It's like printing $100 bills

Sepember 1, 2010

Johnson’s World by Steve Johnson

Taylor Corp. is known within the world of printing as the parent of trade thermographer Carlson Craft. It is better known to its neighbors and the general public through the common ownership it shares with the Minnesota Timberwolves basketball team.

Personnel changes within the family owned-and-operated business, this summer, were duly reported by the Twin Cities area press. An August 4, 2010, story in the Minneapolis StarTribune was headlined, “Taylor Corp.

CEO Quits Amid Tumult.” The article elicited this response from one of the newspaper's readers:
“I've worked in the industry for a number of years in many capacities. In the printing world, if the equipment is paid for, which I suspect most if not all of Taylor's stuff is, there's a saying: ‘It's like printing hundred dollar bills whenever a job comes in.’ Don't let these guys fool you. Printing is a good business that offers solid profit margins. The companies that make the most are the niche/specialty printers. The Internet has been around a long time, now, and I suspect printers have adjusted accordingly to make money. There's only so much print out there to be worked, so it's feast or famine on getting the accounts and retaining them. It all starts with customer service and making the client feel comfortable with printing with you. You can put out the crappiest product, but if you have a strong relationship, clients won't move. [I've] seen it way too often.”

I can't let the “printing hundred dollar bills” comment slip by.

A dose of reality

Printing firms, like everyone else in the world, have been squeezed to some degree by the sad state of the economy, and more than some because our business is being reshaped rapidly by the onslaught of new media technology. Some of us are doing reasonably well. Many are achieving less than satisfactory results. Some will be lucky to make it to the end of the year.

No matter which end of the spectrum you are on, you aren't just sitting around making huge profits. Your banker understands this. Your accountant understands this. Your suppliers understand this. Now, let's talk about some others who don't understand.

Some of your clients think you are stashing away 98 cents of every dollar they pay you. The example I find most telling is when a client or prospect approaches me for a sizable markdown on an order. I'm talking about something like 20% off the quoted price.

Do the math and you'll know that my original estimate would have to have a 25% net profit margin just for me to break even, honoring that request.

“Do you really think I put that kind of margin in your quotes?” I'll ask them. I get a blank look. They've never done the math. They really don't have a clue about typical margins in this business. I'm happy to take a moment to educate them.

Please note that I'm talking about some, not all, customers. The majority of my clients are very knowledgeable, and good clients are as concerned as you are about keeping their print vendors in good financial health.

Tell your own story

Some of your employees also might be in the dark. Have you kept them there? Have you had layoffs, shortened work hours, pay freezes? Do you presume to let these practices tell the story of the economic downturn to your workers?

They see you driving fancy cars and vacationing at resorts. Are you sending mixed messages to your staff? Have you neglected to speak to them frankly and directly about the state of the company?

Better to tell the story yourself, in your own words, than to let assumptions run rampant through the rumor mill.

The general public is clueless about our industry. They see big factories, and presume big profits. They know we're in the Digital Age but don't perceive that this has impacted print volumes. They buy printing at Office Depot yet don't realize how specialized our business has become. They hear nothing of print on the financial network shows, so our industry is largely out of sight and out of mind. Everyone knows someone who worked in a printing plant at one time or another. Like the letterwriter quoted above, they all think we're conducting “business as usual.” A little bit of knowledge is a dangerous thing.