How to survive the recession!
Sunday, January 17th, 2010We all want the answer to this one, my own thoughts are we need to help each other. The worst thing we can do is demean ourselves by always buying the cheapest. Quality of service and product should still be as relevant in a recession as it is out of one. As a small business we are aware that prices get squeezed down, but where do we draw the line!
Our take on this is to offer value, still use the same products but just reduce the profit margin (yes, we all need this; otherwise we are not able to invest in our businesses future).
The problem of course is some businesses are happy to do work for ridiculous prices that put other companies at risk. A prime example of this is a fellow screen print company offering to supply 250 white t shirts with a single colour print on the front, at a cost of 85p each + vat. Now, I have checked with our supplier and the absolute lowest price on this shirt (all be it a poor quality one) is 72p each + vat.
Therefore the shirt costs allow the printer 13p per shirt, making it £32.50 earnings.
Then we have to take off the cost of the screen ( average is £20.00+ vat ) and the ink around £10.00 - which leaves £2.50.
So for working for around three hours (assuming they have the most up to date equipment) they will earn around 83.3p per hour!!!
To work at this rate is counter productive and I like many of my colleagues think it is a disgrace and extremely damaging to our industry.
In almost all industries, especially the service industry we need to be earning at least £30.00 to £40.00 per hour - this is not being greedy this is realistic! The government screws every last penny out of small businesses and at this rate we can just about survive!
So next time you see a ridiculous price, please think twice.
If it’s cheap then it’s most likely not that good, but more to the point it’s a desperate company damaging it’s own industry and ultimately damaging our economy.
Tony
Screen Machine UK Limited