Comments: Authenticated sender is 

To: hotnews@inu.net
Date: Sun, 10 Nov 1996 23:47:53 +0000
Subject: November 10 Hotline Newsletter
Reply-to: hotlinecy@aol.com
Priority: normal
Precendence: bulk
Sender: hotnews-owner@downtown.inu.net
Content-Length: 23622
X-UIDL: 847725108.001

Hotline Newsletter - November 10, 1996
by Cy Stapleton
Helene's Hotline
Box 151107
Lufkin, TX 75915-1107
Fax: (409) 637-1480
Return E-mail: hotlinecy@aol.com
Mailed From: hotlinecy@inu.net (cannot receive mail here)
=====

If you received this mailing in error, please send an e-mail message
to listserv@mail.inu.net. In the body of the message type the words:
                       UNSUBSCRIBE HOTNEWS 
=====

This free e-mail newsletter is compliments of the PTN Graphic Arts
Group and Quick Printing, Southern Graphics, Printing News East, and
Printing News Midwest magazines. The purpose is to expand on my
columns and introduce readers to other services that might be of
interest to the graphic arts industry. We will have book reviews,
helpful hints, etc. Topics to cover are solicited from readers. This
is non commercial, except for the short commercial tag at the end of
each newsletter.  Software and book reviews are primarily those
available through the PTN Graphic Arts Bookshelf and relate
specifically to the graphic arts industry. Previous editions are
available from our listserver. To get an index of available documents,
send an e-mail message to: hotinfo@printer-net.com. In the Subject or
Topic field type the word INDEX and send the message. Nothing is
required in the message area unless your software requires it. Shortly
an index of available documents and the keywords to retrieve them will
appear in your e-mailbox.
 =====

I'm trying to get this newsletter back on schedule. PrinterNet's Dr.
Terry Montgomery has done all of the work in sending the newsletter
out til now. I am now going through the learning curve to do all of
the work from my office. Hopefully it won't take more than a couple of
issues to work the bugs out. I would appreciate any comments -
positive or negative. 
=====

Many of you have inquired about a demo version of the Hotline
database, BFP. I finally have one available. It is free, but is
available only through my infoserver. To get a copy of the demo, send
an e-mail message to hotinfo@printer-net.com as noted above, except
the keyword is BFPDEMO. Send the message and shortly the document will
appear in your mailbox with the file BFPDEMO@.EXE attached. Follow the
instructions in the document to install the program. This is identical
to the registered version except the printed documentation is not
included, there are only 20 records in the demo, and you are limited
to adding a total of 40 records. All functions are fully working.
=====

This time we are going to look at a great idea one reader came up
with, announce the new free Helene's Hotline listserver, take a look
at one of the premier free e-mail industry newsletters - The Crouser
Report, and answer a question about how this newsletter is mailed. 
=====

I received a Hotline inquiry recently from a printer who was looking
for a business card size plastic sleeve with a magnet on the back.
That seems rather simple but I was unable to find someone who had that
as a stock item. The printer's customer was a dentist who wanted give
his patient an appointment card, place that card in a plastic sleeve
with a magnet on the back, so that the patient could stick the card on
his or her refrigerator. Great idea not only for dentists but for any
service company such as physicians, exterminators, or any type of
company that has regular appointments with their clients. There are a
couple of ways to approach this job. The easiest would be to simply
take the appointment card and affix it to a magnetic business card
backing. However the vinyl pocket is intriguing. Why not have a
company who specializes in heat sealed vinyl make the pockets,
purchase the pressure sensitive magnetic backing, and affix that
backing to the vinyl pockets? You could get about 8 pieces of magnetic
backing from a single inexpensive business card backing. If the
quantity is very large, there are companies who specialize in affixing
one item to another. Smaller quantities could be done by hand
in-house. This is a product that could be sold on perceived value
rather than an estimated cost. Great idea. If you are interested in
some sources, fax your request to Hotline at (409) 637-1480. 
=====

The first of October we introduced HotTalk - an interactive, non
monitored Helene's Hotline source resource. HotTalk is free, but you
must subscribe. To subscribe, you send an e-mail message to:
hottalk@printer-net.com. In the Subject field type the word SUBSCRIBE.
Nothing is required in the message area unless your software requires
it. If so, simply type a couple of junk letters and send the message.
Shortly you will receive in your e-mailbox a welcome message. Once you
receive that message you are a subscriber. If you are in need of a
source, simply send an e-mail message to HotTalk. In the Subject or
Topic field type a couple of word description of your inquiry (i.e.
piggyback labels, license plate frames, shingled snaps, etc.) In the
message area fully describe what it is you are looking for - quantity,
color of ink, size, whether camera ready copy is provided, and end use
if the inquiry is obscure. Send the message and it will go to all
subscribers. Hotline will respond with a suggestion, but in addition,
all other subscribers are invited to respond. You will probably get a
much faster response than you will by faxing your inquiry to the
Hotline fax number.

HotTalk is non-commercial, but we encourage vendors to subscribe and 
if they see an inquiry that they are capable of producing, they are 
encouraged to respond.

We also ask that each new subscriber send a brief Introduction 
message letting the other subscribers know who they are, what they 
do, and what their interests are. The introduction is the only time 
subdtle commercialism is appropriate.

A similar listserver has been established by George Croft. His 
listserver, PRINTSHARE, covers other questions and answers not 
related to sources. To subscribe to PRINTSHARE, send an e-mail message 
to printshare@printer-net.com with the word SUBSCRIBE in the Subject 
or Topic field. Both are must-reads for any member of our industry. 
We are attempting to get others (like Tom Crouser, whose newsletter 
we cover this month) to set up similar special interest listservers. 

Two new listservers on PrinterNet that haven't been announced yet 
are: fleamarket@printer-net.com and politics@printer-net.com. you can 
become a charter subscriber by sending an e-mail message with the 
word SUBSCRIBE in the Subject or Topic field. FleaMarket is a free 
classified ad area. At least word classified ads are free. If you 
have a piece of equipment you are looking for or if you have a 
pre-owned piece of equipment you would like to get rid of, this will 
be the place to advertise it. This can be an incredible service once 
a fairly large number of printers subscribe. Politics is a listserver 
for those - both liberal and conservative to share their ideas (I'm 
going to love that one.)

You can always unsubscribe to any listserver by sending the message 
                                 UNSUBSCRIBE.
 =====

Now, let's take a look at one of our industry's premier e-mail
newsletters. Tom Crouser is one of the industry's most sought after
consultants. He has a large following that inundates him with
questions and potential solutions to other subscriber's questions.
Sometimes Tom simply throws out a question and monitors his
subscriber's responses. Other times a subscriber presents a situation
in need of a solution and Tom gives his input and solicits the input
of others. His newsletter is at the top of my list of must read. 
=====

Crouser Report OnLine: Five Reasons Printers Stay Poor 

The Crouser Report OnLine is a free weekly printing management
newsletter for print shop owners and managers, typically with less
than 20 employees. The reports deal in topics such as pricing,
finance, sales, equipment justification, and family business among
others. He also answers questions from readers. Tom reports to you
from the field weekly where he is working with real printers on real
problems. Following is a copy of one of his most frequently downloaded
editions, Five Reasons Printers Stay Poor.  

Tom Crouser is a print shop management consultant who publishes The
Crouser Guide to Estimating Printing; The Crouser Report; and printing
management software. He is a regular monthly columnist for Quick
Printing magazine and is a frequent contributor to other printing
trade publications, is a featured speaker at industry associations and
trade shows, and a prolific writer. Tom owned and operated his own
printing business for twenty years. His undergraduate degree is in
accounting, he holds a Masters in Business Administration, has taught
operations management on the graduate and undergraduate levels, and
taught printing plant management to senior's at West Virginia
Institute of Technology. TO SUBSCRIBE send an e-mail message to
tomcrouser@aol.com and say SUBSCRIBE. You can also reach him through
the Internet at crouser@ibm.net or call (304) 342-5100 or fax (304)
342-5187. Crouser & Associates, 235 Dutch Road, Charleston, WV 25302
(USA). 
 ***** 

Crouser Report OnLine Copyright 1995 Thomas P. Crouser November 20,
1995 - Material may not be reproduced in whole or in part without
prior written consent of the copyright holder. 
 ***** 

Five Reasons Printers Stay Poor by Tom Crouser 

I had the opportunity to keynote the New Jersey Association of Quick
Printers' Northeast Regional Printing Expo last Saturday. Here's some
of the highlights. Five Reasons Printers Stay Poor - We don't
understand that we are a Family-Based, Life-Style Business Engaged In
Monopolistic Competition. Family Based - the assets which create this
business come from the family, not from selling stock on Wall Street.
Our family's savings, our family's future, our family's time, our
family's patience. Whether or not you work on a daily basis with your
spouse or children, the leader of the business is in charge of the
family business and he or she must be accountable to obtain a good
return on investment. And, by the way, if you haven't recently thanked
your spouse then do it now. Cowabonga dudess, I couldn't have done it
without you.  

Life Style - There is not a pot of gold at the end of the rainbow. The
way to get the most for a printing business is to sell it to someone
who is not in the printing business. We regularly ignore the ending
value of the business in retirement planning. And, if we get a lot,
then that's a happy surprise. But, we don't count on it. This is a
Life Style business. We must take the money and time now, not later.
It doesn't come later. If you have a problem with respect to money or
time, then fix it. Fix it now. You are in charge. Don't deny your
family the time and money they deserve because you won't confront the
challenges of the business.  

Monopolistic Competition - Most people don't know what the
battleground looks like, therefore they don't succeed. They have
bought into the misconceptions of the law of supply and demand. They
say as price goes up, volume goes down. Therefore, you have to sell
for less in order to succeed. This is not only not true, it is not
even what economic theory says. There are supply and demand THEORIES,
not theory. Each theory relates to the KIND of competition inwhich we
are engaged. PERFECT COMPETITION is the one where the price has a
direct relationship to the volume (and even that is imperfect). We use
wheat as an example. It assumes the product is the same (homogeneous),
all buyers and all sellers know all prices as they occur (perfect
information such as a stock market ticker tape), and no scarcity.
Well, not all printers can print well, buyers and sellers don't know
of all prices and there is plenty of scarcity when a customer needs
the job printed by tomorrow afternoon. PRINTERS ARE NOT ENGAGED IN
PERFECT COMPETITION! There are other conditions as well, such as
MONOPOLY and OLIGOPOLY. Monopoly is like the power company. There is
only one supplier. Well, it is interesting, but certainly doesn't
describe our battleground. OLIGOPOLY is where there are only a few
folks fighting over the entire market (do you realize there are only
three multinational corporations controlling the entire Turkey
market!). The example used here is automobiles as there are only a
relative few providers. Certainly this condition does not exist in the
printing industry. Well what does describe printing? MONOPOLISTIC
COMPETITION does. It is characterized by some entry barriers but there
is a relative EASE OF ENTRY into the market (if you want to get into
the printing business, there are many vendors waiting to help you with
equipment and supplies on an easy payment plan). It is also
characterized by SIMILAR COSTS. Right, I know everyone says they are
different. But, what price advantage do you get really over the next
guy in buying equipment? How about paper? Do you have such a price
advantage, or is most people in the same market paying roughly the
same amount? How about rent? How about labor? There may be some slight
advantages, but not many. Face it, our costs are similar to our
competitors. In addition, our PRODUCT IS SIMILAR while not exactly the
same. The reason this lack of information keeps printers poor is WE
ASSUME WE ARE DEALING WITH A DIRECT PRICE VOLUME RELATIONSHIP WHEN WE
ARE NOT. We don't understand the battleground. In Monopolistic
Competition, there are ONLY THREE SHORT TERM STRATEGIES one can use to
compete.  

They are: 1. Price - Price makes a difference, but it is not a direct
correlation. If you are going to compete on price, you had better be
the low cost producer. Don't over spend on equipment and personnel not
essential to your customers and then expect the customer to pay for
it. That's not going to happen.  

2. Product - While printing is printing (done right), you can not buy
MY printing from the guy down the street. Along with my printing,
comes me and I add value because I can help you solve your problems.
Note: problem solving can rarely be done in your shop. Problem solving
is done in the customer's office. There are other ways to
differentiate your product from your competitor. You can do it through
the equipment you purchase, but be sure your customer is willing to
pay for the equipment you buy. The best differentiation in the
printing industry is on people. Customers buy printing from printers
who know what they are doing. You're people are your greatest
differentiation assets. 3. Sales Activities - Sales activities occur
outside of your shop, generally through advertising and/or sales
calls. Sales activities have nothing to do with responding to the
customer who comes through the door. Sales activities are getting the
customer to come through the door or call you in the first place. It
is the COMBINATION of PRICE, PRODUCT and SALES ACTIVITIES which is
your price strategy. There are good strategies and bad. High or Low
Price, Adequate to Excellent Product and NO SALES ACTIVITIES is a
strategy for disaster. Lowering the price from High to Low without a
change in sales activities simply reduces the total dollars you take
in without reducing your costs. It is not the high or low price which
is important. High or Low Price, Adequate to Excellent Product and A
HECK OF A SALES EFFORT is the strategy for success. REASON ONE:
Printers are poor for they do not understand they are engaged in
MONOPOLISTIC COMPETITION and do not know how to compete in this arena.
REASON TWO is printers think the price has to do with profitability.
It does not. No study to my knowledge has ever claimed this. Build a
$500,000 box of overhead and labor and fill it with $300,000 of
printing, and you will lose money. You will lose a lot of money,. Fill
it, through sales activities, with $500,000 in sales and you will make
money. Fill it with $600,000 in sales and you will make lots of money.
And you are in charge of the box you build. If it is not working now,
fix it. You are the leader of your company.  

REASON THREE is we stubbornly refuse to learn the truth about WORKING
CAPITAL and use it to our advantage. As people die of mostly of
pneumonia even though they have other diseases; businesses die when
they run out of working capital. Find all of the assets in your
business on your balance sheet. See what the CURRENT ASSETS are. If
you don't see them on your balance sheet, then tell your accountant
you want a CLASSIFIED Balance Sheet. If you don't have an accountant,
get one. If you have one who doesn't know what I am talking about,
then get another one. Once you find the Current Assets, then divide
that by your CURRENT LIABILITIES. That, too, should be showing
automatically on your balance sheet. Here you are dividing the amount
of cash you will have during the next year by the amount of cash you
have already obligated yourself to pay during the next year. GET THE
RATIO TO 2.0 to 1 and keep it there. Businesses die for lack of
working capital. It is more important than profitability. It is more
important than equipment. DON'T SPEND YOUR WORKING CAPITAL FOR
EQUIPMENT. 

REASON FOUR is WE DON'T JUSTIFY EQUIPMENT, we desire it. Buying
equipment is an investment decision. WE MUST COMPARE ALTERNATIVES in
order to see what is the best investment. As such, we must compare all
alternatives at the same time, usually once or twice per year. The
operating budget tells us how much cash we are spinning off. If we are
not building cash, stop and fix it. Do not go forward. If we are
building cash, then we look at working capital. Do we have a 2.0 to 1
ratio. If so, we can spend the amount of money which is above the 2.0
on equipment or whatever we want. If we don't have a 2.0 ratio, then
stop here. Do not go forward until your current ratio is 2.0 or
better. Then we put into play a couple of other factors. Retirement
savings. Educational savings for the kids. Additional income for the
owners so they can buy the bigger house. And equipment. That's what is
competing for the money being spun off by the business. Each of us
must decide what is most important and prioritize. We prioritize based
on what will be the best investment and there are mathematical ways to
do that. To justify one piece of equipment at a time is to lust after
it and your justification is no more than investing in a dog at the
dog track. 

THE FIFTH AND FINAL REASON printers stay poor, in my opinion, is that
WE HAVE TOO MUCH MANAGEMENT and NOT ENOUGH LEADERSHIP. Too many
printers try to build a perpetual motion machine which allows them to
earn lots of money without doing real work. We look for a silver
bullet incentive plan which will make our slovenly employees do their
best without us having to actually supervise and lead anyone. We look
for that specific price which will allow us to maximize our income
without having to really sell anything to anyone. The silver bullet
isn't there. You can't manage people into battle, you must lead them.
That leader is you. Never give in on a worthy cause.  Tom Crouser
 - -- - - - - - - - - - - -
 BACK ISSUES of Tom's newsletters may be found
at the National Association of Quick Printer's America On Line Site
(keyword: NAQP, publications, Crouser Report) or on the internet at
the PrintUSA web site (http://printusa.com/articles/crouser.htm) or on
PrinterNet (modem: 910.767.2622 or telnet: printer-net.com).
 =====

Q. How do you get addresses for your newsletter and how do you send
it? A. How I got the original addresses is a sore spot. I had a little
less than 4,000 addresses that were acquired at trade shows, e-mail I
received, etc. I then acquired a list of some 22,000 that were
supposed to have been printers, but I got scammed on that one.
Unfortunately I merged the two lists without keeping the original
4,000 separate and many who had no interest in receiving this
newsletter were furious. Hopefully most of those are cleaned up now
and the list is about 10,200. New additions come only from those who
request to be added to the list, from e-mail I receive, and from
addresses I pick up at trade shows, meetings, etc.

The newsletter is written in WordPerfect and is saved as an ASCII
stripped file, which is then imported into my e-mail software. I am
now using Pegasus, an excellent e-mail package, but will be switching
to Eudora as soon as I get the new version. I e-mail a copy of the
newsletter to my local Internet provider, who has set up a send-only
listserver folder that I have complete control over. That's sort of
like HotTalk except that only I can send a message and it doesn't
receive any messages. All of my addresses are in that folder, and when
I send my message it is automatically sent to every address on the
subscriber list. Requests to be Subscribed or Unsubscribed are handled
automatically if the requester follows the instructions. If they
don't, then I have to physically remove or add them. Bad addresses are
not handled automatically and I have to manually remove them. This is
wonderful technology, but is very time consuming. This would be a good
topic for discussion on George Kroft's Printshare, mentioned above.
I'll be happy to share what experience I have with it.

I moved this off Dr. Terry Montgomery's PrinterNet because as I learned
just how time consuming this was, I didn't want Terry to have to do
all of that work. I feel certain that as time passes it will be less
time consuming, but Terry has a lot more important things to do other
than spending a couple of days each month dedicated to my newsletter 
and trying to tutor me at the same time. I have an excellent local 
consultant who is working closely with me. He's no Terry Montgomery, 
but he certainly knows what he is doing.
=====

In the next newsletter, among other things, I will have a couple of
reviews - Dave Fellman's Print Selling Seminar on video, the new
Business Forms templates on CD, one of Frank Granger's fascinating 
printing history pieces, and talk about how a couple of printers have found an 
interesting way to capture a significant amount of business from companies 
who have their own in-plant printing department.
===== 
Also, Hotline is set up as an authorized dealer for literally tens of
thousands of commercial software programs - both Mac and PC. This
includes such must-haves as PageMaker, Quark, Word, Word Perfect,
Eurdora, Front Page, and more. All software is sold at 10% over dealer
wholesale cost plus shipping charges. If you are interested in the
details, e-mail your request to our listserver at:
hotinfo@printer-net.com. In the Subject or Topic field of your e-mail
software type the word DISCOUNT and send the message. Nothing is
required in the message area unless your software requires it. In a
few minutes the document explaining the offer will appear in your
mailbox. 
=====

Till next time, God bless you and yours...
     cy 




The House of Gutenberg

Cy Stapleton

Box 151107

Lufkin, TX 75915-1107

(409) 637-7475

Fax (409) 637-1480

Email - hotlinecy@aol.com



Tuesday, January 14, 1997 2:10:30 PM