Did you experience a little bit of déjà vu when you looked at the title of this month’s column? If so, it’s not déjà vu, but rather a really good memory, because I did write an article for Quick Printing back in 1995 with the same title (QP, June 1995). The subject seemed timely back then and I think it’s timely again, with one added wrinkle: The 1995 column was about quitting or joining a franchise, while the 2009 version is about joining a franchise or quitting the business.
Gray and Aging
Much has been written about the graying of the Baby Boom generation. I know I see it when I look in my own mirror. In fact, since that 1995 column, my hair’s gone from black-flecked-with-gray to gray-flecked-with-white. It’s a little scary!
Something else I remember from 1995 is that we generally assumed something like 39,000 quick/small commercial printers in the U.S. Midway through 2009 that “educated assumption” is closer to 29,000.
Here’s one more memory. When I first started hanging around with quick/small commercial printers—back in the early 1990’s, when I was in my early 40’s—I was usually one of the younger people in the room. Anyone who was five or six years older than me then is somewhere near retirement age now, but a lot have not retired because they can’t afford to. The business they counted on as their principal retirement asset isn’t worth anywhere near what they hoped it would be worth, and no one’s breaking down the doors to buy their business at any price.
Okay, that takes us to why we lost those 10,000 printers and where they went. In some cases, the business simply failed and closed its doors—or had them closed by creditors. In other cases, the business was acquired by another printing company, and in some of those cases, the selling owner walked away with a payment that represented the full value of his/her business. In many other cases, though, the owner walked away with very little, or maybe even didn’t walk away at all. I don’t have data to prove this, but I think a survey of the industry would find that there are at least 1,000 former owners now working as salespeople for some other printing company; some with the payoff for their own business contingent on maintaining the book of business they sold, and others who are simply trying to use their industry experience to make a living because they’re too young or can’t afford to retire.
By the way, in my experience, most of those former owners are not very successful as employee/salespeople. And that probably reflects some of the “why” they lost their businesses. If they’d been willing and competent salespeople as owners, their business may well have survived and even prospered.
Regardless of your age, I think it’s important that you’re thinking about an exit strategy right now. That statement can be supported by a conversation I had recently with a 68 year old printer. “I had a pretty good offer about 10 years ago,” he told me, “but I wasn’t ready to quit then, and it never occurred to me that the value of my business would ever go down. If I’d sold it then, I couldn’t have retired on the proceeds, but I didn’t want to retire anyway. Looking back, though, I should have gotten out when I had the chance and done something else till I was ready to retire.”
Another printer told me recently that he’s hoping to sell and retire in four to five years. My advice was to start the process now. “I can’t do that,” he said. “I don’t want the word to get out that I’m thinking of selling.”
My response had two parts. First, that you can’t sell something that no one knows is for sale, and second, that the downside of “thinking about selling” is probably mostly imagined. Think about this, would your current customers leave you if they heard that you were thinking about selling your business? How would that benefit them? The more likely scenario is that they’d continue to buy from whoever bought your business unless the new owner did something that damaged the relationship.