Hotline Newsletter #19
June 23, 1996
WWW in my future . . .and Cy's response!

I will be presenting a Hotline outsourcing seminar at Southwestern Graphi= cs '96 in Dallas from 8am to 11am on Saturday July 13, 1996. For details,= fax (409) 637-1480 or email hotlinecy@aol.com

Subj: WWW in my future . . .
Date: 96-06-22 23:54:50 EDT
From: 8ball@netdoor.com (Peary Lomax)
To: hotlinecy@aol.com


Sir:

Like many small offset shop owners today, I'm beginning to experience some reservations regarding making further financial investments in my little shop. I suppose, in a nutshell, that I want you to tell me that everything's gonna be ok, or words to that effect. After all, we've been in business for more than 50 years, are moderately profitable, have relatively low debt, good employees, loyal Customers, etc. And it isn't as if change is something new to us. I learned typesetting from my dad (out of a California job case), then went to the Linotype, then phototypesetters, and now PCs. We have dealt with change before. Successfully.

But how do I position myself for a future which seems to be more threatened at every turn of the clock? Is offset printing on the way out? What to do!?

Your words of wisdom would be both heeded and appreciated.

Sincerely,

P. Lomax (etaoin, shrdlu) Peary:

I don't know about my wisdom, but I certainly do have my ideas on the subject. Hopefully some other readers will give their input.

First of all, you have done a good job of expressing the situation I have been predicting for several years. Technology is advancing at such a rate that it is virtually impossible for even the largest printers (except, of course the Government Printing Office) to acquire all of the equipment and expertise necessary to service all of their customer's requirements. The result is that in order to survive, I feel the small to medium size printer is going to have to one of two things. He either going to have to develop a niche market specialty or he is going to have to master the art of outsourcing - taking advantage of other's investment in equipment and expertise.

First, lets take a little walk back in history to see from whence we came.

We have had several major technological advances in the last five centuries or so. First was Gutenberg's method of casting type which enabled mankind to mass produce his thoughts. During the first 50 years or so after that invention or event a number of scribes were put out of work but they developed other markets for their work until they were almost gone by normal attrition. While not a lost art, there aren't many scribes left but a significant number of those - now called calligraphers - are doing rather well.

Things went along pretty much the same for about 400 years until Mergenthaler invented his automatic typesetting machine. There were, of course, other advancements over the years such as the iron press and the automatic press, but for the most part things were done the same way. Mergenthaler 's invention in 1886 was fiercely fought by the typographers of the day - those individuals who set type by hand - but it quickly caught on and many of those typographers learned to operate the new equipment. Those who did not fell by the wayside.

A little less than a hundred years later in 1952 Photon came out with the first practical phototypesetter and that was the beginning of the end of another era. Those who did not recognize the importance again fell by the wayside. It was astounding to me to see hot type companies as late as the early to mid 1960s purchasing new Linotypes, Ludlows, Intertypes, etc. A few years later they were all out of business but those companies who saw the future of phototype prospered.

In the 1980s we saw the beginning of another era - the PC. That opened up a whole new world to the printing industry - an opportunity for some and a major problem for others.

You have survived three of these major eras. There is no reason that you cannot survive the one we are seeing on that horizon that is drawing closer and closer. Advancements are moving from the pre-press area to the pressroom.

Enough of the history lesson, let's take a look at some possible solutions.

I feel that for many years - longer than you and I will be around - there will be a place for the small to medium size print shop. You will just be doing things a little different. You are very fortunate in that you have a great deal of experience in letterpress and offset. I don't ever see the day where there will be no place for a letterpress or offset operation. One possibility for you is to capitalize on your letterpress experience. Companies like Blanks USA are among the profit leaders with their die-cut, perforated, scored, and numbered blank forms. Another possibility is to develop a special interest newsletter business. Create a series of business-to-business newsletter shells and either sell them direct or as a trade service to other printers. These would be newsletters for accountants, attorneys, real estate brokers, banks, plumbers, hardware stores, and on, and on, and on. If you are handed a lemon, turn it into lemonade.

Yet another possibility is my area of expertise - outsourcing. Keep the equipment you have, upgrading when absolutely necessary, to handle those short to medium run requirements your present customers have. Then start outsourcing that work someone else can produce more economically than can you. If you take this direction, what you will be doing is let the other guy make the investment in capital equipment and personnel. Let him produce that part of your job (or the entire job) that you do not have the capability of producing in house. This philosophy will give you a partnership with thousands of highly competent vendors across the country. There is virtually nothing that you cannot provide for your customer. Using this philosophy, one small shop owner didn't bat an eye when one of his customer's came in and wanted to order ten million lobster bibs. One of the last jobs I produced before I sold my very small printing company (2 employees) was the largest one I ever produced - $55,000. I only did a small part of the job in house and even though I made a profit of about $39,000 on the job, I was the low bidder. It's wonderful when you know exactly what your bottom line cost on a job is going to be - including spoilage, possible press problems, etc.

Yet another possibility is to join a trade club or association and develop a rapport with other printers. This networking of printers sharing their ideas can be most rewarding.

Go to a printing trade show at least once a year. Look for seminars or programs they might have that relate to questions or problems you have. You would be absolutely amazed at what a small percentage of printers across the country attend trade shows. I believe it is something in the neighborhood of 20%. You can cut your competition dramatically if you are better informed than 80% of your competitors.

Study publications such our regional Southern Graphics, Printer's News East and Printer's News Midwest, and our national Quick Printing magazine. We have columnists who have expertise in many different areas. When you find one that has expertise in an area you are having a problem with, contact him about a possible in- house consulting session. Check out our Graphic Arts Bookshelf to see if there are any publications that are addressing the questions you have.

Since you are certainly not alone in your concerns you can be assured that we, as well as other publishers of trade journals, will be addressing these concerns.

I would like to have other readers comment on this problem. What are you doing to prepare your company for the future? Commercial...

If you would like to have either the Hotline database or the Hotline Ad Specialty database on your own computer, request our descriptive brochure or visit our home page.

The House of Gutenberg
Cy Stapleton
Box 151107
Lufkin, TX 75915-1107
(409) 637-7475
Fax (409) 637-1480
Email - hotlinecy@aol.com


Thursday, June 13, 1996 4:55:43 PM

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