Esther: Welcome back to The BusinessMakers Overtime Show. I'm here with Katie Laird and I'm Esther Steinfeld and our guest today on The Overtime Show is Rishi Narayan. He is the Founder and CEO of Underground Printing. Welcome to The BusinessMakers Show.

Rishi: Thanks for having me.

Esther: Yeah, no problem. So you're traveling right now. You're in the airport. You're a little remote. So tell us a little bit about Underground Printing.

Rishi: I started it with my best friend from high school. We both grew up outside of East Lansing, where Michigan State University is, little town called Okemos, and we've been friends since middle school. Went through high school together and we both went to the University of Michigan, or their college. We were kind of bitten by the entrepreneurial bug. My partner - he had started a loft building company, which was, you know, lofts for dorms. We were partners in it. He did all the production, took care of all that, and I did all the sales. Obviously he had the more tedious task, compared to what I had to do but we loved it. I mean it was a lot of fun. We really felt like we learned a lot and you know, it was something that we wanted to continue. The only problem was A) welcome week was only one week a year. So you know, that kind of ended our dreams of small business after students had moved in and B) hauling bed frames up dorm stairs is not fun.

Katie: Oh my gosh. Sounds awful.

Rishi: So we decided - yeah. So we decided to move on to something else and we really were kinda trying to find something, anything. My dad had started a lot of companies. He was a professor and so it kind of - I kind of had a good background in that. And what happened was is I was driving in my car - I had a Ford Probe GT. First car I ever bought by myself.

Esther: Nice.

Rishi: It was - yeah, it was a lemon, though, and it broke down on the side of the road. The tow truck driver, you know, was nice enough to pick me up and give me a ride and we got to chatting and he used to have a screen printing company in Ann Arbor. It's called A-One Shirt and Sign and you know, that really kinda piqued my interest because I mean, it's t-shirts and who doesn't love t-shirts.

Esther: Of course on a college campus, you need t-shirts.

Rishi: And - absolutely and you know, my partner and I were in a fraternity. We were in this - the Michigan Student Assembly, the student government and so we really felt like this was kind of a cool thing so when my car broke down for the second time a month later -

Katie: [Laughter]

Rishi: - and we went to see this guy again, you know, we kind of took him up on his offer, bought his equipment from him that he still had in a pole barn up north, and we actually set up shop in his garage, next to a broken-down Chevy that - and we were kind of among two golden retrievers that got hair in all the clothes. So -

[Laughter]

Esther: Oh my goodness.

Rishi: That's - that was our - that was our start. That was our glamorous entrance into the world of business was printing shirts in the middle of the night next to a broken-down Chevy.

Esther: That's really incredible.

Katie: What a great startup story.

Esther: And now here you are. So now, tell us about your business today. You've grown it from in the back of a barn to - where is it now?

Rishi: We actually have 13 locations now-

Esther: Wow.

Rishi: - 'cause we just opened up a new one in Lexington, Kentucky and -

Esther: Wow.

Rishi: - what we do now is we actually have stores and they're located on college campuses and they are right in the heart of campus, very convenient, very easy to get to. Customer service oriented through and through. All our production is done back in our production facility in Ann Arbor. You know, after we left the guy's barn, we kind of teamed up with another company and we started doing their sales and we got so involved with them that we bought them out and we took over their production. That company's name was Underground Printing. We were known as A-One Supreme Printing at the time because at that point it actually meant something to be the first in the phone book which doesn't really apply anymore.

Esther: Right.

Rishi: So, we took their name, 'cause it was cooler, and we took their equipment and set up shop. We always thought that college is where the t-shirts begin and end and so we came up with this idea, this model, to open up locations that were convenient, easy to use, and then backed up by great technology. All your social media for sure but also art approvals online, payment via Paypal and over the Internet and just make it super convenient, easy to use, but still keep that face-to-face benefit that you get when you're gonna be spending $500.00 or $1,000.00 on a t-shirt order versus like buying a $10.00 DVD.

Esther: Your business is one of the largest printing companies in the country, is it not?

Rishi: Yeah, that's true. So we're - so for the past five years we've been ranked in the top 50 volume printers in the country which has been a kind of a cool honor and we do it the hard way. We do it by printing a lot of little orders. A lot of fraternities and sororities and student groups. You know they're not the big name ones compared to some of the other people on the list who print for large companies, bands, retailers and so on and so forth. That's been kind of a cool honor and we've been fortunate enough to grow. We've been on the Inc. 5,000 list the last couple years, working our way up that. So yeah, it's been great.

Katie: Excellent. And I'm sure servicing these smaller orders - you probably have some massively raving fans, 'cause you really appear to take good care of people and I'm just looking at your website right now and I mean you have customers submitting photos for photo of the month. You have blog posts that are highlighting, you know, where people's designs have showed up on TV. I mean what an interesting little culture you've built around yourself. What other kinds of things do you do to keep that community, you know, kind of blowin' and growin'? 'Cause I'd imagine college students can be a little flaky - and I say that with love.

[Laughter]

Rishi: Absolutely. Well you hit it on the head. It's definitely the community aspect and we didn't reinvent the wheel here. I mean we didn't come up with this great idea of this t-shirt and applying ink to it to show your school spirit or what have you. What we've tried to do is come up with a unique approach to make it convenient and really, what we're doing is selling the customer service. You could probably find places that are cheaper. You can probably find places that might be able to do it faster. But what you really can't get - or what we believe you can't get - is the combination of the customer service, the convenience and the price all wrapped into one. What we try to do with everything else is we really try to facilitate - basically I want you to feel like you got hooked up when you came in. And, you know -

Katie: Nice.

Rishi: - you came back a second time, a third time, and we'll figure out some way to make your price better or to help out your friends and the real difficulty with all of this has been figuring out how to systemize that, make it consistent. We do a program, for example, where we give away higher-end shirts to customers that have placed a second or third order with us just to thank them for what they did.

Katie: So your workforce is probably predominantly college students.

Rishi: Yeah.

Katie: What is it like working with them? I mean how - of course, we've all been college students ourselves but what have you learned about, you know, really being able to work with this younger workforce as far as training them on customer service.

Rishi: The key is is that our workforce is not college students.

Katie: Oh! Wrong!

Rishi: Not, not -

Esther: There ya go!

Rishi: Not for the most part, anyways. When we first started, you know, we had this idea of branching out and growing and expanding. And the first thing we thought of was, "Oh let's do sales reps." "Let's get reps out there that are college students. That'd be the best way to go," and what we really found was that it works but it doesn't achieve the level of service and comfort that your customer really wants. And so what we did is we decided to make a commitment to the community by opening up stores and locations where other companies would normally just hire someone to float around and in and of itself we would hire a store manager. Salaried employee, so he didn't have to worry about how much his sales were, per se. He was salaried so that customer service was his goal and generally, the store manager is a younger graduate. So you say, you know, college kids. Basically college kids but not - they're out of college, graduated from that school of the town we're in or in their -

Esther: They're a little more serious. They're kind of in that bridge between real adult and college party kid.

Katie: Woo hoo! [Laughter]

Rishi: Absolutely. It's the, you know, the area that I think we're all in after you graduate for the next, like, for some longer than others. I'd like to think that I'm still in it, but yeah. So you know, that's really been the key for us is people that are beginning their career out and are willing to learn about, you know, the things that we wanna teach them.

Esther: So tell us about the challenges you guys have faced because this is a really large business that scales across the country but there must've been some bumps along the way.

Rishi: Absolutely. Actually one of the initial things that we kind of stumbled upon was - so we, you know, we opened up our first store in Ann Arbor; our flagship store if you will, and then we opened up our second store in a bigger town, if you will, in Michigan, at Kalamazoo. Pretty well known but it's where Western Michigan University is and we just did it there because it had a good population and you know, we really felt like okay, we got a license there, collegiate license, so we moved forward with that. What we really found was is that we had to spend a lot more time analyzing these schools because the size of the school and the size of the town around it wasn't enough and what we found was that most kids drove to class there as opposed to walking in school. They don't have a centralized campus. And that's been a big key to our store locations. We wanna make sure there's a lot of traffic outside of it because what it ends up being is that we're a destination location. Meaning that you don't order custom printing every day. You eat every day but you don't order custom printing every day. So what we try to do is we try to imprint ourselves in your mind so that one, two, three times that you're gonna order shirts in your college career, you think of the only place to go and that would be Underground Printing. So that was an interesting lesson. The other lesson we learned from our second store, in just our second store, was that we tried to introduce retail at the same time as we were developing our custom print. So we're like, "Oh yeah, yeah. We'll do custom-printed shirts and we'll also sell college gear for sports and for fans and such." And that was a huge failure. We couldn't do both at the same time. We couldn't manage both. We didn't know enough about the whole retail industry and inventory and so on and so forth. What we decided was that we were just gonna drop retail. All of our stores up until last year were custom printing only and after we had really developed our systems, concentrated on the service, figured out exactly what we needed to do - then we went back and we said, "Okay, now we can offer this existing customer base we have retail options." And in 2009 we - that's how we grew. We added a different revenue stream that we were ready to handle.

Esther: Wow.

Rishi: So those are a couple - couple of lessons that we've learned along the way and, you know, I think have been pretty valid.

Esther: Very cool. It's really a great story. I mean there's so many, I guess, aspects to your business and especially in the midst of a recession, it sounds like you guys are actually growing.

Rishi: Luckily, t-shirts are not a super luxury item and that's been good. And college markets tend to exist in a bubble. You know, the economy does great, a college kid doesn't really have any more money and if the economy's not doing great, the college kid is generally gonna, you know, spend money on the things that matter to him, which mainly involve going out and looking good, I would thing. So -

Katie: [Laughter]

Esther: Right, I'm wearing an awesome t-shirt.

Rishi: [Laughter] Absolutely.

Esther: Well thank you so much for being here. We really appreciate it. This has been very cool.

Rishi: No problem. Absolutely it's been a lot of fun and I enjoy your guys' show. I'm actually wearing a Tommy John shirt right now -

Esther: Nice!

Rishi: - which I only learned about after hearing about him through your show. So -

Katie: Very nice.

Esther: Wonderful!

Katie: You should start printing those.

Esther: I know!

[Laughter]

Esther: They're pretty comfortable. I have one myself I wear all the time.

Rishi: They are. They are pretty good. They are pretty good.

Esther: Now it's time for another Business Survival Tip with Carl Kleimann of Odyssey One Source.

Carl: Hello business owners this is Carl Kleimann from Odyssey One Source with another Business Survival Tip. On March 2nd, President Obama signed the Temporary Extension Act of 2010. This new law extends unemployment benefits and the federal government's COBRA subsidy that would have otherwise expired on February 28th for millions of unemployed Americans.

Understand that this is the second COBRA subsidy extension in 3 months and it probably won't be the last. Just last week, the Senate passed a Jobs Bill that will extend the subsidy through the end of 2010 if it passes the House. The subsidy is equal to 65 percent of the total COBRA premium and employers are responsible for paying it and then recouping the money through payroll tax credits.

The extension grants eligibility for the subsidy to those that are laid-off during the month of March. Previously, it was set to expire at the end of February. In a strange twist, it also creates a new qualifying event under COBRA. Employees whose hours were reduced at any time since September 1, 2008 AND are terminated on or after March 2, 2010 are now eligible for COBRA and the subsidy. So for the first time, employers may be required to offer COBRA to a part-time employee that is not even covered by their healthcare plan at the time they are terminated.

The recent extension includes a new penalty equal to $110 per day for any employer who fails to comply with a determination of subsidy eligibility within 10 days of receiving it. If you have not already outsourced your COBRA administration to a professional, you should consider doing so. It has become an extremely complex task and it is not likely to get better any time soon.

I am Carl Kleimann and this has been another Business Survival Tip by Odyssey One Source, ranked as the number one Professional Employer Organization three years running by the Black Book of Outsourcing. For more information on this and other issues affecting employers, please visit www.odysseyonesource.com.

Esther: You're listening to The BusinessMakers Overtime Show, heard here and online at theBusinessMakers.com. Stay tuned for Chapter 3 where we're gonna talk about some Internet safety.