1. Executive Summary
Overview
Digital Print Solutions Group is a full service solution provider, and printing entity, supplying designers,
traditional textile companies, contractors, and others, digital printing solutions and services across most
textile and hard substrate platforms. Unlike rotary screen printers and textile dye houses, Digital Print
Solutions Group will provide customized, print on demand services for all manmade and natural fiber
materials, as well as interior design materials from floor to ceiling, utilizing ink sets specifically designed
for these materials. Designers can now think in terms of mass customization instead of mass production at
competitive pricing.
Problem
Today the textile industry produces over a trillion yards of fabric each year, with an estimated growth rate of
15% over the next 5 years. Only 2% of this annual production is printed digitally. Reasons for this are
twofold. Until recently, digital printers were not fast enough to compete with rotary screen methods at prices
that were competitive. And ink technology could not keep up with the speed of the print head technology.
Thus, digital production was limited to boutique output and small sampling runs. Ink and print head
technology are now more closely paired, thus pushing faster and faster digital printing solutions.
Traditional textile production, today, is faced with many problems. In order to understand and address these
problems we must first understand the process of textile production with today’s analog methods. Designers
from large fashion houses to boutique shops create computer generated designs which are printed on paper
and presented to buyers. Buyers cannot truly determine what the finished product will look like because
different inks are used in paper printing versus textile printing, and fabric structure, weave, and texture effect
the final color result. To complicate things further, sample yardage is produced in a variety of ways. Digital
technology has been widely used in the creation of samples due to lower production costs for small runs. A
digital printer can produce 16.5 million colors. Rotary screen printers maximum color output is sixteen.
Designers and buyers constantly face an increasingly difficult situation of color matching throughout design,
sampling and production. With continued pressure to get products to market faster, compromises on color
occur in every phase, resulting in a finished product which is very often not what the designer or buyer
initially intended. Include overseas production issues and language barriers into the mix and it is easy to see
that significant improvements are necessary in analog textile production.
Color matching is only one problem faced today. The more complicated the pattern and design, the more
upfront costs involved in creating the rotary screen plates. A complicated pattern could result in upfront
screen costs in excess of $15,000. As upfront costs increase with more sophisticated designs, larger yardage
production is required for economical output. Thousands of yards of fabric are produced prior to
understanding full market adoption of these designs. This results in excessive waste for unpopular patterns.
Virtually every company today that manufacturer’s products using textiles, have inventory issues from
designs that didn't sell. This inventory is either stored, creating warehousing problems, sold for pennies on
the dollar to surplus fabric outlets, or disposed of. With textile production increasing yearly, these issues will
continue to multiply, further complicating matters.
Mass production is needed for economical production. This eliminates the ability for customized patterns
and designs. We have seen a growing trend in sports apparel toward mass customization in certain market
2. segments such as bicycle jerseys, team wear, etc... Today this mass customization is done digitally with
dispersed dyes on polyester fabrics because polyester is the only fiber that works with this ink set.
Companies such as Nike, Boombah, Under Armor, New Balance and others have adopted the mass
customization strategy. From dispersed dye ink sale studies, we can see this market segment has grown 20-
35% annually over the last 3 years suggesting mass customization is here to stay. Polyester was the fabric of
choice for this type of customization due to the ease of fixating the dyes into the fabric as compared with
other fabric/ink combinations. We can bring mass customization into markets dominated by cotton, silk, and
other threads using pigment, acid and reactive dye technology with unique fixating improvements recently
developed by our team.
Overseas production leads to additional problems facing companies today. These problems include:
• Long Lead Times - effects design houses wanting faster cycle times and fashion seasons
• Higher freight costs - Sampling proofs, samples, sample yardage and production all add up to
significant freight costs dealing with overseas vendors.
• Cash Flow constraint's - Most overseas vendors require pre-payment terms.
• High Risk – Loss of shipment in overseas transit, quality issues,
• Environmental Hazards associated with Traditional Textile printing
• High Energy, Water, and Manpower intensive
Solution
Digital Print Solutions Group will offer solutions addressing all of the issues facing the current process from
design, sampling, and production, across multiple textile and hard substrate market segments. By providing
customers with specific ink sets customized to provide the largest color gamut possible for each ink category,
matched with digitally prepared fabrics specifically treated for superior performance when using pigment,
acid dye, reactive dye, or dispersed dye, we can guarantee consistent color throughout the entire design to
production process.
Sampling systems utilizing a digital printer, fabric curing source and matched ink and fabric set will be sold
to the design houses. Designers will be able to design, proof and present samples to buyers on the actual
fabric used for the finished garment. Buyers will receive a true representation of how the garment will look
and feel, thus enhancing and streamlining the process to market. The same ink sets, color profiled to match
output from the sampling systems will be used to produce larger sampling runs and production up to 3,000
linear yards. Lower costs associated with digital sample printing eliminates higher costs of set-up and rotary
screen plate engraving, reducing overall garment or pattern expenses thus increasing profitability. Designers
are no longer limited to producing garments or patterns with limited color varieties because of the limitations
and expense of analog rotary printing equipment thus expanding creativity and design capabilities
Mass customization across multiple substrates, not just polyester, is now a reality. Include a high speed
digital printer, and the entire production process can be color matched from design to finished product. Lead
times are vastly improved with elimination of color issues associated with traditional processes, in addition to
the advantages provided by local outsourcing versus production houses overseas. Closer to home production
lowers freight costs. Eliminating overseas production houses improves cash flow as companies would be
provided 30-day terms versus pre-pay or letter of credit options.
3. Opportunity
Total textile production in 2012 represented over 1 trillion dollars. Out of total production, $10.3 billion was
spent on digitally produced fabrics, according to a Smithers Pira Report: Global Textile Industry. The report
goes on to suggest this figure will double to over $20 billion by 2017, representing less than 10% of total
textile production. A study by Digital Today shows 42% of digital printed textiles are produced in Europe,
while Asian / Pacific countries account for an additional 39%. That shows 81% of all digital textile
production is done outside of the United States.
Additional opportunities arise from the sale of equipment, ink and fabric. Big Picture magazine, in an article
called Textile Printing Transformations published May 2013, estimated printer hardware and ink sales to
increase from $484 million to $2 billion by 2016. With limited digital textile printing competition in the
United States combined with our expertise in digital printing solutions, fabrics and inks, we anticipate initial
sales in excess of $3 million dollars annually. Current customers such as Victoria Secret, Donna Karen,
Vanity Fair, Couch and Swimwear Anywhere, are included in this annual sales figure.
CompetitiveAdvantages
• Color Proofing Systems - Combining an Epson 24" printer and small curing units, we will sell
proofing systems to designers, allowing them to create and present patterns to buyers on the textiles
used for each garment. Pigment ink, Acid dye, Reactive Dye, and Dispersed Dye options allow us to
cover every fabric/ink combination with superior color performance. Acid and Reactive ink proofing
solutions have been avoided due to the need to cure the fabrics by steaming and washing. Small
inexpensive autoclave medical cleaning devices have been proven to work in curing sample design
pieces. With Matched Component ink and fabric, designers can now produce sample yardage which
can be sewn into garments, worn, washed, and perform as production pieces. By providing the same
ink sets for digital production solutions, designers can ensure color matched output from design
through production here and abroad; an industry first.
• Matched Component System- By offering fabrics with innovative digital treatments designed for
optimal output with our ink sets, we can control color, and printed fabric performance to meet
industry standards. Our team of textile engineers, with over 20+ years of industry experience, have
taken traditional fabric treatments and significantly improved their performance, color acceptance,
and feel. Treatments meet or exceed AATCC test requirements, meeting or exceeding industry
standards across multiple markets. Digital suppliers today are segmented, and customers are expected
to figure out which fabric and ink combinations provide optimal results. After months of trial and
error some combinations are discovered. Most provide poor color vibrancy with inferior wear and
wash fastness properties. Matched Component Solutions ensure maximum color gamut and industry
demands are met. Collaboration with Textile supply partners guarantees fabrics are prepared and
available for digital production worldwide.
• Turnkey Solution - We will bundle all components of a solution in a pre-tested, validated package.
Printer, inks, fabric, curing device and Rip software. Competitors today offer a variety of options, all
up to the customer to pick and choose what they want. Since design firms and most new accounts
looking to open printing service bureaus aren't educated in digital printing technology, customers end
up struggling through long periods of trial and error before acceptable output is produced. Add our
ability to digitally print their fabrics during their ramp up period, and we provide a complete one stop
digital Turnkey Solution.
4. • Customized Ink Solutions - By matching the best ink color/performance combination from various
suppliers into their own customized ink sets across all mediums, our ink products will offer the widest
color gamut, vibrancy, and performance characteristics of any competitor. Each competitor focuses
on one or two companies ink products regardless of flaws inherent in one or more colors. By
analyzing each product available, and choosing the best colors of each, our products will be exclusive
and difficult to duplicate.
• Expertise / Industry Contact's - Our team members, each with over 20+ years industry experience
in textile engineering, color chemistry, sales, operations, digital printing equipment, technical service,
print services, color management, and business development, provides Digital Print Solutions Group,
LLC industry know how that is second to none. Worldwide contacts provide the ability to source,
develop and deliver virtually every solution requested on time and on budget. In addition, we are
working with a gentleman who owns an interior design firm who caters to the hospitality industry,
designing and supplying materials for hotel renovations. Due to vast competition, major hotel chains
change their interior decor themes every 5-7 years in order to continue to attract current and new
customers. This represents significant ongoing repeat business opportunities.
• Textile Printer Advantage - The most popular high speed printing devices sold in North and South
America come from Reggiani, MS, Robustelli, Hollander, and F-Tex. Each of these machines varies
in speed and price, ranging from $140,000 up to $1.5 million. All of these machines are produced in
Europe. The strength of the Euro versus the dollar keeps these prices fluctuating, primarily upward
over the last year. Through contacts in Asia, we will offer equipment with features, speed, and
craftsmanship exceeding the specifications of equipment in the same class as those for the
manufactures above, at a cost of $65,000. This will provide Digital Print Solutions Group the
opportunity to sell equipment to distributors and producers at a minimum profit margin of $20,000
per unit. Furthermore, the factory has awarded us an Exclusive Distribution Agreement for the
United States.
BusinessModel
Digital Print Solutions Group is a business to business model operating as a manufacturer and distributor.
We will derive revenue from the sale of digitally printed textiles, tile, wood, materials used to manufacture
laminate furniture and flooring, as well as other digitally printed customized materials. In addition, we will
sell color proofing systems, digitally prepared for print fabrics , inks, coating chemistries, high speed
production textile printers, steamers, washing equipment, heat presses, color calibration devices, and
software, while providing technical support for these items. Products and services are sold directly to
businesses and a limited number of distributors. Equipment sales are on a pre-pay basis with down payment
requirements. Balances due at time of shipment. All other services are rendered via cash, credit card, or 30-
day terms, dependent upon approval. Print services will be billed on a cost per yard basis under the same
conditions laid out for consumables.
Each product’s profitability varies. Equipment traditionally averages a 10-15% profit margin with machine
costs ranging from $1,995 to $1.5 million. Equipment is a vehicle to sell consumables and is not intended to
be a high profit center. Consumables, digital print fabrics and inks, are higher margin, high volume items,
with repeat sales. Consumable margins range from 40-60%. Printing services maintain the highest business
segment margin of 67 - 70%.
5. By installing Proofing Systems at the designer level, with matched component inks and fabric, we will drive
textile production from design/sampling to production. Designers will now control color at the concept,
proof, and sampling phases, and will demand production to match this output. Digital Print Solutions Group
will provide production components to ensure color matching from concept to finished garment. Installation
and training of these systems can be provided both locally and abroad.
Mark Freeman, President: Mark's industry experience began in 1991, where he started in sales for a
wholesale supply organization specializing in digital printing equipment and supplies. In a short time Mark
was promoted to Marketing Director of the organization and soon became V.P of Operations. Instrumental
in incorporating new technologies, suppliers, and vendors, plus implementing Lean Manufacturing policies,
Mark's efforts resulted in over 5 million dollars in sales growth over a 5 year period. In 2006, Mark was
recruited by US Screen Print Technologies, Inc. as Operation Manager. Organizational changes and
manufacturing implementations drove US Screen Print to industry leader in the sales of Direct to Garment
printers. Since 2007, Mark has been the Global Product Manager for Sawgrass Technologies, Inc.
successfully driving digital equipment, ink, and color management improvements worldwide. Mark received
his BA in Business Administration and Economics from Linfield College.
Chris Moore, Director of Sales / Textile Expert: Chris Moore spent 10 years as Sales Manager for Stork, a
Rotary Screen and Digital Printer manufacturer. At Stork, Chris developed his digital color and technical
skills teaching customers how to transition from rotary screen printing to digital printing, working with major
design firms in New York City. After leaving Stork Chris became the Product Development Manager for
Swimwear Anywhere, one of the largest producers of swimwear worldwide. For 2 years Chris developed
and educated customers in the ways of digital textile production, enhancing his skills in color management
and design. In October of 2007, Chris opened his own Digital Print Service Bureau servicing the design
community in New York City. Chris received his Bachelor of Arts degree in Fine/Studio Art in 1992.
Joey Pineda, Director - Technical Services: Joey has worked with digital technology for over 20 years.
Before coming to the United States in 2003, Joey worked in Production and R&D for various printer and silk
screen manufacturers in Asia, repairing and selling digital printing equipment. Joey has professional training
on all machines utilizing Epson, Seiko, Ricoh and Kyocera print heads, and is an expert in color management
techniques. When Joey arrived in United States he was hired as the Production Manager for Oakley in Los
Angeles, CA. Due to his extensive experience with digital printing equipment, Joey moved to Charleston,
SC as a contract service, color management expert. Joey earned his Bachelor of Science degree in Computer
Engineering at the University of San Carlos.
ProjectedCustomer Growth
Sampling System Segment:
• Swimwear Anywhere has committed to purchase a system during the 1st month once available.
• Projected to add 1 additional customer each month during the first 6 months, then 2 customers
each month throughout the next 3 years. There are over 1,000 designers in New York City
alone. Figures are based on only capturing 7.1% of these designers.
6. Print Services Segment:
• Two customers, through Rhodes Textiles, have committed to printing 2,000 yards of sampling
per month. It will take 60 days to receive the printer once purchased. Projections show 1,000
yards printed during the third month of operation, with an additional 3,000 yards during month
four. Projections for each month, moving forward, anticipate 1 new customer printing 500
yards, with a 10% increase in volume per year per customer, after year one.
• Discussions are under way with the Executive Director of Quickstone Decorative Facings Inc.
They design and contract manufacture cabinetry, shelving, furniture and other home decor items
produced with membrane press equipment. They are introducing 24-25 new designs and need
4,000 to 5,000 pieces of 53" x 104" polycarbonate film digitally printed. They came to us
because they couldn't find anyone else to help them. We are in the process of validating the
printing solution with either flexible UV curable inks or dye-sublimation inks. Once validated,
revenue potential from this opportunity could conservatively exceed $300,000 - $500,000 and
is not represented in the sales projections listed below. Additional manufacturers, in similar
industries, using the same production method, are potential customers. This ties in with the
hotel renovation opportunities.
Bulk Ink Segment:
Sales Assumptions
• Sell 30 liters of ink with each Textile Printer sale.
• Each customer increases their usage 10% per month per year.
• Add a minimum of 4 customers per year.
Ink Cartridge Segment
• Swimwear Anywhere spent $70,000 on Epson ink and paper in 2013.
• Of the $70,000 spent, 75% was for ink and 25% for paper.
Sales Assumptions:
• Swimwear Anywhere's expense is the industry average per year for proofing.
• Customers will use our system 25% of the time.
7. Fabric Segment - Proofing Systems
Sales Assumptions:
• Same assumptions represented in Ink Cartridge Segment
Textile Printing Equipment Segment
• Strada Verde, a customer, has two clients interested in purchasing printers immediately.
• Digital Print Solutions Group has been awarded an Exclusive Distribution Agreement from the
manufacturer in China.
Sales Assumptions:
• One printer sold in the 2nd month, and second printer sold in month 3.
• Four months to generate interest for 3rd printer sale.
• Another printer sale 3 months after that.
• Sell 4 printers per year for remaining 3 years.
• Since Equipment is 50% down, 50% at time of shipment, no outlay of cash is required
Garments Prepared for Direct to Garment Printing
• A great deal of variability exists today for business digitally printing dark T-shirts with Direct to Garment
printers. In order for the T-shirts to come out looking as close to screen printed T-shirts as possible,
garments are sprayed with a pre-treatment prior to printing. If you apply too little the white ink doesn't
stick and the garment color comes out dull. If you apply too much pre-treatment, the ink washes out.
Companies within this industry have tried to correct these issues by developing Pre-treatment spraying
machines. These machines assist in correction of this problem however, they do not eliminate it. Spray
nozzles clog from time to time causing variability in the amount of liquid applied, and nozzles themselves
are not very accurate in the amount of liquid fabric fibers absorb. As a result, customers still struggle to
get properly pre-treated garments, resulting in significant waste and expense.
• Digital Print Solutions Group has developed a textile treatment which will be applied to the fabric, after
weaving prior to the fabric being cut and sewn into garments. Through relationships developed at textile
factories in the United States and India, Digital Print Solutions group will offer pre sewn garments already
fully treated from the factory. Since the yard is treated in a traditional textile finishing plant, prior to
garment creation, we eliminate the variability experienced today. Direct to Garment printers can now print
anywhere on the garment - front, back, sides, sleeves, etc... without the need to pre-treat the shirt or worry
8. about print defects, lack of color vibrancy, or image washing out during laundry cycles.
• Currently, fabrics are being evaluated at two potential distributors. The first distributor was the largest
Direct to Garment printer manufacturer in the world a few years ago, selling over 50 units per month. He
has an existing customer base of over 8,000 users. On Monday, July 28th
, the distributor sent an email
stating he is “on board” and ready to “sign-up”. “Samples look fantastic!
The second distributor was the sales manager for this printer manufacturer and now works for Coastal
Business Supply selling Direct to Garment machines. Once fabric is approved, Digital Print Solutions
Group will purchase 1,000 pre-made T-shirts to use as sales demos and promotional items in order to
solicit pre-orders for shirts.
• Average purchase per end-user is 10 garments per size. Potential monthly sales are 80,000 garments
representing nearly $50,000 in revenue. This revenue is not represented in the projected numbers below.
9. Financials
Fixed & Variable Cost Analysis
Monthly Fixed
Costs
Amount Variable
Cost /
Yard
Amount Sale Price /
Yard Printing
Gross Margin
/ Yard
Sales/Yard
Needed to
Break Even
Capital
Equipment
$ 4,800.00 Fabric $ 3.75
Warehouse
Lease
$ 5,000.00 Ink $ 1.80
Utilities $ 2,000.00 Coating
Costs
$ 0.26
Salaries $ 31,200.00
Employment
Expenses
$ 4,687.50
Travel Expenses $ 2,300.00
Marketing
Total $ 49,987.50 Total Cost
/ Yd
$ 5.81 $ 15.00 $ 9.19 5440
-$500,000
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Months
Number of Months to Break Even
Actual Costs(exclude Equipment)
Cumulative Profit/Loss
Total Revenue
Total Monthly Costs
Total Monthly Sales
10. Break Even Analysis:
• Capital Equipment Expense is amortized over 5 years with the equipment being worth 1/3 of its original
value at end of term.
22
40 40
15
65
0
17.5
35
52.5
70
GM %
GM% per Product Segment
Sampling Systems Fabric
Ink Equipment
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
Yards Sold to Break Even
Break Even Analysis
Profit from
Yards Sold
Fixed Costs
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Cash Flow Analysis
Cash Flow Analysis
11. Funding Required:
Digital Print Solutions Group is currently seeking a minimum capital investment of $725,000 which would
be used to purchase Capital Equipment for textile production, proofing systems, and t-shirt inventory for
Direct to Garment sales during Q1. Capital Equipment breakdown is provided below. The remaining
$475,300 is needed for inventory, operating expenses, web site development, marketing and customer growth
through Q2 and Q3. Primary capital need is to fund bi-monthly inventory of t-shirt production, since supply
is based on a pre-pay basis since sourced in Bangladesh, India. Digital Print Solutions Group is expected to
be in a positive cash flow situation to sustain growth after Q3. Sales represented in the graphs above
exclude opportunities for Polycarbonate Film production which is being vetted during the next few weeks.
Initial sampling is very encouraging and promising. Fixed costs used to determine break even analysis are
calculated on supporting all employees from day one and pursuing all business segments equally. Other
scenarios can be planned out for supporting specific business segments at start-up, adding additional
segments as the business grows.
Investor payback is planned for 3 year timeframe. At that time, this business plan supports doubling the
investment dollars provided. A spreadsheet representing monthly sales, revenue, and cash flow projections over the
first three years is available upon request.
-300,000
-200,000
-100,000
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Cumulative Profit/Loss by Month
Cumulative Profit/Loss
12. Capital Equipment neededfor all Opportunities:
Capital Equipment Cost Freight Total Cost
Textile Belt Printer $65,000.00 $5,000.00 $70,000.00
Steamer $25,000.00 $5,000.00 $30,000.00
UV Printer $75,000.00 $5,000.00 $80,000.00
Heat Press $25,000.00 $5,000.00 $30,000.00
Sample Printer $12,500.00 $2,000.00 $14,500.00
Fabric Coating Line $15,000.00 $5,000.00 $20,000.00
Profiling Equipment $1,100.00 $100.00 $1,200.00
Computer Equipment $4,000.00 $0.00 $4,000.00
Total $222,600.00 $27,100.00 $249,700.00