Previously on Disrupting the Future:

In last week’s ERC newsletter/blog post, we talked about the difference between finding and creating opportunities, and how the true entrepreneur—like a true artist—is able to “see” things in nature or the market that no one else and sees, and feels compelled to bring those ideas to fruition, rather than just finding things that someone else has hidden, like Easter eggs.

This week’s excerpt from the forthcoming book, Disrupting the Future: Uncommon Wisdom for Navigating Print’s Challenging Marketplace by Dr. Joe Webb and Richard Romano, takes that general idea a few steps further, and offers six concrete strategies for making the transition from a “printing company” to a new communications logistics management company. The goal is to minimize risk, which is actually a key attribute of successful entrepreneurship, while creating a new relationship with the marketplace that others can't seem to see.

1. Partner with Another Company

Is there a service or product you want to add for your current customers, but don’t know how to bring or develop these services in-house? New media, social media, video production, etc.? Find an outside company to partner with and outsource these tasks to. Networking at local business events, industry seminars and trade shows, and other networking events—actual and virtual—can be excellent places to locate individuals or businesses who may have the skills to you need to outsource to. And don’t forget that you can use Twitter and LinkedIn to find these folks, as well.

It may often be a case of making contact with a freelancer and saying, “I really need some help with my business. Perhaps we can work together and develop this social media content management service. I have a large pool of contacts because of all the print work I have done over the years.”

If your printing company is big enough, it may even be worth acquiring one of these companies and running it as a separate business. That can be decided later once there is a good track record of success and cooperation. Some large printing companies have found that the best way to transition their businesses to where they needed to go was to acquire an agency. Remember, not everything needs to be done under your own roof by your current staff. If you want to move into a new market quickly, and with credibility, an acquisition may be one of the best ways to work. In fact, developing a new service from scratch in-house may take time, and opportunities may not wait for that.

A critical aspect of the relationship is long-term trust. If there is any sense that either side is into the relationship just for occasional jobs, then it's not the right partner to pursue.

2. Start and Nurture a New Business

There is no reason why any new initiative has to be part of your “old” printing business. It may sound harsh, but in some cases it’s accurate: propping up a dying print business may be throwing good money after bad. Therefore, take your new initiative and start it as a new business that exists in parallel with the old one. Staff and equip it appropriately, but keep it separate. Nurture it, and if down the road the old printing business dies a natural death...well, life goes on. Both businesses need to work without a safety net. That safety net only postpones hard decisions to another time.

This “new business” doesn’t even need to have any new equipment, at least not at the outset. The new business can simply start by assembling strategic partners. Eventually, you can acquire your own in-house capabilities once the concept is proven.

3. Ditch Old Equipment

How many times has this happened: you finally paid off your car loan and exulted in the fact that you can save money each month by not having to make a payment. Once that final payment is mailed, it seems that the car “knows” and it’s at that point everything starts breaking down. So, no, you don’t have a monthly car payment anymore, but you do have regularly increasing repair costs.

Printers often make the same mistake with regard to equipment. They keep old equipment around after it has been paid off in the mistaken belief that just because there isn’t a payment being made that it doesn’t have a cost. But it has whatever it costs to operate it and to staff it, as well as an opportunity cost (i.e., there are other things you could be doing with floor space, resources, and staff). If it’s no longer being productive, it doesn’t matter how paid off it is. It’s still a non-recoupable cost center.

This is not to say that you should ditch all old equipment. If it’s productive and profitable, great. But any only marginally used piece of equipment ties up capital that can be better applied elsewhere. That capital is often employee time that is spent on old processes at a time when they should be gaining experience with new ones.

4. Don’t Think You’re Competing Against Yourself

There are commercial printers who feel that some of the new ways of doing business compete against themselves. That’s fine, and they might. The idea, however, is that there is a life cycle to businesses, and often those new ways will replace the old business, except they will be the new ways of a competitor.

As an example, an important application for digital printing has been the production of digital photo albums. These include wedding albums, with photos uploaded and printed in short runs for guests, relatives, as well as corporate and organizational events.

There are services that specialize in offering this online. Consumers go to a Web site, choose a template, upload their pictures, and select the kinds of binding they would like. There is heavy use of pre-designed templates, rather than totally new design. This is a benefit for the customer, because the templates offer a format that they could not create themselves, and the printer uses the templates because it brings a predictability to the work. Many printers feel uncomfortable with template-based businesses because they may offer professional design services, and template-based offerings undermine those design services.

The discomfort comes from the fear of competing against their own high-end production processes, taking their high-end clients and turning them into low-end ones. We don’t grant the premise. High-end clients are usually high-end clients for a reason, and in most cases likely won’t be lured into producing a lower-end job. But at the same time, there are lots of new lower-end customers that could be attracted by offering such a service—and again, it could be as a new business. Big customers usually started as small customers. As Bill Cosby used to say, “I started out as a child.”

The strategy, then, is to offer template-based services as a separate business. Because it would be owned by the same printing company, but marketed with a separate identity, the host company could identify larger users of the template-based services and then target them to upgrade to professional services. What better way to cultivate customers than ones that have been qualified by knowing their track record of purchases.

5. Specific Products May Change, But There Will Always Be Specialty Opportunities

Another concern for many printers making a transition to niche specialty products is that they often have a large upfront capital outlay. For example, the idea of buying digital printing equipment for the production of digital photo books or calendars or other products that are purchased one piece at a time, rather than a long run of 5,000 finished units at a time, is understandably scary. One order of many seems like much better business than trying to attract hundreds of orders of individual items.

These days, there are numerous ways to sell specialty printed items on a private label (or “brokered”) basis. There are printers who have already made these investments and are willing to brand Web sites and sell output on a trade basis. Our industry has always had a history of brokered and trade services, so it’s nothing new to our culture. Once sales volumes are high enough, only then should a consideration of investment should be made, or it may be the case that new money can be spent on a different project that expands the business in a different way.

It’s tempting to think, once again, that certain specialty products are fads—like the digital photo albums. Will there always be a market for them? Probably not. But the advantage of digital equipment is that it maintains a flexibility to capitalize on opportunities for new specialty print products. All these types of projects have similarities, and having experience with one, and the equipment to produce it, makes you able to understand how to produce others when the “new thing” comes along. Today it may be digital photo albums. Tomorrow, it may be...printed collections of blog posts or tweets or Facebook pages. Who knows?

It’s worth mentioning here this story that came over the wire last week:

Newspaper Club launches start-up for printing newspapers on demand, buying low-cost city press time during off hours and reprinting favorite online material.

Unused presstime at daily newspapers may find new customers from an unlikely source: bloggists who would like to see their postings committed to print. Newspaper Club, a U.K. start-up, has launched a business printing newspapers on-demand, buying low-cost  press time during off hours and reprinting material for customers, much of it originating as blogs and other online material.

The point is, once you are set up to take advantage of these types of one-off projects, you are ready for whatever comes along.

6. Clean Your Company

No, we don’t mean dust the equipment and empty the trash cans. We mean that more metaphorically. As an example, there are consultants that go into troubled businesses and “clean” them up to make them attractive to a prospective buyer.  We hope that by reading this book it doesn’t come to this (but it may), but perhaps cleaning you company so that it is attractive to clients is a strategy worth pursuing.

This is not merely cosmetic, or marketing-based obfuscation (i.e., your Web site screams “We’re a marketing services provider!” but mumbles “Actually, we’re just a printer who heard that was a great way to sell more printing.”) Do you offer the right mix of things and then promote them in a way that entices new business and then retains them as ongoing business?

That said, if you do need someone to come and clean up your company for potential acquisition, isn’t that a sign in and of itself that you’re dealing with a withering business—which cries out for change?