The post Episode 62 – How to FAIL at the Custom T-Shirt Business appeared first on The CAS Podcast.
Welcome to the Custom Apparel Startups podcast, your best source for information, news, tips and tricks to get you off the ground running, and earn success with your custom apparel decorating business. So, get ready to soak up some knowledge!
Now, here are your hosts, Mark and Marc!
Mark S: Hey, everyone! Welcome to episode 62 of the Custom Apparel Startups podcast. My name is Mark Stephenson, from ColDesi.
Marc V: And this is Marc Vila, from Colman and Company. Today we are here to talk about how to fail at the custom t-shirt business.
Mark S: What?
Marc V: And other things winners don’t do, other things winners don’t do.
Mark S: That was a good save, in the end. I kind of liked that. This is part of a trilogy that we’re going to be bringing to you, a three-fer on lessons in not failing. So, our approach to these next three podcasts is kind of a little self-defense. We’re going to spend some time educating you on the issues that we’ve seen, the problems that we’ve seen, and the reasons that we’ve identified, that people fail in the business.
Marc V: When our customers, or people who own other equipment, or just small businesses in general, when they fail, oftentimes it’s due to a few core things.
Mark S: And the same things across industries.
Marc V: And the same things across industries. It’s over and over again. When we talk to people that may not have failed yet, but they feel that they’re in failure mode, or they are not achieving success or growth, oftentimes it is the same things. It is the same few things that happen over and over again.
It’s yes, some businesses fail because there was a small business, and Walmart came to town, and then there wasn’t much they could do about it. All of those things happen. There’s going to be circumstances that change.
However, that’s not the majority of the time.
Mark S: Right.
Marc V: The majority of the time, it’s things you can do or not do.
Mark S: I agree. So, how to fail at the custom t-shirt business, and other things winners don’t do.
The first one, I think, is one of the biggest ones, and that is not having an actual plan for your business. The way that scenario works is you get really excited about an idea that you’ve got. Maybe it’s a great funny t-shirt Idea. Or you’ve identified a niche market in your regular life, and you see a huge hole in it, that you could fill with custom t-shirts.
You get really excited, so you buy $25,000 worth of equipment, and you put up a bad website, and poof! You’re in business.
Marc V: Yes, and then you fail.
Mark S: Right.
Marc V: Or another one that’s really common is somebody has a passion for artistry. They want to have kind of their own clothing line or their own t-shirt line. They have designs in mind. You mentioned funny. Maybe it’s funny t-shirts, maybe it’s fashion, maybe it’s music-driven.
Whatever it is, you know the designs are good. You’ve shared the designs with people. They agree. “I would wear that. It looks good.” However, you’ve got no plan to actually make that happen, to make it come to fruition.
Then, you fail. You feel like you’ve failed in that little small business line.
Mark S: Yeah. The things that people that go through that don’t do, is they don’t know how they’re going to get customers, or they don’t think about it. They think that if you make a beautiful design and you show it to people, that they’ll buy it. And that’s not necessarily the case.
Marc V: It’s much more complicated than that.
Mark S: I’ll give you a great example that’s outside the industry. I live in a part of Tampa that is kind of famous for having bars and restaurants, and also infamous on how quickly they go out of business.
So, I get to know some of the local owners. There was a crepe and coffee place that opened up, literally about ten yards from my house. I enjoy both of those things. So, I was there on opening day. I was one of three people.
I got to talking to the owner. He’s on a busy street, but one that it’s hard to stop in. So, it’s very difficult. It’s on a busy street. You’ve got to take a left. It’s not easy to get into his business.
I asked him “What are you going to do, to get the word out?” He says “Well, you know, I’ve got the sign out front,” and that was it. And there were other symptoms, you could tell that he was not going to last. That is he decided to sell a special kind of cappuccino, that required him to buy a $2,000 machine, after he had already opened, and been open for about two weeks.
In our scenario, that would be “Well, I got this one product, and I started making shirts with it. Then, within a couple weeks, even though I wasn’t successful yet and I hadn’t sold anything, I really want to get this other product that I need to learn and figure out.”
The end result is, in a few short months, he was asking me if I wanted to buy the cappuccino machines, because he couldn’t pay his rent. So, out of business very quickly.
Marc V: Yeah, and no real plan. Generally speaking, across the board, great ideas that you see don’t just happen to be successful by accident. We hear stories about these things, about “Oh, this guy just invented this thing and me made a YouTube video, and he sold a million of them.” That’s winning the lottery. That’s not something that is just happening all of the time.
You can make great t-shirts. You can have great cappuccino. But you need to have a plan on how are you going to do everything. How are you going to get customers? How are you going to run your business? How are you going to operate your equipment? What hours are you going to work? When are you going to be available? How are you going to store things? How are you going to maintain equipment?
Mark S: How are you going to manage your inventory? How are you going to handle the books? Who’s going to do your accounting? Who’s going to pay your bills? What are your expenses going to be?
Marc V: It doesn’t have to be scary, and it doesn’t have to be a 20-page plan that you pay somebody $1,000 to create.
Mark S: Right.
Marc V: We’ve talked about this I don’t know how many times, on the podcast, so it’s just time to talk about it again. You take out a notepad, you bring up Microsoft Word, get your phone notepad out, whatever you do, whatever is good for you. Sit in an uninterrupted place, and consider all of the things.
“Okay, how am I going to get customers? What’s my plan?” And it can’t just be “I made a great design. People are going to want to buy it.”
Mark S: Or “I started a Facebook page,” or “I have a website.” Finding customers is an activity. So, what activities are you going to perform, to help find customers?
Marc V: So, this cappuccino example, the crepe shop, he had one plan. “I’ll have a sign out front, on a busy street,” which is a very viable and good idea, you know, having a sign out front on a busy street. However, he’s also in an area of town, where you are, that there are a lot of places to go get a snack and a coffee. Right?
Mark S: Yes, absolutely.
Marc V: I mean, how many within a two-mile radius? Tons! So, you have to figure out “What are other ways I’m going to drive people to there?” This could be including some sort of paid advertising. If it’s local, he could have done a billboard somewhere, or some signage, or little publications. You could also do anything digital, so you could advertise [inaudible 07:55].
Mark S: Gotten referrals from other local businesses that don’t sell crepes and coffee.
Marc V: Yeah. Did he go out to the local businesses and say “Hey, give these to your customers. They can come in and get a free crepe and a free cup of coffee.” You’ve got to think about things like that.
So, you need to have a sales/marketing plan. How are you going to get customers?
Mark S: I think that’s the most important one.
Marc V: We’re biased. That’s what we do. But you also need to have just a general “How am I going to run the business?” plan. Where am I going to keep my equipment? Where am I going to run it? Is there anything good in this area? Do I have the room to actually run a business?
Mark S: Can I get the equipment in the door? Where am I going to put my desk? Do I have the software that I need to run the business?
Marc V: Yes. Is the computer going to be able to handle it? Is this the same computer that my child at home school uses to do classes? That’s not going to work out for you.
So, consider all things. Have a plan, and every time you think of a new thing, figure out how to squeeze that into the plan. Eventually, you clean it up. You make it nice and as neat as you can. It doesn’t have to be anything that you get out of a book, or in any specific order, or anything like that.
You make this for yourself. You’re a small business owner now, or you’re about to be one. So, kind of step up your game. Write some things down. Organize it, and be proud of making a plan, a real plan.
Mark S: I like all of that. I also agree with the idea of just starting off on a legal pad. You can look for a framework out there. I’ve found a couple. It’s easy to find marketing and business plans online, and just get a suggestion. The simpler the plan, the better.
Marc V: And scroll back. Go to CASPodcasts.com, and scroll back a handful of episodes. We interviewed a gentleman from the Small Business Association.
Mark S: Yes. The Small Business Development Council.
Marc V: Listen to that one, because for one, he talks about a bunch of this stuff, about the plan. And also about, in your community; in your city, county, state, there is a Small Business Development Council or SBA, or some other similar organization that will help you do this, for free.
Mark S: Yes. That is episode 52, by the way; Free Government Resources to Help You Start a Business.
Marc V: So, you can get help making a plan. You can look online. I’m sure there’s YouTube videos on it, there’s the SBA. Talk to other people who have successful small businesses. And if they happen to be one of those people that say “I just put a sign up, and I got a million dollars,” great! Find someone else to talk to, because that might not be you.
Mark S: Alright, so the first way to fail at a custom t-shirt business is to not have a plan on how you’re going to succeed.
Marc V: The next one that we wrote down here is about not having cash flow.
Mark S: Yeah. That’s the same example of the crepe shop near my house, because what happened was that person had a build-out into this retail location. He spent a lot of money on the sign and that cappuccino machine that I described. He was out of business in a few months, because he could not pay his rent.
So, not only did he not have the cash flow to make his monthly expenses, but he didn’t have the cash in the bank, to carry him while he got started.
Marc V: Yeah, and this is a lot of different things into one. For one, it does not mean that you necessarily have to have the physical cash on hand, when you get started.
Mark S: Right.
Marc V: This can be done with credit, credit cards, loans, loans from small investors, people you might know. Or it could just be something – collateral, your house. It could just be cash you’ve saved up. However you choose to invest in this business, that’s up to you. But you need to have the ability to buy things to support your business.
What does that mean? That means buy supplies, buy blank apparel, buy the right equipment to use it. Have some money to advertise, if you’re going to do that, at whatever level that means. If it’s just $100 for business cards, or it’s a $5,000 Google ad campaign, you’ve got to prepare for all of that.
You have to have some money aside or available to you, whether it’s credit or cash, to be able to operate your business.
Mark S: A lot of custom apparel entrepreneurs, they think that once they purchase the equipment, that their expenses are done, that that’s all they need to do. “All I need to do to get into the custom t-shirt business is buy a Digital HeatFX system, and make t-shirt transfers. Then, I get the blank t-shirts, or my customer brings them to me, and I’m set. That’s the last thing I need to do.”
That’s just not true. You’ve got two things that happen. Hopefully, you’re going to do well. That means you’re printing a lot of shirts, or you’re embroidering a lot of shirts, or you’re making a lot of bling. As you do that, your machine is going to require maintenance. If you’re doing any kind of printing technology, you’ve got to get ready to buy a new set of toner and a new set of ink.
This is part of that plan, and to have the cash available or the cash coming in, that allows you to do that in a way that doesn’t interrupt your business.
Marc V: Yeah. It’s also about how you operate and sell, and handle your customers. That’s a part of the cash flow scenario. I’ll give you an example from a friend of mine. He’s in roofing, and in the beginning of the year, he got the opportunity to take a huge job, you know, apartment complex size.
Mark S: I hear warning bells already!
Marc V: However, this is a large national company. It’s a great opportunity to get into. However, they are not the type that are going to – they’re not going to pay for the job up front. They’re going to want long terms to pay it off, because they’re a large business. They’ve got plenty of people who have this plan and this cash flow thing worked out.
They’re looking for somebody who – maybe not take advantage of, but somebody that they can get the best deal for them. So, he took that opportunity. It was a great business move for him.
However, it put him into a struggled cash flow position, because he had to buy thousands and thousands of dollars’ worth of supplies, thousands and thousands of dollars’ worth of labor. He’s still waiting for money on this job he did in January. He knows it’s coming, and he’s not concerned about it not coming, and some of it is coming in.
But in the beginning of the year, he struggled with it. However, the reason why he’s still in business and he’s successful, was because he knew that he had the cash flow to be able to do this. It was a risk for his business, but he had money in the bank. He had credit available. He had credit with the companies who provide the supplies.
Whatever it was that he had, he was able to do this. It cost him some money to make some money.
Mark S: He had the plan.
Marc V: He had the plan.
Mark S: Right. And he had the available cash flow.
Marc V: Exactly. Even though it was a risk, with his cash flow position lower than it was before, now he’s collecting on it, as well. So, these are things to think about.
If you’re going to do a job for a customer, you probably should require a deposit, because of cash flow. The job is going to cost this customer $2,000. “In order for me to do this, I take 50% down,” or 40%, 30%, 60%.
Mark S: Whatever it is.
Marc V: [inaudible 16:07] whatever you’re going to put together, because you’re going to have to buy blanks. You might have to buy more rhinestones or more paper, more ink. You’re going to have to buy these things, and there’s no guarantee that this customer is going to show up and pay that end balance. You assume they will.
You’ve already probably done a little bit of due diligence, making sure that they’re a legit business or they’re a good person, and that they’re serious about it. Part of them being serious is putting some money down. It’s going to help you with your cash flow.
We have plenty of customers who say “Everyone just wants to pay when they’re done.” Well, on the flip side -.
Mark S: That’s what I would want, too.
Marc V: That’s what I would want, too. But on the flip side of that, most of our customers take deposits for large orders.
Mark S: Absolutely.
Marc V: Most of them do. So, if you don’t, and you’re having cash flow issues, then this is something you need to work into your business plan.
Mark S: Yeah. I’ll say something else about that, in particular with supplies, because it’s on my mind a lot. We talk about this with Digital HeatFX and with our DTG printers, as well. People, because they don’t have a plan and understand their expenses, while they’re being successful, while they’re ramping up, while they’re getting these big orders, they’re not watching what’s happening with their supplies.
So, someone that’s shocked to find out that it costs you $300 for a liter of white ink, or it costs you how much for a complete toner set for a Digital HeatFX, let’s say that’s $800 or $900. People that are shocked to find that out, and are put in a really tight spot, because they’ve got this big order and they need that product to make it happen, those people did not have a plan, and understand how to work their cash flow.
Because when you ask the question “How much is a set of toner?”, I should be able to respond “Well, depending on the print on the shirt, it’s going to add about 10 cents to each shirt.”
Marc V: Yeah. And there’s so much of a focus that we see on our Custom Apparel Startups Facebook group and things like that, folks trying to figure out “Is there a way I can save $5 on my toner? I just want to be frugal. I’m just –“ whatever they’re trying to say. “I’m just trying to save whatever I can.”
The response I want to just say every time is “So, you want to save a penny a shirt? That’s what you’re looking to do? Are you looking to save a penny a shirt?” Because when I say it that way, it sounds a little ridiculous, doesn’t it?
However, folks aren’t thinking that way, from a cash flow perspective.
Mark S: They’re thinking “Oh, I’ve got to give somebody this amount of money, and how can I make that [inaudible 18:57]?”
Marc V: “I’ve got to give somebody $250 today. I’ve got a credit card that has $400 on it. $250 is more than half of that.” That’s how you’re thinking. You’re not thinking from a large scale business cash flow perspective.
Also, when you’re creating your t-shirts and you’re selling to your customers, oftentimes folks are just thinking about the blank, and how much that costs, and then selling, and not considering that part of that money. So, they gave that money to the blank company. Right? You went to SanMar, and you gave them $2 a shirt for a 20-shirt order. Or you gave them $40 plus shipping, etc.
But you didn’t take aside a few dollars for the toner.
Mark S: Yeah. “This job is also going to cost me $1.50 in direct-to-garment printer ink, or going to cost me 40 cents in pre-treat, or it’s going to cost me X number of dollars in toner.” That’s where the surprise comes in.
Marc V: Just one concept of how you could do something like this, a simple solution; what if you had an extra checking or savings business account? You can have as many as you want. What if one of them was a supply one, and every order that you did, you did a little bit of math on how much it was going to cost you in ink or toner or rhinestones, and you paid yourself that into that account, every time you did an order.
So, “This one order is $9 worth of supplies. I played $80 to SanMar, $9 to myself in this account.” That’s a simple way you can manage your own cash flow. Then, when you have to reorder, in theory, that number is the exact cost of the set of ink or toner or whatever.
Mark S: Yeah. I hope you can see, so far, how this is stacking up. It’s the plan and the cash flow. Then, you’re at the point where if you don’t have the plan, and you’re not paying attention to your cash flow, then you start with this big time waste, where you’re looking for that toner for $5 less, or the thread for three cents less, or direct-to-garment printer ink that no one’s tested before, but you can buy it for $10 less.
Marc V: Yeah, or garments.
Mark S: Oh, the cheap shirt.
Marc V: You end up going with the cheap shirt, or you end up ordering – “First I’m going to check this garment company. Then, this one, then this one, then this one, then this one. This one has the lowest. Oh, let me check the shipping on all of these. Alright, I just saved $11!” Cool, if you don’t have to spend $11.
But how much time did you spend going through that whole exercise, versus on your way to a customer to deliver something, you pick up the phone, you call up your supply company, and you say “I need to order some shirts. Here’s my list. I need 10 of this, 12 of this, 10 of this, 12 of this. Okay. Yeah, bill it to my normal credit card. Thanks! See you later.”
Our successful customers that are very busy, whether they order online or they call us on the phone, that’s exactly what happens. They are really busy people. Some of them do it on the phone, some do it online. They don’t have the time to waste, to try to save a few pennies a shirt. They don’t have time.
So, you’re wasting time. And it kind of goes back to another podcast, You’re Tripping Over Pennies.
Mark S: Absolutely.
Marc V: What if you took that time that you went out to the Facebook group, talked to a whole bunch of people, shopped online a whole bunch, trying to save. “I can get this shirt for 20 cents less. I have to order 50 of these shirts, blah, blah, blah.”
What if you spent all of that time trying to figure out a new way to get more customers?
Mark S: Listen, a couple of times a week, I see in the Custom Apparel Startups Facebook group, somebody starts with this sentence, “Where can I find the cheapest” t-shirt, hoodie, shoe, blanket, whatever it is. I’ll tell you, the answer to that is almost always Alibaba or Walmart. Right? And those are two place that you don’t want to buy your blanks, for a wide variety of reasons.
One of which is because you’re going to do that every time. You’re going to start from zero every time. Because the answer to “What’s the cheapest” anything, is what time is it right now? Because those prices are going to change.
Marc V: Always. And that’s why people will go into this habit of doing like they do [inaudible 23:37], every time. And listen, if you are Walmart, and you have some sort of like a Procurement Department – is that the right word I should be using? And they’ve got a team of people. They’re so big that they can spend – I don’t know how many people. Let’s just say they have ten people that do this, buy their garments.
They can spend eight hours, a full working day, trying to source one garment. But that means that they’re going to buy ten million of these things. So, when they save a penny, it’s a lot of money.
Mark S: It’s a big deal. That’s a good analogy.
Marc V: That’s not you. It’s just not you. How many shirts did you sell last year or last month? Do the math. “What if I saved ten cents?” How much does that really add up?
Mark S: Speaking of that whole combination of cheap shirts and wasting time, another way that you will waste your time, that you could be putting to more productive use, like trying to figure how to make more money. We had an example recently, that you told me about, with some wrinkled vinyl.
Marc V: Oh, yeah! Yeah, that actually was a good example. We sell vinyl to a lot of people all over the country. Every day, stacks of rolls go.
Mark S: Colman and Company is a big deal in the vinyl business, by the way. If you haven’t tried Triton Vinyl, you should.
Marc V: Thanks for the plug! We appreciate it. It’s a very good product. We love it.
But with that, we sell this stuff. We know the product’s good. For one, we’ve tested it ourselves. For two, our customers are testing it for us, when they order again and order again and order again.
So, somebody said online that they ordered this vinyl, and it wrinkled, meaning that they ordered it, it got washed once, and now the design looked like a crinkled mess a little bit, you know, like it puckered in on itself. Which isn’t really a vinyl problem. That could be a bad embroidery problem, but it’s not a DTG, that’s not a vinyl, because those aren’t problems with that technology.
So, comments underneath; “Oh, you should try this brand. I’ve never had that issue.” “I’ve never used that one, but I use this one.” “I’ve never seen that.” My comment is “I’ve never seen that on ours, myself.” So, I commented.
I’m the only person. There’s 20 comments here, of all professionals. You guys listening, people who should know better than me, honestly, because you do this every day. Nobody asked about the garment.
So, I said “It could be the garment. Are you using a cheap garment?” The response was “Yes, we were trying to use a cheaper shirt, because these are just the practice shirts for the team, and we wanted to save a little bit of money.” I’m like “That’s probably it right there.”
If you have a cheap garment, what happened? They washed it, the garment shrunk.
Mark S: Or twisted.
Marc V: That’s another weird thing that happens. Meaning that it shrunk unevenly, in different places. The reason why that is, is because a really good garment, whether you know it or not, is one of two things. It’s either chemically treated, so it does not do that. Or they specifically build it, so when it does shrink, it shrinks in the right manner, so the garment still retains its shape and uniformity.
So, that did not happen. It was a very, very cheap garment. It shrunk just enough, and now the design is twisted. It does not look right. It’s because of the garment. How much money was actually saved in that?
Now, in thinking about this, this was, I think, a volleyball team for a high school, if I recall. How many shirts could this have really been?
Mark S: Let’s say they tried the cheap shirt, and it’s $2 less.
Marc V: And no way it was that much less.
Mark S: Right, but $2. They buy two or three of these to try. So, they’ve got $2 less times two or three shirts. That’s $6. I don’t care about $6. What I care about is that she was online, soaking up all of these peoples’ time and her own time, trying to figure out what the problem was.
Marc V: And frustrating, and then turning around and maybe changing suppliers, because you think you bought a bad product.
Here’s another thing that is just further from it. You could end up switching the supply that you’re buying, and you could actually end up with a lower quality supply, because one anecdotal person made a comment, who has never used that t-shirt before. They only use this one brand of premium shirt.
So, there’s a lot of factors. When you trip over these pennies, if this person ended up saving a dollar a shirt, which was probably not even the case, and it’s for a volleyball team, I mean, what did they save? $20? $30? For the whole team, for the whole job?
Don’t trip over the pennies. Don’t waste time, trying to save money where it doesn’t need to go. And don’t waste time in general, just hovering over a ton of little things.
I’ve read people, “I’ve spent the past two hours looking for this font for this customer.” You should try to sell a different font to the customer. “Here’s all of the fonts I have.”
Mark S: Bring up a website with all of the fonts that you can find in the universe.
Marc V: And give the job to them. Again, this is all very complicated in the scheme of things, right? If you’re working on a job where you’re talking about you just got the opportunity to get a $20,000 job, and they want a specific font -.
Mark S: Find them the font!
Marc V: Find a company to make the font for you! I mean, whatever it is. But if it’s a small job, the successful businesspeople typically are not going to spend the time, spending two hours wasting the time, trying to find a font to do an eight shirt job, because they want to get the business. They’re going to say “Here’s one that’s close.”
Or “Here are the fonts I have available. I’m happy to do any of these for you. Or if you can find the font that you want online, that I can purchase from a reputable company, I’ll do that for you, and we can work that into the pricing.”
All of these are options.
Mark S: That’s a great idea.
Marc V: So, don’t waste time.
Mark S: I agree.
Marc V: What’s next, that we have?
Mark S: Next is kind of – we struggled. We had two different good names for this lesson in how to fail, and that’s “fear of investing” and “choking your growth.” I think choking your growth is a great way to say it.
What that means is that you are a busy shop. You’re kind of making it. You’re busy, you’re selling stuff, you’ve got some money coming in, and you find yourself running up against your own time, the limits of your own hours and capabilities.
In order to break through that, if I have the capacity, I’ve got the equipment and the supplies and the cash flow and the personnel to do 100 shirts a week. But I could do 200 shirts a week, or I could get orders for 400 or 500 shirts a week, if I had the capacity to handle those orders.
Marc V: This trickles back to all of the things that we talked about before, right? If you had a plan to say “I can make 100 shirts a week,” in that plan, “When I want to get to 200, what might I do?” Even if you’re not 100% sure, because you’re so new. “I might want to consider a second heat press. I might want to consider a faster machine, a bigger cutter, things like that.”
So, what might you do? You have a plan. Also, with your cash flow, you plan for that. “Okay, I know if I really want to grow, I’m going to want to invest another $2,000 in this heat press,” or whatever it might be. “So, I’m going to start putting aside, into my heat press growth fund, as I’m getting toward that 100 shirts, putting a little bit aside, for reinvestment into my business.”
Then, it’s the wasting time. You’re sitting, waiting a minute for every shirt. You’re sitting, you’re waiting. You can’t really multi-task as much as you’d like to, because you’ve only got 60 seconds between each thing. There’s not much else you can do. I mean, you can fold shirts and box them up and stuff.
You can’t really market or make a YouTube video, or something like that. So, you’re wasting time sitting, waiting.
Then, you’re afraid to invest.
Mark S: Yes.
Marc V: You’re afraid to say “But I just bought this other equipment three months ago. Now I’m going to buy another heat press.”
Mark S: Or you’re just cheap. You don’t want to spend the money. There’s no reason. There’s no rational reason. I know people like this. There’s no rational reason why you can’t spend the money.
You just don’t want to, or you don’t think you should have to. You think that this is the world that you live in, where “Okay, I have a heat press. I’ve got this, and I fill my orders. I’ve got my laptop. This is what I have to use, to make money.”
I just went to the Colman and Company site, because I think a heat press is a great example. And it’s ridiculous, because the best heat press that we sell, in my humble opinion, is the Fusion, the Hotronix Fusion.
Marc V: Yeah, it’s a good price.
Mark S: It’s $2,100. So, you could save a little bit over the year, while you grow, to add this heat press. Or you could finance it for as low as, according to the website, $57 a month. So, if you think another piece of equipment that only costs you the profit from six shirts every month, can free up time for you to make yourself more successful, and make more money, and you’re not doing it, then you are choking your own growth.
Marc V: Especially if you want to. If you’re saying, like “I want to make $100,000 a year. I want to pay myself $100,000 a year to run this business.” That’s your salary. “And right now, I’m at $60,000.” So, you have to grow. You have to nearly double your business, which means you need to nearly double your production.
So, think about that. “What’s the maximum amount of shirts I can do in an eight-hour day?” Or in a 10-hour day, or in the days that you work? “My maximum number is 200 a week. What can I do, if I need it to get to 400? What else would I need to do?”
So, you think “Well, if I added a heat press, I could get to 150.” Boom! That’s it. That comes back to your plan. Do you have the marketing to do that? Do you have the sales? “Yes. Actually I have a good sales plan.”
We’ve talked about 100 sales plans, if you listen to the podcast. Maybe your plan is Mark’s favorite; you take some samples and some business cards, and hit the road.
Mark S: Get in the car.
Marc V: Get in the car and just drop stuff off, and say “Hello! I’m local. I’m in the area. Can I help you with something?” If you had an extra four hours a week, to do that, and that’s the way you get business, and it works, if you saved four hours a week, that means you could take that four hours and be in the car, which means you can get more business. And you’ve got to be able [inaudible 35:24].
Mark S: And you make more money, and it will be more than $57 a month.
Marc V: It will be much more than that! There’s plenty of ways to do that. Folks that use credit, personal credit or business credit cards. You put $2,000 on the credit card, you pay it off. When you pay it off, you realize that that’s your next investment fund. “What am I going to do with it next?”
Mark S: Now, we tend to think in terms of marketing and equipment and supplies. But you could – that pivotal point for growth could also be another person. You could have all of the equipment you need, but you’re not able to run it the most efficiently.
Or maybe you could hire somebody for a reasonable hourly wage, while you go out and get back in the car, and go make sales, or do whatever you are great at, as opposed to heat pressing shirts.
Marc V: Yeah. There’s all different levels of that. After you finish all of your shirt production, maybe your next step is you fold them, you box them up, you make a thank-you card. You make it all nice and neat, you get it ready for delivery. And that takes you two hours or whatever it might be.
Well, that right there, that stage of it is a low paying job. It’s not expensive. It’s low skill work. You’re way above that. You’re the business owner. So, what if you paid a member of your family, or a friend or a neighbor’s kid, whatever it is. You say “Hey, what I’ll do is I’ll pay you $50 a week, and on Saturday morning, you come and you box up all of my orders. It’ll take you three hours.” However you want to do that.
And you find somebody to do some of this work for you. Maybe they don’t run your DTG printer for you, but maybe they can, if you’re doing Digital HeatFX, and you’re cutting transfers, that’s low skill. You can pay somebody $10 or $15 an hour to cut transfers for you.
So, that’s another way to invest, that’s not necessarily a big chunk for a $2,000 heat press or a $10,000 machine. Maybe it’s $50 a week, to buy yourself three hours of time, where you can spend whatever else you’re really good at.
Mark S: I love all of those options. So, the how to fail is to not have a plan, not have cash flow or cash, to waste a lot of your time doing the variety of things that we described, and choking your own growth and success, because you’re not willing to or thinking about the ability to reinvest, whether it’s in people or equipment.
Marc V: And then, also, just a tiny add-on to that – also, marketing and sales.
Mark S: Yes, please.
Marc V: Maybe it’s time that you, if you put a little ad in a local community paper and it’s working, put in two ads.
Mark S: Double that. Find another paper.
Marc V: You find another local paper that you can do it. Find something that works. Increase it, or if you’ve never tried it before, try some things. And there’s some podcasts where we talk about how to test these things, to see if they work.
Mark S: We’ve done a lot of podcasts!
Marc V: We’ve done approximately 61.
Mark S: We’ve done over 60! That’s for sure.
Marc V: The next thing is actually something that, for me, I see it so much and I hear of it, and it drives me nuts. It’s giving up out of frustration.
Mark S: Yeah.
Marc V: That’s true of everything, right? If you’re listening right now, and you’ve got a kid that is learning to play the piano or learning to play baseball, or learning to read, whatever age and stuff that they’re in, plenty of parents out there – what do you say? You’re teaching your kid how to read, and they’re struggling on the word “the.” They throw the book, because that’s what a kid would do.
What do you do? You go and you pick it up. “Come on! Try! Don’t give up!” And you know that they’re going to do it. Why? You see it from this high level thing, and you know that they’re going to do it, that in three months, they’re going to be reading every sign down the road. You teach them not to give up.
Mark S: I might smack them, and then go get the book, and be very encouraging. But we’re different.
Marc V: Then, what happens is you teach them how to read or you teach them how to swing a bat. You teach them don’t give up, and you pick up the bat and you hand it back to them. They swing again, and eventually they get it, and you see them succeed.
Then, what do you do? You put them to bed, and then you go online and you post that you’re going to throw your embroidery machine out the window.
Mark S: I like that.
Marc V: That’s actually what happened that day. You told your kid not to give up on their math homework. Then, you post online that you want to throw your embroidery machine out the window, because you’ve had it for less than a month, and you’re not a master. You’re not a master embroiderer yet.
Mark S: We get those call. Those come in as support and training calls to ColDesi. Someone will get a direct-to-garment printer, and they’ll come in for training. Or sometimes, they haven’t been to training yet. And they’re up and running, and they’re trying to print a shirt, and they’re having problems.
They call us, angry, because they’re frustrated, because they’re not accomplishing what they need to accomplish, or what they want to. It’s the frustration that’s the issue. Normally, the equipment is fine. Everything works the way it’s supposed to. It’s just getting over that hump of learning what to do and how to do it, and how to take care of everything.
Marc V: Sure. Everything within this world, not just the equipment or the supplies, but it could be your software. It could be the t-shirts you’re using. All of these things, you’re starting a small business that’s profitable, that not everybody does. The reason why every single person doesn’t do it is because it requires knowledge and training and time and learning lessons, and things like that.
Mark S: Agreed.
Marc V: So, you have to go into it, no matter if you’re reinvesting in new equipment or hiring a person. Hiring a person is going to come with all of those challenges, too. You have to go into this thinking all of this, that you’re not going to give up out of frustration. You’re going to realize that yes, maybe you’re going to have an issue with the t-shirts that you buy. They’re going to be faulty, when you take them out of the box. It’s going to happen.
Maybe you’re going to have an issue with your equipment. You turn it on, and it gives you an error code. These are all things that can and will happen over the time of you owning your business. You have to take a breath and say “My equipment’s not functioning right. These t-shirts. How am I going to solve this problem?”
Being angry will never solve it. Yelling at anybody is probably not going to solve it.
Mark S: And if you give up, you will not be successful!
Marc V: That is the opposite!
Mark S: That is the number one – I think we should move that to number one. Really, the number one way to fail in the custom t-shirt business is just to give up.
Marc V: Yeah. We mentioned some examples before. What did we look at? Like Steve Jobs, very famous, Apple, failed plenty of times. He lost tons of money in stock, all of these things. Right? However, he built one of the biggest brands in the world.
We look at like our President. So Trump, he’s a person that had all of these businesses. People love to talk about all of the failed businesses he had. However, just a relentless person. He did not give up.
You go through every example. KFC is one. I’m not even if sure if it’s an urban legend or real, the one that I mentioned. The story is that he had this recipe, and he was broke. He knew it was really good, and he was trying to make money. He went around the country to restaurants, and eventually he found somebody that was willing to work with him on this awesome chicken recipe.
Mark S: At the age of when you see his picture. Right? He was not 12.
Marc V: Yeah. These are all people, these are all examples, and there’s a million of them.
Mark S: WD-40 is 40, because the first 39 didn’t work.
Marc V: Another – Thomas Edison, with the light bulb situation. He didn’t technically invent the light bulb.
Mark S: Let’s not get into that.
Marc V: But he helped perfect it. Why? Because oftentimes, things don’t work out right, the first time. That’s what it is. And there’s this restaurant, [inaudible 43:52]?
Mark S: Yes. It’s near my house.
Marc V: Very close to your house, and it’s a very fancy steakhouse. It’s a really cool place.
Mark S: I do not eat there.
Marc V: I don’t eat there regularly, but it’s a cool place. One of the things you go to, when you go to their dessert room, which is actually a whole separate restaurant in the restaurant – a very hoity toity place – but one of the things that they talk about is their ice cream. They make this macadamia nut ice cream. The person who was making the ice cream was relentless on not giving up on making this perfect, amazing-tasting macadamia nut ice cream.
They tell you the whole story, when you go there. It was the 329th different recipe that they tried. I’m sure there were times where this person wanted to throw the spoon on the floor, throw the mixer out, kick over a jar of cream, whatever it would be. I’m thinking it was in jars, because this happened like 100 years ago.
Mark S: That’s fair, jars.
Marc V: Anyway, these are all stories of people who did not give up out of frustration, and became successful. If you give up, and you decide “I’m not going to turn this machine on anymore. I’m not going to buy any shirts anymore. I’m not going to try it anymore,” you’ve not achieved success. You’ve failed. You’ve decided to fail, at that point in time.
Mark S: So, giving up out of frustration is a big one. The next one is getting angry, rather than getting better. That’s kind of the same thing. They work hand in hand.
For example, if you can’t figure out how to use CorelDraw, and you think that’s an integral part of your business, and for some reason, you’re not willing to hire somebody to do that for you, then how does it help, to get angry about it? How does it help, when you buy a custom apparel piece of equipment, whether it’s an embroidery machine or a printing device or a bling machine, whatever it is, screen printing.
You have to create artwork. And we’ll tell people, for example, that you’re going to need to create the artwork. You can use one of the popular artwork programs. They get angry, because they can’t figure out how to use it. And they think the whole venture is dead. It doesn’t work, and it isn’t a true opportunity, because they get angry about not being able to use Photoshop.
Marc V: Yeah. And there are, in Photoshop or CorelDraw or Illustrator, or all of these programs, they are very easy things you can do. You can type out some lettering, and twist it and curve it and boom, print it on a shirt. That doesn’t take long. You can watch one YouTube video, and learn that in five minutes.
However, a customer gives you a really poor piece of artwork, and they’re asking you to customize some things. These are level things. Level one is printing some text onto a t-shirt, with an arc. You can YouTube video, five minutes, you learned how to do it.
Taking bad art, customizing it, creating custom colors that blend together, that’s level ten stuff. If you’re brand new to this and you don’t know how to do it, and you try to do something that’s a level ten, you have no right to be angry. Sorry, you can feel angry. You can walk away and be angry for a couple minutes, and come back.
But if you’re – going back to a kid – if you’re teaching a kid piano, and then you drop Mozart as the first thing for them to learn -.
Mark S: That’s going to be frustrating, and cause anger.
Marc V: Yes, exactly!
Mark S: I don’t want to hear them trying to do that!
Marc V: No! You give them like Chopsticks, or Mary had a Little Lamb.
Mark S: One of the things about getting angry rather than getting better, that strikes me as being most important, is don’t get angry at yourself. We get those phone calls. People are angry at us because they didn’t know they were going to have to know accounting. They didn’t know that they were going to have to make the lease payment every month. They didn’t know that CorelDraw wasn’t as easy as opening up a bottle of milk.
They didn’t know these things. What they really are is angry at themselves, because they didn’t know. They get angry, because they’re into the business, they’ve spent all this money or they’ve spent all this time learning how to do something, and they’re angry at themselves, because they didn’t realize customers wouldn’t just call them, because they made a nice shirt.
They’re angry at themselves, because they didn’t realize that they had to order ink. They didn’t realize that they may one day get a shirt that doesn’t work with the process that they [inaudible 48:29]. They didn’t realize that customers wouldn’t pay them.
So, they get angry with themselves, and they start lashing out. Then, they give up on their business, or they spend their business time with their fingers directly out in front of them, pointing at everyone that they can find.
Marc V: Yeah. Also, you can’t get angry because the world doesn’t revolve around your timing and your business and your needs. That’s the other thing, is that folks will go to order a t-shirt, and then they’re really upset at their t-shirt supplier, because they’re out of inventory in their Georgia warehouse. Now, it has to come from Indiana, and it’s going to take an extra day to get there, or two days to get there.
And they’re really angry. “How can you be out of stock on this t-shirt?” Well, guess what? No matter where you buy something from anywhere in the world, at some point in time, they’re going to run out, for a million reasons. There could be a manufacturing issue. There could be a snowstorm, and the truck that’s delivering the product -.
It could just be that they never – what happens with us every once in a while, like with rhinestones, we can have ten bags of rhinestones, that that particular color, size and style, we will sell a bag in a month. The next month, we could sell 70.
Mark S: Right, because somebody just like you got that big job that they’ve been trying to get, and all of a sudden, they need 57 million of that color rhinestones.
Marc V: Yeah, or their customer went through a brand change. Their colors used to be red and green, and now their colors are red, white and blue. So, they call you up and say “Next order, we need to change the red,” etc.
Then, all of a sudden, there’s this big influx of these immediate changes that happen. This happens all over the place. I’m sure there’s a million stories about how there was a shortage of green dye, when the Green Bay Packers started, and things like that.
Mark S: Is that why they call it Green Bay?
Marc V: I don’t know.
Mark S: Interesting. Okay, the last thing that I think we should talk about on how to fail at the custom t-shirt business is kind of an old saw. It’s over-promising and under-delivering. It goes back to the planning and the cash flow, and the choking your investments, and the getting angry, and the giving up, and trying to do everything yourself.
Over-promising and under-delivering normally takes place when you are excited about a new customer, and you take the order, without realizing or taking the time to think about what you’re going to need, to accomplish it.
What happens is you get an order for 125 shirts from a University. And they’re not just regular shirts, but they’re this particular Nike polo in a particular color that needs to come in and match the University color, and you’re going to do the embroidery on it. You get a hold of SanMar or your vendor of choice, after you take the order, and after you promise when it’s going to be delivered.
That’s when you realize that they’re out of stock.
Marc V: Then, everything above happens, that we talked about before. You’re angry and you’re frustrated. Now, you’re in a position where you’re in a really tough spot with your customer. So, you need to prepare for that, for over-promising.
Mark S: Usually, successful people take the other tactic. They under-promise and over-deliver. For example, how excited would you be if you ordered your brand new Digital HeatFX system, and we told you it was going to be two weeks to delivery, and you got it in eight days? That’s amazing! Right?
You’re excited! You’re like “Wow! This company’s great! I love it! I can’t wait to get started. I get to do my training early.” Now, how about if we told you that it was going to be two weeks to delivery, and it was three?
Now, all of a sudden, you’re still getting the same product, you’re still getting the great service, you’re still getting the training. Everything is exactly the same, but it’s late.
I order supplements from Amazon, and coffee from Amazon. And for some reason, the local warehouse has trouble finding my house.
So, on more than one occasion, even though I don’t need these things right away, and I have a backup supply, because I’m a bit of a planner. But if Amazon tells me “Your package is out for delivery. Your package will be there tomorrow, before 9:00. Your package is on the truck right now.” If I don’t get the package for another day, even though I don’t need it, it ticks me off.
I’m angry. I do reviews based on that.
Marc V: I ordered a Christmas gift, and it’s a book. It said it was going to be delivered on the 4th. I was really excited to get it, because it was a very cool, unique gift. So, I really want to see it. I can’t wait to see it. I still do not have it yet.
So, I got home on the 4th, and I was stoked to see this. I was like, “It’s going to be cool!” And I was bothered.
Mark S: Yeah. It’s not there.
Marc V: I don’t need it for a long time. I’ve got so much time. I don’t even need to look at it right away. Like, it doesn’t change anything. But if they would have said “We’re really busy. They’ll all going to be delivered on the 15th, okay.
Mark S: Still a little like “Eh.”
Marc V: Yeah, but I still would have ordered it. And we run into that, like you mentioned, with the printers. They’re in high demand, and we still have to deal with the big trucking companies. We’re not getting 100 printers delivered on a UPS truck.
They’re coming with a big trucking company. They’re coming on a boat, in a container.
Mark S: It’s got to go through the port.
Marc V: It’s going through the port. And guess what? We’ve just had, in our country, three major disasters this summer, that have eaten up ports and trucking companies and ships, with Puerto Rico and Florida and Texas.
So, they’re all strapped. They’re all tight. They used to have clear shots to do this. But the government is actually telling them “No, you need to make a stop in Puerto Rico to deliver this for us, first,” or however it works. There’s all of these things, and all of this stuff causes delays and issues, and things like that.
You try to promise to the customer the time it’s going to be. Sometimes it works out, and sometimes it doesn’t, but you have to do your best. If you think you’re going to be able to deliver the shirts on Friday, tell them Monday, as long as – “Hey, is a Monday delivery going to be fine?” If they say “Oh, yeah. We don’t need the shirts until Friday,” “Okay, great!”
“Actually, let’s do this. Let’s just plan for Tuesday morning, that I’ll deliver it. So, I’ll deliver them on Tuesday morning. I’ve got a busy day on Monday. I could probably bring them, but let’s plan for Tuesday morning, since you don’t need them until Friday. Then on Tuesday, you can take a look at everything and verify it. If there’s an issue, you call me on Tuesday or Wednesday. Then, that gives us Wednesday or Thursday to fix an issue.”
Mark S: That’s a great point.
Marc V: But you knew you were probably going to be done at the end of the day on Thursday. So, Friday morning, you give them, “Hey, I finished your shirts. I’m going to be in your area.”
Mark S: What? That’s awesome!
Marc V: Yeah. “Are you going to be around at 9:00? I can come by and drop them off.” That person is just – here comes the Google review. “Delivered on time, delivered early.” And even if you messed up a shirt, on Monday they call you. “Hey, one of the designs was upside down.” You laugh about it, you fix it.
They’re still going to give you a good review, compared to if you said “Oh, yeah. First thing Friday.” But then, your power goes out Thursday night. It halts you for three hours.
Mark S: You ran out of ink.
Marc V: Yeah, all of these things. Some controllable, some not. Some are going to be because you didn’t plan or you didn’t have cash flow. Others are going to be just things happen. The power goes out, or whatever could happen. Then, you don’t deliver to them Friday morning. Again, they don’t need them until next Friday.
But you didn’t deliver on Friday morning. You call them up and you say “Hey, I’m going to be there Monday.” “Oh, alright.” And then, you put a design on upside down. Here comes the Google review; “Not only were they late, they also put a design on upside down.”
Mark S: And you worried that guy for the whole weekend.
Marc V: Yeah. And in the end, both stories end up with they got their shirts the Friday that they needed them, and every one fit, and the product was good. One of them was a negative review, and one of them was a positive review, due to what you promised and how you delivered.
Mark S: That’s great. So, to sum up how to fail at the custom t-shirt business, and I hope none of you do any of these things. How to fail is not to have a plan. It’s not to have the cash flow or the cash in the bank to run your business. It’s wasting time on things that you realize that you should not waste time on.
It’s choking your growth, by a fear to invest, or an irrational look at your own numbers, and the money that you are going to spend. It’s giving up your whole business or a product line, out of frustration. Getting angry, rather than getting better.
Over-promising and under-delivering.
Marc V: With saying this, all of this stuff, all of these rules are how to fail. These are all general practice issues, right? So, you can break any of these rules, at any point in time, every once in a while, due to extenuating circumstances.
So, you’re going to have a time where you decide to not invest in that heat press now. You waited. You’re going to have the time where you wasted a bunch of time messing with art that you shouldn’t have done it. You’re going to have the time where, like that roofing example, you’re way beyond your cash flow rules.
However, the same thing is true with like working out. A healthy person who is in good shape, they work out every day. But hey, it’s their birthday weekend. They’re not going to work out. They’re going to drink a bunch of wine and eat a bunch of food and a bunch of cake. But that doesn’t mean that all of a sudden, now they’re out of shape and in bad health.
That doesn’t mean that because you broke some of these rules. The key of it is the practice, over time, that you’re constantly [inaudible 59:15] do this in your business. You’re constantly concerned about these things, watching out for them. So then, when you do have to break it every once in a while, you know that you’re making a good choice.
Mark S: Yes, and that could be part of your plan.
Marc V: Yeah. It should be part of your plan. I think this is good stuff. I don’t want anybody to fail, but I will tell you that the folks who don’t practice this stuff or who do these things, increase their likelihood of failing, significantly.
Mark S: We’re going to do a couple of things. I’m going to link to episode 52, which is those free government resources, to help you start a business. That is a great place to start researching your plan, or putting one in place.
Also, we’re updating this great blog post that Marc Vila had written some time ago; 18 Rules to Guarantee a Successful T-Shirt and Apparel Business. I think this is going to be something that you’re going to want to print out and tape on the fridge, or put it on your worktable, so you can refer back to these 18 things, and just make sure that you’re not contributing to your own failure, by not following the right rules.
Marc V: So, we’ll have that as a download.
Mark S: Yeah. You’ll go to the show notes page for this episode, episode 62, and click on the link, and you can download it.
Marc V: So, that’s CAS, like Custom Apparel Startups. CASPodcasts.com. The episodes are in order right there, so this one should be toward the top, if you’re listening to it when it just got published. If not, scroll down to episode 62, and when you click on it in there, you’ll see some notes. We usually make some little comments there, and you will see a link to download that.
You’ll also see a link to that other podcast, so we can talk about building a plan. And then, while you’re on the site, you should scroll through other episodes, if you haven’t heard them all. Find some that are good for you. Bookmark them, download them to your phone, if you listen to it on a podcast app.
Then, go through and look at other show notes. Because in some other show notes, too, we’ve put some other links.
Mark S: Yeah, that’s good information.
Marc V: So, look around, and then, reach out to us if you want to talk to us about anything that we’ve spoken about on the podcast.
Mark S: I like that. We are going to engage – episode 63 is going to be another lesson in not failing. So, I can’t wait for you to listen to that one, as well!
Marc V: Awesome! I’m stoked for that one!
Mark S: Alright, everyone. Thank you for listening to the Custom Apparel Startups podcast. This has been Mark Stephenson, from ColDesi.
Marc V: And Marc Vila, from Colman and Company.
Mark S: You guys have a good business!
Podcast: Play in new window | Download