Build Your Business: Management

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November 25, 2014

This may be the most competitive era in the history of printed products. Any customer that wants to get a price quote can go online and, within minutes, have an idea of what a product will cost. However, a smaller, local screen printer is fighting an uphill battle when trying to build a loyal customer base in this type of price-driven environment.

Before you can reap more profits from increasing your business, it is important to review your current system so that you can take advantage of more volume in the future. It is better to refine your process prior to adding more business because an increase in volume doesn’t necessarily mean an increase in profit.

If a production process is flawed and more orders are pushed through, the company will become less profitable at each increase in demand until it eventually is losing money. The only way to increase profit and make it sustainable is to better systemize current processes first to achieve the best practices in each area so that more work will be organized and set up well. In this manner, maximum profit can be retained from each job.

In this article, I will review sales, art, screen and printing areas for a quick start on retaining profits from the functional process of screen printing. You also should consider additional business areas such as accounting, merchandising and billing as critical steps in profit management (this would require another article and can be dependent on your specific system).

MORE PROFIT FROM SALES
Screen printing businesses tend to have diverse and unique approaches toward how they generate and close sales. Since so many companies are grown from the ground up, it makes sense that they slowly develop what works and migrate to the best approaches for their individual sales styles. It is difficult to dictate a best practice because of the dramatic variations, but there are a few specific concepts that always can be considered to help maintain and boost profits:

1. Customer relationships are as important as orders. Talking to clients in a friendly way with a genuine, helpful attitude and voice makes a memorable difference (while being pushy, or acting bored, stressed or annoyed is a sure way to lose them). Since referrals still represent one of the best ways for printers to get new clients, you need to be someone to whom they will want to send a close friend. When was the last time you listened objectively to a sales call from your company? Did your representative sound like a printer to whom you would refer your friends?

2. Don’t sell on price too quickly. Yes, people care about price a lot these days. But the best clients want more than that. They want service that stands behind their products. They want great artwork that makes everyone notice their products. And they want quality printing that doesn’t look rushed. If a client asks for your price, try to find out what he really is looking for first.

After a few questions, you may be surprised to find out that he is more interested in a specific garment, art style, or even a higher-valued item if it will work with his needs. Of course, he may just be price shopping. But if that is the case, then you quickly will know to spend less time with him.

When you shop at the store for something to wear, do you always buy the cheapest item, or do you first look at the value and other qualities balanced against the cost? Delay the pricing question until you have offered the client a chance to know the value and other qualities he is buying. Often, a fair price with a profit for the printer is better for the client than the cheapest price on an order that must be pushed through the shop.

3. Offer additional options. Henry Ford said, “If I asked my customers what they needed, they would have said faster horses.” Since you are a printer, it is likely you can visualize what your clients’ artwork will look like on a variety of items better than they can. Remember that a verbal offer of additional items likely will not generate the mental image for a non-visual customer.

To really sell extra items on existing orders, try generating options in a paper or digital layout example for customers using their artwork. If you are printing T-shirts for them, then offer some additional long-sleeve, tank top or hoodie options if the design will fit on them for the same print run. The extra step of showing customers how the additional garments will lower the cost of their original items through volume pricing can be an even easier sales bump. The real key, however, is to honestly offer these options as a benefit and opportunity that the customer may not realize. In this manner, the client will not feel pressured and you won’t feel disappointed. Do you offer a visual upsell option on every order that makes sense?

4. Track every sale and customer. The profit truly is in the details with regard to sales. If you know when a client will order again and how well he liked his order after it was completed the first time, then you have a great head start on the competition. When you have the details for a large group of sales and customers, you can start to really plan things like marketing, inventory and production needs. In addition, you can start to magnify profits by copying what is profitable with one group of customers into other groups. If it is true that 20% of your customers produce 80% of your profit, then who are those profitable people and how can you get more of them?

PROFIT IN ART AND SCREENS
Art and screen making rarely are considered profit centers for printers. It is common for these areas to be “costs of doing business,” and the expenses from these processes to be absorbed into the garment and printing costs. But there are some hidden ways to really generate profit from both of these areas with some small creative twists.

1. Generate artwork for groups of clients instead of one at a time. Start to save artwork and reuse the effort for customers that are OK with it. In this manner, you can create art that can be repeatedly sold to a wider group. Eventually, you will have a catalog of designs for different purposes that you can offer first to save clients’ money and generate quick orders.

2. Create artwork that is printer friendly. Try to avoid printing big areas of ink coverage on shirts and talk clients out of big, flat-looking square prints whenever possible. Not only will you save money on ink, but the prints also will last a lot longer and avoid cracking in the wash (which may cause clients to return the items for refunds). Another issue is designing graphics that are simple and bold, yet easy to print without a lot of added halftones, shadows or special effects in the art that are a pain to color separate and may look a lot different on the printed product. Creating graphics that are simple to separate and print will save a lot of money over the long haul.

3. Be specific about what you will allow for clients regarding initial comps, revisions and final proofs. Generating speculative artwork for customers who can’t make up their minds represents one of the biggest wastes of time and money in the screen printing business. Having a clear policy on deposits for artwork comps (these can be applied to the order after it is placed), as well as a limit to revisions on artwork, can be a huge benefit to saving money from fickle clients.

When clients refer their friends, they do it because of great service or artwork. When customers reorder shirts because they sell out of them on the first run, it typically is because the artwork really worked. It is difficult to estimate the value and profit of good artwork versus average art, but at the end of the year it can be a huge amount when customers start referring friends because they love the art they get from a company.

Making money in the screen department seems less dramatic than artwork, but it is entirely possible and commonly overlooked. A screen has a fixed cost when it is first brought into the company. If you charge a screen fee or add it to the sale, then it takes a few uses for it to regenerate its cost to the company. But there are other ways to maximize the money you can make from screens and minimize the costs.

1. Treat screens with extra care. As silly as this sounds, it can make or break profit on jobs if a screen blows out, loses tension or gets too dirty. Using extra care with your screens and having consistent processes in place to handle them will enable you to avoid a lot of banging around and save big money. It’s not the cost of the screen itself as much as the handling savings and less cost of having to adjust for poor-quality screens that will generate profit. The longer your screens last, the more money they make.

2. Group designs on screens, where profitable. If you can add a crest and full print on the same screen, then you will save money on each order if you can keep everything organized. Some shops will take this to the extreme and put several orders on one screen, but that can lead to slower set ups or ink changes, and overall confusion, so it likely is not a profitable choice.

3. Sell screens to good clients. Some clients respond with loyalty and consistent reorders when you offer to sell them permanent rental space on specific screens so they can have “VIP” service with fast ordering on certain jobs. This process requires some storage space and it should be justified, but it has been shown to create a feeling of loyalty and ownership with higher quality customers.

PRODUCTION PROFITS
Typically, the production printing process gets the major focus with regard to profits. It is important to consider this, but some of the biggest money often can be captured by streamlining all of the support steps that happen before and after printing. Several areas can make or break profits on smaller jobs depending on how the set up and teardown are handled. So here are a few concepts that can be considered for increasing production profits:

1. Organize and stage jobs in groups based on the best production flow. If you always prioritize based on the order that has to go out soonest, you may miss chances to gang orders that have similar needs on the press and require fewer ink and settings changes. The best way to truly manage order flow is to time and track three aspects — setup, printing and teardown — and see which types of orders work best together. You likely will find that longer orders will require a different mentality than short orders and need to be staged differently.

Of course you have to consider the due date, but if you allow for a little wiggle room, you may start to really save time with set ups and limit your teardown needs by adjusting based on overall production flow. One additional advantage to tracking setup and teardown times is to use it as a strong motivator and offer incentives to employees who consistently have fast times without equipment damage or scrapped shirts.

2. Define a clear, systemized and trainable process for each production and printing step. Imagine you were a new employee who didn’t understand how to produce a shirt. How could you explain the process in the simplest manner so that you could start to contribute as quickly as possible without errors? It can seem like a burden to create a process manual, but once it is done well, your company has an indispensable tool to manage tasks if you need to quickly expand your workforce to meet demands.

3. Be ruthless in eliminating unnecessary handling and production steps. Don’t fall into the trap of assuming that you are as efficient as you can be because things are getting done on time. If you have a certain capacity, there always is strong desire for the existing work to fill it up and to look busy.

Keeping an eye on the numbers for the time required will provide a real estimate of what everyone should achieve, and there always is room for minimizing extra movement or handling of equipment or products. With regard to set up, you can start by staging everything together for orders so that the inks, screens and shirts all arrive at the press simultaneously. This may require multiple buckets of popular inks, more screens and shirt containers (if you have more than one press), but it is a huge time saver.

To be competitive in screen printing requires as much internal focus on profits as outside sales efforts to ensure all of the hard work everyone does ends up making money at the end of the week, month and year. Keep looking for ways to develop profits in each area of your company and you will retain the best value from every shirt you print.

Thomas Trimingham has been working in screen printing for more than 21 years as an industry consultant, freelance artist, and high-end separator. He is an award-winning illustrator, designer, and author of more than 110 articles on screen printing art and separations. For more information on screen printing consulting, separations, and graphic design, visit his educational website at screenprintingartist.com.

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Suggested Reading
Like this article? Read these other screen printing articles at impressionsmag.com:
• “Why Your Shop Needs to Make a Buck a Minute”
• “Keep Visitors Coming Back to Your Website”
• “How to Create Catchier Sales Sheets”