My grandfather told me early on that time would be the most precious and expensive part of doing business—that you will either waste it or use it wisely. It took a few years before I realized the gravity of his advice. I have never worked for anyone except myself since college. I have 15 years of screen printing, embroidery and sign experience under my belt. There have been many days and long nights spent doing what I had no business doing. I have wasted a lot of money and time on learning the hard way.
By now, we have all felt the effects of the down economy in one way or another in our respective businesses. Schools, organizations, event planners, small businesses and corporations have either reduced spending or are out of business altogether. New sales are getting harder to come by and traditional marketing efforts are losing their appeal. Sales growth is the life blood of any business, especially for those who are self-employed. We all need to sustain what we have and create growth through new sales.
There is no doubt the industry is facing challenges, but these present an opportunity for businesses as well since we all know that how we handle adversity is what defines us. Some may look into investing time and money in new equipment. But I challenge those businesses to really consider the time factor. The realization of “time is money” should now be ringing very loudly. The great news is that there is an answer—outsourcing.
For those who haven’t considered outsourcing, it may seem foreign and the benefits of utilizing other business as an effective business tool may not be obvious. Others who have outsourced may see it as a necessary evil for technologies they don’t offer in-house, but these folks haven’t realized the benefits to the fullest extent. Many are leery about entrusting others with their work and fear that others may steal their hard earned business.
Delegating duties is a learned task. A good parallel to outsourcing is looking at running a business. How many micro-managers hang over new employees’ shoulders? Fact is this really doesn’t factor into the level of work they do. More importantly, that free time gained by having a new employee should rather be spent on the tasks we never get to—hiring, luxuries like sitting down to eat lunch, returning emails and phone calls and, most importantly, selling.
Of course, the result of more sales is more orders. In my personal experience, my sales efforts led to clients asking for embroidered polos, aprons, tote bags, awards and plaques, and more items and services I didn’t offer. I did not want to turn them down or give them any reason to buy from someone other than me. I certainly did not have the cash to buy equipment to decorate so many various items, nor did I have the facility and staff to handle it. Such situations present only two viable options: refer clients to someone else or take the job and find someone with the equipment to do it (and add a mark-up, obviously). The choice was easy for me—I never turn down a pay check.
(Image courtesy Lon Winters, graphicelephants.com)
Industry of experts
We all entered this industry with an agenda. Some of us make signs, embroider, screen print and so on. The common thread is that we all have complementary products. Even though our production techniques differ, they all serve a unique purpose and, at some point, are needed by us all. Even though I may sell embroidery as service to my customers, I have no time or desire to make that investment to do it in house. We are screen printers. We do it well and very efficiently. To pide up the production model into three or four new decorating applications is really out of my realm. The risk of becoming that large of an operation—both financially and professionally—is too great for me.
Outsourcing, however, makes sense. I contract with other companies, on my terms, whenever I need their services. Sure, profit margins are smaller than in-house production, but we need to look at the big picture. Say there’s an opportunity to make a 30 percent profit on a pass through, look also at the opportunity cost (time) saved to work on other sales. The amount of time spent outsourcing is a fraction of what it takes to produce. Time is valuable; use it to your advantage.
There are many forums and industry websites such as imprintingzone.com and printwearmag.com that offer referrals or post members who are contract decorators. Supplier representatives may also be able to recommend someone as well. No matter where you happen to find them, be sure to conduct an extensive interview. Take notes, start some files, tell them what you expect. Get an up-to-date price list as well.
Also, don’t get too happy about finding your soul mate in a given decorating sector. Develop a stable of three or four in each discipline you’re looking to outsource. You never know when someone may not be available or you may exceed their abilities. Be prepared to use the best fit contractor for each job.
Points to consider
There are a few points to consider when either outsourcing for the first time or reevaluating current outsourcing endeavors. A little bit of due diligence up front will reduce the learning curve and serve you well in finding quality resources.
First, have a firm grasp of what is expected to carry an order from start to finish. Proper artwork, packing slips, and purchase and work orders are not only professional, but will keep you organized. Have a system to keep all files organized and prepared either electronically or written very legibly. Work orders are crucial. Make sure the decorator has a clear understanding of the type of garment, quantities, decorating locations and so on before they begin. It is something often taken for granted in-house, but employees run the same error-risk as contractors if they are not properly prepared to do the job.
Have an open and comfortable line of communication with the business with which you choose to outsource. Don’t be afraid to state exactly what you expect, but don’t do it on an hourly basis either. Make sure that everyone, say it again, everyone, has a clear understanding of the in-hand delivery date, delivery method and ultimately the price. Know all the charges before production begins and get it all in writing.
I include a color proof of what the finished product should look like as well to make sure the contractor knows exactly what the end result that both my business and client want should be. Nothing says massive fire drill like a box of misprints. It is easily avoidable. Open communication and organization are key—people appreciate professionalism.
The key to success is becoming a sales-driven organization, not a production-driven business. Effective outsourcing provides an opportunity to explore new profit centers and focus internally on producing in-house only those orders that provide the highest margins. Use your time and resources to their fullest advantage. Never underestimate your power as a consumer and the value of your time. Get busy managing your business—make it work for you, not the other way around.