ITEM CURRENTLY OUT OF PRINT
“A Dead Printer Working is one who has cash problems, but doesn’t have time to do anything about it for they are always in their shop working.” Luck plays a role. If you are lucky, praise be. If you are not particularly lucky, then you need to know more about your financials to secure your future. Dead Printers In Waiting are those who are ready to become Dead Printers Working, they just don’t know it yet. Through the examples and practices in this book, printers can read and work their way out of the morass into the position of a Balanced Printer Profiting.
- Chapter 1: What is a Dead Printer Working? Definition
- Chapter 2: Accounting Stuff
- Chapter 3: Reading Financials: The Beginning Of Analysis
- Chapter 4: More Tools Of Financial Analysis
- Chapter 5: Questions About Working Capital and Financials from Real Printers
- Chapter 6: Setting Up Your Chart of Accounts
- Chapter 7: Budgeting Your Way To Happiness Or, Why It Never Works Out That
- Chapter 8: Expanding Capacity and Measuring Work: Which Comes First?
- Chapter 9: Gambling, Er, Investing In Equipment, always a Choice Between Alternatives
- Chapter 10: More Equipment Investing
- Chapter 11: Passing Costs Along To Customers
- Chapter 12: Pricing Printing
- Chapter 13: I’m Outta Here: Putting A Price On The Print Shop
- Chapter 14: I’m Still Gonna Sell This Place!
Chapter 1: What is a Dead Printer Working? Definition
Dead Printers In Waiting Scenarios. Some beginning principles of accounting are presented. Cash vs. accrual. Matching principle. A word about the tax thing. Nailing
down a real transaction. Monthly, quarterly or yearly financial statements? You and Your Accountant. Materiality. The Going Concern. Cost Principle. The
Business Entity.
Chapter 2: Accounting Stuff
Four parts to the financials and a fifth for success. The four parts are: the attest letter; the balance sheet; the income statement; and the statement of cash flows. This chapter introduces all statements. It also covers concepts of the classified balance sheet; the classified income statement; gross margin; cost of goods sold; and direct materials, labor and overhead. Also included are explanations of income before owner’s compensation; direct vs. indirect wages; and a call for changes in the income statement based upon these principles.
Chapter 3: Reading Financials: The Beginning Of Analysis
How to read a financial statement and understand it. The initial analysis: begin with the attest letter. Current Ratio and how to calculate it. Acid test or quick ratio and days of cash on hand. The specific percentages of direct materials, wages and overhead. Understanding the relationships between these classes of expenses tells you much about the challenges faced by the company. And a special emphasis on cash flow (considering depreciation and payments). The analysis presented in this chapter shows the strategy you are relying upon whether you know it or not. Which strategy is best? If your strategy is a loser, then take steps to change it based on the analysis you have just done.
Chapter 4: More Tools Of Financial Analysis
Other tools you may use are explained: Sales Per Employee; Sales Per Square Foot; Asset Turnover; Inventory Turns; Days In Accounts Receivable; and Net Owner’s Return On Assets. Other ratios are discussed. Also a list of what you and your accountant should review monthly, in addition to your tax liability, is enclosed.
Chapter 5: Real Questions About Working Capital and Interpreting Financials from Real Printers
We pause to reflect on real questions Tom has responded to online with real printers. A poignant letter from a printer who, while closing their shop, attests to the wisdom of keeping strong ratios. Folk wisdom and how it prevades our industry. How leases effect working capital and the current ratio. A case of leasing equipment from yourself. Leases and the famed $1 buyout. Handling sales taxes on in-house-printing. What’s counted when you accrue Accounts Payable. Departmentalization of income
statements. What we consider Direct Materials.
Chapter 6: Setting Up Your Chart of Accounts
This chapter is dedicated to one of the most basic of all things in accounting, the chart of accounts. We cover: the chart of accounts; account numbering system; departments; cost centers; the order of accounts; asset accounts; asset accounts order; current assets; non-current assets; liabilities, both current and non-current; stockholder or owner’s equity; income statement accounts; sales accounts; direct materials accounts; wage accounts; overhead accounts; and extraordinary expense and income accounts.
The chart I present was developed by me in my work with print shops around the country. Not perfect, but a good starting place for you to organize your financial information so it may be useful in your business and not just a thing which has to be done to keep the government off of your back.
Chapter 7: Budgeting Your Way To Happiness Or, Why It Never Works Out That Way
Operating budgets and Capital budgets. Their differences and uses. Nothing can be accomplished in curing the Dead Printer Working syndrome without a budget. Get it. Do it. Stick with it. Make it so. Don’t go to work tomorrow without knowing that you will be adding to your pile of cash instead of reducing it. It’s not textbook. It’s real world. This chapter includes how to do it.
Chapter 8: Expanding Capacity and Measuring Work: Which Comes First?
People, Equipment or Sales? The Safe Growth Formula. Measuring Work. Why work can not measured in dollars. The two types of time: set up time and running time. The Case For Standards In Printing. Three types of standards. Engineering standards, production standards and estimating standards. Why not knowing the difference keeps printers poor. Practical application of work measurements, the basic press log. Sales dollars per press operator.
Chapter 9: Gambling, Er, Investing In Equipment, always a Choice Between Alternatives
The Truth about where cash comes from to buy equipment. We discussed working capital (again), depreciation and cash flow. We see the effect of borrowing with no money down. We cover Marginal Contribution and the concepts behind it. We explored Phathom Benefits and what to do with the free months payments the vendor promises you. We then introduced you to the straight forward Payback Method. We cover what goes into the total cost of the investment and analyzed marginal revenue and marginal expenses, then we calculate the payback.
Chapter 10: More Equipment Investing
Using Payback For Replacement Equipment, The Hobbled Itek 1015. In this chapter, we covered using payback for replacement equipment and cover using payback for new equipment offering a new service. Jury of Executive Opinion. Rules for Evaluating Paybacks. We also use payback in a scenario with uneven cash flows: adding the outside salesperson scenario. We also mention the capacity assumption which is used with the salesperson scenario. And we briefly discussed advanced methods which utilize present and future values in their calculations.
Chapter 11: Passing Costs Along To Customers
The Truth About Budget Hour Rates: They Ain’t That Complex. Begin with a shop wide budget hour rate useful to many printing companies with fewer than five employees. Effect of chargeable time on rates and the effects overtime has on income. See what happens to the Budget Hour Rate when a worker is added. The Wage Multiple Budget Hour Rate is explained which can be used with up the 20 employees. Crouser’s Famous Two Bucks Per Ten Thousand Rule and Crouser’s Wage Multiplier BHR Short Cut. Investment in equipment and how that effects the budget hour rate. Then met Activity Based Costing when we add the high speed copier. An introduction to a Job Cost System. And, we developed Cost Centers to help through a cost dilemma. Finally, we discussed Machine Hour Rates and their applicability to the small press shop which was summed up as: not much.
Chapter 12: Pricing Printing
This chapter on pricing is about pricing and not a specifiic price. We cover the reasons why the specifics are the way they are. The history of printing prices according to me. Theodore Roosevelt, the Rough Pricer. Richard Porte and his Franklin catalog. The incident. Quick Printing Pricing. The PIP price list. Bill Friday publishes a price book. The Crouser Guide to Estimating Printing. How important is price. Stategies in pricing. Perfect competition we ain’t. Monopoly. The most important lesson in pricing: substitution! The only three short term and two long term strategies you can use under monopolistic competition. The highest to lowest income strategies you can use. The real problem with price is justification, not the actual price. Why knowing too much about costs is bad. How 2nd side pricing is costing us MILLION$.
Chapter 13: I’m Outta Here: Putting A Price On The Print Shop
Business sales: the form of the transactions. Bulk sale. Purchase of corporate stock. Merger. Cashing it out. Different kind of buyers: Strategic and Tactical. Rule of thumb methods in evaluation. Fixer uppers: the sum of all parts. Sales multiplier method. Industry multiplier method. Adjusted asset evaluation method. The source of all value: earnings. Capitalization of earnings method. Multiplier of cash flow. Comparable sales method. Real life data of print shop sales. How not to evaluate your business. Questions from the field: What do you do with owner perks and other expenses? David Oswald’s Buyer’s Limitus Test.
Chapter 14: I’m Still Gonna Sell This Place!
More About Getting Out Of Here. More letters from the real world beginning with a real Print Shop broker and his view of your transaction. A printer’s observation on buying and selling businesses in Alaska. A question about what happens to accounts receivable and “jobs in the pipeline?” A cautionary message for you from a printer who already sold about what to look for in your buyer. And a message which gives a buyer’s point of view and illustrates why businesses being sold need to make money. An example of the fed-up seller. Concerns about selling the business to an outsider. Tom’s perfect buyer. A word from Tom on children as a successor. Partners: breaking up is hard to do.
