Business Management Software

Learn how to determine the proper features and scale your needs to run and grow your business.
Aug 1, 2008

By Mark L. Venit, MBA

There was a time at the beginning of every new apparel decorating business when the owner could recite by heart the details of every order in house — sizes, colors, styles, design particulars, due date and total sale amount to the penny — along with details about the event or client for which the garments were printed.

As successful shops grow, there comes a time when the owner's brain can no longer precisely reference all the details of every order. When a shop reaches that mystical milestone, smart businesspeople recognize they need help to keep on top of incoming orders, purchasing what for whom, managing production variables and staying abreast of myriad other minutiae. Since the computer is the core of all decorating businesses, it's time to leverage that equipment and invest in shop management software.

One way to think of shop management software is as a virtual file cabinet in which you store data and can retrieve it quickly and efficiently. As your enterprise grows, you may add more file cabinets, and the best systems ideally enable you to link information in different file cabinets so you can use it repeatedly and access it from different locations.

In the following pages, Impressions presents an overview of the issues you should address before settling on any of the various software packages on the market. (Editor's Note: The author is a principal in a shop management software company, which he mentions in the article. He also presents numerous industry seminars on this topic and has worked with the Impressions staff to ensure this overview is fair to all the software products on the market.)

This article will help you get a handle on what's out there, provide some guidance on what questions to ask yourself and software vendors, some awareness of the learning curve issues, cost and financing options, and other issues you want to know about before making a purchase that can't be refunded.

Let's explore the major software functions you'll want to measure against your current and near-term needs, and look at wish-list features that increase as you move up the food chain. We'll also outline the pricing hierarchy to help you limit — or expand — the horizons of your search for software that meets your needs and budget.

Graphics software and e-commerce solutions are beyond the scope of this article.

KEY FUNCTIONS
1. Accounting & Finance — If your primary needs are basic banking chores and general accounting functions, an entry-level, off-the-shelf accounting program such as QuickBooks by Intuit Inc. or Peachtree by Sage Software will cover you for assembling your general ledger, tracking sales and expenses, generating invoices and purchasing orders, tracking accounts receivable and accounts payable, and providing one-button, profit-and-loss and balance statements.

Each offers several versions, starting with a basic application ($80 for Peachtree, $100 for QuickBooks) or a basic Web-based subscription starting at $10 a month.

More expensive versions include more features: payroll software, the ability to do credit card transactions, etc. Some off-the-shelf version of QuickBooks or a competitor should be all a smaller shop requires.

Ask your accountant which software to buy and I'll bet his answer is: QuickBooks. It's the most widely used software in our industry and by scores of other small to mid-size businesses. Accountants also like QuickBooks because they're comfortable with it, so they don't have to spend time learning new software, even in cases in which another program may be better suited to the client's needs.

Should your accounting needs grow, you may want to move to the next level of software — industry-specific applications. Move up when your business requires the capability to address complex financial functions, perform various cash-flow operations, track massive order-volume complexities, perform higher-end bank reconciliation functions, monitor large volumes of inventory purchases and holdings, deal with multiple commission levels and variable royalty schedules and generate scores of different reports.

Only you and your accountant will know when your business has reached the tipping point, which would mandate the switch from a generic computer program to industry-specific software.

INDUSTRY-SPECIFIC SOFTWARE
"Industry-specific software" is essentially a system tailored to the culture, language and conventions of a particular industry in terms of how data is gathered, processed, evaluated and reported. That doesn't automatically translate to big bucks, as there are industry-specific programs for apparel decorators for as little as $200 to $300, such as E-Z Estimator, designed for embroiderers and quilters (ezestimator.net).

The biggest advantages of leading industry-specific programs are comprehensiveness and speed. Most do that through integration of various modules that facilitate a seamless workflow system from order entry to shipping, and often many before- and after-the-sale functions. The biggest downside is often the high cost.

That said, you should view this investment in the context of amortizing the purchase over many years of use and measuring the operational economies it will deliver. The equation may show that capital outlay for sophisticated industry-specific software is cost-effective in the long run.

Your accountant will want to weigh in on any accounting software you consider, as he should. As a general rule, though, you can expect that your accountants won't recommend — or bless — a large investment in industry-specific business management software. (Some progressive CPAs will prove exceptions to this rule.) Explain that most of these programs do not have a proprietary accounting module; they are designed to integrate with QuickBooks or other off-the-shelf software, such as Peachtree, MAS 90, AccountMate and others.

1. Pricing — If creating a price list is a high priority, there are lots of options. Some generic programs offer a limited ability to construct decorated apparel price lists, and shop owners highly skilled in Microsoft Excel can create their own. For the rest of us, however, several software vendors have developed good programs addressing inventory and pricing in every sector and level of the apparel decorating industry. Some are stand-alone programs, while others integrate with standard accounting and inventory management programs.

All industry-specific price list software enables users to either create price lists from scratch or download electronic pricing databases from major garment wholesalers.

2. Purchasing — Are you content calling suppliers and/or placing orders online? Then you don't need industry-specific software. However, if you want to automate apparel buying and auto-generate purchase orders, among other advantages, look at industry-specific software.

A purchasing module can be much more than a simple tool for buying stuff. It's the critical link in verifying the accuracy of payables. It's also invaluable for determining and quantifying buying trends, and aggregating purchasing data when negotiating with vendors for discounts and freight allowances.

3. Inventory Management — Smaller apparel decorating companies manage inventory by simply buying what's needed when it's needed. But for larger enterprises, tracking inventory purchases, monitoring inventory holdings and being able to quickly spot buying trends engenders more cogent marketing and more efficient purchasing. It also creates competitive advantages through faster turnaround, more efficient production and reduced operational costs. Generic software may offer some ability to see what's on hand, what's committed to orders and what's on order, but it will display inventory vertically, which isn't useful in our industry.

For instance, generic software might show the following as an inventory report:

T-shirts — Red Small 36
T-shirts — Red Medium 72
T-shirts — Red Large 144
T-shirts — Red Extra Large 144
T-shirts — Red XXL 24
T-shirts — Red XXXL 6

If you also want to see brand, style number and additional colors, each variable requires another horizontal row.

A custom order for Fruit of the Loom T-shirts, styles 4567 and 6789, in six different sizes distributed in red, navy, black and forest green, combined with Hanes crewneck sweatshirts and Port Authority hoodies, will require a full page — or two — just to display what's in the order.

In our trade, we'd rather see the specifics written in our own jargon and conventions — what you see in our order forms, purchase orders, work orders, invoices and other applications. (See chart above.)

The larger your order volume, the greater the need for an industry-specific solution, though features and benefits of various software programs differ substantially. Also, the more types of items you decorate and sell (promotional products, giftware, awards, signs, digital printing or ceramics), the more useful comprehensive inventory management software will be.

The most sophisticated industry programs also offer kitting as a way to track complex manufacturing and decorating processes. Kitting (used widely in the sign industry and awards business) enables users to manage inventory for finished items sold as a single unit (incorporating screws, hardware and add-ons, with a variety of decorating technologies).

4. Production Management — Tracking and completing orders with precision, on time and without error, can be daunting. Having consulted for more than 600 industry firms, I can report that, for the most part, smaller firms track production variables much like industry pioneers did in the 1970s — with work orders on clipboards, in file folders in trays, on Post-It notes stuck on computer monitors, on chalkboards or DryErase whiteboards and — especially for one-man shops doing only a handful of orders daily — in the boss's head.

Some small companies do, however, manage production quite capably using spreadsheet software. It's important to note here that QuickBooks-type accounting software has zero capability to manage work in progress. It can't track artwork, digitizing, pre-production, credit approval or purchasing, among other issues. That said, QuickBooks and other popular programs do integrate to a greater or lesser degree with industry-specific production management programs.

Good production management software will include quality control data to make re-orders run smoothly, avoid repeating snafus, and will track and report production efficiencies or shortcomings.

5. Sales & Marketing — A range of options and soup-to-nuts functions are available. Simple reports and database tracking can be found in some entry-level programs. Explore higher-level programs to get a comprehensive handle on managing and monitoring diverse target markets, different types of work (custom, preprints, licensed, athletic, contract, events merchandising), managing salespeople, tracking performance of sales agencies and rep groups, evaluating the success of new products, tracking leads, and tracking the activity of key accounts.

While lower-end software might include some rudimentary contact management modules, they don't begin to achieve what you can harness from programs such as Act and Goldmine. Except in the higher-end programs, most contact management software is offered primarily in stand-alone modules that don't integrate with other modules.

The advantages of using your customer and prospect lists to generate e-blasts and broadcast faxes are axiomatic and these functions can be purchased as stand-alone modules or are included in many standard programs.

If customer relationship management (CRM) is a major focus in your business, choosing the right CRM solution might include purchasing an all-encompassing program that covers the gamut from contact management to comprehensive sales force automation, the ability to track marketing campaigns and monitoring the daily productivity of customer service personnel. Properly used, sales and marketing software doesn't cost money, it makes money.

6. Shipping & Receiving — Do you need to get this type of software? Only if you do a lot of warehousing, which most apparel decorators don't. If most of your orders are delivered by salespeople or company personnel, or are picked up by the customer, shipping and receiving software programs are unnecessary. And all that the generic and industry-specific programs do for you is essentially enable two-way communications for data and shipment tracking with UPS, FedEx and USPS, as well as some common carriers. The data you'll obtain or share is essentially about addresses and tracking numbers.

THE REAL COST OF INVESTMENT
The price of business software is paramount for most decision makers. But getting to the real bottom line can be challenging. Just about anything you purchase or subscribe to will have ancillary costs, however they might be packaged, explained or disclosed. So, buyer beware. Read the fine print.

Here's a list of questions that will help determine the real cost of various software applications.

1. Tech support charges can range from free to an annual fee based on a percentage of the software purchase price, typically 10% to 30%. Don't want a tech support contract? Be prepared to pay a la carte when help is needed at $75 or more per hour.

2. Upgrades may be included free for as long as you own the software, or may be covered in a tech support contract.

3. Most systems require users to obtain a license to install and use software. The cost can be a flat fee and/or a charge for each terminal equipped with the software.

4. Training of some sort will be included with your software purchase. It likely will include video tutorials, a user manual, webinars and other online training. Higher-end industry-specific programs offer optional on-site staff training for which you can expect to pay $400 to $500 per day (per trainer) plus travel expenses.

5. If you're purchasing a software bundle with modules for, say, accounting, pricing and contact management, and the bundle integrates with lower-priced industry-specific or generic software, consider the total cost of all the various software programs, including licenses, tech support and other charges. Higher-priced software might be more cost-efficient if there are few or no add-on purchases required.

6. Will your new software require equipment upgrades? If you're investing in a multi-terminal system, anticipate purchasing a server for $2,000 to $5,000, including a service contract — though budget units can be found for $1,000. If you need new workstations, they will run $750 to $1,500 per person. Ask your prospective vendors to provide best practices recommendations for server and workstation purchases.

COSTS & FINANCING
Should you buy or lease? It's hard to say; your accountant will be helpful in crunching numbers. Many vendors offer their own leasing programs. Most of the industry's well-established leasing companies will finance the major industry-specific software programs, though your bank probably won't. Determine if you also can roll training and other ancillary costs into the loan or the lease.

Following is a quick guide on price ranges for various brands of industry-specific business software. Some vendors' prices are negotiable or subject to discounts through distributors, with the purchase of other products, or via other incentives and adjustments. This list is not comprehensive, but it does show all the most widely used software brands in the decorated apparel industry and represents a good starting point for your own investigation of what's out there. Check the vendor Web sites for details on features and benefits, availability, hardware requirements, and other factors. Pricing may be published online, though some vendors require you to call or e-mail.

SOFTWARE VENDORS & PRICING

Under $500
• QuickBooks (quickbooks.intuit.com)
• Peachtree (peachtree.com)
• E-Z Estimator (ezestimator.net)
• EstiMate QuickQuoter, EstiMate Professional (pricingmadeeasy.com)
• Wilcom Business Advantage (wilcom.com)

$500 to $1,000
• More advanced versions of QuickBooks and Peachtree
• EstiMate Enterprise (pricingmadeeasy.com)

$1,000 to $5,000
• More advanced versions of QuickBooks and Peachtree
• MAS 90 (sagemas.com)
• Pricelist Professional (smrsoftware.com)
• PriceIt (priceitsoftware.com)
• FastManager (fastmanager.com)
• T-Quoter (t-quoter.com)

$5,000 and Up
• ShopWorks (shopworx.com)
• ProfitMaker (asicomp.com)
• Impress (precisesoftware.com)
• Lakeshore (lakeshoresoftware.com)
• Cyrious Software (cyrioussoftware.com)

ONE FINAL CONSIDERATION . . .
If you haven't already thought about it, consider how long you expect to use the system you'll buy. Is it good enough to really get you up to speed? Will it serve your needs for now and the near future? What about the longer term — say, three to five years? Will you end up buying something today that you might outgrow and have to replace in the not-too-distant future?

Happy hunting.

Mark L. Venit, MBA, president of Apparel Graphics Institute, Ltd., provides management and marketing consulting and proprietary research to apparel graphics companies. He also serves as chairman of the board of ShopWorks Software. For more information or to comment on this article, e-mail Mark at markvenit@cs.com.

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