Unlike those who have disappeared, they have anticipated future trends and changed their business accordingly. Over the past 15 years at Touchstone DDI they have successfully moved from typesetting to independent pre-press to printing.
Unlike those who have disappeared, they have anticipated future trends and changed their business accordingly.
Over the past 15 years at Touchstone DDI they have successfully moved from typesetting to independent pre-press to printing.
A year ago Messrs Stone and Middleton bought a second printing business, Frank Daniels, and are now in the process of consolidating their entire operation to a new site in Herdsman.
Touchstone in Fitzgerald Street, Frank Daniels in Wellington Street and a print warehouse in Malaga will all combine under the Daniels Printing Craftsmen banner.
"We wanted critical mass," Mr Stone said. "You need at least $14 million in turnover, otherwise you won’t survive."
Mr Stone is confident the merged group will exceed that level, predicting turnover of $17 million this financial year.
While Mr Stone can see a clear future for Daniels, he bemoans the lack of strategic industry awareness among many of his peers.
"Only 10 per cent of people in the industry are making reasonable profits," he said.
"Twenty five per cent are losing money. The bottom 50 per cent just has no idea what is going on. They are people who have spent too long doing rather than thinking."
One example is the lack of focus on capital utilisation.
"People who want to run just one shift; it’s just not economic. The way of the future is two shifts," Mr Stone said.
The industry faced further rationalisation, he said, citing a Federal Government report that predicted the number of printing firms in Australia would fall by half over 10 years.
The WA market may be hit harder than other States, since many national organisations are centralising their printing.
In this environment, Mr Stone sees acquisitions as the only path to growth. He believes Perth could end up with as few as three large printing firms.
To ensure Daniels is one of the survivors, Mr Stone is deploying a combination of quality control, competitive pricing and management skill.
"I’d take product quality as a given. But what you need is consistent and predictable quality, then you lift the bar and improve it," he said.
To improve management skills, both Mr Stone and Mr Middleton have attended courses at Curtin Business School.
One of the benefits of these courses was a more disciplined approach to financial management. For instance, Daniels now prepares 12-month cash flow projections, with daily figures for one month and monthly figures for the rest of the period.
Mr Stone is also a great believer in education for his staff. "Education is a major issue for the industry. We need to train-up our people or import skills," he said.
Daniels currently has three staff completing MBAs, two doing business degrees and six graduates.
"The industry is very capital intensive and very technology driven. The capability of people in the industry is well above average," Mr Stone said. He also advocates continuous informal learning, though the Internet, trade magazines and travel."We always try to visit a couple of printers when we travel. We never walk away from a print shop without coming out with at least one good idea," Mr Stone said.