From: TomCrouser@aol.com
Subject: Spring Break
Content-Length: 22498
X-UIDL: 853950214.001

Crouser Report OnLine Copyright 1997 Thomas P. Crouser, January 21, 1997 -
Material may not be reproduced in whole or in part without prior written
consent of the copyright holder.
*****
I am please to announce the selection of our 1996 Achievers of The Year: John
and Missy Baicy of Immedia Print in Winston-Salem, North Carolina and Mona
Long of Main Street Quick Print in Aspen, Colorado. In addition, I am pleased
to announce the recognition of the following individuals for Exceptional
Leadership: Bruce Mars of Planet Printing in Ft. Lauderdale, Florida and Faun
Leachman and Dee James of Express Press in Melbourne, Florida. These
companies not only achieved exceptional results in 1966, but the individuals
represent, in my opinion, the best of our industry. Congratulations.
***** ***** *****
Spring Break
Transmitted from Jacksonville, Florida
***** ***** *****
INDEX: In this issue: SPRING Break, a recap of the Crouser Client Retreat in
Ft. Lauderdale, Florida; What To PAY Three New Sibling Owners; Ariel Blau of
Argentina tells us about small press life in our first INTERNATIONAL moment;
Alabama wants to know whether to Lease or BUY his next building?; a letter
about my CASE Study - Money Down the Drain; a reader writes questioning the
difference in Employee Performance Reviews vs. Wage REVIEWS; an announcement
about the  FreeMail Document Delivery Service now available on the WEB; and a
question for you from Erik who is looking for an ECRM Driver.
*****
SPRING Break

My mind has been wandering. For those wondering where I have been (if any), I
have been on Spring Break during our first Client Retreat last week in Ft.
Lauderdale, Florida. It was, in my opinion, one of our best meetings yet.

John Giles did a superb job in calmly and rationally discussing the digital
revolution. He took us through a very logical approach to the whole subject
of handling customer files via various media and rationally put into
perspective the 

direct

 issues (direct to plate, direct to press, etc.). Our
participants, an outstanding group mind you, also put in their perspectives.
We had users of most all of the technologies in attendance including
DocuTechs. Then John provided us with a road map to the Graphics of the
Americas show in Miami Beach (an excellent show in my opinion) highlighting
the booths we would want to attend. Thursday afternoon was spent in a square
table (couldn't find round ones) discussions of everything printing and
digital in enlightened surroundings.

Friday, Larry, our bus driver, swiftly and surely delivered the energetic
crowd to the door of the show (sorry for folks who were looking for a parking
place) and picked us up tired, but more knowledgeable at the end of the day.

Saturday was spent with John helping us to translate what we now knew into
how we could sell this knowledge in our markets (which were mainly covered by
snow). Saturday night's gala was unique in that we presented our awards at
the beginning of the evening, thus requiring all unworthy non-winners to
spend the evening praising and groveling at the feet of our 

national
champions of printing

 in 1966.

And national champions they are. Our awards went to folks who we know have
performed exceptionally well. Not only in the area of sales growth (average
awardee grew some 40% in 1966), but also went to those who maintained high
standards of operations and profits and whose companies have real
organizations with real jobs and people stepping up to the responsibilities
of those jobs. So, we congratulated our winners and groveled appropriately.
At the end of the gala, we then announced that the groveling had ended, all
companies were back on the same level and the competition for 1977 commenced.

It wasn't all work, mind you. We did have a great opportunity to meet old
friends and make new ones. As Mark McKenzie of Atlanta commented, 

I now not
only understand the importance of digital printing, but I also more fully
understand the purpose and use of the born on date.



In adjourning our gala, our Party Captain, Bruce Mars, declared the retreat
in recess until our next assemblage to be held in Cancun, Mexico in January
1998. At that time, we will again grovel and pay homage to our new 

national
champions.


*****
And, now, back to this year's business. Doug is facing a transition issue:
compensation for three succeeding sibling owners.
*****
Subj:	Transition: What To PAY The Three Sibling Owners
From:	Doug
To: 	TomCrouser@aol.com

Dear Tom, First of all, thanks for consistently sending your e-mail messages
to me. I really look forward to reading the information that you send out.
And, I would like to get your input regarding a owners compensation question.

Our company has been in business since 1976, we own two stores (a main store
and a satellite), we currently are doing on the average of $90,000 per month
between both stores and our break-even is approximately $80,000 per month.

My parents are anxious to turn over the printing business to me and my two
sisters. We went into a heavy discussion today about how each of us should
get compensated for our efforts. Basically it goes like this, my parents want
all 3 of us to have equal but different responsibilities in the company. One
of us will be in charge of production and employees (hiring, training,
evaluations, etc.)  One of us will be completely in charge of the entire
pre-press department, and one of us will do outside sales, marketing,
equipment purchases and manage a mailing department. It is being suggested
that each of us get a salary of $30,000 year. The first person would only get
the salary, the second person would get the salary plus overtime, and the
third would get a 5% commission on anything over $25,000 per month in sales.
Then, based on increased sales and extra profits (approximately
$26,000/month, each of the three people would equally split a portion of the
profits (approximately $6000 into 3 parts = $2000 per person). 

I wanted to know how this sounds to you and does it seem reasonable for each
person concerned or is 

overfair

 for one person and not fair for another. We
are having a hard time determining what is fair without paying too much or
too little. Please help us out. Sincerely, Doug
*****
Thanks for your kind words, Doug.

The inert need all parents have to 

be fair

 is the single biggest cause of
the successor businesses failing. Fairness isn't fair. It's like trying to
control from the grave. No matter what, children are not created equal nor
are their ambitions equal which is the biggest problem with equally divided
successor businesses. The pay scheme which is being suggested is typical of
what one would see, again, from parents who are trying to be fair. I would
recommend against it.

No, my opinion is that this scenario is setting up three siblings, who
probably like each other, for eventual eternal bickering and Christmas
dinners spent in separate facilities. There's also some other kinds of
problems. When does title pass to the siblings? Or will Mom and Dad hold
title and, in effect, supervise the actions of the siblings until they are
really ready to give up control? This will probably result, I predict, in one
or more of the siblings taking a hike and the family estranged.

Okay, so what do you do? In short, Mom and Dad should SELL the business to
one or more of the siblings. Mom and Dad should BE FAIR WITH THE PROCEEDS,
NOT THE BUSINESS!!! 

Siblings should agree among themselves to an offer. How much will they pay
Mom and Dad for the business? Each sibling should put real cash into the deal
and take on real risk. One or more of the siblings may decide not to
participate and that is okay also. Children are not all created equal. They
don't all have the same goals nor do they have the same situations. Some want
to take the risks inherent with business, others want a situation with little
risk, regular hours and a life at home. Recognizing that siblings are
different is sometimes hard for Mom and Dad.

Okay, but assume all three are willing to take on the risk. Establish a price
which is adequate for the business. Mom and Dad will finance, the siblings
will sign their lives away guaranteeing the loan. The siblings will then run
the business by choosing a leader for the business who will be responsible
for running the business, paying all the bills including paying Mom and Dad,
and obtaining a return on investment for the siblings as owners.

Other siblings who are owners who may be hired by the leader to do a specific
job within the print shop will be paid at a rate which is competitive for the
work they do. They are expected to do real work like any other employee. Mom
and Dad have nothing to do with the pay rates of these workers.

The sibling leader can be fired by the owners of the business. Sibling
workers can be fired by the leader if they don't do their job. In short, the
business is operated like a business.

Other issues also arise. Are the siblings capable of running a business? Are
they trained? Do they have the basic education/mentality to do the job?
Unfortunately, not all do. And, in trying to be fair, many a Mom and Dad
saddle junior with a special needs brother which isn't fair either. Usually,
Mom and Dad are among the last to be able to evaluate the individual
capabilities of the siblings and should seek outside assistance.

Now, what about Mom and Dad's fairness issue? Mom and Dad can be fair with
the proceeds of the business. If the siblings are willing to pay $500,000 for
the business, then Mom and Dad can take this money and split it up among the
siblings as they see fit. They can give it to each of the siblings equally.
They can give it to one of the siblings exclusively. Or they can say to heck
with it and just keep it and spend it on a real nice retirement. I recommend
the latter.

In our consulting practice, we deal frequently with such issues. We perform
business evaluations, evaluations of siblings and structuring of transitional
plans. If you would like to discuss your specific situation further without
obligation, please email me you telephone, etc. and I will give you a call.
Thanks for this most interesting question. Hope the response helps. Tom
*****
INTERNATIONAL Moment: I corresponded with Ariel Blau in Argentina recently
(ain't this internet great) and I asked him to tell us a little about his
shop and what he does. Here's his reply.
*****
Subj:	Q.P. in Argentina
From:	servigraff@overnet.com.ar (servigraff)
To: 	TomCrouser@aol.com

Dear Tom: Thank you for your prompt response.  I'll tell you about my print
shop and our industry. My print shop is a very little one.  We are in
business since 1992. My brother is my partner and we have just one employee
full time and another part-time. Basically we have an A.B. Dick 326, a Gakken
8080 (digital duplicator like a Risso), a Ricoh 7770 copier and we have just
bought a Ryobi 3302 (another world from the A.B. Dick!!??).

In Buenos Aires we have a major local franchise called 

Taller 4

, I think
they have some kind of arrangement with Xerox. They have high speed copiers,
a couple of Docutech's and various color copiers.  In the main location they
have a 4 color Heidelberg. They have just bring on a Xeikon. There's another
one named Copy Show, owned by Canon but they don't sell offset printing. Sir
Speedy has one location downtown and another one outside the main city.
 Then, we have all kind of 

Imprentas

: traditional
commercial printers and 

Copisterias

: (copies only) these ones use to locate
near a school a college or so.

Equipment here is very expensive.  I'll give you two examples: We are looking
for a Multilith 1250, 1 color, 11 X 17, chute. They are asking us about
U$8,000. Laser Master's Pressmate c/RIP STATION: U$ 23,453 plus tax (here we
have a 21% tax, yes you read it OK, no mistakes).

This year we would like to increase sales on offset printing (that's because
we bought the Ryobi).  I'm looking for someone who sells DIRECT MAIL
ADVERTISING MATERIALS, and if it possible written in Spanish.  Could you help
me find someone? I have sent a couple of fax to Ink Inc. and Printer's Idea
Service, but received no answer yet.  By the way, do you know what happened
with Mike Stevens. Why he is not writing for Q. P. any more? Thank you for
your interest, Ariel Blau     
*****
Thanks for the update. We searched the Graphics of the Americas show for
Ariel but came up dry on our Spanish direct mail hunt. As for my friend Mike
Stevens, most know his great articles are now appearing in Instant and Small
Commercial Printer magazine. We forwarded Ariel the magazine's address.

So, now I duly appoint Ariel as our first Crouser Report OnLine Official
Correspondent from Argentina. His responsibilities, if he chooses to accept
them, are to keep us abreast of his observations on printing from his vantage
point in Argentina and to answer questions from us periodically.

We have also previously received reports from others from around the world.
If you are located out of the mainland United States and would like to become
an official correspondent, please message me and I will put you in a special
file. This way we can handle some questions by getting a world view of the
subject. Besides, there may be a T-shirt in it for you. Thanks, again, Ariel.
*****
Now, speaking of international correspondents, Alabama (just kidding) is
faced with a dilemma not faced by most printers. He's come into a lot of cash
from the forced sale of his building. And he's itching to buy equipment.
*****
Subj:	Lease or BUY Our Next Building?
From:	Alabama
To: 	TomCrouser

Hi, Tom, My father started our business in 1965. He 

gifted

 the business to
my brother and I over a few years and for the past 8 years we've been running
the show. We have 3 offset presses and 7 letterpress. We bought all of our
equipment outright (no financing) except for a short term lease (1 year) on
our desktop system and our copier lease.

We currently own a 2800 sq. foot building (which is paid off!) and lease
another 1000 sq. foot facility (with all our letterpress equipment) about 2
blocks away. The Village is going to buy out our main plant for a roadway
project, so we have to move. We've been in our main location for about 18
years and have had our other facility for about 8 years. This is a great
opportunity to consolidate our operations and get the extra space we
desperately need. We also want to update some equipment at this time. 

The big question, though, is whether to lease or to buy (the building). There
are substantial pros and cons to either side of the question. Traditionally,
we've always considered buying the only way to go, but we'd have to borrow a
lot of money. With a lease, we could use the cash from the sale of our
current building to buy new equipment. I was wondering if you or any of your
readers had any thoughts on this issue. Alabama.
*****
Hey, Alabama. Sounds like you do have an excellent opportunity to consolidate
your locations. You're going to get cash for the building and can buy either
another building, or lease a building and use the cash to buy equipment. What
should you do? Tempting isn't it? Well, I don't have enough information to
give you an absolute answer (if there is one). But, of course as you know, I
will try anyway.

If you get $100,000 and move it from building to equipment, you end up with
more equipment under the logic that it will produce more for you than what
the building does. If this is true, then why do you have the building in the
first place? Well, at some time in your history, someone felt that if they
bought a building they would make more money by not having to pay rent than
if they put it into equipment. Hummm. Well, the answer is all in the payback
(or return on investment). What will make you the most money the fastest?

As a guess, however, my money is on the building recognizing a lot depends on
various stuff. You absolutely, positively have to have the facility (building
space) to run a printing business. You don't have to have more equipment (you
are operating and earning money now). That raises the probabilities in any
return on investment scenario in favor of the building.

What specifically to do? Get a Certified Public Accountant to review your tax
situation and help you with a payback decision analysis as a first cut. If
that doesn't show you the way, then use more advanced methods incorporating
discounted cash flows. But, be honest about the assumptions you are required
to make, even if it goes against your preconceived notion (not that you would
have any). Then decide. By the way, I've written an article about leasing vs.
commercial financing of equipment which might add to your discussion in the
February 1997 edition of Quick Printing magazine which should be reaching
your shop soon. Good luck. Tom
*****
And, speaking of the magazine, my case study on money down the drain
published in the January 1997 edition of Quick Printing magazine brought this
message.
*****
Subj:	CASE Study - Money Down the Drain
From:	Gibby
To: 	TomCrouser

Interesting, but sad, story on relying on projected growth...and timely for
our company, a family owned company since 1927. I am a third generation owner
and have been able to keep pace with equipment and payroll since I purchased
the company on a 

Buy-Sell

 agreement with my dad. He died 8 years ago.

So far so good . . . but cash flow is still a challenge. We have our peaks
and valleys, these days seem like the valleys occur sooner than before.
Equipment purchases have been carefully thought out and we use extreme
caution. Gibby, President
*****
Hey, Gibby. I've said before that many accuse me of making case studies up,
but I'm not that creative. That was a real company and, as an update, is
still hanging on. What's important for all of us printers who are 

cash
challenged

 is, in my opinion, to understand that 99% of the time we can
budget our way to happiness. Had our case's subject just stopped and made
money by not spending more than he was getting in, his situation could have
been reversed years ago. But, that wasn't the case.

Anyway, if you or any of our readers are 

cash challenged,

 I'd be glad to
chat with you regarding ways out. Generally, I ask you fax me your latest
financial statement and then we discuss what I see which done without cost or
obligation. Glad to help. Good luck. Tom
*****
A reader writes about the difference between Employee Performance Reviews and
a Wage Review.
*****
Subj:	Employee REVIEWS
From:	California Cathy
To: 	TomCrouser

Hi Tom. We are working on personnel issues and are implementing the employee
guidelines you sent. Do you have any employee performance or wage review
samples? We want to have regular reviews of both, but I do not have a layout.
I have never had an official or proficient one at any past jobs, so I'm not
sure how to handle it. I also want to separate the performance from the wage
review and can't seem to explain the separation to my employees, or maybe I
don't fully understand it myself. Please help!
*****
Hey, Cathy. Performance reviews are to discuss the actual work of the worker
versus what was to be done or what was expected. A wage review is for you
(and probably the worker) to decide how much they should be paid. I know of
no 

form

 for this wage review but we do have a logical outline of the wage
process in the People Management program. As far as a form for Performance
Reviews, we do have one in the People Management program, which can be used
if we don't have anything else, but is not as effective as the following:

Begin with the worker's job description. Go down line by line item and write
down how the person has performed with respect to each line item within the
review period. That is the best evaluation. Of course, this can't really be
done unless you really have job descriptions.

Now, be cautious doing the reviews. 

Recency

 is an effect where the workers
are evaluated on what they have done during the past two weeks as opposed to
the full six month review period because the supervisor has made no notes,
for instance. The 

halo

 effect is an effect which says a worker is evaluated
better because they have a really neat portfolio of graphic designs they did
for the previous employer and have a degree in graphic arts, instead of being
evaluated on the work they have done for you as a typesetter within the
performance rating period. Hope this helps. Tom
*****
FreeMail Document Delivery Service now available on the Web.

FreeMail, Inc. has posted a web page which anyone can use to transmit files
and printing instructions to any Quickprint shop which has an e-mail account.
 There is no charge for this service. Web FreePrint for the Internet can be
found at http://www.FreeMail.com. According to the company the file-upload
technology is the same which is now standard in Netscape compatible browsers
so anyone can transmit document or graphic files along with detailed
instructions to print shops which have e-mail accounts. 

Contact Information: FreeMail, Inc., Tracee Moriarty, Director of Internet
Strategies, Traceem@FreeMail.com, 201 West Main, Missoula, MT 59802 (406)
542-0901 fax (406) 542-0894 http://www.freemail.com
*****
And, now, here is a question for you.
*****
Subj:	ECRM Driver
From:	Erik.Geldermans@ping.be (erik geldermans)
To: 	TomCrouser@aol.com

I'm looking for a printer driver for an ECRM imagesettersetter under
windows NT 4.0. Can you maybe tell me where to find it. Greetings, Erik.
*****
Okay fellow printers. Tell us where to get one. In the meantime, I'll
continue to fight the wind chill here in Florida for the next several weeks
as we continue our winter protest against cold weather. Then, we hope to see
you in Lake Tahoe for the NAQP Meeting (I'll be by the fireplace) and then at
Sunbelt Graphics in Atlanta beginning February 27th through March 1st where
we will be doing seminars and having a booth. Until next time.

Happy Trails,
Tom and Pamela Crouser
*****