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Industry Insight

Are you what you count? The financial numbers that matter

“There'

By Patrick Henry
Published: August 18, 2009

“There's a little bean counter in all of us,” writes consultant Jack Epstein. “So what do you track on a regular basis? Wouldn't we be better served only analyzing what we know we have the ability to fix and that doesn't mean everything all at once?” Epstein believes that there’s no point in tracking some of the things that printers are often encouraged to measure. Other measurements make more sense, but only when the correct information is being gathered. A handful of yardsticks are essential to the economic well-being of every company. He makes a detailed case for these arguments in an essay that can be downloaded here. Some excerpts: “We might be the sum of the parts, but do some things printers commonly track make any significant difference? “Number of days without an accident: Having a sign never prevented a Workmen's Compensation claim. “Number of new customers: Don't start high fiving over a few new orders and forsake figuring out ways to hold on to and expand business with existing accounts. All that really matters is the total. “Number of estimates: Who cares so long as they get done on time and some get turned into contracts? "Number of jobs & average job value: Who among us would turn away work of any size these days? “Moving up several rungs is a group of stats that have value, but only if you know the details: jobs that lost money; sales expenses as a percentage of sales; efficiency/utilization/chargeable time; sales per employee; spoilage; booked sales; inventory; repairs & maintenance; profitability by customer. “At the top of the heap are the categories that are the lifeblood of any company. These need specific goals and should be studied monthly if you want a shot at damage control: profits; sales; bad debts; accounts receivable & payable $ produced per hour; number of bad plates; pricing of booked sales; value added %.” Given the tight money supply, Epstein says, “we should look at numbers the way lending institutions do. They don't care about the number of estimates you did last month, the quantity of plates made, or that a machine ran 2% faster. They assess the risk of a borrower being able to replay a loan by using methods that can be applied to any business. “Trends do matter but it's more important to take corrective actions than to just gather the facts.” Jack Epstein can be contacted at 410-957-3126 or jackep@hughes.net

Patrick Henry, Executive Editor for WhatTheyThink.com is also the director of Liberty or Death Communications, a consultancy specializing in research, education, promotional, and editorial support services for the printing and publishing industries.

Patrick Henry is available for speaking engagements and consulting projects. To get more information contact us here.

Please offer your feedback to Patrick. He can be reached at patrick.henry@whattheythink.com.

 

Discussion

By Chuck on Aug 19, 2009

Good article! One thing I would point out: right now, customers are spending less, across the board. That decrease has to be replaced by work from new customers. It's harder than ever to acquire new customers who have money to spend. So there actually should be high-fives all around when orders come in from new customers, then laser-like focus in determining how those new customers were on acquired so that can be duplicated.

 

By Michael J on Aug 19, 2009

One thing that might be useful to measure is the time it takes to answer a customer email and the time it takes to get an estimate in the customer's hands. Back in the day, answering the phone before the third ring and getting back first with the estimate had a lot to do with winning a lot of jobs.

 

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