A question of trust

Everyone likes awards but perhaps the best are those given by your peers, the people who really know what you go through, hence the popularity of the players player of the year awards within sports teams. Charles Batt, owner of franchise store MBE Parramatta has just won such an award, voted by the thirty odd other franchisees in the group as having the business that puts the most value back into the chain.

Batt started his MBE (Mail Boxes Etc.) 12 years ago, a couple of years before the GFC hit. His journey was typical for franchise owners; a career in the corporate world, a restructuring in the company leading to redundancy and a decent leaving package, and the purchase of a business, in this case MBE, although Batt didn’t purchase an existing business, this was a greenfield site.

He says, “There were several opportunities, but I have always been a tactile person so print appealed. The franchise model suited me due to the level of support. When you buy a business from an individual you are essentially buying their knowledge, but when you have paid the money and they have left you have a lot to work out, whereas with a franchise that is not the case, the knowledge stays and is always available, through head office and through the other franchisees. It is also much easier to sell for the same reason. And there are the deals with suppliers, clearly you are going to get a better price if the supplier is selling to two or three dozen businesses rather than just one.

The choice of MBE came through its multiple revenue streams, the business offers print, shipping and mailboxes. Batt says, “Most printers will offer shipping anyway, but for us it is a key component of our marketing. It tends to be documents that need to go somewhere in a hurry rather than a parcel business. Mailboxes is a steady income, people choose MBE over a Post Office as there is a physical address which is necessary for deliveries in many cases, MBE uses the term Suite for its mailboxes.” For after hours access to the mailboxes, which are located inside the store rather than on the street, clients use a swipe card to enter the shop. Batt says, “Having the mailboxes inside the shop is also important in these days of identity theft, there is simply no possibility of your mail being stolen.”

Batt chose to start a new store in Paramatta CBD, which has turned out to be a great decision. He says, “I did look at a business park with plenty of offices, but there was very little foot traffic. This location as a retail shop front has us right in the middle of Parramatta’s CBD on one of the busiest streets in town, and we do get a fair amount of walk in work.” In the 12 years since 2006 Parramatta has grown out of all recognition, and will continue to do so, it is currently the third biggest CBD in the country after Sydney and Melbourne, and is headquarters to large numbers of institutions and businesses, with numerous major developments underway in the CBD.

It is print though that represents by far the majority of the business, around 90 per cent in the case of the Parramatta store, a figure that has remained fairly constant ratio as the company has grown over the past dozen years. Batt says, “One of the reasons I was attracted to a B2B franchise like MBE was the fact that you develop long term relationships with clients. It is not just about giving them a product like a coffee or a tube of toothpaste when they walk in the store, we can really get to know and understand them, their needs, their goals, what they are trying to achieve, and we can work with them to help them get there. And from their perspective they are able to trust us, which is really important.

“If you are organising the conference for your company, and you have ordered brochures, leaflets, posters, lanyards, you need to know they will be there on time, they will be quality products, they will be in the correct quantities. If not you look bad in front of your bosses. It is a question of trust. Companies need to know they can rely on you, and once you have built that trust relationship it remains strong. Everyone is pressed for time, if your customers know they can rely on you then you are in a great position.”

MBE was founded in the US 25 years ago, then spread worldwide. In the US it was bought by UPS the courier giant, around the same time that FedEx bought Kinkos, essentially to provide logistics for the courier business. MBE is now run from Italy, with some 1,600 stores across the world, and 32 in Australia. Clayton Treolar has been the local CEO of the group for the past three years, and is strongly appreciated by Batt. He says, “The CEO has an ability to get alongside you and really understand where you are coming from and how to move forward. He has a high EI (emotional intelligence) and makes it easy to step up.”

The relationship between franchisor and franchisee can be taut, anyone reading the goings on at Retail Food Group will see that, however Batt says the MBE scenario is completely different, as would be expected in a B2B environment. He says, “Communication is a two way street, I as the franchisee may make suggestions, so may the franchisor. One of the great things about MBE is that it is open to creative ideas, there is no straight jacket, rather a flexibility.”

Visitors to Batt’s store can see the fruits of this flexibility before their eyes, with racks of uniforms and workwear, and shelves of promotional products on display. Batt says, “I am always looking for new opportunities. We made a strategic move into workwear and promotional products. The skill set for most of the process is identical, so we could leverage that into this new market, opening up a whole new range of possibilities. I discussed it with MBE, and they were able to see the value in what I am doing, which was great.”

Like the rest of the print franchise sector Batt is more than frustrated with the antics at some of the consumer franchise stores that have been in the press, and the government’s response, which is essentially to add another whole layer of paperwork and cost to the relationship, as they have now made the franchisor responsible for any misdeeds at the franchisee, with whopping fines in place. Batt says, “It is a layer of completely un-necessary red tape.”

Batt has built his business into the biggest in Australia. He started it as a greenfield site, and says, ”There is no substitute for doorknocking, especially in the early days, and this got the business going. Having a physical retail presence in the CBD has also been great for us. You find that with the big government departments and institutions they often have to get three quotes for a job, and because the staff would walk past us every lunchtime they would come in for one of the quotes, and from this we have generated a fair amount of work, two of our biggest customers for instance, the Police and Fair Trading came to us like this.”

However it is networking that has really paid dividends for Batt and MBE Parramatta, he says, “I joined BNI business network international and I would say a third of all my work has come through those relationships. We are there to support and help each other, and it has provided me with multiple opportunities and opened many doors. Similarly I am in the local Chamber of Commerce, as are 600 other businesses in Parramatta. People buy from people they know and like, and these networking platforms provide that opportunity.”

The Parramatta MBE also has the biggest floorpsace of any MBE at 175sqm, it has six staff, and annual sales are ‘more than $1m’. Batt says, “Conceptually all printers do more or less the same thing, using more or less the same equipment, for more or less the same cost, but ultimately it does come down to trust.”

Batt’s Parramatta site has a trio of Fuji Xerox printers, including the Fuji Xerox 1000i with gold and silver, which Batt talks of in glowing terms, as well as a monochrome printer and a Versant 80. Batt says, “We have just done a job on the 1000i which was 1.1 million pages and it didn’t miss a beat. Those jobs don’t come along every day, but when they do it is great knowing we have the ability to handle them, we need the firepower and the 1000i certainly provides it.”

The company is no stranger to long runs, it recently completed a two million run job. Like almost all smaller printers these days the company uses trade printers, in Batt’s case it is Whirlwind. He says, “Print is no longer just ink on paper, the new technologies such as the MGI digital embellishing at Whirlwind are enabling me to go to my clients with all kinds of suggestions for print that really stands out and make an impact for them.

“Outsourcing is a key part of our strategy, it means we never have to say no to a job, it means we can go for a larger share of our customer’s print spend, for instance we may have a client who buys business cards, but also needs pull up banners from time to time. We manufacture the smaller ones here, but larger ones we outsource. If we have a long run of full colour we may print the first batch here on the digital colour printers and then outsource the rest to be printed offset as that may be the most economical way to work.”

Batt does use a project management system, he says, -”It can’t all be in my head or the production manager’s head, we are busy so need to have it scheduled systematically. We operate on fast turnaround and high quality so we need to have everything nutted down.”

MBE Parramatta has just won the peer award at the annual MBE conference. Batt says, “I have won a fair number of awards over the years, but this means the most, as it is voted for by other franchisees. It is given to the store that brings the most value to the group, I am thrilled to have won it.”

Batt is optimistic about the future of print, citing the trend to quick turnaround as an obstacle to more work going overseas, and pointing out that the latest Ibis survey still has print as an $8bn industry, more or less the same as it was at the time of the GFC. He is though a believer in striding forward, hence the move into promotional products and workwear. He says, “Print has maintained its dollar value, however growth is going to come either from taking work from other printers, or accessing a greater share of the customers’ wallet, and we are looking at both. With the workwear for instance I have moved my outlook from printing onto paper to putting an image onto anything.

“The market is constantly moving, look at wide format work, printed posters were all the go in shops and shopping centres, now there is a massive switch to LED signage, which means those printers will either have to get into supplying LED systems or find new applications for their wide format printers. You cannot stand still.”

It is no easy task running a print business, let alone growing it over the past decade, but by focusing on sales, concentrating on getting the job done well, using the support of the bigger franchise group, and taking opportunities Charles Batt at MBE Parramatta has shown it can be done.

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