NOTEBOOK: Convincing Reluctant Lenders Means Playing by the Numbers
By Bill Esler, Editor-in-Chief -- Graphic Arts Online, 3/1/2008
Skittish lenders are slowing down loan approvals, giving diligence more than it's due. As a result, some print equipment suppliers are watching recessionary trends play out in their sectors, despite the fact that printers are pretty busy. The same situation is limiting other markets. And reports even say smaller banks—traditionally friendlier to local print businesses—are also weakening.
Despite accelerated depreciation and bonus write-offs in the economic stimulus package passed by Congress, the capital slow-down comes just as the print industry is tooling up for the next wave of offerings. As you prepare your case for reluctant lenders, come armed with something stronger than a hunch and a handshake. Even an excellent recent track record will only help so much. We're reminded of the pundit's comment on one surging candidate: “He proved he can walk on water; now, he has to produce the loaves and fishes.” That challenge—moving from inspiration to executing deliverables—often rests on research.
One tip we use around hereGetting started with a review of existing studies will offer market leadings, unmet needs ripe for the picking, that proverbial low-hanging fruit. In printing markets, there is sometimes a confusion of messages about where we stand as an industry, and where we are headed. That's because a good bit of studies publicized about our sector centers not on the business lives of printers, but of their suppliers. Sometimes the data is useful to both parties; sometimes not. Still, we see a rise in rich sources of data projections for print consumption that can prove useful.
One area to begin with is investor presentations, delivered by large print firms to stock analysts, made for sophisticates who take a dispassionate view of our market. One example is the presentation by Consolidated Graphics late last month at the Credit Suisse Global Services Conference in Phoenix. CEO Joe Davis and CFO Jon Biro positioned Consolidated strongly as a leader, showed growth strategies and recent financial performance. They also described the industry as a whole, major trends in technology, and the prospects for growth. Consolidated Graphics projects a 3% sales bump from election work for fiscal 2007, 5% from internal sales growth, and 7% from acquisitions. This and comparable presentations are typically available at investor information locations of publicly traded firms. The GAM 101 provides a list of such publicly traded firms with website links.
Other data minesAnother good source is associations. Equipment supply group NPES (www.npes.org) will present Print Outlook April 1 and 2 in New York City, coupled with the PRIMIR (www.primir.org) research group's quarterly meeting—both excellent for market data-mining. Obvious ones are PIA/GATF (www.gain.net) with a new report on profit potential for ancillary print services, as well as its annual ratio studies and M4D digital market studies; NAPL (www.napl.org) which recently issued “Digital Services,” in which respondents noted that web-to-print clients create “an annuity stream of income.” Don't overlook foundations and targeted trade groups. The Electronic Document Systems Foundation (www.edsf.org) has terrific monographs on market sectors; the Book Industry Study Group (www.bsig.org) for books; the International Card Manufacturers Assn. (www.icma.com) for credit cards; and also the eponymous Direct Marketing Assn. (www.the-dma.org), Newspaper Assn. of America (www.naa.org) and the World Assn. of Newspapers (www.wan-press.org)Also, publicly traded suppliers, or those seeking capital, often present results that are available online. These statements of market share, sales trends and their assessment of the industry prospects are helpful in preparing your business plans as well as arguments that you can take all the way to the bank.
