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Investing in Your Business: Is Now The Time?

Posted Thursday, June 16, 2016 by Gerry MIchael, Falco Sult LLC.

Changing production technology is a fact of life in today’s economy. For Graphic Arts firms that are just returning to financial stability after the Great Recession, these challenges are common. New capabilities and new technology to existing capabilities continue to present themselves. Those presenting these options promise greatly improved financial results and success for those firms that invest in these options. But all too often, the actual results may not be what had been hoped for.

Capital Budgeting offers a framework for evaluating these situations. Although it can be complicated in some cases, it ultimately comes down to a simple question:Is now the right time for my company to make a significant investment to acquire new technology, and if so, what return can we realistically expect?

While the question is simple, the answer is not. Too often decisions such as this use the wrong data and are based on unrealistic assumptions. Companies tend to place too much emphasis on potential benefits or technological improvements rather than the results the specific company should expect. This is misleading, which leads to bad decisions and bad results in most cases.

The correct analysis should use the actual financial benefits that a company expects to realize. All such investments must ultimately be paid for by improved cash flows to the business, which means that either your customers must decide to pay you for the investments by spending more on products and services, or you must be able to maintain revenues while reducing total operating costs.

So, what matters is what changes, and this is called “Marginal Analysis:’

There may be many other elements in the analysis, but in its most basic form, the only real question that matters is this:

Will the net cash flow produced by this new invest­ment, over its expected useful life, be more than the total cost of the investment, after considering the time value of the benefits and costs?

Key concepts here include the following:• What is the total initial cost or investment? This is not as easy as it appears. For instance, will the new technology require changes in other parts of the business, and what will those cost? Will your existing workflow support this change? Will staff training,or even possible staff replacements, be required? How will the investment in this technology increase investment in inven­tory? Will you need to inventory supplies or other consumables to support this invest­ment? These are all costs that need to be included.

• Is our sales/marketing staff knowledgeable enough to bring it to market? Will that involve additional costs or staffing?

• What does “net cash flow” mean here? Is it total cash flow, or just the difference that will result from this investment? Does it include growth in demand that we have no plans to create, beyond the investment itself? How will that growth be generated? Is this a “if we build it, they will come” strategy?

• What will the marginal costs of new sales be, if that is the goal for the investment? This cost is not the same as what you use for estimating or costing .. .in fact, it’s something you probably don’t have anywhere in your current information system. How will you estimate this?

• Are there ongoing indirect costs that will change as a result of this investment?

• What about the effects of how we finance this investment? Do they matter?

• What are the tax effects of this investment?

• How do we evaluate the benefits we expect to receive in the future with costs we incur today? Is there a way to estimate the present value of all cash flows, regardless of when they occur?

• Finally, how should we factor in risk when evaluating this investment? What risks will be involved?

Very few decisions are more critical to the success of your business than a decision about capital expenditures. Be sure when you face such a choice, that you use “best practices” when evaluating both the costs and the benefits.

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Waste of Time & Money

Posted Wednesday, June 15, 2016 by Teri LeVine.

save moneyI confess I do look for shortcuts, but choose them wisely! Like one-pan dinners or leaving my tennis shoes tied. I would never recommend a client work with a faceless internet provider of SEO LOCAL LISTINGS/CITATIONS that locks them into a 6 month contract.

A lawyer friend (now client) was using SwissSong (made that name up so I don’t get sued) and when she called them to get a better sense of what she was getting for her $600/month, SwissSong: 1) did not and could not provide ANY reports, 2) answers were vague and from very inexperienced “agents”, 3) she saw zero results from her investment – my client is fairly savvy and knows how to check things out, and, 4) the worst of it - - I really don’t think SwissSong ever registered her business in any major directory. I checked and could not find it anywhere.

SwissSong refused to cancel the 6 month contract for $600/mo. My friend ended up cancelling the service after six calls and finally reaching the CEO. He said that once you cancel, SwissSong CANCELS all directory listings (supposedly 200). That is ridiculous! It would take so much work to do that and might not even be possible. I think they never did the directory listings.

Adding more pain to her experience, we learned that HER actual Google business listing was locked to SwissSong. It took us 4 weeks to get control of it (Google was very helpful) and we placed ownership with her.

The appeal of SwissSong-like online SEO services is that they make the client’s life so easy. They are the short-cut! You just need to pay the invoice and never worry about the program. NOT! - - like all marketing tactics, it should be an ongoing collaborative process to get REAL RESULTS. No one knows your business better than you and results come from you and your marketing partner working closely together.

Before contracting with any online service, do your due diligence. Ask for references. Google them for reviews. I found truly frightening reviews of SwissSong on mythreecents.com.

A little more about Local Listings/Citations:

  • Organic SEO (search engine optimization) refers to the methods used to obtain a high placement (or ranking) on a search engine results page in unpaid, algorithm-driven results on a given search engine. (different from SEM, search engine marketing, which is pay-per-click, like Google Adwords)
  • Value is that the results are lasting, but it is a much slower build. It takes time for the search engines’ web crawlers to find each listing and credit it to your website.
  • When doing a Local Listing program through an agency ask to review the final master Citation, which includes all your contact information, business description, keywords, photos, and more.
  • It takes about 5 to 6 months to get a business listed in all the major directories. Only 20 or so can be done each month. If too many are done in a month, search engines don’t like it and will be suspicious of the validity/value of the business.
  • If the service you are using offers a “custom website” be very sure what that means. It might be a 3-5 page website that looks very much straight out of the can - - their standard template, void of the personality of your business. Additional pages and customization will come at a surprisingly high price. VERY IMPORTANT – if you discontinue the service, YOU’VE LOST YOUR WEBSITE. I’ve heard horror stories of clients that were told “yes, you own your website” but later they learned “yes, you own the website, but I own the code, so you cannot take it to any other webmaster/hosting.” You’ll be shackled to them indefinitely. Your website is a critical business asset and YOU should have complete ownership and control.

When it comes to investing marketing dollars in your business, work with a partner that you can collaborate with. Someone you know is experienced, professional and is there to ensure your money is invested wisely.

Teri LeVine - Owner
MC2 Marketing - We Build Marketing Machines!
Branding, Websites, SEO/SEM, Coaching +

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With Great Printing Power, Comes Great Responsibility to Show How Your PrintROCKS!

Posted Thursday, June 2, 2016 by Jules VanSant.

Ahhh it’s almost summertime. It’s that time of year again to pull out the iced tea, put your feet up and take a look at how your year is progressing by reviewing the amazing projects you’ve been working on! But what then? How are you going to show your printing prowess to those next customers? The forces of change and uncertainty are everywhere… what can you do?!?!

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KABAM!!!! That’s right… it’s PRINTROCKS season!

As this year’s superhero theme states: With great printing power, comes great responsibility. No matter how small, how large, what substrate or application… you MUST remember to continue promoting your talents, capabilities, staff superpowers and ability to leap tall buildings in a single bound (okay, maybe you can’t do that). Get the recognition deserved by entering PrintROCKS… make this be your breakout year!

We’re here to help you at any level - we’ll even throw our capes on and help get your entries prepped! Check out PrintROCKS.org for the AMAZING and expanded list of categories, use our easy peesy online form to enter and BOOM!

We’re just here to help ma’am.

It’s year #9 – make it YOUR Breakout year!

Truth, Justice, and AMAZING print.

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Passing of NW Industry Icon, Ralph VanDyke

Posted Tuesday, May 17, 2016 by Jules VanSant.

MR. RALPH VAN DYKE

(From his Business Partner Jack Roberts, AIPEX, INC. in Seattle, WA)

The family has asked me to help them in preparing the paid obituary notices, in addition to notifying many of Mr. Van Dyke’s friends and colleagues who knew him. I have lost track of those contacts and could sure use some help. I am also keenly aware of Ralph’s position inthe industry, since he was the person who hired me from southern California in l965 to direct his new VANCOLOR NEWSPAPER DIVISION, which supplied full color reproduction material to supermarkets for their newspaper advertising.

He founded Seattle’s first color separation company, VAN DYKE, INC., in l952 and mentored numerous individuals who went on to start their own production companies.

He collaborated with Dr. John Sherman, in the Geography Department at the University of Washington to develop and produce maps for the blind…..a ten-year project that brought him international acclaim. His maps have assisted vision impaired students on college campuses around the world.

His company installed the first Pako automatic film processor in the Northwest U.S. and he obtained a contract with Washington State that continued for fourteen years, producing all of the state’s color separations. Through research & development his company produced aphoto polymer plate that resulted in press runs of almost six million impressions.

In later years. and just before retirement, he co-founded AIPEX, INC., a printing brokerage firm that specialized in high-quality, low-cost offshore printing.

Ralph was born on January 26, 1925 to Laurence and Edith Van Dyke, Greensburg Westmoreland City, Pennsylvania and passed away on April 5, 2016 at his home in Arlington, Washington, from natural causes. Ralph was a World War 2 veteran, serving honorably on the USSNEW JERSEY BB-62 as a gunner.

He will be laid to rest on Saturday, May 28 at 2:00 p.m. at the TahomaNational Cemetery, 18600 S.E.240th. St., Kent, Washington 98042. The United Stated Navy will perform full military honors.

Obituary will be posted online at www.legacy.com/seattletimes

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4 Simple Ways to Increase 401k Participant Savings

Posted Monday, February 1, 2016 by Joseph P. Trybula, CFP®, AIF® .

As a member of PPI, you can have your 401k plan evaluated at no cost and with no obligation. See more of Joe’s blog and information about PPI partner Printer’s 401k through Diversified Financial Advisors HERE.

alt textNow is the perfect time for planning to find ways to increase employee participation and savings rates in your company retirement plan.

A well-designed 401(k) plan can play a significant role in helping you and your employees save towards a more financially secure retirement. I have highlighted four 401(k) plan design options in this article that have been used to help Plan Sponsors get higher participation and savings levels.

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Automatic Enrollment: Under the automatic enrollment design, employees who fail to respond to enrollment materials will be automatically enrolled in the plan. As a Plan Sponsor you choose the deferral rate at which employees are automatically enrolled. The plan can be designed to automatically enroll only newly eligible employees or to also automatically enroll existing employees who are not actively participating in the plan. The automatic enrollment design eliminates the decision-making and guesswork for Plan participants who might not otherwise take the initiative to enroll in the plan. Plan Success: We have been successful in implementing this plan feature and have been able to obtain plan participation rates in excess of 90%.

Automatic Deferral Increases: Although automatic enrollment can successfully increase participation rates, if the default deferral rate is set too low, automatically enrolled participants may not save enough to produce a meaningful retirement benefit. The automatic deferral increase feature can improve participants’ savings rates without requiring any action by Plan participants. Under the automatic deferral increase design, Plan participants’ deferral rates are scheduled to gradually increase over time in set increments, for example 1% or 2% each year, until they reach a designated cap such as 10%. By slowly increasing the deferral level, the automatic increase feature is intended to help Plan participants become comfortable over time saving at a level that enables them to accumulate substantial retirement savings. The automatic deferral increase design can be an effective tool for any Plan participant who wants to gradually increase their deferral limit – not just for automatically enrolled participants.

Safe Harbor 401(k) Option: This feature is popular with plans that have had to limit contributions by highly-compensated employees because of failed ADP and ACP nondiscrimination tests. Under this design approach, the plan is “deemed” to satisfy the ADP and ACP requirements so long as the plan incorporates certain features including mandatory employer contributions, immediate vesting, and restrictions on distributions. Another benefit of a safe harbor 401(k) plan is that the employer contributions may satisfy the required contribution under the top-heavy rules when key employees own more than 60% of the plan’s assets.

Extended Matching Contribution: Extending the matching contribution is a plan design option that may be used to motivate Plan participants to defer a larger amount into the plan without increasing the amount of the Plan Sponsor contribution. Under this design, the matching contribution formula requires a higher rate of deferrals to trigger the full employer match.

For example, assume a plan currently makes a 100% matching contribution on deferrals up to 3% of pay. To encourage employees to defer more into the plan, the matching formula could be adjusted to match 50% on deferrals up to 6% of pay or 25% on deferrals up to 12% of pay. The Plan Sponsor’s contribution remains at 3% of compensation, but employees must save at a higher deferral rate to obtain the maximum employer match.

Selecting the plan features that will be most effective for your unique employee demographics and business objectives can be challenging.

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Here are some ways we can provide valuable plan design support:

Identify Objectives: Help you identify and prioritize business objectives driving your decision to establish or maintain a retirement plan.

Share Plan Feature: Teach you how various plan features can drive the desired outcomes you are looking for.

Periodically Review Plan Features: As your business grows and employee demographics change, plan features may need to be adjusted. Providing period reviews (e.g., annually) to review plan objectives and evaluate whether the plan is producing positive retirement savings outcomes for Plan participants is an important step in keeping your retirement plan on track.

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