London will host the Olympic Games this summer for the first time since 1948, bringing a £1bn boost to the UK economy that is sure to include a bonanza of games-related print work.
Then, with Drupa fast approaching, the industry has the perfect opportunity to put the doom and gloom of 2011 behind it.
With that in mind, there are a number of measures, such as the ability to offset capital and staff investment against corporation tax, which UK printers have identified as having the potential to help make 2012 a prosperous and successful year for the industry.
"The ability to specify payment terms" is the priority for Kent-based Wallace Print managing director Gary Wallace. "The government should make it law to allow us to specify payment terms after evaluating our clientele. This is what I’d like to be able to do after studying credit checks (which we do every day)."
According to Wallace, a government-led directive could enable companies to categorise clients in 30-day, 45-day and 60-day terms, while preventing the printer from causing offence to customers.
"This would give us the flexibility to not upset our clients, because they would be aware that it is a government initiative and that’s important because offence is the first sign that a company is struggling," he adds.
This echoes calls from the BPIF and the Forum of Private Business (FPB), which last month warned the government that the problem of late payments was "decimating" SMEs.
Other measures called for include clarification on the UK start date for the EU Late Payment Directive, which will make 30-day payment terms mandatory in the absence of specifically agreed payment terms. The organisations have emphasised the need for flexible implementation, though, because of the ‘domino effect’ that slow-paying large businesses could have on small businesses who face suppliers’ demands for 30-day payment.
Tim Lance, sales director at Slough-based print, design and fulfilment business X1, stresses that cashflow is more important than ever, reinforcing the need for something to be done to prevent SMEs being squeezed by their larger customers.
"Cashflow is so important in SMEs – it will be the main concern for me in 2012. Our order book is strong and our staff are good, as is our investment and planning for the future, but cashflow bothers me," he says.
Needless paperwork
According to Ink Shop managing director Stuart Mason, reducing needless paperwork is one way to make printers’ lives easier. "Each year we receive almost 20 surveys from the Office of National Statistics. They aren’t brief. Each one takes around 12 hours to complete and we don’t have the time. They need to stop."
Mason adds that HMRC can also do its bit to help print companies by continuing with Time To Pay (TTP), to allow printers to pay back deferred tax in a cost-effective way. "It is imperative that they continue this. Just because some companies are still making a profit, that does not mean that they are able to pay everything off at once. TTP offers an effective way of doing that," he says.
Tim Hill, managing director of display graphics firm Speedscreen, says that the government could help SMEs in 2012 by encouraging lenders owned by the government or general public to be "more realistic" with lending on the latest technology.
"Banks and lenders are still open for business, but only with personal guarantees and, regarding digital equipment, a buy-back from the manufacturer," he says.
"In addition, the underwriters will not sanction loans on new, high-cost digital plants. Clearly they have suffered massive residual losses and the message is almost that they no longer wish to lend on print kit." Unless action is taken, argues Hill, print will be under-capitalised and under-resourced in the next few years.
George Osborne’s 2011 budget included a number of measures that would impact UK print, including cuts to corporation tax, and Wallace says increased leniency in 2012 could help growth and employment levels.
"Making it a simple choice to either pay all or part of the prevailing rate, or allow us to reinvest a portion of our own profits back into our own companies tax free, can only be a good thing," he says. "This would drive SMEs like us to invest in more machinery and staff. Looking at the country’s unemployment figures, surely they can strike a balance?"
There are numerous measures that the government, banks and the industry as a whole could take to ensure that 2012 – the Olympic year – is a successful one for UK print.
But this isn’t to say that print companies and manufacturers alike can’t help themselves. "The economy this year is going to be hard," says Mason, "but we are investing because we have to stay positive, although there’s no doubt that 2012 will be tough."
X1’s Lance echoes this. "We have all got used to living frugally, so this year is no big change. We are all in it together, so let’s just get on with it and have a good year."
READER REACTION
Dave Broadway
Managing director,
CFH Total Document Management
"As an environmentalist, I’d welcome progress towards saving energy within printing companies and reducing print’s carbon footprint. Many companies try to reduce their environmental impact by cutting their paper usage and using recycled paper. But with the environmental challenges we face today, conservation is not enough. CFH is looking at 35% energy savings in the medium term through more efficient lighting, heating, air conditioning and print drying processes."
Jackie Sidebottom
Managing director,
Glossop Cartons
"Why not go back to automatic retirement at 65? There was nothing wrong with the old system: if the employee was a benefit to the firm and wished to stay on, they could do so; but if they’d run out of steam, an amicable, dignified termination of employment was in order. Also, how about cutting the silly employment meetings and letter games of the long-term sick? Some sick employees will not fall on their sword and have to stay on the books, and to terminate the employment breaches discrimination laws."
Tim Lance
Sales director,
X1
"I believe we need to be more aware of how great we are. I recently received feedback from a client (which was not requested). It said: ‘Your team has always been very vigilant and – never over-stepping the mark – has always brought any errors, inconsistencies and potential problems to our attention. It really feels like you have our backs. It’s been a real benefit to have worked together over the past few years. So thanks, as always, to your team.’"
Stuart Mason
Managing director,
Ink Shop Printing
"There are two main issues, which are both detrimental to print businesses in their current state, that I want addressing in 2012. Rates are based on property values and despite commercial property prices plummeting, we find business rates are increasing. As a business owner, what do I really get for the £30,000-a-year I pay in rates? The second issue is grants for investment. Regional Selective Assistance is an outdated joke and provides no real incentive."
Andrew Brown
Public affairs adviser,
BPIF
"Issues for our members include red tape, public procurement and late payment of debts. On public procurement: there have been some encouraging reforms recently, such as the removal of the requirement for pre-qualification questionnaires on contracts that fall below £100,000 and the establishment of a ‘problem with procurement‘ website for small companies, but there is always more that can be done to improve opportunities for small companies to bid for public sector contracts."
Paul Manning
Customer experience director,
Rapidity
"Rapidity would welcome a review of the VAT laws regarding print. We think the consumer is confused, along with most people in the industry. In an ideal world, we would either have no VAT, or VAT on everything. Although we see the government taking steps to close the anti-competitive loophole on small transactions shipped in from offshore, there is more room for improvement on addressing the VAT spaghetti we’re all forced to endure. We’d also welcome serious consideration for the SME print sector."
