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United States24513 Posts
I have a copy machine (Cannon ImageRunner 2525, black and white). Somehow, the thought of having my own side copy-business occurred to me. I almost immediately dismissed it as being unlikely to be lucrative due to the dominance of stores like Staples and Fedex/Kinkos in the copy market. Then I decided to try to run through the numbers and approach this hypothetically. Keep in mind, I currently have no plan to attempt anything like this; I'm just exploring it from an entrepreneurial perspective out of curiosity (I'm new to this so help is appreciated).
My copy machine can handle double sided copies up to and including 11"x17" (ledger/tabloid), and has a finisher that can collate and staple. Paper by my quick estimation runs at about 0.6 cents per sheet (8.5x11 letter) if you buy it in bulk (1 cent per page if you buy just a ream). My service plan (including toner/parts/labor) costs $30/month plus 0.95 cents per copy, with the first 9000 copies every 3 months included free. Staples cost $50 for 15,000. I don't currently have an estimate for the electrical costs of operating the machine (I actually am not paying for my electricity directly in my current apartment but I will probably want to take the electrical costs seriously if this plan is ever being considered.)
Staples has a service where you can upload documents to their website and have them print it for you. The base cost is 11 cents per copy plus extra for features like stapling (3 cents per) etc. They offer free standard shipping, free local in-store pickup, and 1-2 day expedited shipping (30 dollars based on my observation).
I can undercut this and deliver a job myself. Supposing I charge 8 cents per copy, staples and paper included...
A) 1 single sided page x10 would cost me roughly 15.5 cents
A) I would charge 80 cents for a profit of 64.5 cents
B) 2 double sided pages stapled x50 would cost me roughly $2.67
B) I would charge $16 for a profit of $13.33
C) 5 double sided pages stapled x200 would cost me roughly $25.67
C) I would charge $160 for a profit of $134.33
Of course, I have the option to offer staples for say, 1 or 2 cents per staple and still undercut the competition. I could offer optional hole punching (I have a nearly industrial grade 3 hole punch) for a fee as well. I could charge more for single-sided multipage documents than double-sided due to the increased paper demand per printed side.
I could have a fairly simple website. It wouldn't be as fancy as the automated one Staples has where it actually previews your documents for you as you make selections, but it would have a simple calculator that lets you determine the total cost of the job, pay for the job (credit cards? paypal? other?), and e-mail the document file to me. Depending on circumstances and my personal preference, I could possibly offer free expedited 'shipping' (I deliver it myself) for orders that meet some minimum (50 dollars maybe?). This service would only be offered to people that live within a certain vicinity of me, unless I expanded the idea to include shipping (which is currently beyond the scope of this plan). The website would have a tool that allows the person to input their address and determine if it is viable for me. I would not offer pickup service since the copy machine as at my home.
Here are some of my thoughts on this plan so far...
1) How much time does it take to print out large jobs? Is the time worth the money?
2) Is there enough demand for this? This wouldn't be helpful for people with small copy jobs; it would only make sense for people with fairly large copy jobs, and they often have their own copy machines available already.
3) Would I be able to get the word out? Even if I registered as a business the costs involved in getting the word out to large groups of people wouldn't make sense given the scale of the operation.
4) How hard would it be to have a website made (I can't do it myself with my current knowledge/skills) that meets the criteria mentioned above?
5) As the sole worker, if I ever am sick or go away or anything like that, the printing/delivery of copy jobs comes to a screaming halt.
6) Having only one copy machine would mean if it's down and needs service, it could be a day or two before I get it up and running again (service guy needs to come).
7) If I'm delivering the finished product to a location that doesn't have a person available to receive it, what type of container will I put the paper in (box?) in order to protected it? What if the weather is bad?
And what are your thoughts? Keep in mind once again, I am writing this mostly as an exercise in exploring business ideas rather than in planning an actual future endeavor of mine (unless discussion reveals I will become insanely rich in days with this plan, in which case I will quit my job and do this full time :p).
edit: could I write off my car from taxes with this plan??
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Running your own business is pretty much ALL about marketing. If you market it right then you'll get business. If you sit around waiting for people to come to your little website...it aint gonna happen.
You gotta do all the legwork so it'd probably be a 12 to 14 hour job 7 days a week if you want it to be successful.
Having one copier, one man, all the deliveries (if you get business) will be a daunting task. However it 'COULD' pay off if you find the right clients.
100% about marketing. If you fail at marketing, then your business model fails.
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United States24513 Posts
On December 03 2011 12:23 SleepTech wrote:
Running your own business is pretty much ALL about marketing. If you market it right then you'll get business. If you sit around waiting for people to come to your little website...it aint gonna happen.
You gotta do all the legwork so it'd probably be a 12 to 14 hour job 7 days a week if you want it to be successful.
Having one copier, one man, all the deliveries (if you get business) will be a daunting task. However it 'COULD' pay off if you find the right clients.
100% about marketing. If you fail at marketing, then your business model fails.
This good news is there's no significant start-up cost since the copy machine and service plan already exist. Running copies isn't that difficult by yourself since most of the process is done by the machine. Deliveries, if limited to a reasonable range, aren't necessarily that bad (I haven't estimated costs for this yet).
As for marketing, can you make some suggestions for specific things I would need to do in this plan?
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I don't see there being enough demand to support the time you'd need to invest, but that's quite location specific. Not to mention the increasing nature of digital records.
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United States24513 Posts
On December 03 2011 12:28 divito wrote:
I don't see there being enough demand to support the time you'd need to invest, but that's quite location specific. Not to mention the increasing nature of digital records.
What would most of the time be invested into? If there wasn't business I don't see much time being invested (after the initial setup).
When you say 'increasing nature of digital records' do you simply mean a decrease in the amount of photocopying that is done overall?
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Yea the good news is you have pretty much everything at your disposal with little startup. The main thing you need is to go to every business in your town and give them a packet with all your numbers and what you can do. Don't just go in there and say "Hi, can I make some copies for you?"
Actually make up a marketing pack with several examples of what your copier can do and give them prices on everything. Leave the marketing pack with them. Put your name, number, and email on every page that you hand them. Put a sticker on your car and maybe fliers up around town. Once you get some businesses in then put their 'good comments' into your marketing packet.
I'd hit ever doctor's office in the area. Say you'll print any form they need and get it to them at anytime day or night.
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On December 03 2011 12:30 micronesia wrote:
What would most of the time be invested into? If there wasn't business I don't see much time being invested (after the initial setup).
When you say 'increasing nature of digital records' do you simply mean a decrease in the amount of photocopying that is done overall?
Most everything is going to online digital record keeping.
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Without connections at some local businesses I find it hard to believe you can get it going. The kind of business that doesn't have its own printer will have a hard time taking a risk on an important print job with some random guy with a printer in his apartment just to save $.03 a page.
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Preface:
Entrepreneurship is all about marketing to the right clientele about your business. If you have potential customers lined up for your business, that's a great start. I would caution that since you are doing all the work by yourself, there could be trouble if you were to be unavailable due to other tasks. This business would consume a lot of your time, and the question is that do you have an effort to make this business succeed.
Now to answer your individual questions:
1) I don't think the time it takes to run copies would be long, as long as there is paper in the tray and you're willing to print overnight, or while doing other tasks. Otherwise, you might not want to go through all the effort.
2+3) There is going to be demand, but you have to find potential customers through your marketing efforts. As long as your services are reasonably priced and provide excellent service towards your customers, I don't see why you can't make it successful. Finding the first few customers can be hard though, because big businesses such as Staples probably cornered that market.
4) I don't believe that websites are hard to make, you can get generic templates for a website for small fees or even free. Server hosting and domain name prices are small.
5+6+7) Does the contract explicitly state that you can run this type of copy service? My assumption is that the employer of the service guy already has this type of business set up. You would need to purchase other materials in order to make deliveries of copies, such as shipping boxes, envelopes and labels. Car expenses with gasoline would have to be factored into the final price.
I believe you can write off business expenses as long as you document everything.
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United States24513 Posts
On December 03 2011 12:35 SleepTech wrote:Show nested quote +On December 03 2011 12:30 micronesia wrote:
What would most of the time be invested into? If there wasn't business I don't see much time being invested (after the initial setup).
When you say 'increasing nature of digital records' do you simply mean a decrease in the amount of photocopying that is done overall? Most everything is going to online digital record keeping.
Yeah this rules out certain types of establishments, but not all.
On December 03 2011 12:34 SleepTech wrote:
Yea the good news is you have pretty much everything at your disposal with little startup. The main thing you need is to go to every business in your town and give them a packet with all your numbers and what you can do. Don't just go in there and say "Hi, can I make some copies for you?"
Actually make up a marketing pack with several examples of what your copier can do and give them prices on everything. Leave the marketing pack with them. Put your name, number, and email on every page that you hand them. Put a sticker on your car and maybe fliers up around town. Once you get some businesses in then put their 'good comments' into your marketing packet.
I'd hit ever doctor's office in the area. Say you'll print any form they need and get it to them at anytime day or night.
Thanks for this advice.
On December 03 2011 12:36 mucker wrote:
Without connections at some local businesses I find it hard to believe you can get it going. The kind of business that doesn't have its own printer will have a hard time taking a risk on an important print job with some random guy with a printer in his apartment just to save $.03 a page.
Well it wouldn't be marketed as a guy with a copy machine in his apartment. It would be a company with free delivery to an area. It would most likely be necessary to build some reputation before getting serious jobs (see advice I got from person above who talked about including customer testimonials).
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United States24513 Posts
Hey Phelix.
On December 03 2011 12:41 Phelix wrote:
Now to answer your individual questions:
1) I don't think the time it takes to run copies would be long, as long as there is paper in the tray and you're willing to print overnight, or while doing other tasks. Otherwise, you might not want to go through all the effort. One thing I have to look at is the maximum capacity of the output tray.... I haven't explored that yet.
2+3) There is going to be demand, but you have to find potential customers through your marketing efforts. As long as your services are reasonably priced and provide excellent service towards your customers, I don't see why you can't make it successful. Finding the first few customers can be hard though, because big businesses such as Staples probably cornered that market. Yes, definitely.
4) I don't believe that websites are hard to make, you can get generic templates for a website for small fees or even free. Server hosting and domain name prices are small.
Yeah I'm sure it's not too bad... just admitting I'm currently not knowledgeable on this topic :p
5+6+7) Does the contract explicitly state that you can run this type of copy service? My assumption is that the employer of the service guy already has this type of business set up. You would need to purchase other materials in order to make deliveries of copies, such as shipping boxes, envelopes and labels. Car expenses with gasoline would have to be factored into the final price. When I got the machine I asked and they said I could sell copies or do whatever I want with the machine (no mention of it in the service contract). Yes, the delivery would be additional costs, although I could combine them with getting lunch and other errands for increased efficiency XD
I believe you can write off business expenses as long as you document everything.
Cool, that would be something to consider.
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I can't believe this actually went through!
Good luck 
5/5 for micro blog
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I think your 2nd and 3rd point are the more relevant ones. This is not a market where you are alone and even though you are able to offer a cheaper service, there are drawbacks in terms of the running of the service is dependent on only you and your one machine. You are also an upstart amongst a range of established businesses. When a customers needs a printing job done, he doesn't want to have to deal with uncertainties of when it can be delivered. Although you could as a backup have a plan to forward jobs to other providers if your machine breaks down or you are in some way indisposed. This would have to be taken into account though and would require you to raise your prices, making it harder to compete. With this increased use of the machine, how often can you assume it will break down? Also because your printing capabilities are limited in terms of what jobs you can do, they may approach other service providers first just because they know they can do any kind of job. I would also question if you have taken all costs into account. What happens if your machine is permanently damaged? Do you get a new one as part of your plan? What taxes need to be paid? Will you completely disregard the location costs because it is a home business? You may need some extra space for storage. These are just some initial thoughts. I don't actually have any experience with business plans...
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I'd like to order 100 Hot_Bid name tags. I would prefer to pick them up between the hours of 2AM and 5AM in Washington Square Park, next to a bum-looking guy in a team liquid jersey. Make sure your contact doesn't ask any questions or try something funny, I'll be very disappointed if they all say R1CH or Sadistx or something like that.
In all seriousness though, it looks like you have a pretty nice business model in front of you. Your start-up expenses/investments are very small in this case, so you can focus most of your attention on getting peoples' trust and trying to get them to spread the word to their local friends. Even if you can just build up a small group of loyal customers then you'll be making a profit (it's not like the machine is making any money just sitting there idle). So to do all this you really need to come up with a more concrete value proposition, figure out who your target audience is (random locals who need a quick print job for work? Some business guy whose printer is broken?) and think about what you can offer to get them to spend money. You'll need to figure out exactly what kinkos and staples offer and what their value propositions are. For example If you don't think you can't compete with their online-doc upload service (and you probably can't, their web interface is going to be much more professional/outsourced) then don't invest in that part of the market for now.
Getting a website up is probably optional at this point, but since you aren't doing any sort of e-commerce, a standard HTML website is very easy to build once you feel that the business is big enough to warrant it. A domain is $84 for 2 years on iPage.com, and you can either build the site from scratch using dreamweaver (it's pretty easy to learn) or just use a wordpress template.
Anyways, good luck with this!
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United States24513 Posts
Thanks Erik.TheRed. I'm not sure if I can trust you though... you might be mafia!
BTW I was just thinking, another problem is if people want to send me a physical document to copy instead of a digital one... I need to have an address/box I feel comfortable giving out to the public then.
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The P.O. Box is the standard build order solution for an anonymous address.
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On December 03 2011 13:16 micronesia wrote:
Thanks Erik.TheRed. I'm not sure if I can trust you though... you might be mafia!
BTW I was just thinking, another problem is if people want to send me a physical document to copy instead of a digital one... I need to have an address/box I feel comfortable giving out to the public then.
P.O. Box is an easy way to do that, but you have to make sure that you don't make it too inconvenient for people to get their orders fulfilled or they WILL spend a little extra money and go to staples or kinkos instead. Especially since you're new on the scene and people might have some urgent orders, they need to be sure that they aren't just sending stuff to some anonymous box to never see it again.
I think physical drop off (remember, most of your initial customers will probably be people who know you already or live near you), or even using fax should be fine for now. The P.O. box is always good to have as well but you shouldn't really consider it a "feature" in your value proposition.
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Infrastructure is promising, but marketing for something like this may be difficult given the abundance of alternatives (unless you live in a rural area where there aren't any). Two important questions need to be addressed; firstly, does it matter if you invest little time into marketing the business? If you need to start making money ASAP, I don't see this as a good solution as it will take time to build clientele. If you have another job/school and money is not an issue, you can invest less time into getting the word out and let your book build up over time (eg: posting flyers instead of cold calling possible businesses that may be interested). Secondly, do you have better options? If you can find a job that pays more why bother with this? Unless you have some strong desire to start a printing business, a job which provides more utility (I say utility because some people HAVE to be their own boss, but mostly this translates into salary per time worked) would clearly be the better choice.
If you do go ahead with this you're going to have to factor in things like fucking up an order and having to reprint, stocking different types of paper, gas if you're going to personally deliver packages, etc. along with everything else you mentioned. I mention the reprinting because every so often my office printer wrecks my pitchbooks (think 100+ slide ppts). Maybe the printer just sucks, but something to consider.
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I think you need to be careful with your whole "free delivery" thing. I know that's your main pitch, but if you consider the cost of gas and the time you are going to have to spend, it might not be worth it for small jobs. For example, if you are asked for only
"B) 2 double sided pages stapled x50 would cost me roughly $2.67
B) I would charge $16 for a profit of $13.33"
And you end up spending 2 hours to find the place and drive there, you will be spending money for gas, and 2 hours of your time. If you consider how much that amounts to, it might only be around 3 dollars, but that means that you only made 5 dollars an hour in profit.
Your idea could work, you just have to be very crafty and be careful not to over extend yourself. Good luck!
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from a purely accounting point of view, you need to take multiple things into your pricing consideration. Basically what you're doing would break down into a format like this.
Sales(units sold multiplied by your sales price)
- Variable Costs (costs that increase every time you make a sale i.e. paper, toner usage, gas money)
Contribution Margin (the amount your sales contributes to your income)
- Fixed Costs (costs that you would have even if you didn't make a single sale i.e. car cost, printer cost [salaries/rent later])
Net Operating Income (the money you take away from your sales before tax deductions)
Basically this will show you how you want to format your business (like if your fixed costs are high but your variable costs are low you'll want to sell a lot, where as if your FC are low and your VC are high you'll want to sell a smaller amount to cut back on costs). Some interesting equations.
Some interesting equations to help you.
Contribution Margin/Sales = Contribution Margin Ratio
The CMR is the return on net income for every dollar of sales, assuming that fixed costs don't fluctuate with your sales volume. For example, say you sold a copy for $5.00 but your variable expenses were $3.00. It would look like this.
$5.00 (Sales)
- $3.00 (Variable Costs)
$2.00 (Contribution Margin)
2/5 = .4, meaning you get a return of 40 cents on every dollars worth of copies sold.
Other interesting things you can do with it include the "Break-Even point," or the point at which you'll be breaking even (0 profits). The Equation for this is as follows:
BEP = Fixed Expenses/CMR(what we solved for last problem)
This equation gives you the total sales dollars that you need to earn (in terms of what ever term your fixed expenses are expensed over), although you can also do it in terms of units by manipulating the equation a bit. It gives
So lets apply it to our example. Lets say that in order to sell the copies, you need to pay your single employee $200/month.
CMR = .4
FE = 200
200/.4 = 500
break even point = $500 in total sales
Awesome, but that does that help us... Well obviously the higher your sales exceed your variable expenses (the higher the price of the product), the higher your contribution margin will be, and the lower your break even point will be.
hope this helps in deciding if your company will be profitable or not, the rest is up to you!!!! go get em!
tl;dr your pricing strategy should be much more linear and unattractive to women
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EPT![[image loading]](http://usa.canon.com/CUSA/assets/app/images/Copiers/BW_Copiers/iR_2525/iR2525_HO_279x186.gif)
