M&A Directions
Is Anyone Out There Listening?
By Joe Polanco
There are times when owning a printing company can be lonely. Very often, owners don't have anyone outside the company they can talk to about the condition of the business and the day-to-day pressures. Loneliest of all are owners who've spent decades building up their companies and are now asking themselves, "What comes next?"
During my many years with Printing Industries of America and PIA MidAmerica, as one of its regional affiliates, I got to know hundreds of owners and their concerns. Now, as a consultant in printing industry mergers and acquisitions, I see the same concerns playing into owners' decisions about jump-starting their growth or, in the opposite case, making an orderly and hopefully a profitable exit from the business.
As a trade association president, I knew that one of my most important jobs was to offer our members a friendly, well informed, third-party perspective on strategic business issues. Today, our New Direction Partners clients want the same thing: not just information about the mechanics of M&As, but also a genuine understanding of the industry and the mindsets of the people who own those companies.
Staying in regular touch with clients gives us strong insights into what's uppermost in their thinking. A perennial concern — probably the number one concern — is finding qualified salespeople. Owners know that the 20th century model no longer suffices. They need self-starting professionals who can do the kind of consultative selling media-savvy customers expect.
Sales superstars like these are never easy to find. These days, neither are good people for production jobs, especially in the bindery. Competition from other industries lures workers with the kinds of hands-on skills that plants depend upon. More disturbingly, we're seeing that when print firms close or merge, displaced employees won't necessarily try to find new positions elsewhere in the industry. They look in other sectors where they think career opportunities and job security will be better.
Eventually, every owner comes to the proverbial fork in the road which leads either to expansion or to exit. Those who still want to grow will have realized that the possibilities for further organic growth — finding new customers and getting more volume from existing ones—are limited. These owners then aim at strategic growth by acquisition. The wisest ones engage expert advisers to help them identify, approach, and negotiate with owners of firms that make the most sense to purchase.
For every company, remaining in operation over the long haul means continually reinventing the business. Production technologies change rapidly, and firms that don't adopt them soon fall behind. After going through multiple cycles of transformation, some owners decide that keeping up with the pace is something they no longer wish to do. If no succession plan is in place, the choice is between liquidating the business — which we never advise — and seeking a buyer for it.
There's help for owners who are ready to go to the next stage of business growth and for those who are ready to move on to the other things they want to accomplish in their lives. But in both cases, advance planning is essential.
This is especially true for owners seeking an exit strategy. Selling a company on favorable terms can't be done overnight. Waiting until the last minute to exit a business usually means having to bail out of it in the least advantageous way.
Whether you are in buying or selling mode, give yourself plenty of lead time. Discuss your aspirations with partners, family members, and other stakeholders. Then, be aggressive about seeking reliable advice from knowledgeable third parties. Trade associations and peer groups are good sources, and if you don't belong to any, consider becoming a member of one.
At New Direction Partners, we are always ready to join conversations about strategic next steps for owners of printing companies. No matter what stage of its life cycle your business has reached, managing its future is never a game that you have to play single-handed.
Business Management - M&A
E Joe Polanco Author's page
Joe Polanco has more than 40 years of experience in the printing industry and its trade associations. After graduating with a Printing Management degree from Cal Poly, he spent 15 years in operational positions in printing companies before joining PIA MidAmerica, a Printing Industries of America affiliate. As its president for 20 years, he helped companies realize their potential for success by showing them how to implement best practices, develop financial management tools, and achieve strategic growth through mergers and acquisitions. Contact Joe Polanco at (610) 230-0635, ext. 705, or at jpolanco@newdirectionpartners.com.
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