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Investing is saving.

Investing Is Saving

Last year Equity Service Corp.'s 16-hotel chain found it was spending between $80,000 to $100,000 a year on printing expenses. Like any hard-nosed corporate executive, Equity's CEO Greg Fess was searching for ways to lower his overhead. Reducing his printing bills seemed a likely candidate.

But how? An obvious solution: Move it in-house.

A year ago in July, Fees' financial group, along with Fred Chastain, an Equity employee, bought the Budget Print Center printing business in Searcy for $95,000. Today, Equity is spending 20 percent less on its printing needs, has more materials printed, and is getting exactly what it wants, plus generating a healthy profit - before debt service - of around $30,000 on its investment.

All that makes Fess very happy.

"You get it at real cost instead of people throwing numbers at you and then you are not getting good quality," Fess says.

Now that's smart business.

Almost Anything

Equity, which was started a little over 10 years ago, is based in Little Rock and owns or manages hotels across the country. Their printing needs include brochures, accounting forms, business cards, invoices, stationary and "almost anything a business needs."

"That's right, almost anything any business needs," says Chastain.

Fess said the press was bought to meet the needs of the company because "we have worked with Fred for years and it made sense to buy the press because Fred had always done a good job."

Chastain says the turn-around time is faster and communication is improved.

"By owning your own in-house press you are able to control (your product)," Fess says.

Boosting That Bottom Line

Not only is the new printing business meeting Equity's needs, but they are also expanding to other business ventures.

Equity's printing makes up only 25 percent of Budget Print Center and its Little Rock branch, Commercial Graphics. The other 75 percent consists of 100 to 150 businesses located in Little Rock, Benton and Searcy. These businesses usually spend between $200 to $7,000 a year on their printing bills, Chastain says.

Chastain estimates average printing company profits at a 30 percent return on the initial investment. In Equity's case that's a hefty $30,000.

Almost any growing business can learn from Equity's experience. Routine operations farmed out to outside suppliers can often be profit centers, once they are brought under company control.

Can your business boost its bottom line just like Equity did? Take a look, you may find some extra income.

Dan Bilek is a professional management consultant and business broker who heads up Commercial Consultants of North Little Rock.

PHOTO : MONEY-MAKING MOVE: When Larry Morton, Fred Chastain and Greg Fess of Equity Corp. moved printing operations in-house, the company saved 20 percent on printing costs.
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Title Annotation:Small Business Consultant
Author:Bilek, Dan
Publication:Arkansas Business
Date:Oct 22, 1990
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