Recessions impacting the reprographics business and industry

I've had only some exposure to recessions that impacted the reprographics industry, and that's because I missed one completely (I was out of the industry during that one, thank goodness), but I thought I'd do a post about recessions that affected the industry, including another comment about the one the industry is currently experiencing.

For you younger people in the reprographics industry, this recession - the one we are in the midst of right now - may be your first. This one is going to be an interesting ride, so to speak, from all appearances (based on everything I'm reading and hearing), this one is going to be deep. But, deep does not mean that companies can't make it through to the other side - - make it through to the next up-cycle is, I guess, how I should say it. This is your time to learn about how to deal with recessions. I remember saying to friends years ago that, when were in college, one of the courses they should have had on the curriculum was "recession" planning. In Business School, we learned Marketing and Accounting and Finance and Management and even took courses that were about Business Planning for the upside, but nothing about how to deal with recessions.

In 1973-4 (if I remembered the years correctly) our little reprographics company (we called ours a blueprinting company back then) was affected by a recession. And, in a major way. I was still very young in the industry, that was my first experience with a recession, and it was not fun, not fun at all, but we managed to make it through to the other side. Our sales, Y-O-Y, declined by approximately 25%!!! That was a real shock to me and to our company. We kind of got hit with a double-whammy; there was a recession in the U.S. economy AND there was a building moratorium in Montgomery County, MD (MC is a suburb of Washington, DC.) That building moratorium was caused by the County not wanting to further stress its water/sewer system. Unfortunately, most of our business, back then, came from A&E firms that were involved in projects in the suburbs, Montgomery County being the major one for us and where we and most of our customers were located. As I look back, what allowed us to get through that down-cycle was cost-cutting to-the-bone (my salary got reduced, as did my father-in-law's), and we were fortunate that we had only a minor amount of equipment debt. We had to layoff one employee, but we kept everyone else on the payroll; we did go to an abbreviated work-week. Lesson learned - you can make it through a recession that affects the A/E/C industry. Retain some of your profits, as that money may later be necessary to help you make it through a recession.

Another recession hit around 1981-2 (if I've got the years correct), and interest rates soared. But, we didn't feel that one much, if at all. As I recall, our sales climbed through that one. What happened is that we were aggressively growing our market share, and we also acquired a couple of companies (in our market area, Washington, DC and environs), closing redundant locations and consolidating operations. In 1982, we acquired our largest competitor; that competitor had 52 employees, we kept only 7; that competitor had 5 locations, we closed 4 of the 5 (and "sucked" the business from the other 4 locations into our own locations.) We also acquired (through a small merger transaction) an engineering photolab business, closed its location and brought the work into our existing main-plant location which already had an engineering photolab department. One other thing about the acquisition is that we had less competition, and that had a favorable impact on pricing. So, that particular recession did not hurt us at all; we grew right through that one. TG.

The next recession to hit the A/E/C industry and, of course, the reprographics industry, started around 1989 (at least it did in the eastern part of the U.S., later rolling across the country; my understanding is that the west coast felt that one after the east coast had already been experiencing it for a while), but I, personally, had no direct experience with that particular recession, for I "retired" from the business and industry in mid-1988. From what friends (who were in the reprographics business all the way through that recession) told me, that recession hit the reprographics industry very hard, for it was brought on my serious over-development. I don't know when that recession ended, could have been 1992 or a bit later. I don't know what the 'sales revenue fall-off' was like during that recession, although I do recall hearing some friends say that it was "ugly."

There was a recession in 2001, but the company I was with did not feel that one much. Our sales slowed a bit in the Orlando, FL market (development tied to tourism - theme parks, hotels, retail related to that - tailed off for a while), but our sales were quite robust in our Tampa and Jacksonville, FL markets. In 2001, we were still a rather small company, so we had lots of upside growth, even during a minor recession, from aggressively securing market share gains. Our FM (On-Site) business segment was growing very well, even through that recession period. On an overall basis, I don't recall that our sales dropped during that recession.

For the benefit of "younger" people in the industry, I would appreciate it if some of you "older" people, who've had experience with recessions that impacted the reprographics industry, would jot me an e-mail with your experience; this so that I can post your recollections on my blog-site.

Basically, if you have a manageable debt level before a recession hits, if you know how to, and do, right-size your business, and if you've been paying attention to costs all along, you can manage to make it through the recession the industry is now experiencing, provided that the downturn is not ridiculously severe. I've heard some friends say that they can get through this recession if the sales decline is 20-30%. If the sales decline is a lot more than that, well, I don't even want to think about, or comment on, that.