# Looking at my first commercial space! Brick and Mortar



## BattleCatIND (Oct 8, 2016)

So this is a little terrifying and I wanted to get some thoughts from the cloud of other operators. 
I'm meeting with a commercial realtor tomorrow to talk about a specific spot INSIDE a very large college campus (more than 50,000 students).
The lease will be right around $5000 a month and I will have direct access to 670 student organizations, teams, events and just tens of thousands of people all around. 
To me, getting to that number and and beyond for a profit doesn't seem out of reach, but until this point I've been rather casual about the business so I'm not going into it with a ton of clients. 
Thoughts??


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## PatWibble (Mar 7, 2014)

That's a lot of rent. Is that every month, or just while the students are on campus? How many weeks a year is the campus full? $60k for 30 weeks a year trade could be hard.

My experience with student associations is that everything is price driven.
The danger you face is that you are paying premium rent with no guarantee that any of the student associations will use you. Those that do use you want the best price. You could be undercut, significantly, by an off campus printer with lower overheads, and left with only the low volume work.

I print for a number of student clubs and associations at various Universities in the UK. It is nice business, but the downside is that each academic year each society has a new president and set of officers. Every year I have to build a new set of business relationships. And every year I loose a few and gain a few - all it takes is a president with the inclination to shop around, or who knows someone in the trade, and the society has gone to another printer. 

Unless the lease comes with the contract for the colleges official merchandise and team uniforms you need to proceed with care.


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## binki (Jul 16, 2006)

When we moved into our retail space in a downtown area we didn't have much biz but it didn't take long to really heat up for us. It is exciting and scary at the same time. 

So if you are on campus then will you be able to get other business? Do you have enough equipment and staff to handle the volume? What about marketing, will you be able to have a forum with those organizations? What about publications, will they announce your arrival? What about competition, is there any on campus? Are you Greek Licensed? https://greeklicensing.com/ Are you licensed to sell school logo apparel and promo items? How large is the space? Is it a gross monthly lease or a net lease? What is your business structure? C-Corp, LLC, DBA? Will you be personally liable for the business not paying the lease if that happens?

I would write a business plan for something like this. It could be an instant success if done right and even if done wrong, just more painful that way. 

I would also see if I could negotiate the lease to half price for the first 6 months and for months the school is not in session.

Good Luck.


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## BattleCatIND (Oct 8, 2016)

PatWibble said:


> That's a lot of rent. Is that every month, or just while the students are on campus? How many weeks a year is the campus full? $60k for 30 weeks a year trade could be hard.
> 
> The danger you face is that you are paying premium rent with no guarantee that any of the student associations will use you. Those that do use you want the best price. You could be undercut, significantly, by an off campus printer with lower overheads, and left with only the low volume work.
> 
> ...


Yes, its $5000 a month every month. IS that a lot?? I didn't feel like that was over priced for a location so central to so many people. I mean, its ON the street that leads up to the football stadium. But again, this is my first time doing this and I could easily be wrong!

When I broke down 5000 a month, thats only something like 40 shirts a day, which is obviously SUPER easy on the physically printing portion - of course finding the clients may or may not be a completely different story. The woman said they would tie us in with the athletic department, but NOT for official uniforms, for things like t-shirts the players wear on their off time and warm ups and stuff.. 

This right here is Step 1 of proceeding with care, you guys collectively have decades of experience that I hope to learn from.


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## BattleCatIND (Oct 8, 2016)

binki said:


> So if you are on campus then will you be able to get other business? Do you have enough equipment and staff to handle the volume? What about marketing, will you be able to have a forum with those organizations? What about publications, will they announce your arrival? What about competition, is there any on campus? Are you Greek Licensed? https://greeklicensing.com/ Are you licensed to sell school logo apparel and promo items? How large is the space? Is it a gross monthly lease or a net lease? What is your business structure? C-Corp, LLC, DBA? Will you be personally liable for the business not paying the lease if that happens?
> 
> I would write a business plan for something like this. It could be an instant success if done right and even if done wrong, just more painful that way.
> 
> ...


*So if you are on campus then will you be able to get other business?* Yes, we'll be able to continue to go after 5k's and small gyms (thats what I've been milking so far) - and anyone is allowed onto this campus and into this retail location, so its not JUST students, and in a pretty good part of town otherwise. 

*Do you have enough equipment and staff to handle the volume?* I have two manual presses, one of them a 6 color 4 station riley hopkins aero, and one of them a 4 color 4 station riley hopkins JR that I started everything with. And then a D-100 conveyor dryer from Vortex that I lengthened by putting an additional two flash driers at the back and extending the belt. I'll only need like 1200 shirts per month to break even and keep the lights on, and thats WELL within the parameters of two manual presses. Of course, I may get the occasional BIG order all at once, but Im excited to burn some midnight oil with a couple of friends and make it happen. 

*What about marketing, will you be able to have a forum with those organizations? What about publications, will they announce your arrival? What about competition, is there any on campus? Are you Greek Licensed? * Yes, I am alumni at this university and so I'll have access to everything. Ive also got a couple of friends in grad school who have access into the student union office, and can get sit downs with all the department heads. The convenience of these people being able to come to our shop right on campus, since a lot of students don't drive, is huge. 
I also happen to live just a 15 minute drive from my wholesaler AlphaBroder, AND a 15 minute drive from a Ryonet warehouse which means *NO shipping and NO waiting* for blank shirts ever. I can take a large order and fulfill it right then and there same day same hour. I think we got really lucky there. 

*Are you licensed to sell school logo apparel and promo items? How large is the space? Is it a gross monthly lease or a net lease? What is your business structure? C-Corp, LLC, DBA? Will you be personally liable for the business not paying the lease if that happens?*

I am not licensed to sell school logo stuff, but thats first order of business. And holy crap I didn't even know that about greek life, THANK YOU SO MUCH FOR THAT LINK, Ive already submitted my stuff for them. We're an LLC. We will be personally liable as far as I know, which makes it a bit risky. But I mean, no risk no reward? I also own a rental house near campus that sort of pays all of my "regular life" bills so Im in a unique configuration where I can survive a total failure pretty much just fine. 
The space is 1850 square feet, so theres plenty of room. Its got water and sewer and bathrooms. 

My real concern is how daunting is $5000 a month when you have an actual brick and mortar retail location? Are you guys doing just over that? Are you guys doing $50,000 a month and its simple?


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## Dekzion (May 18, 2015)

There's that old saying "if I knew then what I know now" 5000 is, okay, 40 shirts a day, but that's the retail coming in it's not your profit only, deduct your material and running costs from it and it'll be a lot more shirts per day 7 days a week. the cream has been skimmed too, how many times per month will they be changing designs for warm up gear? over here football teams change their strip at least once a season forcing parents to buy new kit for the children and themselves, The money for licensing goes straight back into the club, can you print that kit and be the main supplier of the off the field strip? 
It may seem I've a downer on it but unless you get everything tied up you could end up in a bad way.
I'm hoping it can work out for you. Good luck Nic.


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## BattleCatIND (Oct 8, 2016)

Dekzion said:


> There's that old saying "if I knew then what I know now" 5000 is, okay, 40 shirts a day, but that's the retail coming in it's not your profit only, deduct your material and running costs from it and it'll be a lot more shirts per day 7 days a week. the cream has been skimmed too, how many times per month will they be changing designs for warm up gear? over here football teams change their strip at least once a season forcing parents to buy new kit for the children and themselves, The money for licensing goes straight back into the club, can you print that kit and be the main supplier of the off the field strip?
> It may seem I've a downer on it but unless you get everything tied up you could end up in a bad way.
> I'm hoping it can work out for you. Good luck Nic.


Oh no, you're not a downer at all! I don't want to hear that it's all rainbows and butterflies if there's a good chance it isn't. I'm still deciding if this is a good idea or if I should stay in my 650sqft garage and try to go after the same clients and get less of them but have no rent to pay. 
One of these plans is better than the other, unfortunately I don't think I'll get to know which one without doing both!


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## DonR (May 6, 2011)

You would be renting the space at $32.43 per sq. foot. That's a lot to pay for production space. It's ok for good retail space but you don't need that size space to sell out of. Will they divide the space so you can only take half or less of the space? You could then continue to produce where you are now or rent less expensive production space. 

Some additional things to think about. Is it a triple net lease or gross. When you start to get all of the new business, you will very quickly want more equipment and production space. The space will not be big enough for you to fit in a good auto press and all of the other equipment you will need. So even with all of the undivided space, you will need to rent additional space.


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## BattleCatIND (Oct 8, 2016)

DonR said:


> You would be renting the space at $32.43 per sq. foot. That's a lot to pay for production space. It's ok for good retail space but you don't need that size space to sell out of. Will they divide the space so you can only take half or less of the space? You could then continue to produce where you are now or rent less expensive production space.
> 
> Some additional things to think about. Is it a triple net lease or gross. When you start to get all of the new business, you will very quickly want more equipment and production space. The space will not be big enough for you to fit in a good auto press and all of the other equipment you will need. So even with all of the undivided space, you will need to rent additional space.


Unfortunately there's no way to divide it. I think a part of the lure for business would be to have the equipment in there and being run while people walk by. The community of a big college campus is so compressed that its not like the world outside.. Part of what I like about it is that my shop would become part of the campus lore.. As everyone slowly came to know it was there (its a main thoroughfare) then when it came time for whatever particular group or team or club or event to need shirts, they would already know where they will stop first to ask about prices. 

The space has a CAM fee, but thats included in that 5000.. Its actually like 3400 a month to rent and then a CAM fee of 1600 for community maintenance. 

Its 1800 square feet and rectangle, it could easily house another 3 presses, and there is a PLETHORA of tiny students who need part time jobs to pull from for cheap labor. Theres even a graphic design school where I could get employees who might actually know what they're doing.


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## binki (Jul 16, 2006)

BattleCatIND said:


> *So if you are on campus then will you be able to get other business?* Yes, we'll be able to continue to go after 5k's and small gyms (thats what I've been milking so far) - and anyone is allowed onto this campus and into this retail location, so its not JUST students, and in a pretty good part of town otherwise.
> 
> *Do you have enough equipment and staff to handle the volume?* I have two manual presses, one of them a 6 color 4 station riley hopkins aero, and one of them a 4 color 4 station riley hopkins JR that I started everything with. And then a D-100 conveyor dryer from Vortex that I lengthened by putting an additional two flash driers at the back and extending the belt. I'll only need like 1200 shirts per month to break even and keep the lights on, and thats WELL within the parameters of two manual presses. Of course, I may get the occasional BIG order all at once, but Im excited to burn some midnight oil with a couple of friends and make it happen.
> 
> ...


First things first here now, do you have embroidery? You can make bank on EMB for the frats. Easy $60 per crewneck for their house greek wear sweatshirts that will cost you about $8. This would be a must on a campus. Without that you will be leaving a lot of money on the table, *A LOT*

Other than that I think you are all set.


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## BattleCatIND (Oct 8, 2016)

binki said:


> First things first here now, do you have embroidery? You can make bank on EMB for the frats. Easy $60 per crewneck for their house greek wear sweatshirts that will cost you about $8. This would be a must on a campus. Without that you will be leaving a lot of money on the table, *A LOT*
> 
> Other than that I think you are all set.


I don't have embroidery. I mean, I do have a little Brother SE400 that I bought to play around with, but thats not capable of commercial quality. 

PLEASE ADVISE, whats a minimum standard machine? Ive got some capital and I want to leverage it smartly!


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## binki (Jul 16, 2006)

I don't know that it is that easy. The machine and digitizing are two components. The learning curve is pretty long, Maybe a separate post in the embroidery forum? 

I was just thinking on a college campus the embroidery aspect would be pretty large. Maybe you can source it to begin with.


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## ShaunTru6 (Sep 29, 2016)

It's all about the math. How many shirts do you need to print per month, every month, to pay the rent.

College kids are lazy. Will they go to you or will they go online from their dorm rooms?

Maybe have workshops to draw students into the process? A Tom Sawyer thing might work.


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## binki (Jul 16, 2006)

Thinking about this for embroidery you will have larger runs for the frats and one off runs. Maybe a full size single head or 2 head and also a 4 head for the bigger runs. 

Brand? Any of the majors. There are lots of opinions but I think you have a few distributors near you or at least on your side of the country. 

Find a good digitizer, it is a lifetime of work to learn that stuff.


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## GTP30 (Dec 18, 2015)

Sounds like you're in a great position to succeed, you seem to know most of your positives but it's those little negatives that add up to get you. If you have a slow start and don't do too well for the 1st few months, can you afford to pay the bills? We are looking at getting a store at the beginning of the year ourselves and that is the biggest issue starting out. If you got some extra cash in case things don't go as planned (do they ever?) or if you can survive the store being a failure "Ain't nothing to it but to do it!".


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## Hotpuppy (Sep 21, 2016)

I hate to be Negative Nancy.... but you *NEED* to do a business plan or you are going to burn through your capital and wind up in bankruptcy.

It's a bad idea to say "40 shirts a day." As others have said, campus business is really finicky. Every year you have to re-compete. It is price driven. 

Is there retail/warehouse space nearby? The going rate in my area is 50 to 65 cents a sq/ft. I would never let CAM charges be that high. Everything is negotiable..... you need to have a provision in the lease to cap your NNN charges. NNN=CAM+taxes+etc. Oh they did tell you they are going to make you pay the management fee and taxes too didn't they? NNN charges should be 10% of your rent or less. Otherwise you run the risk of paying for a remodel at the whim of some dork management company. Think of a strip center where a high end tenant comes in and demands $3MM in renovations. No big deal to Giant Grocery Inc to pay their share, but a $20K assessment could kill you.

Manuals are labor intensive and defect heavy. It can be done, but you want to go Auto as soon as you can. Your production rate goes from 60 shirts an hour to 600 shirts an hour. While it's cute to have a few manual presses you are sunk when someone walks in and asks for 5,000 shirts. Of course you can contract it out, but the more you can control the better you do. With a good shop you can drive your defect rate down to .5% per print location or less.

Okay, next things next... a commercial lease is a net loan not an installment agreement like residential. It varies by state, but the deal is if you sign a 5 year lease you are signing for a $300K loan. If you default or leave you are still liable for the entire $300K.

Make sure you also negotiate escalation clauses... how much rent and other expenses can increase. It's you vs them and they will rob you blind if they can. They are not your friend. Make sure you have your own Agent (representation) and possibly an Attorney who regularly does commercial leases looking at yours. Everything is negotiable. You can even build in some of your build out if you need to....

Lastly, Have you had the "screenpringing is dirty smelly and messy" talk with them? The last thing you need is them shutting you down for running 50/50 tees or sweatshirts and stinking up the area. You also want to make sure that the Sierra Club chapter on campus isn't going to picket you for using Plastisol inks that by nature contain all sorts of stuff you shouldn't eat or bathe in. I once had a bitter ex employee tell the City of Houston I was flushing toxins. An inspector showed up and wanted to know what I was doing. I walked him through all of our processes and showed him that our CCI chemistry was drain safe in California. I was just ahead of the curve and trying to be responsible. I could have been in deep doo doo. He wound up thanking me for my practices and apologized for inspecting me. I had to open up a sewer cleanout and show him no residue was building up. 

Finally, I do not want to discourage you, but I do want you to think about all the critical questions before you sign. 

I personally would find a warehouse/office space at about 1,000 s/f for $500/mo plus $200/mo in NNN charges capped and put the other money into a sales rep or direct mail.  That's enough space for 3 manuals and a small dryer. 

If you think you are going to leap to an auto, you need probably 3,000 s/f.


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## PiratePrinting (Sep 26, 2013)

I would think long and hard before diving in. It's the small stuff that will get you. The shirt biz is headed online faster than we think. Large orders slow up the small ones, re-orders are expensive to do. So on an so forth...... Now is the time to ask questions, and most importantly, LISTEN
My Best!
Ben


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## BattleCatIND (Oct 8, 2016)

Hotpuppy said:


> Finally, I do not want to discourage you, but I do want you to think about all the critical questions before you sign.
> 
> I personally would find a warehouse/office space at about 1,000 s/f for $500/mo plus $200/mo in NNN charges capped and put the other money into a sales rep or direct mail.  That's enough space for 3 manuals and a small dryer.
> 
> If you think you are going to leap to an auto, you need probably 3,000 s/f.


I DO want you to discourage me if its a bad idea! Thats the point of posting on here in the first place. I have experience in this part. I am a master at making shirts But I have never owned a retail store of any kind. 
I actually own a Marathon running race, which is where this all started - buying the t-shirts for 1000 runners was costing SO much money and I had looked up what blank ones were and how little ink went into the process and my first machine and dryer paid itself off THE VERY FIRST RACE. So its been all word of mouth with people Im involved in, in the race world. 

This college campus idea would be the only reason to get warehouse space. I have PLENTY of room at home - Im currently in a totally dedicated 3 car garage with 30amp breakers all around. 

So the space would only be good if its the space that makes it good, if that makes sense. Only if I would make $5000 MORE than what I would make without having it, would it be a good idea at all. I had no idea other space was so cheap! 

I also never would have thought about protesters, but then again, this is a GIANT campus, 60,000+ students, so theres bound to be someone representing every type of group!! 

I've been putting a lot of thought into the fact that every campus club is going to be driven by price, and that their turnover is so high I would never have a real relationship that lasts. AND that I could probably STILL go after them, just get way less of them, without being on campus, but end out ahead because of the $5000 a month I wouldn't be paying. 

What I was HOPING to hear from someone is "Forget $5000, thats a drop in the bucket of what could be made in such a high traffic area, your only problem will be making shirts fast enough!" in which case I would jump on this thing! 

I still haven't made any deals; they have my proposal and they're meeting tomorrow to discuss it. (everything has to be approved by committee since its on a campus, so they have to actually want me in there). Im loving all of this good advice from you more experienced shop owners!


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## backyardcnc (Dec 16, 2013)

the thing about fixed costs like rent and then all the associated costs like heat lights phones business taxes etc.... is they are FIXED and when things slow down they can be a massive burden. I had a bricks and mortar build for many years for an unrelated business and while my gross numbers were much higher the net numbers at the end were no better than they are now with no overhead in my homebased studio. Once you take on the commitment of a lease you need continuous growth. If you are not growing you are shrinking and high overhead and shrinking business do not mix.

I would be very cautious about such a major committent to a $5k a month rental!

just my 2 cents worth experience after 20plus years of comfortable mostly stress free self employment.

Gerald


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## Hotpuppy (Sep 21, 2016)

BattleCatIND said:


> I DO want you to discourage me if its a bad idea! Thats the point of posting on here in the first place. I have experience in this part. I am a master at making shirts But I have never owned a retail store of any kind.
> I actually own a Marathon running race, which is where this all started - buying the t-shirts for 1000 runners was costing SO much money and I had looked up what blank ones were and how little ink went into the process and my first machine and dryer paid itself off THE VERY FIRST RACE. So its been all word of mouth with people Im involved in, in the race world.
> 
> This college campus idea would be the only reason to get warehouse space. I have PLENTY of room at home - Im currently in a totally dedicated 3 car garage with 30amp breakers all around.
> ...



Alright... I'm gonna hit you hard.

You probably have a hobby still. 1,000 shirt is a couple of hours of work. You are not yet thinking of this as a business. 40 shirts a day to cover $5K in rent sounds like the garbage that sleazy sales reps use to distract you from their overpriced gear. Let me put it to you more succinctly. An hour a day of your productivity will cover rent. This is before you cover the cost of that time and any labor.

To spend 5K you need 50K of revenue to cover it. Your net margin will be somewhere between 10% and 25%. Net margin is what's left over after you pay employees, supplies, etc etc etc etc.... including yourself. 

A business makes money without you.... a job requires you to be there. Either way you should be paid for your time and involvement. A critical mistake is thinking your time has no value and that any money leftover is "profit" when you are not paying yourself.

Unless you were running $1MM/yr I wouldn't touch $5K/mo in rent. It's great that you are printing shirts to save money..... we all got in for one reason or another... but just ask yourself how many of you there are at this college who will think your prices are stupid expensive. As you quickly discovered, ink is not expensive. Neither is electricity. Equipment is, and expertise is priceless. You can't buy expertise or experience.... you have to make and earn them.

My advice still stands, find something small and cheap, keep your overhead down. Focus on going automatic, diversifying your business, and send flyers and sales reps to fetch the college kiddos. Run in your garage as long as you can get away with it.

Go automatic before it tears your hands up or the hands of your employees. Carpal tunnel is real and pulling squeegees will tear up your hands.


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## PatWibble (Mar 7, 2014)

It is good that you are getting both sides of the story here. Who knows who is right, but Binki is massively experienced in the business, and Hotpuppy - although new to the forum - sounds like he has a similar level of experiance.

$5k per month is relentless, and if paid monthly can eat your cashflow in a way that could strangle your growth plans. If paid quarterly, the numbers are bigger, but you will have some scope at the beginning of the quarter to invest in marketing and capital expenditure, before concentrating on your next rent payment.

My concern would be that you are going from being a small home based business with low overhead to a small business with massive overheads in one step. Usually there would be an interim step up the ladder.


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## crazymike (Aug 18, 2008)

Also you will need a minimum of $100,000 or more on hand to get
things set up and paying overhead till sales are high enough.


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## decorator (Oct 29, 2012)

There's a HUGE volume of potential. Obviously that's why you're excited about the opportunity. How much of that potential is not already being served, or under served? My guess is that the organizations are already getting their shirts printed somewhere, which means you've got to convince someone to switch to you. If they are unhappy with their current vendor they'll be thrilled to have a better option. But if they're happy, maybe even just mildly satisfied, or if they have a connection to their current vendor, it will be tough to get them to switch. As mentioned before, school organizations change personnel on a frequent basis. Everybody knows SOMEBODY, friend, neighbor, relative, etc. that knows SOMEBODY who can/will print shirts, usually for a little less. Your relationships will help your long term success, but they're tough to maintain in that environment.

The location should generate a lot of interest. But there's a difference between interest and sales, just as there's a difference between sales and profit. Don't get them confused.

I get the impression that you're anticipating sizable orders. The location sounds like you'll get a lot of foot traffic. You'll need staff to deal with all the browsers and tire kickers that walk into the store. Be prepared to spend a lot of time talking to people about what they want, working through art and design issues, and price quoting. Be prepared to handle people looking to order 24 pieces, not 240 pieces. You'll need to set boundaries. There's no limit to what people want. If you don't set some boundaries, you'll waste a lot of time on someone's wild idea that turns out to not be profitable. We have a brick and mortar retail shop. Dealing with the public takes a tremendous amount of time and energy. It's easy to spend so much time working with people on the front end, that you don't turn a profit on the back end. The more people that walk into the store, the more likely it is to happen, just based on the numbers. If you don't want to take time away from production, you will have to hire additional staff for one or the other.

If you want to do pre-print retail you'll have inventory issues with styles, colors, and sizes, on top of anticipating the design that spurs people to buy. Keep in mind that "Do you like it?" and "Would you BUY it?" are completely different questions. And there's that pesky "cash flow" thing.

Now suppose you're correct, and become wildly popular. Are you in a position to handle the growth and volume? You'll need a good set of operating procedures. If the volume pours in, you'll be too busy to figure it out on the fly. And if things start messing up, you're reputation will suffer and so will the business. 

Are you in danger of losing out on the space if you don't act now? I would try to get a good customer base first, then move into a location that makes it more convenient for the customer to do business with you. If it ends up being harder to get customers than you think, you won't have the big overhead hanging over you. $%,000 per month is a pretty big chunk. And as pointed out by a previous poster, that's $5,000 out of profit, not sales.

Best of luck to you.


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## BattleCatIND (Oct 8, 2016)

Thanks Pat and Mike and Decorator! And everyone actually. I'm so glad to have so much experience all in one place. 

I've decided to pass on the spot on campus. But I DID, because of this idea and this thread, learn some great stuff about Greek licensing, embroidery machinery and a lot of stuff that hadn't occurred to me about a physical space like how much time I already spend with pesky customers changing their minds or their orders pretty often and multiplying that by 10 or 100 would be crippling to production. 

I'm instead going to focus on getting a percentage of that business on campus remotely with zero costs of operation (as far as space and electricity is concerned (I have a substantial solar array set up which just about offsets my power usage))

Thanks everyone!!


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## PatWibble (Mar 7, 2014)

If you have free rent and power, you have a big headstart. 

That unit, by the time you added power, water , refuse, insurance and some hired staff would easily cost 100k per year just to open the doors, without paying yourself. (To keep the figures simple) working on a 50% gross margin, that is 200k (+/- 4k per week) of turnover NOT to earn yourself a penny.

Can you not find a much smaller and cheaper unit on campus, install some transfer technology, and keep you screen printing set-up at home?


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