Succession planning is a scary prospect for many printers. But not Cornerstone Press. The Brisbane company is ready for the future. The 60-year-old owner has passed the baton to his 26-year-old son. About $2 million worth of machinery has been ordered this year. Digital printing capacity has just been added. It’s all part of a strategy to strengthen the business in anticipation of further consolidation.
[Photos: Go behind the scenes]
Founder Peter Conomos is stating the obvious when he says the number of print shops will continue to decrease. That’s partly due to the fall in volumes, but also because many other owners are similar to him in age but have no heir apparent to take over their businesses. Peter also notes that it’s becoming harder for printers to upgrade their machinery as banks become less willing to lend money. He takes no pleasure in seeing rivals close and print fleets age, but he recognises that it creates an opportunity if his own business has strong and sustainable foundations.
Cornerstone’s succession plan can be traced back to 2003. That was the year in which current general manager Robbie Conomos – then a high school student – started working at the Northgate firm. He began a three-year apprenticeship in 2004 and then spent a year in estimating and six months in production before being handed a sales role.
“One day I was production manager and the next day I was told to go find some clients,” he says. It was a difficult introduction, but Peter says his son has become a superb salesman and that “sales have gone through the roof” under his watch. Robbie takes this modestly: “The only reason I’ve done so well is because of the training I had around the business.”
Robbie took control of day-to-day operations in 2010 when he became general manager. The transition came sooner than expected after Peter had a triple bypass and was forced to step back from Cornerstone. Peter says that involved another steep learning curve for his son, who had to quickly adapt to the finance side of the business. Peter’s improving health has since seen him back with the company, but these days he has more of a strategic role, which includes overseeing the current round of installations. He’s also been teaching Robbie the art of negotiating major equipment purchases.
“He’s learned how to haggle which is what you need because every dollar is worth so much these days.”
Family ties
It’s fair to say Peter knows his machinery – he’s been in the industry for 45 years. He spent 17 years at Hannan family-owned operation Inprint, which included a stint as a director.
This left a lasting impression on young Robbie, who grew up wanting to follow in his father’s footsteps. “I remember walking around Inprint; the smell of the ink. I’ve been around print my entire life and I’ve always been very fond of my dad.”
Peter eventually decided it was time to move on. “I got sick of working for someone else,” he says.
Inprint had been getting progressively more corporate. So Peter spent a few months in a temporary role at Platypus Graphics, owned by his friend and former Inprint colleague Tom Lusch. Peter then founded Cornerstone in 1995.
Peter started with five staff and a five-colour Heidelberg GTO. It was a tough initiation. He was an old-school printer, so he was less comfortable handling sales. To make matters worse, Australia was still emerging from ‘the recession we had to have’, so there wasn’t much money around.
Peter combined his sales work with a production role, which meant he regularly pulled seven-day weeks. He says the long hours were partly caused by his insistence on high standards. He understood the value of a good first impression – and because almost all clients back then were new clients, he had to work long hours to make it happen.
Different strokes
Father and son take different views on the business. This is apparent when ProPrint asks the pair at what point they felt the company was on stable ground. Robbie nominates a year, but Peter interjects – Conomos senior has never allowed himself the luxury of thinking the business was consolidated.
“That’s the difference between Robbie and me. The business bought the house and fed the family, so I was more worried about the place going broke than making a big success. But now with Robbie here, we know we can make sales. I’ll never get over the stage where I think there’s never a problem.”
Cornerstone has steadily grown during the past two decades, says Peter. Turnover hit $1 million in 1996 and climbed to $5 million in 2007 before the GFC reduced it to $4 million in 2009. The firm now turns over $6 million and employs 24 staff.
Growth has been accompanied by regular machinery investments. In 1998, Cornerstone installed a five-colour Heidelberg Speedmaster SM 52. Then came a five-colour Heidelberg Speedmaster CD 74 in 2003, a six-colour Heidelberg Speedmaster SM 52 in 2005 and a six-colour Heidelberg Speedmaster CD 74 in 2008. Another Speedmaster is on its way – Queensland’s first CX 102 was ordered in May and is scheduled to be installed by November.
The new five-colour press will finally give Cornerstone A1 capacity, something clients have been requesting for a few years, says Robbie. Most of the firm’s A1 work is currently outsourced to Platypus; some also goes to Fergies Print & Mail.
The price is right
Robbie said earlier this year: “Our clients have been pushing us to do more A1 work for them. We’ve been outsourcing this work, but the increased volume has given us the opportunity to bring this service in-house. With the CX 102, we will be able to tackle longer runs and take on catalogue work, also.”
He added that Cornerstone had timed the purchase shrewdly. “When we signed the document, two days later the dollar had dropped 6–7 cents. We had to make a decision; we could see it was going to drop. Luckily, we signed the document and Heidelberg was able to buy the currency before it dropped.”
Cornerstone ordered the new Speedmaster at about the same time it was snapping up used machinery at the Geon auctions in Melbourne on 23 May, Sydney on 28 May and Brisbane on 30 May. Peter says the firm’s strategy was to hold back at the first two auctions in the hope that there would be fewer bidders left standing come the final auction. Cornerstone bought a Palamides paper bander in Melbourne and picked up a Screen platesetter in Sydney. Brisbane yielded an HP Indigo 5000, Heidelberg Prinect Image Control unit, two Polar stack lifters and a Thando stack turner.
The Indigo will finally allow Cornerstone to bring digital work in-house, says Robbie. “It was something we knew we had to get into eventually. It was a good price, and we’ll learn what digital is all about and will then probably go a bit further [with another investment]. It’s good for entry level, and it’s an Indigo so it’s certainly got the quality.”
However, it still won’t be Heidelberg quality, he says. “Digital won’t be our core business. It never will be. Digital will just complement the offset.” The Indigo will be used for on-demand work and will also provide redundancy capacity for the Speedmasters. Robbie suggests the Indigo may essentially be a “glorified proofing machine” – Cornerstone will “fingerprint” the Indigo so it can do proofs before the work is transferred to the offset presses.
Great expectations
Robbie expects the new machinery will help the firm grow about 15% in 2013/14 – a big jump on the 2.5% recorded in the previous financial year. Such rapid expansion inevitably raises the question of real estate. They were already running out of room before the recent investments; negotiations are now underway to buy the block next door.
There are also plans to hire another salesman, an Indigo operator and an apprentice. The firm is proud of its commitment to youth training. Five of the 24 staff have done apprenticeships at Cornerstone, although the last youngster joined another industry because he didn’t feel print offered a sustainable career path. Peter says it’s getting harder these days to find dedicated apprentices, but adds that those who are prepared to work hard can learn a lot from the older staff.
He’s got the awards to prove it. Cornerstone came away from last year’s PICAs with the second-highest number of gold medals after bagging gongs for single-colour litho printing, multi-colour litho printing, postcards and greeting cards, and limited edition prints and art reproductions. Cornerstone’s four golds placed it ahead of Inprint and Geon, which each won three, but well behind Brisbane powerhouse Platypus, which finished with 12 gold medals.
The two companies told ProPrint at the time that they had long enjoyed a friendly rivalry. Robbie paid tribute back then to Platypus and owner Tom Lusch, but warned he had already set his staff the goal of winning even more gold medals in 2013.
Robbie confirms that Cornerstone is still gunning for Platypus. “One of our goals is to kick Tom off his perch at least once,” he says. Robbie has a lot of respect for Lusch, and is also good mates with his son, Tim. The two talk business and discuss the state of the industry over weekly lunches.
A focus on change
One thing everyone seems to agree on is that there is no end in sight to the changes sweeping through the industry. Cornerstone is a case in point. Before the GFC, the firm derived 50% of its turnover from agency work, 40% from government and 10% from other sources. Today, 25% comes from agencies, 15% from government and 60% from direct clients in sectors including retail, cosmetics, politics, galleries, pharmaceutical and machinery. Major clients include John Deere and Health World, says Peter.
Getting smart
One thing that hasn’t changed is Cornerstone’s policy of selling on quality and service rather than price, which translates into regular referrals, says Peter. Robbie adds that the firm will sometimes direct clients to their outsourcing partners, to avoid paying an extra mark-up. “At the end of the day, we’re here to make money, but we’ve got to build relationships and that’s built on trust,” he says.
Robbie is confident that the referrals and sales and growth will continue. Unlike some in the industry, he also thinks today’s market can work in printers’ favour – provided their businesses are run sustainably and they can convince clients that print is an important part of the media mix. That bodes well for a company like Cornerstone with its modern equipment, he says.
“I’m a firm believer that in the next five to 10 years, print will come to a more sustainable level because it’s here to stay. We’ve probably got the youngest and most professional and skilled team out there. Which is probably why we turn over so much work and get such good consistency.”
Factfile
Established 1995
Staff 24
Based Northgate, Brisbane
Turnover $6 million
2012-13 growth 2.5%
2013-14 forecast 15%
Business Briefing
• Cornerstone founder Peter Conomos handed day-to-day control in 2010 to his son, Robbie, who was then 23
• The succession plan occurred ahead of schedule after Peter had a triple bypass
• Robbie started working at Cornerstone in 2003 while at school. He began an apprenticeship in 2004
• Cornerstone ordered Queensland’s first Heidelberg Speedmaster CX 102, due to be installed by November
• Cornerstone moved in to digital with the purchase of an HP Indigo 5000
• Turnover is $6 million, with 60% of revenue coming from direct clients, 25% from agencies and 15% from government
• Last year, Cornerstone came second at the PICAs, with four gold medals. Inprint and Geon each won three, while Platypus won 12
• Cornerstone and Platypus are friendly rivals. The two founders worked together at Inprint, while their two sons lunch regularly
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