- Your equipment will break.
- You will lose the internet for 3 days
- You will ruin the shirts
- Your supplier will be out of blanks, supplies, catalogs
- You’re going to have a bad month.. or 3
- Equipment failure
- Know your vendors contact info and procedures for getting help
- Understand what’s under warranty and what you’ll have to pay for
- Set aside emergency funds
- Have a company you know you can contract out the work too so you can still service your customers
- Internet is Down
- Make sure you have paper back up forms so you can still take phone orders
- Sign up for a plan with your cell phone provider so you can use your phone as a hotspot and bypass local internet
- You ruined shirts
- You’ve got to order for wasteage – especially if you are ordering something custom or that’s not showing tons in stock at your supplier
- Have a defined policy about this – what do you say to customers? How will you compensate them for a delay?
- Your Supplier is out of XYZ! Maybe a ship sank, or a factory closed or a production run failed quality control – there are lots of reasons why your supplier might not have what you need…
- Keep Stock of what you NEED to run your business. For most equipment, inks, toners, papers, substrates and parts there’s either no expiration date or it’s pretty far out. Don’t order this stuff just when you need it. Keep it on hand.
- Find an alternate product or supplier.
- Bad sales months happen.
- Keep a cash reserve
- identify what financial resources (like credit cards) you can use in an emergency
- Listen to the how to sell more next month podcasts.
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 87 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 talking about what to do when bad things happen.
Mark S: And they will, trust me. They will. We’ve got a subtitle here, “What to do when something goes wrong.”
Marc V: Yeah. You’re in business.
Mark S: So, something will go wrong.
Marc V: Absolutely. First of all, you’re alive on this Earth. So, something is definitely going to go wrong, period. Right? In your life, no matter what it is.
Mark S: If you’re over the age of three, then you’ve had something bad happen.
Marc V: What we’re trying to do here is we want to talk about, to help you prepare for when things go bad in your business. When something bad happens, how do you solve the problem? You know, go away from feeling that everything is crashing down on you, to feeling prepared and empowered, when these bad things happen.
Mark S: First, I thought that we would have a little confession time, and talk about some of the worst business things that have happened to us.
When I first started with Colman and Company years ago, we were doing quite a bit, every day. So, when the website didn’t work every day, you’re talking $5,000, $10,000, $15,000 in business, that were just gone. They were just completely gone.
For a while there, we had a lot of power outages in central Florida. You know, the power would go out for a day or so. The third time that happened, I finally figured out that I could take my laptop, and I could drive until I found a Starbucks that had wifi, and I could run the business from there.
If I would have known what to do, I can’t imagine. And do not tell the President of the company how much money we lost, because the internet was down in the building, and we couldn’t accept orders, or we couldn’t respond to accepted orders – the website was still working. The internet was down, the website was still working, but we couldn’t do anything about it.
So basically, I found a Starbucks that had good wifi. I posted up on my phone. And now, from then on, if we did have any interruption of service at all, I would drive to the nearest place with a hotspot. I keep the laptop with me or in my car, and we just continue on doing business.
Marc V: This was years ago, where now, in things you’ve done and things I’ve done, we’ve built up Colman and Company as a company, to be able to accept that a lot better, and prepare. So now, if the power goes out here, 99% of our customers never know that it’s happening.
Not all of our server space and all of those things aren’t just in one spot. We’ve got backups, and different things like that.
These are lessons that we’ve learned over time, and you’re going to deal with the same thing in your business. We don’t know what problems are going to happen. We’ll list a few things that could.
But when you start to become prepared, and you know what’s happening again – if the server is down for a period of time, or something like that, sometimes we don’t even know that the main server has gone down. It went down, and we hear about it after the fact.
Mark S: Right. That’s a great example of, you know that’s going to happen at some point. I don’t care where you are or where you live, or where you do your business. Something is going to do something to interrupt your internet.
It could be power. It could be the server for your website. It could be anything in your area, that prevents your customers from going online and placing an order, or prevents you from fulfilling it.
Marc V: Yeah. This could be power goes out in your shop, and you can’t answer the phone in there. Or if the customers would normally walk into your shop and you don’t have power, you don’t have lights. What are you doing?
For example, at my Publix that I went to the other day, a perfect example. It’s a grocery store locally, if you’re not familiar with it. They live in Florida, so they are very experienced with power going out. Storms happen, power goes out.
Well, they were on this as if it just was normal day-to-day practice. All of the credit card machines and the point of sale services were all on the backup type of power. The big hubs that are on the ground, that you can plug in the wall. By the way, you can buy one of those for your business, yourself. They’re not that expensive.
Anyway, all of that is running on there. Then, flashlights everywhere. It was like they had a rack of them ready to go, charged up. All of the staff was just walking around with flashlights, walking around customers, literally just “What are you looking for today? Cereal?” Shining the flashlights, to keep business going, because really, they just knew all I wanted to do was come in, buy my dinner, and go home. And they let me do that.
Mark S: And as a consumer, nobody cares if your power is out. Really, no one cares. Your customers don’t really care that much about you. If they’re waiting for a shipment, if they’re looking for a great t-shirt, if they need to stop for groceries, if they need to place an order for ink at the last minute, they don’t care what’s happening here, really.
What they really care about is are you providing the service or the product that they called about.
We know that bad things are going to happen to you, and kind of have got an idea of what they will be, unfortunately. Maybe we can, through this podcast, walk you through the one, two, three of what you should do, and what you should be prepared for.
Marc V: I suppose what we could start off with are, we wrote down three basic rules of what to make sure, absolutely, what happens, at the very first, the first issue you know. Like you know that something bad has just happened.
We’ve named off a few, but whenever anything bad does happen, you’re going to kind of get into this fight or flight mode, and you need to stop that.
The first one is don’t panic.
Mark S: Right. If you’ve read the Hitchhiker’s Guide to the Galaxy, you’ll know that’s right on the front of the guide, not to panic.
Marc V: And if you haven’t, you should.
Mark S: You should, because it’s an awesome book, and I won’t seem as much like a nerd, if you do that.
Really, that’s it. Your equipment is going to break. Your supplier is going to be out of stuff. You’re going to have a bad month, financially. You lose a big customer.
The first thing to do is not to panic, because those decisions that you make, which is number two, when you do panic and fall apart, are usually the worst decisions in any given situation.
Marc V: Yeah. You’re going to make a bad decision, if you’re panicking, and you’re looking for the first answer. Because kind of what it is, is what’s happening in your brain is you’re panicking, you’re freaking out. Your body is looking for a way to solve this.
This is primal caveman type of stuff. There’s a fire in the cave, run out. Grab the baby, and run out. That’s what you’re running into.
Mark S: Grab the baby, that’s a good move.
Marc V: Yeah. Grab the baby, run out. Now, our problems are more sophisticated, but we still have these issues of just grab the baby, and get away from the fire. But now, it’s “I just lost a big customer, and I’m going to lose $5,000 in income next month.”
Mark S: Right.
Marc V: So, you have to step out of that panic mode, because you’re not trying to run away from a fire. You’re trying to solve a real problem.
Mark S: And that’s the way, really, to look at it, because things are going to happen. Some of them may be your fault, that you refuse to recognize. Some of them may be somebody else’s fault. But it really doesn’t matter.
So, if I could add to don’t panic and don’t make irrational decisions, is don’t spend the vital time that you have to fix or correct a problem on trying to figure out who to blame. For example, an irrational decision, if you have an equipment failure, would be to call up and start screaming at a technician, maybe at the only technician who can help you.
That’s not a good move. That’s from panic. That’s because you’re worried. You’re scared you’re going to lose the business. You’re worried that you’re not going to make it. You’re afraid that your equipment is going to cost you $1 million to replace or to fix.
Don’t panic. Sit back. Get a strategy in place, in the ways that we’re about to talk about, and go from there. You’ll be able to deal with it better.
Marc V: The first one that you said was the first one that I listed, too, was that when you panic, one of the first irrational decisions you’re going to make is you’re going to lash out at somebody.
Mark S: That’s a good way to put it.
Marc V: It doesn’t help. This could be your business partner, it could be a customer, it could be one of your suppliers. It could be your machine. It could be one of your machines, or a wall that you choose to punch.
Mark S: Or worse, an employee that you take a swing at! But picture it. If you’re in business, you’ve probably been here before, in some level.
I, at one time, imported bamboo fabric t-shirts from Asia.
Marc V: Oh, alright. Good place to import bamboo from.
Mark S: We did a great logo for it. I spent way too much time on my logo. We found the fabric that we loved, and we found what we thought was a good place to get them. We spent all of our money, and we got these shirts in, and they were all skewed. It was terrible quality.
My first instinct was to get on Skype, and to digitally scream at the supplier. What kind of a mood do you think that put that person in, to help me solve my problem? Not a good one. Right?
Marc V: What you don’t want, is you don’t want your irrational decisions now, to be something that affects you for the long run.
Mark S: So, don’t yell at anybody. Don’t ignore the problem.
Marc V: Don’t ignore it. That’s number two, for the irrational decisions. You think that just like you sweep the dust under the rug and you walk over it, but it’s still there, and it will build up over time.
Mark S: In a few circumstances, we were talking before we started recording, on the Custom Apparel Startups Facebook group, we’ll run into some comments, and on the phone with customers. I talk to customers all of the time, every day.
The same kind of themes will come up, a few times a year. One will be “I tried using the Avance 1501C, and it did a crappy job at this. It’s been sitting in a corner, for two years.” “I’ve got a DTG printer, and I went away on a 30-day vacation to Aruba. I came back, and nobody had maintained the machine for me. So, I’m ticked off at it. I need a new print head. So, I just left it alone, and went on and did something else.”
Marc V: Yeah. And people do it with everything else. You could buy a nice version of QuickBooks, because you decide you’re going to take control of your money, and do it way better than you’ve ever done it before. Then, you get frustrated. You can’t figure out how to use it, and then you just never open up the software, and you’ve got expensive software that you’ve ignored.
You got frustrated, you panicked, gave up.
Mark S: Yeah. You leave the temporary tire on your car for a year and a half.
Marc V: Then, what’s really bad about that is that the problem still exists, like the QuickBooks example. You were having some issues managing money, right? And you figured here’s a good solution. Then, you got frustrated, you panicked, you quit. You still have the money problem. But now, you have a bigger money problem, because you’ve got whatever, $1,000 in software that you’re ignoring.
Mark S: it’s not going to get better, if you leave it alone. Also, be careful about implementing these stopgap measures. If you have a commercial piece of equipment, if you’ve got a really big customer that’s relying on you, be careful about thinking of something on the spot, to solve the problem, that isn’t a good, tested, regular or long-term solution.
Because you could easily end up doing more damage. Like the spare tire example. It’s designed to be a stopgap, but I have seen people in our employee parking lot, that have that temporary tire on for, you know, four or six weeks. It’s because they can still get to work.
If you have a problem, whether it’s a customer or an employee, or anything in business, don’t go for the temporary fixes, unless they’re strategic, and you’ve planned them in advance.
Marc V: And sometimes, that temporary fix is just something that becomes – not only can you waste money doing it, but it can actually snowball the problem.
The example I thought of in my head, when I was thinking about wasting money, was you order a bunch of shirts from your apparel supplier. They call you up or you get an email, “Delay.” The shirts are going to be two days late, whatever the reason is. It doesn’t matter.
So, you panic, because your customer is expecting the shirts on Friday. Now you know you can’t deliver them until Monday, or whatever it’s going to be. So, the rational thought might be “Let me call my customer, talk them out. Maybe they’ll be fine with it. Maybe I can offer them something.”
The panic solution might be call them up, yell. Which the person on the phone did not pack them, ship them, or is in charge of the truck.
Mark S: Yeah. They’re not driving the UPS truck.
Marc V: So, you yell at them. You immediately cancel the order. You rush to find a secondary supplier. You spend more money on shirts that you’ve never used before. You order the shirts. You do them. Maybe it doesn’t go so terrible. The shirts turn out well.
Now, your customer calls back again. Now, they want these shirts again, from that other supplier, which are more expensive, less profitable, harder to get. You don’t have the same business relationship.
Mark S: You’ve hit your margin, long-term, and you still have to do something with that shipment of shirts that will get to your shop, eventually.
Marc V: Yeah, because you tried to cancel them, but they’re going to send them anyway. You get them, because you called to cancel, but they’re already on the truck. You can imagine all of these things that happen. So, you’ve got to slow down.
Mark S: Here’s what we would like. I think after the podcast is done, I’d love you guys to all have a list of the bad things that may happen, and what you’re going to do, when they happen.
As we’re talking, jot things down that you can imagine in your business, might happen. Equipment failure. We’re going to go through some, but keep your own notes. “What are the bad things that might happen, that prevent me from being successful and making money in the business? And what am I going to do about them, when they happen?” Because they will.
Marc V: What you could do for a pre-exercise is write down a few bad things that have happened. Okay? So, if you’ve already had two or three bad things that happened within your business, or it could be in your personal life, but it’s business-related. Like maybe a financial issue, or something like that.
Say, write some down, and “Alright, I did good on this one. What lessons can I learn from myself? I did poorly in this one. What could I or should I have done differently?”
Now, you start to build up some “this was good, this was bad,” and you build up a trend. Then, you take that, and you think of it on forward examples. Then, we’re going to show you some things here, where you’re going to write some things down.
You’re going to take notes, and you’re going to have a plan in place, for a bunch of predictable problems. Things that have happened to all of your competition. And if they haven’t happened to you, they probably will one day, because they’re common issues.
Mark S: I think that’s going to be our next survey on the Custom Apparel Startups Facebook group.
Marc V: Yeah, what issues?
Mark S: What have been your big problems?
Marc V: That’s great. So, don’t panic, don’t make irrational decisions. And then the last, do execute the plans that you have in place, because you listened to this podcast.
Mark S: That’s my favorite. Then, call us and give us credit. That’s really what we want.
Marc V: That’s all we’re looking for, is the credit for having done nothing more than tell you to solve your problems in a good way.
Mark S: Well, let’s wrap this podcast up!
Marc V: Yeah, alright! So, you take credit for everything good your children have ever done, then, I gather. Right? And everything bad was their fault, because they didn’t listen to your advice.
Mark S: Or their mother’s. One or the other, although I’d never say that to her.
Okay, so the first one that we’re going to talk about – the first bad thing that will happen at some point is one that we have experience with, because I don’t know if you guys knew this or not, but ColDesi and Colman and Company have been in business for either 21 or about 50 years, depending on how you look at it.
Marc V: That’s true, though.
Mark S: And we have either about 21,000 or 35,000 customers that we’ve put in, or grown their business. So, think about how many pieces of equipment that is. Some of them get old, and some of them break. Believe it or not, even if you buy the best piece of equipment, even your Mercedes or your Lambo, at some point, is going to need more than an oil change.
It’s equipment. If you use it, it’s going to break. And in some cases, if you don’t use it, it’s going to break. It’s not if your equipment has an issue, it’s what are you going to do, when your equipment has an issue?
Marc V: Yes. You have to remember that the equipment, that this is important for this. But equipment also falls under computers, laptops, iPads, software, anything that you use, that’s a piece of technology, even your phone. These are all things that will break.
The reason why this is so important is because people will run into “I’ve got the best of this and the best of this.” Imagine, “I’ve got the iPad. I’ve bought the best desktop computer. I’ve got the best DTG printer out there. I’ve got the best.” Whatever you’re thinking you’re thinking you’ve got the best at, and they don’t break.
“I’ve had this name brand of cutter for 15 years, and I’ve never had one problem.” That’s great. That’s why they’re considered to be great. However, that doesn’t mean that none of them have ever broken.
Mark S: Yeah. And honestly, that’s probably not true, anyway. They just don’t remember all of the issues. They really don’t.
Marc V: Also, the damaging of equipment isn’t necessarily the equipment or the manufacturing fault. You’re talking power surges, you spilled coffee on something. There’s so many things.
Mark S: it could be you or your employees. You think your employee is doing everything right, and they put pre-treat instead of white ink in the bottle for some reason. No one can figure out why that happens, but it does happen.
Marc V: So, equipment is going to fail. What are some things you could do, Mark?
Mark S: First, I want you to understand this. Your equipment will only fail, when you’re trying to use it. It’s not going to fail, when you’re not using it. It will fail in the middle of an order.
You need to figure out what you’re going to do. The first thing that you’re going to do is make it easy to find your vendor’s service information. Know for a fact, who do you contact, and what’s the best way to contact them, and what do they require?
For example, if you have a piece of ColDesi equipment, and you have a problem, we’ve got a great support site. So, here’s what you can do. Number one, you go to Support.ColDesi.com, and you fill out a support request.
They always ask for pictures. You should know that in advance. So, if it’s something visual, take a picture of it. Include it in the request.
At the same time, right after you do that, go check out the ColDesi-Colman YouTube channel, and see if there’s any solutions there, because you may fix the problem, by the time they get back to you.
Marc V: On the Support site, there’s also solutions and common things on there you run into.
Mark S: Absolutely. That’s what you want to know. You want to know what is the procedure for getting help with the software, with the hardware, with anything having to do with running your business.
Marc V: Yep. And again, true, if you have a computer, whatever it is, you’ve got to know on this, where you can fix everything.
Another thing you can do for preventative, on top of this, is before you have an issue, visit the support site. Kind of get familiar with it. Know where you see some videos. Maybe you just skim them over. That one-minute glance could trigger something six months from now. You’re like “You know what? I remember looking at that.”
Mark S: “There’s a solution for that.”
Marc V: And you didn’t even have to open up a ticket. That’s the equivalent of anything. You get your phone, just flip through the instructions and the manual.
One thing I often do is when I get something new, I go to the troubleshooting section. I just look at what problems can happen. I’m like “Okay, when I go to set up, if any of this happens, I know it’s right here.”
Mark S: You’re the worst kind of pessimist. You really are. I only read the instructions after I’m finished on the third tech support call.
All of that’s true. What you really should do is you should know in advance, what’s covered under warranty, and what you’re going to have to pay for. So, when you buy a new car, even if it’s a seven-year or 57-year bumper to bumper warranty, you understand that if you never change the oil, that’s going to impact your warranty.
If you get a flat tire, if there’s road damage, even with a great warranty, there are things that you’re going to be responsible for. So, what you should do in advance is you should know what those are, and how much they’re going to cost you.
Marc V: Which leads to the next one; to set aside some emergency funds for the possibility of something going wrong. This could be, again, everything.
We’re talking a lot about equipment, because we have the most experience. But if your phone falls into a lake while you’re fishing, you’re going to need to replace that phone as soon as possible, especially if you run your business from your mobile phone.
You’re going to need to replace it immediately. Do you have the money to be able to go and replace that phone ASAP?
Mark S: Or, and this go to something further down, do you have an old phone that you can turn on temporarily, to take care of it?
Marc V: There you go. Yeah.
Mark S: There’s going to be a disaster, so the more you know in advance about what you’re going to do to respond to it, the less of a disaster it’s going to be.
With equipment, that’s it.
Marc V: One of the things we have, the DTG, the M2 has like an emergency kit. What’s it called?
Mark S: An emergency kit.
Marc V: Okay, there we go.
Mark S: That’s what it is.
Marc V: You actually can buy a kit, in case. These are the common things that people damage. The same with an embroidery machine. There’s things that will be replaced, like your rotary hook, your bobbin case.
Mark S: You’re going to hit a hoop, so you’re going to need to replace the reciprocator at some point.
Marc V: Yeah. These are things that you can just buy ahead of time, knowing that you have it. Anyone who is like my neighbor, he’s always prepared for something to break in his house. So, I always stop by there first, when something breaks, because he’s like “I’ve got a couple of those PVC connectors. You never know when those sprinklers are going to bust.”
Mark S: I just had a great idea for a website that we should start. “CustomApparelPreppers.com.” We could prep for the end of things, for custom apparel.
Marc V: You should have protected that URL.
Mark S: I know. I like this last tip even more, because it makes sense, and it will help you relax. It’s certainly the first thing that we advise people, when we’re talking to them on the CAS group. If you have an equipment failure, if you have a problem, if you can’t get an order out, the most common thing that we hear is “I have to get this order out by X, or I’m going to lose this customer.”
So, how valuable is that customer? You should have people that you’ve vetted in advance, that can back you up. You should have contract decorators that you can call. We do that all of the time.
If you do transfers, and you got a bad batch of paper, or if you do transfers, and your heat press goes down, and you can’t do that, who can you call that can fulfill that order for you, on your behalf, that you trust?
Marc V: Especially like you mentioned power being out. If there’s a major power outage in your area, that knocks you down for two days, your heat press requires power. And that backup little power source is going to be fine for running your computer and taking a phone call, but not a heat press.
These things are important. What we see on Custom Apparel Startups, on our Facebook group, is people going onto Facebook in an emergency. “I need something ASAP. Can someone get this out for me?”
That is not quite a panic, but you’re going to Facebook, talking to strangers. Semi-vetted strangers, but strangers that you’ve had no opportunity to personally vet. And you’re asking them to help you with your customers.
Mark S: Even though I’m confident you’re not, you could be talking to someone that’s never actually produced an order on time. You could talk to somebody that has crappy equipment, or can’t really do artwork, or doesn’t really know how to digitize.
Marc V: Or never took their training. Calls themselves a professional, and when you see their work, you’re blown away that anybody would want to buy it from them, when all of their problems were just the simplest things. They just don’t do it correctly.
It’s really important, I think, that you do have this ready to go, ahead of time.
Mark S: This is one of my important things, because picture this. It is the Wednesday evening before Thanksgiving. Your print and cut printer goes down, and you have a big order to get out by Sunday. So, you are going to A, cry. B, call up the manufacturer and yell at them. C, you are going to stay up until 3:00 in the morning, doing something by hand, with a paint brush.
Or D, you’ve done all of this work in advance. You’ve got a backup, so you pick them up and say “Hey, can you do 25 shirts for me by this? Here’s the customer’s name and address. I appreciate it.” Then, you calmly work out the issue with the equipment.
You get to pick one of those. Let me rephrase that. You’re going to pick one of those.
Marc V: Yes. You’re going to do something.
Mark S: You’re picking that right now. Something is going to happen. You just have to decide which one’s right for you.
Marc V: Or you’re going to ignore it, not tell your customer it’s not going to be delivered on time, ignore their phone calls for three days. Then, just show up on Wednesday morning before they’re in their office, deliver the box, and run away before they can see you.
Mark S: And get that one star Google review.
Marc V: Another thing with this, the last one is going to be the same for all of them. Spoiler alert, here. Under-promise and over-deliver on your delivery times.
Mark S: That’s good.
Marc V: If your equipment goes down on Wednesday, you’re not producing apparel on Wednesday, for something that’s due on Thursday. You should really never be doing that. That’s the best thing you can do, because that’s when you’re rushed. That’s when you make mistakes, and that’s when equipment goes down.
That is the equivalent of a fire in a cave, right there. You’ve got broken equipment and a stack of blank shirts. And again, it doesn’t matter how.
Mark S: In a cave? There’s a fire in a cave, in an embroidery machine? QuickBooks!
Marc V: We’re not in a biker bar, okay? Just be thankful for that.
If you don’t get that, go back and listen to the podcast on trademarks.
Mark S: Or don’t.
Marc V: That was a good podcast.
Mark S: It was a good podcast.
Marc V: It’s an important one, as well. So, go back and listen to the one on trademarks. You’ll get that joke, because we’ll never stop telling it.
But under-promise and over-deliver on the times when you need to deliver things.
Mark S: Leave that cushion.
Marc V: Leave that cushion this way, because anything can happen during that period of time.
Mark S: At this point, if you want to pause the podcast and write this down while it’s still fresh, you can do that. What are you going to do, if there is an equipment issue? You’re going to find a contract decorator. You’re going to make yourself familiar with the support procedures, where you can get tech support information.
You’re going to figure out what’s under warranty and what’s not. You’re going to make sure that you take responsibility for having the things that you need, to get back and running fast enough. Because the only person it’s going to cost money is you.
Marc V: And the backup parts was one, in addition to the money. If anyone has ever watched racing, or any type of sport, really in general, but one I think of is racing. If something breaks on that car, they pull into the pit, and they open up the engine, and they’ve got an extra one ready to go. In their industry, they have to have an extra of everything, because it literally has to be fixed now.
For you, be prepared for some of those things.
The next one we wrote down is just the internet being down.
Mark S: It happens more than you think. If you’re in an area with very stable fiber optic internet, and your service provider is really on the ball all of the time, I want to know where you live, because I’m going to move there.
But if that’s the case, know that that’s not the way it is in a lot of the country.
Marc V: In most of it.
Mark S: In most of the country, you know, internet is fairly reliable. But there will be a day when you’re closed. You’re not getting any business, because you can’t receive orders.
Marc V: Where I live, I live in a fairly newer area of the Tampa Bay area. It’s like outer suburbs.
Mark S: It’s like Beverly Hills.
Marc V: Yeah, right!
Mark S: Like Beverly Hills is to L.A., is where Marc Vila lives.
Marc V: I would say where I live is the suburbs, and then there’s nothing past me. So, I’m the end of the suburbs. It’s suburbs, and then farms.
Mark S: I just want to highlight that comment, for [inaudible 00:30:28], who lives past Marc Vila.
Marc V: Yes! Well, it’s a different direction.
Mark S: If you say so.
Marc V: In that direction, there’s still civilization. Where I live, you stop, and I can see farms. The farms are doing farming, and they don’t rely on the internet as much, necessarily. Where if I’m working from home, I rely on the internet 100%.
Mark S: Absolutely.
Marc V: The reason why I mention that is because we’ve got really new cable stuff that was put down. They just put down new stuff, like a year ago. So, the internet has never gone down, not even for a second, in like 18 months, something like that.
Well, the other day, a major junction went down. There were like 20,000 people in the area, with no internet, in almost the whole zip code or whatever it was. So, I think about it like, it’s not like when I’m in Tampa, where it goes down almost once a month, for half a day. No. I’m in an area where it’s perfect.
But I do have a plan for that, because what’s one of the solutions that you can have, for if your internet goes down?
Mark S: I used it. I used it on a short trip, just a few weeks ago. I have a modern cell phone that I can use as a mobile hot spot. So really, I just hooked a USB cable up to my laptop, turned off the wifi, and I was set. It was about a 30-second solution, but it was only 30 seconds, because I had done it before.
If you’ve never done that before, if you’re interested in using your phone as a backup wifi hot spot, then call your provider in advance, and make sure that you have a plan that includes that. Because I found, the first time I tried it, that not every plan does.
Then, get to know how to do it. Because man, it is a fast and easy solution.
Marc V: Do it a few times, just for practice. Then, in addition to it, what’s awesome about this stuff is these solutions solve other problems that are not even problems. For example, you’re at a ball park, and you’re talking to somebody about business. You’ve got your laptop there, because you just came from the office. You’re going to see your kid’s game.
Mark S: Wait a minute. You’re at a baseball game. You have the laptop on your lap.
Marc V: It’s in your briefcase or backpack.
Mark S: You’ve got it tethered to a phone.
Marc V: No, it’s in your backpack. You’re talking to somebody, and they happen to be a really hot business opportunity. You say “You know what? After the game, I could just type something for you real quick.” And you open it up.
Anyway, there’s these cool things you can do with these solutions.
Mark S: You said “after the game.” I would have said “Hang on. I’m at bat next. As soon as I’m done.”
Marc V: “My kid’s not at bat, so I’m not paying attention.”
Mark S: That’s great. But you should know. What are you going to do, when the internet goes down? I don’t know what your plan is. Maybe if the cell phone thing isn’t an option for you, maybe you have family or a good friend, and they have another ISP. They have another service provider over at your cousin Louie’s house.
Maybe the local bar has wifi that gets five bars 100% of the time. Whatever you need to do.
Marc V: A biker bar?
Mark S: It could be.
Marc V: And if there’s competing internet service providers in your area, and there’s other small businesses that you’re friendly with, you can also just make this plan together. Say “Hey, by the way, if the internet ever goes down for your company, feel free to jump on my wifi, and vice versa. Or come down to my shop, and I’ll let you log in here,” or whatever it might be.
Mark S: Or honestly, if you have a backup, you could put an antenna on top of your cave. So, you could keep the fire going, with the baby, and there’s an antenna.
Marc V: You could.
Mark S: Internet is down. Number three is, moving on, you’re going to ruin shirts. I don’t know how else to say this. If you’re a new apparel decorator, if you’re an existing one, if you have equipment that you’ve been working on for years, if you just got some brand new stuff, if you always use the same vendor and the same shirt model for everything that you do, or you switch them out all of the time, one of those things is not going to happen right. You’re going to ruin somebody’s shirts.
Marc V: Yeah. There’s so many things. You’re supposed to left-chest logo, and you right-chest logo.
Mark S: Because the shirt’s inside out.
Marc V: Yeah. You sew the front and the back of the shirt together. You’re going to not press it at the right temperature.
Mark S: There’s going to be a spelling error.
Marc V: Yeah, a spelling error. There’s going to be so many ways you’re going to ruin shirts. You’re going to spill coffee on a shirt, if you happen to have coffee next to where you’re doing your shirts. There are so many variables and things.
Mark S: I’ll even include, you’re going to actually have the wrong shirt. You get two orders in at the same time, and you just pick the wrong box. Or your employee picks the wrong box, and they sew the plumbing company’s logo on the baseball team’s hats.
You’re going to screw up, so you’ve got to have a plan on what to do about that.
Marc V: You mentioned, and I love this one. I’m going to give you the credit for this one. Order for wastage. This lesson comes from anybody who is a contractor. If you’ve done construction yourself, in your own home or something like that, then you know when you’re doing floors, you buy extra. Tiles, you buy extra. Everything, you account for wastage.
Mark S: I ended up with 100% too much vinyl floors. I really did. I finished, and I’m like “Where did all of these boxes come from?”
Marc V: Yeah. That was a bit much, on the wastage.
Mark S: It was, it was.
Marc V: But it’s a great idea to have some wastage on shirts.
Mark S: That means when you place your order, depending on how confident you are and how unusual the garment is, you might order an extra 10%, an extra 20%.
Marc V: For larges and mediums and smalls, order an extra couple of each, depending on the size of the order, naturally.
Mark S: Maybe if it’s the first time you’ve worked with a shirt, because you want to run a test first, make sure everything works out. If somebody orders five shirts and you order five shirts, you test the first one and you screw something up, now what do you do?
Marc V: You’ve got to order one, and pay shipping on one. So, order wastage. You can also ask your supplier about returning things. They might an ability for you to return some. So then, you always order wastage, and then you always return some of it. That might be an option.
Also, these extra pieces you order, and we’ve talked about this in other podcasts, you can use those as sale items. You can use them as sample items. You can use them if your customer calls back and needs an extra one or two. There’s a lot of great things that this wastage can do.
Folks do it all of the time, with tiles and flooring and wood, when they’re building things.
Mark S: Order a little extra.
Marc V: Yeah. They order extra, and they take the wastage, and they turn it into a table, or whatever it might be. You’ll use the wastage for something, or you might be able to return it, even. So, find that out.
Mark S: Let’s say that you don’t have that opportunity. Let’s say that you got an order for two dozen shirts. You ordered two dozen shirts, and you spelled the word “shirt” wrong. You left out the R or I. You left out a letter, and you’ve got all these shirts. What are you going to do?
I promise, once again, this is going to happen to you. If you’re in the t-shirt business for ten years, all of this stuff is going to happen to you. But for this one, what are you going to do?
You ordered the extra shirts, just in case you screwed one up. The whole order is bad. So, what are you going to do about that? Do you have a policy in place, on how to deal with your customers? Do you have vendors that you can rely on, to send you new shirts overnight?
It might be something like this. I got in an order for two dozen shirts. I’m screen printing. It’s three colors. And for some reason, the color of the ball in the logo was wrong, on every shirt. In this kind of circumstance, these are the things that I’m going to do.
Number one, you’re going to call your customer, if it’s due soon, if you didn’t do the under-promise and over-deliver. You’re going to call your customer and let them know. Say “I’m sorry. I made a mistake. There’s going to be a slight delay in your order. Is it okay if I deliver them X?”
Then, you’re going to call your vendor and say “Do you have any more of these shirts in stock? Can you overnight them to me?” And you’re going to have the funds and the presence of mind, and the phone numbers in place, so that you know “This is what I’m going to do. This is how I’m going to react to it. I’m just going to take care of it. I’m not going to let it ruin my life.”
Marc V: Yes. Part of all of this is that the profitability in your order is enough that even if you ruined all of the shirts, and had to reorder them, you didn’t lose a ton of money.
Mark S: You’re at least breaking even.
Marc V: You’re at least breaking even, or even making a few bucks. That’s important.
The second is the under-promise and over-deliver, that you don’t even have to call your customer. Now, I do understand, because a common in this would say “Everybody orders shirts at a rush.” I would say “Well, it feels that way, but that’s not true.”
Just the same way, if I talk to our supply reps here, they say “Everyone needs their supplies tomorrow. Nobody can wait.” Then, you call up, and nine out of ten people say “It’s no big deal that your truck’s delayed. I’ll just get it Monday.”
Most of the people say that. You only feel the ones that are yelling at you, because they need it sooner. And they should have followed some of this advice, because they should have ordered it sooner.
Mark S: They should listen to the podcast, on their own time.
Marc V: They should listen to the podcast. But yeah, you need to have that delivery time. You need to have the money set up well, profitability set up well, delivery time set up well. And then, a way to speak to your customers.
Mark S: If you have screwed up in a way that’s damaging to your customer’s business, what are you going to do about that? They came to you for a service, and you failed to deliver. Even if it wasn’t your fault, still, the responsibility is yours. Don’t get defensive. Don’t get angry.
Have something worked out in advance, whether it’s “Look, I’m really sorry about this. I know I’ve put you in a tough spot. I’ll tell you what I’m going to do. I’ll deliver your next order for this price. Or let me come down, since you don’t have the shirts, and I’ll just stand in the stands and yell everybody’s name as they walk out onto the field.”
Whatever you’re going to do, figure something out that will make your customer feel good about coming back to you. And I will tell you a secret. If you screw up, and if you fix it, customers like that better than if you were perfect the entire time. They really do.
Marc V: It shows integrity.
Mark S: They relate to it.
Marc V: Yeah. They relate to it. They know it. We’ll have customers here that will call up, and they will be furious that UPS delayed their delivery, because a bridge went out in Tennessee. That’s our fault.
Mark S: Damn bridges!
Marc V: None of them will ever admit they’ve ever been late on anything ever, to a customer. But they know that they have. You know, and we know we have. Everyone has. It’s a part of doing business.
Mark S: Although not as often as the other vendors in this space.
Marc V: Definitely not. I can guarantee you that. There was one other thing.
Mark S: That brings us to number four.
Marc V: There was one other thing I was thinking of. Oh, compensating them for the delay. One thing that you can do is, and I saw somebody post this a while ago, they said that the customer said they wanted a refund on everything, because they were going to be one day delayed on delivery, because they had to have the shirts by Friday.
They placed the order on Tuesday. It was a worst-case scenario. For one, maybe they shouldn’t have taken that order, but they did. They wanted the money. You’re greedy for the money. I would probably do it, too.
Mark S: You wanted the money. Let’s be specific.
Marc V: Yeah, you wanted the money. I would want the money. I would probably take the order. But one thing you can do is you can protect yourself in your documentation, too. You can put in your documentation, when a customer signs off on an order, that if they don’t order at least X days in advance, you cannot be penalized for not delivering on time.
You could put that in there, even though they don’t want to hear that, and there’s not much to it. But the fact of the matter is they want you to make shirts in four days. It’s almost a favor, that you’re doing that for them.
Mark S: They’ll be very angry, if you don’t [inaudible 00:43:04].
Marc V: Then, something happens, beyond your control. Then, you say “No, I can’t give you all of your money back. I already ordered the shirts. They didn’t get here on time. That’s not my fault, that the truck caught on fire.”
Mark S: Agreed. I mean, it might be. I don’t know.
Okay, so number four. Your supplier is out of whatever it is. Colman and Company is amazing. We have a bajillion dollars’ worth of inventory on almost everything that you can imagine, as far as custom apparel goes. But you know what? Occasionally, the manufacturer will run out. Or occasionally, someone will change part numbers.
Or you’re going to call one day, and you’re going to look for the platinum metallic thread that you bought in 2001, because that spool is finally out. You have a job to do, and Colman and Company might not have it. This goes for any vendor in any part of your business life.
If they don’t have it, if your supplier doesn’t have the ink or the toner that you need, or the paper that you use, or your regular place to buy screens doesn’t have any, or they’re out of that screen printer’s ink, or your sublimation ink isn’t there. Your favorite t-shirt isn’t available from your favorite t-shirt vendor anymore.
You’ve got to figure out what you’re going to do, in advance. Because when are you going to find out they’re out? You’re going to find out they’re out, when you’re out.
Marc V: Yes. What’s crazy about this is we’ve seen this happen various times, in the history of Colman and Company. Oftentimes, being out on these things becomes a layered issue. It’s not just the fact that we sold a bunch, and didn’t order any, and then we don’t have it.
Oftentimes, it could be, if it’s a shirt that’s out at an apparel supplier, that they have a factory in Honduras, that produces these garments. They don’t own the factory. They buy from this factory. The people who run that factory are really poor businesspeople, and the government shut them down, because they didn’t pay any taxes.
So, they don’t get any shirts. Well, this company doesn’t call them up and say “Hey. By the way, the government just shut us down.” No. They’re in jail.
Mark S: Or there’s one person still manning the phones, that just keeps putting you off.
Marc V: Yeah, so you think about that. Well, that happened six weeks ago. There’s shirts on a boat, there are shirts in a factory, and all of this stuff. Nobody knows that this order that’s supposedly being produced for eight weeks, that it’s stuck.
Mark S: It’s not there.
Marc V: It’s not there, and nobody knows until it’s basically too late for everybody. That’s an extreme case.
Mark S: But it’s not unrealistic. I think it was last year or the year before, there was a strike at the Port of Los Angeles.
Marc V: Oh, yeah.
Mark S: Where most things that are sold in America come in through the Port of Los Angeles. So, there were tons of industries all over the country, that had delayed shipments for two or four or six weeks. This is going to happen to you, whether or not it’s shirts. If you sell promotional products, whatever it is, your supplier is going to run out.
So, what are some of the steps that you can take in advance of that happening?
Marc V: We had put, keep stock of your most important things.
Mark S: Wait. I mean, be realistic. You can’t keep stock of thread and ink, and toner. You can’t have that.
Marc V: Oh, yeah. You cannot keep stock of CMYK, a five-skein [inaudible 00:46:45]. But some things, understand, it’s hard to keep a stock on. Like we sell rhinestones. There are, I think we have, I forget how many sku numbers of rhinestones we have. Like 500 or something like that, between stones and studs.
Mark S: There’s a lot.
Marc V: It’s hard to keep the inventory that we have. You, as a shop, are probably not going to keep the inventory we have. So yes, you have somebody who wants a specialty color in a specialty size, you’ve got to just order it when it comes. Keeping that stock is unrealistic.
Mark S: I see where you’re going.
Marc V: However, if it’s a simple thing, if it’s white thread and black thread -.
Mark S: It’s clear rhinestones.
Marc V: Yeah, it’s crystal rhinestones. You have a printer that has four sets of toner, four sets of ink; CMYK or CMYW, whatever it is, you should keep some of those in stock. These are your emergency things.
Because also, you never know what can happen. We talk about a machine breaking, but supplies can break, too.
Mark S: What?
Marc V: Well, you mentioned somebody accidentally mixed pre-treat with their ink. You’ve broken the ink. So, having extra ink as a spare, or whatever it is. You talked also about putting the wrong color, or misspelling “shirt,” by not putting the R in. You used all of that paper or that vinyl, to make that. You’ve broken it. It’s damaged.
So, your supplies get damaged, too. Having extra, especially of your most important ones. Bobbins, white and black thread for embroidery.
Mark S: The same standard color vinyl.
Marc V: Yeah. White and black and red vinyl.
Mark S: It doesn’t have to be very common for us. It could just be something that you use all of the time. The local high school’s color could be violet and august gold or something. So, it’s a struggle for you to find supplies that are like that.
Don’t put yourself in a position where you’re calling your vendor, whoever it is, and saying “I just ran out of X, and I need to finish an order by this weekend.”
Marc V: Here’s how you do it. Your minimum inventory that you would carry would be, say one or two of this item. It depends on how fast you turn this. Let’s just say you go through a bottle of ink a month.
Mark S: I’m going to say yeah. If it’s not a bottle of ink, then it’s several orders’ worth.
Marc V: Yes. Several orders. The standard kind of rule that I’ve always said is you have 60 days on hand. 30 to 60 days on hand, ready to go at all points in time. What’s good about that is you are turning that inventory. Let’s just say 60 days’ worth. You’re turning the inventory six times a year.
That’s a great turn on inventory, in regards to from a business perspective. Having two years’ worth of stuff in stock –.
Mark S: Now, you’re a prepper.
Marc V: Yeah. That’s bad for your inventory. You’re not turning it over enough. You want to have fresh stuff three, four, five times a year.
Mark S: CASpreppers.com.
Marc V: Yeah, CASpreppers. You just ruined another URL. Stop it!
Mark S: It’s going to be great.
Marc V: So, what do you do? You have 60 days of ink on hand. When you use up ink, and you’re down to a certain number of days, that’s when you order. Your zero is not zero. Your zero is 60 days’ worth, or your zero is 30 days’ worth.
Mark S: Here’s what we have to tell you. We’ve done our pet peeves on a lot of podcasts. If you run out of ink, if you run out of toner, if you run out of paper in the middle of an order, or right before a rush order, it’s your fault. It’s your fault, because you’re not planning for your business.
I understand, and we’ll get to cash in a minute. I understand that there may be some financial issues with ordering stuff in advance. But you guys, you need to get there, or this is what your life is going to be like.
Marc V: It’s going to happen again, and many times over. Paper is true of it. If you have a Digital HeatFX system and you’ve got paper, you should never been getting down to five sheets. You should be getting down to a box or two boxes, or whatever 30 days’ worth is for you.
Mark S: I should never see your post on one of our Facebook groups, saying “Hey, does anybody have ten sheets of A and B? Because I need to complete this order today.” I hope the answer is no. Buy some! Buy a box. Have it in a closet.
Marc V: “Does anyone near Atlanta have ten sheets?” That means that you’ve poorly managed. Again, this doesn’t account for emergencies. I understand.
Mark S: We know you’re going to get better, too. We’re not judging.
Marc V: No. You accidentally put an entire stack of paper on your heat press, to store overnight, and you left your heat press on, and it melts it all.
Mark S: Is that a thing? Did somebody do that?
Marc V: I don’t know. Anything could happen. Accidents happen. There’s a difference between an accident, and now you’re trying to fish for a solution. But if you prep, all you’re doing is reducing the percentage chance that one of these accidents is going to happen, and not be solvable.
That’s what we’re looking at, here. You are never going to prepare for everything, and never have an issue kind of blow up in your face. But if you’re prepared for most of it, and you’re in a good position, you’ve reduced your percentage down a lot.
Mark S: If you look back on your career, if you’ve been in this for one, two, three, five years, something like that, then you’ve already recognized at least a half a dozen circumstances that you’ve been through, and can probably appreciate how much more relaxing it would be, and how much more successful you would be in your business and with your customers, and how much lower your blood pressure would be, if you were prepared for these things.
Which brings me to number two, which I hate to talk about. But you should find an alternative supplier for the common items that you carry. For example, if your favorite shirt is by SanMar, it’s district made, and it’s a specific model number. Well, SanMar makes that shirt. They make that shirt.
If they are ever out, if their factory in Honduras or Vietnam burns down, if the ship sinks, what are you going to do about that?
Marc V: They discontinued our favorite shirt.
Mark S: They did. So, what’s your number two? What else do you like? Is there a Bella Canvas? You should have these things, like “Okay, SanMar doesn’t have this shirt. I’m going to order this one.”
Marc V: Yeah. “There’s a Gildan one I like, there’s a Hanes one I like, there’s a Bella one that I like, there’s one from TSC Apparel I like.” You’ve got kind of your book of stuff that’s your alternatives. They’re ready to go. All of that stuff is important.
Mark S: It may not be your favorite vendor. For example, believe it or not, almost any brand thread will work in an Avance 1501C. So, if you are out of magenta metallic, and we don’t have that, and it’s an emergency, you can find other people that sell it.
Marc V: What’s interesting is I’ve had this conversation on the phone a few times with people, where I say “Do you know, is there a local sewing center in your area?” Chances are yes. They’re everywhere. The thread that they sell and the bobbins that they sell, and the backing that they sell all will work for your job. They’ll probably be very good quality, too.
Mark S: Don’t flush an $800 embroidery job, because you’re waiting for this particular backing to come from this particular vendor, who’s out.
Marc V: Yeah. If you know that within a 30-minute drive, there’s a local sewing center, you call them up, and you say “Hey, do you have this? How much is it going to cost?” It’s definitely going to cost more money. Yeah, that sucks. But you get the job done and you move past the emergency.
Because you know what? Back up. There’s another company here. There’s a local company that sells vinyl, but it’s for crafters. It’s really expensive, but I can get it today.
Mark S: It’ll work.
Marc V: It’ll work. Because you made a mistake, right? You forgot to order something. You ran out.
Mark S: You’re not following our suggestion number one, which is keep stock of what you need.
Marc V: Yeah. You spelled “shirt” wrong.
Mark S: Apparently, they were all out of I’s at the vinyl store.
Marc V: So, you go to the local vinyl shop that’s really just for crafters. It costs three times the amount of money, and that sucks. You hate that you have to do that, but you’ve also built in enough profit in your garments, where you’re not losing money in doing that.
But you’re keeping your customer happy, and you learn a lesson for next time.
Mark S: Before we get to number five, I do want to just recap for a second. Then, I want to mention something.
Marc V: Sure, alright.
Mark S: We talked about what you’re going to do when your equipment fails. We talked about what you’re going to do when the internet is down, when you’ve ruined shirts, and when your supplier is out. I hope you, again, are pausing after each one of these, and writing down either past circumstances that you’ve gone through, and ways that you could have done it better.
You’re writing down the issues that we’ve provided for you here, and started strategizing how you are going to overcome them. And I also wanted to tease a new product a little bit.
There’s something new coming in the t-shirt transfer business.
Marc V: So, a normal day.
Mark S: I’m not going to say anything.
Marc V: Okay.
Mark S: Marc and I joke all of the time, there’s always something new coming.
Marc V: Yeah. There’s always something new.
Mark S: Sometimes, we even know about it in advance. Sometimes, we don’t. But there’s something new coming. I’m really excited to talk about that. Maybe at the next podcast, we’ll announce what it is. But you should be excited. I just wanted to stop and say that.
Marc V: There’s a new supply coming, too, that’s not for transfers.
Mark S: Really? What is it?
Marc V: I can’t tell you, yet. During the next podcast -.
Mark S: We’ll talk about that.
Marc V: The good news is that you’ll find out about it the day before it goes on for sale.
Mark S: Nice! So, number five here is, I have bad news. Very few companies start, and then are successful and profitable from day one, until the moment they close 57 years later. It rarely happens.
Look at Amazon.
Marc V: Apple.
Mark S: Apple, Facebook. These companies did not make money right out of the gate. They’ve all had bad months. Even the best companies in the world have a bad quarter, and their stock goes down a little bit.
So, you’re going to have a bad month. You’re going to have a bad month financially. Things are going to go wrong personally. They’re going to go wrong in your business. You’re going to have an unexpected expense that pops up, and it sucks all of the cash out of your business.
The thing that we want you to do here is figure out what you’re going to do in advance, when that happens.
Marc V: Yeah. You’re going to lose a big customer. So many businesses found a lot of their growth on having just a handful of really large customers.
Mark S: It’s true.
Marc V: Even early in Colman and Company, there was a few really big customers that we partnered with. Then, many little customers. But the sum of the big customers was greater than all of the small customers.
That’s what happens in a lot of businesses, that you’re going to grow, and you might get a great customer that’s going to turn out to be 30% of your business. However, they might not be in business forever. They might leave you.
Mark S: Honestly, a lot of times, a lot of our customers that buy machines from us, they do business with schools, and that’s a huge percentage of their business. If you do business with a lot of local high schools, or with a particular county, or any kind of government agency, guess what? Every once in a while, they have to bid stuff out again.
Or maybe the policies change, and they don’t have the budget for that.
Marc V: Yeah. The person in charge retired, and there’s a new person in charge, and their cousin does embroidery. Those things happen.
Mark S: I love that example. So, what are you going to do, in advance? I want you to think about this. What are you going to do, when you have a really bad month? Let’s say in three months, you’re going to have 30 days where you make nothing. How are you going to handle that?
I had yet another business. Back when it was difficult, I built a video editing system.
Marc V: You’ve failed so many times.
Mark S: I fail a lot.
Marc V: The thing is – just one comment on that is that you’re going to fail a bunch of times, in all of these things.
Mark S: Absolutely.
Marc V: It’s in the news all of the time, like we look at the President of our country. Donald Trump owned many businesses.
Mark S: He failed a lot.
Marc V: He failed a lot. However, he didn’t fail at everything, and he did very well in other things. So, you have to think about all of that stuff.
Mark S: The whole President thing is still out for debate. We’ll see, when he’s done.
Marc V: The fact that he became the President.
Mark S: That’s a win.
Marc V: But there’s so many things. Those failures are going to happen, though.
Mark S: So, if you don’t have a big cash reserve, which is the first thing I would recommend. You should have an emergency fund for your business, just like you do for your personal finances. You should have money that you can reach into, when you have a bad month.
The second thing is, like in my own example, I actually almost succeeded myself out of business, because I got a big order for a local University TV station. I wasn’t selling that much, but it was like a $60,000 order, and I had to spend $40,000 to fulfill that order. I didn’t have it.
What I did was I had this nice collection of credit cards that I had a limit on, that kept getting a little bit higher, that I kept in a file cabinet drawer. So, when I really needed it, I just pulled cash out of every one of those credit cards.
But I knew that I had them all wrapped up in a rubber band, and stuck in a specific file. So, I knew “That’s my bank,” because I didn’t have enough cash to do it.
What’s your solution? Maybe it isn’t a bad month. Maybe something amazing happens, and you get an order for 15,000 shirts for a golf tournament. What are you going to do? You’re going to do the same thing as if you had a crappy month. You’re going to go around looking for money.
What’s the plan? Are you going to build up a cash reserve? Are you going to have investors lined up?
Marc V: Yeah, people that will invest in your business. That’s actually a great thought, too. It’s something that is an uncomfortable thought, or you might not think about it, but you might have a friend or a relative or a business partner, or somebody who owns a really big business already, that you’re really close with, that you can always turn to and say “Hey! Great opportunity here for me. I’m looking for somebody to help back me up on this.”
You just tell them. “I’ve got this contract. I need this to fulfill it. This is what I’m going to do.” They’re going to ask you all of the tough questions. “Okay, what’s this? Do you have anything written in there, to protect our money, like if you don’t deliver on time, that they’re not going to cancel all of the funds?”
Then, you answer, and you might have something available for you.
Mark S: And you can do the same thing, even if you don’t have that big opportunity, and it’s the reverse. You just had three really crappy months in advance, but you’ve got eight good months before that.
So, maybe you could go to that same person and say “Listen. I’ve got this eight-month track record. Something happened in the past three months. I haven’t been able to get the sales that I had intended to. Would you work with me on trying to identify what’s happened, and then maybe invest, so we can turn this around together?”
You could do something like that. It’s a great way to bring in an investor. But have these people in mind. Have this money in mind. Have a solution in mind, before you go to pay the rent on your shop or the lease payment on your equipment, and you’re too emotional to do anything about it.
Marc V: Yeah. And this one, number five, is really important to follow those first three steps of not panicking, don’t make an irrational decision, and executing a plan. Because a bad decision might be doing something, just “I’m going to shut the business down. This was a mistake.”
Calling and yelling at your bank, because they said no to a loan. Slow down. Were all of the options explored with them?
Mark S: Calling and yelling at us, because the leasing company won’t let you out of the lease.
Marc V: Yeah.
Mark S: I had this conversation with a customer, I think it’s probably eight or nine months ago now, that really stuck with me. Because he didn’t do this, and he lashed out.
This customer was in a very small town up north. He had purchased a Digital HeatFX system, and he had a plan to do transfers. He worked in a trade before, and he sees other people in the area being successful with this. And he had a big customer lined up, for custom t-shirts.
By the time he got to me, he had already yelled at the supply rep and the support rep and the salesperson, and finally, the salesperson just got me on the phone, because it sounded like more of a business problem. The equipment was working fine.
He could make t-shirts. He just didn’t have a sales plan. So, as we talked through it, I found out that he was charging $8 a shirt. He was charging $8 a shirt, and just working his ass off. I can’t say it any other way. He really was. He was working his ass off.
He was probably losing a dollar, for every shirt he sold. So, he got to the point where he couldn’t make his lease payment, which is $220 on the Digital HeatFX, at that time.
If I had gotten to him sooner, he had a terrible business plan. He was selling shirts for $8, instead of $18, or $12 or $15 or $25 or $35, which is probably what his market would bear. He just couldn’t ask for it. If he had been selling that, then he wouldn’t have a problem with his lease payment.
He had only asked for help, after it was too late. He never identified the problem.
So, you’ve got to have this plan in place. What are you going to do if things aren’t working, and you’re not selling?
You can put us on the list. I’ll just say that right now. If you go a month or two months, and you can’t figure out why you’re not selling shirts, man, give us a call or send us an email. We’ll help pick apart your marketing, and figure that out.
Marc V: Yeah. There’s definitely something in there that can always be fixed. You can always do something better.
Also, sometimes these things become out of your control. For example, you work in a particular industry. You’re supplying things for these fishing tournaments that happen in your area. It’s a local, little thing. You make all these t-shirts. You do great.
And something terrible happens. A storm comes through and messes up all of the lake systems in your area. There’s some sort of a mass extinction of fish. These things are like real-world things that happen. You don’t think about it, but industries die because of natural disasters or things that change in business. A coal mine dries up, and who knows what?
Mark S: Technology changes.
Marc V: Technology changes, so all of a sudden, now the fishing stuff is gone. Your business fails, literally because there’s no one to sell shirts to anymore. Like mentioning the President, as an example. He was in these industries, and they just went terrible.
Then, he took experience and things that he learned, and people in business that he knew, and another thing popped up. And there you go, there’s $1 million again.
Mark S: That’s the way it works for me. $1 million.
Marc V: Yeah. If you look at Steve Jobs, with Apple, it was the same thing. Things tanked down.
Look at all of the people who made it really big, and the companies who made it really big. Oftentimes, their history is not this “start at the bottom, finish at the top.” It’s start at the bottom, up, down, crash, fail.
So, if you’re in an industry, even something beyond your control, you’ve got to bounce back. You’ve got the technology, you’ve got the education, all of these skills. Plan for that.
Say I’m in this dance industry right here. What if something changes in this industry?
I think it goes back to one or two podcasts ago, where we talked about growing a small business.
Mark S: Oh, yeah. The 12 steps.
Marc V: Yeah, the 12 steps. The last step was to take what you’re learned, and replicate it. So, maybe part of your planning for bad months is getting another niche industry that you work in, that you’re building up.
So, as this one’s floating high and doing really well, and you’re making a bunch of money every month, you’re building up something new. You only do sports stuff, but on the side, you’re also building up a little book of business of corporate apparel.
Then, if the sports goes down, then “Alright. I’m just going to run with this corporate stuff.
Mark S: I do want to change your number one. I think you should keep the cash reserve. I think you should have the financing backup. But the first thing that you can do, if you’re having a bad month or two, is to look back and see what you’ve done, for sales. What has your activity been?
If I look back at my career, and I’ve had a bad month, sometimes it’s market conditions. But mostly, it’s because I forgot to do stuff. I didn’t send out the same number of emails that I did. I didn’t go to the corporate events. I didn’t do the markets, like I did last year, this month.
Marc V: Or you didn’t follow up with your current customers. A lot of these things are all related to the other 80-plus podcasts that are before this, right? One of the things we talk about all of the time is like you can’t deliver to a customer. You can’t deliver to a customer, because they ordered four days before, and something happened in those four days.
Well, everyone orders only four days before, because everyone does that. However, this is also a business that has an event every single year. If you listen to some previous podcasts, and some marketing and sales tips, if you do business with this customer all of the time, and they’re late ordering all of the time, you know this event happens every spring.
Mark S: Just call them, for God’s sake!
Marc V: You call them in the winter, at the end of the winter and you say “An event coming up in spring, right? Still happening?” “Yep.” “Shirts need to get done, right?” “Yep.” “Okay, let’s get them ordered early this time. Let’s get you ready to go. I want to take that stress off of your plate.”
Mark S: I love that.
Marc V: Now, you’ve solved this problem of potentially being late on shirts, where you made them two weeks ahead of time.
Mark S: You know, we’re close to wrapping things up. I just want to say that this is a good podcast.
Marc V: Yeah. It’s important. It’s really important.
Mark S: I really feel like if you guys do this, you’ll do better than I’ve done at all of those businesses that I’ve closed, because you’re ready. You know what you’re going to do, and how you’re going to handle it.
You’re prepared, when your equipment fails in the middle of an order. You know what you’re going to do when the internet is down, when you ruin shirts, when your supplier is out of stock, or you’re out of stock of whatever you need. You know what you’re going to do, if you have a bad sales month.
You make your own list of the other things you can think of. You know what you’re going to do, if a tornado takes away your building.
Marc V: If your niche dries up, you’ve got another one behind it.
Now, listening to all of this, I know sometimes this will happen to me. I’ll listen to something about financial management or time management, or marketing, or doing business, or eating healthy, or whatever it is. You listen to it, and you’re like “Wow! That was cool! I do none of that. I eat garbage. I’m depressed. I should have been doing this five years ago! Any of these things are going to happen to me, like tomorrow!”
When you listen to this, you can’t go into a panic mode or into an anxiety mode. You just need to say “I don’t do any of these things now, or I do one of them.” Now is the time to start getting going. Because chances are, these big emergencies are not tomorrow. They’re just one day, so you start to build it up now.
That’s kind of like the adage of the best time to start saving is just now. Don’t beat yourself up that you didn’t start five years ago. You didn’t. Okay. But you can right now. So, you can start doing these things now.
Start with little wins. “What am I going to do if the internet’s down?” It’s a simple one. Then, go into the bigger ones. “What am I going to do if I have one big niche business or one big customer that I’m dependent on? What am I going to do, if they go away?” Start preparing for that now, by finding other customers.
Mark S: Are you dependent on just one big customer right now, and what are you going to do?
Marc V: What are you going to do, when they might not be there? You don’t know. Any of these things can happen, but if you don’t panic, if you don’t make irrational decisions, and you execute the plan that you’ve built, because you listened to this podcast, it doesn’t mean that you’re fireproof or bulletproof. What it means is that you are better than three quarters of the businesses out there, 90% maybe.
Mark S: And even better than that is we get the phone calls that are really, people are so emotional because they’re in such a tough spot. It’s not all their fault, but you are responsible for preparing your business for certain things. All of those things are on the list.
Marc V: Yeah.
Mark S: So, be responsible and get prepared. It’s like having insurance on your car. It’s like using your turn signal. Please, everybody. It’s just being prepared for the things that are going to happen to you in life and business, in advance.
And you’ll see the next disaster as just something that you have to handle, not the end of the world. Right?
Marc V: Yeah. That’s great, definitely. There are so many things that are like this in my personal life, that I wish I did better, or I don’t do at all, whatever they are. So, you’ve got to look at this. But when you’re really trying to build your business, and you really want to succeed and be that person who is just like, when you get knocked down, you get back up again.
Those are the small business owners that really succeed in the long term, because they’ve gotten hit a bunch of times, but they were prepared, or they handled it correctly. Even if they weren’t prepared, because they couldn’t even imagine that this would happen, they were of this mindset.
So many things that we do here are of the mindset that you’re in.
Mark S: True.
Marc V: I think that’s a good amount of information. It’s a longer podcast. It’s going to be over an hour, but it’s important. It’s one of the more important ones.
I think the ones where we talk about making more money, that’s really important. When we talk about how to sell and how to market, those are really important. Those are fundamentals, because you’re not going anywhere, if no money is coming in.
But this is one of those that I find to be extremely important, because I can’t tell you how many times we see a customer do so great, and then go away, over the years. But on the flip side, we see customers that do really great, and they almost go away, and then bounce back again.
Those are the inspirational ones. We have plenty of customers that have been steady forever, and I hope that you’re one of them. But if you’re one that gets beat up, we want you to come back stronger than you were before.
Mark S: I agree. Okay, I also agree that I think that this has been incredibly useful. I hope you guys took lots of notes, and that you will share this podcast with your friends and family, you’ll follow us at the CustomApparelStartups.com website, you’ll join our Facebook group, you’ll review us on iTunes, you’ll send us cash in an envelope. That would be great!
Okay! Thanks for listening, everybody. This has been Mark Stephenson, from ColDesi.
Marc V: And Marc Vila, from Colman and Company.
Mark S: You guys have a great business!