Just an introduction

[froldt]

I stumbled across Tim's book a few months ago and thought it looked interesting. I saw it in the library last week and picked it up. I read it in two days and just finished re-reading it. I am working on my muse. I told my fiance about it and she has to hold me accountable to it. She says that I have lots of great ideas, but I never go through with them. So this is going to be the one that changes it all.

A bit about me. I'm 26 and engaged to be married in less than a month. We are both in school and have completed our first year of college. Our monthly expenses are fairly small, but when you add in school costs, that bumps up our TMI fairly high. What is the point of a goal without making it a challenge, right?

As I mentioned, I have a muse that I'm working on. Currently planning and doing research (I've narrowed down my target market, and how to get the product produced at a good price which allowed me to get the right price for .) We're planning on studying in Ireland in the spring, so that gives me a short time-frame to have the muse up, running, and automated.

I've been lurking for about a week now and debated about joining. I figured that it would be beneficial to have a peer group who could encourage and advise me when needed, and hope that I can return the favor.

Well, that's all that I can think of at the moment.

[kamakiri]

Throw your business plan up here. I would be happy to poke holes in it for you. (and hopefully give some productive advise along the way).

[JFrenzel]

Congrats on joining the group. I too would be interested in your product, I will give you my best advice or at least try to direct to someone who can. Btw, I hope you are looking into using Elance as a resource. They have been great to me.


Cheers

Jose

[froldt]

Congrats on joining the group. I too would be interested in your product, I will give you my best advice or at least try to direct to someone who can. Btw, I hope you are looking into using Elance as a resource. They have been great to me.

Thanks for the encouraging words!

It's hard to know how to describe the idea without giving away all the details, but I'll just put it up here and see where it goes from there. I'd love any advice I can get.

I used to work for a retail company as a sales person. It was very competetive (both between sales-people and between the different stores). One of the methods of keeping our company in client's mind for future purchases was a newsletter. I was told a number of times, from a number of different people, that I should make some sort of one-page monthly mailing and send it out to my contact list. I liked this idea but a) wasn't sure exactly how to go about the whole process of writing the newsletter and b) didn't have a computer there at the office and didn't want to spend my personal time on something for work. Thus, I never mailed out even a single newsletter.

My original idea was to sell the service of providing a monthly newsletter to the salespeople in this field. The profit and markup would be small, but with an annual subscription, it could be a steady income flow.
There are two concerns/problems with this idea.

The printing costs proved to be more than what I was hoping to charge each month. Since I was looking at being about $200 in the negative per month per client, this obviously negated the idea.
As it appears to be with any type of job, the majority of the salespeople were in an almost constant state of turnover. I wasn't sure how successful I would be at getting clients would be willing to commit to the annual subscription, or was afraid that they would commit then default... creating a whole new set of headaches.


It then occured to me that the ideal would be to sell to management, instead of the individual sales-people. The store could provide newsletters for the sales staff to send out. This way the store's name is put into the client's minds, and if the sales-person they dealt with previously had moved on, the client would still come back to their store and could be sold to. (selling point: the long-term effects of the newsletter vs. the potential loss of clients going with the salespeople)

With a bit of quick research (checking Staples.com and BestBuy.com) I found that the costs of printing 1000 black and white newsletters, two-sided is $150, including some built-in wiggle-room. This is printing, a laser printer (divided up by page and then spread across a year's time), toner (divided by page), a folding machine(divided by page and spread across a year's time), labor (guessed at $30 per hour) and shipping (guessed at $30).
Using $150 as my base cost and a 10x markup, I can print 1000 fliers, have them shipped to the store (who will pay for the postage for their salespeople to send them out) and charge $1500, resulting in $1350 in profit. Each additional 1000 fliers can be printed for $200 more, netting $50 in profit.

This seems high to me, but the store I worked in (the biggest in the region, granted) spent $40-50,000 per month in advertising. Also, it can be justified. If each of the 10 salespeople send out their own newsletter, they will spend about two hours apiece writing it (20 hours total), then an hour printing and folding (30 hrs total). The average sale brings in at least a thousand dollars, so if there is one extra sale that is not missed due to the sales-people being able to focus on selling, then using the prepared newsletter will almost pay for itself.

Also, the company doesn't provide the salespeople with computers, they would either have to do so to truly encourage the newsletter habit. The one that is available is in the middle of the sales floor and thus not conducive to focusing and getting work done. These distractions mean that the sales people will take longer to get the letter prepared, wasting even more of the company's time.

As for labor, I can hire someone, probably from Elance, to prepare a couple of newsletter templates that the customers can choose from. Once I have these templates, I will know how long the articles need to be and can farm them out to either someone from Elance or to a VA firm. Then each month I can just pay a flat fee to prepare the articles; the articles will be of the same basic type each month, so it can be a standing order. I can then place the articles in the newsletters where they are needed (just a cut-and-past operation on my part) and then email the completed documents to someone for the printing/folding/shipping process.

To start with, I will purchase a laser printer and a folding machine and do the labor part myself (it should take 1-1.5 hours to print/fold 1000 newsletters). The first order will pay for the equipment. After a couple of months I will farm out the labor portion. To do so I have some family who are in need of some extra income, (and if they agree they are good, dependable workers). I can have a printing setup in the Western US and one in the Eastern US. I can then have each do half of the orders. In this way, if one is unable, I can just have the other do twice as much, so I have some emergency setup in place.

I have a friend whose family owns one of these stores. I plan to get in touch with them and use them as my first customer/advertising testing. Due to the nature of the store, I am not currently aware of any type of publication that would work to reach them. Likewise, I am not sure how to reach them via Google. I thought, therefore, that old-fashioned mailing might be the best option. I have not explored the cost of this. However, if I am able to fine-tune the advertising with the two general managers that I have an "in" with, I should be able to get the process started. Since there is such a high profit with this product, and it's set up to be a yearly subscription, I can meet my TMI with about 10 customers. Once this works with the one brand that I am targeting, I can easily branch out to other brands and grow my muse this way.

Well, that ended up being longer than I thought it would be, and taking a bit longer to write than I thought. It's good to get the whole thought-process down in written form, though. Please make suggestions/poke holes. Thanks!

[Sven]

That's a bit of a long post to react to but I'll give it a try. Here are a few of my thoughts.

Printing seems a bit expensive in your calculations. Printing an extra 1000 in full color costs eu 13.-- over here. You may be able to find a cheaper print shop.

I wouldn't invest in a printer let alone a folding machine to start with. Printers depreciate quickly, foldingmachines are a bit hard to sell on. Find a good printshop that does the folding too. Focus on the service.

In general this does sound like it can be something of value to the stores, good idea to get in touch with your friends family to investigate this further!

[ConquerLife]

Yea, I think your big drawback is the manufacturing costs to make the fliers. However, like Sven stated, I believe you could outsource just about EVERYTHING probably for 1/10th the price.

You also might want to look into what other things you can offer other than fliers/brochures. Go a little deeper, because I'm not too sure how many people would be willing to pay a decent fee (or any fee) for JUST fliers, since they're fairly easy and fun to make.

They might take your idea, and hand it over to the receptionist to do all the work.

[froldt]

Printing seems a bit expensive in your calculations. Printing an extra 1000 in full color costs eu 13.-- over here. You may be able to find a cheaper print shop.

Yea, I think your big drawback is the manufacturing costs to make the fliers. However, like Sven stated, I believe you could outsource just about EVERYTHING probably for 1/10th the price.

Does anyone have any suggestions on where else I can look for printing? All that I plan to really need is copies made. Create one flier design per customer and then have them printed/copied.

I've looked a number of different places for printing/copying and it all seemed to be running me easily $250 and up. I was quite excited with my price of $0.15 per page, $150 total (which includes the printing, folding, machines, shipping and labor).
I just checked Kinkos and for 1000 pages (color option), not folded, not shipped, double sided, collated, gloss text paper, it is $1,115. With the volume discount of 500 pages, final price is $615. :eek:

I could spread the cost of the equipment out further and lower the expenses (currently set up so that one client's one year subscription pays for them). By doing so (divide by 4) I can reduce the printing costs to $109. This means that it will cost $0.11 per page.

I wouldn't invest in a printer let alone a folding machine to start with. Printers depreciate quickly, foldingmachines are a bit hard to sell on. Find a good printshop that does the folding too. Focus on the service.
I was actually considering the printer as a disposable asset. Since I was looking at the low-cost ones that are readily available from chain stores, I figured that if there were any problems I could purchase a new one quickly. Also, this is part of why I included the full cost of the printer in each order. I would fairly quickly build up some money for replacement costs.

You also might want to look into what other things you can offer other than fliers/brochures. Go a little deeper, because I'm not too sure how many people would be willing to pay a decent fee (or any fee) for JUST fliers, since they're fairly easy and fun to make.

They might take your idea, and hand it over to the receptionist to do all the work.
I hadn't considered the receptionist doing this. I was just looking at this from the viewpoint that I would have paid for the service when I was working there and figured that someone else would as well.

I'm not sure what other services I can offer. I'll have to think about it for awhile. As far as customer service, last night I thought of a way that I can fairly easily customize the newsletters further for each individual client.

[Krayzi]

Does anyone have any suggestions on where else I can look for printing? All that I plan to really need is copies made. Create one flier design per customer and then have them printed/copied.

...doing so (divide by 4) I can reduce the printing costs to $109. This means that it will cost $0.11 per page.

This is way too high for printing. Even with a mid-range commodity laser printer (including the price of the printer), you can do much better than this:

Price of printer: $300, includes 2K copies @ 5% coverage
Price of toner: $90 per 6K copies
Price of drum: $100 per 10K copies (after first 10K)
Price of paper: $70 per 5K sheets (bright white 24lb premium laser paper)
Typical duty life of printer: I wouldn't expect more than 30K pages out of something like this.

Even if you only look at only the first 8 months (8K copies?), that works out to a little more than 0.06/copy, which is still actually quite high.

The thing is, your printing volume is very low. I print more than 1K copies per month on my color laser printer at home. With higher volume, outsourcing would indeed be cheaper, but when you factor in the time you spend sending files out, scheduling couriers, looking at proofs (or paying for mistakes if you decline the proof), AND paying 2-3x the raw printing cost, the outsourced route could be pretty expensive for you for only 1000 copies. Especially when you can just hit "Print" from your computer any hour of the day, walk away, and have 1000 copies the next hour. The advantage here is you can customize and use a database to mail merge, include company names, etc. This is not possible (or is more expensive) with "cheaper" bulk copy services.

However, to do this the 4HWW way, you would not want to be doing this work yourself in the long run, so then you would want to outsource. Just outsource carefully, and try it yourself for a while first. Setting up a system that works for YOU, and then outsourcing that system, is often better than trying to make someone else's system work for you.

My advice (and, I think, Tim's as well) would be to get the market first. Once you done one or two newsletter runs, you'll probably have a much better idea of how to optimize the back end of your operation to reduce time and increase profit.

I think the even more basic point, though, is that your idea sounds pretty good. Now go and do it. :) Don't sweat the details too much, or you'll never make a single sale. As long as you have SOME fulfillment system in place, just get that market, sell to that market, and THEN fine tune your process if necessary.

[Sven]

Krayzi has a point here. I think that with black and white printing a home printer would be fine. But color? Only expensive color printers are realy quick.

I had a look a vistaprint, try their prices (.com) I get prices in euro but it's way less then the prices you mention!

[froldt]

Even if you only look at only the first 8 months (8K copies?), that works out to a little more than 0.06/copy, which is still actually quite high.

However, to do this the 4HWW way, you would not want to be doing this work yourself in the long run, so then you would want to outsource. Just outsource carefully, and try it yourself for a while first. Setting up a system that works for YOU, and then outsourcing that system, is often better than trying to make someone else's system work for you.

I think the even more basic point, though, is that your idea sounds pretty good. Now go and do it. :) Don't sweat the details too much, or you'll never make a single sale. As long as you have SOME fulfillment system in place, just get that market, sell to that market, and THEN fine tune your process if necessary.

That last part was exactly what I needed to hear. Thanks! Next steps are to get some newsletter templates and get a website together.

As for the printing, I think that we are agreeing on the prices, just looking at them differently. My figures ended up at about $0.06 per copy with a home printer. Then I added on the cost of folding, labor and shipping, which is over half of the cost.

I only plan to do the work myself for a couple of months, then outsource it. I thought that I could outsource it to family because a) I figure it would be cheaper and b) if it will help them financially and they're interested/willing, it will be worth it on my end.