Jim Hutcheson of Regeneration offered tips for transitioning a family business.
By Ed Avis
Reprographics firm owners wondering about how they’ll transition their businesses to the next stage received a ton of solid advice during the 2019 APDSP Convention in Dallas, October 25-26.
The event involved more than just APDSP members. The RSA convention was held in the same hotel, and a group of reprographic professionals from the German reprographic association, Motio, attended, so all three groups mingled and shared ideas.
The German group, led by executive director Achim Carius, took full advantage of their time in the United States. They visited APDSP member firm MS Dallas and a Houston location of Thomas Printworks, and received personalized presentations from APDSP vendor members Construction Workforce Management System (CWMS), Pinnacle Infotech, CAD/CAM Services, and Inktronic.
The weekend started with a reception on Friday night, sponsored by 13 leading vendors to the reprographics field. Attendees networked and chatted while enjoying an open bar and hors d vours. Click here for photos of the event.
Transition Training
Saturday morning kicked off with comments from APDSP Board member Mikel Monsen, who discussed the process through which his family company, Monsen Engineering in Salt Lake City, was acquired in 2017.
Monsen explained that one suitor wanted only the company’s survey equipment business, not the print business, so he planned to open his own printing firm. Then another company came along that wanted to acquire the whole business, and that’s the route they eventually took. Click here to read more about Monsen’s story.
Keys to Success in Reprographics
Joseph Szobody, co-founder of ReproConnect
Next up was a presentation about the keys to success in reprographics by Joseph Szobody, president of ReproConnect. Szobody tapped into the data he has collected over the years to definitively show the areas in which reprographics firms have seen business grow in recent years.
For example, his data revealed that reprographics firms have seen revenue from downloads triple since 2013, and he predicts it will soon exceed revenue from printing.
Szobody said looking at the data and speaking with members has led to the conclusion that three factors seem to most affect the success of a reprographics firm:
1) A gutsy, scrappy sales culture. He said firms in which the owner “hits the streets” are the most successful. A related factor is the willingness to take risks – firms that routinely tried innovative sales ideas were more successful than firms that relied on traditional sales methods.
For example, he said a ReproConnect user told him a couple of years ago that he was going to start charging customers a subscription fee to use the planroom. No other ReproConnect client was doing that at that time, but eventually it caught on and now it’s an important revenue stream for that firm.
Another suggestion in this area was that repro firms should become partners rather than suppliers.
“Companies are always looking to cut costs, and if they only see you as a cost center, they are focused on cutting you out,” Szobody says. “But if you make yourself useful to them, and suggest ways to cut costs, they don’t want to eliminate you.”
2) A focus on the public sector. Szobody said another key characteristic of his most successful firms was that they have a large percentage of work coming from the public sector. School districts, for example, can be great customers because they don’t compete with each other and they set their own procurement rules, which means when a repro firm establishes itself as a supplier, it often remains one for years.
3) Take a big picture perspective. This means remembering that giving up something on one job – such as a fee for using the planroom – can lead to bigger rewards down the line.
“Use ‘free’ planroom services as a way to get your foot in the door,” he advised.
Once you have established a client as a user of a free service, it’s a logical step to get work printing files that have been uploaded, earning fees from downloads, or finding unrelated work such as scanning or equipment rentals.
When something is offered for free, there’s much less red tape for the buying official to cut through to begin that relationship.
Finally, Szobody noted that his most successful clients are aggressive in gaining marketshare. For example, he said one client added 100 new planrooms for various businesses in his community, even though they hadn’t specifically asked for them. Once the planrooms were there, jobs trickled in through them, and competitors were boxed out. It was an investment in development that paid off in the long run.
Szobody’s presentation was followed by presentations by Mark Hahn of Graphic Arts Advisors, who discussed the key issues that buyers of graphic arts firms consider when they’re looking at an acquisition, and Jim Hutcheson of Regeneration, who helped attendees understand how to successfully transition a family firm. The day’s education concluded with an illuminating report from Joel Salus, a veteran of many reprographics firm mergers and acquisitions. Stay tuned to future issues of APDSP Today for summaries of Hahn’s, Hutcheson’s and Salus’ presentations.