How to Prepare Your Print Shop for a Recession

If there’s one thing every printing business has in common, it’s this: resilience. Those who survived the pandemic know the importance of creating process efficiencies and adapting to changing demand. After being hit with runaway inflation, rising interest rates, and the Great Resignation (to name a few), we are now on the precipice of a recession.

While recessions can be scary for print shops who are already facing tight profit margins, it doesn’t have to mean layoffs and loss. Understanding what causes a recession, what stagflation means, and what your business can do to prepare for a period of uncertainty is the key to not just surviving but prospering. That’s exactly what we aim to do in this blog post. Keep reading to learn more about what to expect in the months to come and how you can start protecting your operations now.

When a Recession Becomes Stagflation

A recession is generally defined as a widespread and prolonged economic downturn. The commonly accepted definition is that two consecutive quarters of decline in GDP is a recession. As a normal part of economic cycles, recessions are usually a corrective result of economic imbalance. These days recessions don’t last as long as they did in the past, but they still have a significant impact on everyone.

Stagflation (stagnation + inflation), on the other hand, is not as common as recession. It combines persistently high inflation, high unemployment, and stagnant demand. Stagnant demand happens when debt levels are high, inflation starts to jump, and interest rates rise, which reduces the actual real income and buying power of people. This triggers a tightening of purse strings and a dip in consumer confidence.

The last time stagflation occurred was in 1974, lasting until 1982. Now, the combination of inflation, reduced buying power, rising interest rates, dropping consumer confidence, high debt levels, and geopolitical tensions following an already challenging economic period have created the perfect storm for recession and stagflation. Because stagflation lasts longer and is more complex than a standard recession, it means you need to start proactively planning ahead and strengthening your print operations.

The Impact of a Recession on the Printing Industry

Due to a print company’s reliance on consumer confidence, GDP growth, print equipment, and marketing spend, the print industry is often hit the hardest by recessions. As we look ahead to 2023, one of the areas where print shops will start to feel the crunch of stagflation is in cash flow levels.

The first place most small to midsize businesses cut in difficult financial periods is their marketing and advertising budget. As customers tighten their belts and look for places to save, they’ll start making fewer and smaller orders. They might be forced to look for cheaper options and ask for discounts. What does that mean for printers? Less sales coming in from new and existing customers.

Because other companies will also be experiencing cash flow challenges, you also face the risk of delayed payments. You’ll be forced to spend more time chasing outstanding invoices and if they can’t pay up, it can damage your cash flow and cash reserves. Rising interest rates and uncertainty in the market will also make it more challenging to get credit approval from banks for any business investments.

The good news is there are plenty of ways to protect your cash flow – the lifeblood of your business. Keep reading to find out how.

Preparing for a Recession: Step 1

The possibility of recession and stagflation doesn’t have to be all fear and anxiety. It’s not time to throw in the towel; it’s time to double down on building resilience in your print shop. Printers that adapt and innovate to survive emerge from recessions much stronger and more efficient than when the economic downturn hit.

Although there are many ways to start prepping for economic turmoil, the first step is to find efficiencies across your business. Optimizing your systems, improving visibility, streamlining service delivery, and operating as lean as possible is the best (and fastest) way to stay afloat through economic correction.

For a busy print shop, this means:

  • Reducing or eliminating bottlenecks in every department, from estimating to the shop floor
  • Optimizing production planning and scheduling to make the best use of all your resources, human and machine
  • Automating heavily manual processes to improve sales productivity
  • Attracting new customers with value-added services and marketing
  • Tapping into accurate data and being able to analyze performance and costs

It sounds easy enough in theory, right? With a few changes to your processes and technology, Wye Print can have you equipped for every worst-case scenario.

Although we don’t have a crystal ball, we do have the knowledge and expertise to help better position you for every downturn and opportunity that lies ahead. We’ve put together a step-by-step guide that walks you through how to address each of these areas of your print business. From managing your working capital to optimizing sales productivity, you will learn 7 actionable steps to protect and stabilize your print business in times of economic uncertainty.

7 Ways to Prepare Your Print Business for Economic Turmoil