Business Spotlight: Keep The Momentum Going
Now that Rob and Shelley DeWolfee modernized the operation they bought from a retiring owner, Dynamite Graphics focuses on serving not only its long-time customer segments, but also its community's needs. But the duo's long-term goal is to become a $1-million-per-year company.
By Robert Carey
In 2006, three years after leaving long-time jobs at a mid-size decorating firm to start their own embroidery and screen-printing operation, Shelley and Rob DeWolfee were itchy. The business they ran from their garage in Silver Spring, MD, was chugging along, but they had hoped it would be somewhat more robust by that time.
Just then, opportunity knocked: The owner of a local decorating firm was set to retire after 23 years of serving many of the community's small businesses, sports leagues, schools, churches, charitable organizations, plus the reunion and party circuit. And while the owner's machinery was dated, his client list was deep. So the DeWolfees bought the firm, assumed the lease on his 3,000-square-foot facility, and moved their own manual press and four-head embroidery machine across town.
Once settled in, Shelley began to comb through the client list so she could make contact with everyone, confirm their recurring business, and gather all of their artwork in one place. The task proved to be a nightmare. "We took over in late October, so I thought I had plenty of time to create the database for the coming year," she says. "But the files were all handwritten, and most of the customer information was incomplete – it lacked addresses or phone numbers, and even some last names. At one point I said to myself, ‘What have we gotten ourselves into?' "
However, with the help of a software program called Shopworks, Shelley completed the task by early spring. The good news: Dynamite Graphics' solid reputation persuaded most customers to give the new owners a chance to keep their business. And, they didn't disappoint.
Today, with one embroiderer and one screen printer occupying full-time positions, plus a part-time employee doing most of the sales, the firm is looking to grow beyond its base. "Until a year ago, I was doing both the sales and graphics work," Shelley says. "Now I can focus on graphics, art setups and getting production out more quickly and smoothly. Rob is a terrific screen-print person, and he keeps the computers and office equipment running. So at this point, we've finished our transition and want to move forward with marketing and boosting sales."
With their shop located between Baltimore and Washington D.C., Shelley and Rob have considered enlisting another salesperson who would hunt for new business in the Germantown area, a suburb 30 minutes from their shop in a direction that makes it distant for big-city competitors. They'd like to differentiate the firm through creative and high-quality artwork as well as eco-friendly garment offerings. They also are looking at adding a direct-to-garment printer to serve customers who, says Shelley, "bring us lots of logos that are not production-ready – and they want six colors on just 12 pieces, and they want it in a week. We'd like to be able to do it for them, so we think the garment printer can solve that problem."
Lastly, they're very active in Silver Spring's civic life, not only providing free merchandise and apparel for events run by various groups that have done business with them, but even working the events as support staff. "We think helping out is the right thing to do for the people who give us business. And although we don't advertise our company name overtly at these events, our presence helps keep us visible to the public," Shelley says.
The firm most often handles orders between 12 and 36 pieces, but Shelley says, "We do land the occasional $2,000 order, which helps." On the other hand, demand slows considerably in December, January and February, which makes the owners consider other options. "We don't have any large corporate clients right now, so we think that getting a few would help keep business steady over 12 months; perhaps we can get some government work too," Shelley says. Over seven to 10 years, the DeWolfees want revenue to break the $1 million mark. "We're hands-on people who won't ever get away from operations entirely. We don't want to become huge; we just want to be comfortable," she says.
Step 1: Define your roles; then chase new business
Given its current position, Dynamite Graphics can surely get to $1 million in revenue in the next several years, says Jennifer Cox, president of National Network of Embroidery Professionals in Kent, OH. "It's a matter of what the two principals can do with their hours to bring in the most money," she says. "Shelley loves the graphics work, but she has to analyze whether the firm can make more money with her doing that or driving sales," especially if Shelley is a recognized figure in the community. "It's up to her, but her choice will impact revenue growth. She could do sales four days a week and graphics one day a week to stay involved in it," she says.
The same goes for Rob: Can the firm make more with him running screen-printing equipment himself, or managing people running a screen press? "The majority of an owner's time should be devoted to the task that makes the firm the most money, and employees should do the other stuff," Cox says.
What's more, Dynamite Graphics' sales aren't at full potential among prior customers. Shelley should go through her database to see how many clients have placed orders in the past six months, and which customers have had no contact with the firm in that time. "Business experts say that reviving prior clients is one of the most profitable things you can do," Cox says. "So you have to touch everyone in some way – phone, e-mail, direct mail, whatever. You can offer a seasonal special, or use a softer approach that's not totally sales-driven. Even a postcard that says ‘What have we done for you lately?' and offers a list of seasonal products is an invitation for them to contact you."
There's proof that Dynamite Graphics' prior customers aren't delivering enough: Screen-printing revenue is three times that of embroidery. But with higher margins for embroidery, just getting the mix closer to 50-50 would improve profits drastically. An idea: Promoting the firm's latest artwork creations in the marketing pieces could help spur embroidery demand.
Andy Shuman, general manager at Rockland Embroidery in Topton, PA, finds that Shelley and Rob are too modest in their presence during their community outreach. "There's a difference between cornering people with a pitch and simple self-promotion," he says. "They should wear their own decorated garments and have flyers and cards handy for people to take away. After all, churchgoers, road runners and parents of Little Leaguers are businesspeople, and every business has some type of decorating need. But their clothing and the flyers must show that the company can do much more than just sports and church items." Dynamite's Web site should also be chock full of samples and testimonials showcasing the firm's wide range of expertise.
Step 2: Land new business by looking broadly, but avoid large corporate clients
The experts agree that hiring a sales rep for a satellite office is a good idea. But they'd go even farther from the home office than what Shelley and Rob have proposed. For instance, if they placed the rep in the bustling suburb of Frederick, 45 minutes beyond Germantown, then that rep could cover both Frederick and Germantown, while the home office covers the area between Silver Spring and Germantown. "It just maximizes their reach and minimizes overlap," Cox says.
"I was a bit shocked that they wanted to keep the rep so close," says David Schlier, owner of Rockland Embroidery, which has clients in every state east of the Mississippi. "Maybe their clients are very visual. But you can do everything electronically, and just overnight a sample if you absolutely have to."
As for hiring the right salesperson, Schlier advises finding a multiple-line rep to keep the compensation package reasonable. But the key with using a multiline rep, he stresses, is to "keep on them so that your goods and services are top of mind and displayed in most sales calls."
An interesting alternative is to hire a seasoned salesperson who is not primarily a rep in the apparel-decorating field, but who instead has many contacts among the businesses and nonprofits in that region. "You'll have to train them on your products, but think about this: A food-service salesperson could also sell your services to all the restaurant owners he already has a relationship with," Shuman says. "So think of a few industries in that area that would need decorating services, and look for independent reps serving them." Lastly, Shelley should prepare the rep to present the firm's ability to deliver high-quality garments and decoration beyond the sports, church and civic niches.
Being adjacent to the nation's capital, Dynamite could try to push into the large nonprofit universe that's centered there. "Create a marketing campaign that focuses specifically on D.C. nonprofits – there are thousands of them," Cox says. "Use a multimedia approach that incorporates direct mail, e-mails and perhaps telemarketing. Also use what your suppliers offer, such as virtual flyers and electronic samples. Now you have a more robust and customized pitch for each client. If you consistently devote time to this, business will come. And once you land a few recognizable clients, you can modify your marketing messages to include their case studies or testimonials."
Also, with more federal money now flowing toward certain government agencies and selected industries, Dynamite should follow the money and make itself known in those segments. "We find trade shows to be quite beneficial for us," Schlier says. "I don't mean our own industry's events, but rather the contractor shows, the flower-specialty show, and other markets. It costs a few thousand dollars in registration and travel, but it brings a good return."
Government agencies and nonprofits might react well to Dynamite's eco-friendly pitch, as well. "I would think that organic shirts would go over well in Washington," Shuman says. Cox, however, warns that eco-friendly products "are a romance thing – you're either in love with the idea or it means nothing to you. And the ones who are in love don't want to pay for it once they find out the price. They often say, ‘Oh, we'll try to do it next time.' So it's not quite there yet."
Another idea that's less appealing than it sounds is servicing large corporate accounts. "It's too much like contract work for most shops to want to deal with," Schlier warns. "They often want open-book sourcing to see what you're paying for materials, so they can dictate your profit from them. They'll also demand 90-day payment terms. So they tie up machine time, sales time and cashflow. It's brutal; don't go down that path if you don't have to."
Step 3: Add a single-head for flexibility, but learn more before leasing a printer
Despite the fact that Dynamite's four-head embroidery machine is not being used to capacity at the moment, Cox suggests that the firm add a single-head machine to be ready to handle more orders once the marketing plans produce results. "A single-head gives them flexibility for fulfilling smaller orders or running custom samples and sewouts without breaking into their four-head production time," she says.
On the flip side, the idea of leasing a direct-to-garment printer needs more analysis before the owners make that leap. There are certainly potential benefits for Dynamite: "Seeing that their orders are usually 24 to 36 pieces, it could be a good application for small orders that have a lot of colors, and you could charge a premium for that even though you need less setup time," Shuman says. "Also, Rob sounds like he's machine-savvy, and that's important because the machine likely will need some troubleshooting, like unclogging nozzles."
There are also potential drawbacks. "Although the machines are constantly improving, we haven't gone for one yet," Schlier says. "They still haven't perfected light printing on dark shirts, and most of our clients want darker shirts. Brother is getting closer, but right now you need to pre-treat dark shirts and press them, and then who knows how many passes you'll still have to make. So when the manufacturer tells you how many pieces they do an hour, you have to be skeptical." On that last point, Cox agrees: "I'd strongly advise finding out for yourself what the production capacity is for whichever machine you're considering. Talk to users about its realistic hourly output – don't rely only on the salesperson's claim. With six-color jobs, I'd say you could do 12 to 15 items an hour, at most."
As the year winds down, Shelley and Rob could plan to use their quiet winter months to define their roles, hire a new sales rep and develop marketing plans to land new clients. They could also dig deep into their client database to find hidden opportunities, such as seeing which clients can deliver more embroidery and which ones prefer lighter shirts that would work well with a garment printer.
Robert Carey is a contributing writer based in NY.