s your business continues to grow, so will your profits. The question is, what should you do with all that extra money? The best option could be to reinvest it back into your business.
Marshall Atkinson, business consultant at Atkinson Consulting and Shirt Lab Tribe, says that a good way to approach reinvesting is aiming to solve your shop’s biggest problem. “Just because you’ve put away money doesn’t mean you have to spend it,” he says. “If you’re a planner, rather than a reactor, you can make the moves to invest in new equipment, hire a new staffer or get into a larger space.”
1. Invest in equipment and software.
Take a holistic view of your decorating equipment, and see if you need to replace or add any machines. This can take a longer view of planning if you see your order volumes are increasing year over year, and you want to meet the demand. At the very least, invest in having a tech visit for routine maintenance and audits so that your machines stay in tip-top working order.
This is also a good time to look at new software solutions like management software, a CRM tool or even a computer-to-screen setup. You can also look at investing in your ecommerce tools, since they evolve constantly, and updating or adding new features is never a bad idea.
“When shop owners invest in new equipment or software, some fall into the trap of ‘It's new and cool and I want it,’ and don't stop to think about how new equipment will integrate with their existing equipment or whether there's a market for whatever products the new equipment can be used to create,” says Kristine Shreve, director of marketing and outreach at Applique Getaway.
“Before purchasing new equipment make sure the market is there and that it integrates well with your current staffing and production levels.”
- Kristine Shreve, director of marketing and outreach at Applique Getaway.
2. Invest in quality materials.
Shreve sees a lot of shop owners making the misguided assumption that because something’s cheaper, it’s better for their bottom line. “They don’t do the math on what a cheaper product may cost them in the long run,” she says. “If you’re an embroiderer who buys cheap thread, you might save upfront. However, when the thread has uneven dye lots or breaks often, stopping production, you’ve spent more time and effort to make it work, than if you had invested in a more expensive, better-quality thread.”
3. Find great professionals to help you save more dollars, and reinvest wisely.
An experienced accountant or tax strategist can help you find ways to save taxes and to use tax breaks available to you. A financial advisor or business attorney can help you look at your goals and prioritize your equipment and software investments, new hires, and new shop locations.
4. Don’t skimp on advertising.
Roberson’s favorite way to reinvest money back into her shop is to take 15% off the top of her budget and put that toward advertising products that have a high ROI for her.
To help her decide what to invest in, she figures out what the biggest problem she needs to solve is first. “That tells me what direction I need to go in,” she says. “If your equipment is at capacity and you want to print more shirts, buy faster equipment and then use that 15% you put back into promoting those items your printing on the new equipment.”
5. Invest in ongoing training for yourself and your team.
“The financially solvent shops are the ones that made it out of the pandemic, not the ones with giant accounts receivable problems,” Atkinson says. “If you’re a true entrepreneur, you invest in programs to help you get better at your decorating craft, as well as how you’re making business decisions to increase your profits. You may be in business now, but how about in August?”
This Is About Your Shop’s Future
Any business leader will tell you that you must always innovate to grow your business. Just following the status quo and doing things “like we always have” is the surest way to lead to stagnation and loss of business. But taking the time to reinvest in your business now, will pay off in in a big way later.