The Next Level: A Business Expansion Case Study

Raw Talent Inc. co-founders share the experience of a recent upgrade from one manual and one entry-level automatic press to two high-output, 8-color automatics.
Dec 17, 2008

By Susie McManus, Assistant Editor

On a good day's worth of production, Cody Murray and Corey Bramlett, president and vice president of custom apparel company Raw Talent Inc., Bethlehem, Ga., pull in what a majority of their peers earn in one salaried year. The 24-year-old co-founders conservatively forecast that Raw Talent — which is fresh out of the four-year window that constitutes a company's start-up phase — will take home $4.5 million in revenue for 2007. With numbers this impressive, imagine how many pieces Raw Talent must ship out daily to see this kind of return. Clients and profits are growing exponentially, so the company recently adapted its facility size, equipment needs and staff count to accommodate for the influx of orders.

It's hard to fathom that these entrepreneurs established Raw Talent in 2002 in Bramlett's bedroom with one computer, outsourcing all aspects of design and production. Five years and three relocations later, the company now produces 95% of all pieces in-house, thanks to two new 8-color Progressive Falcon automatic presses Murray and Bramlett brought to the floor in October 2006.

How did they determine Raw Talent could handle this pricey investment? Here's Murray’s advice to decorators contemplating taking a similar business leap.

READ THE SIGNS
Murray knew the upgrade was a must when he could see the strain in Raw Talent's workflow. "We couldn't get stuff out the door fast enough," he says. "Our ideal turnaround time is five to seven days, but we were at around 25 days. It got really rough because of our volume." At that point, Raw Talent used three contractors, and Murray estimates that 85% of the company's business was fulfilled out-of-house. "When [your workload] becomes a headache, you know you're ready."

Looking back, the entrepreneurs believe they should have brought in the new equipment earlier. "We knew what was available before we needed it," says Bramlett. "We definitely should have invested earlier, but we didn't have the money." When asked how far in advance to plan for an investment such as this, Murray says "most of the time it's already too late. If you've got a steady workflow, you should always be planning."

Just as you wouldn't buy a car without first checking its mileage and crash test ratings, don't invest in a costly automatic press without first doing your homework. "We're young, so we're Internet junkies," says Murray. The Raw Talent founders surfed Web sites such as the Impressions forum, t-shirtforums.com and screenprinters.net to learn about the availability and quality of automatic machines. Bramlett estimates that it was three months from the start of in-depth research to the actual point of purchase.

Another option to investigate is buying used equipment. "Everything we want is new," says Murray. "But you can save five figures on one press by buying used." He notes that several Web sites can point you in the direction of pre-owned equipment.

After visiting several distributors and seeing the machinery in action, the entrepreneurs chose to go with Progressive, which took Raw Talent's existing equipment as a trade-in for the two automatic presses. "They made a value deal and service [agreement] with us," explains Murray. "When our machines have quirks, the vice president of the company is down here in four hours to help us fix [the situation]."

FACTOR IT ALL IN
Sure, trading in your current equipment for more productive machines sounds great. But what about that heart-stopping price tag? If you're hesitant to take the risk but think it's crucial to your production demands, Murray advises you to carefully consider all variables, such as costs, workflow, clients, hiring needs and anything else that may slip under the radar.

"Plan everything," Murray says. "You've got to recognize the costs that come with purchasing these machines. We dumped $12,000 into the wiring alone [to set up the presses]." He estimates that the upgrade in its entirety took at least $200,000 out of Raw Talent's pocket, which accounts for both presses ($60,000 each), dryer, exposure unit, flashes, electrical wiring and the folding machine.

"Put numbers down on paper and see what volume you're doing," Murray advises.  Also, assess the possibility of large clients or orders backfiring on you. There's always the risk of what Murray calls "locking up a press." If you have one large client accounting for a majority of your production and consequently your revenue, what happens if his business flops and he no longer needs your services? Murray suggests experimenting with your workflow. "You don't want to dedicate a press to one client. Contract out your big clients' orders and then look at your workflow from that standpoint. If these clients are gone, can you still maintain your machine?"

In addition to stabilizing the financial side of your business to verify that you can support such a hefty investment, Murray recommends preparing your shop by sketching a layout prior to the equipment delivery. "We cleared out our other machines, and taped down the measurements to get an idea of where the presses would be located," he explains. It's also imperative to know the distance from the machines to the dryer, he continues, and how far the press’ arms come out in relation to the size of your shop.

"Efficiency is the key to success in this industry. You don't realize how distance can factor into efficiency, so that's why we brought math into our equation. If you're moving 1,000 pieces a day, location really matters."

HIRING HANDS
For Raw Talent, the two 8-color presses equated faster production, increased cashflow and the ability to take on more orders. It also meant hiring more hands to keep production at a steady rate. The company moved into its current 6,000-square-foot facility in August 2006, set up the two automatic presses in October and, by March 2007 had increased its number of full-time employees from six to 21. "To operate efficiently, we need two people working each press and one catcher at the end," explains Murray. “And that's in addition to the staff that labels and bags garments.”

For decorators looking to score in high-volume niches such as hot market printing, a second shift may be inevitable, which has crossed Murray's mind a time or two. As of now, he's satisfied with the ground crew that operates the facility during the day. Plus, the hassle of hiring a night manager and extra employees does not appeal to him. "But who knows," he says. "When we move into our 30,000-square-foot facility in August (2007), we may need to run second and third shifts."   

LESSONS LEARNED
All in all, Raw Talent's transition went fairly smoothly. But Murray does have a few pointers to share. Before the company brought in the two new machines, in-house production relied solely on an entry-level automatic and a manual press. If you decide to install a larger automatic press, Murray advises to expect delays on the delivery, especially since the machines are custom built. "For delivery, get word from the trucking company bringing you the machines rather than from the supplier," he quips. "Anything that large is going to have a hurdle or two. If they tell you four weeks for delivery, expect eight."

While moving the machines in manually wasn't a problem, the delay in delivery time put a strain on workflow, says Murray. Raw Talent prepared for this by contracting out many orders and alerting larger accounts of the changes going on in the facility. However, these 20-somethings learned a valuable lesson during this recent transition. When the company relocates to its new facility in late summer and brings in two more automatic presses, Murray says he's figured out how he'll avoid lag time in production. "Our plan is to build a two-story facility and have our [new] equipment installed and operational so we'll have no days when we're 100% down."

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