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JULY 2013 NEWSLETTER

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5 Ways to Tap the Healthcare Repro Market

Healthcare is a giant and rapidly growing business. Can reprographics get a slice of that pie? Yes, there is plenty of reprographics-related work in the healthcare industry!

But there are some things to keep in mind before jumping into the field.

First, in addition to your usual high quality standards, healthcare clients require discretion – because of the Health Insurance Portability and Accountability Act, better known as HIPAA, all healthcare documents with patient identification information must be kept strictly confidential.

Second, many in healthcare deal in life-and-death issues, and take their business very seriously. Consequently, they expect their vendors to be equally serious and professional.

Keep these issues in mind when you pursue any of these five opportunities:

  1. Healthcare litigation support. Perhaps you already do litigation support of some type; healthcare litigation support requires an extra level of security. ARC Reprographics in Absecon, New Jersey (not the same as the public company ARC), operates what it calls a “HIPAA compliant website” to help lawyers with healthcare litigation. Here’s an excerpt from their website:
    “Once Arc Legal obtains paper records, we convert them to digital images and make them available for review on our HIPAA compliant website. You gain 24/7 access to monitor the progress of your record requests and can download copies. You also have the convenience of ordering new records online.”

  2. Shredding. Speaking of security, hospitals are seriously concerned about what happens to any documents that need to be disposed of. HIPAA requires that anything containing patient identifying information be destroyed before being disposed of. Such document destruction is major business for shredding companies; you can get into that business as well.

  3. Floor plan management. Large hospitals can be enormous – an average hospital is 76,000 square feet – and several departments within the hospital could require convenient access to floor plans. The engineering department, the security department, and the housekeeping department, for example, all could benefit from easy access to floor plans. No business is better at scanning and storing floor plans than reprographics firms, so consider your local hospital a potential client for your document management service. An essential part of that service is upkeep – hospitals frequently add on and renovate, so keeping the floorplans current should be part of your business plan.

  4. Signage. If large-format color is part of your service offering, make sure your salespeople are calling on the hospital marketing department. From signage to floor graphics to banners, hospitals could become a major customer of your large-format color output.

  5. Interior design and artwork. If you have any artists as clients, you probably already reproduce artwork. Hospital corridors and rooms are full of artwork, and most of it is reproductions, not originals. Whenever you learn of a local hospital being renovated or added on to, make sure the designer in charge is aware of your color reproduction services. (Of course, make sure you and the hospital have the proper rights to reproduce the artwork.)

These five services are just scratching the surface of the healthcare market. Obviously, managing construction documents when a hospital is being built or renovated is your first entree to this field. Just make sure that when the cranes come down, the hospital remembers your name!

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Are You Ready for Recovery?

Everyone knows that paper printing will never return to the halcyon days of the 1990s, but the AEC economy is recovering, according to many key indicators, and reprographics shops that survived the recession are poised to benefit.

First, here are the facts:

The AIA Architecture Billings Index jumped to 52.9 in May, up 4.2 points from April. This index is derived from a survey of AIA members that asks if billings are up, down, or the same from the previous month. A score of 50 means they were the same, so 52.9 is solidly in the positive area. This is the tenth positive monthly billings index in the last eleven months, indicating a solid overall recovery.

“This rebound is a good sign for the design and construction industry and hopefully means that April’s negative dip was a blip rather than a sign of challenging times to come,” said AIA Chief Economist, Kermit Baker, PhD, Hon. AIA.

Other strong recent economic indicators include:

Housing Permits and Starts: The U.S. Census Bureau and the Department of Housing and Urban Development reported that 974,000 permits for privately owned houses were issued in May. This is a 3.1 percent dip from April figures, but a 20.8 percent jump from May 2012. Furthermore, housing starts – that is, actual nails being pounded into boards – was up 6.8 percent over April and 28.6 percent over May 2012.

Construction Employment: Construction employment rose to 5,812,000 jobs in June, up from 5,799,000 jobs in May, according to the U.S. Bureau of Labor Statistics. Accordingly, the unemployment rate for the construction industry fell from 10.8 percent in May to 9.8 percent in June. (These numbers are “seasonally adjusted,” which means they take into account to a certain extent the fact that construction employment naturally increases in warmer weather.)

ENR Construction Cost Index: Engineering News Record, a trade publication for the engineering industry, measures average construction costs across the country each month. For July 2013, the Construction Cost Index, which incorporates the cost of labor, steel, concrete, and wood, was up 2.5 percent from the previous year. That means demand is up, meaning overall construction business is climbing.

All of these indicators, and many others, point towards a broad recovery in AEC work. That doesn’t mean it’s time to take the diazo machine out of mothballs! Paper printing will probably never be the same as it was before the recession. But it does mean that some of the traditional AEC business, which has sustained repro for a century, should pick up.

Are you ready for it?

Shops that survived the recession are leaner and meaner than they were before, with smaller staffs, fewer branch offices, and more efficient equipment. And they have created solid businesses in the digital realm, from cloud-based planrooms to scanning/indexing/filing.

They also have created ancillary streams of revenue, such as large-format color reproduction, vehicle graphics, and other non-traditional businesses.

But most important, those shops that are poised to gain from the recovery kept their wits during the recession and remained viable. They maintained good relations with customers who were similarly suffering, and they found new customers when revenue from old customers didn’t cover the bills. They didn’t get into price wars with competitors. They did continue to market themselves. Bottomline: They didn’t give up, and now they’re poised to get their due.

If you’re reading this newsletter, you’re probably in that category. If you don’t feel ready for the recovery, it’s not too late to consider breaking into new markets and developing new product lines. Consider the repro possibilities in the healthcare arena and in document destruction, both of which are discussed elsewhere in this newsletter.

Also consider new marketing efforts, aimed at reminding your customers that you survived the recession and you’re ready to help them thrive.

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Summer Weather Means Outdoor Media

Q&A with John D. Stevens, L2 Business Development Manager for Hewlett-Packard. Stevens is located in West Palm Beach.

ERA: What does the “L2” in your title mean?

Stevens: It refers to the fact that the entire family of HP DesignJet and Scitex latex printers and supplies are now called HP Latex. We rebranded the line on June 3.

ERA: Many of our members provide large-format color printing these days. What’s going on with that market, in particular the outdoor market?

Stevens: The overall category is growing, and it breaks down to 58 percent indoor and 42 percent outdoor. In 2010 that equaled $9.28 billion for the indoor market and $6.72 billion for outdoor. So if you don’t have the capability to participate in outdoor wide-format color printing, you’re missing almost half the market.

ERA: Our members are not conventional sign shops – how do you think they should market color?

Stevens: Color printing is driven by marketing, so your members might go to their existing clients that do a lot of marketing and show them what they can do. For example, doing posters has good ROI. It’s on paper, and we can print on poster paper, which costs about 16 cents per square, and 50 cents for ink, then sell for it for 3-4 bucks per square. Another thing that they’re doing is maps – colored maps for GIS applications.
You don’t have to compete with the sign guys. Our printer comes with a RIP, and latex is the really the Swiss army knife of printers – it does indoor and outdoor. It does it all and it’s 20 thousand bucks.

ERA: What types of wide-format color projects are most common?

Stevens: If you look at the number one SKUs it’s banners, posters, and signs. Banners and signs are typically outdoor. So if you can’t do outdoor, you’re missing those key markets.

ERA: Many reprographics firms have AEC printers that are color capable. Can they get into the outdoors market with those printers?

Stevens: The T-series is an AEC printer that can do color, but it’s not right for this market for several reasons. First, the prints are not outdoor durable. Second, they’re not the right size – sign guys use printers that are 54-inch or bigger. And here’s the bigger thing: That cheap banner the FastSign guy is doing will last six months outdoors; that thing you’re doing will last a week outdoors, and it will cost more.
So when people talk about outdoor color, the issue is not really the color – it’s durability. If you’re going to be in the sign and display business, you need to be able to create durable prints.

ERA: So what’s considered durable?

Stevens: Three years unlaminated and five years laminated. That’s the standard, and everybody hits that standard today.
About 10 years ago Mimaki and Roland figured out how to make a large-format inkjet printer with solvent ink that would print on uncoated media, and that really became the standard. When we came out with latex media and a water-based ink, people questioned it. And sometimes they still ask about the durability, and we tell them it’s the same.
There are some advantages to water-based ink. The first advantage of aqueous ink is environmental, the printers don’t emit hazardous air pollutants. Another advantage is that aqueous printers require much less maintenance than solvent printers. And the last thing is that solvent dries through evaporation where latex ink is cured with heat, so everything that comes out of the latex printer is dry and ready to go. You can laminate it right away.

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Shredding the Market: Destroying Docs Can Be Part of Your Business

By Ed Avis

About 10 years ago, Al Shalati, president of Delta Reprographics in Ottawa, Ontario, won a government document scanning contract with an interesting requirement: The shop had to be able to shred the documents after scanning them.

So Shalati invested in shredding equipment, and ever since then his company has offered shredding as another service. The equipment is located in Delta’s office, so they bring documents in from clients and scan and shred them there. He charges for the service by the estimated weight of the documents and the type of shredding required.

“It is just a sideline, but you may lose the main scanning business if you do not have shredding,” Shalati says.

Reprographics firms are naturals for the shredding business. After all, they’re already dealing with documents all day long, and shredding is just one more document management service. And legislation about security and privacy is constantly being enacted, so more and more companies and government agencies are concerned with the proper destruction of their documents.

The Opportunity

Shredding is a growing business because so many people and organizations are worried about security.
Hospitals, for example, are required to destroy documents that contain identifying information before they are disposed of. That’s a lot of documents!

And hospitals are hardly the only organizations that require shredding – any organization that collects personal information, from addresses to credit card numbers, must destroy documents containing that information. The liability those organizations face if they fail to do that can be catastrophic.

Many companies shred their own documents, of course, but companies with large volumes of documents that need shredding often learn that hiring a company to do that is more efficient and cost effective.
The common arrangement is that the shredding company provides secure bins that the client uses to store the documents between pick-ups. The bins are emptied by the shredding company and the documents are destroyed, either on-site or back at the shredder’s facility.

The Equipment

The first step towards becoming a shredding service provider is acquiring the equipment, either by purchasing equipment on your own, as Shalati did, or by becoming a franchisee of mobile shredding service.

Forget about that little shredder you keep by your desk – you need an industrial shredder that destroys documents to the point that they can’t be reassembled. Do you remember the scene in Argo, the movie about the Iranian hostage crisis in which the people reassemble all the shredded diplomatic documents by hand? Your clients don’t want that to be possible!

Shredders come in a variety of types and security levels. What you need is one that has the capacity to handle a large-volume of paper and one that destroys the paper to the point it can’t be easily reassembled.

There are a number of types of shredders, such as strip cut (the type you have next to your desk); cross-cut, which create rectangular or diamond-shape shreds; particle-cut, which create tiny squares or circles; hammermills, which pound the paper into fine particles; and others.

Shredding is typically defined in six levels, from 1 (big strips) to 6 (dust-like particles). Level 3, which is hair-thin cross cut, is considered acceptable for most secure applications, though many government applications require even finer shredding.

If you decide to buy your own equipment, expect an investment in the low five figures. For example, a Dahle 20345 High Capacity Shredder, which uses cross cut technology and can shred 65 sheets per pass, has a list price of about $14,000. A Formax FD8902CC Industrial Shredder that handles up to 650 sheets per pass retails for about $30,000.

Another option is franchising. The most active franchise in this field is ProShred - www.proshredfranchise.com. ProShred franchisees operate trucks with built-in industrial shredders than can shred anywhere from 1,500 to 5,000 pounds of paper per hour. Operators drive the trucks to client locations and shred the paper right there.

ProShred offers franchisees four weeks of training, exclusive territories, ongoing field support, marketing support, and other benefits. The company advises franchisees on what kind of truck to buy, depending on the hoped-for volume of shredding and other factors.

The initial investment for a ProShred franchise ranges from $332,000 to $477,000, plus franchise fees, royalties, and other fees.

Recycling

What happens to all the paper shredders destroy? Most commonly it is recycled. Since it’s generally high quality office paper, it is a desirable type of recyclable, and in some cases can be sold.

Shredding is a natural extension of document management, and it could be another income flow for your shop. And if you don’t start offering the service to your clients, someone else will.

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