The first couple of years are make-or-break for any fledgling organization, and the odds against new-business survival are often unkind to startups. That applies as much to new trade associations as it does to for-profit enterprises just coming out of the gate.
The printers who launched the National Print Owners Association (NPOA) toward the end of 2012 knew there would be teething pains, but they were confident enough in their venture to see that a bigger organizational challenge lay ahead. That would be adapting the association’s management structure for stable, long-term operation after a fast initial growth spurt. This is exactly what happened—and it led to exactly the kind of successful strategic adjustment that NPOA foresaw it would need to make.
The group, which once operated mostly without professional support, now gets a full slate of administrative services from Printing Industries of America (PIA), the industry’s biggest trade association. Under the arrangement, NPOA retains its autonomy and gets the management elbow room it needs to develop new services and resources for its members.
John Henry, NPOA’s director of programs and events, says that he and his fellow founding members felt certain that the group would get off safely the ground on the strength of enthusiasm and voluntarism. The association’s rapid growth proved them right: in a little more than two years, 370 small and medium-sized printing companies had signed on. Handling whatever management chores the members didn’t see to themselves was John Stewart, a quick-print industry consultant serving as a pro tem executive director.
Stewart had been engaged for a two-year contract but actually held the assignment for nearly three. “John had to do everything. It was almost unfair,” says Henry, adding that NPOA knew the consultant would be the proverbial tough act to follow once his time finally was up. (Stewart officially resigned on January 31.)
“We explored many options including hiring an interim director,” says Henry. “It soon became apparent that replacing John with one person was going to be close to impossible.” It eventually became just as apparent that “the best choice for stability, costs, and professionalism” would be an administrative services contract with PIA.
Under the contract, which became effective on February 1, PIA is providing the kinds of back-office services that every trade group depends on: phone and mail support, membership renewals, database maintenance, and accounting. In practical terms, it means when an NPOA member phones the association with a request, the call is answered and the request is fulfilled by an NPOA-dedicated PIA employee at that organization’s national headquarters in Warrendale, PA.
Henry says that outsourcing the day-to-day administrative chores to PIA “allows us to create an organization that can go forward for years, not as dependent on any one person or the original members of the board.” But, he emphasizes that although PIA now oversees NPOA’s member-facing activities, the bigger group doesn’t control anything else.
“This is strictly a management contract for certain tasks,” says Henry. “We are not merging or becoming an affiliate.” The contract does not turn NPOA members into PIA members, intermingle the two groups’ finances, or give PIA a seat on NPOA’s board of directors. NPOA may decide to contract additional services and benefits from PIA, but according to Henry, it can exit the arrangement anytime it wants.
Continuing to act independently, NPOA will begin a search for new executive director in April. Henry says that Barry Martin, president of the NPOA board, will consider candidates both with and without industry experience who possess strong association skills.
The person selected will lead a group that now has about 330 member companies paying $385 per year to belong. Their annual sales range from $100,000 to $10 million, averaging about $1.2 million. Most employ eight to 10 people; a few are chain or franchise printing operations.
“Our members are 100% printing shop owners,” says Henry, who owns Mitchell’s Speedway Press in Oswego, NY. “Every member of our board is also an owner of a print shop.” They have affiliated with NPOA, he says, because it offers them something unique to their interests: “We have a voice in the industry not heard from any other group—the small print shop owner.”
All trade associations attract and retain members by providing them with resources they cannot obtain anywhere else. Among NPOA’s key resources for member retention is the Printowners list, a long-running online discussion forum open to anyone with at least a 5% ownership stake in a printing company. Another is a library of research reports published by NPOA and QP Consulting Inc., Stewart’s firm. The members-only studies address financial benchmarking; wages and benefits; retirement plans; sales trends; and pricing for mailing service, signs, and wide-format output—all from the perspective of quick and small printers.
Henry says that the signs and wide-format pricing study is a good example of NPOA’s responsiveness to the need of its members. Information about best practices in the market was their number one request, yet no good source of answers existed. NPOA created one by surveying 230 sign shops about what they do and how much they charge. The result, says Henry, is a guide to “where the money is made” and what capabilities are needed to make it. An update to the 2015-2016 report is planned.
NPOA’s 2015-2016 quick printing industry pricing study covers pricing trends across the board, including charges for design and prepress as well as offset and digital printing. Not surprisingly, the various benchmarking data collected by NPOA indicate that shops with the highest sales per employee (SPE) also earn the most profits, with some enjoying margins of 20 percent or more.
Sadly, notes Henry, NPOA’s research also has found that many shops are losing money. “They have high employee costs as a percentage of sales and often do not charge and bill enough. This does not mean the most profitable pay less—in fact, their wages are most often higher. They just get more sales dollars per person employed.”
Although the data might seem to suggest that shops with low SPEs don’t have as good a handle on their production costs as shops with stronger sales, Henry says that job costing isn’t the primary issue.
NPOA initially thought, for example, that having a cost-capturing management information system could help shops improve SPE. However, its research found no such correlation, and the differences in SPE persist even though most shops now use an MIS of one kind or another. “The big problem is having too many people on hand for too little work, even if wages are lower,” Henry says.
The urgency of boosting sales will be the theme of the next edition of NPOA’s most popular event, its annual spring conference. Henry expects NPOA members to fill a boutique hotel in San Antonio where, for three days (April 14-16), a series of presentations, panel discussions, workshops, and networking sessions will delve into what printers can do—and have done—to improve profits and sales. Says Henry, “This will be more of what we get asked for each year—chances to learn from your peers who do it every day.”
An association that has professional management, a stable and an engaged membership, and a growing menu of member services needs just one other thing to secure its long-term future: vendor support. According to Henry, NPOA has earned it. “Most of the major vendors have joined and embraced NPOA,” he says. “We have key contacts for members to buy from, but more important, we have contacts we can go to if a member has issues.”
It’s an impressive track record for any trade group, but all the more so for a group that has managed to achieve everything in such a short space of time. NPOA now appears solidly positioned to deliver the benefits of association membership to small and medium-sized printers for as long as that segment of the industry is likely to want them.