Differing Print Owners
Need vs. Want
By Greg Mischio
Regardless of whether a printing business is successful or not, owners feel intense pressure to dramatically change their current operation. In a recent joint research study between InfoTrends and FESPA, more than one third of print service providers (PSPs) reported that they are making some kind of strategic change in their business operation in order to compete more effectively.
For some, this means they’re going to stay and work on growing business organically. According to Tim Green, director, wide format printing and jetting technology opportunities consulting services, InfoTrends, “these strategic changes range from sales force realignment to undertaking a comprehensive sustainability initiative.” Other printers choose to either exit the game or look for growth through transitions such as mergers and acquisitions.
According to Rock LaManna, intermediary for the printing industry/owner, LaManna Alliance, picking the correct strategic transition happens only if PSPs understand which type of printer they are—need to versus want to sell.
Need to Sell
Every PSP is in a different situation. Feeling burned out is a major reason why owners are currently selling. Between the long hours and the rocky economy, many industry veterans are feeling the burn. In other cases, the business has just become dull.
An owner may want to keep its business, but there is no offspring waiting in the wings to take over. The owner thus realizes it’s time to sell, because junior won’t be around to run the show.
Dealing with personal problems is a common reason to sell, and it seems to be cropping up more with a down economy. Illness, divorce, family tragedy, and partnership issues often force the sale of the company. They’re unpredictable and usually lead to a less-than-optimal selling price.
It’s retirement time, but for many owners, all the money is sunk into the business. It’s hard to find a bank in a lending mood these days, so it may be difficult to borrow against the assets of the business. To access your hard-earned cash, the only other option may be to sell.
Wants to Sell
Owners who want to sell have a successful business. With investments in talent and equipment, or because of solid strategic thinking, they’re ready to take the next step.
Some look to bypass the extra roles. Building a business is tough work, and most printers wind up being a jack of all trades. From business development to human resources, they handle it all. Many become burned out and miss the excitement and joy of creating services and selling them.
Can selling your business get you into new markets? Let’s say you’re a wide format digital printer and you want to expand into flexographic printing. Why not sell the business to a flexographic printer? You’d suddenly have access to a company you could never have created as quickly.
How about growth in general? If you’re purchased by a larger company, you can add resources, such as a bigger sales force and more marketing.
How about the old idea of getting out while you’re ahead? If you’ve grown the business and you want to kick back, you can always sell out to a larger investor.
A PSP looking to sell should put a solid team in place and surround themselves with experienced, industry-specific professional advisors, including a legal counsel, tax advisors, accounts, and financial experts. Then they will be in the right place to take the next step.
Dec2011, Digital Output