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Monday, June 16, 2008

"Shaun's Corner" - Is Your Champagne Glass Half Full or Half Empty?





By Shaun Meany
President, The PEiR Group

I am reminded almost daily that the US economy is in dire straights and consumer confidence in the economy continues to weaken.

Pick your culprit: newspapers, web sites, business journals – all seem to be carrying the latest “doom and gloom” headline. A recent report in one of the construction industry’s leading market intelligence consulting organizations, FMI, predicts the downturn in construction will continue through 2008 into 2009. FMI even went so far as to revise their 2009 forecasts for nonresidential construction – saying it would be ever so slightly down from earlier projections.

Reading all this, you know how closely related our industry is and how we all feel the heat from the same fires. An article in the June 2nd issue of the International Herald Tribune (the global edition of the NY Times) stated that credit conditions have begun to tighten in Europe just as they have in the United States, and the European Commission's monthly survey of economic sentiment dropped unexpectedly in April to its lowest level since August 2005.

Historically, there has always been a lag in the impact that the U.S. economy has on other economies, so if you are reading this newsletter outside of the U.S. and you think that you are immune to current economic conditions you may want to re-think your position.

Some of the ideas we’ll get into below may be helpful for your organizations, as well.

With all of these experts predicting a softening economy and, in particular, a continued decline in construction, what is a reprographer to do to weather these market conditions?

Earlier in the year I shared a few strategies I felt could be used to counter the affects of the economic downturn (POV # 109; January 11, 2008). It’s time to build on some of these strategies. In the last few months I’ve been travelling heavily, talking with scores of reprographers in the US, Canada, UK, and France. I found that no matter where you are or what country you may be in there is a commonality of experience we all can use to our benefit.

Visiting with a U.S. reprographer recently I was informed that their volume of black and white large format printing has dropped precipitously. They have been able to offset the loss of this print volume by going to developers, home-builders and others with excess real estate inventories and helping these clients to market these properties. As a result, printing volumes and profits have increased significantly in their large and small color departments. Another contributing factor to this reprographer’s success was their willingness to make investments in capital equipment (solvent based wide format printers) even during these tough economic times.

Here’s some more “shop talk” and a few sales initiatives that could be helpful in growing your sales.

Call on government, institutions, commercial property and hospital facilities’ managers and offer to scan and archive their record (as-built) documents on to CD Roms or into PlanWell.

Let your General Contractors know that you can help them with their bid communications. We have been talking about Bid Communications with members for several years now. Many of our PlanWell Enterprise customers have deployed BidCaster to their customers and are finding some real revenue opportunities as a result. In times like these bidding is more competitive than ever. Your GC’s need solutions to automate the laborious task involved with managing this aspect of their business.

Give them some. PEiR members looking for an entry level bid communications solution for their customers can now offer Sub-Hub. For more information on Sub-Hub please review the article Bid Communications in this issue.

Expand your business by calling on non-AEC customers. Here is a good list of potential businesses that need and want our reprographic services. As the economy softens more promotions and advertising is required to keep existing customers and to attract new ones. Try these sectors on for size:

 Chain Restaurants (Menus, Signage, Employee Training and Development)
 Educational Institutions (Good candidates for FM’s)
 Hotels (Both LF and SF Color Printing)
 Corporate Marketing and Communications Departments (Both LF and SF Color Printing)
 Retail Stores (POP Signage)
 Trade Shows (Displays and brochures)
 Real Estate Brokers and Agents (direct mail and follow-up campaigns)
 Car Dealerships (direct mail and follow-up campaigns)

I am sure many of you are already trying to find new areas of sales revenue to offset the loss in revenues from your AEC clientele.

It is important to realize that the design-build industry is not expected to turnaround anytime soon. It is imperative that you diversify your business beyond your traditional markets and services.

In every marketplace there are businesses that are thriving and others who need your services in order to survive. Find them. The future is yours to shape. If you stay positive, creative and focused you can find the sort of opportunities you need to grow your business and defy the headline writers.

Cheers,

Shaun

1 comment:

David said...

FMI is a good source, though usually a little "brighter" in attitude than McGraw-Hill. A blend between the two is usually a good bet.