Editor's Note: This is the first in a series of articles about exit strategies for printing company owners.

An old Chinese proverb says, "He who rides tiger must find way to dismount." When most of us got into this tiger of an industry, we never gave much thought to how we would dismount. "Someday, when I am ready and have ridden my tiger until he is ready to drop, someone will ride up on a white horse, pull me from my tiger, and hand me a bucket of cash big enough to buy my house at the beach." All too often, this seems to be the attitude of print center owners. Ten or 15 years ago, this type of outlook may have been at least partially true. However, today this vision does not apply.

This article explores the first step in how to dismount safely and profitably: Preparing your business for sale while building retirement assets outside the business.

Preparing to Dismount

When preparing for this transition, one must recognize a common mistake made by many print center owners. Erroneously, entrepreneurs in the industry will ride their tiger until it drops. This blunder is a sure way to decrease the business' value to the point where it cannot be revived and has essentially no worth other than what can be sold at auction. Certainly, no one in their right mind would take this approach purposely. However, when owners have run out of steam or do not show the desire to keep up with the fast pace of change that has come to the industry in the digital age, sharp declines in a business' value are inevitable.

As succession preparations begin, there are several elements of the business that must be in place before finalizing the sale of a print center.

Marketing

One important aspect is sales and marketing. Too often, this pair of critical cogs in the wheel of a print center's operations is ignored to the point that revenues either flatten out or actually begin to decline. Flat sales are palatable to some, but when looked at more closely, flat sales indicate that inflation is outpacing volume and profits are falling. For example, three years of 3% inflation equates to a 10% decline if sales are flat. Hence, cutting investments made in sales and marketing is not a wise decision or an effective way to make the profits look more inviting.

Personnel

Failure to invest in quality people is also a critical mistake print center owners are making. The industry requires that businesses are well staffed in all key disciplines of sales, customer service, and production. When achieved, a business will begin to operate efficiently, to the point where the business can go forward without constant owner oversight. This does not indicate the need to overstaff, but rather to hire and hold onto good, experienced people in key positions who will continue with a new owner.

In addition, a print center owner must dispel the idea of waiting until the last day to tell the staff that he or she is dismounting. I firmly believe that they should know the day you decide to begin a dismount plan. Anything else would be unfair to them and to a new buyer. If key people bail out, the new owner has a huge problem and so do the original owners if they carry back any financing. As a buyer, my purchase price goes up when I can meet and interview the staff and ensure that they will move forward with me. If not, the original owner is forced to discount their offering price for the unexpected.