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Increasing Sales from Marginal to MEGA!

Posted Wednesday, June 19, 2013 by Jules VanSant.

PPI Association Partners MargolisBecker | New Direction Partners share their insights on how to increase Sales & Profits in print production. Their extensive experience with the PIA Ratio Studies and in working with numerous printing firms in the US makes these advice nuggets worth a chew!STU’s View – authored by Stuart Margolis | June 2013 Stuart Margolis Becker PPI Association

Printers today wonder if they will ever get past the low pricing roadblock leftover from the recent recession. Some causes of low pricing like overcapacity and competition are inherent in any mature industry. Others causes are situational and can be managed.

Consider these low pricing causes and their potential solutions:

Two factors differentiate the more profitable printers:

 Price discipline – Printers who have established and adhere to a set price structure sell below cost less frequently than other printers. They don’t “panic price”, dropping their price to what the customer wants to pay just to keep thier presses running.

 Efficiency in Cost and Productivity Management – A profitable printer can produce $2M worth of print with 12 employees to his competitor’s 15. Controlling labor costs increases profitability. Every time you implement new technology, re-examine your employee functionality. Ask the question, can labor be reduced due to better automation? If the answer is yes, address it. In some cases, excess talent can be re-directed and assigned to more innovative work.

Recently, I worked with a client to develop a successful web marketing initiative by using in house talent that was displaced by automation. The result? Better technology helped to reduce current costs but the big bonus was an increase in profitability due to the addition of the new web services.In another case, I recently implemented two parts of a profit plan for a client, asking him to reduce his payroll by 15- 20%, and move his pricing up by 10-15% across the board. He was skeptical, but willing to try. Four months later, his production was the same despite the 15% reduction in employee count. Profitability is now above normal with sales sustained at the same level. In the next phase of this implementation there will be a focus to increase sales levels, but only profitable sales.Remember – increasing sales alone is not the answer to increased profitability. Sales should be increased strategically with a plan in place to proceed with a focus. All strategic elements should be considered such as pricing, staffing, production automation/technology, along with goals for growth and goals to reach the owner’s personal objectives for success. The successful pursuit of increase profit requires a well-coordinated combination of cost containment and focused sales efforts. Having it all is not easy, but time and time again I can attest, people are doing it and you can too.

About MargolisBeckerMargolisBecker has long been recognized as the financial expert for the printing, packaging and allied graphic communications industries, assisting thousands of companies with strategic and financial management, valuation, mergers/acquisitions, accounting, audit and tax services. The firm is noted for its expertise in enabling companies to optimize profits. Proudly, it is the purveyor of the industry’s Cash is King, and Value-Added Principles of Management, and compiles the annual Printing Industries of America Ratios, the printing industry’s premier financial benchmarking tool.

About New Direction Partners

The team at New Direction Partners LLC has guided over 200 printing company owners through the sales and merger process. The advisory services reflect a full set of skills to help you sell or expand your business: valuation, management consulting, financial advisory and investment banking. The deep experience and industry expertise at New Direction makes it uniquely suited to serve printing, packaging and allied graphic arts businesses.