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Posted Thursday, December 31, 2015 by Jules VanSant.

January is PPI MEMBERSHIP REFERRAL MONTH! We invite you to work with us to grow PPI Membership so we can continue supporting your company and the six state community we serve.alt text

Limited time offer… Restrictions & Rules:

  • Award of $25 is valid for up to 4 qualified referrals ($100 maximum). Once confirmed you can receive a gift card from a supplied list.
  • LEAD must not have been a member in 2015 (search our current members online at [] or already in conversations with PPI about membership in the past 6 months. 2)
  • Value of Membership Dues to be applied as a credit to your future invoices will be based on new member’s invoice and must be used against 2016 invoices.
  • iLearning Subscription availability is limited: one email address valid, can be used for your employees / group training in-house on a variety of subjects. See more at
  • 2016 Wage & Benefit Report is usually only available to members who participate in the report (and is free) or for $250 to non participating members.
  • Offer valid to PPI Members in good standing as of January 2016.

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Compensation: Group Incentive Plans

Posted Wednesday, December 16, 2015 by Stuart Margolis, CPA, MT Margolis Partners LLC.

At year end, you reviewed annual performance. Now is a good time to put the numbers to work. As you set company goals for 2016, consider translating corporate objectives into performance goals. As you communicate with staff to let them know just how valuable they are to you, consider creating ways to tie performance to goals over the next 12 months. If you are successful in doing so, you could end up with better overall results than last year. How do you reward staff, recognize their efforts, and encourage their ongoing loyalty while ensuring performance meets or exceeds benchmarks that will meet or exceed company goals?

Incentives Based on Operating Improvements

One way is to provide creative opportunities for the staff to receive incentives. Since a typical goal is to remain efficient, incentives could be based on operating improvements, efficiencies, etc. This way, by challenging your staff to help contain costs and be more productive, you will be able to recognize and financially reward them for doing so. Generally, it is best to reward staff and management for areas of operations they work in and can control. Generally, those items to build the incentives around should have a level of variability to them, and hence need a focus of effort and/or control. For example, direct production overtime is variable is needs a level of focus from management on a regular basis all year, whereas building rent does not. Some possible group incentive based benchmarks include:

  • Gross Profit
  • Spoilage
  • Overtime
  • Pre-tax income

Gross Profit

Virtually anyone in a manufacturing company is a candidate for inclusion in an incentive program based on gross profit.

Here are the key elements of a Gross Profit incentive program:

  • Higher chargeable production hours or lower non-chargeable hours or a better utilization factor
  • Direct Labor including overtime
  • Utilities – turn off the lights, HVAC
  • Supplies – cut out waste and overuse
  • Repairs and Maintenance – maintain rigid maintenance schedules and take care of the equipment

If there is a shop supervisor or manager that can personally impact a certain area of performance, it could be wise to break out a separate/personal goal for them that ties-in to the overall goal. When doing so, make sure they take responsibility for the goal and buy in to plans for achievability.


Reducing spoilage is a great opportunity. It seems that almost everyone is satisfied if spoilage is 1.5% of sales. At $10,000,000 in sales spoilage of 2% is $200,000. A 25% savings would improve cash flow by $50,000 which is a decent monetary reserve to utilize for incentives. Is there a department or team that can directly impact spoilage? If so, let them set the annual goal. Then, delineate how they envision spoilage decreasing. Break it down into monthly or quarterly estimates. Suggest ways the estimate can be achieved on a weekly basis with actionable item. Ask them to try to meet the weekly goal and monitor their results. Realize that change is hard. Closely monitor it in the beginning. If performance is off course, uncover reasons. If correctable, suggest adjustments.


Overtime is a culprit that can drain cash flow quickly and it may be difficult to control and reduce. After all, it may be the most important “culprit” in meeting production schedules and job turn around. With the cooperation and communications among the salespeople, production management, and staff on focusing to improve efficiencies, it is possible to improve overtime’s efficiencies.

Here are some creative ways to think about it. Ask salespeople to get a clear understanding of client deadlines and demand. If 12-24 hours can be added to a production schedule, overtime can sometimes be avoided. Alternatively, if a job’s set up time is negligible, and the client doesn’t need the full order of the product immediately, sometimes a partial order fulfillment could work. Run part of the job now (to give the client what they presently need), then run the rest of the job latter when there is a break in the schedule (without overtime). We have actually seen both these tactics work, and the savings can be very significant.

Pre-Tax Income or EBITDA (Earnings Before Interest and Taxes, Depreciation and Amortization)

Setting a goal based on Pre-Tax Income or EBITDA is typically another group goal. The group as a whole must work together for achievement. It can provide valuable teamwork and learning opportunities for your staff since some players will pay attention to the goal while others may not. The philosophy? Hopefully the result-driven members of the team will pull along the less focused, reminding them to stay on task. Of course, it’s important to have the right people on the bus (Jim Collins, “Good to Great”.)


Different types of incentive programs may be appropriate for different personnel or departments in your organization. Be careful, to set goals so that the assigned parties are actually able to achieve the goals. Incent teams to achieve the goal with individual goals given to particular people, departmental goals given to specific teams that can contribute, and company-wide goals set when a full effort is needed. Safeguard against setting goals that destroy teamwork and a commonality of purpose or set up “walls” or friction between departments.

If this sounds like too much planning, too much to handle, take a day to retreat, think about goals and bring them back to the grind. If it doesn’t work, rethink it. We run retreats all year long for profit leading, goal-focused companies to help re-focus.Using incentive-based pay can help maintain a healthy cash flow environment since labor costs only increase when goals are actually attained. It creates a positive energized and forward-thinking environment. Savvy staff members thrive under great leadership, hope and purpose. Challenge them with incentives that are not just based on sales. Next year at this time, you will be glad you did.

About Margolis Partners

Margolis Partners has long been recognized as the financial expert for family-owned businesses with a specialty in 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 Value-Added Principles of Management, and compiles the annual Printing Industries of America Ratios, the printing industry’s premier financial benchmarking tool.

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Recruiting and Layoffs - Where to Find the Workforce of the Future

Posted Friday, November 20, 2015 by Jules VanSant.

According to the Bureau of Labor and Statistics, the U.S. workforce has an average age of 42, while our print & graphic communication’s industry’s average age is 46.

We are seeing more retirements, but also seeing more open positions as companies experience growth. While we encourage all members to recruit from colleges, universities, high schools, and vo-tech centers, getting high-end talent for today’s needs remains a challenge.

There is a source of talent that not all printers capitalize on, however: Displaced workers. While plant closings are thankfully slowing, we have seen some big closing announcements this year. Don’t forget that there are many industry job banks out there, including Printworkers and many affiliate job banks. Hiring production talent with the right experience from a thousand miles away is not unheard today. See for an expanded list of recruiting sources.

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The industry pays very well as illustrated in our 2015 Wage & Benefit Survey. This national and regionally based study will give you a good sense of pay levels and expectations for the employers looking to recruit locally or from across the country. If you would like to purchase a copy of the report as a member or want more information about this and other support we offer in this quest, contact PPI.

Also Keep in mind that PPI along with the Pacific Printing Industries Educational Trust is working hard in the region to encourage high school and community college students to consider print and visual communications firms as a viable, positive career opportunity for the future. Along with attending career fairs, our WhyVizComm program is expanding School to Work deep dive days for students to learn about the variety of opportunities and career paths our industry offers. Take time to check out to learn more. If you would like to engage your local high school with our program, contact to learn more!

We are looking to support the re-engagement of the community college system and support 1 - 2 year training programs for bindery, press-room, pre-press and other key production positions. We also offer scholarships through our PrintROCKS Poster contest in high school and college level as well as supporting the Skills USA participants from our region.

We need your involvement and support. See why donating to our educational trust matters at>EdTrust. Contact Jules @ PPI 503-221-3944 to learn more and help make something happen through volunteering or making a donation.

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Washington State Legislative Update

Posted Monday, November 16, 2015 by Bill Stauffacher, Stauffacher Communications.

alt textIn an off-year election typically focused on local races, House Republicans picked up a critical special election victory that reduces the House Democrats’ majority to one seat. The razor-tight House Democratic majority combined with the Senate Republicans’ two-seat majority means lawmakers will put on hold any significant action to address additional public education funding – including potential tax increases - until after the 2016 elections.

In this one critical legislative race, GOP challenger Teri Hickel defeated appointed Democratic Rep. Carol Gregory in the 30th District (Federal Way, in south King County suburban Seattle). Hickel’s campaign and independent expenditure ads hammered Gregory for supporting a state income tax during her tenure as president of state teacher’s union. Hickel, a local community leader whose husband served in the state legislature in the mid-to-late 90’s, is winning by a 54-46% margin. Gregory was appointed to the seat after the late Democrat Rep. Roger Freeman died a week before the 2014 election but still won the race.

In one other legislative race, appointed Republican Rep. Mary Dye defeated GOP challenger Richard Lathim in the 9th District (rural southeastern Washington). In this rock-solid GOP district, Dye, a wheat farmer, replaced a state legislator who was forced to resign over ethics violations involving expense reimbursement discrepancies.

Statewide Initiatives

Two initiatives on the 2015 ballot are passing:

· PASSING 54% - Initiative 1366 cuts the state sales tax rate from 6.5% to 5.5% on April 15, 2016 unless the Legislature places a constitutional amendment on the ballot requiring a two-thirds super-majority legislative vote for tax increases. Progressive left political groups intend to challenge the initiative as unconstitutional. While lawmakers privately believe I-1366 will be tossed by the state Supreme Court as unconstitutional, it is strange that lawmakers on both sides of the aisle are taking so lightly a potential $1.4 billion annual reduction in state tax revenues.

· PASSING 70% - Initiative 1401 increases regulation and fines that involve commercial activities of 10 endangered or nearly extinct animal species.

Local Races/Issues of Note

· Snohomish County Executive: Democrat Snohomish Council Councilmember Dave Somers defeated incumbent Democrat Snohomish County Executive John Lovick in this top-two Democratic showdown. Somers’ victory may impact state House budget leadership as local Democrats will push newly appointed House Appropriations Committee chair Hans Dunshee to leave the state legislature for the county council.

· Seattle: The Emerald City’s progressive left voting reputation did not disappoint.

o Transportation: Voters passed a $930 million property tax levy to fund green-focused transportation improvements. The levy increase costs the average homeowner $279 a year.

o Public Financing of Campaigns: Voters also approved a public campaign finance measure that may lead to a statewide ballot issue.

o Socialism: Seattle voters re-elected a socialist to the Seattle City Council.

· Pierce County

o Minimum Wage: Tacoma votes approved a $12 per-hour minimum wage ballot measure phased in over four years (and rejected a competing $15 per-hour ballot proposal).

o Liquor: Fircrest voters ended a Prohibition-era ban on alcohol sales. This means the township of 6,000 residents will soon have beer and wine options at local restaurants.

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Don't Miss your 'Window of Opportunity' with the C-Suite

Posted Tuesday, November 3, 2015 by Lisa Magnuson, Top Line Sales LLC.

alt textMany sellers don’t recognize the precious few windows of opportunity to access the C-Suite. When it comes to your TOP Line Accounts™ (i.e. largest prospect or most important customers worth at least 2x your average customer or deal size), these open windows can be deal makers or breakers.

Open Window One:

There’s a window of opportunity right after contract signature but before implementation where a lot can get accomplished. Why? Executives are interested in the very beginning stages of a project to set the stage. Right after your win celebration and win retrospective, you can help the executive by giving them briefing points and reinforcing the importance of their role in support of the initiative. Accessing a key executive early in the contract is an important component of setting yourself up for future business. Seizing this window of receptivity post-contract is a smart move.

Open Window Two:

C-Suite executives want to ensure a positive ROI on any big investment. If you have important information and data on your project’s ROI impact, then they will be very receptive to meeting with you. This also allows you to ask how they would like to receive timely reports on progress. Many people miss this brief but critical opening.

Open Window Three:

Executives are also interested in new and creative ideas which could lead to a project. (I.e. deciding if your ideas will move their company agenda forward) For a complete list of ’why’ executives want to meet with you, see my BLOG at

Capitalize on these windows of opportunity and watch your win rates skyrocket. Good luck in your efforts to ring the bell more frequently with TOP Line Account™ victories!

About Lisa Magnuson and Top Line Sales alt text

When was the last time your team closed a seven-figure contract? Let Top Line Sales instill the know-how into your sales organization to identify, cultivate and close strategic account opportunities through a field-proven process that includes, the right tools, strategic training and live deal coaching. Our clients boast of closed contracts totaling over $100 million in new revenue due to our commitment to ’roll up our sleeves’ to help your team win.

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