October 2002
Surviving in tough times
Working harder and smarter is key to making it through this sales slump
Today’s business environment is probably the most demanding and challenging ever for organizations whose growth is aligned to the overall economy. I don’t think anyone in the graphic arts industry would dispute this.

Hardly a day goes by that we don’t hear from some government agency about how well the economy is performing. We learn of improved housing starts, the expansion plans that are being implemented in the automobile manufacturing plants and the relatively high levels of employment throughout most of the country.

These positive factors seem to be in sharp contrast to the reality in the printing industry and the many businesses that are aligned with it. (As many of you are aware, the printing industry in Canada employs more people than the auto industry.) Almost weekly, we learn of another firm that’s declaring bankruptcy or is being asked by its bank to bring in a receiver and liquidate the company.

Either one of these activities is horrific and almost always ends up with machinery manufacturers taking back equipment, paper distributors left with huge unpaid receivables, and employees who lose their pay, salary arrears and their benefit packages. The owners or managers also suffer greatly because their equity has disappeared and they face the reality of starting over. It’s simply hard to imagine how anyone or any organization can possibly come out of these actions a winner.

My guess is that many organizations today are facing very difficult business conditions. They have high fixed costs on underutilized equipment, they are not getting enough money for their work, and they can’t find the professional sales reps to generate the volume of work to keep the company going.

Survival challenges and tactics
One of the major differences between this business downturn and those the industry has experienced before, is that this one has lasted so long. Difficult weeks have turned into bad months and bad months have stretched over two years. A year ago, many would have said that pricing had reached rock bottom, that there could be no further reductions or discounts. This hasn’t proved to be the case as prices continue to deteriorate throughout the industry. One of the major problems this situation creates is that customers seem to lose all idea of what a job is worth because it must appear to them that each time they re-order a particular piece of printing they pay less for it than the last time.

If you think you are giving good service now, figure out how to improve by another 50%
Compounding this very challenging situation is the fact that many customers will be tuned into the rumour mill and will be aware that your company is having difficulties. The fact that an entire industry is in a similar predicament is of little or no interest. While I am not for a moment suggesting that I have experienced a business climate like today’s, I can tell you that I worked for an organization that was on the verge of bankruptcy for years. It was so bad that one particular customer seemed to take perverse pleasure in relating to me that he had heard that we “couldn’t make this week’s payroll” or that “the bank is calling your loan.”

It seemed to me that this went on for many months and you can be sure that if I had not been getting work from this character, I wouldn’t have subjected myself to this abuse. Other customers were subtler in trying to determine when we would expire.

Like others in our organization, I found that all the talk about our impending demise became the greatest incentive possible to prove the naysayers wrong. Our group was absolutely determined not to give in or give up on our goal of becoming a first-class printing company that produced superior work. In return, we expected to make a profit that we could reinvest in the business and provide even better service and value.

I mention this predicament because I think a number of companies across Canada are facing a similar situation, with low utilization, an extremely competitive marketplace and a number of other industry-related problems. My advice is to commit yourself and your team to succeeding. Failure should not be a consideration because you know and believe that the effort you make every single day to give your customers recommendations and suggestions will sooner or later be rewarded with profitable orders.

You must work harder and smarter than your competitors, and if you think that you are giving good service now, figure out how to improve by another 50%. You must find ways to look different from your competitors, and you must continually tell your customers how you solved problems for other clients. Your customers must think of you as their best resource centre for all their printing-related communications needs.
Be positive, be confident and be committed to working harder and smarter and you will be successful.
Duncan McGregor was president of the former Arthurs-Jones Inc., a Toronto-based, award-winning commercial printer. He led the $5 million-a-year firm to a five-fold increase in sales. He is now a consultant to the printing industry and can be reached at (416) 487-7666.
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