Choose Your Business Adventure, Volume 1: “Escape to Profitability Island”
The following article was originally published by Wide-format Impressions. To read more of their content, subscribe to their newsletter, Wide-Format Impressions.
A Sneaking Suspicion…
Despite the success of your company, and the accolades you receive from your customers, you have a sneaking suspicion that your company – though it is both busy and “up” on revenue – is not as profitable as it could be. What you seek is to grow your business and find success. If you do this, and do it well, you will have earned access to the warm sands of Profitability Island.
There are several paths to paradise, though some are shorter and easier than others. In your quest to increase the profitability of your company, the choices you make will define the adversity of your journey. In this adventure, you can choose to hire more staff to help you keep up and meet deadlines; you can add capacity, giving you the ability to produce more “stuff” in the same period of time; you can add capability, which can help you offer more kinds of stuff and access more profitable opportunities; or, you can explore process automation to help you maximize time, labor, and processes. This choice is yours – if you dare!
Begin Your Adventure…
• If you choose to hire more people, skip to “A” below
• If you choose to add capacity, skip to “B” below
• If you choose to increase capability, skip to “C” below
• If you choose to explore process automation, skip to “D” below
A
If you just can’t keep up with the work you have to get done, or if you want to offer more of what you do, one option is to hire more staff. It takes people to do work, right? In adding staff, however, you also have to navigate the labor market, which was tight even before COVID changed our lives and redefined (for many) how they want to work. If you find a qualified person, they will need training; to keep them, you will need to pay a competitive wage, provide attractive benefits, and provide engaging work. Skip to E below…
B
Congratulations on your new capital investment! Surely you carefully evaluated your production processes before you signed on the dotted line. If your investment was to simply provide additional capacity, then two challenge ahead are job management and staffing. Without workflow automation in place, more capacity will mean you will have more jobs to juggle, and that means more touches by more people – an expensive option, especially since you’re now making payments on the new machine. Start selling! Depending on the equipment your purchased, you may also need to hire an operator for that nice new machine (see A). Skip to E below…
C
If you made this decision thoughtfully, your customers – and perhaps some future customers – will be happy with you. They want a print provider that can “do it all” for them. Depending on the capability you chose to add, the path ahead will fall somewhere between easy and complicated. If you added a new line of substrates to your offerings, for instance adding synthetic paper, your path to friendly shores may be easy (assuming the equipment you use can print effectively on that substrate). If you added a CNC cutter/router, for instance, to offer more from your flatbed inkjet press, then you have also made a capital investment. Congratulations (see B)! And you might need staff (see A). Skip to E below…
D
Exploring automation should begin with a careful evaluation of your processes: how can you do more, with equal or better quality, in equal or fewer person hours, through software or mechanical means, without adding capacity? For many companies, using an MIS or other production-focused software system, can remove confusion from project management and simplify order taking – in some cases today, the customer is placing the order online. On today’s top-shelf offset presses, for example, features such as automated plate loading, ink dispersion, and color correction, provide increased quality, reduced spoilage and make-ready waste, and minimized the number of operators needed to effectively staff a press line. Skip to F below…
Your Adventure Continues…
E
While seeing greater profitability by hiring, adding capacity, or expanding your offerings may be a viable strategy, it must be done systematically. No business moves this important should be made based on gut feeling. Take time to carefully run financial and production numbers. Evaluate expected ROI on equipment purchases, understand the potential boost from those new hires, and/or set realistic goals and timelines on the profitability of moving into new product or market areas. Ready? Make your move! Skip to G below…
F
The same steps that can lead you to identify the areas in your processes where automation is advantageous can also help your business overall. That which is automated increases both efficiency and quality. Efficiency, in this case, means more can get done within a defined period, or using a defined workforce. The result? More things produced. Conversely, quality means less spoilage, less waste, and higher customer satisfaction. Again, more things produced. If all of this sounds to you very much like lean manufacturing concepts, then you’re right. And remember, you don’t have to go it alone – suppliers, equipment manufacturers, and consultants can all help make your processes “ship-shape.” Skip to H below…
The Exciting Conclusion…
G
The choice you made at the outset of this story made a big different in how it affected your profitability. But it was your choice, and you’re standing by it. That’s fine. While the goal of this adventure is to get to Profitability Island and stay there (sort of an early, working retirement), don’t book the voyage just yet. To some degree, defaulting to staffing increases or equipment acquisition may not have been the best option moving forward – you may have a heavier weight to bear. Next time you have a similar choice (and it is a choice), explore automation first. Once that’s done, skip to H below…
H
Ahh, paradise. You’re reaping the benefits of your thoughtful exploration of your processes and the steps you’ve taken to automate them. The benefits are tangible: your company is more profitable, even amid higher prices for materials. You are operating at the top of your game! While gaining all the benefits of automation does not mean you will never have to add capacity or capability, or add staffing, it does mean that you are adding them only because you have maximized what you have. Take a victory lap! Go to Epilogue below…
Epilogue…
Based on whatever path you took through this article; it seems we all get to Profitability Island sooner or later. Despite the path you took, it was automation that ultimately served to increase the profitability of your business. Further, it has reduced risk by making your business better: leaner, stronger, more efficient, better prepared to pivot, and ready to thoughtfully redefine or expand.
Enjoy your time in paradise!
For another exciting adventure, check out Choose Your Business Adventure, Volume 2: "Escape to Succession Acres."
Dan Marx, Content Director for Wide-Format Impressions, holds extensive knowledge of the graphic communications industry, resulting from his more than three decades working closely with business owners, equipment and materials developers, and thought leaders.
