A major capital investment may seem like a no-brainer, but it will change your organization in ways you need to consider before signing the purchase order.
Congratulations! Business is great and you’re able to purchase your first automatic press. For many budding entrepreneurs, this is a milestone objective. I’ve been there, and it’s an exciting time. It’s also scary.
Believe me, you will question yourself. Are you ready for this? Can you make the payments? How much should you put down? What is this going to do to your business? Seeing the world through the rose-colored glasses of “what if” can be exciting and exhilarating, but is that vision possible?
The answer is, it depends. It’s yes if you take a step back and fully consider the consequences of bringing on an automatic press.
Sadly, it’s no if you only consider the front-end costs of the press, compressor, chiller, and installation. Many articles have been written about the support and installation costs associated with automation. I’m going to go beyond those and look at changes to your overhead and cash flow that many buyers don’t anticipate – hopefully helping you avoid the disappointment of not realizing the potential of your first major investment.
Before discussing these overlooked costs, it would be helpful to set the stage for how most small printers come to the decision of purchasing their first automatic press.
Startup operations typically begin in a garage, basement, or other home setting. They have a manual press with a flash, heat press, or small dryer. They sell to friends and family, with a few referrals. Or, their printing business may have been a by-product of a craft-making hobby with goods designed to be sold on websites like Etsy. Business grows to the point where it becomes a burden to get the work out with just a manual press. Because it’s easy at this stage to confuse cash flow and profitability, it’s unclear whether the business is making money.
At this point, the entrepreneur has two options. The first is to hire a part-time or full-time employee to help increase production. (The shop may already have one or two employees.) The owner will be doing most of the key tasks like selling, creating artwork, printing, and of course, keeping the books. Something has to give, and it usually means considering the second option: automation. At first glance, it makes so much sense.
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