One of the most commonly asked questions I hear from shop owners or managers is how to raise the bar and start taking your business to the next level. Everyone always wants to know the “secret” to getting bigger and better.
I hate to say it, but there isn’t a secret.
The wish is that there was a locked away hidden formula that I could hand out like Halloween candy. That certainly would make things easier.
Trick or Treat!
Taking your business to the next level isn’t about secrets, magic or any mystical recipe. Instead, it is only brutal common sense and working with an open mind to make better decisions. Equally important is a dose of honest effort thrown in for good measure.
That is a recipe that rocks.
A typical industry journey is that shops will start off as a one or two person operation in a basement or garage. As sales come in and their skill develops in the craft, they might add another manual press or get into using other decoration equipment. Heat press or sublimation. Embroidery or rhinestones. Maybe even cut vinyl for names and numbers. Additionally, after a bit of outsourcing their larger screen-printing runs to an auto or embroidery work, they might purchase their own. Then maybe if they are lucky there is some added growth.
Likewise, it’s just a matter of time before they are shopping for a bigger space to have room for the new equipment lineup. The dollar bills should be rolling in now!
But, maybe not.
All along it is a constant struggle. Many shops never make it very far. One thing or another leads to their demise. A lot of it comes down to not scaling their business correctly.
Despite decent sales, there may not be a lot of growth.
The Rule of 3 and 10
I recently read a great theory about the challenges associated with business scaling called the rule of three and ten. This was featured in Tim Ferriss’ great book, Tools of Titans. Hiroshi Mikitani, the founder and CEO of the multi-billion dollar e-commerce conglomerate Rakuten coined this term to demonstrate the pain that companies feel when growing. When you go from one person to three, everything breaks. Next, when you go from three to ten everything breaks again. From then on, it’s all about multiples. Ten to thirty. Thirty to one hundred. One hundred to three hundred. Surely you get the picture.
What’s breaking is all the important stuff that makes a company tick.
This includes how the business handles decisions, communicates, meets payroll, implements workflow, sets rules or policies, hires and motivates staff, even the sales and marketing end of the company. The previous way of working and thinking just doesn’t fit any longer.
Significantly, this aligns with our industry, and as your shop scales in growth new ways of working must be introduced to keep the engine turning properly. The boat anchor mentality that is holding your growth back usually sounds like this: “Hey, it’s how we’ve always done it”.
As a result, people are either too comfortable to change or too busy to make the impactful decisions they know they need to implement.
The biggest problems happen when you run your thirty person shop with the same mindset you started your shop with years ago. Or when you have over a hundred people on your staff and your processes are built for a few dozen.
Everybody talks about the need for change, as they see the obvious problems, but nobody has the guts to do something about it.
Change is scary. Worse is when the old guard can’t get out of their own way and be open to run things differently to make the positive changes necessary to scale the business.
So what are some basic rules to follow that will make this struggle a little easier?
Read on, my friend.
Different is Good
The first point to make is that in order to grow you must be different than your competitors in a noticeable way to your customer base. By and large, anybody can print or embroider a shirt. And they will.
What sets your company apart from the rest of the yahoos out there? Can you distance yourself from those customers that solely shop on price? Winning the race to the bottom on price isn’t an accomplishment.
Does that unique thing about your shop resonate with your customers? Are you constantly marketing that?
It could be your incredible art staff. Maybe it’s the dynamic way you make ordering easier. What about the expert craftsmanship and knowledge you bring to the table? It might even be your turn times, as you’ve figured out how to take orders and ship in a day or two. In fact, some shops even make their own apparel blanks.
What is your shining example of awesomeness?
I was speaking to a shop owner the other day and he was complaining about their lack of growth. He’s another one of those “next level” seekers. The owner was personally too busy to work on any sort of marketing to attract new business.
As a matter of fact, he had a great story but didn’t offer it up to his customer base to connect with them. His sales have been flat for a year or two, but he freely admits that the shop hasn’t completed any meaningful effort to obtain new customers. Yet, he was reluctant to delegate the marketing or hire someone to do it.
It’s a control thing.
You are operating in an online, constantly connected world. When you choose, either by choice or inaction, to not show up with a presence and tell your unique story, that lack of exposure to your shop will result in zero sales growth. Want to start taking your business to the next level? Obviously, marketing matters.
Are you controlling the conversation about your company?
Promote your different.
Establish “Your Way”
Let’s talk about the standards for your shop. These are the core tenets for every meaningful thing that should happen. From how an order is entered into the system, to how you accept payment for an invoice, there should be an established process.
One critical part of taking your business to the next level is building this infrastructure for how your business should operate.
Ultimately, there is only one right way to do these things. When you establish these rules, you can operate with more accountability and speed.
Don’t think this matters? Let’s use a few real shop examples to illustrate some challenges.
Quoting a Customer
In your shop can multiple staff members quote customers and arrive at the same final price using your method?
Is there even an established standard for this important task?
When a different answer is derived in the quoting process depending on who is working the math, you are opening a Pandora’s box of issues. After all, when was the last time you tested this to see if everyone is doing it the same way?
For most shops, the answer is never.
Believe it or not, there are numerous shops out there that don’t even have price matrices worked out.
Test this in your shop today with everyone that does quoting and audit the answers.
- 143 S-XL Black Bella+Canvas 3001 with a logo that is PMS 107 and PMS 202 as a left chest and full back.
- Remove tag and apply customer supplied woven neck label.
- Polybag by size.
- Ship date is four business days from today, third party UPS ground. Address provided.
- New customer.
- Art file supplied. Illustrator .eps.
- Your shop is ordering the shirts.
What is the final price per shirt? Have everyone that quotes do this exercise and compare answers. In short, they should be the same. If not, ask why?
For the scenario above, the quote is approved.
- When are the shirts ordered?
- The inventory arrives. When are the shirts counted?
- What happens when it’s discovered that 8 mediums are missing from the delivery?
- Is there an established procedure for handling the inventory, identifying the problem and notifying customer service or sales?
- How do you link up the second delivery of the missing shirts with the ones that came in originally? Will everyone know they are all here?
For this example, I purposely didn’t talk about the need for an underbase plate.
- Did your team members quoting know that it was needed? Did they include that in their quote?
- When the graphic file is handed over to the art team, do they automatically make the underbase plate, so now there are six screens for the job instead of four as quoted?
- What is the long-term financial impact on your company when those “secret” screens are used? How dialed in are you on this?
For our example order, Pantone colors were chosen. PMS 107 and PMS 202.
- How good is your production team in matching these colors accurately? 100% perfection or just “close enough”?
- Do you ever have problems matching a PMS color when printing over an underbase?
- PMS 202 can come out too pink when printed over a white underbase sometimes. Do you know what you should do?
Could you even do this job four business days from today?
- If the answer is no, what happens? Do your sales teams enter it anyway? Dogpile on production!
- Just curious, but did your team add in a rush fee for the order when quoting?
- What would happen if there was a delay in getting the inventory in or the art approved? Would that push the ship date for orders like this? What happens usually?
- Questions to ask:
- When would the screens be burned?
- Would you pre-schedule this order to a press?
- How does your shop ensure quick turn jobs ship on time? Is there a process? How do you make it easy?
Growth Comes With Solving These Challenges
This part of operating a decorated apparel business is complicated. After all, it gets crazier the more equipment you add to your lineup.
Taking your business to the next level happens when you solve these problems and eliminate the bottlenecks. To be able to take on more work, you have to build the infrastructure to handle the larger load.
The rule of three and ten works with the number of machines too. Supporting one work unit is easier than three. Three machines are easier than ten. It’s not just the people required to run the equipment, but also all the consumables, maintenance, support and even the electrical hardware that is needed. Think about what’s required to keep everything operating at full-tilt-bozo speed.
If you are struggling with what’s on your plate now, how are you going to solve the problem when it triples? Conversely, when business triples and you still haven’t invested in anything to solve your operational challenges is there any wonder the wheels are blowing off the bus?
Remember, you are only getting paid when these machines are decorating shirts. Every time you stop to wait on something that delay is costing you the opportunity to make money.
Definitely, those friction points can’t be overlooked. Dig in.
The Importance of Values and People
This can’t be stressed enough. You’ve probably read some of the mantra-like phrases regarding staffing.
“Hire for attitude, train for skill” or “Hire slowly, fire quickly”, are two of my favorites.
The people you let play for your team will determine how well you succeed. As a company, are you hiring based on an established set of core values? These are the concrete ideas that you run your company with and should be written down somewhere. Specifically, words like Accountability, Honesty, Trustworthiness and others are often used. They should be tailored to your company and how you want to run your business.
Oh, you don’t have them?
I know, that type of big picture thinking seems like the last thing you should work on when you have orders to produce and ship. But maybe, that’s why you have so many quality control problems or the fact that you can’t ship on time.
For this reason, is it any wonder you are stuck with mediocre personnel on your team? When you say you want to take your business to the next level, why are you handicapping your effort with allowing sub-par people on your team?
I’ll bet there is someone in your shop right now that you know in your gut doesn’t belong.
Why is this person still around? Are you too scared of the confrontation to fire them and hire someone better? What day to day damage do you think they are doing to your shop or reputation?
Additionally, get your key leaders in your company to decide what are the important traits your staff should possess.
Operate at a Higher Level
Companies that operate on a higher level than everyone else know exactly what type of employee they should be hiring. They hire and fire based on those core values mentioned above. There is no settling. As a result, either the employee meets the standards set or they don’t work there.
What do you put up with? Stop making excuses for the people that work in your company. You know what you need to do.
The Importance of Leadership
In the long run, people need direction. When there is a captain of the ship, all hands know what to do.
But sometimes, there is the wrong captain leading. Or, the methods used don’t quite work so your business is going in the wrong direction.
Surprisingly, all is not lost. If you want to create a culture in your shop that rises above everyone else, think about how you can use these four ideas below to build the culture of excellence you need. It’s all about taking your business to the next level.
- Clear Expectations – Does your team know what they need to do today? Is there a crystal clear picture that outlines the companies goals and immediate direction? Can you describe how your company should look three or five years from now? Better yet, can your newest employee? What will everyone need to do to achieve that goal?
- No Excuses Mindset – How is the accountability with your staff? Do you have staff members that own their work? Are departments playing the “defend the castle” game where they point fingers to blame why something didn’t go right? What happens when there is a mistake?
- Ownership – Can your staff work on solving challenges and making the shop better on their own? When your departments and staff members operate with a culture of continuous improvement, and their focus is to always make the shop better, you’ll see that getting to the next level is easier. If you have to micromanage everything to get things done, your company has the opposite of that culture. Micromanaging is a leadership failure.
- Trust – A culture of trust means that your team members can make decisions. Leaders create the environment where team members can solve problems without asking “what should I do?”. In your shop, what is the level of trust with your staff?
Insecure leaders operate out of the need to drive fear to get their way.
More effective leaders operate with the knowledge that the more training, empowerment, and success each team member has, the more contributions and quality work will show up.
Team member success = company success.
Remember, people usually don’t quit companies over money issues. They quit due to bad management. When you look at your shop and say, “We used to be great, where did all those wonderful people go?” In particular, you need to take a close look at who is running things.
Reorganize Your Business to Better Serve Customers
How well do you know your customer base? What are their pain points? When they buy from you, what are the friction points? Have you ever asked?
When your customers complain, they are essentially giving you pointers on what you need to do to improve.
Amazingly, few companies are listening.
Instead, when a customer gripes about something many people that work in shops will take that as an opportunity to complain about them after they are out of earshot. Does this ring true for you?
- “I can’t believe they want to order with a text message!”
- “This lady keeps making changes to the art! We should charge her for all that work.”
- “Customers keep trying to place an order at 10:00 on a Friday night! Don’t they know I have a life?!”
- “Here’s another guy wanting only two or three shirts!”
- “Why do customers keep asking for stickers? We sell shirts!”
- “They want that order by Monday. Don’t they know this is our busy season?”
Is your customer complaint on the list? Probably not. Truly, I can’t list them all. If you want to hear the most popular examples just tune into an industry Facebook group or forum.
Change Your Direction
Here’s a fact. Your customers don’t know what you do or your capabilities. Decorating apparel is magic to most people. However, if you are open to new ideas and keep track of what your customers are saying to you, you can change the direction for your company to be in tune with what they are asking about.
It’s not that hard.
Can you have an open mind and recognize opportunities when presented to you? Currently, there are plenty of apps and resources that you can deploy to solve these challenges when presented to you from your customers.
Work the problem.
Can you find new ways to sell your product or service? Want more business?
Recognize that “how” people are buying is changing, and that your target market may include new people with different buying habits. Can you cater to them?
One last thought on this. In particular, what have you done in the past six months to make it easier for your customers to do business with you?
Know Your Numbers
Shocking is that many shops don’t understand their basic business numbers. The old adage, “You can’t manage what you don’t measure” holds true.
Sure, you might have an accountant help you with your basic day to day books, but do you know your breakeven amount? This is the sales number you need daily to break even with your costs. For that matter, do you know the cost per impression for your shop?
What does it cost you to do one basic unit of work on average?
Many shops just use an aggregate of pricing lists to sell. Worse, is that they have a copy of some nearby shop’s price list and just mark down everything by a nickel to compete. Is this you?
Understand Your Costs
Price lists based on the true costs of your own shop operation make the most sense. If you don’t know your costs, you can’t calculate your profit. Likewise, using someone else’s price list isn’t an accurate way to ensure that those dollar amounts will mean you are making money at the end of the year.
Selling price is always crucial, don’t get me wrong. It’s always important to know the details of the marketplace, but you should be selling on value, not price.
If you are trying to compete by singing the lowest cost song, that’s the only tune people will remember. Plus, there always is a cheaper guy out there and for those that only care about that one song, that voice sounds sweeter.
If your goal is all about taking your business to the next level you will realize the more you understand your shop’s numbers and build your pricing based on the value you bring, the stronger you will become. Profit is not a dirty word.
Stop selling to tire kickers, and find a market that appreciates the value you bring. Again, it’s not too late.
The shops that operate at the magical “next level” that everyone aspires to, understand that. They market their business based on their unique selling position.
Taking Your Business to the Next Level
So in a nutshell:
- Be different.
- Set standards.
- Value people.
- Lead with direction.
- Serve customers better.
- Understand your numbers.
If someone wants to understand the secrets of taking your business to the next level, send them this article.
“It’s not what you preach; it’s what you tolerate.” – Jocko Willink
“Opportunity is missed by most people as it is dressed in overalls and looks like hard work.” – Thomas Edison
“Put your best people on your biggest opportunities, not your biggest problems.” – Jim Collins
“You teach people how to treat you.” – Oprah Winfrey