Business Success Stories – Tom Rumbaugh
T-Shirt Printer, Embroidery Business Owner – Real Life in Apparel Decorating
Tom Rumbaugh, who now provides insights and content for the ColDesi group is a former business owner and has been in the industry since 1992.
We wanted to learn about Tom’s experience in the business before he came to Coldesi.
I had gotten into the industry when at the time I was selling siding. And it wasn’t a great industry to be in. A lot of dishonesty and convincing people to purchase something they didn’t need. It really didn’t agree with me.
I answered an ad in the paper, someone at Coldesi needed a trainer that would fly all over the country and teach people how to use their embroidery machines.
The wife of the owner interviewed me, and I knew I blew the interview. It was terrible. So I wrote a letter to her, expressing how I knew the interview didn’t go well, but that I knew working with them was something I wanted to do. And it was that letter that convinced her to take a chance.
I flew to 34 different states teaching people.
That’s how I got into sales and became better and better at demonstrating the equipment. Then they invited me on board to sell for the company.
What made you think about going into a business?
This was around 2004 and had worked for the company for a number of years and had put hundreds of people into the business. At the time my wife was pregnant with our first son and she had to travel 40 miles back and forth to work every day. We were doing okay financially so I mentioned to her that she could stay at home, and start her own business if she wanted to.
That resonated with her and so I wrote up a quote and sold my wife our first single-head embroidery machine. That’s how we started.
That story is the same as so many of our other customers. Where someone is a car salesman, plumber, teacher. Whatever they do, this is not their favorite thing. Or they’re commuting too far for work or just had kids, something like that
When Tom started embroidery machines were not cheap.
No, they were not. An entire system was somewhere around $35/40,000 for a six needle single-head. And the software was what was amazing, because there was $30,000 software at the time. Our was not that expensive, but still $15/16,000. You had maybe 3 people/companies in the whole country or world who had software for embroidery machines.
Did you finance it or did you write a check?
I believe we put it on a credit card for part of it and then financed the rest. We did really well. In the first six months my wife had grown tremendously, she had got two or three thousand dollars worth of orders, and she was concerned we wouldn’t be able to get the production done with her being due soon. Her mom came in to help with production and at the same time we purchased a second embroidery machine to be able to do two things at once.
The thinking behind the second machine was that she’s going to be dealing with a baby soon, so when she has the time to embroider, she needs to be able to do it quicker. It wasn’t the fact that we couldn’t have run the machine all day long it was that we’ve only got limited time, so we need to increase our production.
We wanted to brand Tom the “King of ROI” because he already knows the cost of setting everything up, and that’s often one of the most common questions we get.
Now you can get set up with a single-head machine for $12,000. Including great software, which often is a yearly subscription of $100. Getting up and running is so much more affordable. So when you need that second machine or better software, it’s so much easier.
The people who succeed really well, regardless of the cost of their investment – whether it was $35,000 or $12,000 – they’re the ones that say “I need to get another heat press” “I need to get another embroidery machine, now” because they see what’s coming ahead and they make the decision and dive into it. There’s risk, but that’s how you bring success.
We position our customers to grow. So that they can upgrade their machine to a multi-head or router their machines together.
The one thing I have learned, even before I got into being an embroidery business owner, is that if you just maintain, and you maintain long enough, work begins to push itself to you. If you concentrate on doing the best quality you can, concentrate on being efficient, and doing everything correctly, you almost can’t help but grow. There’s a point where the work begins to push itself – as long as you don’t quit, as long as you don’t take yourself out of the game before you get a chance to experience those gains.
It was probably withing our second year that we began to get to the point where more sales were coming in from unexpected sources than from us having to sell every job. That’s when it begins to get good, You just have to allow yourself to be in the game long enough to be receiving those additional benefits.
If you build it they will come. We’ve talked about that attitude before, and we’ve also talked about not being complacent there. You have to find that balance, but if you are doing good work consistently (and not focusing on trying to save ten cents on backing), it is going to gravitate towards you.
How did you get the business?
I actually continued to work while my wife ran the business. It was mostly through churches, through associations, networks we new at church, people we had met in business. I don’t think it was a lot of calling, but was really just the people we knew – Word of mouth. I don’t recall us doing any advertising, that really did anything for us, or was successful.
Advertising is good if you get to a certain point in your business. Much later on when I had left Coldesi to work the business full-time, advertising helped to cement our name. But when you’re just beginning I don’t know that advertising is necessarily the best way to go.
I want to plug a podcast: Social – Not Social Media Marketing. In it is exactly what Tom just talked about. You go to church, you go to business groups, you go to youth sports leagues. Whatever you do, wherever you go, you go there and you tell people what you’re doing. And you ask for referrals, “Do you know someone who needs custom apparel? Do you ever need any?” In the beginning, you’ll want to take an attitude of ‘no job is too small’. If you know this guy is a plumber and it’s just him and his son, offer to make them some shirts. When you break it down, if someone is dressing nicely as a contract worker, it helps them look professional. If they were to go to a department store and buy a collared shirt/polo they’re likely going to spend $20, and you’re pretty much at the price where you as a custom apparel business could embroider it, and get them a custom shirt. That’s what you can communicate to those potential customers – for just a little bit more you can do them a branded shirt.
And instead of the department store making the profit – because there is a mark-up – you’ve made the mark-up. Customers would much rather give an order to a small, local business owner.
Ask people: would you rather buy your produce from a little local shop that you know, or would you rather buy it from a big store? Almost everyone you run into would rather support a small business. Especially from someone they know. It feels a lot better writing the check to someone you know, even if it’s indirectly than simply swiping your card at a department store.
You mentioned you started getting these mystery orders, but that you didn’t have a website, or do advertising. How did you get those orders?
People know that you’re in the industry. I was just at the chiropractor and she said “Don’t you own a custom embroidery shop?” And I told her I used to, I just sold it. She said that’s too bad because she had 300 t-shirts she needed to order, and a few other things. But because I’m in the industry I can refer her to someone.
We are contracting with someone to do some professional video work for Coldesi. He came into the office and we gave him a tour, and after we walked around he mentioned that he’s going to need 2 dozen polos with his company name on it. So while we don’t do that, we can give him the name of a customer.
You’ll remember when you meet someone who does custom embroidery or DTG or vinyl. It’s interesting and it’s a fun thing to be in. You have to talk about it, somehow work it into the conversation, because you’ll get referral business from it.
Over the course of ten years in the embroidery business, we had our ups and downs. We had a retail location, but when the recession hit in 2008 we had to go back into our house for a a couple years. Little by little we just kept sticking with it and it kept going. Then it all clicked. The second time we went into a retail location we were very successful at it. We added screen print the next year, we added a t shirt printer, multiple embroidery machines. I probably had one of the first DTG t shirt printer machines ever made.
Just before we sold we were at a 3,800 square feet facility. And all of this in the course of twelve years. People ask me a lot, “How do you do this?” and the answer is simple, don’t stop. There’s always that point where you get that fear, and you just live with that fear and keep going, and eventually that success will happen. I believe that any business that has that attitude will be able to stick through it.
At Coldesi, that’s why we do more than just one thing. Not a lot of new businesses are going to do just embroidery or just direct to garment printing or rhinestones or vinyl. They’re going to do all of those things.
How long did you do embroidery before you added something else?
We had the digital t shirt printing machine within a year and a half to two years. We did that because we were selling embroidery to people and then they would also need screen printing. Since we didn’t do screen printing we would sometime bid it out to a subcontractor.
And we would sometimes find out that the customer only went through us for the screen printing because they already had the contract with us for the embroidery. In the end we really couldn’t compete with the screen printers. I felt like I needed to have that as a piece of my arsenal to prevent my customers from leaking away.
The ability to be very nimble can prevent customers from leaking away. That’s why we also encourage folks to get into at least heat transfer vinyl if they can’t get into screen printing. Vinyl isn’t going to be as profitable, but for the size of the investment you make and quickly preventing all that leaking, it’s an opportunity to say yes.
About every other year we would add something new. Until we got to a point where $30-50,000 was coming in every month, and we felt we could start parring away some of the ones that were not the most profitable.
Where we did a lot of signs and banners at the beginning, we backed out of that once we had an automated screen print press that could do a thousand shirts a day. Printing up 20 yard signs wasn’t as valuable/profitable.
In the beginning, those little patch orders might be something you say yes to. You’ll do those orders with a minimum of 50 patches and that works out really well for you. We’ve had customers that just take off, and patches are a staple of their business. Whereas other businesses choose to stop doing that. You have to find what’s making you money, what your customers want. But in the beginning, you got to be able to go out there and get a taste of everything so you can find your niche.
It’s why so many single head embroidery machines go out with a cut-and-press system from Colman and Company. It’s so someone can say yes to a job.
Having multiple custom apparel machines gives you the ability to grow. The ability to go to your cousin’s kid’s game and meet the parents and the coaches, and convert one team over to getting their jerseys from you, or just parent t-shirts.
There were times when it was an all night affair. Friends and family would come in just to help out. Jerseys spread out all across the shop.
This type of business is something that can bring family and friends together. Little kids can come in a weave vinyl or pick up trash, or put t-shirts in boxes. Kids want to do anything you want to do. We were talking about that the other day because it’s the same thing with home renovations. Anything you want to do, your 5 years will want to do with you. So if you do this business you can bring your kids in to help out with little things, because they love to be a part of it.
In so many other businesses, like computer repair, for example, you don’t want you kid anywhere near it, but with apparel, you can find things they can do, that’ll be fun.
My kids grew up with embroidery machines. Hearing them all day long, and my son one of the first things he helped out with was hooping shirts.
Tell us a bit more about the transition from having those two heads to having the multi-head machines. What motivated you to make that decision?
What happened was we got to the point where we had put together a proposal for the SBA (Small Business Administration). Talked to people down there. We also had family who were willing to invest. So ultimately it was a mix of family funding and outside funding, along with money we had saved up. We decided this was it. I put in my resignation with Colman and Company and away we went.
We immediately bought the six-head knowing that we were going to get larger work. And that was when we also bought the digital t shirt printing machine.
What do you say to people that maybe they’ve hit the end of their investment cap and they’d like to ask friends or family for that? How did you feel comfortable doing that? What approach did you take? What advice might you give?
That was done automatically. It was my wife’s family, they simply saw what she was doing and wanted to help out. It’s not necessarily something I would go tell people to pursue, because there is good and bad to that. If it can be done without family money, that’s probably a better way to go to be quite honest.
Once we had the machines, I did what I tell anyone else to do, which is get out and sell.
You can enjoy the art of embroidery and the art of decorating apparel all-day long, but what gets you to be able to continue to do your art is the ability to bring in some money from it. So you do have to be promoting. It’s that longevity that will make your work multiply. I think after the third or fourth year that we got to the point where we really didn’t have to go sell every job. Often we did nothing more than just answer the phones. That’s when it really gets juicy, people are hearing about your work.
You have the referrals and the business starts coming in. We hardly ever say the “S” word – sell – on the blog or the podcasts, because it scares people to death. We did a blog post called Active Word of Mouth. Which is basically you going out and selling what you do?
I’ll give you an interesting success story. In the very first month that we started, very easily my wife and I embroidered up some shirts and we developed this real easy approach. We had a shop now, we had a location, we had the six-head machine, we needed to keep busy. My wife wasn’t so much into selling, but I was at least comfortable with it.
We’d just scratch some shirts and we’d just walk around to businesses and if it said “no soliciting” we didn’t bother, otherwise we’d walk in and just say “Hey we just opened up a shop a few blocks down the road. If you guys ever need anything – shirts or promotional items – let us know, we’d be happy to put a bid in for you.” And that’s it, that’s all we would say.
A comfortable conversation. I’m not trying to convince them to buy. I think we saw 12-15 people that day and by the end of the week we had 3 orders. Be willing to go talk to 15 people near where you’re at, that have businesses that could potentially buy shirts. That one day we ended up with $4,000 worth of orders.
I’m not too sure we did it too many more months after that, because we didn’t have to.
You don’t need much. A simple business card or flyer, wearing what you do. If you don’t want to sell, you don’t have to go in and ask for an order, because what you’re doing isn’t a heavy sell. Use the “we’re a local, small business”. It can happen with as little as going to 12 businesses. If you’re doing 12 businesses each day for twelve days, you’re going to get business.
I would coach people on this. Go to 15 businesses, and then call it a day. And within the first month they had $4-5,000 worth of sales. And then at some point, you won’t have to go out and do that too much. Business networking groups are terrific for that. If you meet once a week with a business networking group they’ll just automatically send you business.
They’re concentrating on your business, your concentrating on theirs.
I still occasionally get calls from people who are in my network group, because there hasn’t been another embroidery person at those meetings.
We talked to some people who don’t have kids, don’t have a big family, aren’t involved in anything. So when we give all these examples on where to network, they’re not a part of any of them. Then they have the freedom to go to Meetup.com and look for groups that may be interesting – books, religion, kayaking. They might not sell for you as the networking groups would, but there are 12 people there to meet who have a similar interest with you, and just make sure all of them know that you’re an embroiderer. There are also groups on LinkedIn you can connect with.
If you don’t have the dance and little league, etc. groups then you have the opportunity to go get different ones.
I think we concentrate on it differently than other companies do. The fact that we ask where do you get your work from. There’s this whole other aspect besides just selling you a machine that we concentrate on. I don’t want to just sell them a machine and then have them feel like they’re floundering. I want them to know how they’re going to attack the market.
In some cases people just say “I want to do my art with the machine” and in that case, as long as they just make their payment and can create their art, that’s what they want, that’s great.
We’ve talked before about financing your hobby, which is perfectly acceptable.
There are other people that want to make a business out of it. If they’re willing to do a couple small, potentially uncomfortable things, it can payoff big. You can build something that is not only good for yourself, your family, your kids. You just have to keep pushing.
What was your biggest hurdle when you started up?
I would say working together as a couple. It really does take a long time to get good at working with someone you’re so close to. We used to butt heads a lot. At one point we separated duties, she concentrated on embroidery, I took sales. When the recession happened we had to join forces. That forced us to really work with each other.
I’m more big picture, where she’s more details. She’s seeing grey streaks, whereas I’m seeing an elephant.When she would allow me to move her to different spots and I learned to accept those details as true, even if I couldn’t always see them, we became a really good mix.
Work with your strengths and accept the flaws in each other.
A great exercise to do, because you might not be starting as a couple, you might be starting with a friend, or a business partner you kind of know, is to write down things you’re good at, and then on the other side of the paper, be honest with yourself and name a few things you’re not good at.
Sometimes it’s easier to say what you don’t like – because most often you don’t like the things you’re not good at. Then you can take those lists, compare them together, and just see what tasks that you’re not good at that the other person is good at. You’re immediately creating that environment of working together and working with your strengths. The
Write down a mini sales plan. Writing things down instead of just saying them, will help you get them done.
People think that a partnership, especially when you’re working with a spouse, is 50/50. And that’s not the case. It’s 100% you accept that person. You can’t control whether they are also going to accept you 100%, but if you do get two people who are accepting each other 100% then you have a great partnership.
Do you have a final piece of advice you’d like to leave anyone with who’s thinking about starting a custom apparel business?
One of the things that people don’t do too well is they don’t track where their sales are coming from. They don’t know how much of it is screen printing, how much is promotional items, etc. Along with every invoice you want to use Quickbooks ability, or whatever accounting software you have, to track the type of sale that it is.
It’s critical because how do you make the right machine decisions, what is the right purchases?
I might be really insightful, but that doesn’t mean I’m right. What are the facts and figures?
You can’t go by what you feel is your most successful part of the business, or how much time you put into something.
There’ll always be that one deal, that one situation where you just make the sale, you feel like you were taken advantage of, or whatever it is. I had sales reps that would talk about that one customer for the next two or three months.
And you just have to let go of those hurts. You can’t let those hurts define you. The quicker you stop talking about that one customer, the easier it is to accept there’s a lot more good.
When you go out o businesses, you might get a weird, negative reactive from a business. That can stop some people because that one person then defines the group for them.
We don’t even go out to areas that could be wildly successful for us because we have this psychological chain from that one bad memory, form that one client who screwed us over.
Re-enforce those good experiences.
You went from part-time, and a machine that you and your wife spent a lot of money on, to two machines, to having your own business, to buying multiple machines, to having 6-8 sales people working for you, to managing all that. Just by making that first decision that you’re going to do this. As long as you keep track of your customers, and don’t stop there’s success out therefore just about everybody.