Graphic Media Alliance

12/26/2023

Quoins2Pixels

Insured Deposits

Generally, we’re used to thinking that deposits are safe in any amount as even smaller regional banks have billions in assets. Also, the federal government insures bank deposits up to a maximum of $250,000.

However, it has become apparent that many banks have substantial exposure to large commercial mortgages particularly in the office building sector. These have been impacted by rising interest rates and dropping office occupancy. This has created a situation where building owners find it necessary to default on the mortgage and surrender the property to the bank lender.

Do You Want Margin or Profit?

If job margin and enterprise profit are not the same, which do we want? Obviously, profit is what determines our ability to grow and to build security for our people and ourselves — its absence leads to failure and destruction.

If that’s so, what should we do? Accept the reality that sales volume is the principal driver of profit. Unfortunately, the assumption of our estimating and costing system is that every cost of operating our business can be assigned to a particular job and that margin and profit are somehow identical.

Their Needs Vs. Your Capabilities

The traditional goal of sales is to fill the plant. While there’s no question that a busy plant is almost always a profitable one, a focus on selling what we can produce tends to commoditize the work and always makes it unlikely that the firm will become a partner rather than a supplier.

Diversification

As the prior article implies, it becomes apparent that producing the same products for the same customers is not a strategy for long-time survival. Searching for new customers is crucial, but diversification is a proven path.

Road Map To Profitability

One of the often-overlooked business controls is a company’s chart of accounts. It needs to be structured in a manner which provides information management can use effectively. The key area is structuring Costs of Goods Sold (COGS).

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quoins2pixels—the bi-weekly, nuts and bolts management newsletter

Graphic Media Alliance is proud to share this publication which is short, easy to read, but totally focused on the nuts and bolts of the actions that will increase your profits.  quoins2pixels is written by Bob Lindgren and Joe Polanco. Bob and Joe have spent decades in the printing industry, and throughout their careers, they have counseled hundreds of company owners on a variety of management topics. As a value-added service of Graphic Media Alliance, they are available to expand on these articles, or aid with projects.