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2016 Review

In Australia, 2016 has been largely one of politics. It started with local Council Elections, then we had to endure the Federal Election and of course, we had to also endure the American Presidential elections.


I’m not sure why the Australian media had to devote so much air time to the presidential circus to be honest, as we could do nothing to influence the results, and it is not something that directly affects us anyway.
Personally I think 2016 must go down as one of the most negative years in terms of media reporting that we have had in a long time. A direct result of negative media is a negative business outlook.
Businesses, big or small, are more interested in positive news because it gives investors, resellers, buyers and families the hope of better times ahead. It isn’t rocket science.
Whether the incoming president can tap into his business skills to improve the lives of his constituents is something that everyone is banking on. He has some serious work to do, and the livelihoods of a lot of people are in the balance.
Let’s not forget, that on January 26, 2016, debt held by the American public was $13.62 trillion or about 75% of the previous 12 months of GDP. Intergovernmental holdings stood at $5.34 trillion, giving a combined total gross national debt of $18.96 trillion ($18,960,000,000,000) or about 104% of the previous 12 months of GDP.
In reality though, any government is just another business. The head of the government is the CEO. The CEO of a large organisation has a board to oversee the operation of the company. The CEO has people employed to do set tasks and they have people employed to make sure the tasks are completed according to the direction of the CEO or board. In its most basic form, anyone using sound business principles should be able to run a country. I guess time will tell if that theory is true.
So how does that apply to us?
Our businesses, although being infinitely smaller than something like America, still need to apply sound business principles and are imperative if we want to remain in business for the longer term.
The real worry I have is that, after talking, listening and competing against my peers over the last year, it is becoming increasingly evident that some of my colleagues are very intent on working for the lowest hourly rate they can devise, work the longest hours they can, and then complain that it’s getting harder to make a living.
I know firsthand, colleagues competing with me on quotes must be working for nothing. I recently competed for, and won a contract that several colleagues undercut me on, by huge percentage. Even the client couldn’t understand how they could come in so cheap. The client assumed they were using an inferior product and inexperienced fitters. I don’t know if they were or not, but I agreed with the clients doubt and got the job.
For some reason, it seems that everyone in this industry hell bent on devaluing their livelihood and professionalism. Instead of value adding to the job, they happily scuttle the value their workmanship, experience and knowledge. They are successfully reducing their ability and opportunity to make a decent living. This mentality will always be attracting the bottom feeders that buy solely on price, and give no consideration to your actual ability and worth. You will be forever making minimum wage, using inferior products and chasing new bottom feeding clients.
With all due respect to those in the wide format food chain called ‘Print brokers’, I believe that section of the industry are partly to blame.
Before these brokers forced themselves onto the market by carving out their little niche, we had an industry typical of most business platforms. You had a client who conversed with the manufactures, who agreed on a price, and the job was done. The manufacturer made a realistic margin, the buyer dealt directly with the manufacturer, and the arrangement worked well.
When brokers came on the scene, we were expected to give up some margin to accommodate them. In some cases, we, the manufacturer is making less than the broker makes on the same deal. The rot seemed to start from there.
Our industry started to become lazy. Brokers meant that the manufacturer didn’t need to sell his services to a lot of people and started to become reliant on brokers for their new business. That made the broker even more powerful, and they started playing colleagues off against each other on prices. All the time, margins for the manufacturer are being eroded.
I speak to more and more people in our industry that are struggling simply because they no longer understand, or don’t know the value of their own worth.
So what can we do to change the situation?
In truth, it’s not something that the industry as a whole will change overnight. But we can change our view of our worth and on our ability. It’s all about us as individuals.
In terms of longevity, there are a lot of operators out there without insurance. There are even more without (TPD) disability or life insurance. I’ve been rushed to hospital three times for injuries at work. I slipped with a knife and stabbed myself in the stomach and I’ve knelt down on a floor signing a vehicle and tore a muscle in my knee. There is no truth to the rumour that I screamed like a girl either.
Ours is considered a dangerous industry although my wife maintains I’m more dangerous than the industry itself. She may be on to something.
I also had a mishap at work with a knife late one night, trying to meet a deadline for a morning TV show. When I arrived at hospital, the surgeon looked at me and said ‘Don’t tell me, you are in the sign game?’ I said ‘yes, how’d you know’
He said it was a rare injury of the hand, and the most common industry it occurred in was the sign industry. He told me that hand surgeons consider our industry one of the most accident prone there is. Who’d have thought?
So, start by understanding the value of you. If you are incapacitated, it could spell the end of your business. My hand injury had me off for 8 weeks.
Then you need to understand the value of your client.
Supply a rubbish material to meet the cheap price and you will be judged for it. At the very least, give the client a choice – cheap and nasty, or quality and long lasting.
Let them make the decision as to which way they want to go. You will be surprised by the amount of people who will opt for the better quality.
Another thing some of my colleagues tend to forget is that it’s cheaper to retain a client than keep finding new ones. In this modern technological world, keeping in touch has never been easier. Keep in touch with your clients.
My final piece of advice would be; value all you clients the same. Little spenders can quickly become big spenders if their circumstances change, and the same applies to big spenders. When I stared 20 years ago, I would have cleaned an elephant with a tooth brush. I picked up a client who was constantly at loggerheads with his sign shop. They were not spending a lot of money so the sign shop didn’t rate them highly in the overall scheme of things.
I took over the contract and was averaging $200 a month. They were a small manufacturing facility and I was doing their logo production and signs here and there on their company fleet. Their circumstances changed the following year, they expanded rapidly after taking on new investors and I then averaged $5000 a week. I did that for 5 years until they sold out to an American company.
I learned a valuable lesson and I’ve never forgotten it.
So, let’s be competitive without going broke. Examine your situation and make sure your margins are sustainable. Believe in yourself and appreciate your worth.
We have some awesome operators in our industry, and I admire every one of them. Some I know personally, others I know from afar, but each fully understands their worth, their knowledge and their skill.
The most important thing to remember is this; when we sell our services, if we don’t value our own worth, neither will the client. It is as simple as that.
Therein lays the primary task of the incoming President. Some think he is a fool, others think he is a genius, but the important thing is that he believes in himself and fully understands his worth, value and experience. In many ways, that is his strength.
I would also like to thank all those that  follow this blog and thank those that interact via email and contact me through the year. Due to my workload and family commitments this year, I’ve been a little irregular.
Take care, see you in 2017.

 

Shane Drew
www.dsi.net.au

 

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