Ed Avis:
Good morning everybody. This is Ed Avis. I'm the managing director of APDSP. I'd like to welcome you all to our webinar today on reinventing Repro post-COVID. It's a hot topic, and I think that the COVID situation has given the Reprographics industry, like every industry, an opportunity to see what's going on, and take some time to take inventory and predict what's going to happen in the future. It's a time to reinvent.
Ed Avis:
We are very fortunate today to have three panelists coming at this topic from different perspectives. Dirck Holscher is the former editor of Larry Hunt Newsletters, and someone who has deep knowledge in the imaging field. He also has been an owner of many print businesses, including a large number of them in Eastern Europe. If you'd like to learn more about Dirck, you can read an article that we wrote about him on the website a couple years ago. He's had a fascinating history, and he is still involved in this industry, and is still considered a very insightful person on this topic.
Ed Avis:
Then we have Paula Fargo, the owner of Curry Printing in Baltimore. Paula is someone who knows Dirck well, and I came to know her when she was writing for the Larry Hunt Newsletters. She always wrote very insightful articles about key issues in the imaging field. She is someone who I think has a perspective that will help us grasp the future.
Ed Avis:
Our third panelist is Paul Korman, co-owner of Trukmann's Reprographics. Paul has been involved in Reprographics for decades. When I was asking some of my colleagues in the industry who should we put on this panel, Paul's name rose to the top. I talked to him, and learned more about him and Trukmann's. Trukmann's is a leading firm with a lot of innovations and a long history of innovation, so will be very interested to hear what Paul has to say.
Ed Avis:
The way this webinar is going to work is I have some questions for the panelists that will attempt to kind of draw out this concept of reinventing repro post-COVID. Each of them will answer these questions, and then we will open it up to questions to attendees. Attendees, you can see that on your screen there is a Q&A tab, and you can ask questions there. Please do ask questions whenever they come to mind. Don't wait until the end. We will reply to them as appropriate, whenever we have a moment to do that. Don't wait until the end, just fire off your questions whenever you're ready.
Ed Avis:
Okay. I'm going to direct the first question to Dirck. Dirck, are you with us?
Dirck Holscher:
Yes I am.
Ed Avis:
Okay. Dirck, COVID has affected every business mostly negatively, but did you find any silver lining to the crisis? For example, did you hear about any new types of work that emerged during this crisis?
Dirck Holscher:
Ed, yes, there have been a few silver linings that I've heard about. One comes to mind, a quick copy company basically that was approached by one and then two huge school districts to do at home course packets for their students. Many students, these are both fairly rural areas, did not have high speed internet, or if they did, mom and/or dad were using it for work. They had very low participation in their coursework, so they decided to go back to good old paper. He's running two shifts doing thousands and thousands of course packets, and fulfilling them either by messenger, or for awhile they were taking them out in school buses. That didn't work so well, so now the USPS is doing it.
Dirck Holscher:
Another obvious one has been the signage that's been required. For example, some of the big box stores are now having one way streets on their aisles. They have stickers, and I know companies that are doing those to put on the floor. That used to be purely at trade shows, and that's a new application. Same thing with other signage required. Wear your mask. New hours. Senior hours. Yes, there have been some opportunities.
Ed Avis:
Okay. Thank you Dirck. Paula, let me direct that question to you. At Curry Printing, have you found some silver lining in this crisis?
Paula Fargo:
There's been a few silver linings, very few of them related to sales. We're selling whatever anyone wants to buy. We're doing the floor decals and the special signage, and we're doing custom masks, and custom hand sanitizers. We're jumping on with all of those items obviously, but they're certainly not of a volume to replace the business that has gone away as far as the events go. Our business was very heavily event oriented, and without those events our sales have definitely taken a hit. We're selling what anyone wants to buy.
Paula Fargo:
I wouldn't say the silver lining was in the sales of new items. I'll say that the silver lining was in the chance to really see how your management of your company is doing. What's that old saying, when the tide comes out, you can see who's been swimming naked. There's really no place to hide during something like this. Any management practices that aren't up to snuff are going to be smoked out immediately. It's a good time to take stock, kind of get your team on the same page and tackle projects that might not get done when you're moving in sixth gear. When you're in first and second gear, you've got a little time to take care of some of those projects. I would say those are mostly the silver linings.
Ed Avis:
Great. Thank you Paula. Paul, how about you? At Trukmann's, any interesting new stuff going on, or new opportunities not related to sales, as Paula mentioned?
Paul Korman:
Yeah. Well, first in terms of the effect on the business. We initially, really immediately, saw a significant drop out, because just like Paula, we're very event centric. We do everything from invitations to events. I've got several portals that drop out daily invitations to events, and we probably lost $25,000 a month in business on those portals in a day.
Paul Korman:
At the same time, we in March had probably, in the course of about three days we had $75,000 worth of event graphics and all the materials canceled spontaneously. It went down in a hurry.
Paul Korman:
Once we started bringing people back, we started using a bunch of our people for pure research and promotion to try to find as many opportunities as we possibly could.
Paul Korman:
A number of years ago I remember Doug Hook doing a presentation for IRGA where he talked about going outside of the conventional circles of business to then use that to gain access to businesses that you don't do business with, as well as supporting your existing businesses with us. We had no idea. One of the things that we picked up on early was the sneeze guards. We have a flatbed, and so we print on acrylic, so we had it available and people started asking us about it.
Paul Korman:
Then we started to promote it, and we've probably don't, I don't know, maybe $75,000 or $80,000 in sneeze guards already. Might be higher than that. We've got about another $80,000 to $100,000 in the pipeline, and we're continuing to market it regularly. We have a list of about 9000 contacts that we send information out to regularly on that. That's resulted in a lot of the floor graphics, because we do floor graphics, and signage, and popup banners, and the like. It has opened up new opportunities.
Paul Korman:
One of the companies I did sneeze guards for, we're a commercial reprographic firm, I'm a reformed ammonia sniffer, an old blueprinter, and I actually sold sneeze guards to an engineering firm I had never done business with. I was dealing directly with and walking through the empty facility with the president of the company, and we sold to all five of their locations. Now as they open, we anticipate having opportunities for new business there.
Paul Korman:
We're off a significant degree, but we've had open doors because we've sold to people something that nobody else could sell. Now that we're in relationship with them, I believe that will ultimately result in us having opportunities for whatever the new conventional business is, whatever model that is.
Paul Korman:
We are also doing a lot of online order, a lot of clients are ordering online, and we're doing a lot of porch drops, a lot of direct distribution because their in house office services are not open. Has not made up the difference, but it's I think part of what we're going to be looking at for a long time now.
Ed Avis:
Thank you Paul. You mentioned that you got your foot in the door with an engineering firm that you had not worked with before. Who are some other clients who are buying sneeze guards that you had not worked with before?
Paul Korman:
Let's see. We've always done a lot of litigation copying and scanning, but early on the lawyers jumped on this sneeze guard thing and they've spent more money on it than anybody. It's a little eerie, because it's like they're protecting themselves against what it is that they're planning to do to the rest of us. The issue is you do need to protect yourselves against litigation. You have to keep a facility clean, and safe, and so they are going more overboard than anybody. The legal business has expanded, even though we did work with a lot of them, we're doing work with a whole bunch more that we'll have opportunities with.
Paul Korman:
We're also doing work for accounting firms. We've done work for coffee shops, who by the way market, so there'll be opportunities for digital print later on. We've done ice cream shops. We've done software companies. We have done institutions. We did about a $5500 job for a local township. We did the whole municipal building, the library, all of the concession stands at the pool and at the fields. We also have done work for, well right now the schools are contemplating coming back and we're quoting a lot of school jobs. We've gotten a couple of them. That's an area we see emerging as well.
Paul Korman:
It has opened up areas of business that really were not normal verticals of ours, but now that we're in them, virtually all of them have other opportunities. We're excited about now that we've gotten to know people there, and hopefully we've done a good job with this. I always ask people to give us an opportunity, and with any opportunity we'll have whatever share of their business that we earn. We're in the door at places that we've never been before and areas that are all new to us. That's a partial list. I'm sure there are more, but those are the ones that I can think of off the top of my head.
Ed Avis:
That's great. Thank you Paul. Paul, you mentioned that you're using a flatbed for this work, but I assume you're also using a cutter, right?
Paul Korman:
Correct.
Ed Avis:
Can you briefly explain the process here?
Paul Korman:
Well yeah. We're not printing any of this stuff. Basically we go, and we're like carpenters now, we go out and measure, and determine what the need is. Sometimes it's just a straight sheet, and we have somebody's fabricating aluminum bases, and they're all different types of sources for clamps and hanging hardware. We've pretty much latched onto and done a lot of research on all of those kinds of things. We also are part of a consortium where other people are doing it, so we've gained a lot of knowledge from partners that we have through that consortium who are doing the same thing. Taking advantage and swapping services for things that we don't do in those areas as well, that we're outsourcing.
Paul Korman:
As far as the cutting is concerned, basically we determine what has to be cut, if there are windows that have to be cut into it, if there are notches to go around certain things on the top of cubicles. We're creating acrylic stands for simple countertops. We're creating essentially we have adapters to go onto the top of cubicles that slot into the bottom of cubicle toppers. Basically that extend the tops of cubicles. Rounding corners. At this point we're doing installation as well. We've used some of our resources for people who didn't have as much work in their regular jobs but they're handy folks, and so we've actually had two installation teams go out as well. It's kind of like carpentry. We're going out and we're measuring jobs, we're doing estimates. The thing is that we're probably getting between 80% and 90% of the jobs because nobody was doing this before.
Paul Korman:
The other thing is that there's a shortage of acrylic. We got in this early, and through our consortium partners we're bringing in container loads of this stuff. A lot of the glass companies and the conventional commercial companies, and the Home Depots, and the Lowe's don't have acrylic in the kind of volumes and types that we're able to get our hands on.
Ed Avis:
That's great. Congratulations on that business Paul.
Paul Korman:
Thanks.
Ed Avis:
Okay, let me move on to a second question. Paula, I'll start with you on this one. That is, if something like COVID happens again, what would you do differently the next time?
Paula Fargo:
I hate to think that something like this could happen again. If it does, I hope I continue to have the intestinal fortitude I have to keep plowing ahead. I would say the safest thing for a business owner in this industry is to maintain a high SPE. If you have a high sales per employee, then you can withstand better a drop in sales. That's one thing I would make sure that I continue to do.
Paula Fargo:
As far as doing anything differently, I think I would turn off the 24/7 news cycle. It was certainly stressful, and didn't really help matters. I would kind of turn that down quite a bit more than I did this time. I think I could have saved myself a lot of angst.
Ed Avis:
All right. That's good advice Paula, thank you. Dirck, let me ask you that same question. You're a little bit retired. You're a little bit outside the industry now, but from your observations, should the print industry do something differently next time?
Dirck Holscher:
Well, yes and no. Oddly enough, in December of 2018 I did a special report in our newsletters about being prepared for the unexpected, disaster preparedness and recovery. I was talking not only about natural disasters, but other things that happen. Of course, one of the things that caused me to do that was that FEMA, who handles natural disasters, said that 40% of small businesses are unlikely to reopen after a substantial natural disaster. That got me concerned. I'm not hearing statistics about, for example the number of restaurants that might not reopen, or other types of small businesses. You do need a plan.
Dirck Holscher:
I do agree with Paula completely about not paying too much attention to the news, because that can work on your mental state. I do also agree that you need really good financial reserves to get you through any kind, natural or pandemic kind of disaster. In other words, you need the resources within your company to keep going without cashflow coming in, at least for a short period of time.
Dirck Holscher:
I have been impressed by the resources that have been put forward, government programs and what have you, but not all of them came immediately. You have to have some reserves. High sales per employee is another one.
Dirck Holscher:
Then finally, while it is hard to prepare for this because you don't know exactly what you're ... I wasn't preparing for a pandemic, that's for sure. A business continuity plan, just a general continuity for any kind of disaster really makes sense. If anybody's interested, I'd be glad to send them a copy of that report, because it's got a blueprint about how to do a continuity plan. You can find it other places as well.
Ed Avis:
Thank you Dirck. Paul, how about you? Having been through this now, would you do something different if something else like this happened again?
Paul Korman:
I think the only thing I would do differently is I'd get an earlier start relative to what it was, that about a month and a half into this thing I really kind of caught a revelation on. I do network actively. I'm in a couple of different groups that we tactically network together. I've found that in one of the groups, which meets weekly, that about five weeks in we were getting together and it was almost like a wake. I realized that this is a room full of service providers, we're a room full of problem solvers, and there have never been more problems in my lifetime than people are facing right now. We kind of started with each other, and how we could help each other. Then tactically aligned ourselves with one another to a greater degree, really doubled down on the idea of working together to try to help each other through it.
Paul Korman:
The other thing that I've done in regards to the PPE thing with these screens, is I'm getting together and working together with, I've sought out people who are selling the temperature devices, for instance, and sanitizer, and masks, and things like that. Which we've chosen not to really focus on because we've got enough facilities here that we have to continue to produce stuff for. Maybe we could do well with it, but it would be a distraction and we're trying to stay focused on the things that are going to give us the biggest bang. We felt like if we aligned ourselves with people that we could strategically go in together or refer one another for opportunities.
Paul Korman:
Even though I actively network, I really kind of was a little bit caught up by maybe what Paula was talking about, the distraction, and the fear, and the noise. We were working, but I don't think we were working as smart as we could by taking advantage of the connections and the people that we knew who we could help, and they could ...
Paul Korman:
That's really kind of why I'm here today. It's not like I've got more time right now to do something like this because I don't have work to do. I'm working 75, 80 hours a week, which I didn't anticipate doing at this stage of my career. Ed talked about it before. I am now actually physically working in my seventh decade, and I'm still working. It's a challenge. Rocky Balboa said, "It's not how hard you can hit, but how hard you can get hit and keep moving forward." That's what I'm doing, but I realized about five weeks in that I needed to not do it so much by myself, but to rely on and work together with partners and people who were collectively motivated to work together and to help each other.
Ed Avis:
That's great advice in any situation I think. I can echo that feeling. I think the first few weeks in the association side we thought, well this is going to pass, or what can we do? Very quickly we realized how much the association could be helping with forums, and webinars, and news articles, and things. It spun up, and we've been busier than ever also, just keeping up with all those requirements. I think next time we'll be one step ahead.
Ed Avis:
Attendees, let me remind you that you can ask questions at any time. Don't hold back. If you have something you want to ask of any of the panelists, please go ahead and fire it off, and we will raise those questions later.
Ed Avis:
Okay. Let me move on to another question. This I'm going to start with you, Paul. Have you had a chance to think about the future of your firm post-COVID? How will it look different than it is now?
Paul Korman:
Our company, as a service provider, has got to be driven by what it's going to look like for our clients. Being out and around, and talking to as many of the higher level people, the administrative executives, and the owners of companies, one of the things that we've, it's become clear to us. Because we were an essential business, and we've worked every day through this, and we've been out and seen the empty parking lots and the empty buildings. I've been in buildings actually in Manhattan that are a million square foot buildings and there's single digit number of people in the building. It's a little eerie.
Paul Korman:
What they're telling us is what percentage of the people are not coming back. It worries me from a commercial real estate standpoint, but at the end of the day it is I think on the back end of this thing going to be much more decentralized, many more people working from home. To the degree and extent that print is necessary, and I think there's already suggestions out there that you shouldn't be exchanging print because you could have viral activity on the documents, which we don't want to talk about here, but it's a reality, it's something they're talking about.
Paul Korman:
To the degree and extent that there are things that need to be filed, or distributed, and print is still a part of it, I think there's going to be opportunities for us because why would a company who's only going to bring a third or a quarter of the people back to an office have the same kind of centralized reproduction facilities? I think our opportunities are going to be web based submission applications, and more distribution of the documentation that they would typically be doing in their house or sending out to us in bulk. It might be a shift in cases, but in other cases I think it would be opportunities for us if we get ahead of that curve and go after clients and say just what I was talking about before, "How can we help?" Your problem is you're going to have a lot of real estate, what about that print room, what is your plan with that, and how can we help?
Ed Avis:
Paul, have you had any opportunity to provide equipment to home bound engineers or architects who might suddenly have a need for a printer?
Paul Korman:
We have not yet. So far, because I think a lot of them are at the point where they still imagine that they might go back, that we haven't turned that corner yet. I suspect that that's something that we may see. In fact, we probably will see it, but at this point it's been more just here's an easy way to submit, and they're submitting, and we're doing more of that work, and doing more porch drops, or doing more direct distribution. I would suspect that that's coming. I would certainly suspect that that's coming.
Paul Korman:
I think that a lot of the bigger machines are going to become smaller machines, and are going to be in more places. That's a good point Ed.
Ed Avis:
Thank you Paul. Paula, how about you? Have you had a chance to think about the future of your firm?
Paula Fargo:
Certainly, almost nonstop. I would say that having a set of core values is key, things that don't change when everything else changes. Something that your company relies on and knows that regardless of what's happening in the world, good or bad, these are the values that we have, and this is who we are and what we do. That is not going to change for a pandemic, a natural disaster, or winning a billion dollar lottery. Those things would never change.
Paula Fargo:
Again, back to the SPE, I can't emphasize that enough, how important it is to try to maintain that. I also believe that in the past maybe we've been a little on the smug side as far as the clients that we work with. We do feel like we're the best in the area, and maybe we have a little bit of an attitude about that. Now it's brought more to the forefront that any job is important. Big customer, small customer, it's the work coming in that feeds the machine and provides the blood that your company needs to survive. I think that we've all had a little bit of a taste of humble pie here, and I'd be willing to bet that my company is going to be a bit less smug, a little bit more humble in the future. Hopefully that will serve us well.
Ed Avis:
Thank you. Paula, you've mentioned sales per employee a couple of times. How has this current situation affected your sales peoples' efforts? I assume they're not going knocking on doors at the moment, and do you think that things will return to normal, or have they learned some new sales tricks or techniques that they may continue in the future?
Paula Fargo:
Like everyone, we've tried to adapt to what our clients are looking for. We've done more teleconferencing, I suppose, rather than the in person meetings, which is sad because I think that those are important. It's hard to let someone feel a paper sample or look at a finish over a Zoom. Hopefully we'll get back to that at some point. I don't think it's going to be as quickly as we were all hoping or expecting, but I think eventually it will get back to that.
Paula Fargo:
We've done a lot more outbound digital marketing and social media, direct mail. Trying to walk the talk there. We're still learning. It's still early days, even though it seems like it's been forever. We're still trying to learn things.
Ed Avis:
Thank you. Dirck, let me ask that same question from your perspective. How do you think the print industry will look post-COVID?
Dirck Holscher:
Ed, I think the print industry fundamentally will be similar, but a number of trends that have already started are going to become even more significant. One is consolidation. I think there are already a lot of interest, I saw that in my newsletter just about every other issue I had something about, should I sell my accounts? What should I do about all this equipment? That's going to continue to occur, and I think consolidation will be driven by economies of scale and by changes in the marketplace.
Dirck Holscher:
I think a second thing that Paul alluded to is there is going to be more virtual office work, more people working remotely. That again is a trend that's already started, but I'm seeing it more and more. This has just forced everybody to give it a try. It's like the old ad, try it, you'll like it. Some people are sort of liking working from ... I think that was the New York area, a bread company or something. More people are working from home and they like that. I think that the trends that have already started are going to continue and accelerate even, whether we like it or not. Unfortunately, before we had a little bit more control. Now the locomotive has began to run away a little bit, and we better be prepared for those business changes.
Dirck Holscher:
Getting back, the final thing would be what Paula's mentioned, sale per employee, my mention earlier of a good balance sheet is going to be important. I think the survivors of this experience are going to have their numbers all in good order, hopefully.
Ed Avis:
Right. I can back up the point that you made, Dirck, about trends in digitized work growing because of people working at home, and because of people's just general desire not to have to meet each other. I've talked to several repro firms that have said, "If we're not doing our digital side well, we need to really step it up." That's worldwide too. I have some contact with the German repro group, and they also have found that the movement towards digital submissions for plans on the municipality side has just accelerated because nobody wants to have paper delivered. They want everything set up digitally. They were already moving that way, and this really accelerated it.
Dirck Holscher:
Right.
Ed Avis:
All right. Thank you. Attendees, again let me ask if you have any questions, use your Q&A tab please, and send them in.
Ed Avis:
Let me ask another question here. I'm going to start with Paula on this one. Paula, overall, not just at your company but overall, how do you think the print industry will change in the combing 12 months? What opportunities should print companies be thinking about?
Paula Fargo:
This goes along with what Dirck just said about consolidation. I think there's a lot of companies that are always kind of skating on the edge of profitability, and at this point they're probably thinking about selling or closing. I think there is opportunities for those companies in acquisition mode to come in and get some good deals for companies that might be closing. I think it could be a good time for a sensible tuck in type of situation.
Paula Fargo:
I think also that's going to cause the used equipment market to become more robust and drive prices down. If any company is interested in growing, this could be a good time to start considering what equipment you need and try to source that from closing companies.
Paula Fargo:
I also think that it's just going to be a wildly swinging pendulum. One end are companies, like restaurants that are closing, and weaker, smaller businesses that are closing, and event oriented businesses, event planners, whatever, they might closing. On one end there's a lot of bad news, but on the other end there's companies that are growing exponentially. It's a matter of determining those industries and approaching them to see how you can assist them and what services you can provide for them. I think our roster of customers is going to be changing dramatically over the next 12 months.
Ed Avis:
That's interesting. Thank you Paula. Can you think of some industries that you might be pursuing as new clients that maybe you weren't pursuing before COVID?
Paula Fargo:
Just off the top of my head I would say that cyber security companies are going to be in big demand with more people working remotely. I think chemical companies. I think security companies, and cleaning companies, companies that do cleaning, biotech companies. I think all of those types of industries are seeing a dramatic increase.
Ed Avis:
All right. Thank you. Paul, let me ask that same question of you. Overall, how do you think the reprographics industry is going to change in the coming year, and what opportunities should companies in reprographics be thinking about?
Paul Korman:
It's kind of interesting. Forgive me. That was just my cellphone ring. I'm not sure it's going to be just a year. The thing that's concerning me is so many of the people that I'm talking to, they're not even considering, and that's part of why I think this acrylic thing is going to be sustained for a while, but they're not even thinking about returning to the office until March of next year. A lot of them. I think there's going to be sort of an extended whatever that normalization is. I don't have a crystal ball, and I'm not 100% sure yet. I'm really still talking to my clients fairly regularly about this. They're not even back at their offices even to a small degree yet. I think they're still trying to feel it out.
Paul Korman:
I think for us it's going to be one of listening and looking for the opportunities. I think that was a great list on Paula's part in regards to people that we're going to be looking at and working at. One on my acrylic list that I forgot before was churches and synagogues, that a lot of the places of worship and faith, a lot of people are rallying around that, but it's all being done by Zoom. Those folks are all going to get back together. There are just areas of opportunity where I think to be sustainable we've got to expand the places where we actually do work with, or we need to find a couple of verticals that we can really dig into or double down. I mean, in New Jersey here pharma has been big for a long time, but I think that's going to decentralize. A lot of people are going to be working from home in that field. A lot of the training was done face to face, and I'm not sure what's going to happen with that.
Paul Korman:
I think it's going to be a protracted time of transition and change. I think it's a little bit early for me to sort of project, other than to just say that we really need to pay attention, get close to our clients. Paula was talking about what the sales call looked like. I think when we're talking to our clients, it's got to be, what are you hearing? What's going on? What are you guys planning? What are the things you need to know? I just think it's early. That's a hard question to ask, it really is. I think if we're going to survive, we're going to have to be paying attention to the changes and the opportunities, like Paula was just talking about.
Ed Avis:
Thank you.
Paul Korman:
By the way, one quick thing for Dirck. It was Alka-Seltzer. Try it, you'll like it, was Alka-Seltzer.
Dirck Holscher:
Thank you Paul.
Ed Avis:
Dirck, let me direct that last question to you. What opportunities do you think the print companies should be thinking about in the coming 12 months? How is the industry going to be different and what industries can they be tapping?
Dirck Holscher:
Well, I agree with Paul and Paula that I think our customers are going to tell us that. In other words, staying close to your customers, seeing what their needs are. We're problem solvers. We're good problem solvers, and we can use the same skills. Many years ago I survived a transition, we actually had a typesetting business, and we started it. Most of the people say, "What is typesetting?" We saw the advent of [inaudible 00:40:38] publishing and do it yourself, and we transitioned into some other things, like quick printing, and copy shops, and what have you, because our business was going away.
Dirck Holscher:
We're in a little bit of the same situation now. Some parts of our business are probably going to go away. I can't tell you exactly what. Listening to our customers, working closely with them will make a difference. I agree with Paula. I think there's going to be some equipment buying opportunists. I compared this to post-2008 financial meltdown. There's going to be a lot of equipment back with the manufacturers. It's going to depress prices, so if you're in the market this is the time to look.
Dirck Holscher:
I have been alone in the wilderness on this, but maybe there's some opportunities in 3D printing. Yes, I know it's not printing, it's actually additive manufacturing, but I followed it pretty closely. It has, even though the product is a physical thing, the skills required are similar to what we do in the print business. Something to keep in the back of your mind, even though again it's not really printing. I'm glad it was called printing, it helped some people come to us [inaudible 00:41:56]. That's a marketing plus right there.
Dirck Holscher:
Another example, which sort of corresponds with what Paul said, was WS Display, which is a fairly big company, is now offering portable cubicles. They're basically build it yourself. They've taken your technology, which was based on trade show displays, and they've repurposed it into protective panels, pop up panels, cubicles, temporary distancing systems. There are a lot of different directions we're going to be able to go and I think our customers are going to tell us what those directions are.
Ed Avis:
All right. Thank you. Attendees, let me remind you to ask questions. We have about 15 minutes left on our presentation. I've got a couple questions that are here. This one is directed to Paul Korman. Paul, what was the learning curve on the making the sneeze guards? Was it difficult to learn, and was it something that you were doing before the crisis?
Paul Korman:
It was not something we were doing, but with the router technology we were cutting dimensionally already. It was actually in some regards simpler to some of the things that we did when we were doing special silhouette cuts and what have you. More of this is straight rectangular. The learning curve was more kind of the going out and measuring. I actually did try at one point to see if we could find an out of work carpenter or builder, somebody who would go out and really had the experience to measure up a job because it's construction in some cases. I was not successful in doing that.
Paul Korman:
One of the things that we did is we would go out and estimate jobs, and then order the materials and send them out there, and find out that we were a little bit off. Now what we do is we estimate jobs, and then when we go to build them we go out and measure again, and the installation team goes out and might tweak the project. Trying to get to a position where you get it right the first time, especially because a number of these opportunities have become multiple locations, or have turned into referrals.
Paul Korman:
We've gotten a lot of referral business because of this. We actually established, we bought a URL, it goes to one of our pages on our site, but we've got the logo on it. It's blockthatsneeze.com. We did it for the purposes of it was easier than our company name and it related to what it is that we're doing. We've gotten a lot of referrals, but you want to do the job right the first time.
Paul Korman:
Part of our learning curve was not winging it, or trying to get close, or thinking you got it right the first time. We haven't mis-estimated anything, which is always a concern, but what we have done is estimated it where them, when we went out there, the conditions maybe were a little bit more complicated than they appeared at the time. We're letting the mechanical people go out there before we do a complex install. If it's a shield that's just going on a counter, it just goes. The learning curve wasn't bad because of some of the things that we were doing already. I think if you're starting from scratch, I mean one of these things used is going to be an $80,000 cutter. It's not the kind of thing that I would try to do with a saw and a razor blade.
Ed Avis:
All right. Thank you. Here's a question directed to Paula. Paula, you mentioned acquisitions, what are people looking for when they are acquiring, some basics, and is this time a good time to be acquiring considering the difficult business conditions?
Paula Fargo:
Great question. My management team kind of posed that same question to me at one of our meetings recently. They're like, "Maybe we should be in a position to talk to some of our competitors, see how they're doing, and possibly talk about buying them out." For me that wasn't palatable. I'm not mentally in a position where I would like to deal with an acquisition right now, but a lot of places would be well served to do so. Dirck's probably a better person to talk to about this than me. I know that there's a lot of different ways to do them, depending on what it is. I mean, asset purchase, tuck in, things like that, or just kind of have a buyout of the accounts and pay a flat fee, and then a certain percentage over a certain number of years. That's how a lot of successful acquisitions are laid out.
Ed Avis:
Okay. Thank you Paula. Okay, that's the end of the questions that we have, unless attendees, if you have anything else, send it in, in the last minute here. Here's one just came in. Why don't we direct this to Paula first, and then to Paul. Can you provide a range of sales per employee that you try to achieve?
Paula Fargo:
I belong to the National Print Owners Association, NPOA, and I believe that the average in the industry for the quick printing industry, is about 129, 130 per employee. We try to maintain an average of 50% higher than that, which puts us in the top quartile. I believe that average is about 130, and if you're below that then, like Jon Stewart used to say, "When you get to the office, just fire the first person you see." Help get your numbers back where they need to be.
Ed Avis:
All right. Paul, how about you? Do you have a feeling on sales per employee?
Paul Korman:
I'm more on the operations and sales side, so that's really my brother's department in the business. I think at least historically that our numbers are pretty close to where Paula is, that we've been pretty significantly north of that 130 number. That's just looking at it seat of the pants. Now through this, and while the government was paying our people for all intents and purposes, we've been obviously fighting our way through this and using our resources to try to build opportunities in business. Like I said, I took four of my staff and went to pure research and promotion with internal sales. Then I had to shift a couple of people into the installations, where there was business. It's been lower than that, and it's something now coming out of this that we're going to have to keep a really close eye on.
Paul Korman:
We did not bring everybody back after the PPP, simply because we knew we weren't going to have enough work. We had a night shift, which we ended up closing altogether because there simply wasn't enough work.
Paul Korman:
I think Paula's numbers are healthy numbers. We try to stay significantly north of that 130 number. Where we are exactly right now, that's a cubicle just north of me here.
Ed Avis:
All right. Thank you. Paul, let me follow up quickly on that. When the crisis hit, how did your sales efforts change? When you were trying to reach especially new potential clients, obviously you weren't going door to door selling.
Paul Korman:
No. One of the things that we did is, well first off nobody was around. Initially, before we got the PPP, we dropped out, I only had five people on staff at that point. That was about 20% of my normal staff, and we were just handling the stuff that was coming in and out. It wasn't much. We were probably off 70% to 75% the first full month.
Paul Korman:
Once we brought people back, then we pretty much got to the point where our efforts started with a combination of email and a lot of social promotion. One of the things we had going for us at the time was we do a lot of signage on the direct print machine. A good month for us on the lawn signs is about 1500 signs a month. Well, because of what was going on this year, we were doing 1500 signs every two days for the course of about two months. That created a combination of some activity to kind of carry us, but also we were upselling, or reselling, or getting referrals, or looking for referrals, from all of the people that were coming in for all these things.
Paul Korman:
I've actually got an installation that we're finishing up for three acrylic graphics and 600 office graphics from an agency, a huge agency of 1200 people, although they'll probably only bring 300 back to the office. That was as a result of somebody buying a single lawn sign, and seeing our acrylic shield.
Paul Korman:
In the context that we've had, we've done whatever we could to try to come up with creative solutions with the people that we're working with. We're actually just getting to the point where we're starting to call people, because people are available. If you don't have cellphone numbers, that's something for the future. If I had it to do over again, I would get more people's cellphone numbers, because that's been part of the challenge. People working from home, not all of them are connected by their work phone. A lot of people are working with their cellphones, so that's been a challenge.
Ed Avis:
Good point. Paul, there was a quick follow up on the sales per employee question. It was, I assume these are annual numbers, that's right, right?
Paula Fargo:
Yes.
Paul Korman:
Correct. Yeah.
Ed Avis:
Here's another question that just came in, and Paula, I'm going to direct this to you. Just so that you know, Paula, all of the attendees are members of the association, which means most of their business is large format printing. This person asked, we've had our biggest downturn in business with small format, which to you Paula is regular printing. This questioner asks, any thoughts about different opportunities for that segment?
Paula Fargo:
If anyone has any, I am willing to hear them. I mean, it's definitely been suffering in our area too. We're doing a lot more wide format, we call it wide format, large format, than we've ever done. It's a larger share of our business. There's just not a whole lot of activity in what you're calling the small format. I mean, if you can do mailers, or any type of for nonprofits appeal mailers, those things are still, we're still printing that. I mean, there is just not a lot of small format work right now.
Ed Avis:
Dirck, can you answer that question? Any ideas for this attendee on where there might be some more work in that regard?
Dirck Holscher:
Small format, or publication work, that sort of thing has really been hit hard I think. I think I mentioned earlier the course packs for students. I suppose universities too will probably be doing that, at least some of them this fall, especially if they go offline. Some of it still needs to be done with hard copy.
Dirck Holscher:
The good old law firms still are very paper bound and paper based. A good part of my business, since that's my educational background, is in the law. We did a lot of litigation support. I suspect some of that is still going to be out there, especially evidentiary work, where paper records are being copied. That's going to continue, or scanned. In fact, I just had a call from a state government the other day asking about scanning small format documents. If you've got some scanners around, or you want to buy some cheap, that is still a viable option. You can use your people to do that.
Dirck Holscher:
I haven't heard a whole lot about new opportunities. I mean, it's basically going out and trying to sell what you've been doing harder, and hoping that things will come back more quickly. I don't have the magic bullet there.
Ed Avis:
Thank you Dirck.
Paul Korman:
Can I address that? Because I haven't talked about it at all, but we do do a lot of small format in color and black and white. That's always been a huge part of our business here. I'll chime in on the litigation side. We do a lot of litigation support. A lot of family law activity right now, and a lot of it's still in paper, although a lot of it's in scanning as well. As well as that they're giving us files to functionally what we call, barring the microphone term, blow back to copy. There is a lot of paper that's still going on. There's a lot of submission stuff, although a lot of that stuff is being electronically submitted, but sometimes you have to convert it to paper.
Paul Korman:
The other thing we've taken advantage of is, because we do scan, we've actually offered to some of our clientele to take some of their back files, some of their old stuff, and provide scanning at a reduced rate as long as they don't care how long it takes to do it. If they want to convert their old stuff, we bring boxes in here and then we just take stuff off the pile and scan. Instead of playing cards when there's nothing to do, we have people prepping documents and scanning.
Paul Korman:
The other thing is, to speak to the course packs idea, in a corporate setting is we've had some clients who have actually now done training, but they're doing the training virtually. They have found the same thing they found in the schools, that it seems to go better when these folks have workbooks in front of them. They have whatever the notes are. For a couple of large companies we've done regular print and distribution, but now we're distributing to the 150 people who are going to be doing the studies at home. Instead of shipping it all to a hotel or delivering it back to the headquarters, we're actually sending out 150 FedEx's to residences for people.
Paul Korman:
This is something I would suggest, if you're talking to people who've done training in the past, find out how they're going to be doing training in the future. Even use that as sort of a case study to say, "You know, some of our clients have found that in education, in public education or private education, they've found that the training goes better with documentation in front of them, and so what some people are doing ..." This is our side of the, what are you hearing out there that you could share with people to put that idea in somebody's head.
Ed Avis:
Thank you. Great ideas. Let me touch on something that Paul mentioned too, on the lawn signs. I interviewed one of our members a few weeks ago who created a lawn sign for some high school graduates. I think he actually donated the signs, the first few, but of course he had his company's name and contact at the bottom of the lawn sign. Immediately all sorts of other graduates, even from other schools noticed those signs and started placing orders. The lawn sign thing, even though maybe it hasn't been traditionally a marketing thing, has turned into that for some people.
Ed Avis:
Okay. Well we are out of time, but let me thank Dirck and Paula and Paul. Your contributions today were wonderful, and I'm sure that the attendees enjoyed what you had to say and learned some things from it. Attendees, thank you very much for coming today. This event was recorded, and it will be posted on the APDSP members portal later today or tomorrow. We'll announce that in tomorrow's newsletter. Thank you. Appreciate your time. Please continue attending APDSP events. That ends today's webinar.
Paul Korman:
Thanks Ed.