Are you thinking of starting a new business?

For the most part, founders of companies in this industry are either artists/designers themselves or someone who believes they've found a better way to build a mousetrap. They bring with them a strong creative energy, a desire to somehow make a better product and an enthusiasm which continually fuels the entire industry.

And like most new entrepreneurs, they tend to jump in head first figuring that they'll learn to swim as they go. Often I see them first in the trade shows, which seems a natural place to begin - but is it? They're all set up, full of smiles and hope and excited to meet other like-minded individuals to show and share their newest products. They arrive expecting/hoping that buyers from around the country will flood into their booth and write massive orders. It's a nice idea, but one that in these times is not likely to actually occur.

HINT: While trade shows have their place, those companies that limit themselves to this mechanism or even worse, see these as THE way to build their business, handicap their chances for success. In today's market, you need a multi-pronged approach (and adding reps is NOT in itself a 'multi-pronged' approach).

But that doesn't stop them, they hopefully do write some orders, maybe meet some sales reps who lavish them with praise and fuel the hope that all will be well with their new venture and along the way, they also meet some industry vets who offer them encouragement.

These founders come from all walks of life and background. Some have experience in other businesses which they hope gave them the tools they need, some come knowing they lack those tools but confident they'll learn I mean, how hard can it really be?

Does any of this sound at all familiar?

If it does, perhaps some part of you has wondered if you're making the right decisions. Is your business actually headed toward success or are you making choices that will sooner or later end with less than the desired results.

I'd like to share with you some thoughts and insights about starting a company.I'm sure you've done enough research to already know that over 90% of all new business fail, that's one I think most people have read at one point or another. But do you know why? Here is a list of the most common reasons that I've found for a business failing in this industry. I've bolded those that I feel are most relevant to the typical smaller businesses that are the normal start-ups on this industry.

Management
Lack of relevant experience.
Unreal expectations.
Ineffective financial & managerial control systems.

Finance:
Underestimating start-up costs (for operations & capital expenditure).
Insufficient funds or access to top-up finance
Mistaking profit for cash flow.
Overoptimistic projections.

Sales and Marketing
Misjudging the size or growth of the overall market
Overoptimistic estimates of market penetration & shares.
Delays in securing or developing distribution channels.
Underestimating the strength of competitors.
Misreading customer requirements.
Lack of promotion & customer awareness.

Product
Restricted range of offerings.
Inability to supply profitably to required price.
Lack of innovation (me-too offerings).
Problems sourcing supplies.
Offerings out of line with customer needs.

Ok, so if you're reading this, perhaps you remember that I told you I had bolded those that I've seen as most relevant. Did you perhaps notice they're all bolded!

The real question here is; did you read this list and mark those you think are true for you, or are you going to overlook them and move forward thinking you'll be different?

In case you're defaulting to the latter; STOP, THINK, READ.

Go out into the market place (you can probably do this in your mind as I would assume you've already spent hours in retailer's stores looking at what they have), DID YOU NOTICE HOW MANY WHAT YOU MIGHT CALL MEDIOCRE PRODUCT'S WHERE THERE? Is this the reason you think you'll succeed?

I want you to consider that some of those companies that produce what you think (and in my opinion rightfully so) are mediocre products, are some of the biggest and best in this industry.

HINT: While it's true that this is a product driven industry, these companies are successful because they got the importance of this list and made sure they understood their business BEFORE they jumped off the deep end.

The truth is that a great product in and of itself does not equate to success. Quite the opposite, you can have a GREAT product and fail or have a so-so product and be successful.

So then where do you begin and how does someone already limited in capital find and or develop the resources they need to make it?

I'm going to list some items that EVERY business should have before they begin and remind you it's never too late to do it correctly. I'm also going to give you some pointers to consider about each.

Management: There is no substitution for experience. Years ago, when I looked at starting my own business, a mentor told me to first go spend a few years working for someone else in that industry and learn from them. "Consider it 'college' that to some extent you actually are getting paid to attend." Fortunately I actually heard that when I was young enough and had no choice, but to start at the bottom. I began my career in the stock room of a retail store and spent five years in retail before opening up my first store. When I moved into the wholesale side of the business, I began as a rep and moved up through Sales Management, Product Development, Operations/Finance and finally was President/General Manager of several companies before I started my own.

I learned through experience the number and variety of issues that come up so that by the time I started my business, I didn't have to learn all the mistakes we usually have to make on our own dime. Any amount of industry related experience will be of tremendous help and will save you more than you can imagine. I've also come to believe that ANY business at any time can succeed, no matter how bad things are if they are willing to learn how the game is played and are willing to adjust to the current situation.

If you've already started your business and/or are just too far along (or too impatient) to become a stock clerk then I really can't emphasis enough how important it is to find someone who's been down your path and pay them to mentor you. And yes, that could be read as a sales pitch as this is part of what I do, but truly think about it; what could make more sense than having someone who's already been down your path guiding you?

Have a Plan: It's seems today that every new founder I meet has a business plan. Sometimes they've written it themselves, and sometime they've actually hired someone to do it for them. The thing is I've yet to read one that made any real sense. There are two types of business plans. The first is the fluffy, well written Wall Street type of plan that is largely exaggerated and is designed to lure investors. This is the type that both paid professional business writers and most business books/online plan creators offer. The second, which by-the-way is that one you need, is a confidential (your eyes only) document that truly outlines your goals and the path you are planning to head down. It covers your strengths and weaknesses and also speaks about how you plan on addressing those weaknesses. The most important aspect of this plan is your estimated cash flow. Whether you write this yourself or have someone do it, this part of the plan needs to be a Microsoft Excel document or even better, integrated into your financial software, that you have on your computer and that you look at and UPDATE every month if not every week.

It should be based on the 'what' you want to happen and be accurate in each of the aspects of your business. It takes into account the fact that some businesses fail and will never pay you and often when they do, they pay much later than you asked for. It also shows when you make what changes/additions to your company, when you bring out new products, re-order basic stocks etc.
What this document is intended to be is your cash bible. It shows you if you have enough money to go forward, when you might run low and if/when you can take a breath. Regardless of who created it, the job of monitoring it is yours. The reason I place so much emphasis on your cash flow is that I've yet to find a new business that has one they are paying ANY attention to and at the same time, I've NEVER found a successful business that doesn't live by it.

A good cash flow often tells you right at the beginning that you're headed down a path that will guarantee you are out of money before you ever begin and this. is the good news. It allows you to then look at alternatives and see how they affect your business. This allows you to set up realistic expectations not only of your estimated revenue, but everything from hiring, office space etc.

I also want to add here for those who are thinking but I don't actually know how to build one or operate one then find someone who can build it for you and then, either teach you how to manage it or do that for you with monthly meetings. And be aware, most accountants I meet talk about cash flows but few know enough about your actual business to accurately build you one and show you how to manage it.

While the business plan will tell you in theory what will be needed and if all goes according to plan, when you'll do certain things, it's of no value unless you have controls in place. The first step would be having a financial system that you can operate and that will give the tools you need. For start-ups and smaller businesses in this industry I recommend QuickBooks. And no, it doesn't do everything you'll need it to do, but as long as you opt for the Premier Wholesales/Distributors edition and have someone who knows how to set it up properly for you, it can do most everything you need it to. Now if you're using a MAC (love them) for your company, please seriously consider using the PC side of that great system of yours for the accounting. The QuickBooks for MAC version just won't do what you need it to (neither does PRO for the PC). But whatever you choose, make sure it's set up correctly and that you can and will maintain it. Managing your accounting is serious business and while it takes time to set it up, once running it doesn't take much at all to keep it going. Your accounting package is much more than what your accountant uses to prepare your taxes. Properly set up, your system monitors your sales by item, area and account. If used correctly, it can alert you well in advance of issues and allow you to correct them before they cause unneeded harm.

Hint: Don't let your accountant or anyone else 'archive' your history. This is vitally important as your history will be continually referred to when making decisions instead, buy a larger version and/or more hard drive space. In the years to come, you'll want to look back to see when a customer stopped buying and what they carried, or you may want to see what a former vendor was charging you. There are just too much to learn from history to let it go.

Think outside the box: Almost without exception what I've found is that a company starting in the business and many who have been around for years and are struggling is that they bet the farm on doing new and different versions of the same thing.attending trade shows and hiring reps. To be clear here, I'm not saying those don't work, but they DO NOT in themselves, create a strategy that is going to work.

A good Sales and Marketing plan today includes direct mail for both retention and acquisition going beyond just mailing out catalogs and flyers. It should be timed to events, seasons and new product introductions. Make sure they are well done and relevant to your retailers. They should also always have a call to action, something that encourages buyers to act now. In house sales should also be a part of the plan along with PR and if you can afford it, advertising.

When it comes to Sales Reps, they are a vital and very positive aspect of this industry. Think of them as your actual representative in the territory, an extension of you.

All too often, I find that businesses have no real idea of how to hire, train and manage a rep force. They have no idea of the difficulties reps have in working with companies and place expectations on them that are just not possible. They send way too many emails or letters, call them too often and expect way more of them then a rep could ever actually deliver. And then, when they find that not every rep in a given territory is servicing their area to the satisfaction of the company, they are replaced with a different group and the cycle repeats.

Over the years, I've seen many seasoned companies go through reps constantly hiring and firing them and always complaining that they pick off the top and let the rest go. And to some extent, that is true. A rep cannot actually afford to call on every store in their territory, the cost of gas, time and other expenses is just too great and that is why you must have a plan that covers the retailers that your reps can't visit. Hopefully if done right, some of these retailers can become important enough that they can be turned over to your reps. In future articles I will cover in more detail about how to hire, train and manage reps, but for now, I'll leave this with; consider them your eyes and ears in the territory and if you really want your business to succeed, go be your own rep for 3 days in ONE territory and see just how exhaustive it can be.

So how do you go about creating a well thought out and executable plan for Sales and Marketing? The first step is to make sure that within your budget, you have allowed to enough capital to do at least some of everything I've outlined. Again this can be tricky and so unless you have experience in developing a Sales/Marketing department, consider bringing in someone who does. And be careful here, there are people in the market who charge plenty to hire and train reps, but you need much more than that. Look for someone who has experience in every aspect of Sales and Marketing.

And now to the fun part - making great products: Ah the one we like the best and for good reason, for this is the WHY we really do this business, the chance to both expand and show off our creativity by bringing new and innovative products to market. Assuming that the areas mentioned above are somewhat in alignment, this is where a company puts their stamp on the industry and to some small extent, the world. It's also the area that will determine the success of your business.

Let's move to the product you've decided to make. Years ago I said the last thing anyone needs is another damn coffee mug. And by that I mean that with today's market dynamics taking yet another pretty design and putting it on a product is just not cutting it. Very rarely will another new design for a typical product give you much growth. That said, there are those and indeed there is a NEED to constantly update existing lines with new designs but if you're starting out in this business and want to be successful you'll need to be able to offer retailers and consumers something more, something that is uniquely YOU. And until you can identify and quantify what it is about your company that NO one can duplicate, your chances in this business will be limited.

I used to tell my art directors, don't take a piece of art and put it onto a product, make a piece of art that is a product. Figure out a new way to make that journal in a way that no one has done. Look at what will be the use of the product, who the consumer is, what is their lifestyle and specifically HOW will they use it. Then go check out the discounters (I'm assuming here, your product is NOT being designed for mass merchants), and see if they already carry something similar only with a different design. In these economic times, your product cannot be like something found there, your retailer just can't compete and they need products that are different enough that their customer can justify the expense.

Hint: If you're designing a fabric covered box to compete with all the other fabric covered boxes that can be found in chain and discount stores nationwide, why would I buy yours? Now if yours is about storing clothes and you've made a really great new box that has some type of unique dividers for my sox as part of a series of Smart boxes that might make it worth paying more.

All too frequently, I will see a new business start with an idea and develop some piece types and BANG, they think they have a company. I recently walked the aisles of the National Stationery Show and as I'd come across a new exhibitor (and some established ones) I would stop at what I thought was a really nice display or perhaps some item caught my eye. But then, as I'd look just a bit deeper, I'd see that while an item or several items might be well done, the line itself was lacking in enough depth/purpose to give a retailer a strong enough reason to buy the line. This is called Line Development and it's an area that few companies understand. It's about having the right mix of different products so that a retailer can make a statement with the line. It's also about having a specific point of view; the line must be about something and its products must tell that story.

Think outside the box find a new way to make that piece type, a different material, a clasp that closes in a unique way, a flap or something that is uniquely yours. Those companies in this market that are experiencing growth (and there are some) are the ones who have dared to reinvent themselves and the product they make. DARE…it’s worth the risk.

As I talk with these new businesses, I find that they just don't know the industry and this is where I may be able to make the most difference. Few people truly understand the need for a product line to be properly developed before it can be successful.

For new companies, another potentially fatal mistake that I will find is that they don't actually understand the pricing structure that must be built into their product in order to be profitable. Often I find that they think the same doubling or keystone markup traditionally used from Wholesale to Retail is how it works. But it's not, there are formulas in this industry that while not set in stone, they are good formulas to use. It takes a lot of gross profit to run a company in this industry, there are reps commissions, show fees, shrinkage and other expenses that must be taken into consideration.

Most often I find that new companies failed to understand the manufacturing process and the pricing structure and they end up paying way too much for their products and then can't offer them at a reasonable price and earn a living. This is NOT about cutting back on quality, this is about understanding things like the printing curve and how many of each item you need to produce to get the price to a point where you can offer the item at a fair retail and still earn a living.

The most common mistakes I see is in accepting the price the manufacturer gives you without an independent understanding of their costs. With almost every one of my new clients, I have found they are paying anywhere from 30-60% more for their products then they should. In almost no time at all, I save them what will be hundreds and thousands and eventually millions a year on product cost!

I hope you've found something is this article that has caused you to think differently, perhaps get excited in a new and different way about your new venture.

It can be successful if you'll put some thoughts into these different areas and really take what you're doing seriously.

Good luck and if I can be of any assistance, please do NOT hesitate to give me a call.

How do I start my own Greeting Card company?

The good news is that as your own boss, you have total control over what you want to create. There is one important drawback, though - you are not focused solely on the creative aspect, you need to take care of the supply chain, production, financing, marketing, selling, bookkeeping and administrative tasks. In addition to being the creator, you will be an entrepreneur who has to wear many hats.

Start by putting together some samples or prototypes of the cards that you intend to make. Determine what type of greeting card you like to create... inspirational, sentimental, humorous. Start by doing some shopping, buy as many cards as you feel comfortable buying that inspire you. I’m not suggesting you copy anyone else’s work, but to find your voice it often helps to see where you tend to gravitate. Start up a conversation and hopefully a relationship with the store owner or buyer and pick their brain about what is selling best in their store and why. This can serve two purposes. It gives you an insight into the market and with luck, might give you your first customer.

You’ll also need to start thinking about your market. Who is the end user and what type of retailer will carry your cards. Remember, there are over 50,000 retailers of various type that carry cards. Are your cards aimed at the general card shop, mass retailer or are you aiming for the high-end market. Each of these markets have pro’s and con’s.

Once you believe you have a good handle on the product itself, it’s time to decide how you want to enter the market.

You also need to know about the "technical aspects" of this business -- where to sell your cards; printing and color; buying the right paper and envelopes; renting spaces and finding a sales rep or distributor.

There are several things you’ll need to consider.
1. Printing and preparing your cards.
2. Setting up your office.
3. Setting up your accounting package so you have the ability to input an order, and record your sales.
4. Determining how you will market and sale your cards.

The first thing will be to determine how much money you will be investing in your new business and how big you expect it to be.
I’ve broken this down into 3 basic categories with an estimate on what you can hope for (depending on the market acceptance of your line). Here you have a few choices and they basically come down to dollars and potential revenue.

1. An initial investment of less then $20,000 and a hoped for first year revenue of between $10 - $100K.
2. An initial investment of between $100-250K with a first year of between $100K-$1M in revenue.
3. An initial investment exceeding $1M

In future posts, I’ll cover each of these topics…for now, think about your new life, the fun you’ll have and the work you will be doing.For more information on me, please visit my website at www.managementbyintention.com

Why greeting cards are about the message:

In an article I did years ago when asked about greeting cards, I said that “Greeting Cards are the written expression of the social consciousness of the consumer”. We buy them to send a message, a message that we want to say, but don’t know how. Sometimes we just can’t find the words, or perhaps we want the words to be printed so as to validate our reason for sending them.

The image is there to support the words and indeed, it usually requires both to be a good card (though there are a number of companies in the industry that have been successful with only words).

In a future entry, I’ll write more about how to go about this.

Good luck!

For more information on me, please visit my website at www.managementbyintention.com

I want to start a greeting card company with my images, but no copy. Can this work?

The first thing you have understand about a greeting card is that it is NOT an industry that is about the art. Greeting Cards are about the message. And I know this is something you may hate to hear, but it’s true. Over 90% of all cards sold in this country are greeted cards, cards with some kind of message both on the inside and the outside of the card. It doesn’t have to be wordy, the message can be one word, what is important is that you understand that the total package of art and message is what creates a card that a person buys.

I emphasize this because over the years there have been literally hundreds of artists who have come through my door wanting to start their own greeting card company and every time when I tell them this, I get this look from them that suggests that ‘well, that may be for some, but my art stands for itself’. Yea, well…that may be true of your art, but try to find one single company that exists in the greeting card business with blank cards and the work of a single artist…it doesn’t exist for a reason.

And yes, there are a couple of card companies that have made it with just blank cards. These companies and again, out of 1000’s, there are really only one or two that made it use art of all types from literally 1000’s of artists. I’ve been blown away when I find an amazing photographer or artist of international acclaim and then find that these companies have chosen 1 or 2 images from a body of 1000’s that they artist has.

But that is the art card or blank card market. It does not work for one artist – ever.

So let me ask you a question. Do you want your company to be successful? If you answer yes, then I’d say to you; ‘why take a path that has so little possibility of success when there is another path….or let me put it this way; ‘why set yourself up for failure when you don’t have to. Give your art a voice, if you can’t…stay in the fine art market.

Should I start my own Greeting Card Company?

Usually when someone decides to start a greeting card company, they are either an artist of some kind or have a talent for writing. Both of these talents are going to be needed, but trust me, it takes a whole lot more then creative talent to start a business. There is the ‘business of the business’ that must be taken seriously.

But let’s start with the creative aspects.

Most new companies in the industry are started by artists, for any artist, the idea of finding a way to make a living selling their art is a lifetime struggle. Finding a market for your original art can be very difficult. In talking with hundreds of artists over the years that got into this market, that was most often the reason that finally came out.

The answer to this question comes first from the creative aspect. Do you have the ability and the desire to create 100 or more cards per year every year?

The Greeting card industry is a business and like any creative or fashion business, it depends on new products to come to market for every season and every year. So take a minute and think about how many cards are you willing to design each and every year?

Only if you can see yourself doing 100’s every year should you even consider starting a full time business. If not, consider offering your creative services to an existing company. In a future entry, I’ll write more about how to go about this. In the meantime, you can search the web and find many articles on submitting your ideas.

Good luck!
For more information on me, please visit my website at www.managementbyintention.com

How to start a greeting card company

Ah…the beauty of new frontiers, of taking control of your own destiny, the thrill when others ‘buy’ and therefore support our belief in our own creativity. And of course, the financial freedom that comes with earning a living with our creativity.

To anyone who dreams of starting their own greeting card company, I applaud you and hope with all my heart that if you take the plunge that you do it committed to succeed. For above all else, you will need to be committed to the process. Yes, it can be fun and there will be times when you will absolutely know you made the right decision…that is if you do it right.

As a former executive of some of the best alternative (small privately owned) greeting card companies in the U.S. and founder of my own successful card company, I will try to share with you here a bit about how you can start your own company and have it be successful.

There are hundreds of new greeting card companies that start each year and 1000’s that are in business today, but few will ever make it. My goal here is to at least make you aware of some of the biggest pitfalls of the industry in hopes that with this knowledge you will be better prepared should you take the plunge.

In the posts to come, I’ll cover some general ‘how-to’ subjects and of course am more than happy to answer any questions you might have.


For more information on me, please visit my website at www.managementbyintention.com