Standing still can mean stagnating – in business and in life. You couldn’t accuse Kerim El Gabaili of standing still. The quick-thinking, restless chief executive of Prografica Production Agency is on a journey of self-improvement, both for himself and his business. 

El Gabaili says his personal development comes through regularly attendance of industry events, as well as taking courses to better himself. “The more you search for knowledge, the more you realise how much you don’t know. I’m constantly reinventing myself so I can reinvent my business.”

He’s a proud business owner, but doesn’t fall into the trap of letting ego stop him from asking for help. El Gabaili agrees that when seeking support – whether that’s personal development or a business boost – it’s a good idea to look externally.

That’s why he saw the possibilities in Enterprise Connect (EC). This Federal government program is designed to help small and medium-sized enterprises reach their full potential. Experienced advisers visit a business to conduct a comprehensive analysis and highlight potential growth areas. This service is free. EC then provides half the funding to help implement the recommendations.

“I’m always looking for an edge, something to take us where we want to get to,” says El Gabaili. 

But despite the clear benefits of EC, uptake among print businesses has been slow, according to the people in charge. El Gabaili doesn’t understand the hesitance. 

“Why wouldn’t you use it if it’s available? They’ve got good people doing good work for free and then giving you a chunk of money to improve your business. It’d be good if there were more schemes like that.”

The problem that Enterprise Connect was trying to solve for Prografica is very familiar to readers. The Global Financial Crisis had made the printer realise it had to become better at sales. 

“We lost 25% of our revenue overnight,” says El Gabaili. New sales staff were failing to meet the target of paying for themselves after three months. Prografica initially thought the employees were responsible, but it was happening so much that the Sydney-based company eventually concluded there were deeper problems.

Management devised a solution: Kerim and his brother Jim took over the sales responsibilities. Bringing to bear their greater experience and networks has produced better results, says Kerim El Gabaili. But he concedes it’s not a long-term solution, as it takes the two brothers away from day-to-day operations.

While that solution was an effective stopgap, EC made El Gabaili realise that Prografica wasn’t to blame for the falling sales. The salespeople had been receiving adequate pay and support, but the tough market made it difficult to win new work. It sounds like a simple assessment, but it’s the kind of observation that can be much clearer to an outside observer.

Strengths and weaknesses

Prografica’s Enterprise Connect journey began in mid-2011 with an online application. A sales consultant then met El Gabaili for a preliminary discussion at which both parties agreed to proceed. That was followed by a formal meeting that covered the company’s vision and funding proposals. The consultant then had a look at Prografica’s books and subjected the company to a SWOT analysis to identify its strengths, weakness, opportunities and threats. The consultant used that information to prepare a report.

“It was an exceptional report, very in-depth, with a lot of very good recommendations,” says El Gabaili. The consultant advised Prografica to continue diversifying, improve its customer intelligence and rebuild the website to better show its capabilities. He praised its direct marketing and the diversification it had already undertaken, but thought it needed to improve management disciplines and better communicate the company vision to employees. The consultant also helped Prografica prepare a sales plan.

EC approved a $20,000 grant to put the plan into action. Prografica implemented this and submitted a bill.

El Gabaili wasn’t worried about having an outsider look at his books. He trusted the consultant to keep the information confidential. As someone with a thirst for self-improvement, he says he welcomed the advice of an experienced professional. He can’t understand why other companies don’t make use of EC and its “excellent” and “experienced” consultants. 

“They help you get where you want to be. It’s a no-brainer. I can’t see why everybody wouldn’t want to do it.”

He’s not the industry’s only Enterprise Connect fan. Gold Coast-based Heaneys Performers in Print sought help with time management and print loading a few years ago. Managing director Susan Heaney told ProPrint of her positive experience of the programme. 

“They were excellent. I had a fabulous case manager,” says Heaney. Having run the business on her own since 2004, Heaney says she had often second-guessed herself, so it was helpful to have an experienced consultant come in with a fresh set of eyes and let her know the business was largely on the right track.

Family-owned Prografica was founded by Kerim and Jim in 1995, before a third brother, Kamahl, came on board two years later. The El Gabailis are a third-generation printing family. “My dad used to work for [former industry giant] John Sands, so we grew up around the industry,” says Kerim.

The company has changed a lot in those 17 years, he says. One major change came in 1997, when the brothers decided to dispense with print brokers. The rationale was that third-party resellers were holding Prografica back. Print managers were taking fewer risks, but getting bigger margins. They controlled the business’s key assets – its clients. They were also approaching those clients with the blinkers on; all they were interested in was discussing one specific job. Another problem was the fear the brokers were inducing an unhealthy dependency. “What happens in the end is you become a servant to them and in most cases you only get the business because you’re the cheapest.”

Shown the door

Print brokers were shown the door and Prografica immediately lost 60% of its business. From this lower base, it managed to grow by 112% throughout that year. 

Having started in 1995 with three staff and a turnover of $150,000, Prografica now has 17 employees and seven-figure sales. El Gabaili declines to reveal today’s revenue and profit figures, other than to say: “We have a healthy net margin in relation to the industry.” 

Further expansion is imminent. Prografica is finalising the acquisition of an agency that will increase the headcount by five and boost revenue by 50%. It’s telling Prografica should buy an agency rather than a printer. The company was originally called Prografica Print, before changing its name to Prografica Production Agency in 2010. Abandoning print brokers wasn’t the company’s only piece of forward thinking; it also decided to stop being a printer and start looking and feeling like a production agency.

Part of the transformation involved spending $400,000 on customised new premises in 1999. It was a big investment, but worth it, says El Gabaili. The new guise has allowed Prografica to generate fatter margins. A ‘production agency’ could charge $100 for the artwork on a business card that a ‘printer’ would only get $30 for, he says. 

On the flipside, Prografica also benefits from being able to sell clients on the possibility of cheaper prices. The firm tells clients that it can do their design work and because it also has printing capacity, it can handle production rather than outsourcing it, which would mean a mark-up.

El Gabaili says the key to the production agency strategy is having the diversity and mentality to offer solutions rather than standalone products. It is about understanding clients, he says. Prografica asks customers what challenges they have and how the two parties can work together to solve the problems and grow business.

Multichannel marketing

Recent wins include a project to build a website and produce marketing collateral to help Toni & Guy promote a new business college. Prografica also conducted a multi-channel marketing campaign for Mortgage Choice in November and February that generated a response rate of more than 30%. There is an ongoing deal with a major car rental firm that orders through Prografica’s web-to-print system.

A few years ago, the company resolved to steer commercial discussions in the direction of value rather than price. “[Price] is a conversation we absolutely don’t want to have,” says El Gabaili. 

Businesses can only be so lean, he adds, which means prices can only be so low.
It comes back to Prografica positioning itself as a production agency that provides attractive solutions rather than a printer that churns out volume.

El Gabaili’s reform agenda has not ended. Perhaps it never will. He insists he’s not one to sit still. The company moved into wide format last October. A new MIS is being deployed now after three years of internal development. Prografica’s business currently consists of 51% across offset and digital printing, 16% merchandising, 14% wide format, 12% web development and 7% direct marketing. 

The key word is ‘currently’. El Gabaili says the market is dynamic and ever-changing, so his company must be the same. Companies from all industries are going broke because they are too set in their ways. Prografica is working to combat this malaise by preparing a strategic plan that includes growth targets and will be “completely different to a traditional print plan”, he says. “Within 18 months we’ll be a completely different company.”

The recent acquisition and the new MIS will bring about part of the change. There is also an ambition to decentralise Prografica. Under this scheme, only five people would remain in the office: the chief executive, chief financial officer, sales manager, production manager and receptionist. Graphic designers would operate from home, salespeople would be on the road and some work would be outsourced overseas. That would hopefully lead to greater productivity, reduced overheads and a smaller carbon footprint.

Another area in which he’s expecting positive change is though his involvement with Cooperative Sydney Digital Print, which is located alongside Prografica’s Auburn site. Prografica has been part of the 10-company hub since it launched in 2007 and El Gabaili served as its first chairman. He says he has gained a lot from being a member of the cooperative – and not just the $1.2 million it would have cost to build the facility himself.

Share alike

Everyone in the co-op shares staff and equipment. The pooling of resources means they are able to get better rates and service. Downtime is minimised, because when one company has less work, another has more. The cooperative is poised for a makeover and El Gabaili is hoping other businesses come on board so the benefits can be further maximised. 

Previous recruitment drives have fared poorly. It is perhaps more evidence of many business owners’ unwillingness to share information and collaborate.

“To be honest I’m not sure why printers haven’t jumped on board, but it’s something we’re going to try to relaunch because the value proposition is exceptional as far as we’re concerned,” says El Gabaili.

Relaunches, strategic plans, business reviews, acquisitions, diversification… El Gabaili has crafted a company in his own image, one that is hungry to learn, improve and evolve. He doesn’t know what the future holds for Prografica, but he is sure of one thing: it will look very different to the present.

Factfile

Established 1995

Location Auburn, Sydney

Headcount 17

Equipment Five-colour Komori Lithrone 28, two Canon ImagePress 7000s and
a grand-format Teckwin Teckpro S3200

Sectors Offset and digital printing, merchandising, wide format, web design, direct marketing

Business briefing: Prografica

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