Cole Lundstrom joins us on the show to talk about closing down his print shop. He chats with us about looking back at things he would have done differently, and looking forward to how he’s using his experience now.
Guest Email: cole@merchtroop.com
Merchtroop.com
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Transcript:
00:00:04:05 – 00:00:27:04
I don’t know if I have the right words to describe this. What did what an incredible episode. And I think, honestly, one of the best, if not the best episodes this year. we talked with Cole Lundstrom about shutting down his shop and why. I mean, they were doing million to 2 million or so in sales, and from the outside appeared to be crushing it from the inside.
00:00:27:05 – 00:00:53:12
We dive into what actually happened. So truly appreciate Cole, and we’ll share this. What do you think? Incredible. The fact that Cole is courageous and brave enough to be vulnerable and come on here, he’s been influential in the industry, and to be able to do that is not easy. we’re going to go through what that felt like, what red flag started to have, and how he pivoted his business a couple times and then when he ended up calling it quits.
00:00:53:12 – 00:01:10:10
But on the flip side, what he’s doing now, to restart and, and just the positive things that he’s doing. So this is, this is a hard one to listen to, I imagine, but it’s going to be a good one. And, hope you guys can enjoy the episode. But first, we got some sponsors. Bruce, let’s kick it off.
00:01:10:11 – 00:01:36:10
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00:02:50:13 – 00:03:23:22
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00:03:24:00 – 00:03:42:23
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00:03:43:01 – 00:04:03:12
All right let’s jump on in. All right guys I actually have great news to share with you just to kick this off. So before before we get in this episode where we got a lot of talk about southwest is ending its open seat policy and open and offering extra legroom and designated seats early next year. Wow. cool.
00:04:03:12 – 00:04:25:09
Do you know, do you know about Bruce’s? His obsession with Southwest Airlines? I didn’t know he was a southwest man. I was doing Delta a lot because I was actually. But not anymore, Bruce. Like, he was a frontier and spirit guy for a really long time, you know? and then he finally made the move to southwest here.
00:04:25:14 – 00:04:45:04
And so we’re still he’s still in our thoughts, but we’re happy for him now that he got this extra leg room and stuff. but that’s okay, Bruce. You’ll figure it out eventually. Or a companion Pass loyalist. Yeah. Although Delta has had that crazy issue with that. Like cancellations for 4 or 5 days or something straight. Yeah, something insane.
00:04:45:04 – 00:05:02:20
Or people have been stuck in airports for multiple days. Yeah, I was just in Chicago and I barely dodged it, but, yeah, it was like it was chaos in the airports. Survival of the fittest for that one. So that was the good news. Now we can talk about the other stuff. Where are you at? You’re in the hotel.
00:05:02:22 – 00:05:31:22
I’m in a hotel, so I’m in Utah this morning in Salt Lake City. we are installing heat presses and kiosks in bookstores across the country so that our retailers can customize, their athletes gear in their stores, and they don’t have to deal with inventory risk. So, we took our system that we do at Campus Inc, unpacked it, and, shipped it out to our friends and partners.
00:05:31:22 – 00:05:55:09
And now they’re going to do the final decoration. So, this is a new, new muscle for us. And, on the first install this morning. So, yeah. Damn, that’s a great idea. Thanks. I hope it’s a good. I hope it works. That’s like the, like the Nike, like how they do the live printing and stuff in the store, but for the bookstores.
00:05:55:11 – 00:06:18:13
Yeah. I mean, the industry is changing. We all have to adapt. And, this is one way that we’re going to try and pivot a little bit, to help our retailers out. And my goal is that it’s in stadiums and stuff this fall. So yeah, we’ll see what happens. Wow. So instead of booking live printing as an event, you’re basically just a live station kiosk permanently.
00:06:18:15 – 00:06:38:13
Yeah. So, they buy the heat press and the kiosk and the software from us that we built, and then we essentially will ship them all of the supplies that they need. And, as they, you know, run through blanks or transfers, we just keep reloading them. the analogy I use is kind of like a soda machine, a fountain machine.
00:06:38:13 – 00:07:01:15
We’ll keep them. We’ll keep them topped off at all times. And then, the software we build is pretty wicked. Where as it gets ordered, we can track their inventory, and then we can reload them and we can pay out, like the the royalties and all that stuff. almost in real time. So, we’re almost turning into a little bit of a software, but yeah, we’re essentially selling what we do in-house to our friends.
00:07:01:17 – 00:07:17:16
It’s a little weird. So yeah, it’s it’s kind of I mean, you’re empowering them to basically start being their own tiny print shop. So I guess the biggest risk is margin risk because you don’t have that, like that veil of secrecy anymore. Yeah. Now in the licensing space call, it’s a little bit different right. Because we control that.
00:07:17:16 – 00:07:49:13
We are a licensed vendor so they must buy the stuff from us. It’s not like anyone. They couldn’t just go get a UCLA transfer and do their own thing. There are some really strict rules about decoration. So we get to use that as a protective barrier. but to your point, totally. Yeah. Why wouldn’t they? it is sort of exposing and vulnerable a little bit because and we’re not giving them clamshells, we’re giving them memes with a compressor, like, it’s it’s,
00:07:49:15 – 00:08:11:22
Yeah, we’re doing the whole thing, but if it works and it’s sticky and it makes them money and it hedges their inventory risk, we all win. We’ll see what happens. Anyways, enough about me. Cool. So, how do we jump into this in a, in the nicest way. I mean, we had lunch, maybe come a failure. So,
00:08:12:00 – 00:08:32:03
Yeah, I mean, I shut I shut down the shop, like, that’s what the, that’s the situation with me. and shutting down the shop was something that was like a huge decision that we were battling with back in the fall. And then we went into winter. Winter was fairly bad. And then we kept talking about how spring was the answer.
00:08:32:05 – 00:09:00:21
And then we had a kind of okay, spring. I mean, even the week that I finally, like, decided it was over, we still were doing like 10,000 units. but it was a situation where we were seeing clients order less. We were seeing, our expenses go up. We didn’t have any clear answer for it. And ultimately, I had to make a decision about, like, me making money for myself, because I wasn’t making money for myself anymore.
00:09:00:21 – 00:09:20:14
I was just scrambling to constantly feed the machine and the bills. because we needed to make we needed to make, like, more than 120 K a month because of overhead equipment, loans, payroll, all this stuff that had added up. I had been to your old warehouse and I’ve been to your new one. And so I saw you guys.
00:09:20:14 – 00:09:45:09
You’re like really expand, you know, add more equipment, add more people. What size was the business when you started to go through these? Do this thought process? And how long were you thinking this through too? Because obviously this probably wasn’t like, you know, Sunday evening at dinner. Hey, Mike, you know. Hey, Bruce. Yeah, yeah. Before we before we ask a bunch of questions, Cole, you said in the beginning you said I’m a failure.
00:09:45:11 – 00:10:11:17
I first want to say, like, you’re brave and courageous, and I’m sorry that you had to do that. Because as business owners, we know that we where our business, like our business, is our lives. And so the fact that you have the audacity, the courage, the bravery, the task, maturity, the wisdom to know when to cut it and do that, you’re not a failure.
00:10:11:19 – 00:10:28:17
And I just before before we get into that, we’re with you. You know it is. And for you to come on here and talk about it and tell that story, a lot of people would, would, would not be able to do that. So I just first want to tell you that before we, before we expose you.
00:10:28:19 – 00:10:56:16
Sorry. Yeah, well, well worded, stupid. Way better than I would have said Bruce. You you not an empathetic asshole. Feelings. Feelings is. Okay. We’re working on it. okay. Cool. Can we. Can we now let’s go back to it a little bit. Yeah, yeah. So because because you’ve had, you’ve had like a, you know, I think we’ve known each other for some time through, through the shows and just visiting in California and such.
00:10:56:18 – 00:11:17:11
I mean, you had definitely what appeared from the outside as a pretty, you know, a good sized business. I mean, there’s there’s a lot going on. Yeah. I mean, I think that was a lot of my downfall. So, I mean, we never, like, raised money or had, like, any sort of investor. We, we were a bootstrapped print shop.
00:11:17:13 – 00:11:42:08
and so we would get these opportunities, our first year, we did barely anything. It was like 100,000, but our second year we were at 400 something thousand plus, basically one customer and then everyone else was like ten, 15% of the business. And they helped us get into the auto situation when we were in the 400,000 range.
00:11:42:10 – 00:12:12:18
and then we kept growing from there. And, you know, everybody loves seeing like pallets of shirts on Instagram. And so kind of because we looked busy, we got more busy. And so that’s how we started landing some of these bigger clients. going back like, you know, 2017, 2018, those types of years, we were not quite yet having to deal with people like Printful Printful had started, but Printful was somebody that, like a few people knew existed.
00:12:12:20 – 00:12:35:02
It was not what it is today. And we actually were offering, you know, fulfillment and inventory management, which was fairly unique going back then. and basically we had no investment in it and other companies did. So we started to see this thing where we got pushed more and more into volume screen printing because we didn’t play the print on demand game.
00:12:35:02 – 00:13:12:11
Right. We basically didn’t seize the moment at all. and so going into Covid, we had all the Covid problems. Then Covid had these weird booths where the whole market flipped. but then we started to see like 2023 or, yeah, 2023. We started to see things where like one client who was doing 300 K by themselves, that client, dropped their sales down to 70 K because we were doing things with marketing companies, and those marketing companies were getting their budgets slashed so they would go from nice items with high ticket prices to bottom of the barrel t shirts or tote bags.
00:13:12:13 – 00:13:35:23
And it we would see them not leave us, but just spend less. so yeah, it was a combination of print on demand rising, DTF rising, and us being built for volume that was becoming more and more of a commodity and less valuable. back in the day, like 2019 ish, you could brag about screen printing being this superior thing.
00:13:36:01 – 00:13:52:00
we were the kind of people that could set up a very difficult job. We would print for people like Post Malone, and it would be like a full color screen print, and it would look great. But more and more, we started seeing people think digital really was good enough, and we saw the prices of digital come down too.
00:13:52:05 – 00:14:18:09
So unless it was a very high volume run, you had problems with screen printing being anything more than a cheap commodity. and that’s kind of where we ended up. I think a lot of my mistakes had to do with not hiring the right team to support me. I ended up doing this kind of I ran everything, and I kept kind of filling labor positions, and I didn’t really have those, like, I didn’t have the marketing partner and the sales partner.
00:14:18:11 – 00:14:42:03
I basically had me and Joni and then everyone else was labor. And that was another mistake. Is, Kohl’s wife. Yeah. But the business, I’m assuming, was profitable at some point. Right. Like before. Oh, yeah. You know, years where we were killing it. Was there a sweet spot then before, you know, maybe, let’s say the 2023 where you said marketing budgets started to get cut, you had this overhead.
00:14:42:03 – 00:15:05:04
So top line, it’s hard to shrink, but overhead was still kind of high. When was the sweet spot what was that like? I don’t know, like 1,000,003 or something a year. But also we had we had like a manageable amount of staff because at our peak of staff, we were at like 16 staff, and I found myself not being able to get the most out of them anymore.
00:15:05:06 – 00:15:26:10
Like, I couldn’t keep my eyes on the individual people. And you would find out that at the end of the day, their output was like really unimpressive. so I either needed to hire supervisors at that point or I needed to, downsize a bit. And so when we were somewhere around, like, I don’t know, 1011 people, it was more manageable.
00:15:26:10 – 00:15:58:06
I was still handling it myself. And then we were like, blatantly profitable in the business because we could bring in enough orders. It was only like 80 to $100,000 a month we needed to bring in. but we didn’t have quite as much overhead at that moment. So it’s just kind of been this thing where, like, figuring out how to grow and not over growing, I think is the biggest battle in this game, because we’ve had days where people hand us checks for 50 K or 80 K, and you’re like, oh, we can never get this done in time.
00:15:58:06 – 00:16:18:11
I need to hire. I wish I had another auto, whatever. And then you have another month right after it where you make 65 K and you’re like, this is a disaster. How in the world are we going to survive? I have to lay people off and that kind of roller coaster ride of buying things, because you are losing an opportunity that you don’t have the size for balance to with.
00:16:18:13 – 00:16:53:08
You know, what can I actually sustain? that was a lot of the struggle, you know? Cool. It’s really interesting. I’ve been talking to some shops lately that said, like, we all went into business to do one thing, and then our customers pushed us to become something else. And that’s something else we are not equipped to do. do you feel like it was you kind of getting swayed by the industry because it’s like you went into the business to screen, print and probably not to to do a lot of like pod or inventory and then all of a sudden you get a couple clients, you change your business around a little bit, and then
00:16:53:08 – 00:17:14:01
that sometimes is what also like sent you on a, on a decline. Do you feel like if you did something different or stayed true to something else, like the business would have been okay? Like, what are your biggest regrets if you were to go backwards? Obviously you said labor or supervision. What else like as far as your niche goes?
00:17:14:03 – 00:17:35:03
I mean, if you go way backwards, the real reason I started it when I started it like by myself was I wanted it to be like, a fairly customer focused, arty, kind of a print shop. I wanted it to be like, where capable of doing very difficult screen prints, where we’re going to be doing the discharge for the water base.
00:17:35:03 – 00:17:54:10
We’re going to be doing the high quality, expensive blanks. and I wanted it to be kind of a kind of a bougie print shop and in the library. Yeah, exactly. And like in the very beginning, like you would come into our office and, on Pico, this was our very first office. It was only like 1200 square feet.
00:17:54:12 – 00:18:19:06
And you would like, hang out on the couch, and we, like, had coffee and waters, and we were like, having these nice little meetings about, like, what your vision for your brand was. And then we were able to charge quite a bit, but as we would land clients and we started seeing these bigger numbers, we started getting more sucked into the production and got pulled away from the customer side.
00:18:19:08 – 00:18:40:14
and then we’ve had opportunities to print for, I mean, insane people, like, we printed for Ariana Grande and we’ve printed for car companies and we printed for Xbox and stuff like that. But what we ended up discovering was a lot of those people that you land end up being through marketing companies and the marketing companies, they ultimately end up being about cost.
00:18:40:14 – 00:19:02:01
And to be honest, they’re making way more money than any of the print shops because they’re taking your print pricing, marketing up, and then they have zero labor, zero overhead. which is why you have these huge marketing companies making a fortune. and they have, you know, billion dollar valuations on the highest end. It’s because they have all the corporate clientele and they have basically none of the overhead, the overhead is on us.
00:19:02:03 – 00:19:25:13
Right. And they’re just a service. I mean, they’re just trading money for time basically in their expertise. Right? Yeah. And I think what’s also interesting is there’s a lot of, you know, in the entertainment business, there’s probably so much turnover with agents and marketing teams and people. And it’s like, does loyalty even exist? I don’t know, I mean, we were doing a lot of influencer stuff.
00:19:25:13 – 00:19:47:04
So like we did age three. and then we also did like the team ten, which is one of the Logan Paul projects. and what we would find is like we would get their stuff done on time, they would be charging $80 for a Gildan hoodie like they were making an amazing margin. And then we would be told, someone in Ohio wants to do the same print job for $0.80.
00:19:47:06 – 00:20:12:12
And then even if we matched it, we’d find out somebody in Indiana wants to do the same print job for $0.68. And it’s just like to race. Sure, sure, we’re doing 10,000 units, but when they start calling any shop, they all say that they’re ready to do 10,000 units. Right. And cool. Do you think it was is it, do you would you would you attribute this decline to the rise of labor?
00:20:12:12 – 00:20:32:02
Like it’s just harder to stay in business because labor costs are skyrocketing. Or do you think it’s consistency of sales and business? I mean, my labor costs rose dramatically because we went from, I don’t know if we were at 9 or 10 when we first opened because I was my own labor. But, we ended up at 15 minimum.
00:20:32:02 – 00:21:01:05
And then towards the end, they announced the California fast food $20 an hour thing. So now you have the your person is at the end of the dryer, who is essentially your lowest skilled worker, but you that they can they can go to Taco Bell and make more money. and it makes for a situation where like, to be honest, a lot of this industry is running on questionable labor practices, and there’s a lot of under the table nonsense that happens in California.
00:21:01:07 – 00:21:21:06
and so we didn’t want to be a part of that. And we also felt like we wanted to reward our team properly. so, like, I would have printers making good pay and stuff, and it meant that I could be beaten pretty easily on price. I mean, if they left the state, people could slaughter me on price, like those $4 ads you see all the time.
00:21:21:07 – 00:21:42:09
And then if even if they were in our local area, I wasn’t really the same type of labor force that, that yeah, I really needed to be to compete on, like a contract level. so I would, I would make good money on like the 200 piece local small business order, but I couldn’t necessarily handle the big contract order and be profitable.
00:21:42:11 – 00:22:05:16
for shops listening to this, labor percentages are skyrocketing or they’re starting to become really high. So if you if you do $1 million in business, theoretically your labor should be like 25%, call it $250,000. If you find that your labor is like 3539, 40% right, you are eating away 12 to 15% of your profit. that should be going to you.
00:22:05:18 – 00:22:30:22
And you can quickly run yourself out. You can bleed out basically. because the, the ratio like a 10 or 15% jump in your labor rate, that means you have to do, I don’t know, $300,000 more just to make up for that money that, that, that you’re, you’re spending. So I guess like when did you start you kind of talked about the decline a little bit and what you were feeling.
00:22:31:01 – 00:23:05:21
What numbers were you looking at every day that started to scare the crap out of you? I mean, the biggest thing that would scare me was gross revenue. Like if we didn’t do at least 90, it was a disaster, in my opinion. And then I started seeing these situations where I was like, man, we’re not getting good revenue and we’re somehow booked solid, which was a situation where, like I had, I didn’t have enough people in the building working, and I also had not enough revenue.
00:23:05:21 – 00:23:25:21
And I was like these people who seem like amazing opportunities and they’re huge corporate accounts and like, I have to sign NDAs because it’s movies and whatever. They’re also not paying enough for what I built. And a lot of that is my fault. Like, I didn’t own the building, so I had a very high lease payment of almost 12 grand.
00:23:25:23 – 00:23:49:15
I had employees that were paid, like, I guess two. Well, and then I had a situation where I would be shopped against people that were anywhere in the country, as long as they could ship in a day or two to a certain location. so maybe my client base was part of the problem. Maybe I should have been built on a different, smaller type of business that I would have had a healthier margin on.
00:23:49:17 – 00:24:11:11
but just seeing those revenues decline while simultaneously my cost had gone up, just started scaring the hell out of me like a year ago. Was there no way to. And this is all hindsight, right? Because I’m sure there’s an emotional aspect of being either tired or, you know, maybe even just wanting a switch, which we can get into to be interesting too.
00:24:11:11 – 00:24:33:08
But yeah, was there no way to right size it because I could hear someone listening saying, well, what, you know, could you charge more and or not take on certain jobs and or cut the team or like, how did you think about those. Yeah, I mean, I think there’s definitely things that there could have been ideas that could have been implement in a year and a half ago or a year ago that would have fixed it.
00:24:33:08 – 00:24:58:22
But I was doing things like cutting labor and taking on, you know, additional like work basically. So a lot of it ended up following on the smaller team, just working more than they ever had. And then besides that, we did like a big marketing push, like maybe 18 months ago or 20 months ago, and we saw really bad returns on it.
00:24:58:22 – 00:25:22:11
So we were spending money on ad, spending money on, help people making content, pushing stuff out. And we would get views and we would get likes and shares and we would get 2 or 3 kind of vague leads off of like, an ad on a given day or two. but we didn’t have like an obvious large ROI from our ad spend.
00:25:22:13 – 00:25:46:15
So we would see that, like, okay, we spent $3,000 this month on ads. We brought in $8,000 in new customers. Our existing customers might say they liked our ad, but they’re already our customer. And with our margins being around like maybe 40% gross margin on a lot of items, that that $3,000 spend on that eight grand made it barely worth it.
00:25:46:17 – 00:26:10:03
and so that kind of was a situation where, like, I guess I just couldn’t figure out the thing to flip the business. Some of my old tricks were just not working anymore. before we actually did really well with, like, Facebook, Instagram ads, we would do things that were inside of Google search, and they converted a lot better years ago, and they just did not convert the same.
00:26:10:03 – 00:26:27:20
And that was part of our problem with finding new customers. also, we weren’t built for print on demand, so we would get calls from amazing customers that would be paying us a lot, but we didn’t have a room full of core needs. We didn’t have like a DTF solution in place to do high volume print on demand.
00:26:27:22 – 00:26:42:10
And so when we would tell them we can screen, print inventory and then stay on top of your inventory and fulfill it and do all of the film it that way, they just lost interest because they’re like, oh no, I yeah, I’ll go to print. I’ll go to mad Engine, I’ll go to Printful, I’ll go to one of these.
00:26:42:10 – 00:27:00:20
That’ll do it for nine bucks a shirt. Right. Like, why would you? Can’t blame them right now. You can’t blame them at all when you talk about your marketing or your sales engine. Did you have a pretty developed sales team that was doing like outbound or customer success or like account managers or what? What did the sales org actually look like?
00:27:00:22 – 00:27:22:01
Me and Joni, it’s been me and Joni for 12 years. If you were to look back, was that was that something? Would that be something you would have changed now that, you know, I tried to change it like seven times. And the problem that I kept seeing was there was a few people that we had a different years who were essentially really good receptionists.
00:27:22:01 – 00:27:40:09
So they would they would be able to talk about t shirts. They’d be able to answer the phone. They could write up an order if it was a basic order, like they could do that kind of stuff. But I either lost them because they got better pay at a different place that I really couldn’t afford. or they were basically nothing but someone who answered phones.
00:27:40:09 – 00:28:07:22
So there was no outside sales engine that was based on humans at all. It was always like my marketing brought in leads and then we handled leads, and that was definitely something that I did not succeed at. Like, I was not good at hiring salespeople, so the kind of salespeople I wanted on my team were going to cost, you know, 60 to $80,000 a year, which I never wanted to take the gamble on, because I kind of didn’t believe that they would bring in like 4 to 5 x their, their salary.
00:28:07:22 – 00:28:37:12
And I figured that they needed to bring in 4 to 5 x their salary to even be justified as an employee. so part of it was risk aversion, and then part of it was not quite understanding how to build an outside sales team. That wasn’t just me talking someone into doing something for the next four hours, like I, I would try to implement something like, okay, we’re reaching out to these types of businesses and they would just kind of waste a few days and get like no conversions.
00:28:37:12 – 00:28:59:08
And I guess I just didn’t know what an answer was. So I would revert back to my marketing. That at least gave us leads. It’s interesting because our industry, I think, has this has this issue everywhere, where the owners are usually the salesperson and they’re usually the ones responsible for drumming up business. But we’re not formally trained in sales.
00:28:59:10 – 00:29:22:13
nor are we able to do it for 40 hours a week. We’re just hoping our reputation, word of mouth and everything we can take at us, we can just process. And I feel like people listening to this are going to be able to relate and say, yeah, I’m stuck here. what advice would you give shops, you know, that are in this position that are hearing this and saying that, that are saying like, I am where Cole is?
00:29:22:13 – 00:29:48:16
I’m not brave enough to speak up, but I am where, where, where, where he’s at right now. What advice would you would you give them to start implementing like tomorrow? Yeah, I mean, it will be one of the two of my guys actually started their own shop and basically, they’re just like eating up a lot of our print only work because, like, it was a great opportunity if you didn’t have the infrastructure we had.
00:29:48:18 – 00:30:15:21
And what I’ve been telling him is like, do not focus on growth, focus on sales because you’re in a better position doing as much sales as humanly possible, and you be the company that outsources for $0.80 per hit. Because if you start growing that back end, you better have an insane amount of sales happening. and then if you have a small downturn, you’re going to be eating all the risk.
00:30:15:21 – 00:30:41:19
Whereas these people that are being essentially brokers or their small shops, plus brokering they’re killing it because they have a bad month and they make $0. A large print shop with large overhead has a bad month and they make -$20,000. So it’s a different way to grow. but I feel like that model of focusing on the sales exclusively is a lot safer.
00:30:41:21 – 00:31:05:18
and so, you know, it depends on how big your shop is currently. But if I had been more hardcore about sales years ago before even expanding, and I had just decided I’m the type of company like a fresh Prince, for example, where I can have my location, but I’m going to find trusted print shops that I partner with and just feed them or dump the blanks to them.
00:31:05:20 – 00:31:26:03
Have a back end portal where they can see all the artwork, see all the art files and then they’re just going to white label, ship it out. I could have had a much healthier business. I mean, you know, you fill your own doors first and then you start shipping it out. I think. I think this is why companies like MLR and ROC are probably a little scared, right?
00:31:26:03 – 00:31:49:09
Because I am not. Campus Inc is not buying new autos anymore. Yeah, well, imagine how scary it is to sell manuals. That’s like really don’t think. But it’s like, I’m not I’m not buying new presses right now. I will sub out work first. Right. but four years ago there was this ego check of, no, we’re going to keep it all in-house.
00:31:49:09 – 00:32:07:01
We’re going to get the biggest, nicest presses, we’re going to get beautiful spaces. And now we’re all staring at it like, we don’t want to touch that. You know? so, so I think what you said there is don’t be afraid to sub it out and focus on sales first. Bruce, what other what other questions you got when you.
00:32:07:03 – 00:32:25:11
I love to actually learn a little bit about closing the shop and some of the details there. But you know, after going through some of that process, I’m not sure where you’re at yet. What how did you feel or how do you feel now? Is it relief? Is it, you know, bummed about it? Is it excited for what’s that like what?
00:32:25:13 – 00:32:55:13
What’s going through your feelings? Are you having. Yeah. Well, I mean, we had the staff disappear, right? We told them that we were finishing all jobs, and as soon as they were finished, it was over, like late May, and we filed for dissolution, early June. So it’s been a while since, like, the complete kind of meltdown part of it where you feel like that because there there were weeks or even months of, like, feeling like I was always scrambling.
00:32:55:13 – 00:33:17:06
I was always going to somehow land an extra 40 grand, you know, in the next two days of the month or whatever, because you’re like seeing the month be bad and you’re like, all right, I’m just like, going to land sales. And I, instead of landing 40 grand, I’d land like six brands. And it was just this thing of like, scrambling and being panicked and stressed over and over and over, and, it was really bad.
00:33:17:07 – 00:33:42:02
Like, it was it felt terrible. It felt like there wasn’t really anything I could control. And I was working harder than when I was doing good. Like when I was doing good. I actually didn’t work nearly as hard as when I was doing bad, and that was some sort of scramble spiral of trying to make sales that just there wasn’t something in place to get them.
00:33:42:04 – 00:34:04:20
so yeah, I mean, it was like a massive loss when we decided to do it. we came to find out, like when going to shut down, that the process for shutting down and dissolutions and trustees and stuff is insanely slow. So like the equipment sitting in the building today, it’s it’s still not, actually been liquidated.
00:34:04:22 – 00:34:28:19
That’s because that process is, like, shockingly slow. As soon as the like, the courts are involved in, like, debt obligations and stuff, all of a sudden you just don’t do anything for weeks and weeks because you can’t you’re not allowed to do it. So they instantly are in charge of, doing it. And it’s super slow pull. You’re not allowed to do it because there is debt or leans on the business, whether that be equipment leases or whatever.
00:34:28:19 – 00:34:48:16
And so they essentially freeze the business. Right? Exactly. They do. They freeze the business. And that was something I was warned about because I talked to people back in like the late fall, December ish, and they said, if you think you will shut this place down, you can’t sell your stuff. So I couldn’t scrape together 30 grand by selling an auto.
00:34:48:18 – 00:35:12:19
because basically any sale within even an entire year of when that shut down and, and freezes it, they can actually start claiming that’s fraud. Either you sold it for two, you sold it for too little or you misspent the funds, or those funds should have been going to, whatever bank it is that has that loan. or they have like a right to X, Y and Z.
00:35:12:21 – 00:35:40:01
So like there was a situation where unless I, I did have the opportunity to restructure all that, which was going to take like six months, and I was going to be able to still be in control of the business, still restructure it. and I could theoretically just be open right now, but I still didn’t in my mind, see, the way for me to be as big as the building needed me to be.
00:35:40:03 – 00:36:10:15
so I felt like if I restructured, I’d have this situation where maybe we were begging to get out of our lease, downsizing to a whole nother building. How do you even pay the moving costs if you’re not making good money anyway? and so I was just like, for myself and my family, I have to figure out how we’re going to be profitable ourselves instead of me adding the extra six months or one year or whatever that I could tack on to the business by doing something like a restructure instead of a shutdown.
00:36:10:15 – 00:36:31:22
But how does it feel now? Yeah. And the other thing, how do you feel about it now? I mean, the process is one thing, but I personally have brought in like $22,000 for myself and projects in the last like 40 days and it’s projects for myself with no cost of goods and no overhead and no staff. Is that relief or like what?
00:36:31:23 – 00:37:00:15
Yeah. Do you feel like it’s a relief? Yeah. I mean, I’m actually making money. I was like grinding to pay my employees and now I can like, grind for myself. But that was kind of how the business started. I mean, in the first year I was in an apartment outsourcing every single job. And so even though we only made like 140,000 or something in the first year, like I was just able to do the math, like after blanks and after this, here’s what I get to keep.
00:37:00:15 – 00:37:20:14
And it was simple math to me back then. And then I justified that as to why I was getting a building, why I was getting stuff, and then we ended up with, you know, upgrading from 1 to 3 locations. And at one point we even had a whole separate warehouse for fulfillment. And that was like 4000ft² of nothing but storage.
00:37:20:16 – 00:37:40:17
and a lot of it. I just wish I didn’t grow like, I, I was really right when I was like 27 and landing orders in my apartment. it’s interesting that, you know, a lot of people like, hold on for dear life a little bit. And in this case, you admitted to yourself this isn’t the right way.
00:37:40:19 – 00:37:58:17
I’m not going to have shame or guilt. Let’s just cut bait here and restart. that takes a lot of courage to be able to do. I don’t know if people I feel like some people might go try to take an extra loan or, you know, go to a family friend and say, I just need a little bit more money, or I just need a little bit more of this or that.
00:37:58:17 – 00:38:29:11
And for the, you know, for the fact that you you didn’t do that. Did you have any advisors or mentors helping you with this? Are you like, this must have been probably one of the hardest decisions in your life to make is basically a giant secret. I mean, just think. I think some of the first people that I ever found out or like Bruce, some of the guys at family, like my sister, like it was not I didn’t have mentors or like people that would guide me in the business.
00:38:29:11 – 00:38:51:00
That was probably something that was stupid. I probably needed that for years, and they could have helped me avoid a lot of these problems. So was it a secret just out of pride? Like everything’s fine? Yeah. I mean, it’s like everything’s amazing until you, you know, are completely screwed. It’s just you don’t want to present the negative to people, and people out.
00:38:51:02 – 00:39:12:16
They basically started every conversation with me about the business. It was always shared agency. So like that as a business, as a business, it was always good. Yeah, yeah, yeah. No one’s asking me like how it was this last weekend when I, like, went camping, like, it’s always the business. And the business is always doing great. And it’s been like that for 12 years.
00:39:12:18 – 00:39:31:02
That’s really interesting. I went on a journey probably 4 or 5 years ago, and started working with a coach and mentor. And what we tried to actually work on is how to unidentified with the business. Steven was not campus on campus Inc is not Steven. I am my own self and that is my business. That’s my job, not my life.
00:39:31:04 – 00:39:51:05
and I feel like we take so much pride in it, and we want it to, to work so badly that we’ll do anything. And it can ruin us to the point of, you know, like our lives. and so I just see, you know, I see a lot of shops listening to this, hopefully knowing, you know, if you’re living in that secrecy, like you’re not alone.
00:39:51:07 – 00:40:08:19
but you can reach out and you can reach out to Cole, and he’ll probably help you. Right. and he’ll probably give you probably give you some best practices. I’m sure you could help out a ton of shops. going through this, right now, I’m curious. Cole, did you ever think about trying to get the shop acquired or merged with someone else?
00:40:08:19 – 00:40:39:11
That was a little healthier? I had, like, one conversation with a shop we all know, and, they. I think I was simultaneously still not big enough for them. And also, I you’re like, they thought that I had issues with, like, how much debt responsibility there was while also not being a big enough facility. So that conversation happened for maybe 2 or 3 meetings and then it dropped.
00:40:39:12 – 00:41:05:01
but I never had, like, a business broker or something. step in. There could have been a situation where somebody would have wanted to buy it. I guess theoretically, they still could, they could come in and, like, talk with the trustee and, like, arrange some sort of restructure under a whole new ownership. I don’t know, I think I was trying so hard to fix it that I the idea of trying to start to sell it was like giving up or something.
00:41:05:02 – 00:41:23:07
It wasn’t very logical, I guess it was more of an emotional thing where I just didn’t want to try to sell it because I didn’t want to lose it. Ultimately. Yeah, there are a lot of folks that just step aside for one reason or the other. I mean, we we talked to a lot that, you know, hey, I want to get into this space, and I pick this up.
00:41:23:07 – 00:41:42:09
I mean, Steven, we just had you’re just helping consult for the guy that that picked up on one. but anyway, that’s interesting. Yeah. And if you sell your business, you can do, like, an asset sale where it’s just the assets and there’s no liabilities, or they can really. Do I forget what the other name of it is, where they would take on that debt and try to service it.
00:41:42:11 – 00:42:01:21
And so if you can place your business in a healthier company that can absorb that debt and can brush it off, there are sometimes instances where that does work. But it’s I think it’s like you said, it’s more emotional. It’s like, do I even want that? You know, I’d rather just restart and reset and stuff like that.
00:42:01:21 – 00:42:19:14
So cool. What? You know, obviously obviously you’ve got your podcasts and stuff like that. You’re still involved in the industry. What are you spending your time doing now? Yeah. So, I have a few things going on. Like right now, I’m actually in a fairly large facility and where, they’re having me consult to fix their fulfillment, set up.
00:42:19:16 – 00:42:45:01
So their fulfillment set up, even though they’re successful and large, was, like, shockingly unorganized with like, piles of, you know, shirts that aren’t even organized by size and stuff. And it was this chaotic thing of random people digging through piles and stuff. And so, I’m here for the next, like, two weeks being like, okay, here’s the software, here’s the bin system, here’s the expected output per operator.
00:42:45:03 – 00:43:02:17
and so we’re working on that at the moment. and those kind of projects are fun because I feel like I can come in and like, make a big change and then not have to deal with their day to day. and then besides that, I started a partnership that’s called merge. True. And so that’s a DTF transfer.
00:43:02:18 – 00:43:26:21
that’s wholesale and only for print shops. So at Merge Troop, we’re doing, a 1.7 cent per square inch transfer, which basically beats all of the public prices in the industry. so we’ve signed up a few shops already, and, we’re looking to get some more print shops on that because we’re just printing them every 24 hours shipping them out.
00:43:26:23 – 00:43:46:18
And, our plan is basically until we grow past the four machines that are running, the price is going to be fixed at that point. So we’re just seeing who is interested in that so that we can have them, save a lot of money compared to, like, the big DTF options. I feel like that’s why you like consulting over to Steven.
00:43:46:18 – 00:44:07:03
Because it’s. Oh, wow. I’ve already been there. I know exactly how to help you guys a lot quicker than what you’re doing. It’s fulfilling Cole. Right? Like, it’s fun to show someone what you learned and let them implement it and then turn around and say, hey, that works. Thanks. And it’s amazing the different things that you see.
00:44:07:03 – 00:44:25:14
For example, this one guy I know, he’s amazing at Landing Tour merch. He’s amazing at dealing with the bands. He has the connections, and he built a very large business off of like connections, where he literally just knows the guy’s cell phones. And so they’re giving them thousands and thousands of units. But like his website was like one page with a black background.
00:44:25:14 – 00:44:43:07
And so, like just stepping into these certain roles and being like, okay, here’s something you can work on that even though you’re killing it over here, you haven’t focused on at all. And then if they need help, like giving them a way to have it be done for them, or at least giving them guidance on what should be getting done by their team.
00:44:43:09 – 00:44:59:10
because everybody has some sort of blind spot, whether or not they’re making a lot of money right now or not, there’s something that they’re not seeing that’s an opportunity, and you’re just kind of like a mirror for them. And you’re like, you need a new website. Get this right, or, you know, website or organization or whatever it is.
00:44:59:10 – 00:45:14:21
Like, I have stuff on the back end where you find out that, like, they’re still using paper file folders and like, they literally don’t have the right software running. stuff like that is just kind of shockingly obvious sometimes. Cool. You’re a boss for sure. And all this, this is I think this is the best episode of the year.
00:45:14:23 – 00:45:37:20
Thank you. Well, yeah, I mean, all it did was cost me my livelihood. So I hope it’s a good episode now. I remember getting the text and we talked on the phone for a while, but like, to your point to Steven, I mean, I think there’s more shops than we like to admit going through these similar struggles and, you know, making it okay to make a strong pivot like you will be fine.
00:45:37:20 – 00:45:58:15
A and B, like you could turn out a lot better as it sounds like you’re you’re off to the races. Yeah. I mean, I feel like personally I’m, I’m doing better. And, I guess ultimately we got into business to make money for ourselves and this scramble to, like, pay the guy who owns your building, your rent money is just kind of exhausting.
00:45:58:17 – 00:46:21:15
so it feels nice to not have insane overhead anymore and just be like, oh, okay, I have to pay my own rent. It’s like, feels shockingly easy. so yeah, it feels better at the moment. It’s really interesting. Cool. I’ve been told this when you start a business or do things for the second time, you just move like a ship through the night and you’re so much more efficient.
00:46:21:15 – 00:46:40:01
You don’t make the same mistakes. When you see something, you can spot it. and so it’s going to be really cool to, to, you know, you’re still an entrepreneur. You just are taking a new shape. And it’s going to be cool to see the new shape that’s taken over the next couple of years. And I think you’re going to be able to really positively impact the industry.
00:46:40:01 – 00:47:03:02
So we are really, really grateful for you sharing your story. and, and being rooted in education. That’s amazing. So thank you. How do people reach your call? either in consulting or you talk about transfers or. Yeah. so we’ve got merch. Trip.com, which is barely been up for like a month, so the features are going to get better.
00:47:03:04 – 00:47:23:15
and then my new emails call it merch Trip.com. And then I still have the same, like Instagram. so we can throw the link in your description or whatever. Awesome. All right. We’ll share it. Thanks. Pronounces. We appreciate you guys. Joining us for another week conference, our producers podcast gamma Steven Ferg and Bruce. See you next week.
00:47:23:17 – 00:47:45:20
Thanks so much for listening. Hopefully that was informative. Don’t forget to subscribe. Don’t forget to like, don’t forget to hit the bell for notifications if you enjoyed this video. If you enjoy all the stuff we’re putting out, it’s really helpful. We love to just be able to see it. That means that we’re doing a good job. To subscribe, hit the bell for and hit the like button and I’ll see you in the next episode.
00:47:45:20 – 00:47:46:07
Bye.
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