The $50 Mistake That Costs Your Print Shop $5,000 a Year
It's not always the big mistakes that hurt your bottom line. Sometimes it's the little things nobody thinks twice about.
Every print shop makes mistakes. It's part of running a business. Somebody orders the wrong size shirts, forgets to charge for artwork, or overlooks a setup fee. You fix the problem, eat the cost, and move on to the next job.
Most of the time, we're talking about $25, $50, maybe $75. Not exactly the kind of money that's going to put you out of business.
But have you ever stopped to think about how often those little mistakes happen?
Let's say your shop loses $50 twice a week on something that could have been avoided. That's $5,200 a year. Make it four times a week, and you're over $10,000.
I've been around this industry long enough to know that most shop owners aren't sitting around calculating how much they lost because somebody forgot a screen charge last Tuesday. They're too busy trying to get orders out the door.
And that's part of the problem.
It's Usually Not One Big Mistake
When a print shop has a bad year, it's easy to blame rising garment costs, customers shopping around for better prices, or the shop down the street that's practically giving their work away.
Sometimes those things really are the problem.
But I've also seen how shops can lose money simply because of the way they handle everyday business. Nothing dramatic. Just little things that happen over and over.
Take screen charges, for example.
A customer orders 72 shirts with a two-color front print. Someone puts together the estimate, gets approval, and sends the job to production. Everything goes according to plan, except the setup charges never made it onto the invoice.
Maybe the estimator thought it was a reorder. Maybe the screens were supposed to be on file. Or maybe they simply forgot.
Either way, the shop still has to do the work. The screens don't magically prepare themselves because you forgot to charge for them.
The same thing happens with artwork, digitizing, additional print locations, specialty inks, and all sorts of other charges.
One missed charge isn't the end of the world. But when estimating depends on someone remembering every little detail, sooner or later something gets missed.
And if it happens often enough, it starts costing real money.
The Customer Changed the Order. Did Everybody Get the Message?
Here's a situation that probably sounds familiar.
A customer places an order for 100 shirts. A couple of days later, they call and reduce it to 85.
The person who takes the call changes the order, but the shirts have already been purchased. Or maybe purchasing hasn't ordered them yet, but nobody tells them about the change.
Now you've got 15 extra shirts sitting around.
Maybe you can return them. Maybe you can't. Either way, somebody has to deal with it.
I've seen shops where sales, purchasing, and production are practically operating as three separate businesses. Sales knows about a change, purchasing doesn't, and production is still working from a printed work order that was created three days ago.
Nobody's intentionally doing anything wrong. They're just not all working with the same information.
That's one of the reasons having a centralized order management system is so important. When everyone is working from the same order, there's a much better chance that changes get caught before they become expensive.
Of course, a system only helps if people actually update the information. You still need good procedures.
Doing a Favor for a Customer Is Fine. Just Know What It's Costing You.
Every shop has customers who occasionally need something yesterday.
They call on Thursday afternoon wanting 48 embroidered polos by Monday. They're a good customer, so you figure out how to make it happen.
You move a few jobs around, somebody stays late, and the order gets finished on time.
Everybody's happy.
Except you never charged a rush fee.
Now, I'm not suggesting you should nickel-and-dime every customer. Sometimes taking care of a good customer is worth more than the extra money you could have charged.
But it should be your decision.
There's a difference between choosing to waive a rush charge and simply forgetting to include one.
The same goes for extra artwork revisions, special packaging, individual bagging, and other services that take additional time.
If you're going to give something away, at least know you're giving it away.
Purchasing Mistakes Cost More Than the Merchandise
Let's say somebody orders the wrong color shirts.
It's a $50 mistake, and everybody figures it's no big deal. Just order the correct ones and send the others back.
But there's more to it than that.
Someone has to figure out what happened, contact the supplier, arrange the return, and place another order. If you're close to the production date, you might end up paying extra freight to get the replacements in time.
And if those shirts aren't returnable, you're stuck with them.
What started as a $50 mistake might end up costing considerably more once you factor in the time spent correcting it.
There's also the problem of ordering the same merchandise twice. It happens more often than you'd think, especially in shops where several people are involved in purchasing.
One person assumes the order hasn't been placed. Another person already took care of it. Before you know it, two boxes show up.
Having purchasing tied directly to the customer order helps reduce these kinds of problems. It also cuts down on the amount of information that needs to be entered more than once.
Anytime you're entering the same information into two or three different places, you're creating another opportunity for something to go wrong.
The Job Made Money. At Least You Think It Did.
This is probably the area that concerns me the most.
A shop quotes a job for $1,200 and figures there's about $400 in profit.
The customer approves it, production gets started, and everything seems fine.
Then the artwork takes longer than expected. There's a problem on press. A few shirts need to be replaced. Packing takes longer than anyone anticipated.
The job eventually ships, the customer pays the invoice, and everybody moves on.
But did you actually make $400?
Maybe you made $250. Maybe you made $100. It's even possible you lost money.
Unless you're comparing your estimated costs with what actually happened during production, you really don't know.
I covered this in more detail in Why Print Shops Lose Money on Jobs They Thought Were Profitable.
One thing I've learned over the years is that it's pretty easy to convince yourself a job was profitable when all you're looking at is the selling price.
The numbers can tell a very different story once you start accounting for labor, materials, overhead, and the extra work nobody anticipated.
Being Busy Can Actually Make Things Worse
When you're running a small shop, you can usually keep track of most things yourself. You know which orders are coming in, what's being printed, and which customers are waiting for their jobs.
As the business grows, that gets harder.
You hire more employees, take on more orders, and suddenly there's a lot more information being passed around.
If you haven't changed the way you manage things, the same little mistakes you made when you were doing 20 jobs a week are now happening while you're doing 100.
And because everybody's so busy, nobody has time to figure out why they keep happening.
I've talked about this before in Why Being Busy Doesn't Mean Your Print Shop Is Profitable.
More orders don't automatically mean more profit. Sometimes they just mean more opportunities to lose money.
So What Can You Do About It?
First, pay attention to the mistakes that keep happening.
If someone forgets a setup charge once, that's probably just an oversight. If it happens every couple of weeks, you've got a problem with your estimating process.
If purchasing repeatedly orders the wrong quantities, find out why. Are they working from outdated information? Are orders being changed without anyone telling them? Are employees manually copying information from one place to another?
And if jobs regularly take longer than expected, you need to know whether your estimates are wrong or something is happening during production that needs attention.
I'm not suggesting you start keeping a spreadsheet of every little mistake your employees make. That would probably create more work than it's worth.
What I am suggesting is that you start looking for patterns.
The goal isn't to find somebody to blame. It's to figure out why the same problems keep happening and do something about them.
Sometimes the fix is as simple as changing a procedure. Other times, it means giving your employees better tools.
This Is One of the Reasons We Developed PriceIt
When we started developing PriceIt Software nearly 30 years ago, the idea wasn't to make running a print shop more complicated. It was to help eliminate some of the everyday headaches that come with managing one.
Estimating, order entry, purchasing, production, scheduling, and invoicing are all connected. When those things are managed separately, information gets lost, entered incorrectly, or simply forgotten.
PriceIt brings those parts of the business together so employees aren't constantly trying to figure out what somebody else did or didn't do.
We've also added job costing and profitability tools to help shop owners get a better handle on what their jobs are actually costing them.
Will software eliminate every mistake? Of course not. People are still going to make mistakes, customers are still going to change their minds, and things are still going to go wrong in production.
That's the nature of the business.
But if you can prevent even a handful of those mistakes every month, the savings can add up pretty quickly.
Before You Write Off Another $50
The next time something goes wrong and somebody says, "It's only fifty bucks," think about how many times you've heard that over the past year.
Maybe it really was a one-time mistake. No big deal.
But if it's the same type of mistake that happened last week, and the week before that, it might be worth spending a little time figuring out why.
Because losing $50 once isn't going to hurt most print shops.
Losing $50 over and over again, year after year, is another story.
And the frustrating thing is that a lot of those losses could have been avoided.
You work too hard to earn that money to keep giving it away.
About PriceIt Software
For more than 25 years, PriceIt Software has helped screen printing, embroidery, DTG, DTF, and promotional products businesses become more organized, efficient, and profitable.
Backed by more than 35 years of hands-on experience in the decorated apparel industry, PriceIt understands the challenges shop owners face every day.
From estimating and order management to purchasing, production scheduling, and profitability tracking, PriceIt provides the tools needed to run a more organized and profitable business.
