Whether you are planning on doing it asap, or you have another twenty years of working life to get through, we all need a plan. In fact we are often told we should have had a plan before we started on day one of owning our own shops.
It used to be simpler – printing equipment held value and there was a continuing stream of people in the trade coming up who aspired to buy a printing business. People from outside the trade were attracted by good margins and the essential nature of print to other businesses.
No need to tell you how things have changed. So how do you get out now?
Let’s assume your kids aren’t interested – they want to do something else, or do not see much future in print.
You could try and sell outright but that is a tough route. I have written before about my own adventures in trying to buy another printer, and things have not become any better. There are a couple of good business brokers around who specialise in printers, and they seem to be pushing some decent sales through but I would imagine they are picky about the companies they represent.
You could try and merge into another firm using an earn-out scheme. I personally think this is a way out many more printers should be considering, but it is risky, and again only available to you if your business has something to offer the other company.
Let’s face it – for a lot of us the only way out is going to be to pull the shutters down, send the kit to India and pay any leases out of our savings. Hardly a great way to end an otherwise successful working life.
But maybe PIAA can help. At the moment if you are looking for help with your exit, you are probably relying on your accountant, a broker or consultant. Few of them would be totally on board with the idiosyncrasies of a printing business and the advice, at least as I have found it, probably is not that great.
But here is a potential solution – I think PIAA should be putting together an Industry Exit Scheme.
I am not proposing they try and become a business clearing house – they did briefly start down this track once but it quickly became apparent it was a bad idea.
No – I am suggesting they sit down with the federal government and the big industry suppliers/financiers and put together a package that print business could take advantage of to help them get out with some dignity.
Maybe get a few tax breaks specific to a capital intensive but declining industry like ours, or help negotiate an industry-wide lease pay out scheme with the finance companies and copier companies that would let owners pay the leases out over a reasonable amount of time with better tax concessions. Maybe even set up transparent standard agreements that help exiting owners transfer leases and other obligations to other companies easily and without penalty.
There are going to be a lot of businesses over the next few years forced to go through this process, and a clear and cheap set of protocols set up by PIAA that they could follow would be invaluable. And if PIAA can get some financial concessions from government or the suppliers on our behalf, all the better.
These kind of schemes have been run before – usually for industries that involve some kind of government licensing like fishing or taxis. These industries can go into sharp decline because of massive disruption from new technology (think Uber/Taxi) or government action (like a state government shutting fishing grounds) and you may think it does not apply
to us.
But it does – we are being wiped out by online challenges most of us cannot fight – and the decline is being exacerbated by government actions, starting with the end of the compulsory printing of annual reports, all the way to Turnbull’s current war on paper. Our problems are just being ignored because they have occurred over a longer period of time than other industries, and because our industry bodies have not really done anything about it.
PIAA has set itself a sharp focus on lobbying and they have some capable people running their shop. One thing they seem to be missing though is an agenda beyond taking on Australia Post (which is certainly a good idea). This is something they can do that will help those of us who want to get out safely, and will make sure that the suppliers and printers who remain have a more stable and financially secure market to run in.
Baden Kirgan is managing director of Jeffries Printing Services
Comment below to have your say on this story.
If you have a news story or tip-off, get in touch at editorial@sprinter.com.au.
Sign up to the Sprinter newsletter
I think this is a brilliant idea I had suggested something similar many years ago when we were in the buying cycle and discovered how hard it was to work out the business value that was running in the red. Nevertheless I can help if required, we transitioned out very well and retained the equity in our business.