There are several battles being fought today by printing business owners and more looming on the horizon. The first battle is already underway. It is about remaining successful during periods of great change. Print shop owners are going to have to deal with never ending waves of change coming from both internal and external sources.
Owners often see a change in status quo as something bad—something might be taken away or unnecessarily added to obligation. Yet change is how a printing business adapts and grows.
Because of their outlook, owners usually see change coming and brace themselves. However, they often fail to do a good job of communicating change successfully to the rest of the people in the organization.
Your hourly employees deal with whatever comes their way. They might not be happy about the change or the method that it was communicated. But they do what is necessary to survive; to stay on the payroll. Your salaried managers often see change as unnecessary. These people may have their heads in the sand and may have evolved to have serious entitlement attitudes. Managers who deal well with change survive. Managers who initiate positive change and sell it will thrive. Managers fighting change usually end up working somewhere else.
The second battle is executing with fewer resources: people, time, and money. Layers of management and payroll counts have been shrinking throughout the printing industry. This will continue. Yet there will be no reduction in expected results from our customers. Doing more with less is now how it is.
Related to the first two battles is the third battle: the battle for cash. While it could be said that banks aren’t lending anymore, don’t blame the bank or the banking industry. The bank is doing what every company should be doing: focusing internally because that is where the tide of this battle will turn.
Where should the internal focus be? Every employee has an impact on whether your printing company is losing or winning the battle for cash. The challenge is for you, as the print shop owner, to explain this concept to your employees and manage the appropriate change in attitude and behavior.
Cash comes into your print shop when you sell to the right kind of customer. When your marketing sends the wrong message to the wrong target market and when the sales department chases the wrong kind of customer, getting cash into the business becomes that much harder. The right kind of customer is one who can afford to buy the products or services being sold. The best of these customers are the ones that buy on a regular basis.
You must price every product or service to be sold at a profit. When the person responsible for setting prices does their assignment correctly, this helps cash flow. When they fail to do their job correctly, it hurts cash flow. When the wrong kind of customer seeks to buy and cannot afford to do so, those in sales often discount the purchase price. This reduces both cash and profits.
Cash comes in when the proper business model is established, ensuring prompt and regular payments from customers who have been converted to clients. Every print shop owner wants clients and should be focusing on improving the business model so that cash comes in on a regular basis.
When those responsible for delivering or providing products or services do not do so efficiently or at a high enough quality level, it costs time and money which has a negative impact on cash flow. When additional time and resources are spent redoing something because it was not done correctly the first time, it costs money.
When invoicing is done incorrectly, it impacts cash flow. When telephone calls related to outstanding invoices are not returned promptly by salespeople or accounts receivable, it negatively affects cash flow. When an organization has credit policies and procedures that are ignored, it impacts cash flow. When inventory or finished jobs sit on your floor, it ties up cash that could be used elsewhere. When your printing organization establishes barriers to prevent customers from paying in a manner they prefer, it negatively impacts cash flow.
Today, cash is king. It’s your job to explain why this is important and that every penny counts. Employees understand this at home; they need to be educated about why it is important at their place of employment.
These battles rage today. Those printers who win them will be well positioned when the economy turns. Those who don’t will likely fail. Today is the time to renew attention to making certain everything possible is being done so that your printing company will emerge victorious.
Mitch Evans is president of Mitch Evans Consulting, which is targeted to meet the consulting needs of the quick and small commercial printing industry. His areas of expertise are in strategic planning, valuation, mergers and acquisition, financial planning, new technology, and “1-2-1” coaching. Contact him at 561/351-6950 or email@example.com. This article is available as a podcast at www.quickprinting.com/podcast and from iTunes.