repair business to be a $250 million business - at least. We currently are doing $1.2 million in sales so there is massive potential for growth (and that’s not even considering all the other potential markets for device repairs - like hospitals and businesses). We would like to see our business doing $3 - $5 million in recurring annual revenues by the end of 2024. We think this is aggressive but doable.

This makes it clear what our #1 priority as a business needs to be: customer acquisition. Now that we have sold our B2C stores we can put all our efforts into the B2B business, and a significant part of that effort will be marketing. We have a great service but not nearly enough IT administrators know about it. My primary focus for the next year will be to make TechUnwreck a schoolhouse word.

What’s the best thing you read in the last year?

I recently reread The Effective Executive by Peter Drucker. It’s dated but has great advice on how to effectively lead a company.
The 1-Page Marketing Plan by Allan Dib. A little bit too salesy but full of some great advice and techniques.
Never Split the Difference by Chris Voss. This is a former FBI hostage negotiator talking about negotiating techniques. I’ve tried a few of the ideas on my wife and 9-year-old son and I can say that it works.

Advice for other entrepreneurs who might be struggling to grow their business?

Remember that you can never get everything done. Forgetting that and trying to “do it all” is one of the biggest mistakes entrepreneurs make (even experienced ones who already know this). It’s so easy to overcommit. The solution is to write down what your top priority is and then try to make 80% of what you do serve that main priority.

A good solution is the OKR technique touted by John Doerr. Another technique is to start each week by writing down the 2-3 main things you want to accomplish that week and then start each day writing down the 2-3 things you want to do that day. The weekly objectives should be in service to your main priority and the daily tasks should serve the weekly objectives.

And one more thing: spend at least 1-2 days a week completely ignoring your email. Email is a trap because when you’re paralyzed with what to do next (because there’s so much stuff to do), we often turn to email. After all, it’s a simple list of todos and feels like progress. Resist this urge! Yes, you do need to respond to some of your emails but it’s surprising how few of them matter 1-2 days after you get them.

Are you looking to hire for certain positions right now?

We are currently looking for a part-time shipping & receiving assistant and a full-time technician that is capable of circuit board level diagnostic and repair (microsoldering). In the near future, we will probably also be looking for more general repair technicians and a full-time marketer to take over my marketing duties as I get them figured out and dialed in. If you’re looking to work for us, please send us an email: [email protected].

Where can we go to learn more?

TechUnwreck Blog
LinkedIn Pate
Company Twitter
Email: [email protected]
Podcast & Youtube channels coming soon…

If you have any questions or comments, drop a comment below!