Build Your Business: Management

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April 1, 2013

Whether it’s at three or six months, or even two years, all apparel decorators will face growing pains. They are unavoidable, and while they are a good sign because they mean your shop has seen success, growing pains can be tough to survive.

However, by being adaptable and open to changes that will ease these growing pains, your shop can endure. You first must accept that you are in this stage of the business cycle and be prepared to make modifications. Here’s some advice on how to deal with them.

NOT ENOUGH TIME
As your shop picks up new and repeat business, you likely will realize that you and your staff are consistently working extra hours, and that you need employees to consistently put in overtime.

If your staff is working overtime so that you can increase your shop’s profitability, that’s one thing; if overtime is necessary to be profitable, something is not right. Either your staff is working inefficiently or your product is not priced correctly.

In either situation, it’s time to make a change. Everyone likes a little bit of overtime, but nobody likes ongoing overtime that negatively affects their personal lives.

One solution, if you are trying to increase your profitability, is to hire additional (possibly temporary) staff. If you are in this situation just to be profitable, then it’s time to look at your products and services, and re-evaluate how you are pricing them.

Take the time to do market research, and compare your costs and prices against similar businesses. Make changes where necessary. Once you have figured out which products or services need to increase in price, plan for and create a business environment that lets you reach your profit goals within your staff’s scheduled working time.

NOT ENOUGH STAFF
Finding quality employees who can operate equipment correctly and at a satisfactory pace can be difficult. But by investing in the right people and cross training your entire production team, you will find that you will not have to push your employees beyond their limits.

One note of caution: Avoid leaning on one employee for a specific process. You never know when that person may want to take two weeks off for a honeymoon, be out on maternity leave, face a sudden medical emergency or even resign. By training several staffers on two, three or all of your processes, you will have a flexible workforce. If one core employee is out, someone else can step in to fill that person’s shoes.

When your shop expands to the point where you need to hire additional team members, do so carefully and train them thoroughly. You also must know whether you are considering adding staff as a knee-jerk reaction to a peak season.

Instead of hiring new full-time workers during peak seasons, consider contracting work out or bringing in temporary help. Also, in some cases, consider the idea of a second shift. It’s imperative to step back and smartly evaluate how your shop is running and the improvements you need to make, as well as what you realistically can afford.

In addition, know when it’s time to hire managers. Yes, you started out with a small staff and are accustomed to overseeing their work. But you will reach a point with your business where you cannot do it all. Hiring a floor manager will free you up to more effectively plan for your shop’s future.

NOT ENOUGH EQUIPMENT
Perhaps you started out with one automatic press, but your workers are telling you they are restricted by it and cannot complete the orders your shop is receiving because there is only one press. Before you agree and look to purchase an additional press, consider whether you’re outgrowing the machine or your workers.

First, evaluate the productivity rating for your equipment. If your staff should be printing 400 shirts an hour on your press, but are only completing 200, then something is wrong. Consider training refreshers or replacing staff. However, if your staff is close to achieving your equipment’s maximum capacity, then it could be time to buy an additional press. But, again, consider seasonality. Is right now your niche market’s peak season? If so, is an additional press necessary or do you need to contract out the work to another firm? Always ask yourself these questions to avoid an impulsive purchase.

A machine bought and only used during two months of the year is not a smart purchase. Prevent yourself from making a rash decision by thinking through your long-term business objectives. Do not just deal with the existing problem: Think about the issue and how it will pertain to your business during the next year, not just the next few weeks.

NOT ENOUGH SPACE
Often, apparel decorators will think they have outgrown their production space, when the reality is that they are not optimally using it.

When you first set up your shop, you may have been restricted by the location of your electricity, gas or air lines. For the first several months, this was not a hindrance to your productivity — but now it is.

Instead of looking for a larger, more costly space to lease, consider spending the few hundred dollars to have a gas line extended, if that’s an issue for you. Then, place your equipment in the most sensible location. You may find that your current location can handle your volume just fine and there is no need for an
expensive relocation. While you’re at it, consider rearranging all your machines to allow for the most efficient production flow. If your dryer is on the opposite side of the facility from your presses, then things are not set up correctly.

You may need to bring in a consultant or another professional to evaluate your arrangement and suggest modifications. In the end, the cost to do so can actually save you in terms of lost productivity.
An outsider who can suggest layout improvements can possibly reduce your average production time on a certain item from, say, five minutes to three minutes. Imagine the opportunities those extra minutes will allow you to handle. After all, time is money.

NOT ENOUGH MONEY
Last, but certainly not least, is the issue of not having enough money. In fact, this growing pain goes hand in hand with the four aforementioned problems.

One of the worst growing pains a decorator can experience is not being able to handle his payables and receivables. Some customers — whether they be school systems or big corporations — will not place deposits on orders. These same larger customers also may take 45 to 60 days to pay for your products and services. You know the story: “Where does the 800-pound gorilla sit? Wherever he wants to!” Therefore, you have to decide if you can afford to do business with the gorilla.

However, your employees, landlord and ink suppliers cannot wait 45 to 60 days to be paid, so you have to be equipped
to fill that gap. The money has to come from somewhere.

In these instances, you have to consider your options. When you are working with certain clients who will not put down deposits, you then need to turn to shareholders, banks, etc., to borrow the money so you can pay your bills until you receive payment from these customers.

While it may be tempting to always require deposits — regardless of whom you’re dealing with — that practice can prevent you from working with large customers, such as mass market retailers. You have to weigh the potential profits against what you’re willing to borrow and make the best decision for your shop’s continued success.

Discuss these situations with your
financial team (banker, financial planner and accountant, at the bare minimum) to ensure you make smart decisions to grow your business. Just as you have an ink supplier, you also will require a money supplier.

While there are growing pains beyond these five, this list features the worst ones you can encounter. They also are growing pains you should not impulsively address. With proper planning and smart, long-term business objectives, your shop can make it through these headaches and come out stronger on the other side.

Greg Kitson is founder of Mind’s Eye Graphics, Decatur, Ind. For more information or to comment on this article, email Greg at greg@mindseyeg.com or visit mindseyeg.com. Hear Greg speak on apparel decorating topics at the 2013 Imprinted Sportswear Shows (ISS). Reduced workshop and seminar rates are available if you preregister: issshows.com.