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‘Printers Continue to Dig Their Own Graves’ —Michelson

January 2010
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Vista's president already knew that the real profits lie in value-added services built around its press work. "By providing true turnkey services, we can and do earn a nice profit, and our diverse, yet synergistic, offerings provide stability for our business. From printing and mailing, to variable data campaigns, to packaging and point-of-sale, our goal is to cross-sell each of our accounts as many of our services as we can. We are considered problem solvers in their eyes, where printing is only part of the process. As a result, clients are willing to pay a bit more for our expertise," according to Rolfsen.

"I truly hope that many of the printers will wake up before they put themselves out of business. The hard reality is that the world has forever changed, and gone are the golden days of print," he concluded. "We still have 40 percent to 50 percent more capacity in the market than is needed, so perhaps the process of thinning the ranks is being hastened by those who would rather watch cylinders turn than earn a profit."

Sage business advice that fellow printers, both large and small, can take to the bank.


 
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COMMENTS

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Most Recent Comments:
Tim Rolfsen - Posted on February 26, 2010
A key point that for space purposes was not included in my comments is that by selling at irrationally low prices the business owner reduces the future value of his/her enterprise. I like many other business owners plan on selling my business some day, but to receive a good price I must show the ability to generate profit and cash, the two key measuring sticks in valuing a business. Top line sales means little to a buyer that uses an EBITDA or cash flow model to value a business. You must show that your accounts are capable of producing enough cash to pay for the acquisition, let alone create additional cash flow.
Andrew Griffin - Posted on January 29, 2010
Tim, You are right on in your comments and concerns here and for the rest of the pack - it is best to listen up... "Cylinders turning on no profit" breeds only one thing for you and I, Tim - Less competition, thus more work, in the future. Hang in there and keep doing what you are doing. Yes, it is truly frustrating now, as business owners lose all sense of business finance out of pure desperation, but hold steady the ship and you will be around to perhaps see a better day... Thanks for the article and for taking a stand.
Click here to view archived comments...
Archived Comments:
Tim Rolfsen - Posted on February 26, 2010
A key point that for space purposes was not included in my comments is that by selling at irrationally low prices the business owner reduces the future value of his/her enterprise. I like many other business owners plan on selling my business some day, but to receive a good price I must show the ability to generate profit and cash, the two key measuring sticks in valuing a business. Top line sales means little to a buyer that uses an EBITDA or cash flow model to value a business. You must show that your accounts are capable of producing enough cash to pay for the acquisition, let alone create additional cash flow.
Andrew Griffin - Posted on January 29, 2010
Tim, You are right on in your comments and concerns here and for the rest of the pack - it is best to listen up... "Cylinders turning on no profit" breeds only one thing for you and I, Tim - Less competition, thus more work, in the future. Hang in there and keep doing what you are doing. Yes, it is truly frustrating now, as business owners lose all sense of business finance out of pure desperation, but hold steady the ship and you will be around to perhaps see a better day... Thanks for the article and for taking a stand.