Thursday, April 1, 2010

Printing businesses are struggling and suffering; that should not be a surprise to any of us!

This post is a bit “off-topic,” but that’s only because the information that appears below came from a web-site primarily focused on the “printing” industry, as opposed to the “reprographics” industry. We in the reprographics industry do know that there are similarities between businesses in the printing industry and businesses in the reprographics industry, and, since the information I read in a couple of posts on “” were particularly thought provoking, I decided to talk about them in this post on my blog-site.

First, someone did a post about “do you know your Z score?” I’ve never before heard that term, but, after reading about what that is (what the Z score is), I found it very interesting, and I would suggest that reprographer-owners compute Z-scores for their companies, simply to see what the outcome is. This is the post that talks about the Z-score:

Do You Know Your Z Score? You Should!

By David Dodd on March 25th, 2010
It’s no secret that the past 12 to 24 months have been especially difficult for many printing companies. Dr. Joe Webb is estimating that the printing industry lost 2,844 firms in 2009. Bankruptcies, foreclosure auctions, and other closures have been well documented by WhatTheyThink as well as by other trade publications.
Having a clear picture of your company’s financial health is always important, but it becomes essential when business conditions are difficult and the margin for error is reduced. And while no single tool or formula provides a complete picture of financial health, one popular measure is known as the Z Score.

The full post and the formula used for computing a company’s Z-score can be found at this Internet address:

Secondly, there was another post – actually, an interview – on the site that talked about the shut-down (the closing) of a printing company. In this “interview” article, the owner of the company that was shut-down responds to questions, basically, about “what happened?” This particular printing company was 33 years old (the owner who shut down the company, owned it for the last 22 of those years.) Sad article, but revealing and interesting (and provokes “food for thought” for any struggling printing OR reprographics business owner.) Here’s that post:

Jim Duffy talks about closing Alonzo Printing
By Gail Nickel-Kailing on March 16th, 2010
In mid-January, Alonzo Printing closed its doors after more than a year of struggling financially. Jim Duffy, owner of Alonzo Printing for 22 years, shared his thoughts on the closure and had some advice for others in the same situation.
WTT: Alonzo Printing was not just a flagship green printing company, but seemed to be a successful web, sheetfed, and digital printing company. And yet, in January 2010, after 33 years in business, you shut the company down. How did it all unravel?

The full post and can be found at this Internet address:
and, I encourage readers to go to that post and read all of the “replies” to that post, because many of the replies are quite interesting and thought-provoking. One of the replies was this one:

By Kate Dunn on Mar 17, 2010 | Reply
No one should have been “caught off guard” by this situation. As communication channels have expanded and been adopted by the population it should have been a “no brainer” that print volumes were going to go down. Other channels offer better ways to communicate some messages and to get those messages to some people. The recession only sped up the process. The fundamental problem here is that the business model for most printers was and is based on volume. The more you run, the cheaper it gets. There simply isn’t enough volume to go around and the industry is self-correcting. If you don’t have the volume to bring your costs down but the market will only bear a certain price – you lose money on the things that you sell. It doesn’t take long to run out of cash especially when you owe on a lot of iron. Just putting in digital equipment doesn’t fix the problem especially if you are still selling digital or purls or store fronts on price. As long as the sales people in this industry can’t figure out how to solve a strategic problem and create value for their clients, this is going to continue unless of course you can find enough volume to make the old model work which is a really big if.

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Now, I’m going to make one last comment. If you are an owner of a reprographics company and your business is struggling (and is likely to continue to struggle, to the point where you might just end up on the brink…), you might want to consider the idea of approaching one or more of your competitors to discuss “merging” your businesses together. That is not only a valid business strategy when times are good, but is also a valid business strategy when times are bad. Two can live cheaper than one. However, any merger (or otherwise consolidation of two or more former competing businesses) requires that the owners swallow their egos.

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