These are trying times for printing companies. Competition has strained pricing and profitability. More than a few competitors are offering prices that have little relationship to the actual cost of production. Printing companies also have to keep up their investment in new technologies to remain cost competitive and on the leading edge of new product offerings to customers. Printers continue to struggle with how to make money in a changing marketplace.
Now that summer is over, business owners need to consider the future of their companies and where they want to take them. One question you should be asking yourself is “Should I sell”?
The decision to sell your company, or to put effort into improving it, is affected by both personal issues and business conditions. You may be at the point in life where you want to try something new or want to retire. If you do decide to sell your company, ask yourself whether it is ready to be sold and is of interest to potential buyers.
Readying a business for sale is much like readying a house for sale. Business owners must determine whether their company is profitable enough to appeal to the marketplace. You may find that you need more than a fresh coat of paint in order to appeal to buyers.
If you don’t want to sell immediately, you may instead want to restructure your company, find a new focus, and make some good profits before selling at a later date.
Regardless of your situation, there are three paths that you can follow:
- Decide that you are here for the long haul and that you need to find new direction and ways to improve profitability. You have the energy and the funding to see this transition through.
- Decide to sell your company for various reasons, but make improvements first to realize the greatest sale value.
- Simply sell your business as is to the highest bidder. Depending on the condition of the company, this option may not yield more than fire sale values of your equipment.
In order to be ready to sell, you must have a plan of action to improve your weaknesses. I am currently assisting a Toronto printer using our “Sell Ready” program by taking the next six months to develop an assessment as well taking specific steps to correct shortcomings. We will then use the next 12 months to monitor results in sales and profits and several operational metrics including customer satisfaction. Measuring such results will get you the extra value in a business sale.
There are a number of specific areas that must be addressed before you think about selling, including:
- Your company’s strategic focus
- Identifying what your customers want today and will want in the future
- Long-term industry direction
- Effective marketing and sales systems
- Production and administrative efficiencies
- Management and employee skills and training,
- Cleaning up your balance sheet, corporate record book, debt positions and tax filings
But before any of these steps are started, owners should first ask themselves whether they have what it takes to turn their company around. Are you engaged but frustrated, keen to move your company forward but not sure how? Or are you disengaged, going through the paces with no solid improvement plan, and wishing you could just get out now?
Rather than any structural or marketing weakness in a company, in my experience, the determining factor in the success of any turnaround program is how committed the owner is to working to achieve success. If you are committed and eager to identify ways to develop a profitable competitive advantage then you are much more likely to increase the value of your company, whether you wish to sell or stay for the longer term. Now that summer is over, it is imperative that you develop action plans for your company and implement them. Doing the same old things is not an option.
Douglas Hart CMC
douglashart@hartconsultants.com
www.hartconsultants.com
