Print doesn’t always have to fight with digital. One doesn’t invariably have to suffer at the hands of the other. Lately, of course, it has been digital that has been delivering the punches while print staggers. But one company is prospering — growing, hiring, and racking up outsized profits — by finding new ways to marry print and digital.
Alphagraphics, a 15-person print shop that is a franchise of a Salt Lake City company, is using digital both in the everyday business of turning out its clients reports, ads, and menus, and also in new ventures. In each case, digital is the enabler, and print is the valued product. Digital may do the heavy lifting, but print is still what people need, or at least want, in their hands.
“We go live with the Daily Mail on Sunday,” says David Kovacs, owner of the Alphagraphics’ franchise at 12 Stults Road in Dayton. This new line of business for the print shop involves printing the English newspaper through digital technology and then handing it off to a distributor whose employees will deliver it to newsstands throughout the New York area. Up until Super Bowl Sunday, the papers were either shipped to their New York fans directly from England or were printed in Florida before making the trip north. Now, says Kovacs, the papers — 550 copies to start — will leave his plant at 9 p.m. and will hit newsstands by the next morning.
These will be full color copies of the paper, indistinguisable from those run off on standard presses. Kovacs and his partner in this venture, News World, spent $3.5 million on new digital presses. News World, a U.K. company, “owns the equipment and the relationship with the client,” says Kovacs. His company handles the processing, and has had to add two employees to get it done.
The Daily Mail is the first paper to be distributed this way, and Kovacs sees its digital-to-print publication as only the beginning. “We expect it to grow to six different papers, at about 500 to 1,000 each,” he says. For now, after a period of testing and practice, the project just involves getting the Daily Mail to readers. But soon it is to be expanded to ad sales. The plan is to digially swap out ads that appear in the print edition on the streets of the England, and replace them with ads targeting New York area consumers.
“Phase 1, we print the paper,” says Kovacs. “Phase 2, we sell ads.” The printing company will not do the selling itself. It will share in the revenue, but News World will do the media marketing.
There is also a phase 3 planned. “Someone might want sports news from England, and Spain, and France, and financial news from Russia,” says Kovacs. “We will print custom newspapers.” He paints a picture of a hotel guest checking in, being queried about his interests, and then having a newspaper made just for him first thing every morning of his stay.
At this point in Kovacs’ narrative a delicate question must be asked: Can’t everyone get all of this information online?
Sure they can, he readily admits, but “people want to be able to read a paper,” he says.
Alphagraphics’ other new product, is its Franklin Covey web-to-print day planners. Consumers go to a website and design their own day planners, which are then printed by Alphagraphics and mailed to them. Online software allows extensive customization, including a choice of 56 lay-outs, the use of personal photos, and the addition of notations on family or business events, day-by-day. Events that repeat year after year — birthdays, anniversaries, and the like — are stored so that they do not have to be added manually the next time around.
While the two new ventures are all about digital technology, the same is true for the bulk of Alphagraphics’ traditional business. More and more of it is coming in through the Internet. Digital transmission is no longer anything like new, Kovacs admits, but he says that there is one key elment of it that is new.
“Customers are just getting comfortable with digital,” Kovacs says. Businesses of all sizes are getting used to going to the computer rather than getting in the car to deliver projects that need to be printed. This allows for vastly improved efficiency in the 15-person print shop, and lowers costs. No longer do restaurant owners need to call or come over with menu changes, is one example he cites. “They can go online and change a price or a menu item,” he says, and increasingly they are feeling good about doing so. This means that employees are less tied up in answering phones and writing notes at the customer service counter. They can concentrate on getting the jobs ready.
Kovacs’ print business started with a difficult family conversation. His parents, and his grandparents before them, had owned a printing company. Family discord and poor management had driven it to bankruptcy, and so one day his parents asked Kovacs, age 18 at the time, if he could help to support the family. Giving up plans to become an electrical engineer, he borrowed $9,000 from a family friend, bought two of his parents’ presses at a bankruptcy auction, and set them up in his garage.
“I felt obliged,” he says. “I had brothers and a sister. You do what you have to do.”
He got a day job in a paper company because he figured that the owner of every copy shop would pass through, and he would get to know them. At night he worked on printing jobs out of his garage. His hunch about the contacts he could make at the paper company proved to be correct. He met Joe Schwartz, the owner of an Alphagraphics franchise, went to work for him, and then proposed a merger. By 1996 he was able to buy Schwartz out.
After building his business to a 12,000-square-foot operation and achieving profits that put him among the top franchisees in his company, Kovacs decided that it was time to grow further by opening a second location. He began to remove himself from day-to-day operations, hiring a manager, Don Klumbach, to take over. Then, in 2006, his company’s headquarters asked him to take over as director of operations for the United States, overseeing 238 locations. He accepted depite the fact that headquarters is in Utah.
“I commute,” he says. “I go out to Utah for about one week every month.” Since his franchisees are all over the country he does a lot of his managing via teleconference and video conference. But there are essential business trips, too. “I travel 150 to 200 days a year,” says Kovacs.
When he is at home, Kovacs, a Princeton resident, spends most of his free time with his family — his wife, Lorraine, who works in the business, and his daughters, Courtney, a 10-year-old who has earned a blue belt in karate, and Caitlyn, nearly 14, an A student, who, says her father, “sends 8,900 texts a month.”
Kovacs says that 2008 was not a great year, but that 2009 is beginning strong, thanks to new accounts. He says that he is on track to improve profits by 25 to 30 percent this year, and credits long-time employees, like Cecil Barnes, who has been with him for 12 years, and Jose Cruz, a 6-year-employee, for giving his company an edge. Beyond loyal employees, Kovacs says that success rides on careful attention to where technology is heading and what it can do.
“You have to keep up with technology,” says the self-taught entrepreneur who started his company by cranking out orders part-time on two old-line presses in his family’s garage.
AlphaGraphics – Dayton, 12 Stults Road, Suite 100, Dayton 08810; 609-860-9444; fax, 609-860-9449. David Kovacs, owner. Home page: www.us281.alphagraphics.com.