Gone are the times when the Xerox Company launched its first photocopy machine and the usage of this novel technology was only limited to elite offices. Today even school children need to photocopy papers for their school work. Photocopying is not an expensive and unique thing now; it has become a necessity of our daily life. No office or school or college can run without a photocopy machine. Their working slows down without it. Photocopying business is a vast business and with each passing day the demand for this business is also increasing.
Starting the Business
This business can be started from several places. It can be initiated in a market place by selecting a good location with respect to residential or office area and it can also be started within the offices and especially universities. Universities have heavy work load with large margins for profit. To start the photocopy business, a good location is an essential where preferably there are no other photocopiers nearby or the demand is excessive. By high demand it is meant that the residential areas should have easy access to the shop or the shop should be near the office area. Ranking the areas with respect to profit margins, the photocopy business in universities comes first, and then places near offices and the residential areas comes in third. There are however, some residential areas where this business is more profitable than the one near offices. The market needs to be studied first and the demand of the area needs to be analyzed.
Once the location has been selected, photocopy machine is the next requirement. These days the photocopiers are using Japanese used machines. New machines are very expensive to buy costing approximately Rs. 450,000 each along with high maintenance which ultimately increases the charges of per page photocopy thus not being feasible for the local market. The new machines are so quick and efficient that even a single person can run at least three machines, because these machine do every thing from photocopying to sorting out the pages till the binding. This increases the cost so investors hesitate to use it in Pakistan. They prefer buying used machines from Japan in bulk and each machine costs around Rs. 5000. This price reaches to Rs. 20,000 when the shipment arrives in Pakistan after paying the tax dues. Small investors from different cities contact and place their orders for purchasing the machines. The price ranges from Rs. 40,000 to Rs. 50,000 from the port depending upon the relationship with the main investor and the bargaining power. After that, they sell the machines to the end users for around Rs. 80,000.
When the location is selected, you have to evaluate the demand of that location. The business preferably should be started from 2 or 3 machines only, if the demand increases then you should increase the number of machines. Composing facility should also be available at the shop which can also be a part of this business. Computer, printer and a scanner is the requirement. Other small machines can also be placed in the shop like cutting machine, lamination machine and many others. If we calculate the total initial investment to start a small photocopy shop with 3 machines, 1 computer, a printer and a scanner, the initial investment would be around, Rs. 350,000 minimum. If you want to add more machines according to your requirement and an extra computer, then the investment could reach around Rs. 500,000. This initial investment does not include the rent or good-will of the area because that varies from place to place, it could range from Rs. 1 million to 5 million. The bigger entrepreneurs in the market have many other machines like printing of maps, big scanners, colored laser printers etc, but that requires huge initial investment and there should be demand for all these services in the market and above all, you have to market your business properly.
Employees should be hired according to the number of machines. One person is mandatory for a machine and if affordable, an extra employee can be hired for sorting out and binding of books in a shop. Similarly each computer requires a person who has all the composing expertise. The pays of employees could be from Rs. 5000 to Rs. 10,000 per employee. If the pay is more, the employee’s turnover rate will be low and experts in the shop will always be available working efficiently and effectively. If you are paying Rs. 10,000 per month to each employee, it is a good salary. Training of employees is not an issue because the machines are very user friendly.
Working of Machines
As the machines are used, their maintenance varies from one machine to another. Some machines break down every month and some after a few months. Technicians are easily available for these machines in the market. The workload could also be a reason for frequent maintenance. The ink roll of the machine costs around Rs. 800 which prints almost 5000 copies. The toner or ink roll being used in markets is of very low quality, because genuine toners are expensive and their ink results are of fine quality costing more, and ultimately the customer would have to pay Rs. 3 to 4 for each photocopy page. It is not feasible to use genuine toners in Pakistani markets because the customer wants cheap photocopy without considering the quality of prints. Also the paper being used for photocopies is of low quality to reduce the cost. Another factor to increase the overall cost of the shop is the electricity bills. These photocopy machines consume more electricity. For 4 machines in the shop and the air conditioning unit, the monthly electricity bill could be around Rs. 10,000 to 15,000.
One cannot estimate the exact profit margins for this business because it depends on the customers you get every day and month. A normal photocopying shop in a good location, with 4 machines, 2 computers, 6 employees and other small facilities, can easily generate Rs. 40,000 to Rs. 60,000 profit every month. This could reach to Rs. 1 lac if you get more customers. If one is running a shop within a university with a number of machines, profits can reach up to 6 digits monthly income or around Rs. 1 to 2 lacs or even more. Similarly in areas like district courts and near offices, earnings are also high.
Marketing of the Business
In Pakistan, marketing side of the business is not given proper attention. Entrepreneurs only rely on walk in customers. Even if one is running a small shop, marketing tactics need to be adopted. It is necessary to market your photocopy business and get work from different offices and universities even if you are not in the university. Extra services can also be provided like selling of stationary items in the shop, which costs less.
Businesses do not resemble jobs. It is a line full of commitment and hard work; the profit margins can be increased and business can be expanded by the passage of time and hard work. If you are passionate and committed to your work, any business can be profitable and these two things cannot be learned from any marketing book or a business school, it is a mind set.