Date: Mon, 8 Jun 1998 20:08:52 -0500 
Subject: Crouser Report #192; June 7, 1998, Part 1
To: martin@lata.net

Crouser Report OnLine Copyright 1998 Thomas P. Crouser, Sunday, May 31, 1998 -
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*****
Crouser Report #192; June 7, 1998
Soon To Be Broker
Transmitted from Pittsburgh, Pennsylvania
*****
INDEX: Marianne Arbuckle of Express Press in Melbourne, Florida has been
honored as our Production Manager of THE Year. Congrats! A reader wants to be
a broker. We respond in Soon To BE Broker. Diane has several basic
Accounting QUESTIONS. An Australian DEAD Printer writes. And WOW Things are
looking UP for a Detroit printer. WANT AD information is requested. Peter asks
about Thanking YOUR Customers. And speaking of thanks, Roy in New York State
sent a thank you/happy message to Ray and Lisa. I thought it would serve as
a good reminder for all of us. Tony wants to go to the opera occasionally, so
he's ready to GET Back To The Rat Race: Tony's Wyoming SHOP is for Sale.
You'll find all these stories in this headed back to Pittsburgh this week
too edition of the Crouser Report Online.
***
Travelog: Signal Graphics convention in Vail, Colorado on June 27th; the NAQP
Print Image meeting and show, Chicago July 23rd to 25th; and then our 1998
Print Shop Sales Conference for clients, August 5th - 8th in Pittsburgh. Hope
to see you soon.
***
Production Manager of the Year

We honored Marianne Arbuckle, (Express Press, Melbourne, Florida) as the 1998
Production Manager of the Year during our annual Production Manager's
Conference in Pittsburgh yesterday (June 6, 1998). Marianne's rating during
the company's annual Operational Performance Audit and her leadership among
her peers made her an obvious and popular choice. In other activities, Rob
Blanton of Commercial Printing in Owensboro, Kentucky discussed his firm's
quality assurance in printing of highly critical process color work on a two-
color Heidelberg.  Lawrence Bart of DocuPress in Cambridge, Massachusetts
reviewed his firm's strategies and procedures in the deployment of DocuTechs
in the Boston market. And, Marianne Arbuckle of Express Press presented her
smaller shop's production control system, which has allowed them to double
sales in two years. Mentor Don Mashue of Mashue Printing in Midland, Michigan
led a session on press and bindery related issues and Mark Crowley, president
of WinCore, introduced ToPress, software which allows printers to prepare
typical Microsoft application files in separated form (such as Publisher,
Word, Excel). John Giles, author of The Digital Original spoke on current
topics in pre-press including the forthcoming emphasis on PDF formats. And, of
course, Tom Crouser put in a few remarks about production organization and
people management. The group also saw the first ever game between the
Pittsburgh Pirates and the Minnesota Twins. The annual Crouser Conference on
Production Management is held for clients of Crouser & Associates who operate
similar production management systems. The 1999 Conference will be held during
the first week of June in 1999 in Pittsburgh, PA.
*****
Subj:   Soon To BE Broker
From:   Soon
To:     TomCrouser

Tom, hello to you and your beautiful other half. I am writing to you today
looking for a little advice. I want to start brokering printing. I still have
a few people that would prefer to deal direct with me rather than my former
employer, and I have been talking to some other people who would be interested
in me handling their printing.

Before I get into brokering, I have a few questions and some concerns. First,
besides obtaining a few printing clients, and letting their work out to
printers to be produced, are there items I need to consider before getting
started.

Second, what should I consider as a fair vendors discount?  What should be
considered a decent percentage markup. Should I go after major niche accounts,
or stay with general print clients. (I feel that I can sell to the digital
print for pay market knowing what it takes to produce such work, and knowing
who has what equipment in the area and around the country). Even though I
would not be pushing items like business cards, should I set up my own account
with companies like BCT or AWT? Or should I broker through one of the printing
companies that I will be dealing with. Another question is what type of
agreements should I have with printers prior to my starting out in brokering,
and what should I expect from them in the way of turn around time,
confidentially and treatment?

One thing I should mention. I may be good at selling, but I don't like cold
calls. I have done some in the past, but it has always bothered me going into
a strange office and making my presence known. I imagine that many of the
printers you talked to have the same feelings. I would appreciate any advice
to help me get over this type of feeling. Again, I know I can sell. I am just
looking for a comfortable way to get my foot in the door without having an
inside contact.

Tom, I guess what I am asking is, if I make the decision to get into print
brokering, what do I need to do to do it properly. Where should I be looking
to start, and where should I be looking to make sure that I am making a living
and not just working for nothing. As you know, I am not an accountant, but I
know that I would need an accounting system. Should I set up a different set
of accounts other than outlined in your book? Or should I let an accountant
keep the accounts straight for me (by the way, I thoroughly enjoyed your book,
and have learned a great deal more from it prior to my picking it up).

I know that the area of print brokering is not you main area of consultation,
and I have thrown you a lot to be considered. I respect the advice that you do
give to the printing industry, and that is why I have come to you for help
here. It is people like you and Pamela that want me to want to stay in the
printing industry. Thank you, Soon To Be Broker.
***
Hey, Soon, let me answer in parts.

Generally, you need to find a few printers who will do you work (probably
smaller ones - some will be glad to work with you - others will not). Sell
them on the idea that you will be their outside sales person (most hate to do
that for themselves). Then the issue of credit will come up. In a broker's
relationship, you sell the customer and buy from the printer. Bad debts are
yours, not the printer's. Brokers who pay their printers well are at a
premium. Be able to demonstrate this and you will have a lot of loyal
suppliers.

 Second, what should I consider as a fair vendors discount?  What should be
considered a decent percentage markup. 

Buy low, sell high. Generally 10-15% is a cost of sales for the printer. I
would expect many would give you a 10% discount. You could then mark up that
work by 1.25 and still be competitive. (How? Most printers price low because
they don't sell. Solve customer problems and they will pay.)

 Should I go after major niche accounts, or stay with general print clients.
(I feel that I can sell to the digital print for pay market knowing what it
takes to produce such work, and knowing who has what equipment in the area and
around the country). 

I think that more traditional print brokering would be easier to sell and
service. The digital market is new and not well established for brokers. But,
on the other hand, if you find customers who need your help in getting this
done . . .then do it. Find out what the customer needs first (help with what
kind of printing problems) and then provide the solution.

 Even though I would not be pushing items like business cards, should I set
up my own account with companies like BCT or AWT, or should I broker through
one of the printing companies that I will be dealing with. 

I would think you would set up your own accounts for this type of stuff. Why?
Doesn't make sense to me for a broker to broker to a broker who will broker to
a manufacturer.

 Another question is, what type of agreements should I have with printers
prior to my starting out in brokering, and what should I expect from them in
the way of turn around time, confidentially and treatment. 

You can expect the same turnaround time given to other customers until you can
prove you can: pay; provide them with a good volume of business they can (and
like) to do; provide them with jobs which are specified correctly so there are
little problems. Confidentiality, treatment, non-competes are not subjects you
can really worry about as you start up because you have no credibility. These
are subjects you can discuss once you have some credibility as a real broker.

 One thing I should mention. I may be good at selling, but I don't like cold
calls. I have done some in the past, but it has always bothered me going into
a strange office and making my presence known. I imagine that many of the
printers you talked to have the same feelings. I would appreciate any advice
to help me get over this type of feeling. Again, I know I can sell. I am just
looking for a comfortable way to get my foot in the door without having an
inside contact. 

A broker who doesn't really like to sell? Is that like a printer who is afraid
of ink? My advice: get over it and when you are hungry enough, you will get
over the feeling in your mind. Another alternative would be to get some sales
training in establishing and caring for account relationships. That is much
harder for a broker to do than a printer for the printer has, at least, a sign
on the street to attract some customers.

Actually, I would assess what customers would deal with me. Go to them and
make sure they will. Then I would go to printers. Build your business through
the network you have already established. You have not chosen the easiest life
in the world. The easiest life for you would be to get a real job paying real
money, especially while the unemployment rate is so low.

 As you know, I am not an accountant, but I know that I would need an
accounting system. Should I set up a different set of accounts other than
outlined in your book? Or should I let an accountant keep the accounts
straight for me 

Your accounting will not be a problem. Finding customers who want you to
handle their printing problems will be. You can simplify your chart of account
(income statement) a great deal: sales, cost of sales and any overhead item
(rent, etc.). For the first year, don't have any overhead and your chances of
success are greatly improved.

And thanks for your kind words. Good luck. Tom.
*****
Diane has several accounting questions. We'll respond to them one at a time as
we go.

Subj:   Accounting QUESTIONS
From:   Diane
To:     TomCrouser@aol.com (Tom Crouser)

Tom, Well, I am back!! Been too busy getting ready to move the office to write
sooner, but I have a few questions. Trying to get all the bookkeeping lined up
correctly.

1. What do I do with the cash value of Accumulated depreciation? My
accountant gave me the numbers to plug in for the end of 1997, so they show on
the books. But do I take a cash equivalent and put it into savings or
something? How do I assure myself that when something needs to be replaced
that the depreciation money will be available?

 Good question. You've actually already done something with the cash. The
cash has already flowed through to your bank account, accounts receivable,
etc. Now, how do you make sure it's available to you when you need it? Don't
spend it. I guess you could put it aside in a bank account as you suggest. I
have seen people do that. But most of us don't really have the overall cash to
do that. I would suggest you have your accountant prepare a Statement of Cash
Flow as a normal part of your financial information. Pay a lot of attention to
this and it will help you keep from spending money you don't have which is
your point. We've got almost a chapter on the background of depreciation, etc.
for you in Dead Printer Working. Hope this helps.  

2. I would like to set up my notes payable for current and long term. Is the
Current figure constantly changing? Or can I enter a figure on January 1 for
the entire year, deduct payments from it throughout the year, and on the next
January 1 repeat the process? Or must it change every month? I don't know how
to figure on a monthly basis, is that something my accountant would help with?

 Current figure never changes until there is 12 or fewer payments left. The
non-current figure is the one that's always changing. You can enter the
current portion on day one of creating the note and then not change it until
you are within a year of paying it off. Now, the non-current would be changed
every month. When you pay the payment, you would debit Notes Payable-Non
Current, and credit Cash. Assuming you use the Prepaid Interest method (which
we recommend), you would also debit Interest Expense and Prepaid Interest.
Your professional accountant could be of help to you here. 

3. Maintenance agreements on my copiers - I understand that the click
charges monthly are a COG expense. Is the actual monthly contract amount also
COG? Or is it just an expense.

 I recommend in Dead Printer Working that the click charges go into cost
of direct materials and the equipment rental or base cost goes into equipment
rental in overhead. Theory here is if you didn't make one copy during the
month, the monthly base cost would still apply. Therefore it is a fixed
expense. The actual number of copies and thus click charges is variable and is
a direct material. 

By the way, I have not given up on being in one of your performance groups.
Give me another year or so and I should meet your requirements. Have you ever
thought about doing something specifically for start-ups? I hope to meet you
in Chicago in July. I will bring along a set of financials if I remember it.
Thanks for your help, Diane.

Haven't really thought of it, but it could possibly be done if enough people
are interested. If you are interested, message me with your name, company,
address and telephone. We'll see what we can do depending upon the response.
Tom
*****
Australian DEAD Printer Writes

 Hi Tom: I guess it's because I'm a recent arrival on your list but I need
to ask yet another potentially stupid question. One of your correspondents in
#191 said he had set up his financials like yours. My business is in the
doldrums so I figure I need to start measuring it by some comparable standard.
So ... please ...where do I find your financials? And is there then a

standard against which I can compare my business. I imagine Dead Printer' may
be the source but while that may be available from all good bookstores in
US, I'm not quite sure where I can - easily - get it from this distance.

I have to say that I'm glad I live where I do but I sure wish I were a lot
closer to where you are so I could join one of your groups! Your Report is a
highlight of the week . . . Thanks. Australian Dead. 
***
Hey, AD, you're right. Dead Printer is the source although I have published
some parts of it as articles. Anyway, believe it or not, the Printing Industry
of Australia has a quantity of the books for sale. However, since you have
given me a good excuse to plug the book and said so many kind words, I will be
sending you a copy without charge. Hope it helps and we hope to get back to
Australia soon. Anyway, what follows is a message from Detroit, which shows
that things can get better! Tom
*****
Subj:   WOW Things are looking UP
From:   Rick
To:     TomCrouser

Hi everyone, I just thought I would update all you guys about what has been
going on here at (our shop). For the first 4 months we have averaged almost
$53,000 per month; in April we had sales of $61,000. And we really only had 4
people working the whole month. (One) was out with gall bladder surgery since
the end of March. She is back now, but only working part-time for a while. (My
wife) is only in here maybe 8-10 hours a week. She is spending most of her
time trying to get her back in better shape. We just got our April financials
back from our accountant, and according to these numbers we made $19,795 for
the month of April and $37,537 for the first 4 months.

Even our current ratio is 2.8:1. Tom maybe you should look at this I can't
believe things are going so well. Ann and I left here on Friday about 4:00,
and I said to her I left at 4:00, don't have to work the weekend, coming off
$60,000 month, we actually have money in the bank, current ratio looks good,
I've gotten out of the shop at 5:00 or sooner every day this week WHAT IS
GOING ON HERE!! So anyway things are going pretty good here! Hope everything
is going well with all of you guys. Rick at the Top.
***
Hey, Rick. Yea, but not working 100 hours a week and living on a shoestring
has a certain amount of bonding appeal doesn't it - just think - you will
really miss those good old days. Congratulations on an excellent job . . .and
yes, the current ratio does look correct (they faxed me a copy of their
financials). Congrats! Wanted everyone to see your message so they will know
that it can be a lot better. But, only if we want to make the necessary
changes like you did. Congratulations again. Both of you have done a really
great job. Keep up the good work. Tom
*****
WANT AD

Another reader writes:  Can you e-mail or fax us a sample of an effective
want ad for a pressman for our Ryobi 3200, 3302M or 582H. Thank you. 

Hey, guys. Want Ad: First you gotta stop (like most printers) advertising for
a SPECIFIC press operator. Imagine advertising for a delivery truck driver who
drove only Ford products. Or refusing to hire a cracker jack printing salesman
because they have never sold to your kind of customers before. What you want
is a PRESS OPERATOR! Worry about the details later.

I have sent you the Crouser Report #177; February 22, 1998 entitled Getting
Good Help. It is also the Crouser Report Feb. 1998 for those receiving our
printed form only. (See end of message instructions on how you can RETRIEVE
MESSAGES via email.)

In that issue, a suggestion the following suggestion appears: Press Operators
- move up to a Ryobi two-color with this aggressive Smithville printing
company. $13 hour. 2 weeks vacation after one year. 7 paid holidays including
day after Thanksgiving. Health, disability, life insurance half paid by
company including family coverage. Retirement plan. Join this involved owner
and spirited team. Call xxxxxxxxxx.

In short, sell the potential applicant on your job; don't try to eliminate
them with the ad. Eliminate them later. Right now the job is to get a pool of
workers to choose from and that is one of the highest level problems in our
businesses. Good luck. Tom
*****
Subj:   Print Shop FOR Sale
From:   thenry@rmisp.com
To:     tomcrouser@aol.com (Thomas P. Crouser)

I want to sell my printing business and real estate. It's a good little
business in Lander, Wyoming, at the foot of the Wind River Range of the Rocky
Mountains far from the madding crowds. The buyer of this business will have to
enjoy the mountains, hunting, fishing and hiking etc. The longest snowmobile
trail in the lower 48 begins in Lander and runs 150 miles up through Grand
Teton and Yellowstone National Parks. An unforgettable trip.

My wife (a schoolteacher) and I own the building located in historic downtown
Lander occupied by Valley Printing and 2 other tenants. Valley Printing, Inc.
had sales of  $240,000 last year. We have 3 employees including myself. We
have 1 competitor, a current ratio of 8:1 and owners compensation of about
20%.

I work 45 to 50 hours a week. 25 hours operating the press and bindery, 10 to
15 hours calling on customers, making deliveries etc. 10 hours on management
duties. My wife and I want to move closer to the big city. I'm tired of
cowboys and Indians. I want to go to the opera. Can you help us find a buyer?
Sincerely, Tony.
*****
Tony, don't know. Your shop and town sounds like a wonderful place. Most
businesses of this size, however, are sold through business brokers - one in
your state would be of most help to you. We do belong to the International
Business Brokers Association and can refer you to someone near the area. In
the meantime, if someone wants to trade places with Tony, you may reach him at
thenry@rmisp.com. Good luck. Tom
*****
Thanking YOUR Customers.

From:   PETER
To:     tomcrouser@aol.com

Love your newsletter. Last one mentioned that the printer had not thanked his
top 25 customers in the last two years. How do you recommend thanking our top
25 customers? I shy away from the trash and trinkets like coffee mugs and
pens with my name on them, but am open to suggestions. Your thoughts would be
appreciated. Peter.

Hey, Pete. Pay them a visit and look them directly in the eye and say, I know
you have a choice of printers, and on behalf of my family and the families of
all of the folks who work with us, thank you.

You don't have to take anything, give them a discount or give them tickets to
the World Series. Just thank them. And, while you're at it, sit all of your
workers down one at a time, look them directly in the eye and say, I know
you have a choice of places to work, and on behalf of my family and all of the
customers whose business depends upon each of us, thank you. Hope this helps.
Tom
***
And speaking of thanks, Roy in New York State sent a thank you/happy message
to Ray and Lisa. I thought it would serve as a good reminder for all of us.

Subj:   No, Thank YOU
From:   Roy
To:     Rays@crouser.com

Dear Ray & Lisa: When you were here a few weeks ago you made the suggestion we
back up our typesetting data. So a couple of days later I did. Thank you for
the suggestion. This weekend while I was at the Production Managers Meeting in
Pittsburgh, (our shop) was broken into.  The alarm went off, so it looks like
after failing to break into the vending machine they took the closest thing of
value they could find. It was our typesetting computer.

It will be a pain to install all the software again and reconfigure the
machine.  But until your suggestion, all the customer logos we had scanned the
last few years were only on that hard drive. You saved us hundreds of hours
and maybe a customer or two. Thanks, Roy.
= = =
All right, don't give them the big head . . . . .really, thanks for the kind
words about Ray and Lisa. The reason we do the annual on-site with our client
is to make sure the minimum performance standards are being met . . .and
backups to computers are certainly one of them. Sounds like the process really
paid off in this instance. Thanks for allowing us to remind everyone to
backup. You never know why and when you will need them. Tom
***
Odds and Ends

True story. Overhead a young mother tell her daughter at the Atlanta airport,
Darling, when your daddy is talking to a patient, never, never, never hang
the telephone up. I hope he was a dermatologist.

Another true story. During the Dallas show a couple of weeks ago; I was
passing out literature to people. To get people's attention, I started saying
free money. Why? I was giving out free copies of our report, which help
people make money. So, it was like giving away free money. Anyway, most
chuckled and took the brochure. One printer didn't. I said, free money. He
said without hesitating, Nope, I don't want none of that. And that, friends,
is a real printer. Off to Pittsburgh again this week . . . .

Tom and Pamela Crouser