Refocusing Your Business

[Mike Null]

Recently there have been threads relating to the future of laser engraving and another by Tom Bernard offering a great idea starter for those trying to develop products to market.

This thread is along that line but deals with the need to continually evaluate your business and your marketing efforts. For example, when I started over 15 years ago it was my idea to cater to the woodworker. I quickly found that that was a sure path to failure and began to alter my plan. Fairly soon I found that engraving name tags could be lucrative. A thing as simple as a label on the back of my work got me started on an element of my business that still provides good income many years later.

Gradually, I saw the need to offer more than just engraved name tags. I purchased the MagicTouch program of color laser transfers and I could make name tags in color as well as to enhance my plaque offerings with color transfers. I then purchased dye sublimation equipment but, being home based and without a good marketing plan for it, soon found that I had not made a good decision for my business. After a short time I dumped the printer and gave away the expensive ink. Now, if I need to sub something, I have My Transfer Source make the transfers and I press them.

I also realized that sublimated mugs were not for me and sold my press. I now offer mugs but have a wholesaler make them for me. I made t-shirts for a while but soon realized that it is just too competitive for a home based based business to compete. They were quite easy to make but inventory was a problem. If I have an inquiry I'll call a local wholesaler for a price but I won't make any more myself.

I've bought and sold two pantograph engravers. I bought a good rotary engraver which also allows me to do cylindrical work. That proved to be a good decision and I'm one of the very few in St. Louis who does that work.

A few years ago I bought a vinyl cutter and had great plans to market vinyl in several different ways. It wasn't really good for me. It took too much time for a one man shop and I never had time to develop the marketing plan. It also requires a fair amount of space. I did have an important customer that I wanted to keep so I still have the cutter but I'm re-thinking that as well as it is not paying it's rent.

I've been in and out and back in sandcarving. I don't like sandcarving but I'm going to hang on a bit longer--it's not a moneymaker for me but it does offer an option that I like to have.

I have tried hot stamping and find that I can do without it. I have three machines and soon I'll be selling two if not all.

I just purchased a card printer. I just received an order that paid for the machine, supplies and provided quite a nice profit. I had been wanting one of these for years but could not justify the expense but it provides more options for my name tag business as well as for labeling.

Three or four years ago I purchased a re-furbished laser printer to do black only laser sublimation. That has proven to be another money tree.

Perhaps most important in the refocusing of my business besides the processes I had added or discontinued is my customer focus. I have, for several years, been concentrating on commercial and industrial clients and moving away from individuals or what I term retail customers. Today, I rarely accept any retail business as I perceive it to be a distraction and even a nuisance. Keep in mind I am home based and basically a one man gang though I have a part time helper. Doing business on the internet is so convenient, whereas having retail customers come to my home isn't and further, they don't want to pay a fair price--at least what I think is a fair price.

Since I rarely have an opportunity to do anything creative I will take on a challenging job just to see if I can do it but I rely on SMC to show me the creative side of things.

In summary, I'm constantly reviewing my processes; expanding or removing options focusing on my customer base and what I want my base to be and most importantly, how I can serve them better.

[Rodne Gold]

If you got a good customer base and are busy as you seem to be , I recon being torn in a zillion directions as a one man show is a big limiting factor to growth and satisying everyone. You cant do , market , experiment , be creative , sell , troubleshoot , be an operator , be an accountant etc all by yourself and do the best in all fields. What you really need to do is define your strengths and pass on all the other stuff to others. I soon realised one pair of hands can only do so much and if , g-d forbid, something happens to me.. the whole bangshoot is down the tubes.

[Martin Boekers]

Mike you are a perfect example as what it takes not only to survive in this business, but to thrive.
We see it all too often that someone gets into this business with Great Expectations only to find
out that it isn't what is expected. many get out quickly. It does take dedication, perserverence,
creativity and a bit of common sense. I keep a good base of customers, but it takes as much time
exploring better ways to do things, different process etc. to keep them coming back. Somethings work
good for me but not for others. We have to provide our own path. Efficiency is imperative, it can make
or break a shop. I have 4 assistants right now, but more or less it still is a one person shop as when
something doesn't go as expected I have to find to why and correct it.

I have to say on the 7 or so years I have been here on SMC I have watched newcomers (like myself at one time)
Considering throwing in the towel and giving up only to hang on and perserver to finally define their shops
and make a business of it! That is heartening! Not only have they made a business of it, but have shared their
thoughts, ideas, success and failures! That is what makes the forum great!

[Mike Null]

To avoid any confusion, my business was established for the purpose of supplementing my retirement income. I did not want to create a large operation which would entail employees and a separate location. I suppose if I could jump right into a million dollar plus operation that would be ok but I have no desire to spend all my energy trying to build such a business.

[Rodne Gold]

Mike , reading between the lines , you already put in a huge amount of energy into the enterprise. You seem to have tried a lot of stuff and have huge technical knowledge , doesn't come from being lazy or resting on your laurels..
I think that thinking out the box combined with creativity and technical knowledge is the key to finding your niche , add to that the ability to integrate fairly cutting edge stuff with your existing product line and focus on your markets , you got a winning solution.

I am younger than you , 54 , but even now , I understand the desire to slow down and quit trying to build the empire.

With my excellent staff , I am in a position now where I come in at 8 am and go home at 2 or so , plus I have the luxury of doing stuff *I* like doing in the business .

I have also tried this and tried that and dumped processes and items that are too difficult to create a market for...you gotta try , if it costs you ...well then its written off to school fees.
The issue with a lot of posts I see here is that the expectations of one machine are unrealistic, nothing comes off the machine "ready to sell" and I am of the opinion that one needs complimentary processes and equipment to add more value to your production.

[Mike Lassiter]

I am of the opinion that one needs complimentary processes and equipment to add more value to your production

Me too Rodney. Doing something nobody else around is doing, or can do

[Joe Pelonio]

Great tips Mike. I went the other way, with a full service sign shop 11 years, adding the laser to make more profit rather than subbing out name badges and plates. Turned out to be much more than that with many custom car parts, and good repeat manufacturing jobs, for another 5 years or so. When I retired from the sign business and got a full-time job with great benefits and retirement plan, I kept only the laser side. Going from several employees to just myself, I have kept a few of the bigger production customers, but don't do much of the one-off small custom personalization jobs any more. For me I'd rather spend my "free" time doing other things if I'm only going to make $30-40 on a job. I'm happy to do a few jobs a month now that may take a few evenings or a weekend, and do something fun with the extra money. I also use the laser for my own projects, it's actually a good tool to have around the home and shop.

[Tim Bateson]

5 1/2 years ago I got into this business - somewhat like Mike, partially to learn it and increase my skills to the point that when I "retire" I'd still have an income source beyond my 401K. The other half was to have something to fall back on as I was downsized from job after job. At the conception I believed 100% in the "business plan". Today I use it as a guide, but if you want to succeed don't put too much stock in that document.

My business has bounced back & forth as I work what is hot for my market. By doing so, I seem to always have work. For example just this past week a deal so large dropped into my lap, I will likely buy a 2nd laser to keep up. As with a lot of my business, someone-else failed the day before one of their regular customers hit pay dirt with a large contract and now had no one to do their laser marking. Like I said, this was not in my original business plan, but it's easy and pays great.

Use your business plan as a guide, but be open to new opportunities as they come.

I also wanted to add that I owe a lot to the people here at SMC like Mike and Joe & the experience they share. You folks have really shortened the learning curve.

[Martin Boekers]

Tim, you are one that I was thinking of in my post, I remember when you came on board here and
talked of difficulties and low bidders and other things. You took the time and effort to hang with it and adapt.
It paid off!

It's not an easy business and even harder to make it work if you are not prepared!


Good work! Not only have you learned from SMC now you kelp others with your thoughts
and ides!


Thanks!

[Mike Null]

Rodney

I agree. It is indeed a mistake to think that a laser engraver will pave the way to riches. I think of us who do this for a living have found that our customers require more than just laser engraving or that laser engraving requires other processes to enhance the finished product. I have bought and sold several pieces of equipment over the years as a result of the equipment not producing the desired results; it was more difficult to market than anticipated or I just didn't like the process once I could do it. With the exception of the sublimation printer I never lost any money on those transactions and usually picked up a little.

But the need to offer complimentary processes is real and marketable. And, in many cases gives you a clear advantage over competition.

I recently purchased a card printer; a speculative purchase, but one that I had been considering for some time. The gamble proved to be a good one as I was just awarded a very large job which not only repaid my investment but produced a reasonable profit after expenses. Now I can broaden my name tag assortment and offer the service to other engravers who have a need for that type name tag but not enough volume to justify the purchase.

[Rodne Gold]

I must say , the one thing I sometimes detest the most is working for the signage/engraving/promotions trade..and this is an area where we have moved away from in all that we do. We have a few good trade customers but a lot of them are really worse than the general public/industry/corporates.
Everything is urgent , they try lowball you on price , a lot of artwork is not ready to go , small qtys, tons of competition for the "trade pie" in our area, lots of fly by night promo agencies and "signage" co's , payment issues , the list just goes on....
Far more profit dealing with an end user at end user prices than 2x the amount of work at "trade" prices.

[Mike Null]

I agree for the most part. Recently I turned away a promotional products account who couldn't be clear about the art that his customer wanted to use, the precise acrylic piece, the size of the engraving etc., etc. After several emails I finally advised him to find somebody else to do his work. On the other hand, I do work for a jeweler, another awards shop--much larger than me but without one of my processes, a photographer, and a couple of promo products companies. These are long time customers who pay more or less on time and pay my rates. I also have several wholesale name tag accounts who are among my oldest customers.

I had two sign shops that I discontinued for the reasons you mentioned.

[Dan Hintz]

Perhaps most important in the refocusing of my business besides the processes I had added or discontinued is my customer focus. I have, for several years, been concentrating on commercial and industrial clients and moving away from individuals or what I term retail customers. Today, I rarely accept any retail business as I perceive it to be a distraction and even a nuisance. Keep in mind I am home based and basically a one man gang though I have a part time helper. Doing business on the internet is so convenient, whereas having retail customers come to my home isn't and further, they don't want to pay a fair price--at least what I think is a fair price.

Yep... getting rid of "retail" sales has helped me immensely (one man gang here, too). I kept trying to convince myself that "this sale will bring in others when word spreads of my good service"... not so much. I tried taking on jobs at low rates for "in need" customers, again thinking it will bring me more business down the road. All it did was bring me more "in need" customers. I was amazed at how demanding these same characters were after asking for reduced prices. You want a low price and fast turnaround and amazing quality? And you want it even cheaper the next time around?

In the end I was working for (literally) a few dollars per hour. Yes, let me come into my six-figure engineering job like a zombie the next morning because I was up all night working on your $100 job (with $40 in materials) that had to be finished before tomorrow's lunchtime get-together with friends. No more of that. I try to let people down nicely, but I refuse to do it. The only "retail" jobs that get done anymore are ones meant for me.

[Liesl Dexheimer]

Wow, another great discussion! Thank you Mike for contributing this info. It was nice of you to share your experiences & ventures with your business. You tried many different avenues and have had to evaluate and reevaluate your strategy. I too run a home based business, basically a one man operation like yourself. I've wanted to expand our business into the sublimation market but feel now is not the time because of the economy. I've had quite a few customers come to me and say they are unhappy with their current engraver. Usually they either complain about the quality or the service (takes too long for them to get their product). However, the sad thing is that they don't want to pay for better service or quality. I've done a lot of price quotes recently and most of them fall through & my guess is it's usually price. Lowest bidder almost always wins. I'm not sure if it's just the area I'm in or what...is anyone else experiencing this situation?

[Walt Langhans]

Oh what the heck, here's my 2 Cents

I think the first thing that people who get into this business need to do is take a good hard look at themselves and ask 'how much do I know about business' which includes sales, marketing, customer service, and financial concerns. And if the answer is not much then get some help before you take the jump. The talent and creativity of the people on this forum never ceases to amaze me, but just because you can make neat things that doesn't mean that people are going to be willing to buy them, and even if you can make neat things that people ARE willing to buy, you still have to be able to get the word out and then deal with the day to day of the sales side.

Probably the biggest mistake I see when people start talking about what business they want to do or get into is that very few of them realize what business it actually is. I don't care what you are doing or making but if you are a one person shop, you business is sales. Pure and simple. No sales = no money = no business. People 'know' this but few realizes what it means.

The thing is that most people who have the arts & craft and/or designer engineer side, aren't typically wired for sales / business side of things but that doesn't mean they can't learn or run a successful business, but generally it's done through the school of hard knocks and trial an error however it doesn't have to be.

I respectively and 100% completely disagree with:

At the conception I believed 100% in the "business plan". Today I use it as a guide, but if you want to succeed don't put too much stock in that document.

Do put lot's of stock in that document and do have one. But realize that a business plan is a living breathing thing that should be flexible and adjust to all the factors that affect your business and isn't something static that's carved in stone. How many of you turn your laser on in the morning without a plan? You might not have it written down but you at least have an idea in your head of what needs to get done and in what order don't you? So why would you approach YOUR business in any other manner?

So how do you come up with a plan for your business and try to avoid the school of hard knocks if this experience / skill isn't in your wheelhouse? Simple get some help. Here in the states there is an organization call the Small Business Administration. They have offices all across the US and there goal is to help you with your business. They are staffed with people who have real world business experience that are will to help you at the low low cost of FREE. In any given office you'd be hard pressed to bring them a problem that some one there wouldn't have some experience with. There is no excuse not to use this resource.

So work harder or smarter the choice is your my friends, but realize that you are not in the laser business you are in sales.

*** steps down off soap box ***