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Printing Impressions-December 2001 Column
Good Times, Bad Times
AFTER 30 years in the printing business I have been through this before. Does that make it any easier? Frankly, at this moment, yes. That's because I no longer have to carry all that equipment, overhead and weekly payroll (that somehow seemed to come about every two days) on my back. I'm now a consultant and only carry my own weight-which is getting a little out of hand as I get older. But for you, the printer, that carries this heavy burden, no matter how many times you have weathered an economic storm it still comes at you like a category 5 hurricane. Worse, it can be just as destructive.

Now, like the other consultants, I can be a sage and give you advice on how to weather these storms. Unfortunately, when I went through the bad times, carrying that awesome weight, all the advice I got still didn't stop the beating. Particularly bad for me was that awful early '90s recession that the senior Bush insisted didn't exist. The younger Bush seems to be aware of not repeating the same mistake. Being aware is good; prescribing the right remedy to restore the ship is another matter. But that is not in our hands so we-and after so many years I still say we-are left to defend ourselves.

Like I said, as a so-called consultant this is the time I should be providing my words of wisdom. Well, I'm not going to insult your intelligence by replaying the standard beat the bushes, don't lower your price (yea, right) and cut staff routine. You know that already. Instead, I'm going to give you a perspective from Irv, a very successful individual who built a large company. I never forgot the advice he gave me so many years ago. Unfortunately, I never heeded it either. But as one gets older you ponder many things. For no matter what degree of success you have enjoyed, you think about how you could have done it better. I guess that's why you become a consultant, so you can share your deep thoughts with others who also may not listen. Even so, read and think. We're too deep into the current malaise for most to act on what I'm telling you. So, for this recession, you're on your own and hopefully you'll make it through it OK. You may want to tuck this away for better times, which we all know will come-we just don't know when. And that's just the point: All through our history there has been this ongoing cycle of good times, followed by bad, followed by good and so on. During the good times we forget the bad and vice versa because it seems as if the cycle in which we currently dwell is here forever. We all seem to suffer from short memories. Also, good times brings their own share of problems, like how do we get all this work out the door? At the time, getting work out seems like a frightening problem, but it pales in comparison to the dilemma of bringing work in. Irv told me to read the story in the Bible about Joseph in Egypt. You know, the one where he interprets Pharaoh's dream about seven years of feast and seven years of famine. The Pharaoh allows him to institute his plan to put away grain during the good times for the bad. When the bad times came they not only had the means to survive for themselves, but became a power since others had to come to them. No great revelation here; we've all heard it before. However, how many of us have actually used this concept in business? Probably not many, judging by the so-called "irrational exuberance" exhibited a very short time ago. Irv did and, by using a variation of this theme, built a highly successful business. Although I can't tell you exactly what and how he did it in this column, I can take you through some of his thinking.

First, he looked beyond the current times and prepared for the next cycle. No question, in order to do this you have to start on the good part of the cycle. There are also many pitfalls during a good cycle, the major one being not fully capitalizing on it. And of course there is the exquisite timing, which is like trying to guess the high point of a stock so as to sell at that perfect moment. We know that isn't probable. But what is possible is to curb your enthusiasm and to sell when your good judgment and reason tells you that the stock is reaching the point of being unreasonably high. A profit is a profit and even if the stock goes higher you still shouldn't second guess yourself. Look how much we all lost in the boom-and-bust tech market-myself included. We thought it would go up forever, ignoring that common sense voice that said, this is nothing but thin air. I know people who got out of the market, made a profit and were teased because it went even higher. But who is laughing now? OK, so what does this have to do with our business? Well, we go into a good period bruised and battered from the storm that we just barely survived. After being in the good for a while we get that giddy feeling and start to look for new equipment. That bright, shiny, new press arrives just when the economy begins to sour. Unfortunately that bright, shiny, new press also arrives with big payments and a hungry appetite for work that is now scarce. So we cut prices to feed the machine. Irv did it the opposite way. He rarely bought new equipment or expanded during the good times. He bought during the bad times, not at the beginning, but at a point when he felt the turnaround was near. When the turnaround came he was well-positioned because he had accomplished several things. The most important was that he hadn't taken on new burdens during the bad times, but instead coordinated the new debt, as best as possible, with oncoming boom times, upon which he was now well-prepared to capitalize. Plus, can you imagine the deals he made with machinery manufacturers doing a period doom and gloom?

All this is easy to say. But he made it work. I guess he had good instincts and good timing. However, let's face it. When good times are here we all seem to have trouble accepting the onset of bad times. As I said, when you're in good times you have to make hay. But suppose we started planning for the bad times at a reasonable point during the good times?

The precise point may be impossible to pick, but we can look for clues and make a reasonable guess. Plan what? For starters you might not execute that expansion plan well into a good period. Perhaps expansion should be delayed until some point during the bad times. That's how Irv did it and he made it work. This is a simple formula that has been around for centuries, all too often ignored. Who knows? You might become a successful chapter in the good time, bad time, never-ending story.

Harry Waldman

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