Advice starting up a letterpress shop & storefront

Time is money.

If your 12x18 is what I expect, any sort of production work will be limited by how fast you can hand-feed your press. Unless you can charge (and receive) a premium price for your design work, there is an automatic feed press in your future. This could be a Windmill, or a Kluge/C&P with a feeder mechanism.

I think that decision would also depend heavily on anticipated press runs — I wouldn’t think the auto-feed would be practical for runs of 100-200 — by the time you get it set up and running satisfactorily you could have hand-fed the whole job, unless it’s multi-color. Of course hand-feeding a 12x18 is a different proposition from an 8x12!

Bob

oops

What advertising will you use to generate foot traffic to your store? What will the price point be for your items. Search Google or go to card shops to see what the going price for comparable product. Cost of rent, electric, advertising, paper supplies for enough items to fill the shelves on opening day. A stock of supplies for the print shop to reprint these items. Store fixtures, trade shows, etc…

Your business plan should include all expenses for a year to start up your shop. It can get complicated but to succeed you should have a business plan.

http://www.startupnation.com/business-articles/1227/1/AT_Costs-Starting-...

Casey
Inky Lips Press

It might be a good idea to investigate what collateral items you might offer to increase traffic in your shop. Pens, ribbons, decorative papers, etc. as these may serve to increase your store profits.

Another route would be to find an existing stationery store who would be willing to take on your “line” to begin, when you find sales sufficently high to allow opening your own shop, you will at least have some idea what type of materials sell better than others and can tailor your output to the market.

You have to remember that tending a storefront shop can take big chunks of your working day away from the presses and production, and unless you hire someone to watch the front shop, you will be spending many late hours in the back shop.

You could contact the local office of the Small Business Administration where you could find some help in creating a marketing survey of some sort which could help you with your projected sales figures. There may also be resources at local colleges where business & marketing students are looking for “real-world” projects into which they can sink their teeth.

John Henry

The way I have gone about this forming a business plan in the past, was to build two separate cost models. What does it cost just to occupy space, turn on the electricity, and all of your fixed costs. This will be your overhead. Your overhead is divided into the theoretical number of jobs you’d like to complete each term dictated by a given capacity, this is the assigned overhead to break-even.

The second model will explain expenses generated from production. In this area, you’d subdivide out your expenses like ink, paper, maintenance costs, replacement tools, waste, and packaging, by the amount of each it takes to complete a job. In example, 1# of black ink costs $16, and will print roughly 1000 pages, the incremental cost of ink is $1.60 per 100 pages. Knowing what your incremental costs are will help dictate your pricing schedule. In this format you will take your revenue and subtract the variable costs.

The amount left is what is often called the controllable contribution. This represents the remaining monies that can be paid towards your fixed expenses. Any money left after, is your profit.

This model can be really quite simple or quite complicated. Some people choose to roll fixed overhead costs into their incremental costs. However, this can skew your overall profitability for a number of reasons. Not covering all your overhead expenses, but still significantly covering your incremental costs, can still be profitable and will be more profitable the busier you are.

There are many different ways to account and determine profitability. The thing your are striving for are models that accurately depict costs as a function of production. You can use The Theory of Constraints modeling, straight product costing… just be careful not that your model doesn’t lead to cost cross subsidization.

Do as much research as you possibly can. Call and talk to others in the business that are willing to share and mentor. After you start gathering all your information, you might want to consult with an accountant.

I don’t know that it is meaningful to project sales, but rather, it paints a much better picture to know where your break-even point is and the likelihood of reaching it, as it relates to the determinants of capacity. Sales and profitability can be projected using a standard bell curve distribution based on capacity utilization

Thank you! Thank you! Everyone! for all your feedback and guidance. And incredibly quick to boot. I have a property in mind that is almost too good to pass up for the price. I will certainly use all your suggestions. I’ve been researching this for the past few years.

In regards to my 12x18 C&P, I actually already have a Kluge auto-feeder set up for it. It’s not exactly perfect yet but it’s very close. I’m knitpicky with having things perfect sometimes…sometimes, ha! I’ve just been hand feeding jobs since it’s mostly around 200 per job, not a big deal. But having the auto-feeder working will certainly boost production and time…which = money.

First I think I’ll look at budgeting and estimating costs/overhead as mentioned by woweber. Thanks as well for the suggestions John Henry, great idea seeing what sells in other shops first. I’ve been getting good feedback so far with my designs and quality of work so I feel like my basis for good business is here, I just have to find a way to implement it more effectively. Before it was just for fun. Fun has to translate into fun business. Thanks again everyone, I’ll let you know as things progress.

Cheers,
-Chris-

PS- Great start-up article Casey, Cheers my friend!

-Chris-