Transitioning the business

A few weeks ago, Printing Industries ran a Future Print Transitions seminar at its Sydney office. They are being rolled out around the country and are all about how to reshape your business into something that will give you a better return, through a mergers or acquisitions strategy. Run by broker Richard Rasmussen, much of the information will not be new if you have ever done any in-depth research into buying or selling a business. What may be new is some of the data presented specific to Australian printing companies, although you could probably guess that side of things. It basically boils down to some of us are doing great, some are doing ok, but lots are doing really badly.

The biggest take-away is the urgent need for some printers to get out. A scary number are earning less than they could at McDonalds. The longer they stay in the worse it will get, and the seminar has some good ideas as to how even a printer in diabolical trouble can try to get some value out of their business. Selling up is the most obvious method for these guys, although the valuation methodology Rasmussen describes would be sobering if you were losing money using old equipment. You ain’t getting millions for losing $50k on $300k turnover using a 46 and an Ideal. Buying another printer, whether it is one that complements what you are already doing or one that will help you expand into a new market, gets a going over in the seminar. I have written before about my own attempts and my lack of luck in finding the right shop to purchase. And while I stopped looking a year ago, under the right circumstances I still think it would be a good move for us, and the seminar only confirmed this.

In fact part of my motivation in going to the seminar was seeing if there were any interesting prospective M&A partners there, although just like a Friday night at the Revesby Workers Club between the ages of 18-20, I struck out. The most novel approach to restructuring yourself that Rasmussen presented was converting to a franchise. Snap was used as an example and Stephen Edwards, CEO of Snap, was there at the seminar. I am sure it was in his role as Printing Industries board member rather than franchise-seller-in-chief. Turning into a franchise is not a stupid idea. I have to confess that on days when the marketing side of the business seems all too hard, or I am faced with having to spend a ton of money on software, the idea of signing up as a Snap and not having to think about that stuff is pretty appealing. I actually rang them about it a few years ago. I was having a rotten day and thought if I could only hand over all this future stuff to someone else I could concentrate on what I do best and manage my client’s accounts. I rang Snap but the guy I spoke to made a very good point – why would I want to hand over 10 per cent of a business already trading in the millions to them every year? Why indeed? I sucked it up, went home early for some red wine and came back the next day ready to keep trying.

Now if I have days where the stress and drudgery of running my own business gets too much I fantasise about selling into a bigger company and just working as an account manager. But if I was doing $500k-800k a year, I would probably have to look at the Snap option again and the seminar made the point well. All in all though the seminar was pretty good. I would strongly recommend going, even if you are not looking to buy or sell right now – it takes a lot of work getting your shop into the shape a buyer or partner wants and this seminar is the first step in getting it done.

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