Printwear

May '20

For the Business of Apparel Decorating

Issue link: https://nbm.uberflip.com/i/1238115

Contents of this Issue

Navigation

Page 20 of 68

1 8 P R I N T W E A R M A Y 2 0 2 0 1 8 P R I N T W E A R M A Y 2 0 2 0 EMBROIDERY Stitch Solutions J e n n i f e r C o x Only So Many Ways to Grow Your Profits Focus your sales conversations and ef- forts on the products that bring in higher profit margins. A customer that is order- ing performance golf shirts is highly likely to add some hats to their order. Sell the shirts and mention the caps near the end of the conversation. RANKING OPPORTUNITIES Now that you have the main categories in your head, it is time to rank them by the level of opportunity and the level of interest they represent. Rank each of the six categories as an opportunity level from 1–10, with 1 being a low opportunity and 10 being the highest opportunity. Next, rank each of the six categories as an interest level as A, B, or C with A having the most interest, B having some interest, and C having little interest to you. Now, which of these six categories comes out with the best or highest ranking? The ones that have the closest to a 10A ranking are where you should focus your efforts to increase the profits of your business. For some people it will be getting more customers, for others it will be improving the product mix. There is no single correct answer. This process of ranking the catego- ries helps you evaluate what gives you the biggest chance of increasing your profits because it will work, and, more impor- T here are only so many ways to grow profits in your business. The trick is to determine which way or ways will yield the best results based on your current situation, resources, and capabilities. Let's break down the different ways so that you can evaluate where you want to focus your efforts this year. Let's outline six main categories of ways to grow your business profits. GET MORE CUSTOMERS The more customers you have, the more profits are possible. For some business owners, the idea of getting more customers is not a big deal. For others, I may as well suggest that they sprout wings and fly. GET MORE FROM EXISTING CUSTOMERS Every time you make a sale, offer them an additional product to complete the purchase. Hats to go with the shirts for the landscaper. Jackets to go with the hoodies for the contractor. Aprons to go with the shirts for the new restaurant in town. Golf shirts to go with the dress shirts for the front office sales staff for casual Fridays. REDUCE COSTS When you can get a better deal on your apparel, materials, or supplies you can sell your finished goods for the same price yet yield higher profits. Another way to reduce costs is to increase your production efficiency so that you are making more units per day. You can also focus on lowering the number of errors made and waste produced, both of which lower costs. INCREASE PRICES If you have not increased your prices in the last 12 months, it is probably time to do this, no matter what. Prices go up, that is how it works. There is no reason for your prices to remain stagnant for years on end. IMPROVE CLIENT MIX Have you ever heard of the 80/20 rule, also known as the Pareto Principle? In the simplest of terms, it means that 80% of your sales come from 20% of your customers. The secret to using this concept for the maximum benefit is to figure which customers are in that magi- cal 20% and focus as much time and effort on keeping them happy and then finding more customers just like them. IMPROVE PRODUCT MIX You can apply this same 80/20 rule to your product mix. Which of your products do you sell the most? And which products bring in the most profits? I am surprised when I hear a business owner say that they did not realize that something they sell a lot of (caps for example) turn out to be not very profitable for the business. These products, caps and t-shirts in particular, will sell themselves. You do not need to work to sell them. CATEGORY OPPORTUNITY Level 1–10 (10=highest) INTEREST Level A–C (A=highest) Get more customers Get more business from existing customers Reduce costs Increase prices Improve your client mix Improve your product mix

Articles in this issue

view archives of Printwear - May '20