I'm worried! I just realized that if and when (doubtful) the Treasury Department or the Commerce Department calls me, asking for advice on solving the myriad of financial challenges facing this country, I am going to decline the offer.
As much as I would like to help, my calculator from Office Depot simply doesn't go up that high. You know, it's bad enough when you're trying to stay on top of the printing industry in terms of profits, pricing strategy, and sales, but trying to resolve the best way to handle $700 billion dollar bailout packages and $50 billion dollar loans for the "big three" automakers is too much for my calculator to handle.
Seriously, how many of you can quickly write out $700 billion without starting from the right and counting zeros as you move your way over to the left. Let's see now, "thousands, hundreds of thousands, millions, billions!" Well, my calculator can only handle 10 digits. After that, I just get an "E" for error. Ten digits can only display a measly $1 billion, which to paraphrase the late Sen. Everett Dirksen (R-IL) is hardly worth counting, so I guess that means I cannot play with the big boys.
Can you imagine showing up for your first day at the Treasury Department, where you've been hired to work on budget projections, only to discover that your rinky-dink calculator can't even handle all the zeros the budget calculations will throw at you? How embarrassing! Do you suppose that government employees at Treasury and Commerce automatically get special calculators with extra large display windows for calculating the national debt and budget?
Well, let's face it. By now, most of us have done all we can on behalf of the economy at the present time. We voted this past November and now the country's economic future is in the hands of President elect Barack Obama and the new Congress. Like most Americans, I wish them the best of luck and I say a small prayer as well that they will be guided in the best direction.
We Don't Need Luck
Okay, assuming that neither the Treasury nor the Commerce Departments will be asking for my help, I am going to return to my roots and offer a couple of suggestions for coping with some of the problems and challenges facing our industry.
First and foremost, I don't know of a single printer with blood in his veins who doesn't have at least some concern about the outlook for his or her future sales, profits, and general financial stability, especially in light of the current recession.
Assuming you are one of those concerned owners, let me offer you the best piece of free advice I can and that is that you should visit this website today and download and complete NAQP's 2009 Industry Pricing Survey: www.surveyadvantage.com/naqp09pricing. All I can promise is that you will be glad you did.
Conducted on a biennial basis, the Industry Pricing Survey is by far the single most popular study conducted in the printing industry. Typically attracting more than 350 participants, and with hundreds of studies sold afterwards, this study covers a broad range of products and services in our industry. Year after year, printers from around the country praise this study as an ideal tool for fine-tuning computerized systems as well as letting a printer know where he or she stands in comparison to their peers.
Below are just a few of the pricing topics covered in this survey:
- DTP hourly typesetting and design rates
- Preflight fees
- Scanning charges
- Charges for CTP plates
- Regular and aggressive digital color pricing
- Color copier ratings
- Regular and aggressive black-and-white pricing
- Offset pricing for one- and two-color products
- Basic bindery charges (folding, padding, cutting)
- Standard paper markup rates
- Standard markups for brokered work
Best of all, by completing this survey, you will receive a copy of the entire study absolutely free. Remember, what you will receive is not an abbreviated or condensed version, but the complete study, which typically averages 75+ pages.
How to Participate in Pricing Survey
Although approximately 9,000 surveys are mailed to a random selection of printers, you don't have to be on that list to participate and to receive your free copy of the final survey. Simply visit the site listed above and follow the simple instructions. You will be asked to download a PDF of the six-page survey.
Once you've completed the survey, you have two options. You can return the completed survey by mail by Feb. 16, 2009 or you can submit your survey data electronically at the website.
If you were one of my consulting clients (be grateful you aren't), I would be telling you that participating in this survey isn't an option, it is mandatory. In my mind, participating in industry surveys, especially those dealing with pricing and profitability, is simply one of the many small, yet critical steps required for running a profitable business.
How long does it take to complete one of these studies? I'll be honest with you. If you're computerized, this survey can be completed in 1-1.5 hours or less. If you're not computerized, it can easily take twice as long, but it is worth the effort in either case.
Are you too busy to complete the survey yourself? No problem. This is the kind of survey that can be easily delegated to a key employee with one of my typical, diplomatic warnings such as, "Cathy, please complete this survey by the deadline or you will be placed in the stocks outside the building where you will remain for seven days! Of course, I know its snowing!"
To Go or Not To Go?
I find myself writing this column about two weeks earlier than normal. Why? Because Mary and I leave on Nov. 21 for what has become almost an annual event, our Thanksgiving Holiday cruise.
In many respects, it's an ideal time for taking a cruise. The shop is closed, as it is every year, for Thursday and Friday of Thanksgiving week, thus allowing Mary and me to take a 10-day cruise and yet only have to miss three days of actual work. That's an ideal situation in any small company, especially in Mary's situation where her absence constitutes the loss of 20% of the staff.
Nonetheless, I will be the first to admit that the subject of canceling the cruise came up numerous times in the past two months, especially as news about the nation's current financial crisis seemed to worsen. There seems to be no let up in the bad news, so we asked ourselves all the appropriate questions. Would canceling the cruise be a smart move for us, personally? Would it help the business if we stayed closer to home? Could the staff make the critical decisions and price jobs appropriately in our absence? Is it possible we would return from the vacation with a renewed sense of dedication and energy?
In the end, we decided to go. We've owned printing businesses, large and small, dating back to 1974. We've never operated a business that didn't rank in the top 25% of the industry. Call it luck, call it good management, call it a combination of things, but we know enough that we can state with certainty that businesses do not collapse as a result of decisions made and not made during a short period of time. We've learned over the years that the world does not and will not collapse overnight and there is very little that can be done over a three to five day period of time that will reverse the world scene.
Five Tips for Survival
As I noted previously, Mary and I have been in this industry since 1970. We've owned our own business since 1974, first in the suburbs of Washington, D.C., and for the last 23 years down here in Florida.
Having survived other recessions, coped with gasoline rationing, and interest rates that rose as high at 18% in 1981, I've learned a few lessons that I will pass on for what they are worth. A couple may sound cruel, but so be it.
Run your business like a business—do not allow emotions to intervene where sound decisions have to be me made. There is an abundance of financial data in our industry, almost all of which can keep you out of trouble, but only if you use it. Some printers ignore bad news and bad ratios, or rationalize that the ratios either don't apply to them or aren't that important. That's a very big mistake.
Your sales per employee (SPE) is a significant ratio. If your total annual sales, divided by the number of full time and part time equivalent employees, including yourself and your partners, totals less than $100,000, your business is a disaster waiting to happen. While no SPE ratio guarantees total immunity from economic turmoil, an SPE of $140,000 should provide you with at least some healthy breathing room. Anything less than $140,000, at least in my book, means its time to go back to suggestion #1.
Firing Rotten Apples: Virtually every company of 10 or more employees has at least one "bad" or "rotten" apple. Even in companies with five employees, there is usually at least one questionable employee. Rest assured, your employees already know who this individual is, and you know who that person is as well. You've tolerated this person, you've put up with the bad habits, you've made excuses for this individual, and you've handed out paychecks to this person for months if not years. If there was ever a time to fire a bad apple or a troubled employee, it is now. These are not the times to be generous or tolerant towards those who deserve neither.
Examine Pricing Carefully: These are not the times to be tentative regarding your pricing. It is extremely important to know the reality of your pricing practices as they compare to both your competitors and your profit objectives. It is critical that companies be keenly aware of what competitors are charging for similar products and services. It is also important that you take every step possible to make sure you are producing products as efficiently as possible. Do not be afraid of raising prices in times of economic turmoil, and be confident in the value proposition that you present to customers and prospects.
Know Characteristics of Profit Leaders: Being a smart business owner means knowing your industry better than your competitors. Part of that knowledge includes not only knowing what the key operating ratios are for profit leaders in our industry, but in establishing written goals and objectives for achieving this status as well.
Happy New Year to all my friends and foes. We can certainly look forward to some exciting times this year. Just keep smiling and maintain your sense of humor! For some recent rants and raves, visit my blog at: http://www.quickconsultant.com/blog/index.html.
Senior contributing columnist John Stewart is president of Q.P. Consulting, Inc. He is the co-author of the industry best-seller titled, "Print Shop For Sale." You can visit his website at www.quickconsultant.com or a special website dedicated to his new book at www.printshopsforsale.net. You can also email him at email@example.com, write to him at 2110 S. Dairy Road, West Melbourne, FL 32904, or call him at 321/727-2444.