very competitive market

[prepressprinting]

Hi everybody
I have a question to ask, we're thinking into getting into the printing business...again.
We still have a lot of reasons not to, but I need some feedback from somebody to prove us wrong, especially a printing salesperson who is reading this thread.
Not too long ago we had a shop with 4/c Heidelberg GTO 52 and a direct to plate system, including a nice Polar cutter and bindery equipments, all these machines were bought brand new from Heidelberg. The business lasted 10 years, back from 1995 until 2005. the first 5 years were great until year 2000, when everything after that went down hill, until we decided to sell, reason being is that Xerox and Cannon and all these players came in with their gadgets competing with the offset world, charging their clients an arm and a leg on the clicks, by the time the end user knew what they were getting into, it was too late, anyway...
Here comes the question and I hope somebody would tell me a good reason why should we go back in:
With printing machines going sky hi in price, being so automated and fully electronic, not to mention that they're most likely have to be backed up with a hefty service contract, maybe around $5000 a month.
A good pressman to run a nice 4 or 5/c press that at least has to be above 28" so you can compete with this lousy market, say $4500 to $5000 a month, plus workman comp, plus health insurance, plus the rest of the crew that comes with the package.
A good sales team that works on commission, will suck your pockets dry.
Materials cost; ink, plates, solvent with the right VOC so the AQMD doesn't come in and shut you down.
Make sure you don't have a lot of redo just because the pressman or the prepress person
forgot a letter that was hidden or was checked to overprint by mistake.
Some graphic artist, figure they know what they're doing, check the files, bleeds, overprints, the right CMYK, etc...
Add all this to the list and start your new venture just to find out that some other printer around the corner knocked your price down by $2 dollars on a set of 1000 business cards that's selling for $19.95
Did I mention that we used to charge $250.00 to $300.00 for a set of 1000 business cards
printed 4/0 only and 1 pass without any UV on that press that we bought for 250k back then and it's probably one and a half times more now.
I think Printing manufactures are flooding the market with automated presses, soooooo automated that they'll tell you that these are money making machines and you'll start making money from day one.
Any thoughts?
Thanks

 

[Paultheprinter]

Why does anybody invest in printing now? in the uk margins have shrunk down to the level where the companies without a clear business plan take on work at or below cost just to gain turnover. This is a crazy situation because management wont go back to basics an see where they make money, after working in the comercial sector for severn years and watching the company go downhill because they did not go for the right work, they went in at cost minus 10% to gain local goverment work which at best could only ever make small margins as over five printers tendered for every job, this might work if every quote turned into a job, but it was as low as 1 in 15 jobs which went live. money was leaking from everywhere and when push came to shove the production staff were made redundent as the estimation/office staff were busy chasing that 1 in 15. My point is do you have a business plan which actually justifies the investment ? do you want to invest a quarter of a million dollers to make ten thousand a year? and how much give or take is in your business plan ?if your sales fall short by 20% or you have a customer go down will you folllow?

If you have a cautious business plan which can make money on worst case senarios than there may be money to be made, but the key if finding a nieche market which gives you an advantage over your competetors before you start.

Paul