Tackling climate change
We're not talking about the environment - but the new business climate. Given that we now operate in what's been described as a 'new normal', what can we expect to face in terms of finance and investment challenges in 2010, and what can we do about them? BPIF director of corporate affairs, Andrew Brown, gives his view.
As the first speaker, financial journalist Anthony Hilton put it: "We're never going to get back to doing business the way we used to do it. Recessions come to an end but this time there's been a worldwide economic and power destabilisation that has meant a tectonic shift. The East is forecast to grow its GDP enormously and the West's will shrink as a proportion of global GDP. By 2050 the UK will account for only 1 - 2% of GDP and we'll be a speck in global economic terms. We will have to invest more and consume less and businesses will have to learn to operate in that climate."
It sounds bleak, but the print sector is used to adapting and those who realign their businesses to meet the new conditions will be the ones that succeed. As Hilton pointed out, "you always get parts of the economy growing above the national average. Be nimble enough to cut your losses and keep moving to areas that are performing better."
Given this 'new normal' BPIF director of corporate affairs, Andrew Brown, talks you through what he sees as the finance and investment challenges facing printers throughout 2010.
1 Understand the 'new normal' and adapt to it
The business climate has been permanently changed as a consequence of this recession, or rather the lending and credit crisis that caused it in the first place. The past year has been characterised by the removal, or highly restrictive cost, of bank lending facilities and this is set to continue into 2010. There is now a 'new normal' of lower growth and/or constant change setting in: an environment less compatible or helpful than the one we knew pre-recession, with bad debt levels on the rise and credit lines tightened.
2 Diversify your offering
Avoid your business becoming treated as a commodity by evolving from being a specialist in ink on paper into a broad-based integrated marketing solutions provider that offers a comprehensive range of multi-channel communications solutions. Many printers now lead the way in offering cross-media services and are profiting as a consequence. There is scope for many more to join them. Printers have been moving text and graphics around electronically for decades now, and delivering exciting campaigns and promotional products has always been at the heart of what print businesses offer. The BPIF launched dotain.org earlier this year - to support the industry in the next phase in its natural evolution
3 Raise your performance
Competition in the print industry is as fierce as ever, and customer expectations - in terms of quality, service and cost - continue to rise. In this environment, all printing companies, whatever their size or service offering, must constantly innovate and invest to compete. Continuous and rapid innovation requires flexible and adaptable processes. Focus on building capacity for sustainable improvement rather than short-term gains. If you need help Vision in Print has the expertise necessary to provide your company with tailored programmes to tackle these challenges.
4 Look at your company through the eyes of the buyer
If there's something in your business that would put off a potential buyer, it is probably damaging your business today. Examples might be over-dependence on a small number of customers, supply chain weaknesses, under-investment in training causing over-reliance on a few key employees, contingent liabilities, leases due to expire, inaccurate inventory, or poor information and accounting systems.
While managing your business, even if you have no plans to sell it, look at it through the eyes of a possible buyer. By simply identifying possible issues, and fixing them, your business will improve immediately. If you don't, they will surely come back to haunt you if you do decide to sell or merge at some point.
5 Market your business
Make sure that you reach out to potential customers and make them aware of any specialist production capabilities and added-value services that you offer. Using a creatively targeted marketing, campaign as opposed to scattergun, non-creative junk mail, can help you sell more, particularly if it supported by other communication channels such as email, the web or social media. Ads in customers' trade publications and newspapers are also another option. And when did you last look critically at the design of your website? Does it still fulfil your marketing and business needs? A well designed, fully functional website that makes it simple to do business with you is essential in today's competitive marketplace. Perhaps you have problems with your current website provider, or maybe you would like to promote your business by setting up a brand new site?
6 Champion your industry
You need to constantly remind your customers - and anyone else who cares to listen - that print has a great environmental story to tell. Paper is a sustainable product that comes from renewable sources. Sign up to the industry's Two Sides campaign and help promote the environmental credentials of print and paper. For a nominal membership fee you get access to information on emerging sustainability issues and the challenges the industry is facing. You can also use the Two Sides logo and intellectual property to demonstrate that your company is taking a proactive approach to responsible business practices, which helps show customers that you're serious about sustainability. Of course, sustainability is only one half of the message and we also need to promote the power of print as a communications medium that can demonstrate real effectiveness and return on advertising spend. You'll be pleased to know that from spring this year, Two Sides will also be managing a host of promotional activity to be rolled out in the UK as part of a new European-wide Print Power campaign.
7 Go to shows
Print is under continuing pressure to hold down costs and to improve quality and turnaround times still further. This requires ongoing investment in new equipment in order to be able to reduce costs and optimise efficiency. Of course improving environmental performance will be vital too, as the industry's clients increasingly need to be able show that their suppliers have played their part in reducing the carbon footprint of their products. So you definitely need to be at shows like Ipex 2010 at Birmingham's NEC this May to get the latest.
8 Know your costs
Having up-to-date and accurate cost rates in your management information system will enable you to price jobs for profit and understand how to manage your costs and workflow better. BPIF Business offers a Cost Rate Review service to help you gain greater understanding of your costs and improve the effectiveness of your estimating and pricing.
9 Support a charity
With more and more customers looking for suppliers that are able to demonstrate corporate social responsibility, there's never been a better tome to show good corporate citizenship. It's also a great opportunity to put something back into the community and network with other companies and business leaders.
10 Invest in your people
Success in business means providing quality work and great customer service at a good price. It means keeping up with technology and staying ahead of the competition. To do that, you need skilled staff that are full of ideas, know the job and understand business priorities. That means they need quality training and incentivising. Keep remembering that satisfied and motivated workers mean higher levels of staff retention, lowering the costs of recruitment.