Building long term business success requires thought and planning. We’ve previously highlighted how you can start growing your embroidery business by creating active word of mouth, phoning existing customers and prospects, and using email. But what we also want to do is take a step back and look at last year’s business, as well as some of the other key business management actions that you should consider to ensure you’re heading in the right direction for the new year.
To ensure we’re not overwhelming anyone with information and give you actionable steps to take away and do, we’re going to split this topic in to two parts: Business/Financial and Sales/Marketing.
Last year’s highlights
- Think about the blanks you used last year. Which ones were easy to work with and embroidered really well? Which one were the most profitable? Which ones were the easiest to order – always in stock from the supplier? Those are the products you want to highlight and suggest to customers. Make them the staples for your business.
- Which deal returned the highest profit? This may not be your largest order – you may have had a $500 order, but after all the costs are calculated in (including your paycheck), the job may have only profited you $50 = 10%. Whereas you may have had a $100 order, and you profited $20 = 20% profit. What made that deal more profitable than the others? How can you replicate that profit margin on all your deals?
- What were your biggest mistakes? What can you learn from it? Whether it was a deal you lost a lot of money on because the blank wasn’t right for your embroidery machine and you had to redo a lot f them, or it took twice as long to complete the job. Or perhaps you lost a customer because you didn’t handle their complaint well. Or you took on a big job without having the tools/finances/capacity to complete it.
- Do a review of your vendors. Which were really easy to work with? Who handled your issues the best? Did any make ordering from them a chore? Do you need to look for alternative vendors for any of your supplies or blanks?
There are 6 things that you can do this year to make sure your business management and finances are set up for success.
- Talk to your CPA/bookkeeper/accountant. Not everyone has an accountant on the regular payroll, so if you haven’t been talking to your accountant regularly over the past year, and even if you were, make an appointment to see them before taxes become due. It gives your accountant and you time to ensure all the necessary paper work and receipts are in order. And, just as important, gives you an opportunity to discuss what you can do going forward to ensure that finances are handled smoothly next year.
- Get a second opinion. It never hurts to ask another professional for advice. Whether it’s another accountant who can help you go over your numbers to ensure nothing is missing or another small business owner who’s been in business for a few years and has some tips that really helped them out.
- Invest in accounting software. Instead of storing everything in file folders with the potential for everything to get misplaced or destroyed, accounting software stores everything you need and can even create recurring expenses. It makes things easier for your accountant too.
- Invest in an online system for orders. When things are solely written out on paper it’s easier for things to get lost or mishandled. By moving all orders to an online system you can email your clients the quotes before they come in to sign off on the order, saving everyone time if the quote has to be readjusted. And provides you a digital copy in case any questions come up, or you have to hand the order over to one of your employees to complete.
- Improve inventory management. Review what you have on hand and what’s on order. Then take a look at your last year’s figures. What did you go through the most or the fastest? These are the supplies you’re going to want to make sure you have plenty on hand of at all times. We recommend having a 60 day supply of all the common/major supplies you use, and then reorder once you get down to a 30 day supply. This way you always know you can fill your regular orders, plus have extra in case a larger order comes in.
- Invest in a CRM. Customer Relation Management software is going to be your biggest advantage when it comes to creating lifelong customers in the embroidery business. They allow you to store all the information about customers all in one place, from their contact information to past orders, to notes on their account (like their birthday or the date of the company’s annual fundraiser, etc). CRM’s help you provide better customer service.
Create yourself a checklist and give yourself a deadline to complete each task. Then come back next week to read part two where we’ll talk directly about Sales and Marketing and what steps you can take to improve your embroidery business this year.