Once you have an idea as to which decoration process or processes that you want to offer, you need to decide on a business model. One of the best things about the product decoration industry is that there are many different routes to revenue available. Much of the variety in business models for the decoration industry comes from the fact that there are several ways to decorate an extremely wide variety of products. So, take the time to research prospective business models to see which models best fit the decoration process or processes that you want to offer.
A business model is essentially a design that illustrates how the business will operate, including how it will generate revenue, who it will sell to, and how it will handle production. There are many kinds of business models, and many businesses will even use hybrids of multiple business models. As a result of there being so many options available to product decorators, narrowing the focus to a specific design is extremely helpful, and an important step in actualizing the idea that got it all started.
The development of the business model is an important step towards creating a business plan. Choosing the correct business model is critical to the ultimate fate of the business. Some examples of various business models are:
Retail Brick and Mortar- The traditional business model whereby a product decorator operates out of a physical location where customers come to shop based on marketing and location. A brick & mortar location is how the majority of retail and custom decoration business operate.
Retail Bricks and Clicks- A hybrid of the Brick and Mortar model and an online sales model, where the business is able to sell both at a physical location and over the internet. If a decoration business has a physical location, then it should have a website as well. Why not give your customers the ability to purchase from you 24 hours a day, 7 days a week?
Custom Decoration Services Direct Sales - A model in which the business typically sells and markets its products or services to the customer one-on-one outside of a Brick and Mortar location. When you are first starting out you might be simply decorating your products in a garage or basement and do not have a physical place for your customer to come and make a purchase at. You can also perform direct sales even with a physical location.
Wholesale Contract Production - This model revolves around working with larger clients who consistently order large volumes, making it worthwhile to price their items cheaper. Most decoration businesses look for another decoration business that offers complimentary decoration methods for a wholesale price. For example, printing shops get many requests for embroidery. So, the key is to find an embroiderer who will do the job at a contract rate so that you can make a profit, essentially for being a middle man.
These are just a few of the many options available to product decorators, so be sure to do your research to find the right fit for you and your business. Once you have determined your business model, it is time to determine your target market. The first thing to think about is weather you are going to sell to a business to business (B2B) or business to customer (B2C) market, and if you will sell your products and services at a wholesale or retail price. B2B is probably the most common method of selling for new decoration businesses. It revolves around custom printing for local businesses with the price ranging from wholesale to retail based on the quantity of products being ordered. Pretty much every decoration method has quantity discounts, and businesses typically purchase more at one time than a customer off of the street.
For a decoration business, a customer typically only needs to place a small order and thus is charged a retail price. So, when thinking about if you want to sell to B2B or B2C, consider if you want to sell larger quantities and make less per unit, or sell lower quantities and have a higher margin per unit. There is also a third option, which is actually becoming a supplier/outsourcer for other decoration businesses. In this scenario you would print at a wholesale rate so they can act as a middle man. Your margins are even lower than wholesale prices for businesses, but the volume is typically much bigger. The beautiful thing is that running a product decoration business gives you so many options when it comes to selling and creating a business model.
Once you have chosen your business model, you likely will know (at least in a general sense) what your target market is. A target market is the group of people that you intend to sell your products to. In your industry research, you will likely have turned up some good information on the common target markets for your specific industry. This is an excellent place to start, as a large industry like product decoration will have a well-established target market. From here you should do your best to further refine your personal target market from the larger industry target market or markets.
If your business model relies on a brick and mortar location, then you must take the demographics of your local area into consideration. If your business will operate online, then you will need to choose a subset of the larger industry target market to focus on, at least initially. It would be unwise to attempt to corner such a large market as a new small business. Doing so will run the risk of spreading yourself too thin and missing your market entirely. It is a good idea to also find secondary target markets. While your primary target market will be your focus, having secondary markets to take advantage of can help to create revenue and expand your business.
The business model that you develop around your decoration processes will dictate several things like, how the business is run, how it is marketed, and how products are sold. Your business model can then be used to help determine your target market. With a business model and target market in place, you are ready to move on to the next step in starting your own product decoration business. Choosing your business model and target market will be a large determining factor in the overall success of your product decoration business. So, be sure to use all available information so that you can make the most informed decisions possible.
