Know Your Business Basics to Survive & Thrive
BY ANTHONY CORSANO
Know Your Business Basics to Survive & Thrive
Most people do not get into the decorated apparel industry to become a “businessperson.” Have you ever heard a child say “I want to be a screen printer when I grow up?”
Many of you got started because you love fashion or art; are fascinated with the decorating process; or you were a high school coach, in a band, or already in a niche, and saw the sales potential of offering T-shirts. Or maybe you got a job in a decorated apparel shop and ended up buying it or starting your own.
The sad reality of being an imprinted sportswear entrepreneur is that while you may be the world’s best at artwork, decorating techniques and print quality as well as a natural-born salesperson, if you do not have basic business skills, you’re never going to survive.
According to U.S. Bureau of Labor Statistics, 20% of U.S. small businesses fail within the first year. By the fifth year, 50% have closed.
I have worked in this industry for 40 years. While the majority of that time was on the blank apparel supply side as a salesperson and in management, I have talked to hundreds of decorators over those years.
In addition, my wife has had her own print shop for the past 12 years of which I am now an integral part. So I have seen many decorators come and go.
The first step anyone who wants to get into decorated apparel should take is to research and create a business plan. It can be simple or sophisticated, but it must include these essential elements:
Who is your target customer?
How are you going to find customers?
What product and services are you going to offer?
Who is your competition?
How much capital will you need to get started?
What will you charge?
Another question your business plan should answer is its reason for existing. Ideally, you can share that in 60 seconds. What am I going to do that's unique and different? What sets me apart? If you want to sell cheaper than everyone else, don't even bother opening.
To get started, you’ll find books, blogs, templates, videos, and webinars that can teach you what you need to know. The important thing is to do it.
The next step is to determine if you have enough cash. Many new businesses fail for the simple reason they did not have enough money to hold them over until they could acquire enough customers and sales to cover expenses.
It’s general wisdom to have at least six months’ of expenses before you start. And, if you are not good with numbers, I recommend hiring a part-time bookkeeper.
A common mistake I have seen is individuals who do not have a financial structure in place that allows them to support the business while it’s not making money. And they don’t really even know what it costs to run a business.
Of course, when you are starting out, you don’t have history to provide accurate numbers so you may have to go with averages. But it comes down to itemizing all costs: rent, utilities, equipment, supplies, labor etc., and then anticipating how many shirts you need to sell to cover those costs.
Another important area is the time and energy it takes to start a business. It’s not a 9-to-5 job. It's not 40 hours. It's literally 60 to 70 hours. And in the beginning, especially if you're starting small, it means no vacations and limited holidays.
Starting a business is like having a baby, it’s going to take a lot of time and energy to nurture the company as you would an infant.
Another aspect to be aware of is the difference between a company that sells a product like books, car parts or services like landscaping and a business built completely around customization. Because it involves art, decorating has an intangible level, and there’s never going to be a universal opinion of what's good and what's bad.
From my perspective, I highly suggest working for someone else for six months. This offers a tremendous advantage for anyone entering the industry brand new. One of the greatest things you will learn while working for another decorator is about the labor market.
Labor is most businesses’ biggest headache. If all company owners listed their top 10 headaches and then ranked them from one to 10, labor would be number one, and its intensity would be a 10.
Another area to understand is the varied tasks that need to happen in the shop and build an infrastructure to support them. This means taking a piece of paper and mapping out the workflow. This is how I’m going to take orders, and here’s the path this order will travel through the shop until it’s ready to be shipped. Someone has to write down the steps.
Plan on being flexible when you’re first getting started. We all go into a situation making assumptions. We vet those assumptions, but events do not always play out as expected.
Be willing to let go of the things you were sure you were right about and embrace whatever comes your way. For example, you did not want to chase team business, but that's what is coming to you. Be capable of change and adjusting.
Of all the things I have talked about in regards to a new business, what my wife and I have learned from COVID is you better have a strong business plan and a reason for existing.
Intimately understand your business and whether you need to cut back or gear up. Have a complete handle on your finances, specifically your costs and expenses, and have enough cash to take you through six months of a downturn.
Many decorators survived by pivoting to personal protection equipment and became financially savvy at filling out documents for loans. Businesses that didn't take the time and energy to do these things got left behind.
* *According to data from the U.S. Bureau of Labor Statistics, about 20% of U.S. small businesses fail within the first year. By the end of their fifth year, roughly 50% have faltered.
Aug 7, 2020