Everyone wants to be successful. Least everyone I know does. Can one be “successful” in the printing business these days? Aren’t things going down the tubes? Yes and no. What you really need to know is that there’s still plenty of success to be had as witnessed by my friends at Rapid Printing in Big Stone Gap, VA. No, that’s not their real name or location because I want you to know some of the facts of what Mark and Linda have accomplished. So, here’s what one couple has accomplished in this changing industry.
I first met Mark and Linda in Chicago at a seminar I presented on Justifying Equipment Purchases in 1998. They had just purchased one of the larger-format Heidelberg presses and, as I remember it, Mark felt the session would help them be successful. During the session we focused a lot on the financial part and whether “investing” in equipment was really investing or gambling. In an investment, one can only lose the total investment. In a gamble, one can lose the investment as well as the business, the house, the dog and everything else. They were clearly gambling.
The business was started by Linda’s dad in 1977. He had been an early quick printer who started with almost nothing and took a few gambles himself. Linda and Mark met at a church camp sometime in the 1980s and both ended up graduating from North Carolina State University. After a few years in North Carolina they moved to Linda’s hometown of in Virginia, where she continued her career as a phlebotomist and he worked for the Scott County Phone Co-op. In Linda’s spare time, she began doing accounting work for her father in the print shop.
Yes, dad did gamble on equipment. By 1997, after some success and then adversity because of some bad equipment investments, the father was ready to retire. Mark and Linda took over the $120K-a-year business devoting their full time to it. In order to grow, they too gambled on equipment which brought them to my seminar.
What they learned that day was that equipment purchases was a financial decision, and they further grasped the concept that they really weren’t in very good shape. They had something like a 0.7 current ratio and 3 or 4 days cash on hand.
I began working with them in 1998 and they began working on the business side of their business with dodged determination.
So can one be successful in the printing business today? This past year, Mark and Linda had impressive results. Sales have reached $1.3 million, an 11 percent increase over the previous year; their current ratio stood at 3.2 and they had 68 days cash on hand and had earnings of $320,000 or 25 percent of sales.
2013 wasn't a fluke
In the 14 years that I have known them, nine of those years they have maintained a better than 2:1 current ratio and 20 percent income along with maintaining at least a 15 percent three-year increase in sales. That’s nine of the 14 years (60 percent) that they have been “successful” with a financial performance that puts them in the top 5 percent of all printing companies, according to my calculations.
How in the world did they do that? Linda summarized it best when she said, “I focus on the financial fundamentals of maintaining our current ratio and income, and Mark focuses on that sales line.” My observations also include that they make rational equipment purchase decisions, are willing to take risks moving into new services for their customers, and keep up with technological changes. They also have worked hard. That’s a combination which spells success.
They worked hard while they also worked smart. They not only used their passion for graphics but also the financial fundamentals of cash-flow budgeting. Earning $300K+ in today’s printing business while maintaining strength is testament to their success. And yes, those are real numbers of a real company. And yes, it can still be done. And yes, it has been a real honor to work with them on their trail.
Next month, I begin a series of articles based on getting out of the business. How does one sell or transition, and what are the myths and dynamics of doing so? If you’re within 10 years of retirement, then you may be interested in joining my study group of companies. I invite you to do so. Send me an email at firstname.lastname@example.org and I’ll see that you are put on our list to receive special information about “Cashing In before You Check Out.”
Reach Tom at (304) 541-3714 or message email@example.com and yes, he is available for consulting. Connect on Facebook and LinkedIn and follow his business tweets on Twitter @tomcrouser. Tom is Senior Contributing Editor of this magazine, chairman of CPrint International and principal of Crouser & Associates, Inc., 235 Dutch Road, Charleston, WV 25302, www.crouser.com, www.cprint.com or call (304) 965-7100.