How to Make Money at Screen Printing

Establishing good policies and habits from finances to customer service is critical to running a profitable screen printing business. November 22, 2010
By Jill and Sam Wildt, Contributing Writers

The simple act of acknowledging a customer who walks into your shop or being friendly to a customer who calls in may seem to be an obvious part of good customer service, but you must make sure your employees are sticking to this practice.

Though all business owners would love to discover a quick and easy secret to profitability, real success comes through hard work and by following basic business principles. To run a successful, profitable screen printing business, we’ve found that it’s imperative to keep a constant eye on your margins, find one or two reliable niches that will supply your shop with steady business and provide impeccable, honest service to your clients.

As owners of a diversified apparel decorating shop for 11 years, we’ve been through many stages of growth and have discovered how to ensure our business remains profitable. Though we have our slow months like every other business, we know how to prepare for those less-profitable times by saving during our busier months. Following are our key strategies to building and maintaining a lucrative screen printing business.

First, it is imperative to have routine, precise bookkeeping. Though we have a bookkeeper, we also keep our own Microsoft Excel spreadsheet so we can track the money that is going out against every penny we bring in. On the left-hand side of our spreadsheet, we list all of our overhead costs, such as electricity, gas, rent, etc. On the right-hand side of the spreadsheet, we list our suppliers. As the bills come in, we input the amounts we owe, and to whom, in the designated places. Then, those columns are brought down for a total, and we can compare what we owe to the actual amount of money we have in the bank. Knowing how those two amounts compare, we can decipher what we need to make in a month and then divide that amount by four to map out our goals for each week.

It’s almost like the stock market in a sense, as we watch the spreadsheet continuously throughout our workdays so we know exactly where we are. Watching our numbers so closely also has let us identify sales patterns through the months of the year. We now know that we run lean in January and February, so our expectations are lower during that time of the year than in our busy months of June, July and August. During these more profitable months, we stockpile our money to get ready for January and February.

In addition, we keep our staff informed of all our overhead costs so they don’t think we’re pocketing all the money they see coming in each week. Every Monday, we meet with our employees and discuss our weekly sales goal. We make it clear what dollar amount we absolutely have to bring in for the week to make a certain percentage of profit, and we display our goals on a huge white board for all the staff to see.

Our production manager also holds a daily morning meeting. In fact, we instituted a policy that if he does not conduct this daily meeting by 9 a.m., all of the employees can go home paid for the day — so he hasn’t missed one yet! By gathering all the employees every day, we ensure that everyone is on the same page in terms of “dollar goals.”

Nailing Down Niches
Keeping a close eye on your numbers is only part of a solid strategy for running a profitable screen printing business. In addition, you must find one or two niche markets that you can develop that will give your business a sound reputation for providing quality goods. Our niche is the military market, which makes up about 10% of our business. We are persistently pursuing new business through the military contacts Sam knew when he served or has since met. Our motto is to focus on our long-term niche and let the retail or local business happen on its own.

For our retail storefront, we have a salesperson who mans the front desk and handles the smaller sales from customers who walk in off the street. Sam handles the larger, 500- to 5,000-piece orders, which are mostly for our loyal military clients or contract work. For now, contract work only accounts for about 5% of our business, though we would like it to grow to roughly 30% or 40% of our overall business. We carefully screen possible contract customers, as we prefer that they bring us five to 10 jobs a month, not two jobs a year. It’s important not to accept a contract job just because it presents itself; it has to be worth your time.

In addition to the above success strategies, it’s also important to be upfront and honest about your pricing and services so your customers can recognize the value of your work and understand what a fair price is. Unless you profit from a job or are getting your foot in the door with a potential large client by agreeing to a break-even job, you shouldn’t take it.

For example, if a customer walks in and wants an eight-color shirt with traditional screen printing, you have to figure $20 for each screen setup and, since there are eight colors, the price is at $160 right off the bat. Once you figure in the shirt, the production time and everything else, a single shirt is going to be in the price range of $350.

Instead of turning this kind of job and customer away, we explain why the cost is high for one T-shirt. Then we’ll follow up with a recommendation of the most cost-effective alternative for that customer, which, for this example, would be to use digital direct-to-garment (DTG) printing instead of traditional screen printing.

Also, most of the time we won’t take jobs that we can’t profit from, though occasionally we’ll do a small, break-even order if the client can potentially lead to larger sales. Let these potential big clients know that you’ll do the six hats for them but, after that, you expect big business.

As owner of a screen printing shop, it is hard to stick to your guns on pricing since a client can argue that he’s been quoted a lower price elsewhere. You can go through these funny cycles: First, you are humble, let people walk all over you and agree to a low price that’s unfair to you. Then, you go through the ticked-off stage where you will not allow customers to take advantage of you. Then, you go through the phase of trying to figure out how to get them to stop walking all over you, while still getting their business.

We went through these cycles too, but after so many years in business, we are at the point where we can explain our pricing firmly to people. Once we walk a customer through our reasoning, he begins to understand, and we can work with him on finding the most cost-effective solution and products for his order.

Another pricing strategy we have is not giving a quote until we get a customer’s name, number and e-mail address. This enables us to make a connection to that person and follow up with him later. Say a potential customer is calling around to find the cheapest price for printed shirts. Once we capture his name and number, we can call back to follow up and have a second chance to explain the real value in what we offer, compared to our cheaper competitors. Though many screen printers often think they can hook a customer in with a low price for the first job or two, it’s hard to convince him to pay more later once that customer sees how low your pricing is.

Service First
While being upfront about pricing is an essential element to success, it also is important to follow best practices in face-to-face and over-the-phone customer service.

The simple act of acknowledging a customer who walks into your shop or being friendly to a customer who calls in may seem to be an obvious part of good customer service, but you have to make certain your employees also are sticking to this polite practice. Being helpful and friendly to clients can go a long way in terms of earning their business. We brief all of our employees on how to treat customers who take the time to stop in or give us a call.

We recently had a new employee who hadn’t yet been briefed on our greeting policy and therefore didn’t welcome a customer who stopped in one day. After the customer left, we approached our employee and explained to her what we expected of her. We let her know that if a possible client walks through our front door, we always say, “Welcome to Palomar Printing. How may I help you?” Or, “I will be right with you,” simply to acknowledge that person.

Then we pointed out to her that while we pay her, it’s really our customers who are responsible for all of us getting paid. Just as she understood that she must be nice and respectful to us as her employers, she quickly caught on that she needed to have the same attitude toward anyone who comes through our doors or dials our number.

As a screen printing business owner, you can’t simply sit back and expect money to pour in. You have to dedicate yourself to fastidious bookkeeping, work your way into the heart of a niche market or two, be firm and consistent with your pricing, and provide superior customer service to your clients — all while providing high-quality decorated apparel.

Sam and Jill Wildt are co-owners of Palomar Printing, Worchester, Mass., which offers screen printing, digital direct-to-garment printing, vinyl graphics, promotional products, and embroidery. For more information, visit palomarprinting.com.



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