Business as usual?

I've been away. Not having had a huge readership to encourage me to keep pouring out my deepest heartfelt emotions and troubles, it would seem that summer has been much more important. The gardens needed tending. After taking some time to just simply watch plants and lilies grow, though, it is time to start thinking about business again. Re-focus would seem to be the key here.

Everyone needs some time away, even if it is only mental. I haven't taken any actual vacations during the past month but I have definitely allowed my attention to wander a bit while I just did the day-to-day stuff that needs to be done as a person involved in a small business is required to do. The rest of the work, the program and marketing development, the lead generation, the efficiency improvements, the continuing development of our operations manual and the analysis of production have all sat here on my desk while I stared out the window. And tended my gardens (gonna be on tours next year in case you're nearby). And pretty much just mentally vacated the premises.

My youngest daughter brought me back, though. We have a rather odd relationship, but I am finally getting to know her a little bit after about eighteen years of our living in separate locales. And she is eighteen at the moment. Should give you a clue as to the way life sometimes happens.

Anyway, she was walking with me in the yard and out popped the question of the day... "Dad, how come you like to garden?"

I thought about it for a minute and, being rather verbose, I'll just paraphrase the answer. Because it is constantly new. A garden varies not only from year to year, but also daily. There is always something to plant, to move, to weed out, to thing, to transplant or water or just plain enjoy. Every single aspect of it evolves and it is a small environment that is exciting at nearly every single point in a year, even if it is covered in snow.

This, of course, caused me to consider my business. Even though we have established some patterns of sales over the years, we are changing daily as well. Last night, I upgraded our accounting system. It is designed to save time but requires work. We are constantly working to focus our sales efforts and to target customers where we can, to manage our employees and provide them with better benefits. Daily, each individual has a slightly different outlook, a different attitude and even a slightly changed view of the quality and timeliness in orders. Our costs change. Sometimes it feels like trying to pick up the ocean in one hand.

That is the aspect of business that fascinates me. How do we grow steadily, how do we maintain at least a semblance of profitability when we are never entirely in control of our surrounding influences? And why do we keep plugging away at it after all of these years.

The answer, I think, lies in the gardens.

All clothing is NOT created equal

You are a distributor (go with me here... it's a thought process). Your customer shows you a shirt and you immediately think 'this is why I hate clothing sales'.

"I bought this at Sears," he says. "Get more for me." (By the way, what he really means is that you need to get them for him cheaper).

Of course you can find them. You're super-sales person. You have experience, the ASI reference manuals at your fingertips and you can do anything. And two hours later, you are concluding that this is a complete waste of your time.

The reason you can't locate the exact same brand and color combination and set of styles or materials is simple. The shirt your customer bought was retail. The catalogs you have been searching through are corporate wholesale. And mostly, the twain shall not meet.

Retail apparel sells way better than its corporate counterparts and is far more profitable to the sellers. If you happen to locate the exact same style in a mill brand (that is, one of the major manufacturers like Hanes or Jerzees), then it probably means that the customer got the item on closeout and the emphasis on the marketing of that particular shirt is now shifting to those of us in the other part of their marketing network. We, the wholesalers and distributors to the corporate market, get the leftovers or standard stock items that don't cut into their more lucrative markets.

Pretty cheesy, huh? And it seems kind of unfair, especially if you're trying to make a living at this horrible business we so affectionately call "trinkets and trash".

Fortunately, bravery and a little bit of soft selling can get you through. And some perseverance.

All will not be sugar-coated. You simply cannot find some apparel if it is purely retail and you may never be able to price it at a lower price even if you do happen to locate it. We go back to the idea that retail sales are far more profitable than we corporate folks ever will be. There is the volume sold through retailers. Way big. This leads, of course, comes the volume of purchases that stores can make as opposed to the six or eight pieces at a time that we can. Seems like we may not be able to get a good deal that might just beat our rather retail competitors.

We're kind of stuck at times. Even offering to try to find something similar is daunting, although it is the job we do.

Sadly, there is no easy solution. The only truly successful approach I have ever taken has been to be honest with the customer and to have more knowledge. If they want to buy from, say, Land's End, it is fine. We can't. If they buy from some other retail location, again, that is all well and good. As a service, we will get the goods decorated. Otherwise, we really don't have a lot more advice to offer.

On the other hand, there are way more customers who understand and they are the ones who get the most attention. Go find a few more of them.

Yes, I DO rant

Today's rant is about trust. It occurs to me that business in general is based on it. Forget the long-term supply contract, the written non-compete, the long and verbose tomes that are best kept in a safe deposit box and never spoken of because they will somehow activate and cause lawsuits of epic proportion (I always enjoy using that phrase).

Trust is about how things are done.

This particular topic arises because after three years with my credit card processing company, I have changed once more. The contract terminates this month and the processing company will be no longer. Enter new folks. They get their chance.

Why did I do this? Easy enough to explain. In a roundabout manner anyway.

We receive, as do most businesses and homes, enormous numbers of letters and solicitations, many from credit card companies, processors and advertisers. Most are not even reviewed. Most are filed in the round bin.

In January of this year, for reasons unknown, and probably because I was bored, I happened to open a note from our soon-to-be future card processing company. The note was all in fine print. It stated that, due to reasons to be explained later, they were raising our processing fee for one particular card by seventy five (75) percent (%). No explanation other than the fact that the rate was going up.

Had I not read the fine print, I probably would not have noticed this.

Fortunately, I did. I then called the processor and asked why they were doing this. They could not give a reasonable answer. After that, I requested a review and suggested that the fees they had earned last year were reasonable (hey, it's a lot of money running through the accounts!) and that they were about to lose my business if they didn't change their tune.

Usually, that is enough. Except that even though the processing company did indeed lower my rates and not make any changes, I was placed in a position of distrust. I knew that I had been treated this way once and that it was likely to happen once more. I also realized that it would be necessary forever into the future to review every single piece of mail, junk appearing or not, for my processor, just to make sure that they didn't pull some sneaky switch later on.

All for trust. Or a lack thereof.

This causes me to review our own (Team Mates) practices. Are we trustworthy? Do we ever attempt to do anything that brings on a feeling of mistrust?

Just wondering. Always.

A little bit of Philosophy

I am not well-read, at least in the classics area, although I do read an awful lot of trashy mystery books and such. One must entertain oneself after all.

But I get to thinking about business in general and Team Mates in particular and come up with some interesting ideas (well, maybe).

One of them is that business should be fun. Yes, it really should be.

I wrote an email reply to a client today. It was just the slightest bit caustic, but there was a point to it. The reply was a response to a demand for credit. Anyone who has ever been in business for a few years gets those sorts of, well, orders. "If you want to do business with me, you'll give me net 60 days". And, of course, they really look promising on the outside. Lots of business, even maybe a credit application that looks like they have tons of good references.

There are little signs, though. The way that the instruction is given. "You WILL give me credit." Definitely a bad sign. "I have thirty thousand dollars worth of orders to place. Don't you want them?" Gotta think about that one. Especially if business overall is down. "I always pay my bills." Oh, that's fabulous. So when?

How about this for an appropriate beginning to a new business relationship.

"Do you have a credit app? And I don't mind paying this right away in order to establish credit with you."

Expectations. I mean, give me at least a little bit of a break here. We have expectations and we even, should the need arise, do our best to raise the level of our customers' education in embroidery, to work with them to give the very best of service, and even to make them smile on occasion.

Which brings me full circle. New customer responses to simple questions like, "We don't normally do net thirty on a first order" are key to the establishment of a good business relationship and the future fun we can have. I really don't enjoy coming in to work and finding a pile of past due receiveables on my desk. I really hate struggling to make payroll while some person sits on my hard-earned cash or struggles because he's too lazy to call and collect from his customers.

Just the way it goes, I think. And today, the letter I wrote? Not all that complimentary. Hidden hopes that maybe the potential new customer might take all those huge orders down the road. Because his responses to my questions regarding credit just didn't make me feel happy. And that's my story. It is Friday. I want to be happy.

You can pick your threads and you can pick your friends...

But you really can't pick your friends' threads. No, really. Ever tried to explain a color to someone? Tough, isn't it. And I'm not talking about the blind neighbor who really wants to know what the sunset looks like. I am truly just talking about, say, a pal on the other side of town, on the phone, who wants to know what your vegas gold thread matches. Or the one who did some t-shirts and now wants to match the t-shirt colors to a crest-sized embroidered logo but needs exact matches.

Personally, my heart kinda sinks when I get the question, "Here are the PMS colors for the design and my client wants them matched exactly."

My first thought is, well (it's a thought), I could just go out and spin some polyester right after I mix the proper colors and do a test print somewhere. That would work, right?

The answer is, um, no. Really, thread never matches ink. It just doesn't. You can take a piece of embroidery or sewing thread out in the sunlight and it looks entirely different in color than it does under fluorescents. Apart from that, it never really matches those expensive little pantone charts that are so carefully updated and handed out (or sold for lots of money).

There are close comparisons. We carry a couple of manufactured threads that provide us with reference charts. The charts are good at giving us an approximation of the color that will closely match but often, it is not exact and we have, over the past sixteen years, actually had complaints by customers who said that our thread color is way off from their own idea of the correct pantone. Some have even come in and looked at our wall of thread (over 100 colors, no waiting), and picked their own, which is always an option.

Oh, wait. We don't have every single color, either. We rarely have to go buy additional ones, but we do, on occasion, have to substitute one slightly different one, or come 'as close as possible' where necessary. But really, how many colors should one be expected to carry?

We do work hard at matching. But the very first thing we do try to do during the client education process is inform them that some compromise regarding color may be required, especially if they are doing embroidered goods for the first time. Because it just is not the same. Embroidery colors are never quite like print colors and while PMS colors are close, they are not entirely perfect. It's just the nature of the beast.

So much to discuss

Even though I haven't been able to get much more than a post every other week, the fact is, I have a lot to say. Life and companies change with the demands of consumers, who change with the demands of their customers at such a great clip these days that it not only is hard to keep up, but it is nearly impossible to WANT to keep up.

I'll bet everyone has one of those days when they dig their heels in and say "No, I won't do it." In fact, the older I get, the more I hear that little voice in my head. At some point, isn't enough just plain enough?

The answer is "absolutely not."

What makes business interesting has nothing to do with how much money you make or how much prestige is earned by being the biggest or the loudest or the fastest. The interesting thing is that, for those who want it, there is always something new to do, something new to learn and some incentive for doing it.

As a young man, I was confused about what I wanted to do with my life. Oh, I had aspirations, most of which had to do with being rich and successful (still do as a matter of fact) but the flood of opportunities and indecision led me to conclude that I had no clear idea as to what it was that really called me. I spent money on advisors, took the tests, tried the aptitude and psychological evaluations and learned one simple thing.

At some point, the psychologist asked me a simple question. "Do you want to be an employer or an employee?"

I pondered that for a long moment. And finally answered the question.

"You're always an employee. There really is no such thing as an employer, except the company you work for. Or the customers who buy from you."

And that was what I learned. It is also the one thing that I try to make clear to employees here. We are all beholden to one single employer. Our customers. Without them, we simply couldn't make it.

Design difficulty

I spend a ton of time writing letters to customers and to potential customers that all basically say the same thing. "Sorry, but that design just won't work." I try, of course, to say it nicely since the first rule is to treat people with respect and the second rule in contract embroidery is not to send someone running off to another embroiderer who will make the claim that it CAN be done.

Our business involves machines with one or more sewing heads that attach thread to material. The items required (apart from the sewing heads) are thread, needles, something to sew on and a design that has certain parameters.

We charge, at the most basic level, by the amount of time that it takes to sew a piece. The charges drop for higher quantities, although the reason behind the dropping charges is that the first piece, as in printing, takes the longest to set up and each additional piece cuts the average set up time down. Thousands of pieces at a time reduce the setup time to nil and also create a situation where we can be the very most efficient. This allows us to charge a very small amount per (measured rate) 1,000 stitches, which is the standard used to measure price in the industry.

Back to basics, though. It amazes me at the number of new designs that are thought up each day. I keep wondering if we'll ever run out of fresh, new ideas that signify someone's idea of their company business. At the same time, I keep wondering if artists will ever learn to ask for advice before arting up designs. They really should.

Here are some logical reasons for needing to work with an embroiderer if a design is made specifically to decorate apparel.

Fades are darned near impossible when doing embroidery. Those small, crest-sized logos with imaginative and cool fades and color transitions will never look the same. You're using thread and multiple colors of thread just don't blend the way the art program makes them look. Thread is linear. It needs to go in and out of other linear items in order to stay attached. Laying one color on top of another just simply doesn't work the same.

Stitch count is a big factor in doing designs. Big solid boxes and colored backgrounds and complex, highly detailed two- and three-color drawings are going to be expensive to do, probably far larger than one might wish for them to be and they do very very bad things to material. A nice polo shirt looks like it has a hole in the crest, for instance, when one adds a whole bunch of stitches to a design.

Design significance really tells the tale, I think. Does the design that will be applied actually impart the meaning of the company or event? Does it just contain lettering? Artists in general tend to go to great lengths to make something fascinating. I have great respect for that. But really, does it impart meaning to the logo, which is representative and should remind those who see the logo what the company actually does? Or is it just something cool? How clear is the company's function when printed out? Yes, we have been going through that very same concern lately. Team Mates has been around for nearly sixteen years and we still work on creating a logo that actually tells potential customers what we do.

Anyway, those are a few of the challenges I face daily. And the nice letters give me a chance to practice written communication. I even get to do humor once in awhile.

Times are changing

I've had a lot of time to review and reflect on the corporate apparel industry during the past sixteen years that we have actively participated in it. Things have changed dramatically during that time, especially in our embroidery side. One of the big changes has been the consistent decrease in order size and the increase in number of orders processed. The other aspect that has changed is the speed of output required.

It is interesting to see how this affects the way we approach both marketing and production as well as how we compete.

A whole lot of things have conspired to create a very dramatic change in the way we do our own business at
Team Mates. First, the larger jobs are actually becoming smaller and more of them are sent overseas. The first example of that was the cap industry, which has migrated overseas during the past few years to the point where there are very few (and very expensive) U.S. manufacturers. I'm not going to spend a lot of time belaboring the ability of our overseas competitors who can produce caps and clothing for far less than we can. The fact is, they do it well. The quality is high and the import cost is very low. The end result is that we, at the decorator end, do very few caps compared to the quantities we did in the last decade. The decoration is usually done on the caps during manufacture and this sort of eliminates our participation in the actual market.

The manufactured clothing industry has also gone overseas. All of the major factories have migrated to either the Orient or to the NAFTA countries and again, there are no hard feelings. Adaptation for the locals is what is needed. We just have to learn some new tricks.

In our case, for instance, we have encouraged smaller runs. We eliminated any thought of minimums and have worked on programs that allow us to reduce pricing in order to be competitive. All in all, the change has been good and we find ourselves involved in the performance of fulfillment work which requires the addition of services like drop shipping and consolidating orders. In some cases, we have carried inventory in order to help distributors reduce their own carrying costs and improve turnaround to customers.

The key, for us, is to continue to improve our production and turnaround. It always will be. And I'm sure that I'll have more thoughts later.

Freight savings

Gasoline has gone up. Yes, it's the mantra these days. So has the cost of packaging, processing and shipping of just about everything. As a goods processor (can't honestly say that we are a manufacturer because we decorate just finished goods for the most part), we are caught in the middle of all of the trouble.

As a decorator, we are pushed by in-bound freight charges. We are squeezed by the outbound ones and our customers certainly don't want to be paying several times over. We need every size job and so many of them are smaller than the minimums that many of the apparel distributors use as a 'free freight' cut-off. Distributors don't want to cut their margins either. After all, why should they? And customers really don't want to be paying an extra ten or fifteen dollars in freight charges for a shirt that they probably could buy at Penney's for the same price as the distributor is selling it.

It is becoming frustrating!

Solutions abound. Some apparel suppliers have begun offering their own embroidery. It works in a few cases as long as the suppliers are stocked and as long as the customer doesn't want something that the suppliers don't carry. Then, there is no justice, I'm afraid. The customer gets stuck with either a huge bill for digitizing, doing one piece and extra freight (there's that word again) or they do without. Or they go somewhere else and the distributor loses out.

The other solution is to make some sort of arrangement with suppliers.

We've started doing just that. It is amazing how cooperative a supplier becomes when a contractor comes to them to offer some sort of order consolidation and/or pickup that is provided by the decorator. Yes, there is an expense when it is done and unfortunately it has to be passed onto the end-users but the fact is, it is saving our customers money. Freight rates are again going down because we can consolidate deliveries. We sort the goods, we are working with suppliers to simplify the pickup system and we have seen some very good results.

This work will continue. Really, it's kind of fun and no, it is not a new idea, although the concept of spreading the pickups to include some clothing suppliers who may not be local is taking off as well. The hope we have is that we'll entice more customers to come to us. We do, after all, have a bunch of mouths to feed and our employees want to work. It's kind of refreshing!

Small changes

Making small changes seems to make bigger things happen. That is what apparently creates a climate for adaptation and for new ideas about how we manage.

This year, the small changes included efficiency. We have started on an improved operations manual and decided to do a few little things to make operations go better. I see the differences in the way we handle work now and also see where we have to go in order to stay current and continue to be competitive in the embroidery industry.

Funny thing about the business these days is that we have to focus more on speed and fast turnaround and less on bidding for large jobs.

Business in the U.S. these days has to remain competitive but price doesn't seem to be as big an issue as speed, quality and quality delivery. We do have to be reasonable with price, of course, and certainly want to stay within the range of charges that other embroiderers charge but our primary desire is to do each job perfectly and send it out on time. One of the primary statements we have made to our operators is that we do a hundred thirty thousand pieces a year... one at a time.

The change, though, has been a progression to steadily smaller jobs. A recent statistical summary of work for one of our customers revealed that out of 583 purchase orders, the largest single job was for 240 pieces. Fully 75% of all of the jobs entailed less than six pieces. What a realization!

Retooling is not always an option but we have changed our direction as a result of the statistics. Our staff has taken to them readily and one might think that we've always been doing this sort of work.

More about that later. For now, a pleasant week and Happy Easter holiday to all.

Ever changing business

I have always been convinced that business is a game just to keep us busy for the twelve or so hours we aren't eating or sleeping during our lives. For those who practice it independently, it is one that we always want to win, at least in varying degrees. Being independent carries with it, at least if one is to survive, the responsibility and eagerness to continue learning, especially if the particular type of business is to provide enough income to allow for us to live appropriately and to retire at some point prior to the end of our short lives. We must always adapt, after all.

Each year, toward the end, I go through the final phase of a cycle. The beginning of this annual learning curve is the realization that so much of what we did last year did not work. Things must change if we are to continue.

The middle is, of course, the implementation. The end is the realization that we still made some customers unhappy, that we did not have a very positive income and at this rate, I'll be working the local variety store greeting circuit before long.

The ending of the cycle becomes the new beginning. I look back, am frightened by what I see and vow to move ahead, to do some more research, to pull up my currently sagging britches and wade through another approach as soon as it is identified.

That, plus a little bit of much-appreciated advice, was how I happened across E-Myth Revisited by Michael Gerber. No, this is not an advertisement. This was, though, a very eye-opening experience for me and for Team Mates. It is also one that I'll share over the next few, hmm... days/weeks/months. I don't think that Mr. Gerber will be all that unhappy if I do. He's in business as well.

I have a burning question for people. So if you happen to read this (well, you would be reading it if you're here, right?), have you ever hired a consultant? We did, once. Okay, twice. The experiences were mildly positive.

First comments

Okay, so why a blog? 

I think that we all have something to say.  Whether it is important or not remains to be seen.  In this particular blog, I want to chronicle our efforts as Team Mates, Inc. and how we are constantly changing and adapting to what we perceive to be 'modern' business needs and requirements.

I also have certain opinions. While they often will reflect certain moral values (hopefully), they are simply non-political, business-oriented thoughts regarding how we should, as an embroidery contractor, conduct ourselves. 

If you have read our history, you see how we've grown from a small retail store into the, um, giant contractor... okay, moderately sized but very willing decorator, that we are.  You probably also have seen that most of our growth has come through trial and error and through acquisition, sometimes at slightly overpriced payments. 

These days, though, we intend on growing through the addition of customers.  This is our hope and our desire.  We want to add more customers who believe in the values of service, reliability and trust that a job will be done when we agree that it will be done and delivered to you or your clients with pleasure and pride.  We want all of our work to be perfect. Well, okay, it IS embroidery.  We want it to be as good as you can get.  And we want you and your customers to be happy with the results. 

To this end, we have worked to improve our services, our order processing systems and the expertise of our staff.  That is what we offer.  Whether it makes a difference, whether it makes us better than our competitors can only be shown in your satisfaction. 

And yes, this part sounds like an advertisement. Mainly, that is because I believe in what we do. I believe thoroughly in our staff and most of all, I believe in the fact that we can be an outstanding, world class company. 

Hopefully you'll enjoy the writing as well.  It reflects the approach I have to our business and to life in general.

Thanks for reading.

Mike