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When Should You Start Your Own Business?

(June 2005) posted on Fri Jul 15, 2005

Find out how to determine whether you have what it takes to own your own screen shop.


By Gordon Roberts

I've taught a course in screen printing for several years now aimed at the complete novice. It never fails to amaze me when I see my students take their basic skills and, over time, turn them into a flourishing business. Even with all the innovations and all the high-end technology that we deal with these days, it is still possible, with a few thousand dollars up front, a little space in the basement, and a lot of hard work, to carve out your own little niche in this industry. Many—perhaps most—of the major players in the world of screen printing started this way.

So what's stopping you?

You have worked in a print shop for years and have all the requisite skills. You know where to get your hands on a great second-hand press and a workable dryer. You have space in the garage, and your daughter's new Mac will do for an art department for a while until you get established. You're confident that your ideas will sell and you know the customers you want to target for sales.

Perhaps you already have your business up and running and are trying to decide what the next step should be. Should you move to a larger facility, hire more employees, buy that new piece of machinery? Everything is primed for that jump to the next level—all you have to do is make the decision, pull the trigger, and start reaping the rewards. Sounds like a pretty good plan, and it is, so why aren't you doing it?

The answer to that question of course comes late at night when you lie awake wondering if it really could work. How long will you have to live off your savings until the business shows a profit? Is your product really viable in the marketplace? How many hours are you going to have to put in every day? Will the new press really pay for itself? The questions are endless and are often responsible for most budding entrepreneurs' lack of progress. In this month's column, I will show you a way to cut through these worries so you can see the road ahead more clearly and decide whether it really is the right time to make your move.

Are you the right person for the job?

You have to start by asking yourself some difficult questions if you want this process to be successful. Are you a self-starter? Are you ready to work all the hours that the day gives you to get this project off the ground? Are you ready to be the boss, the marketer, the supervisor, the salesman, the customer-service manager, the accountant, the printer, and the shipping clerk? Will you be able to do all of this and still interface with difficult customers, bankers, vendors, and others without losing your focus? It sounds frightening, doesn't it? But if you can answer yes to these questions, then the ultimate benefits that come with owning your own business will make it all worthwhile.

Perhaps one of the most important questions you have to ask yourself is, do you have the support of your family and loved ones? A supportive spouse or partner can be the crucial element that allows you to follow your dream. The first few years of a startup business can be hard on family life, so make sure that you have the backing of those nearest and dearest to you and warn them in advance of what they might experience.

Write a business plan

Put your ideas down on paper and use the skills that you will bring to your business to thoroughly critique those ideas. This is no time to avoid the realities. Ask these questions ruthlessly and hold yourself responsible in the same way you will hold your future employees responsible for their analyses. If you don't have an adequate answer to each of the following questions, then your business will probably fail—and you will have thrown away your opportunity. Be brutally honest with yourself.

Is there a need for the product that you are going to provide? Check around very carefully and make sure that there isn't somebody else out there taking care of your potential customers. If there is competition, will you be able to bring something new to the table, whether it be lower prices or more timely delivery, and will it make you the vendor of choice?

Have you properly identified your potential customers? Go and talk to some of your potential customers and find out if they are happy with the way they are being serviced by your competition. It will take more than the offer of lower prices to make a customer switch suppliers when he has built up trust over many years with the very businesses that you are going after. Do you remember how you reacted when the new ink salesman came in and promised you the earth if you would only start using his products? How many of those guys did you send packing simply because you didn't have time to talk? Make sure you know in advance why your customers should want to use you over the competition, and have strategies ready to win them over.

Do you have adequate funding? Many potential entrepreneurs think that a second mortgage or a savings account will be enough to start their businesses, but this scenario is not always possible. The rule of thumb is to work out a worst-case scenario by determining exactly what finances you'll need to get the business off the ground and sustain it, then double the amount. This figure can be quite daunting, but it is part of the reality of launching your own business.

If you write a strong enough business plan that takes this number into account and projects a profitable business, then it won't be hard to find the funding. But if the figures don't add up, you're just wasting your time. Do a break-even analysis. Several Websites feature calculators that enable you to punch in your startup costs, the price at which you expect to sell your product, and your overhead expenses in order to predict your break-even point. You can find a very good calculator online at http://www.dinkytown.net/java/ breakeven.html.

This also might be a good time to go to your local office-supply store to check out some of the software packages that are available for developing business plans. They appear at first to be expensive, but the $100 or so that you spend on them will translate into a professional business plan that could net you the bank loan necessary to get started.

Also remember that there are many investors out there looking for ventures in which to invest. If your business plan is good enough to convince one of them to fund you, then you know you are on the right track.

Additionally, you can take your business plan to the Small Business Administration (www.sba.gov) and apply for one of their small-business loans. They have many incentives available, including special minority loans (remember, if you are a woman, you are considered a minority). Make use of them. Many financial institutions require anything from a 20-40% down payment on a loan, and it will often be the quality of your business plan that will determine whether you pay the higher or the lower figure.

Are you lucky? Ask any successful screen-shop owner what the most important element in getting the business started was. He or she will inevitably tell you that it was luck. However, a little more investigation will show you that in a lot of these cases, it was not so much luck as the skill to see opportunities where others didn't. It may be luck that drops

a new substrate in your lap that needs printing, but it is the problem-solving skill of the entrepreneur that makes the printing possible. Keep your eyes and ears open for these "lucky" opportunities and seize them enthusiastically. Many a successful business has been built on the back of a customer who walks in and

asks whether something uncommon or unusual can be printed. The established business shakes its corporate head and says no, while the can-do startup shop says maybe and then sets out to figure exactly how to do it.

Ready to own?

The benefits of owning your own screen-printing business can far outweigh the initial setup difficulties if you remain determined. The industry is growing, and there are new opportunities for startup companies appearing every day. If you choose your niche carefully, there is no reason why you can't develop a successful business. All it takes is a lot of hard work, some very focused planning, and, occasionally, a little luck.


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