Busy But Broke: Financial Mistakes Apparel Decorators Make
Industry experts break down the financial blind spots and cash flow mistakes that keep busy apparel decorating shops from becoming truly profitable.
More often than not, apparel decorators are missing the mark when it comes to their financials. If financial planning feels overwhelming, you’re constantly running your presses but not profitable, or you’re not sure where things are going wrong, you’re not alone.
Read on to discover why you might be busy but broke, what cash flow really means, and how to take control fast. Warning: You may face some hard truths along the way, but better late than never.
Busy But Broke
That sounds harsh, and maybe you’re not completely broke, but the numbers just aren’t adding up. You’re working hard, your shop is taking on big jobs, but for whatever reason, all the grinding isn’t moving the needle. What’s the culprit?
Nick Gawreluk, founder of Print Profit, says shops often forget the basics of knowing their breakeven point. How much do you need to sell to break even?
“Commonly, they (apparel decoration shops) don't have those breakeven metrics, just to know what is success or not,” Gawreluk says. “And until you have that, it's hard to set a strategy against it.”
Thankfully, those numbers aren’t overwhelming, he says. Shops need to look at all costs in their business (not job costs) and add those up. This can be done in QuickBooks or with a financial advisor — any resource you have available to you. When that’s added up each month, you have your overhead — your fixed costs — which will be consistent from month to month.
“Finding out what that number is, and then looking at your jobs and having the clarity to say, whatever I sell the job for when I subtract out primarily the blank and maybe a DTF transfer, what's left over, that's what each and every job is giving you to help cover that overhead," Gawreluk explains. "So, it almost becomes a one-to-one relationship. How tall is my mountain? My fixed costs. I want to get to profit land — to profitability. And each job is giving me fuel to climb that mountain. And then it just becomes a game.”
According to seasoned business founder and serial entrepreneur Adam Tanaka, some signs you might be falling under the “busy but broke” category include:
- Your team is exhausted.
- Your machines run nonstop, but your bank account isn’t growing at the same pace.
- You celebrate revenue wins (“We hit $200K this month!”) but avoid actual profit numbers.
- Rush jobs feel like wins, but they create chaos, not margin.
- You rely on credit cards, lines of credit, or vendor terms just to keep up with payroll and materials.
While this list isn’t exhaustive, it’s a reminder that “feeling busy” doesn’t mean your bank account is healthy. One mistake you don’t want to make is confusing revenue with success, Tanaka says. In his experience, owners often mistake high sales for profitability, full production schedules for financial stability, and a lot of work in progress for wealth.
He sees it all the time: A shop makes seven figures, but it’s still “bleeding out” because they’re relying on the vanity metric of revenue. “Profit is reality,” he says.
Gawreluk and Tanaka agree it all starts with knowing your true costs. Without that clarity, a shop can only guess, which, Tanaka says, is expensive.
Avoidance Isn’t the Answer
It sounds simple, approachable, easy. So, why do so many custom apparel businesses avoid their financials? While being Superman or Superwoman sounds great, not every shop owner comes to the table with a finance and accounting background. Add overcomplicated costing into the mix, and the interest just isn’t there.
Gawreluk argues that it’s no fault of their own. The industry’s go-to resources often rely on complicated spreadsheets and outdated approaches, he argues, adding that it hasn’t evolved, and it leads shop owners down the wrong path.
“We're not setting up owners to succeed, and even if you come from a historic background of finance and accounting, the tools, practices, and methodology still get you confused,” he explains. “I think it's a pivotal time that we rally as an industry and want to modernize.”
The other factor keeping shop owners in the dark is the simple fact that they know their numbers are messy, so avoiding seems better than facing the problem, Tanaka shares.
“They built a craft business, not a financial one: Decorators love making things, not spreadsheets,” Tanaka adds. “So, they stay in the press room and out of the P&L. It becomes harder to admit you have a hobby instead of a business.”
It’s that shame and avoidance that can lead to overwhelm, and the issue snowballs. Maybe shops tried to get their numbers “right” in the past, Tanaka acknowledges, but they got lost along the way and felt inadequate for the job. Afraid of what they might find, they avoid it altogether.
“I say this with love: Avoidance feels safer in the short term, but it’s brutal long-term,” Tanaka adds.
Damaging Blind Spots Shops Operate Under
According to Gawreluk, two major blind spots consistently hold apparel shops back:
- Not regularly updating their books: If you don’t rely on these numbers, you’ll never know where you stand. He says many shops update their books once per year (around tax season). This means they don’t have a scorecard to reference throughout the year.
“It's like if a professional basketball team shut off the score and they're just running around, and then we find out at the end of the game who won,” Gawreluk explains.
- Confusion around job costing and profit: Because many shops use complicated methods to figure out job cost, or they don’t bother at all, profit becomes a blind spot. It can be a mirage, and relying on matrices to tell shops job costs is a slippery slope.
“We turn to price matrices for selling price, for an understanding of a cost and knowledge of profit,” Gawreluk explains. “In reality, we only get a selling price out of it, and we don't get truthful costs, and we don't get truthful profits.”
When true cost per print is fuzzy, it can destroy shops, Tanaka warns. “Most owners have no idea what it actually costs them to print a shirt once labor, overhead, machine time, and reworking are factored in.”
As a result, he says, shops underprice jobs, overpromise turnarounds, take on “bad” customers, grind until burnout, and end up subsidizing clients under the guise of competitive pricing. And that’s when things become expensive.
Pro Tip: Require deposits (or payment in full) on every job — minimum 50% upfront. No exceptions.
Misleading Job Costing Methods
BY NICK GAWRELUK
Every industry hands down traditions and methods from one generation to the next. In manufacturing, especially in the custom manufacturing we’re in, we tend to accept those stone tablets without questioning them.
One of the biggest mistakes we make is blending fixed costs and job costs together.
We love to take all the costs of the business and find an arbitrary way to sprinkle it into a job. That approach is very misleading and complicated. A fixed cost is a fixed cost, independent of how many jobs you print. Job costs are job costs. It’s apples and oranges, but the minute we blend them together, you lose your sense of reality. Profit becomes a mirage. You’ve distorted the true cost of a job.
If we ask simple questions — what did we sell, what did it cost, and what’s left over — but our costs are distorted, our understanding of profit is distorted too. Fixed costs are fixed costs. Let it be. Don't touch it. Job costs are job costs.
But everywhere you look in the industry, we blend it. That’s a no-no, and it really starts to get hairy. Then owners start pulling their hair out every month when every job seemed profitable, yet QuickBooks says they’re losing money, and they can’t tie out the difference.
Why? Because apples and oranges mixed.
The Cash Flow Reality
And just when a shop grasps costs and profit, understanding the difference between profitability and cash flow is next. Surprisingly, or unsurprisingly, Gawreluk says this concept is a tough one for businesses to understand, and, for some, the light bulb never goes on.
“You can be a profitable business and go out of business,” he advises. “We know in our industry, a lot of larger clients, they're going to have terms,” he explains. “We are upfronting the cost of the blank, and we might be getting paid 30 to 60 to 90 days later. So, I like to say: Sales is vanity, profit is sanity, and cash is reality.”
For him, cash flow is the most critical financial report to consider. It keeps the numbers black and white: How much came in? How much came out? Is it sustainable long-term?
Now, he notes that correlations do occur. More profit should align with healthy cash flows (as long as a shop manages payment terms). If that concept isn’t on the radar, shops end up relying on one financial report or metric and get blindsided.
In simple terms, according to Tanaka:
- Profit = What you earned on paper
- Cash flow = What you actually have available to run your business
Common Cash Flow Traps Print Shops Fall Into
BY ADAM TANAKA
These are the five biggest cash flow traps I see in the industry:
- Net-30 clients with no deposits: You bankroll their merch while they sit on your money.
- Overbuying blanks because “it’s a good deal”: Cheap inventory that sits is still expensive.
- Equipment upgrades without financial planning: Buying a new auto press before you’ve mastered your numbers.
- Too much focus on new sales: Not enough focus on retention.
- Rushing jobs that eat margin: You say yes to everything, even when it costs you money.
You can be profitable and still broke.
That can happen in that 30-90-day waiting period that Gawreluk mentions if you’re overinvested in equipment, carrying too much inventory, fronting massive material costs, or undercharging for rush jobs that tie up resources.
“I’ve seen shops with healthy margins collapse because they ran out of cash at the wrong moment,” Tanaka shares. “Profit doesn’t make payroll. Cash does. Profit is the proof things are working heading into the long term. Cash flow makes things happen now.”
How Print Shops Can Gain Control Fast
If you want to get your financials in order and understand the basics, you need the right partner(s). A bookkeeper you can trust and who’s willing to teach you can be your best asset.
“Your job as a shop owner is not to be a CPA,” Gawreluk continues. “That's not realistic. However, it's your business, it's your responsibility, it's an obligation for the great people you employ and their families in the community. And I think we owe it to ourselves as owners to at least have an eye and ear open to understand some of the basics, and in that journey, you're empowering yourself.”
Shop owners may even find they enjoy it a bit more than expected. When they start to understand even just the fundamentals, keeping tabs on things doesn't become so overwhelming and grueling.
The industry norm for bookkeeping is either yearly or quarterly, and if you’re a shop that does it monthly, Gawreluk says you’re already ahead of the curve. “I've never met an owner who started to look at their books monthly who regretted it,” Gawreluk adds.
If you want to stay competitive, monthly is mandatory, and 30 minutes every week is even better. This ensures you “face reality early, not when it’s a crisis,” Tanaka says.
He provides five easy things to focus on during these checks:
Best Practices for Building Cash Reserves
BY ADAM TANAKA
Stop overcomplicating it. Start simple. Be realistic.
Step 1: Aim for 3 months of operating expenses (not revenue).
Expenses: Your rent, payroll, materials, and utilities.
Step 2: Save 5% to 10% of every dollar that hits your bank account.
Don’t make this a decision each month. Automate it.
Step 3: Build slowly but consistently.
Better to save $1,000 a month than try to save $30,000 all at once.
Step 4: Park it somewhere boring.
High-yield savings account. No gambling, no risky moves.
Cash reserves are freedom. They give you options, confidence, and leverage, and help you make better decisions.
Weekly (30 minutes), ask:
- How much cash do we have today?
- What deposits are coming in this week?
- What big expenses are going out?
- Did we make money on our last five jobs?
- Are we feeling tight or comfortable?
Monthly (60-90 minutes), check:
- Revenue
- Gross profit
- Biggest expenses
- Best clients vs. worst clients
- One decision to improve next month (price, clients, workflow, or costs)
Performing these regular checks, knowing your true costs, and properly managing payment terms can help a shop begin to take control of its financials. Say goodbye to busy, and hello to a healthy, profitable business.
“The real power shift is from ‘How much can we take on?’ to ‘What work actually serves us?’” Tanaka says. “When you stop glorifying hustle and start honoring profit, your entire business changes and, get this, your life gets better.”