Labelmakers focus on the family business
TLMI meeting aims to help members answer question: Sell or pass down?
By Managing Editor Melissa Larson -- Converting Magazine, 4/1/2007 2:00:00 AM
Outside, the Florida landscape was warm and inviting. The links beckoned. But inside, the Tag & Label Manufacturers Institute wrestled with some compelling issues at its annual Converter Meeting Feb. 25-28 at the Ritz-Carlton Golf Resort in Naples.
For the sizable number of converter members whose label businesses are a family affair, the programming at this year's meeting was especially appropriate. Meeting chair Dave McDowell of McDowell Label & Screen Printing not only gathered some classic management programming but also invited small-business consultant Mike Henning, head of the Henning Family Business Center (www.mikehen ning.com), to present a morning-long, two-part series aimed squarely at the label-business owner who finds himself or herself at a crossroads.
In “Valuing Your Business for Sale, Succession and Taxes,” Henning tackled the thorny issue of figuring out if and when it's time to sell the business—a timely subject given the current climate of mergers and acquisitions, and one that is certainly faced by small converters of all kinds.
Henning discussed how to properly value the business, find a qualified buyer, evaluate offers, deal with the legal and tax issues, etc. Henning also covered various methods for passing on your business to the next generation, should you prefer that alternative.
Kid to King
Next, Henning took on the even more delicate subject of passing a business to the next generation, and the challenges both for the owner/parent and the child who stands to progress from “kid” to “king.” How much formal education should the child have? Where else should they work before coming into the family business? How can you tell whether they “have what it takes” to take over the operation? How will both of you know when it's time for them to take over, and you to step aside? Despite the lure of a free afternoon on the golf course, the audience of converters appeared to be paying rapt attention.
A panel discussion followed, featuring “a second generation” of label-business owners who had taken over from their parents or were in the process of doing so. Among the panelists were Jeff Dunphy of Design Label Mfg. Inc. and Dwane Wall of Creative Labels of Vermont, Inc.
The four discussed the challenges—and the rewards—of taking over the family business. They offered insights as simple as calling the parent “Dad” if it was a personal discussion, and by his first name if the subject was business. One panelist, who shares his enterprise with two brothers, provoked a hearty laugh by advising, “Make sure your wives all drive the same car.” That night, Julie Chavez of Stixon Label, in accepting the Eugene Singer Award for Best-Managed Companies in the Small Company Category on behalf of herself and her three sisters, turned that advice around when she said, “We make sure our husbands all have the same golf clubs!”
Best companies shine
Other highlights of the three-day program included “Making Culture Pay,” a presentation on how to create an effective company culture, by Jerry Haney of Visionomics (www.vision omics.com).
A veteran of Xerox and Marion Laboratories, Haney detailed the common characteristics of outstanding corporate cultures and how effective leaders can create and maintain them. The goal: Help TLMI converters become better cultural leaders and thus create a committed and effective organization.
TLMI members were also informed that the latest North American pressure-sensitive label study is complete and available for purchase. NALS 2007 is the sixth North American market label study that TLMI has commissioned. NALS 2007 covers the most relevant issues North American label converters, industry suppliers and end users face in today's challenging marketplace. The object of the NALS is to inform label manufacturers and suppliers about the drivers shaping the pressure-sensitive label industry today and in the future. According to TLMI, it also provides a benchmark containing accurate and relevant research market data and knowledge to assist industry leaders in making business decisions critical to their growth and profitability. It's available at a discount to members, as a hard copy or in CD form, or both.
In a session open only to converter members, Shawn Six of Industry Insights presented general results of the yearly TLMI Ratio Study, which provides key industry benchmarking. The data-based discussion presents information from both TLMI members and comparisons from the tag and label industry in general, with the aim of helping member companies—both those who attend meeting and those who don't—run their own businesses better.
According to TLMI, defined business ratios, calculated annually through the TLMI study, help and encourage members to incorporate new and innovative methods of improving productivity and efficiency to increase their financial returns. The Ratio Study program and the industry information it provides is considered one of the most valuable features of TLMI membership, according to both new and longtime members.
In addition, the study results determine the winners of the Eugene Singer Awards, which were announced at a special banquet Feb. 27. Along with Stixon Label (Albuquerque) winning in the Small Company Category (under $6 million in sales), the Mid-Range winner ($6 million to $14.9 million in sales) was Luminer Converting (Lakewood, NJ). In the Medium Category ($15 million to $35 million in sales), the winner was Consolidated Label (Longwood, FL), winning for the 5th year in a row. In the Large Company Category, the winner once again was Belmark, Inc. This De Pere, WI-based company has won the Singer Award for the ninth time.
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