More often than not, apparel decorators are missing the mark when it comes to their financials. If financial planning feels overwhelming, you’re constantly running your presses but not profitable, or you’re not sure where things are going wrong, you’re not alone.
Read on to discover why you might be busy but broke, what cash flow really means, and how to take control fast. Warning: You may face some hard truths along the way, but better late than never.
Busy But Broke
That sounds harsh, and maybe you’re not completely broke, but the numbers just aren’t adding up. You’re working hard, your shop is taking on big jobs, but for whatever reason, all the grinding isn’t moving the needle. What’s the culprit?
Nick Gawreluk, founder of Print Profit, says shops often forget the basics of knowing their breakeven point. How much do you need to sell to break even?
“Commonly, they (apparel decoration shops) don’t have those breakeven metrics, just to know what is success or not,” Gawreluk says. “And until you have that, it’s hard to set a strategy against it.”
Thankfully, those numbers aren’t overwhelming, he says. Shops need to look at all costs in their business (not job costs) and add those up. This can be done in QuickBooks or with a financial advisor — any resource you have available to you. When that’s added up each month, you have your overhead — your fixed costs — which will be consistent from month to month.
“Finding out what that number is, and then looking at your jobs and having the clarity to say, whatever I sell the job for when I subtract out primarily the blank and maybe a DTF transfer, what’s left over, that’s what each and every job is giving you to help cover that overhead,” Gawreluk explains. “So, it almost becomes a one-to-one relationship. How tall is my mountain? My fixed costs. I want to get to profit land — to profitability. And each job is giving me fuel to climb that mountain. And then it just becomes a game.”
According to seasoned business founder and serial entrepreneur Adam Tanaka, some signs you might be falling under the “busy but broke” category include:
- Your team is exhausted.
- Your machines run nonstop, but your bank account isn’t growing at the same pace.
- You celebrate revenue wins (“We hit $200K this month!”) but avoid actual profit numbers.
- Rush jobs feel like wins, but they create chaos, not margin.
- You rely on credit cards, lines of credit, or vendor terms just to keep up with payroll and materials.
While this list isn’t exhaustive, it’s a reminder that “feeling busy” doesn’t mean your bank account is healthy. One mistake you don’t want to make is confusing revenue with success, Tanaka says. In his experience, owners often mistake high sales for profitability, full production schedules for financial stability, and a lot of work in progress for wealth.
He sees it all the time: A shop makes seven figures, but it’s still “bleeding out” because they’re relying on the vanity metric of revenue. “Profit is reality,” he says.
Gawreluk and Tanaka agree it all starts with knowing your true costs. Without that clarity, a shop can only guess, which, Tanaka says, is expensive.
Read this full article on Apparelist, a publication of PRINTING United Alliance, ASI’s strategic partner.
