The printing industry in South Africa is under strain. Digital is taking more and more market share of what was traditionally print media, and South Africa is seeing one printing company close after another, as well as leading newspapers and magazines closing over the past decade. People are turning to the internet for news and information.
More than that, digital printing hardware, such as 3D printing, is gaining momentum and, in some cases, replacing traditional printers as costs are lowered. 3D printing also produces professional-standard work, which allows organisations and individuals to print work themselves, cutting out traditional printing companies.
A recent Global Media Report by McKinsey & Company shows that “spending on media continues to shift from traditional to digital products and services at a rapid pace. By 2019, we believe digital spending will account for more than 50 percent of overall media spend…. As it continues, it will not only expand the digital share of the media wallet, but have a structural effect on almost all media sub-sectors, redefining business models.”
Digital is not the only challenge facing the printing industry in South Africa. Skilled resources that are affordable and available are a challenge, as well as general wastage costs and poor business information management. If we don’t plug the holes of this leaky ship, your printing company could end up on the endangered list.
Thankfully, printing is here to stay. Digital cannot replace the labels on your food in the grocery store, or the latest printed garment in retail, or the magazines at the hairdresser, or the packaging the awesome things are housed in.
The challenge then is not to replace your printing company with something else, but to run your printing business optimally in order to survive the shift, and to outlast your competitors.
1. Staffing: Skilled people are an asset you want to invest in. They are the most important product you actually have to offer your clients. Nothing can compare to years of experience or to a great attitude and solid work ethic.
If we are going to avoid the ‘continental shift’ to digital, we need to update our thinking and the way we do things. Yes, it was fine to have one person do all the quoting because they’ve done it for years and have invaluable industry savvy. But there has to be a smarter, leaner way.
Expensive quotes salary
Most printing companies pay a considerable amount to a single person, just to do quotes. To lean up:
- Consider training two or three younger people as ‘interns’ under your expensive resource so that you have a renewable, more affordable plan for the years ahead.
- It’s time to update your software. If you are still using spread sheets to manage your quoting, you need to move your business out of the 80’s in order to gain competitive advantage. We use QuickEasy BOS – integrated business software customised especially for the printing industry, which allows for a more junior (more affordable) person to handle quotes, because the system does the thinking for them.
Unreliable sales reps
Sales people’s basic salaries are quite pricey. We usually hire them on a three month trial basis and then either party can decide to stay or move on. However, when a sales rep leaves, they usually take all their contacts and leads with them. This is a challenge.
- Log Book: Ensure sales reps complete a log book with contacts, visits, follow ups, etc. Either this needs to be a daily email, or written in a ledger, but record should be kept of these things.
- Systems: Updating your operating systems with software that includes a sales rep activity tracker, contact sheet and time log will help show you the effectiveness of your sales teams, as well as keep your lead sheet your own, whether the sales rep stays or leaves. Plus, with the follow-ups being logged in the system, you’ll never drop a follow up again.
2. Purchasing: 30% of your turn over is spent on purchasing material. We know that you need to compare prices daily in order to purchase the best deal and run at optimal levels, otherwise you stand the risk of under-quoting or over-paying.
Compare constantly: Assign a resource to constantly compare prices in order to have the latest price lists available. However, this could be a poor utilisation of your resources if you are short-staffed and under pressure.
Work smarter: We love QuickEasy Software for this: They update the price lists daily and upload them into the system, so that – no matter what the job – I have the latest paper prices from at least three suppliers instantly available for me to make informed decisions on. If you can save even 5% on your costings, you are running your business better.
3. Overtime vs downtime: This all comes down to proper planning. You know the cost of your printing machine to just stand on the floor. Couple that with the cost of your staff member standing idle next to it. Downtime eats away at your bottom line and then adds insult to injury when the job comes in late, and now you have to pay overtime to get it done.
Improve Communication: Ensure communication with your client and your suppliers are streamlined in order to reduce downtime and overtime.
Improve Contracts: Ensure that your agreement with your client covers whatever delays that might be caused from oversight on their part.
Improve Systems: A single-view planner will help you allocate queued jobs and idle resources with ease.
4. Reporting and costing. Most printing companies in South Africa are running this part of their businesses blind. When you quoted and estimated material costs and hourly time needed to complete the job, have you measured the actual costs against the quoted cost?
Quote on packaging. This is often overlooked and is part of the actual costs of the job, often left off of the estimated costs.
Estimate accurately. If you are not sure what your inventory, hourly and capital costs are, you are probably either under or over-quoting. If you come in too low, you stand the risk of losing money. If you quote to high, you stand the risk of losing the client.
Candace van Zyl is the marketing manager of QuickEasy Software.
