Opportunity for new business...need advice please

[Stacey K]

Those of you who are familiar with my business, and those that not, I'm looking for your opinion. I'll try to simplify this: I do about 30/30/30 apparel/signs/vehicles - I prefer working with vinyl.

1. A girl working from home making shirts is opening up a shop in town, I will likely see a reduction in my apparel business.
2. A guy who letters up to 60 race a year is retiring. I'm getting a lot of requests for next season.

My apparel abilities are limited so it's often not overly profitable.

I think I should try and go after the race car business, my sons are both huge race car fans and my oldest is graduating next year for High Performance Motor Sports and seeks to open a shop specializing in shocks or engine refreshing - or something.

I will need to buy a printer if I do race cars. Should I contact the guy and see if he's interested in selling his printer, files, fonts, etc.? I wouldn't hurt to ask right? If that doesn't pan out then I'm going to need some resources for templates, fonts, etc. I want to do an excellent job, not just use Impact for a number font - this is where those of you who do race cars could help me out. Many years ago I had a website with race car decals and it did very well, I also lettered quite a few cars for several years until I got out of the business.

It seems like a good idea, it would fill my January, February and March which are typically slow and a good way to work together with my son in generating contacts for both of us. I also have an attached 40'x50' shed that my son is eyeing up for his business (it would need heat, insulation, concrete floor so it's down the road) - and I can't count on a kid but it's a strong possibility down the road. I currently rent it out.

Gino and Notarealsignguy Texas_Signmaker - you guys seem to know me best, what are your thoughts? Thanks!

 

[CanuckSigns]

What have your experience been of the race cars you do letter or have in the past? Is it profitable for you?

I know personally my experience has been less than ideal, race car drivers are usually looking for you to sponsor them in lieu of payment (think of all the exposure!!) It's also very fast paced work as everything is last minute, and those that do pay don't want to pay much as it will probably get ruined during the next race.

Now your experience may be different then mine, but you need to weigh up your options. Racing is a very tight knit community and breaking in might prove difficult if you are not "one of the gang"

 

[rossmosh]

Call up the guy retiring and say "Hi, I've heard you're retiring and have an excellent reputation. Would you consider selling your business and giving me some training?"

As for the structure of the deal, there are primarily two ways to handle it.

1. Cash for assets, contacts, files, email address, phone number, and training. One time fee. Whatever happens happens.

2. Cash for assets. So if he has a printer, computer, tools, etc, worth $5000, you hand him $5k. Then for every job you book under his name, you kick back a commission. You do this for 1-3 years.

Generally speaking, option #2 is a much better choice, but option #1 works too. You just can't pay a lot for the expectation of business. Recapture rate can be anywhere from 80%+ down to 20%.

 

[FireSprint.com]

Sounds like you have a great opportunity here. It also sounds like you like the racecar business more than the apparel business. As far as buying a used printer, remember that they lose their value pretty fast from new. 50% the first year and 50% of that each year after. I'm not saying don't buy it, but just know that a premium you would be paying for that printer is more for the connection than the printer itself.

Good luck!!

 

[Notarealsignguy]

I would go talk to him and see. It will go 1 of 2 ways. The guy will think what he has is gold and put the price so high that he takes it to the grave with him. Or the guy sees you as a clean and easy way to walk away from his stuff without having to hassle with piecing it out so he sells you the equipment and throws in the files/contacts. Unfortunately, more often then not people that spent their lifetime building up their business think that's it's worth way more than it actually is and aren't open to much negotiation.
The other problem is what canuck said. Racers are like broke real estate agents. It is an expensive hobby so many of them are self employed which may open doors for new clients. As for the ones that want it for nothing, saying no is always an option. Someone is going to pick up that business, and if you don't make a move, someone else might. If nothing else, I think you should bite the bullet and get yourself a printer. You will not regret it one bit.

 

[rjssigns]

What have your experience been of the race cars you do letter or have in the past? Is it profitable for you?

I know personally my experience has been less than ideal, race car drivers are usually looking for you to sponsor them in lieu of payment (think of all the exposure!!) It's also very fast paced work as everything is last minute, and those that do pay don't want to pay much as it will probably get ruined during the next race.

Now your experience may be different then mine, but you need to weigh up your options. Racing is a very tight knit community and breaking in might prove difficult if you are not "one of the gang"

Canuck is bang on. Racers will spend 10's of thousands on a motor, trans etc...then come beggin'. You'll hear the classic: "If you sponsor me I'll bring you a lot of other racers". Yeah sure buddy.

I would hand them a stack of my business cards while telling them; "Sign the back of these and give them to your buddies. If I get five cards back with you r name on them and do their cars I'll do your car for free." Guess how that turned out...

Years ago I could count on doing 24 to 30 cars every season. Got out of it because of the BS, "late payments" and every car was last minute. like right up to having the car done hours before qualifying. Money was okay when I could get it but it wasn't worth it. Cut all ties and replaced cars with commercial work.

Racers are an odd bunch when it comes to spending money on stuff that doesn't make them faster.

 

[2B]

I would hand them a stack of my business cards while telling them; "Sign the back of these and give them to your buddies. If I get five cards back with you r name on them and do their cars I'll do your car for free." Guess how that turned out...

This is an EXCELLENT approach and I'll be using it for anyone wanting free graphics

 

[Pauly]

I'd go and speak to him. See what he says.

If it was me in your position, id see if he's willing to sell up, & teach you. maybe do a trial run or something? if it goes well and you're capable, then bite the bullet.
If he i willing to sell up, make sure you look at his books. how much he makes on each car, how well the pay and ontime.

 

[Johnny Best]

I would get a good deal on a new HP latex and used laminator. The latex won't have problems like a solvent if it sits for awhile not being used. Get in contact with Bigfish on the HP printer. The latex puts out great colors. Like others have said, the guy retiring probably thinks his equipment is worth more than it is. After a printer is a year old it is worth a third of what he paid for it. He probably has a Roland with print and cut. My 2002 Ford F150 is a worth more.

 

[WildWestDesigns]

We have a big racing community here, I'll deal with the embroidery of their outfits etc, but otherwise, I wouldn't touch it. Especially knowing what I know in not a very different community. I was a big time diesel modder back in my younger days. Had a DRW that could do 508 HP on all 4 wheels, not bad for a brick. I did do billet badging versus vinyl customization, but vinyl is definitely something that people are tire kickers on. After thousands of dollars on fuel pump, injectors, bigger turbo etc...vinyl comes in last. Just my penny on the matter.

 

[netsol]

Stacey, my largest client put together quite a business over the years, with a string of probably 14 acquisitions.
keep in mind that many times the reaction from customers, after the sale is "what do you mean? I WAS SOLD?"
and I can't tell you how many clients flat out refused to give the new owners a chance.

that being said, you seem like you can talk to people (either you can or you can't, it's not something you can teach), if you previously did work for
auto racing people, it seems like a natural

my story was a long way around agreeing that you shouldn't pay much for the expectation of business, you will be paying for the
opportunity to win over the existing clients.

 

[Notarealsignguy]

The way you talk about the apparel, it sounds like you enjoy doing it. That in itself is very valuable. I would never give up doing work I liked just because it wasn't as profitable as other things.

 

[MikePro]

stay away from used printers, if possible. nothing but threads of headaches on this forum.
then again, same can be said about posts regarding the car racing graphics market. lol.
stand your ground, set your timeline, & charge your rate. rush job demands will be common, & sponsorships for free graphics just advertises that you do sponsorships for free graphics. 20years in the golf outing graphics business and I have yet to see an invoice out of it...but I do get to play a LOT of golf

+1 to an HP latex, as they're super easy for a beginner and consumables are plug n' play. Solvent machines out there will give you an expanded color range and white/metallic options, but head replacements can get costly and also have a bit more odor during operation than a latex machine.

 

[Gino]

When someone leaves or retires, their customers need to go somewhere. What better way then to have the person retiring, working for you part-time ?? You don't need to buy his business or equipment. Tell him you'd like him to hang around and show you the ropes. His style might be yours or it might be at the other end of the spectrum. Ya need to find this out before making any commitments or you could end up losing out big time.

As for me, I basically quit doing race cars, when I got serious about getting real customers. Sure, it was neat going to somebody's garage, setting up, getting out the mahl stick and some paint and a buncha guys just shooting the breeze and you working. You got all the beer you wanted that night, not to mention straight lines looked good from any angle, but sponsoring and hoping for work got old real fast. Ya either stick to your guns and charge your shop rate or tell 'em to hit the road. They a a cheap buncha people. Nice people, but cheap. They'd brag what they paid for tires or that they wanted a second set of everything lettered, in case of pile ups, but like I said, stopped doing that around the very early 90's. Not to say I haven't done any recently, but they pay accordingly.

 

[Texas_Signmaker]

Never hurts to ask about his equipment and just see where the guy is at... if for nothing else you'll get a good conversation out of him and his perspective on his career and the local industry.

I would separate the thought on buying a printer from the thought of this guy closing his business. They are two different things that need separate consideration. If you prefer working with vinyl, and are in your shop a good part of the day.. you might enjoy having a printer in there. Come back here with his printer information so we can help you make that decision.

I don't know that I would worry about the girl doing shirts from home. Sounds like that isn't a big $$ maker for you anyway.

 

[Stacey K]

WOW! So much great advice here, I'm more confused now than I was LOL!!! I am going to call him and see what he says, and get a feel for the kind of guys he's working with and how he's running things - if he's chatty. I think most of them are the higher end ones and he does a lot of full body printed panels. I got out of doing race cars for the very reasons listed in many of your responses. The ones I have now I just print/cut and the customer installs. The installing part is where the problem is, especially if it's at their shop, they always want to drink beer, that is exactly true - or stand and talk. Not to mention crashes...these wraps are bit more time consuming. Now if they crash, it's easy to pull the file and find a few minutes to recut certain graphics.

I think I'm leaning more towards continuing to do what I'm doing now, design print cut and customer install. There's a major shortage of guys/gals that will even touch these so I've been charging plenty and nobody has batted an eye. I used to sell race car number packages online and it was very lucrative...that might be a better option especially since my online sales of other things have been increasing. Online is the way to go, I'm all for increasing my online sales and having less "open" hours for the storefront.

Used printer...maybe not the best idea as many of you said, I'm going to see what he says and I'll report back. Maybe he is doing more than just race cars? I'm not sure!