How to Start a Business with a Small Vinyl Cutter

I recently did some consulting for a guy that had left his job and wanted to start his own small business. Despite being over 50 he was only earning around R5000 a month and wanted to earn more but could not get a better paying job.

He had bought a second hand Roland Stika vinyl cutter (the SX-12 model) from Cash Crusaders for R2000 and wanted to start a t-shirt vinyl transfer business, and the reason he had contacted me was to accompany him when he purchased the heat press machine. Under the circumstances (he really had no plan), I talked him out of that idea (literally outside of the shop that sold the heat presses) and charted a better option for him which I’m presenting here.

His idea
He had wanted to start a t-shirt vinyl heat transfer business in his local area. For those unfamiliar with vinyl heat transfer, wording or shapes is cut from a vinyl (also known by its trade name VideoFlex) and then transferred onto a t-shirt using a heat press. The end result varies from type of vinyl from a rubbery, to plastic to velvety feel.

The problem with his plan was multifold:
1.
Vinyl heat transfer on t-shirts is what we call a “mall business”; it is a novelty printing technique that is almost exclusively successful on its own when operated in a high traffic environment like a mall or a carnival setting (where there is due chance of an impulse buy due to its instant nature). He had wanted to operate this business out of a poor area on the Cape Flats.

2. Sourcing vinyl and t-shirts, this is where his plan really fell apart, he was going to offer this service where he was going to supply the t-shirts and he needed stock of multiple colours of transfer vinyl. This would mean that he would need to hold stock of various colours of transfer vinyl (which is expensive) and go and purchase a t-shirt whenever an order came in and he was not in an area that would generate high volume orders. And biggest problem of all: he did not own a vehicle and was going to take public transport which could take a whole day to get from home to supplier and back. But even if he did have a car the petrol cost would have eaten his profit up anyway. This idea was DOA.

3. The heat transfer machine would have been a big expense and then stock of vinyl would have eaten up his other money (which I assume he saved up for this purpose or got from quitting his job) which would have resulted in a cash crunch and failure of his business.

The idea I presented:

Start a business offering a few select services that is capable of being achieved with this vinyl cutting machine which has a maximum cutting width of 250x1000mm, using standard signage vinyl. This business will allow him to break even from his previous job earnings (R5000) on just one client a day and double his previously salary (make R10 000) a month by just doing two clients a day in a six day week (half day Saturday).

Here is the product mix I devised:

  1. Magnetic Door Signs
    Magnetic sheet covered with vinyl.
  2. Back of window sign
    The rear window of is covered with vinyl applied directly to the glass window. This is easy to apply as the window surface is uniform and is also small enough to cut with a small vinyl cutter.
  3. Corrugated plastic signs
    Corrugated plastic covered with vinyl graphics

Other options

Vehicle branding
Vinyl applied direct to car. I put off from going with this route at the beginning as he was just starting out, and cars sometimes have certain contours that require more skill to apply. Appling vinyl to flat even surfaces is easier to learn.

ABS plastic signs
ABS plastic covered with vinyl popularly used for indoor signage. Not too popular in this case.

Chromadek signs (roof sheets also used for steel signboard)
Used for outdoor long lasting signs, this usually have to be built into a frame and be installed. Guy did not have a vehicle.

Now with the above (1, 2 & 3) product mix, you are catering to clients looking for certain types of signs. You won’t be able to do full colour work with a vinyl cutter, but in business it’s sometimes best to stick to certain things and by doing so in this case you will be able to offer an affordable service and good price and make a profit.

Equipment & Material Needed
Vinyl Cutter
Now in this case, I said “small” vinyl cutter as I was specifically referring to the Roland Sticka range which you can pick up for around R2000 second hand (I have seen some on Gumtree in this price range as well). Now you are probably thinking well, I have seen vinyl cutters for a few thousand rand extra that can cut 610mm wide, is that not better. Not necessarily, those are cheap Chinese cutters in that range and they come with a lot of problems. Roland is a good brand and yes this is more of a consumer cutter than a pro cutter but for a one man show business it can easily cut tens of thousands of rands of work a month. One of the benefits of using a brand name is readily available drivers and manuals. I kid you not, this is a plug-and-play machine, and I got it working on first attempt cutting direct from CorelDRAW. This is definitely one of the better machines I have used; Check the Amazon reviews.

Now if you have done your homework you must be thinking whoa the Stika SX12 can only cut 250mm (25cm) wide, this might not be wide enough for some applications mentioned above. You see there is 1000mm recommended length of the sheet you can cut, if your artwork is too wide then you cut it at 90 degrees.

Later on as your business grows you can invest in a bigger cutter if required.

  • I recommend either the SX-12 or SX-15. The SX-8 is a bit too small for this purpose unless you are willing to break artwork into various rows and stick together.

Vinyl
Vinyl is the main material you will be using. And sign vinyl is way cheaper than transfer vinyl this means you will be able to keep lots of colours in stock, some colours are more popular than others, such as black and white so keep more of those. This also means you don’t have to drive down to suppliers often to replenish stock. A stand can be made to hold the various rolls of vinyl.

Magnetic sheet
This is what the door signs vinyl will be applied to.

Corrugated plastic
This is the signs often used by estate agents but it has many other uses.

Let’s run the numbers
If you are running the top three product mix, then your profit per customer will be at around R200. One customer a day on a six day week (half day Saturday) and you have a R4800 a month business. Two customers a day and its R9600. Three a day: R14400 (these numbers I’m quoting are all profit). This is from using a machine that cost R2000.

Breaking it down
Note: all pricing I’m using include VAT

Product: Magnetic door signs (Set of 2)

1m x 610 x 0.8mm magnetic sheet
: R81.44
This will yield four 500x300mm door signs at a cost of R20.36 each (R81.44 / 4)
Sign vinyl 1m x 610mm: R34.40, this is enough vinyl to cover four 500x300mm signs at a cost of R8.60 per sign (R34.40 / 4). Please note my calculation is based on single colour signs, but using multiple colours can have a similar metric if you are able to use it smartly.
Cost of sales: R28.96 (R20.36 + R8.60) – R57.92 on a set of 2 (R28.96 x 2)
Sales: R130 each. Sold in a set of 2 (R260).
Profit: R202.08 (sales – cost of sales)

Product: Rear window signage

The rear windows of car varies, but the graphic won’t be end to end and you should work with the width of the sheet you have for maximum profit, the same way you should not deviate from the 500×300 magnets above. A common size is 900mm x 300mm and this is the size you should use. This will allow you to do two windows with a sheet of 1x610mm vinyl at a cost of R17.20 (R34.40 / 2) each.
Cost of sales: R17.20
Sales: R220 per car/window
Profit: R202.80
Don’t think that the profit is too high and don’t make less than this number as you have to factor in cutting and application time.

Product: Corrugated Plastic Signs (Also known by its trade name Correx)

Picture for illustration purposes only

These signs are used for various purposes. Please note, you should add eyelets in each corner.
While you can buy corrugated plastic sheets in large sizes, they are also sold in a standard size which is 600x400mm and costs R5.47 each. You will be able to get two board’s graphics out of 1mx610mm vinyl and a 200x610mm offcut.

Cost of sales: R22.67 or R45.34 for set of two (R22.67 x 2)
(R17.20 for the half sheet vinyl and R5.47 for the blank board)
Sales: R250 for two
Profit: R204.66 (sales – cost of sales). Don’t forget to factor in a few rands for eyelets. You can purchase a grommet installation kit which will do the job.

Marketing / Location
Where your business is located matters a lot. When I pitched the new product mix to this guy I was helping he still wanted to run it from home, which he shared with a lot of other people and he is in a poor area. I made a phone call to a friend who also knew the guy I was helping and asked if he can’t share some of the extra space he had, which is central and close to various business and industrial areas. It is close to roads where signage can be displayed to get clients. It is also in an area where lots of people are self employed and can use his service.

This business can be run from a hole in the wall and can make a lot of money if the area is right, a garage is also a perfect spot as there will be place for the cars to park when making or applying the graphics. All you need is a laptop, vinyl cutter and materials. The laptop and vinyl cutter can be carried with you to and from your location if you feel you don’t want to leave it there overnight. Both the vinyl cutter and the laptop will fit in a 20l Karrimor backpack

Resources

Suppliers
Prices quoted are from Maizey Plastics who have branches nationwide.

Guide
Vinyl Installation Guide by Speed Graphics (I printed him a copy of this)

Image credits: RolandDGA, SignGround, jemome, actionsignsdayton