Case Study: Case Of What Do We Do Now?, Part 2

I said last month that there is not panic and fear among printers concerning the economy. In fact, there is not as much concern as I think there should be. Why? I think many printers are ignoring the reality of a probable loss among their top accounts. Why do I say that?

You may remember that I am presenting a seminar for printers around the country entitled "Surviving the Economic Downturn" (schedule at www.cprint.org). I started last November, so the observations in this series aren't based on old perceptions, but on what I have seen since then. So, what I have I seen and heard?

I have heard a significant number of printers talking themselves out of business. One explained that there was no more printing for his type of presses and that he wasn't willing to learn or invest in any new technology to move his company off of the train tracks before the train comes.

I heard another printer describe how sales calls became ineffective for printing about 10 years ago and how direct mail stopped working five years ago. Sales are down, by the way, and he wonders what he should do.

I heard a printer who has serious family issues in the business describe everything but the family relationships as being a concern.

I heard how another printer didn't have time to create new business, yet he also described how he spends a lot of time filing every day.

I learned one printer who is doing a significant amount of sales has not found the time to computerize order entry and estimating, while that is his main bottleneck.

I learned how another printer, facing price competition for walk-up copies, diversified into more trinket business. That, in turn, has eaten up his time without producing an increase in revenue.

I found a printer who required his staff to do duplicate paperwork, thus creating an unnecessary waste of time for him as well as for others.

I heard a printer say his sales were down, but he couldn't say which specific customers were buying less than before.

I listened as one printer described how he had to work more than 60 hours a week—except during the summer when he spent a lot of his time boating.

I was very interested when every attendee at one session described lack of cash as being their major concern, yet not one would actually say so during the session. Instead, they wanted to talk about other things.

I am very interested to find almost everyone saying that more sales would cure their ills, but not finding one who is really doing anything about creating them.
I listened as another printer described how the printing business, which has provided him a bountiful life for many years, is suddenly no longer viable.

I found it is still common for most printers to describe their biggest concerns as a lack of cash, lack of sales growth, amount of time spent in the shop, and the hassle factor in running their businesses. Yet it is also common that I find these same folks resisting the changes necessary to create cash, increase sales, and to decrease shop time and the hassle factor in running their businesses.

What I am saying is that I am finding the same concerns that were there in the good times. There's not much difference. Why? Business owners want to change results without changing their behavior.

Reality Check

Let's do it by the numbers. First, this industry is not going to disappear. Our industry is one in which we buy business technology that is too expensive for the typical business and then we time share it with a geographical market. It's too expensive, too labor intensive, too complex, requires too much space, or it's too dirty and messy. The equipment is too something, which is why most businesses don't have it or the expertise to provide it.

The specific technology is secondary, not primary. The specific technology changes over time. I was born into an industry where letterpress was the predominate process. There was offset, but that was a mere annoyance. I have seen us go from machine type (Linotype, Ludlow, hand-spiked, and even wooden display type) to strike on (Varitype, Headliners, IBM composers) to photo-typesetters (Compugraphic) to digital (Macs and laser printers) to Web-based technologies where the customer actually sets the type on the Internet and delivers imposed high resolution PDF files to us. It doesn't matter; it is the same function with different technology and different levels of involvement on our part.

We've gone from letterpress to offset to analog copiers to digital presses. It's the same function, only on different equipment. I hereby predict right now that we will continue to see changes in all of this in the future as well.

Our skills have gone from mainly mechanical and intellectual (printing is the original intellectual trade, as we universally had to be able to read, where other trade people didn't necessarily have to do so) to certainly more computer-based. But what trade hasn't?

So, as long as we continue to provide a service based on technology that is too something for the typical business and time share it in a geographical area, we're not going anywhere. But yes, we will have to change, and learn, and perform. We cannot fall victim to the mentality that we want different outcomes without changing our behavior.

We also lost some technology along the way. Plain paper copiers were too expensive for most offices at one point, and we had a good business in time sharing them. There was the fax machine. A number of folks had a short-lived service before those were widely accepted by all. So what? I'm here to predict that the same thing will happen in the future with what we have now. But there will be something to take the place for those who understand they need to change in order to have a different outcome.

Change!

Second, let's dispel the myth that it used to be a lot easier making money in this business. It never has been that easy. PIA has reported for years that 75% of the printers make no money, while 25% make all the money. It was the same in the old days as it is today. We have to learn to run businesses in order to have better outcomes. Yes, that includes finance, organization, and competing on the battleground.

Now, that doesn't mean that some who came into the business with technically current equipment didn't do well, and then coasted to an ever lower income level because they didn't change. It just means that you can do well if you keep up, which is our job.

Third, there are fundamental tasks which all businesses must put into place to prosper. They must be fully aware of who they are and what they are doing, as well as keeping up to date. They must adopt an orthodox accounting system and use that information to properly guide the business. They must organize around functions, not people, even if the people are related to them. The economic gods punish waste and ineffectiveness and reward efficiencies and competitiveness.

You must understand your battleground and get out there and compete. Yes, this means selling something to someone using a number of different methods.

Above all, the owner must be the leader of the team. You can't push a string, as General Dwight David Eisenhower said. As a leader, you must pull it.

So here is the problem as I see it. There is a major shift coming in the significant accounts of almost all printing companies caused by seismic shifts in our economy. It is not a matter of if, but when. Most printers don't seem to be that concerned about these shifts. I don't believe they should be panicked, but they should be concerned because I don't see many who are ready to do what is needed when they lose a top account.

Al Ries said the business of business is to attract and retain customers. What panics me is listening to many owners who want to see a change in results, but aren't willing to change behavior to attain them. That really panics me. So what are you going to do when you lose a top account?

Tom Crouser is CEO of CPrint International, a program of Crouser & Associates, Inc., 4710 Chimney Drive, Charleston, WV 25302, 304/965-7100. You can reach him at tom@cprint.org. Join Tom as he discusses "Surviving the Economic Downturn" and what you can do about it, coming to a location near you. Go to www.cprint.org and click on the seminar icon. See the ad for Tom's services in this issue.

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