This past week has reminded me why too much government and large bureaucracies can be bad. The Texas Comptroller has recently taken a position on the state’s relatively new Franchise Tax law (it’s really a gross margin tax) which could be extremely detrimental to our industry. For the sake of brevity, I’ll spare you the details, but the net affect could be a 1% tax on postage – paid by the mail service provider.
And if that wasn’t bad enough, it was brought to my attention that the folks at FSC are going to require that anyone adopting the FSC Chain of Custody standard, as of 2012, must declare that the firm is not directly or indirectly in violation of the ILO Core Conventions (among other things). In a nutshell, companies will have to state their support of collective bargaining. Hmmmm. Does anyone live in the real world any more? Maybe it’s time to call it a week and go home. Say good night Gracie.
As of this week the NFL lockout is over and everyone is getting back to business as usual. For the true NFL fans, they can start breathing again. For us casual fans, it’s nice that we’ll have football this fall. And there are dozens of printers, mailers, designers, agencies who have collectively said, Thank God it’s over. We might just have a good year!
To quote Thomas Paine, “These are the times that try men’s souls.” Do you notice when the industry is struggling that there are certain individuals who are constantly finding ways to spread rumors? Rather than focusing on being more efficient; being creative; finding new markets and customers; it’s all about beating up one’s competitor.
The past 12 months have been pretty ugly regarding rumors. Several firms have been reported to have closed their doors — every month since last November. While others have been castigated by the rumor mongers for making business decisions that may not make sense to the outsider – but might be a good decision to the insiders. Regardless, it’s time to pay attention to your basket and not worry about everyone else’s. Let’s remember another famous adage which mama probably told you — “If you can’t say something nice about someone, don’t say anything.”
Everyone in the print industry is constantly hearing about the need to re-invent oneself. While there’s a lot of truth to that concept, it’s more important for company CEOs and their teams to understand the environment and then develop the winning strategy. There are a lot of thought leaders out there on this topic, but I just finished reading a text which should be on every print CEO’s “must read” list.
The book, which is a very quick and straight-forward read, is titled “Business Transformation, A New Path to Profit for the Printing Industry.” The author is John Foley, Jr., and unless you’ve been sleeping under a rock for the past six months, you’ll recognize John as one of the industry’s voices on social media.
I thought John’s book was chockfull of information and more importantly contains the steps one needs to take to either re-invent their company, or to make modifications to be properly positioned in the visual communications industry (we used to call it print.).
In today’s business climate of uncertainty, many owners are contemplating an exit strategy. One of the key elements is focusing on what the numbers are telling you rather than your gut. “Quick Printing” contributing writer and business consultant John Stewart wrote an excellent article in the July 2011 edition (Page 24). It’s worth reading for anyone who is contemplating selling/merging/tucking-in their business.
Bluntly, it’s about understanding that a buyer of a business is looking for ROI – and that’s based purely on the numbers. If a business has declining sales and is losing money, it basically has no real value. Oh yes, there might be some synergies and “goodwill,” but the buyer is not interested in past performance, but future returns. Regardless of how much sweat and tears has been put into the business, selling is all about the numbers — as John reminds us.
This past week was a real eye-opener for many printers in Texas as one of the state’s best-known firms, and one of a handful which had been owned by the same family for over 100 years, shuttered their doors. Padgett Printing was a top echelon company for the vast majority of it corporate life. It was a company which utilized the latest technologies and was known for being a good corporate citizen. The family run business had a solid management team. So, what happened?
As is probably true of many firms in this recent industry depression (let’s not mince words), it was a victim of its own success. For the past 20 years, like many other firms in Dallas/Fort Worth, it grew at rates far exceeding standard industry growth. Investments were made in equipment. Personnel. Infrastructure. It was a good time to be in the print industry – and a profitable one. But, who could foresee the train wreck that was 2008 and has continued through 2011? Thus, like many firms in our industry, what seemed to have been built on solid ground, collapsed with the tremors created by a major economic recession and major shifts in print purchasing.
We can argue all day about what should have been done or what could have been done – but we really don’t have access to that insider information. And that’s moot. But there are lessons to be learned.
The days of mass consumption of print growing in excess of GDP are gone. In the past decades, in order to grow and be a “successful” printer, one had to add more and larger presses. You went from a duplicator to a 20″ press to a 28″ press to a 40″ press to ½ webs or more recently, long perfectors. Along with that growth came more debt – and more iron to feed. In the past, one could ride out the economic cycle — but not this one.
The sands of print are shifting and if one is not looking carefully at the road being traveled and not willing to think strategically, the road could rapidly disappear. The “build it and they will come” philosophy which worked for many years is a dead end. Today’s firm needs to understand the market dynamics of visual communications (not just print) and realize that success is still possible, but don’t plan on taking the same road as your predecessors.
On a final note since we’re speaking about different roads. Check this out.