When a Good Business Stops Being a Growing Business

My hat’s off to every business owner, entrepreneur, and CEO who is operating a printing company today. While other industries will claim the hardships and the changes that they have had to overcome, it seems like our industry continues to catch all the headwinds. From technological changes like going from film to digital files to staffing concerns as many skilled operators are (or have) aged out with few truly qualified replacement hires. Think of how the sales efforts have changed for most companies as well and how about the industry consolidation? For those that know me, I’m a “glass is half full” guy. So, with change, I see opportunities. Now let’s tackle the next headwind – when a good company stops being a growing company.

I see plants that are somewhat busy but with a combination of flat revenue, rising operating costs, skinny margins, and limited new business growth. In most cases the company hasn’t done anything wrong, it’s just that what got them here, won’t get them there. The playbook needs a refresh. Where to start? Let’s talk about four areas that operators can check out to assess their situation and look to the future.

Four Critical Business Checkpoints

Let’s begin with a hard look at the revenue quality. Simply maintaining is not a bad thing if that was your goal. However, with the investments that most companies have made, you should be looking to grow into your potential.

• How much of your revenue is from existing clients as opposed to new logos?
• How many of your top 10-15 client relationships are less the 3-5 years old?
• Are your best (best is a relative term) clients growing, declining, and is their business mix shifting?
• How do you win work – was it your competitive advantage, price concessions, or there was a mistake in the estimate?

Take a deep dive into how you’ve positioned yourself in the marketplace – my take is that most printing companies underestimate the value they bring to their clients. Is there additional work you can capture from your existing accounts, i.e. do you want fries with that? And have you considered expanding into adjacent markets – whether that’s a regional expansion or a product-based expansion?

Profits can be elusive, ask if you are generating the returns and cash flow you deserve based on the investment in people and technology that you’ve made. A few areas to look at include:

• Do you know which clients, services, and products are profitable and worthwhile?
• Are you pricing work in a manner that keeps up with rising costs?
• Is the business equipped to handle the work you have today, versus the work mix from yesterday? That includes equipment, tech, staffing, and structure.

Higher prices are everywhere these days and costs continue to rise. When was the last time you updated your rates and passed on a price increase? Your sales team will tell you that the clients will be upset if you do, while you continue to win every order that they throw at you.

Check to make sure your business model is relevant for a time that is, not once was. Don’t be afraid to challenge whether your existing equipment, processes, and capabilities are still relevant. This doesn’t mean you throw everything out and start over – rather, make sure that what you have and do is aligned with clients you have and want to have. Some questions to consider:

• Are you investing to replace aged equipment or to support what markets you are chasing?
• Are there internal impediments that act as restraints to revenue and profitability growth?
• As the leader, your business needs you to be able to see around corners and anticipate the next market moves – if that is a skill you possess, great. If not, probably should work on it.

The word automation seems to be batted around like ice cream cones after a t-ball baseball game. What that means to each business though has its own unique application. It may be time to re-evaluate your workflow – not only from file ingestion to finished product, but include all the non-value-added activities, or touches, in the carpeted areas of your business.

While the popular trend is to diversify products and services, I see many growth companies doing the opposite – moving away from being all things to all people and specializing in a niche and then executing like heck. Both can work; you pick based on the position you’re starting from and your appetite.

Who’s in charge and where are they leading us? That’s what most of your associates may be asking themselves. I believe that leadership and strategic direction (mixed in with a bit of good fortune), have never been more important. Ask whether your leadership team is looking in the rearview mirror or looking ahead through the windshield. Keep your head up and ask your team these questions:

• Do we have a clear strategy, whether that’s a one, three, five year, or longer plan? And have we articulated it to the team – have you shared the vision, the playbook?
• Is your current leadership team capable of taking you to the next level – a difficult and uncomfortable question to ask but ask it anyways.
• Are your actions aligned with your strategy – such as capex, hiring, and succession planning?

This may be a good time to dust off that strategic plan that’s under your blotter. Bring it to light, challenge it, edit as needed, and communicate it to your team. Be accountable and hold others accountable for their role in executing the plan.

This isn’t about being an alarmist, not at all. This is about taking care of your business and not letting it fade into a non-relevant business. Try out some of these questions, first to yourself, then to your senior team. When a good business stops being a growing business, something’s up. Dive into it and together with your team, work to make your business the best version of itself that it could be.

Mike Philie helps owners and CEOs in the Graphic communications industry validate what’s working, identify what needs to change, and create a practical path forward.

PhilieGroup | mphilie@philiegroup.com | Linkedin

The preceding content was provided by a contributor unaffiliated with Printing Impressions. The views expressed within may not directly reflect the thoughts or opinions of the staff of Printing Impressions. Artificial Intelligence may have been used in part to create or edit this content.