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Living in Low-Budget Land

(March 2012) posted on Tue Mar 20, 2012

How to survive the current economy as a printer

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By Andy MacDougall

Every print shop goes through cash-flow problems and extended periods of dropping sales. In my experience, next to wages and materials, overhead is probably one of the biggest costs to a business. In most cases, unlike labor and consumables, it doesn’t fluctuate as much when sales volumes go up or down. Reducing overhead gives the biggest bang for saved bucks.
I experienced this first hand once when our sales dropped for a couple of months in a row and some large jobs went bad. With the bank ready to call our loan, I got the biggest red pencil I could find and attacked our monthly costs in an effort to avoid ruin. Along with a number of smaller expenses immediately reduced, we figured our rent and space were more than needed. The building was also poorly insulated, resulting in wintertime heating costs that were literally through the roof. After failing to negotiate any relief from the landlord, we looked around and ended up in a smaller, custom-built space with radiant heat and great insulation. Savings amounted to nearly $3000 per month on rent and an additional $2000 per month on heat in the winter.
A move is a major disruption to any business, but any time a shop can reduce its monthly fixed costs, the savings over the long haul are easy to calculate. We saved more than $40,000 per year. As a comparison, if you had a net profit of 10%, you would need to add sales of more than $400,000 to match those numbers up on a balance sheet.

Material costs
I’m a believer in sticking with a trusted supplier, preferably local, and worrying less about rock-bottom pricing. People who chase the cheapest prices end up paying more if materials don’t perform or aren’t delivered properly. Most materials are commodities, so don’t lose sight of the intangibles for a few cents off. Having said all that, if materials and consumables are not doing the job for you, start shopping. Where you can also save is on volume discounts and freight. Look into trade-association discounts for delivery services.


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