Lots of decorators (including you) wrestle with the big questions: how and when to diversify. You risk sinking your shop’s profitability when you jump in at the wrong time. Don’t worry—we asked industry experts to weigh in on how to expand your offerings smartly and strategically.

There are lots of great reasons to diversify. “You separate yourself from your competitors,” says Marian Hinebauch, owner of Las Vegas-based Logo Droppers. “You give them more options. You become a consultant, as you bring new ideas to your customers’ attention.”

During the COVID-19 lockdown though, diversification’s more complicated. “There’s no crystal ball for what our new normal is—people are in survival mode,” says Marshall Atkinson,   a decorated-apparel success coach, who also offers hands-on training via his Shirt Lab events.  “Wayne Gretsky said, ‘You skate to where the puck is going to be.’ You diversify successfully if you see where the puck’s headed.” Right now, for example, if you’re a screen printer, diversification might mean heat-pressing masks

Pre-pandemic, Jonathan Ornelas, owner of San Angelo, TX-based Success Print Shop, expanded his customer base beyond schools to gyms, restaurants and other local businesses. “COVID-19 showed me how important it is to diversify into different industries,” he says. “Plus, if you deliver more products and services, it’s easier for customers. That’s the business we’re in, making the customer happy.”

Atkinson points out that “diversification’s the creative opportunity you see before you, based on your business plan.” Now’s also the time to operate with clarity and transparency. “This pandemic’s unlike anything we’ve ever seen,” he says. “We must do good for the community.”

Do This Before You Diversify

Get really good at offering your core products and services first, before diversifying and spreading yourself too thin. “My favorite thing to do is talk to the folks who’ve been down the path I’m headed,” Ornelas says. “Learn from their experiences.

Before you jump into any form of diversification, though, Atkinson suggests writing a mini business plan, even if you don’t want to. “Write your plan to sell to a higher level,” he says. “You can sell $100 DTG shirts. Remember, it’s easier to write a check for that amazing field of dreams, than to write your plan out.”

Address these questions in your mini business plan:

  • How are you going to make money?
  • Who is your customer?
  • What do they buy?
  • How much do they spend?
  • Where will you reach buyers for this new service? Social media or virtual trade shows?
  • What problem are you solving for them?
  • If you’re expanding into embroidery or DTG, how long will training take? Do you need to hire new operators? Do you have the bandwidth to do preventative maintenance?

Top Ways to Diversify

Here are the top four ways that decorators expand their offerings.

1. Invest in new machinery or equipment. “Now is the perfect time to buy because buyers have leverage,” Atkinson says. “Manufacturers have lots of equipment to sell and interest rates are low. There’s also a market for used equipment, as many shops are unfortunately liquidating.”

2. Subcontract to a trusted partner shop or supplier, if you’re not ready to invest. For example, Hinebaugh outsources all of her DTG and still makes a profit. “You don’t need to learn how to laser leather patches for trucker hats upfront—you need to learn how to sell the service,” Atkinson says. “Don’t buy the equipment for DTG, sublimation, transfers or patches upfront. Spend six months selling the new offering before you decide to bring it in-house.

3. Add promo products or hard goods to your lineup. “This is a must,” Hinebaugh says. “I don’t want my apparel customers going to another company for promo items, especially since a lot of distributors are getting into apparel.”

Atkinson agrees, but notes that promo products can be confusing. There are thousands of things you can sell. That’s why you should base your product offerings on your core customers. If you sell decorated apparel for gyms, select core complementary good-better-best products: water bottles, towels, yoga mats and water bottles.

“Plus, use the products yourself, to create a reliable list of supplier partners,” Atkinson says. “The real value in this service extension for your clients is that you’ve done the legwork research. You can make the best product recommendations.”

4. Get set up with e-commerce stores—for your own businesses and for clients. This is a great way to empower customers to customize their products. For example, Hinebaugh manages an online store for a customer with sales reps located across the country. “We made it easy for the reps to log in with a pin number and order what they want,” she says. “We ship products out within 24 hours.”

However, you’ll need a solid marketing plan to get buyers to the store upfront. “Spend time brainstorming this, since it’ll be a key part of your success,” he says. “If you really understand your clients, you’ll also select the right products and artwork.”

The Other Side of Diversifying

Of course, there’s a flipside to diversifying your business. The reality is that you might not be ready. If you overextend your shop in the wrong direction, everything might crash down like a house of cards.

Here are four questions to ask if you’re ready to diversify:

1. What benefits do you hope to gain by diversifying? If you can’t answer this question, then diversifying right now isn’t for you. Spell out your goals from the beginning. Look closely at your strategic plan to determine where adding embroidery or sublimation fits into your overall strategy—and if it makes sense.

2. Do your customers need this service? “If your customers aren’t asking for a certain product or service, you might be wasting your time on something that’s not going to play out for you,” Ornelas says.

3. Can your business diversify without a massive capital outlay? If you must change your business massively (either with new equipment or a new brick-and-mortar location), then it’s smart to look at other options, like subcontracting first. Can you map out how long it’ll take your shop to earn a profit on the new machine? Or, is it possible to enter this new market or area with minimal spending? Hinebaugh bought a new hat press, with a special arm that imprints more locations than a regular press. “It wasn’t a huge investment, but I can offer customers something different,” she says.

4. How much of an impact do you expect to have in this new area?  If there are already companies offering this new product or service, examine the benefits of adding it. Maybe you don’t want to lose customers to other shops that offer it.. “I looked into DTG and the numbers didn’t make sense for my shop, even though there are a lot of used machines for sale,” says Hinebaugh, who opted for subcontracting.

Ready to Diversify (or Not)?

Now, you’ve got an expert perspective on the pros and cons of diversification.

Ultimately, it’s important to observe what’s going on around your shop. “Online stores will be more on trend, along with print on demand,” Atkinson says. “Order quantities will skew toward units of one, so you might do more heat transfers or DTG. Ask yourself: Are these opportunities a good fit for me?”

Are you doing a deeper dive into diversification during the COVID-19 lockdown? Share your plans with us in the comments section.

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