Last week Congress launched an assault on the federal regulatory process as the House passed the bipartisan HR 185, the Regulatory Accountability Act, a bill to reform the process by which Federal agencies analyze and formulate new regulations and guidance documents.  

 

A key provision of this bill would redefine and make more stringent cost-benefit studies associated with "high impact rules" that would impose $100,000,000 plus cost on the economy, raise costs for consumers or negatively impacts jobs in the manufacturing sector. The legislative effort is timely as it was recently reported that 300 new Federal regulations alone were proposed in the first seven days of 2015. 

 

After a five year absence, retailer JC Penny has decided to bring back its popular print catalog!

The retailer acknowledged the power of print stating that customers have much better engagement with print than simply visiting the JC Penney Website.

The news generated a lot of buzz which is also great for print.  Hopefully other retailers will follow suit!

To see a story featured on MSNBC, CLICK HERE.

When we produce a job, we are paid by the client the agreed price and spend the dollars (materials, wages, commission) to produce it.  The difference between the two numbers is called contribution.  When the total contribution from jobs in a period (a month, quarter or year) exceeds the dollars spent for the machinery, building and office (the overhead) for the same period, profit is generated.  Therefore, profit maximization is really contribution maximization.  It can be achieved by increasing prices or increasing volume.

Generally, increasing volume is a more powerful solution.  This is because at typical pricing levels, a commercial printer's actual expenditure is about 60 percent of the job price.  Thus, selling an additional job at a normal price level of $1,000 produces a $400 additional contribution while raising the price of an existing $1,000 job by 10 percent produces only a $100 additional contribution.  Indeed, if the client can only be persuaded to pay $900 for a new project, it sill produces a $300 contribution.

Full utilization of capacity plays a key role in profit maximization as a management commitment to 24/5 or 24/6 automatically brings large amounts of contribution dollars to apply against substantially the same overhead expense.  A three shift operation does not require tripling the size of the building or equipment, but it can bring almost triple the amount of contribution to the table with a profound effect on profits.  The implementation of such an approach requires a pricing policy that is focused on charging as much as the clients are willing to pay for the work, but is also focused on getting the orders - which requires a flexible approach.

Making this work requires a sales compensation system that keeps the sales reps and the firm on the same team, which usually implies that compensation is based on contribution rather than gross sales.