What’s new at Reno Type

Money is tight right now, and everyone is cutting back. Advertising is one of the first things to get axed, it seems, and it shouldn’t be. Here are some thoughts:
1) If you advertise when your competitors are not, your ad (whether broadcast, print or direct mail) will have more impact.
2) Everyone is hungry. You have more negotiation power than usual. Use it!
3) If you maintain a strong advertising presence when no one is spending money, you will be “top of mind” when customers again have money to spend.
I’m practicing what I preach. This homely website is about to be replaced by a shiny new one… produced by a top notch local firm. I’ve placed a few radio spots, and am in production on 4 more right now. I’m sending 1000 postcards to potential customers every three weeks. In short, I’m spending more on advertising and promotion NOW than I ever have. I don’t expect instant results. I DO expect long term results… and those are the kind that matter.

On another, unrelated note… Why is it that customer service turns into a bag-of-ass when times are tough? You’d think that now, when customers are scarce, folks would be falling all over themselves to help customers. Not the case. For my point of view, that makes this economy a tremendous OPPORTUNITY for smart business-people. We always do our best to help customers here at Reno Type, of course. If you didn’t know this to be true, you probably wouldn’t be reading this. But we are making an extra effort to outperform expectations. People notice.

When I first heard of Joe the Plumber, I identified with him. Six years ago, I worked at a little shop and hoped to buy it. Like Joe, I had NO IDEA of what sort of tax ramifications there might be to such a purchase. Like Joe, I believed that a democratic administration would make my tax (and therefore profit, growth, etc) situation worse.

So when Sen. McCain threw out Joe’s story, I was interested. He said the plumbing business he hoped to buy “made” $270k. Now in order for the owner of this business to have a tax increase under Sen. Obama’s tax proposal, the company’s “Net profit before owner compensation” would have to be $270k, as this is the what a business owner pays taxes on (of course equipment purchases lead to depreciation which could lower the taxable amount… but that’s more detail than this post needs) Admittedly, i don’t know much about the plumbing business… but let’s assume that from an overhead, payroll, and cost of goods standpoint, it is similar to the printing business… one that i DO know something about.

in 2006-7 (the most recent period for which full data is available) The AVERAGE “Net Profit Before Owner Compensation” in the printing business was 13.5% of gross sales. The profit “leaders” — the most profitable 25% of all printing — firms was 23%. If Joe’s plumbing business is “average,” the company’s gross sales would have to be about 2 million dollars (13.5% of $2,000,000 is $270,000). If it’s among the best (from a profit standpoint), It would need to gross almost 1.2 million. Anyway… this is more or less where I assumed Joe was: purchasing a business with between 1.2 and 2 million dollars gross sales. Certainly, his taxes might go up.

As it turns out, the company’s gross sales were something like $270k (some are now reporting $100k, which strikes me as improbable… such a firm could not afford to employ Joe at $40k). Assuming it’s one of the best run companies in the country, the net profit before owner compensation would be about $62,000. Almost certainly a tax CUT for Joe, under Obama’s proposals.

Joe says it’s not the current situation he’s concerned about, but his FUTURE. When he buys this firm and it grows to 1.2 to 2 million dollars in gross sales, he doesn’t want to be unfairly taxed on his success. Fair enough, I guess. I wonder if Joe has any idea of how to grow a plumbing business from $300k to $2 million? I’m not saying it can’t be done… just that it takes a lot more than 14 hour days. It takes that AND business accumen AND salesmanship, AND marketing ability AND great credit, AND more.

So let’s say he has all that, and uses it to his best advantage, and becomes one of the 5% of small business owners pulling out more than $250,000. His “punishment,” for success, under the Obama tax plan works out to about $900. And when considering all of the tax BREAKS Joe got while is income climbed to that amount, I don’t think that 900 bucks is really out of line.

I don’t know many small business owners who do as well as Joe aspires to do (in fact I know only one). That’s not to say that my peers are not successful –in fact most of them are– just that they’re just not as successful as Joe plans to be. I asked the single associate who pulls out more than $250K (He owns a printing firm about the size of Reno Type in CA) what he thinks about paying more taxes under Obama. Turns out he has no problem with it. I guess when you make that much money, $900 really isn’t so much.

Joe…. I wish you luck. In fact, I’m going to help you. While your company is growing, you’re gonna need some printing. A company in a growth phase is going to have to allocate at least 3-4% of gross sales to marketing (more if you’re a plumber… have you seen what the yellow pages charges for full-page ads?), and a portion of that ought to be direct mail… something we’re really good at here. I’ll make you a deal. So long as you buy your printing and mailing from Reno Type (remember, advertising is an expense, so it lowers your net profit and therefore taxes!) I’ll give you $900 in free printing every year that you make more than $250k. My reward will balance out Obama’s “punishment.” What do you say?

By the way…. I’m a registered Republican, and a business owner who aspires to make over $250k. I support Barack Obama.

Back in hallowed antiquity, when Reno Type was exclusively a pre-press firm making film and color separations from client supplied files, our clients took an active role in ensuring that their work was done correctly. Today, the workflow has changed dramatically. “Throw it on a disk. They’ll figure it out” seems to be the operating methodology.
If getting your work done quickly, correctly and at the expected price is important, consider adding these tested steps to your workflow.
1) Include an accurate hard-copy proof so we know what YOU expect your job to look like. We still have a fax machine (775) 852-7310 in case delivery is a challenge.
2) Print separations of your file to your own printer and make sure all the elements you expect are actually there, and that it separates as it should.
3) Give us at least the bare minimum information: The name of the file. I cant believe how many CDs and flash-drives come in here with hundreds of files and instructions like “print the file that has a blue dot in the lower left-hand corner.
4) If it’s film we’re making, tell us what line screen, and whether it should be positive or negative and emulsion up, or down. Ask your printer if you don’t know the answer to these questions .
5) In short: Help us help you. We’re not so good with ESP around here.

A recent article in “Quick Printing,” a magazine for small printers suggested that small commercial shops like Reno Type don’t really have much to fear from printers in other communities who use direct mail and the internet to solicit business.

This postcard, received at our shop a couple days ago kinda hammers the point home. Imagine the conversation:

CEO: “Bob, Reno Type charges too much. Let’s give this company a try.”
BOB: “Hey! Free shipping what a deal! I’ll call em right away, sir.”
— a few moments pass –
BOB: “Sir? There’s no phone number on this card.”
CEO: “Go to their web site then.”
BOB: “uhhhh….”
CEO: “So they forgot some contact information. You’re a smart print buyer. Google em. Call information. Write em a letter and snail-mail it. I don’t care… JUST GET IT DONE!”
BOB: “Umm… Sir? I don’t know the company name.”
CEO: “What? Can’t you read?”
BOB: ” I mean it isn’t on the piece. Nothing. There is no way to contact this company.”
CEO: “Well Bob… I guess you’re Not the stupidist human being in the world after all. Someone should call those guys and tell em how dumb they are!”
BOB: “Sir?”
CEO: ” Oh. Never mind.”

Probably not asurrprise, but we’ll be at the beach, or on the river, or in the mountains, or drinking beer or doing something other than printing on Monday the 28th. We hope you’ll be doing the same thing. Happy Memorial Day!

Ok. This is off topic, I know… but stay with me for a moment. Project Great Outdoors (http://www.projectGO.org) is an organization providing educational outdoor adventures for disadvantaged young people. Reno Type has donated money and pro-bono services to the organization since its beginning 7 years ago. If you or your organization is looking for a fun way to do some good, you should get involved.

The easiest way? In order to offer whitewater rafting adventures for as close to free as possible, Project GO trains volunteer raft guides. The 11 day program costs only $425 (just the cost of food, camping and county fees), and at the end of it you are an honest-to-goodness raft guide. http://www.projectgo.org/Becoming_a_Whitewater_Rafting_Guide for more info!

When I started writing this “what’s new” blog thing, I figured it would be all about advances in technology, new proceedures and the nuts and bolts of Reno Type. It seems, though that when I feel like writing, it’s always about someting else. I was looking forward to writing something “good,” (and I will), but a phone call I just had rolled up “Bad and Ugly” into one package so neatly, that I have to share it, too. Here goes.

The Good
Reno Type just re-did a complete print job for a client… beacuse of a bindery error made by that client. We had no involvement in the bindery whatsoever, but the error was large enough that the whole job HAD to be reprinted… and reprinted INSTANTLY. We did this reprint at no cost to our customer, even though all parties agreed that we had absolutely no responsibility for or even involvement in the error. We absorbed this cost beacuse the client is a good one. There are lots of things that make a client “good,” of course, but the BIG one — the one that mattered today — is that this client does a reasonable amount of work with us, and ALWAYS pays within their terms. It’s unfortunate that this behavior is so rare that we make a big deal abiut it.

The Bad and Ugly
A C.O.D. customer came to us requesting a scan. The original was a small and very poor quality color photograph, and there was an unusual request that came along with the order: “Don’t proof it, just let me see it on your monitor.” An unusual request, but the customer is always right etc., so we complied.
For the record, we worked hard on it. We scanned it three times in an effort to do the best work we possibly could. When the client arrived to look at his scan on our monitor, I was proud, and confident, as it was excellent work. Mr. client sat with me for an about half an hour asking for specific and additional edits. These edits were not simple: they required skill, and our shop rate for this sort of image editing is $125 per hour.
When the work was completed to his satisfaction, the file was burned to a disk (in the industry standard TIF format). We were unable to create an invoice on the spot, so we agreed to send him an invoice, and he agreed to pay it when it was received. When we generated the invoice, it was ONLY for the scan (once) and the disk: i.e. A GREAT DEAL, considering the amount of work that was done.
So today I get a call from the client. He tells me that he can’t use the image, so won’t pay for it.
“Why?” I ask.
“Beacuse you gave me a TIF, and InDesign can’t use it. I needed a JPEG.” was the response.
Those of you familiar with software and file formats used in the graphics industry know exactly how ridiculous this is, but I responded in a reasonable way.
“Considering that the people who MAKE In-design pretty much created the TIF file format [Adobe bought Aldus], I think you’re mistaken,” I began.
“We could also turn it into a JPEG for you, though I wouldn’t recomend it, as the JPEG will be a lower quality than the TIF.”
“I called your shop and was told that the only solution was for me to buy a new computer.” He said.
I’ve worked with the employee he spoke to for over 17 years, and am pretty certain that nothing like that that was said.
“I paid someone else to scan it so I could have it as a JPEG, and that worked fine,” He finished.
What could I do? I explained that our work was good, that in conformed to all commercialy recognized standards, and that we charged a more than resonable rate. We’d be glad to turn it into a JPEG for him, or help him figure out how to use it in InDesgn, but that we expected payment. He refused.
Obviously, I’m not going to sue someone over 50 bucks. I did tell him that his choice to not pay us was also a choice to not do business with us again.
Feel free to give a call to find out who this bozo is so you don’t get burned trying to help him.

It’s an old trick. One fellow printers have been subjected to for years. “Since you have to reprint it anyway, can we make some changes and not be charged?” The truth is, NO print job is perfect. There is ALWAYS some flaw. About the most frustrating thing printers deal with is the client who looks for, and finds that flaw, and uses it as a lever to correct their errors at no charge. This lever is used far too frequently.

Today, for the first time in my recollection, a client called and offered to split the cost of a reprint 50/50. Half for their error, and half for ours. Why is this simple and appropriate gesture so rare? It is the kind of behavior that’s rewarded. Clients who “do the right thing” find themselves getting better prices, faster turns, and even better quality work.