How do you start an engraving shop?

[Tim Watson]

Hello everyone,

I've lurked here for a year always planning to get started in the engraving industry. I think they call it "analysis paralysis"! :D I finally bought a used 45 watt Epilog laser and I'm really learning a lot about everything involved, especially corel draw. I've been making some name tags and trophies, but I'm looking for something different. Most importantly, something profitable.

I did a blogsearch a few minutes ago and found a very recent post (it says today, but I'm not sure if it's the date it was posted or just showing me today's date) with an interview called how to start an engraving business (http://www.startingabiz.com/starting-a-laser-engraving-business/) with Tom Bernard who I recognized from his column in Awards Engraving magazine which was pretty good and worth listening to, especially if you're a newbie. He addressed some of the business issues not covered elsewhere. It was probably a little on the basic side for me, especially as I already bought my laser and wasn't looking for buying advice. Tom is pretty interesting. His Jack and Jill series in Engraving Awards is worth checking out (a few issues back).

I also have enjoyed Laser University (http://www.laseru.com), but here again, there isn't a lot about the business side of the industry. It's all about how to make stuff (though I found the settings calculator most helpful). I can make stuff, but I want to SELL stuff! :(

Anyone offer any other resources that might be helpful? Books? Tapes? CD's? Courses? Seminars? Trade shows? ANYTHING?

Thanks! -T.J.

[Mike Hood]

Subscribe to two magazines to be sure: Engraver's Journal and Awards & Engraving magazines. Matter of fact, that article is straight out A&E Magazine from this month.

[Phil Sanders]

Tim:

This isn't what you asked for, but---

Quite a few years ago when I was looking into it, and decided woodworking will never, ever, be more than a hobby for me, I heard the following story. Yes, you may have heard it before.

I think it came from the S.C.O.R.E. seminar I went to, but it could have been somewhere else:


A University finds a whole bunch of people starting up small business. Each new hopeful entrepreneur is interviewed as to what is the most important factor in their startup business. They talked about the new equipment, or their skills at doing the work, or their luck in being able to bring into the new business skilled workers, or the location of the business, or business loans they qualified for, but most of all they talked about new technology.
A period of time goes by, and the small business owners who are still in business are interviewed again. This time, in response to the question as to most important factor in their business, almost everyone responds with "Paying Customers". Take note of the exact phrase: Paying Customers.The Small Business Administration, and the retired business owners of SCORE, (score.org) keep hitting on one subject: your business plan. This is very important. You need to very realistically know where, who, how, and what you are going to sell, and when. Then know the market for the price to sell it at. And you need to know who is going to pay for that, and pay on time.

If you don't know the who your customer is, and how your customers are going to find out that you are in business, you are just in an expensive hobby not a for profit business. This is a bit above "an add in the Yellow Pages."

The business plan, well at least it should, walk you through the steps:
-contact by customer
-agreement on exactly what is being contracted for ("meeting of minds")
-specific performance for specific pay agreement
-order of supplies (either from stock, (with replenishment) or special supplier order)
-schedule (or scheduling) of work
---break down work steps
---Tooling required changes? (don't forget, special tooling--who pays?)
---etc.
-Excution of work steps
-inspection of work (this really should be onging all through the excution)
-OK to ship, compare exactly what was ordered to product produced?
-Ship and invoice customer
-recieve payment
-process payment and make necessary tax payment(s).

Don't forget the cost of carry over from when you have to pay for your supplies, utility bills, loan payments, etc, (plus your personal draw from the business for food & shelter,) to when can you really expect payment from your customers. (30 days, 60 days, 90 days?)

This is why I didn't go into business, I like to work wood, not push a pencil.

Phil

[Mitchell Andrus]

Phil. Excellent!

In short... find a need and fill it. If the need is real, you're in business.

[Stephen Beckham]

Phil hit is on the head...

My Story (reader's digest version). Found myself loving the wood-working hobby since a kid and playing with other people's laser's for my last seven years in the military. Fate had me assigned to Fort Knox, where there was only one provider within 40 miles with a laser.

At the point I decided to buy my own laser and start a etching business - I counted on the military to keep me in business with their gift purchases of plaques and stuff. Surprise - although they are quite supportive, it was the local community that has been keeping me afloat - they've never seen the likes of a laser in this area... I never wanted and even swore at one point that I'd never do trophies... But the last trophy guy in the area doesn't make trophies anymore, that has also picked up my walkin business...

Bottom line - my business plan's market research covered the wrong target of opportunity. Now that I've got local community supporting the store, I've had a chance to cater to some of the military units and they are starting to come over... They'll still be a big part and maybe the larger part as they realize their are two of us here, but for the original buisness plan - good thing it wasn't written in stone...

[Tim Watson]

Thank you to everyone, and especially Phil, for the great replies. They helped me a lot!

[Vicky Orsini]

...but for the original buisness plan - good thing it wasn't written in stone... That's actually a very important part of a business plan - the ability to change and grow as the business does. ;)

[Tim Watson]

Thanks, Vicky! Do you have any tips or advice from your own experience starting your shop?

[Lisa Walter]

I am just getting started in this business, but according to my laser salesman, he has seen a lot of people go under because they are looking for that "one" thing to do, a specialized thing no one else does. He gave an example of one man who makes specialized flag boxes for service people who have passed away (or even fire fighters or who ever). He said this man engraves the wooden box, the glass, etc. I guess he even makes the flag box. He said this man puts so much time into these boxes (I guess they are nice too!) that he can't really charge enough to get all the time and effort he puts into the boxes. So this man is actually losing money. He (the laser guy) also told me that the good money is with the big businesses doing things like marking parts. Right now I plan on doing the small stuff (you have to pay the bills right?) when there is no BIG stuff (companies) to do.

Lisa

[Tim Watson]

That's what I liked about Tom Bernard's interview. He really stressed that you should be thinking outside the box. I've never used his patterns, but I think even if you never try them you can get a lot out of the idea that you should be finding a product line of your own instead of going down the same path everyone else does.

[Mike Null]

I would like to add one thought for your consideration.

Engraving is a service business. The overwhelming majority of laser engravers make their money by offering a personalized engraving service that may or may not include selling a product. Others, like me, make our money by doing marking or engraving for commercial accounts. I do not have a product line but do sell awards from a distributor.

I have seen too many people who had a "great idea" for a product they could make with the laser but for one reason or another it didn't sell and they were in trouble.

[Sandra Force]

Tim,

You don't say where you are located at and if there are other laser and engraving shops in the area. No matter how much you enjoy doing this if you are in a already crowded market it is going to be much tougher to get a start. You can do it but you may well have to do more on line and less locally. First thing is you have to come up with what you can engrave that is likely to sell in your area. Find out who are potential suppliers, buyers and can you sell through existing stores instead of opening your own. This way can well be a more reasonable way to start up. If you do start an online store make sure that it is professional. Nothing is more irritating that to try to shop online and it be worse than driving to the store and getttng the item.

I do not want to discourage you but make sure that you have done your research before you get in too deep and loose a lot of money. I am seeing more and more laser operations close due to lack of research and understanding of the market.

[Tim Watson]

Hi Sandra,

I live in a very small down which is a bit of a double-edged sword. There is virtually no competition for almost thirty miles, but the population density is pretty low, too. There are probably 10,000 people in the communities surrounding me.

[Stephen Beckham]

Tim,

Another thought that I missed in my research. What months are good for customers and which are bad. They are tied to the ebb-n-flow of schools, clubs and sports seasons.

For instance - what you make in May/June - you better set aside for July unless you have some very good back-to-school items. All sports are done, not many award ceremonies and it's just down right hard to find things to etch or personalize for back to school. I jumped in on etching blue-jeans with school logos...

Obviously - Christmas season would likely be your best.

Wedding and sports seasons are good for business as well.

What does your small town have to offer that might need the xtra touch? I've got a guy here who loves to sell CASE knives. At the end of the year, he gives away what's left over to stock all new ones for the new year... I've etched more for him than I could count.

I've also found a vendor that likes to sell junk doors. I let him give me ideas of what to put on the doors at a wholesale rate and then he deals with the customers and carries the stock. He's my second largest customer. His ideas, his stock - my laser...

One last note - I'll second Mike's comments about a service business. That includes being able to deal with customer's (good & bad). If you have a good sense of dealing with people - keep them happy and they'll keep coming back to get good service...

Take care,

[Roy Brewer]

Anyone offer any other resources that might be helpful?
Tim,
If you have considered joining ARAnow would be a great time. The last issue of their Recognition Review came with a CD of what I consider to be the most helpful statistics ever compiled on pricing and industry trends.

This is on their website(http://www.ARA.org), for download, but only in the members section.

To many this research could easily be worth the price of membership, but if not, join the the year you plan to go to the Vegas show(largest in the industry--this year early March) and the combination of the two make membership a no brainer to me.