INDUSTRY TIPS / THE ONLINE PRINT COACH 52 email: news@printmonthly.co.uk May / June 2024 - Issue 348 I’m not looking to invest in kit anymore. If you do find yourself in a situation where you must, it’s crucial to make sure you are building up those surplus funds. During the pandemic, I saw lots of companies utilising the bounce-back loan offering and treating it a bit like free money to buy new kit. I saw one company go and buy a full embroidery set up having never sold one garment. Thankfully, the garment decoration industry is thriving at the moment, however, it was a bit of a risky strategy. One thing I’ve learned over the years is that if you do want to invest in production, build a case for it first. There are enough good trade suppliers out there to allow you to test the market. In this case, perhaps the person just needed to cover their costs and bring in £2,000 in sales consistently for six months to build the justification for the investment. Surely, this is a much safer strategy with a more predictable outcome. I wonder how many of you right now are pondering over that spare bit of kit you have lying around in the print room that barely ever gets used? If any of this has resonated with you and you would find it useful to talk with someone who’s also been through it, you can get in touch with me via www. theonlineprintcoach.com. month. This is a pretty stressful way to run a business and if we learned anything during the pandemic, it was the need to plan for the unforeseen. We were very lucky in this country with the support the government did offer, but how would your business have survived had it not been for the furlough scheme and bounce-back loans? The smart business owners are planning for situations like this, so they don’t need to rely on the support of others. Many banks these days have the facility to create savings pots, so you are in effect future-proofing your business. Put set percentages away each month for tax liabilities, business savings, marketing budgets, etc. This is something I should have done much sooner. This is one thing I wish I had done better and falls appropriately after Lesson 3 because one thing I found myself doing back in the day, especially when cashflow was tight, would be using up credit with one supplier and hopping over to another to do the same until my cashflow had caught up with itself. That’s if it did! There’s a name for this. It’s called ‘Trading Whilst Insolvent’ and it’s illegal. You need to keep your suppliers on board. News travels fast in this industry and trust me, your suppliers talk to each other. Without your suppliers, you have no business so look after them, communicate with them, and pay them on time. Become their best client and they’ll look after you! My experience with suppliers is one of the reasons I prefer to pay for everything up front nowadays. It just keeps everything right and it keeps me in control. Back around 2012 I took the decision to remove a credit facility from all my clients. This was following on from a conversation with my cousin who ran a design agency in Oslo, Norway. He advised me that they simply didn’t have the same cashflow issues there as we did. Everyone paid each other up front and the industry was financially stronger for it. It was a bold move for us at the time and yes, we did lose a few clients but if I’m honest, the ones we lost were the ones who always haggled on price and caused us the most issues anyway. The majority understood and with many print orders starting to be placed online at the time, it was becoming more expected. Even the local authorities we worked with somehow managed to find a way to source a credit card. The way I looked at it then, if someone can’t afford to pay for 5,000 flyers up front now, what’s going to have changed in 30 days? If you’re good enough at what you do, your clients will pay you up front. I came into the world of business when everything seemed pretty hunky dory. My business manager was taking me out to events every other week, they were literally throwing money at me to help me grow my business. However, overdrafts and business loans soon mounted up, and in my naivety as a new business owner, I’d overlooked the whole ‘PG’ (personal guarantee) thing that came with these. I never thought about being in a position where the business wouldn’t be able to pay them back and what that meant for me. The clue really should have been in the name. Now I appreciate there will be times in your business when it will be unavoidable to not sign one, but this is why I stress so much about building that buffer. After my first business failed in 2008, I was left paying those personal guarantees for several years. I’ll personally never sign one ever again. If I can’t buy something outright, it’s just not worth the risk for me because of my own setbacks. However, I do appreciate I’m now in a space where Lesson 4 – Look After Your Suppliers Lesson 5 – Stop Offering Credit Lesson 6 – Be Wary of Personal Guarantees Lesson 7 – Don’t Make Rash Investments
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