Successfully Turning Revenue Through Sublimation
Jimmy Lamb, of Sawgrass Technologies, addresses these issues in the February 2019 issue of Insights Magazine and focuses on a few of the most important components: operational costs, production capabilities, and better managing those facets. Although some of the terms associated may sound intimidating, incorporating his essentials into your company is a lot less daunting than you think.
Operational Overhead
To summarize, operational overhead is the cost of keeping your business running. Your business’ rent, phone service, internet access, utilities, licenses and other requirements are considered as overhead. To properly calculate this figure, you will need to include what you and your employees will need to earn to make it worth your while. Once you have an accurate estimate of your company’s overhead, you can determine how much your company needs to earn annually to cover expenses. It can then be broken down further to weekly and hourly requirements.
Consider how often your business will be open for operation. Will you be taking certain holidays off? Will you be working five days a week or taking an annual vacation? If so, you also need to include that time in your calculations. Say you need to earn roughly $60,000 a year to cover overhead costs but will only be working 48 weeks. Thus, your business needs to profit a minimum of $1250 a week for 48 weeks to maintain stability. If we break that figure down even further, we can assume we need to make $250 daily for a five-day work week.
Production Capabilities
When determining production capabilities, it is pertinent to remember our three parts of printing: setup, production, and backend/finishing work. Although we may account for the cost of our sublimation blanks, we also need to consider the time it takes to setup the product for print and how much we are paying the employees who are putting in the labor to materialize the final product.
Sublimation press times are fairly well defined. With the information gathered, we are able to evaluate production costs and include that in our pricing estimate. Likewise, we need to account for the time we are not producing. Downtime can be detrimental to a business's operations because when production is halted, or time is not managed wisely, revenue is not being generated. After all, time is money.
To counter excess cost, buying in bulk is recommended. Buying in bulk is used to battle production costs and can be very effective if the items you buy are used frequently. If you buy bulk items that you rarely use, you have invested money that could be allotted elsewhere. Not only that, if these items are sitting on a shelf in a warehouse unused, you may be paying rent to house an item that is not turning revenue and costing you with its shelf life. Lamb also suggests staging jobs so that your machines and time are used most efficiently. Why waste time and energy creating one item at a time if you can use the same amount of energy to create 10 or 20?
Properly Managing your Business
Sublimation is an incredibly rewarding business if managed properly. Few careers can fulfill the heart of an artist with the mindset of a businessman. With dedication, business strategy, and sensible spending procedures, a person can easily grow from a garage company, to owning multiple printers and being worth millions. David Gross has a great article about sublimation tips here. We at Condé wish you great success and look forward to seeing your artistic vision. Good luck!