Happy, Profitable New Year --Morgan
ONCE FORCES to be reckoned with, countless printing companies have gone out of business by under-pricing unprofitable work. In these harsh economic times, it is more tempting than ever for print suppliers to drop prices and lowball the cost of print projects. But printers that do this inevitably end up shooting themselves in the foot. The words of Paul Nathan of the Lotus Press ring as clearly today as they did when he published “How to Make Money in the Printing Business in 1900.” He wrote: “How many printers we see spending half their time figuring how cheaply they can print this or that job, whereas their true object in business is not to see how cheaply they can do work, but how much they can get for the work they do. The way to charge is to make the price as high as a customer will pay without being driven away, and not to make it as low as can be afforded.”
Well said. I would add to that by saying the way to be able to charge more is to have an intrinsic value attached to the product or service. Of course, the greatest benefit for your customer is when you can offer advice on how to increase their return on investment.
But don’t forget how important it is to keep an eye on your balance sheet. A printer’s prices should provide for the recovery of all operational expenses (rent, taxes, equipment costs, payroll, overhead expenditures, etc.). If they don’t, it is time to rethink company strategy—and what better time to do so than at the dawn of a new year? Think about what measures you can take to ensure that your company becomes/remains profitable. Here are some guidelines that may be worth your time to revisit: