Quick Printing is the only business resource serving the quick and small commercial printing niche in North America. Quick Printing is the authoritative source for business information, emerging technologies, shop profiles and management insight.
Issue link: https://quickprinting.epubxp.com/i/305478
28 Q U I C K P R I N T I N G / M a y 2 0 1 4 w w w. M y P R I N T R e s o u r c e . c o m If we sell direct mail products, what siz- es do we offer? What type of envelopes? For direct mail, what is the range of sizes and amount of customization that can be offered? • What specific range of services do we sell? Within the offering or solutions you sell, do you offer graphic design, database cleansing, list acquisition, Web develop- ment, shipping services, case binding or mailing? • What is the scale and scope of our offer- ings? Can you provide just one of something or can you provide millions? Knowing your capabilities and capacity to print large or small jobs will be a great help for your customer. • What types and sizes of companies do we sell to? Are your products and services being sold to large national companies, regional companies or specific departments with companies like the HR department or the sales department? Perhaps you spe- cifically sell to a few vertical markets like healthcare or colleges. • How are our offerings delivered? Can orders be taken over the Web? Is there a well-developed store front avail- able? Does the printer offer distribution and supply chain programs? What are minimum orders and what are the time- frames? These are questions that both expe- rienced and inexperienced buyers will want to know upfront. Once the sales- person is comfortable and knowledge- able in what they sell, then it should be a lot easier to tailor a short and mean- ingful positioning statement for each customer. Here is my suggestion. Before figuring out what makes you unique, how you create value for the customer, and where you have done this in the past, practice communicating with family and friends exactly what you sell. If they can't explain back to you what specifically you are selling, then there is more work to be done. ◗◗ Joe Rickard is a training leader and consul- tant who works with printing and technology companies in the graphic arts to improve their sales and operational effectiveness. He is the founder of Intellective Solutions, a provider of customized sales, operational, and sales management training material and services. Contact him at 845-753-6156, jrickard@intellectives.com MONEY TALK Net Profit Margin—Often referred to simply as a company's profit margin, the so-called bottom line is the most often mentioned when discussing a company's profitability. It is calculated as net income divided by revenues, or net profits divided by sales. It measures how much out of every dollar of sales a company actually keeps in earn- ings. While undeniably an important number, one can easily see from a complete profit margin analysis that it is prudent to look at several margins to analyze profitability, not just Net Profit Margin. Usefulness of Profit Margin Analysis Profit margin analysis is very useful when comparing companies in similar industries. A higher profit margin indi- cates a more profitable company that has better control over its costs compared to its competitors. Profit margins are dis- played as percentages; for example a 20% net profit margin means the company has a net income of $0.20 for each dollar of sales. Once margins are established, compare results historically to manage internal progress as well as with industry peers to make sure are navigating for competitive stamina. ticularly as these relate to the stability or lack thereof, which in turn has a major effect on a company's gross margin. Generally, management cannot exercise complete control over such costs so it is important to look at other indicators. Operating Profit Margin—By subtracting selling, general and administrative or operating, expenses from a company's gross profit number, we get operating income. Management has much more control over operating expenses than its cost of sales outlays. Positive and negative trends in this ratio are, for the most part, direct- ly attributable to management decisions. It is noteworthy to mention, that in cases of acquisition, buyers/investors will scru- tinize the operating profit margin care- fully. A company's operating income fig- ure is often the preferred metric (deemed to be more reliable) of investment ana- lysts, versus its net income figure, for making inter-company comparisons and financial projections. Pretax Profit Margin—When a compa- ny has access to a variety of tax-man- agement techniques, it can allow it to manipulate the timing and magnitude of its taxable income. Hence another ratio some analysts like to use is pretax profit margin, taking the tax out of the equation. SALES CLINIC Printing Industries of America's Role to Help Printing Industries of America and your local print associations pro-actively conduct a nationwide survey of informa- tion on the income statements of hun- dreds of companies annually. Anony- mous results are published in The Ratios. With participation, companies can get a volume of the results for free. It is an excellent tool for analyzing competitive stamina and will help facilitate manage- ment's ability to increase profits. ◗◗ Margolis Partners has long been recognized as the financial expert for family-owned busi- nesses with a specialty in the printing, pack- aging and allied graphic communications industries, assisting thousands of companies with strategic and financial management, valuation, mergers/acquisitions, accounting, audit and tax services. The firm is noted for its expertise in enabling companies to opti- mize profits. It is the purveyor of the indus- try's Value-Added Principles of Management, and compiles the annual Printing Industries of America Ratios, the printing industry's premier financial benchmarking tool. For more than 90 years, the Printing Industries of America Ratios Study program has been the leading financial benchmark- ing tool for the printing industry. To partici- pate go to www.printing.org/ratios. (continued from page 25) (continued from previous page) QP_25-28_0514 MoneyT-SalesC.indd 28 4/15/14 5:06 PM