THREE RETIRED PRINTERS SHARE THEIR TIPS FOR PREPARING A BUSINESS FOR SALE AND ENJOYING THE NEXT CHAPTERS OF THEIR LIVES
The National Print Owners Association (NPOA) was launched in January 2013 by 19 small commercial printers. In February 2014, the NPOA’s second annual owners’ conference drew 150 attendees to Fort Lauderdale, FL. Highlights included sessions on marketing challenges, Web-to-print, business valuation, the Affordable Care Act, large-format printing and mailing. With NPOA Executive Director John Stewart acting as moderator, a panel of three recently retired printers reflected on the lessons they’d learned during their decades of running their own businesses and recounted some of the steps they took to support their exit strategies. We found their discussion very informative and, with the permission of the NPOA, are pleased to summarize some of the salient points.
At 75 years old, Howard Kack was the oldest panelist. Kack’s quick-print roots run deep. In 1971, he and a partner founded B & K Printing in Louisville, KY. Fifteen years later, with sales at $900,000, he sold his share of the business to the partner and moved west to launch a new career. When that didn’t pan out, he launched Mojave Copy in Victorville, CA, 80 miles northeast of Los Angeles. In 2007, with sales at $1.2 million, he and his wife, Vicky, retired and moved to Temecula, CA, to be closer to their grandchildren and wineries (“Not necessarily in that order!” he jokes).
THE SEVEN-YEAR SWITCH
Kack credits his CPA with instigating a seven-year plan that helped the couple prepare for retirement. “In the early 1990s, an Air Force base near us closed, and it decimated our economy for the next decade. In 2000, when things began to rebound, our CPA said, ‘Let’s talk about retirement. You need a program.’ He said retirement could be defined as freedom—to go and do whatever we wanted. But he also said there was a catch—we had to be debt free. ‘Double up and triple up your payments on corporate and personal notes, and get out of debt,' he said. It took us seven years.”
Timely financial statements are critical to any business, and even more so to an owner preparing to sell a company. Kack also offers the following financial suggestions:
- Create a monthly report card—set percentage goals for each line item on your P&L statement. Enter the goal next to each line item and review your progress on a monthly basis.
- Prepare an annual business plan and retirement plan with a projected date.
- Let your balance sheet (current ratio and working capital) dictate your expenditures.
Asked if he would do anything differently, Kack said he had bought a building that would continue to deliver an income stream. He also would have been more proactive in communicating the impending sale to his employees. “We waited until the last minute to tell them. [In hindsight,] I would have done a better job in preparing them for the news.”
NEW BEST FRIENDS
Kack and his wife are enjoying retirement, although he acknowledges the good life isn’t without its challenges. “Moving to a new area and making new friends at 70 years old took some time,” he says. Kack’s dream for his retirement was to train a certified therapy dog. He’s achieved that goal and, accompanied by Abby his four-legged friend, volunteers at hospitals and nursing homes.
Fourteen years ago, Steve Minta was a newcomer to the world of printing, having previously spent 16 years as an engineer. In 1996, Steve and his wife, Diana, purchased A Better Image Printing printing in Chapel Hill, NC. During that first year, the company, which had two employees in addition to the Mintas, did $275,000 in sales—one- and two-color offset printing comprised all of its business.
A Better Image Printing gradually upgraded its equipment and, in 2003, moved from its original shopping plaza location to a 7,000-sq.-ft. facility they built. The printing firm occupied 4,000 sq. ft.; the rest was office space rented to others. In 2008, the company had seven employees and $1.1 million in sales.
After losing a son to cancer in 2003 and their eldest daughter to a car accident in 2004, the Mintas decided life was too short not to enjoy it to its fullest. They decided they would sell their business in five years so they could travel and move to coastal South Carolina.
“As printers, we tend to get bogged down in day-to-day activities and lose sight of our ultimate goals,” says Steve. “Thank goodness we had started to prepare—the business was healthy and could survive with or without us.”
Steve and Diana listed their business through a local business broker in 2009. It sold in 2010, exactly 14 years after they bought it.
The Mintas had a clear ongoing picture of their professional and personal finances. “Every year, we would analyze the value of the business because we knew [we eventually wanted to sell it]. We used Larry Hunt Publications’ formula as well as [Hunt and John Stewart’s book] Print Shop for Sale.”
Steve’s advice includes the following:
- Maintain good financial reports. They should be on accrual basis and match industry standards so they’re easier to compare with studies.
- Keep up on accounts receivable. Contact late clients (35+ plus days) on a weekly basis.
- Review financials, both P&L and your balance sheet, on a monthly basis to keep track of the year-to-date vs. budget.
- Have annual sales and budgets with a three- and five- year plan.
- Join a peer group. The input—both technical and financial—is invaluable.
- Participate in all industry studies (ratio, pricing, etc.). You get the results for free, and you have a benchmark for comparison.
DAY TRADING ON THE BEACH
At age 55, Steve is on the young side for a retiree and wants to stay active. He enjoys dabbling in the stock market and, like Howard Kack, is developing stronger ties in a new community—Pawley’s Island, SC.
A MAN WITH A PLAN
Randy Daly has the distinction of being John Stewart’s first employee at Rockville Printing and Graphics in Rockville, MD. When the quick printing industry consultant and his wife Mary decided to sell their business to Daly in 1983, Rockville Instant Printing had reached $1.4 million in sales. By 2003, Daly had taken the business to $7.2 million, and in 2006 Daly sold it to a local competitor.
Daly is a meticulous planner. “I started planning in high school,” he recounts. “I had a 5-, 10-, and 20-year plan and an ultimate plan. Every day I had a list of things to do. If I didn’t get that list done, I didn’t go home.”
Daly first thought about selling his business during the 1990s, when Consolidated Graphics and other companies were on acquisition sprees. His peer group briefly flirted with getting into the consolidation game, but it set the wheels in motion for Daly. Although his company was flourishing, it had grown to a 70-employee operation, and the stress was eating at him.
Having sold his company at the age of 50, Daly wasn’t ready to retire. He got into commercial real estate and, in Stewart’s words, is a mogul who now owns and manages eight commercial properties. Daly and his wife now spend two months of the year in Florida. The rest of year, you can find him happily painting, nailing and otherwise working on his properties.
“Work ON the business and IN the business,” advises Randy. “My style took more hours but generated good results. Do not put off work for tomorrow that needs to be done today!”