“Excess Earnings” Are Key to High Valuations!


5-page valuation report

NPRC is offering, for a limited time, a special report detailing real world valuations for 48 printing firms. The report features four special valuation charts. Each chart features key factors used to arrive at a typical company valuation.  The charts examine factors such as  –  annual sales, excess earnings, excess earnings as a percent of sales, net assets and assigned earnings multipliers.

The valuation charts then summarize the estimated value arrived at for each of the 48 firms in question, as well as the ratio of value to annual sales.

Top & Bottom Firms by Value

When it comes to establishing the value of a printing company, there’s one fact that stands out above all the rest – “The value of a company has little to do with annual sales.” The charts depict that while one firm with sales of $717,000 can be worth almost $676,000 (or 94% of it sales), a similar size firm with almost identical sales of $745,000 can be worth less than $81,000 (less than 11% of sales.) The same comparisons can be made regardless of annual sales volume.

How do you explain these great variations? Most variations in company valuations can be explained by a company’s ability or inability to generate “excess earnings.” What are “excess earnings?” Complete the form below to download your FREE copy of this special report.


    2021 Wage & Benefits Study Just Released!

    The 2021 NPRC Printing Industry Wage & Benefits Study has just been released (effective Nov. 2, 2020), according to NPRC Executive Director John Stewart.

    The new 150+ page study reports average and median wages, along with key benefits, for 24 key positions in the printing industry.  This brand new report also covers sales and compensation practices for outside sales representatives.

    Specific positions covered include general managers, production managers, Sr. and Jr. customer service representatives, Digital and Offset press operators, graphic designers as well as bindery operators and mailing specialists, just to name a few. This year’s survey also included employees assigned to producing signs and large format.


    Wages & salaries are broken down based upon population density, geographic location, sales and profitability.  Discover what firms your size in similar markets are paying for specific positions such as press operators, bindery assistants and delivery technicians. Click here or the artwork to the left to download and view the Table of Contents for the 2021 Wage & Benefits Study.

    Complimentary Copies Distributed – If you’re one of the 200+ firms that participated in this popular industry recent survey you should expect to receive your FREE, complimentary copy of the study between Nov. 4-6th. If you did not receive your copy please drop us an email at: membership@printingresearch.org.

    2021 Wage & Benefits Study PDF
    Non-Member Price… $179.00
    NPRC Member Price… $89.50

    2021 Wage & Benefits Study (Hard Copy)
    Non-Member Price… $195.00
    NPRC Member Price… $98.00

    To order your copy, visit the NPRC Bookstore.




    Save 18% on Signs & Wide Format Pricing Study

    18% Discount on Popular Signs Study

    The 2018-2019 Signs & Wide Format Pricing Study is one of NPRC’s most popular pricing studies, and you can now save 18% – BUT you must place your order by Friday, Nov. 27, 2020.  Use Coupon NPRCSIGNS18 to save 18%.

    This study has already proven to be a real eye-opener for many firms! Read testimonials below.

    Visit our bookstore at  https://printingresearch.org/products-page/ to read details about this popular study. Remember too, that 98% of  all orders are processed and mailed same day as received. Covering dozens of products & services – This new, 110+ page study details real-world pricing practices for dozens of the most common products and services in the signs and wide format industry. Click here or the artwork below to view and download two sample pricing pages.

    Click below to view
    Table of contents 

    RETAIL PRICE (PDF)… $169.00
    AND PAY ONLY… $138.58!


    “After reviewing the latest Sign & Wide Format study I realized I’d been leaving money ‘sitting on the table’ on some products. Literally within minutes of receiving the study, I was able to confidently revise a quote for a customer, knowing the price would still be fair yet competitive. The resulting revenue increase nearly covered the cost of the study—and that’s just one project! Thank you for all of your hard work.”

    James Jepsen, General Manager
    Local Copies Etc. Santa Maria CA

    “The work that John and his team do is so great for our industry and I would hope more companies invest the time in taking part in the survey every year. We all rise up together and this work is a great step for all of us! Our company is only 4 years old so this information is invaluable.”

    Zeno Signs & Chesterton Printing Co.
    Chesterton, IN

    “Hi John. Got the study, printed it, and now using it. Every time we get a survey from you we spend a good deal of time reviewing our pricing. I know we should do this more often but your surveys are the ‘kick in the butt’ that we need to make sure we are getting the best return on our work. I have been doing these surveys for more than 20 years. While I own other businesses, there is nothing in those industries to compare with the surveys you produce. Thanks.”

    Jon Robson
    Auburn Document Centre, Auburn, NY

    This information-packed study offers average and median pricing for dozens of products and services offered in the sign industry, including the following:

    • Laminating Services
    • Substrate Pricing Retail and Discounted)
    • 3′ x 6′ and 4′ x 8′ Banners
    • Vertical Banners & Stands
    • Feather Flags
    • 4MM Coroplast Yard Signs (1-S & 2-S)
    • ACM Panel Pricing (18″ x 24″ and 24′ x 36′)
    • Magnetic Signs
    • Decals – square and contour cut
    • Vehicle Decals
    • Flat Surface Vehicle Wraps
    • Window Perfs
    • Basic Pricing Charges for Vinyl Signs

    The study is available in both PDF and Hard-Copy formats.



    Download FREE Digital Pricing Pages & Save 18%

    Act now and save 18% on popular 2019-2020 Digital Pricing Study. This study covers pricing for dozens of the most popular digital products and services provided in our industry. Use Coupon: NPRCDIGITAL18. This special offer expires Oct. 30, 2020.

    As an example, you’ll find useful pricing info for 4 x 9 rack cards, #10 and 9×12″ Envelopes, 4/4 flyers, catalog sheets, rack cards and postcards just to name a few. Most prices includes cutting and trim charges, but assumes artwork is provided by customer.

    Click here to view the Table of Contents. Visit the Bookstore for more info about this study. Reg. Retail Price  (PDF) is $225. With coupon pay on $184.50


    You can download two sample pricing pages from this popular study by clicking here.



    The Battle to Recover Sales & Profits

    Published Oct. 15, 2020

    Printers Continue to Face Covid-19 Challenges
    As They Battle to Recover Sales & Profits
    By John C. Stewart, Executive Director, NPRC

    It’s been seven months since Covid-19 first began impacting our industry (as well as the entire U.S. economy) and NPRC has been surveying fellow printers ever since. Some businesses have closed their doors in the past few months, while others struggle to recover lost sales.

    All in all, it has clearly been a rough seven months for the printing industry and our latest survey data indicates that while there may be light at the end of the tunnel the tunnel itself extends well into 2021 and possibly into 2022.

    We launched our 4th Covid-19 survey on Oct. 6, 2020 and we implemented a strict Deadline of October 12th to allow us time to analyze and report our findings back to survey participants in a timely fashion. If you would like to view July 20-21st Covid-19 Report click here, or copy and paste the following: https://printingresearch.org/resilient-industry-despite-major-sales-declines/

    We received 136 responses in our shortened survey time-frame. Below is a very brief profile of the firms that participated:



    Average Median
    2020 Projected Sales $1,290,601 $696,500
    2020 Projected SPE    $134,149  $114,943
    Staffing Jan. 1, 2020       9.27     5.0
    Staffing Proj’d Jan 1, 2021       8.11     5.0


    So Where Do We Stand?  As you can see from the following (Chart #1), the industry indeed suffered a dramatic decline in quarterly sales of almost 30% between the 1st and 2nd Quarters. And while the data shows signs of a modest recover since the end of the 2nd quarter, the recovery has been far from a “full recovery,” with projected 4th quarter average sales still down almost 15%!

    Although we often rely on averages as opposed to medians, it is notable that the projected drop in median sales for the 4th quarter 2020 is down 29% – clearly an indication that the road to recovery for our industry is surely a long one.

    #2 Employee Staffing Report – In order to help us with various SPE calculations, we asked survey participants to tell us how many total employees (excluding all working owners & partners) were employed at the beginning of each quarter in 2020, as well as what they projected for the 1st quarter in 2021. We used this data to calculate our SPEs for those respective periods.

    Chart #3 below illustrates the results of our calculations for the various periods specified. Average reported SPE dropped almost 20% between the 1st quarter and year-end projections. The median decline was almost identical at 18%.

    #3 Deployment of work force? We asked employers to tell us the current status of their workforce – who was working at their main plant versus who was still working at home. According to our data, approximately 92% of employees are now back at work, with the remaining 8% still working at home.

    #4 Employee Staffing – Today vs. March 1, 2020 – Survey participants reported that their overall average staffing, as compared to March 1, 2020 was down -13.4%. The median decline was down -10%. It is clear from our data that employers, have not reacted as quickly to modifying their staffing as they have to declines in sales. The failure to react to same has resulted in lower SPEs than would otherwise be expected.

    Questions #5 – #8 – June/July Sales 2020 vs. 2019 – We queried survey participants to compare their monthly sales for the months of June, July, August and September against their corresponding periods in 2019.

    Not a single participating firm indicated they had increased their sales during the respective months. As you can see from the graph below, average and median sales declines of 20-25% were quite common among our survey participants.

    Survey Questions #9 – #11 (2020 vs. 2019 Comparative Sales) asked participants to examine various sales periods and indicate how much their sales had increased/decreased for the respective reporting periods. Suffice it to say that while a handful of firms did report sales increases in the 2-6% range, most firms indicated significant declines in sales as indicated below.

    Questions #12 – #14 – Covid-19 and Its Impact on Specific Sales – These questions addressed the impact that Covid-19 has had on three categories of sales during the past seven months (March – Sept 2020).

    Based upon our data, it appears that digital and offset printing sales have both been heavily impacted by the Corona virus, with digital printing possibly being hit slightly more. Brokered printing has been slightly less impacted but declines of -18% are not easily dismissed.

    Note that the questions covered cumulative declines over a 7-month period of time. Just as the sales declines have occurred over an extended period of time, so too will be any recovery. There is no reason or logic that we can see that would suggest that sales of digital, offset and even brokered sales will rebound anytime soon.

    “There is no reason or logic that we can
    see that would suggest that sales of digital,
    offset and even brokered sales will
    rebound anytime soon.”

    We suspect, although we have no hard evidence to support this statement, that our industry may indeed have to wait until the 3rd or 4th quarter of 2021, if not beyond that time, before we begin to see even a hint that the economy returning to the pre-Covid economy that existed in January or February 2020.

    15 – Sales of Covid-19 Related Sales – Some firms indicated early on that they were turning to selling and/or promoting various Covid-19 products (gloves, masks, sanitizers, dispensers, and signs) as a way to possibly make up for sales lost to Covid-19. We asked participants to estimate the volume of sales generated over the preceding 7-months.

    As you can see from the graph below, approximately 28% of our respondents indicated they had sold between $5,000 and $25,000 Covid products. An additional 12% of respondents reported sales of $25,000 or greater.

    At the other end of the spectrum, approximately 50% of all survey participants indicated they had sold less than $2,500 during that 7-month period.

    #16 – Cash Reserves as of Oct. 2020? We asked participants to tell us the status of their current cash reserves. We specified that taking into account steps and expenditures they had taken through Sept. 2020, we asked them to tell us how many additional weeks or months they felt they could operate under the current Covid-19 economy.

    The graph below presents a far more positive picture than previous graphs we have posted due to the fact that weaker firms have already dropped by the wayside. As a general observation, firms that continue to operate today, even at a reduced capacity and at lower sales levels, are by their very nature healthier companies.

    At least 73% of our participating firms indicate they are well-positioned for 2021 and whatever transpires in regard to the continuing challenges of Covid-19.

    #17 – Overall Confidence Level – Question #17 of our survey asked participants to tell us that in light of everything that has transpired during the previous 7 months, how would they rate their confidence that their business will be somewhat “back to normal or better” by July 2021.

    The scale we used ranged as follows: -100 (very doubtful) to 0 in the center (chances are 50/50), to +100 (extremely confident).

    The collective answer? The average score was 7.2, or just slightly above the “chances are 50-50” that things will be back to normal. The median score was 0. Certainly not optimistic, but most likely as realistic considering what the industry has already gone through in the past seven months.

    #18 – Prospects for the Future – We gave participants six choices to describe the impact that Covid-19 has had on their business during the March-September 2020 time frame. Below are their answers:

    #19 – Efforts to Recapture Customers – We asked owners to tell us what methods they were implementing and/or employing to recapture the attention of their existing customers as well as to attract new ones. Multiple answers were allowed. We suspect that had this question been asked pre-Covid-19, the percentage of owners indicating they were using “direct mail” would have been significantly lower.

    #20 – Vendor/Supplier Costs – Participants were asked to tell us by what percent, if any, had their vendor/supplier costs increased or decreased. Owners told us that they had experienced a modest average increase in pricing of 3.9%, and a median price increase of 1.0%.

    #21 – Impact on Selling Prices – The vast majority (98%) of owners indicated that neither increased or decreased their selling prices during this 7-month timeframe.

    #22 – Support for the President – We posed the question: “Considering everything that has transpired since Jan. 1, 2020 in regards to the Covid-19 Pandemic, how would you rate your support of President Donald J. Trump and his administration?”

    The scale we used ranged from “Totally Opposed” (0) to “Fully Support” (100). The results? The average score was 55.7. The median score was 75. The distribution of answers from 0 to 100 was startling in their extremes, with 23% of owners grading the President with a “0” and 33.7% awarding the President a “100.”

    It was clear from our data that our survey revealed a case of extremes. Participants either “loved the President” or they “hate” him.


    Please note that this report is Copyrighted and initial distribution has been limited to those firms who participated in any one or all of the three Covid-19 Surveys conducted by NPRC. This limited distribution is being done in recognition of and out of respect for the firms who took the time and effort to complete one or more of our surveys. However, in recognition that we serve the entire industry as well, we will publicly distribute this report within the next 15 days. For right now, however, we ask that you refrain from forwarding this report on to others. Thank you for your support. Send comments or questions to membership@printingresearch.org, 2110 Dairy Road, #102, Melbourne, FL 32904



    NPRC Shares July-Sept. Covid-19 Findings

    Although the primary purpose of our recent “Survey of Surveys” was to determine where to concentrate our efforts in the next six months, we couldn’t help but ask a few questions regarding Covid-19 and its impact on the printing industry.

    Based upon survey data we have gathered since early March 2020, it is clear that Covid-19 has had a major impact quarterly and annual sales for 2020 and into 2021. In contrast with what President Trump often says, the effects and impact of Covid-19 on the printing industry are not going to suddenly disappear.

    “In contrast with what President Trump often says, the effects and impact of Covid-19 on the printing industry are not going to suddenly disappear.”

    In fact, the data NPRC has collected so far strongly suggests many printers are forecasting significant declines in sales through 2021.

    Projected sales for 2020 and 2021

    Whether we are looking at raw $$$ or percentages, our survey participants, whether we are talking “averages” or “medians,” are forecasting troubled times at least for the next 18-24 months.

    Significant Declines in Annual Sales

    Relying upon financial data we have collected for more than 38 years, 2020 and possibly 2021 will be the first two years on record where sales (at least forecast sales) will actually be lower than the preceding year. Based upon our most recent data, printers are predicting their 2020 sales will be down -14.5% (Average) compared to 2019. Note the median data is only slightly better, reporting sales for year-end 2020 will be down -11.5%.

    Significant declines in sales forecast for 2021

    When it comes to key ratios in our industry, we will be the first to admit we have rarely if ever had to prepare and present charts and graphs dealing with “negative” numbers. Nonetheless, it is what is, with significant declines in sales projected through year-end 2021.

    What about 2021 Sales? As you can see from the chart above, printers who responded to our most recent survey are predicting that year-end sales for 2021 will still be -6.4% below 2019 sales.

    Typically we always calculate “averages” because we need that number to calculate “margin of error.” However, in many cases, this one being one of them, we feel the “median” is probably more reflective of what is happening in the industry. The median, unlike averages, is not distorted by large outliers. And while the latter are often valid, they can easily distort an otherwise realistic “average.”

    As you can see from the chart above, many printers are predicting an even greater decline in annual sales for 2021 than they are forecasting for 2020. Part of the reason for this is that sales for January, February, and a portion of March 2020 were generally healthy and unaffected by Convid-19. Thus, it is not surprising to see that the negative median sales projection for 2021 is greater than the median for 2020, since the latter included 2.5 months (Jan-March) of relatively healthy sales.

    Covid-19’s Impact on SPE

    We continue to rely upon “Sales Per Employee” (SPE) calculations as a reliable method for tracking productivity in the industry. The data we’ve collected since early spring is extremely encouraging. It appears that printers, mailers and sign company owners are clearly reacting to the impact that Covid-19 has had by making significant adjustments in staffing.

    Following what turned out to be major reductions in staffing earlier in the year, many employers appear more than willing to make some of those preliminary adjustments in staffing permanent. Employers appear willing to make “permanent” furloughed decisions made earlier in the year, even at the risk of losing some long-term employees. Many owners have reluctantly made significant adjustments in staffing and payroll, believing that is what it is going to take to survive the financial challenges brought about by the current pandemic.

    Despite forecast for many problems ahead, sales per employee appears to be holding its own.

    We are pleased to note that printers appear to have reacted quickly to Covid-19 and have made significant adjustments in staffing to maintain healthy SPE ratios.

    Popularity of NPRC Surveys

    Popularity of NPRC Studies

    NPRC typically publishes 2-3 industry surveys a year. Companies that participate and complete a survey are automatically entitled to a FREE PDF of the final report. The graph below illustrates the relative participation levels in various surveys based upon our “Survey of Surveys.”

    Participation levels in various surveys

    This graph illustrates the relative degree of participation in various NPRC surveys.

    Perceived Value of Studies – For planning purposes, we asked survey participants (125) to score a list of seven studies we have published in the past five years and rate the studies on a scale of 0-100 in terms of “Perceived Value.” The chart below illustrates the results.

    Perceived value of various NPRC research studies.

    We asked survey participants to rate or grade the overall perceived value of eight different studies we’ve published in the past five years.

    Our Next Study – Based in large part on the feedback we received, NPRC has decided to launch a new industry 2020-21 Wage & Benefits Survey within the next two weeks. Not only does this study typically attract a healthy level of participation, it presents data that is critically important, especially in a time when employers are cutting costs, but also carefully monitoring labor costs.

    “…end up receiving a “two week” notice from a long-term employee who you possibly failed to acknowledge or reward in a timely or adequate manner.”

    It is one thing to discover that you might be paying an above average wage to a key yet “average” employee, but it is another thing entirely to end up receiving a “two week” notice from a long-term employee who you possibly failed to acknowledge or reward in a timely or adequate manner.

    For additional information about NPRC and its various services and products, we invite you to visit our website at: www.printingresearch.org.










    Save 18% on Popular NPRC Mailing Study

    Use Coupon to Save 18%
    On Association’s Newest Study
    One of NPRC’s most popular pricing studies!

    Now, for the first time, you can save 16% on NPRC’s recently released pricing study – The 2020-2021 Mailing Services Pricing Study. First published in February 2020 and offered at a retail price of $175 (PDF Only), you can now purchase this study for only $147, but you must act quickly since this limited-time offer expires Nov. 28, 2020. Use the following coupon code to save 18%: NPRCMAILING18

    NPRC’s newest study has been praised by printers from across the country. The 2020-2021 Mailing Services Pricing Study is 110+ pages in length, and covers dozens of mailing services and products, including average and median pricing for products and services such as:

    • Full-Service IMb Charges
    • De-duping Fees
    • NCOA Processing
    • Markup Rates for Brokered Lists
    • Laser letter Merging Fees
    • Inkjet Addressing Fees
    • Insertion Charges #10, 6×9″ & 9×12″
    • Metering Charges
    • Hand & Machine Application of stamps
    • Self-Mailer Processing Fees
      Plus many, many other services & products

    To order your copy or to read more about this study, visit the NPRC Bookstore.

    “As always, NPRC has produced a top-notch publication. “Going rates” for mailing services are hard to track from company to company and town to town, so it’s very helpful to have a baseline to compare with. While the numbers alone are worth the cost of the book, the commentary and analyses that come along with these studies are a huge bonus, especially true because they are unbiased and accurate.”

    James Jepsen, Gen. Manager
    Local Copies Etc.
    Santa Maria, CA


    “I have been in the printing business almost 30 years. A big part of my success is because of John Stewart’s industry studies. The latest study, the 2020-21 Mailing Services Pricing Study has helped me determine that I was undercharging on some of my mailing services. We all are busy running our companies and often times simply forget how long it’s been since we last raised our prices to reflect the increased costs of operation. This study is the perfect tool to remind you to analyze your prices to ensure you stay profitable.”

    Armand Girard
    Curry Printing & Marketing
    Auburn, ME


    “NPRC has hit the mark again! We are very appreciative of the association’s tireless efforts to get these studies right and on time. We’ve been in the print and mail business for 15 years and have always relied on client feedback and market knowledge to help us set prices. It’s nice to see these corroborated by other businesses similar to ours on a regional and even national basis. Thanks again NPRC.”

    Bob Heid
    We Are Kymera
    Orlando, FL


    “The mailing survey is one of the best surveys to come out from NPRC in a long time. All of the association’s surveys are of immense help. This one hit a sweet spot for our company. It validated our pricing positions and gave us some items to add, services we should be breaking up into different price categories and not be “all-inclusive in pricing”. We have grown our commercial printing firm to be in the top ten in the San Francisco north bay. Surveys like the Mailing Services Pricing Study keep us growing.”

    David Adams
    QPS Printing
    Petaluma, CA 94952

    To order your copy or to read more about this study, visit the NPRC Bookstore.


    Controller Embezzles $2.8M from Printing Firm

    We rarely if ever provide links to outside sources that we are unable to verify, but the following story is worth the exception. Over the years, however, we have encountered a number of stories involving fraud and embezzlement, and not all of them involved multi-million dollar firms.

    It’s amazing to hear printers say that this could never happen to them because they see and sign all checks personally. No way an accountant or bookkeeper could pull the wool over their eyes!

    The truth of the matter is that there are many firms with sales far less than a million that have also be victims of embezzlement. The lesson to be learned is that it can happen to firms of all sizes. Click here or the artwork above to read the story of one such embezzlement.

    The Shocking Surprise – Then read the story to the end where you will find a shocking surprise!



    Calculating Break-even Sales in the Covid Era

    Update & revised with corrections as of 8-28-2020 11:00 AM

    The good news is that calculating break-even sales for a company is actually quite simple. The bad news is that many companies in our industry are having a difficult time meeting that break-even figure, thanks in large part to Covid-19 and the devastating impact it has had on the printing industry.

    Basically, “break-even” sales is the dollar amount of sales that must be achieved that will cover all of the fixed and variable expenses of the business, and produce a profit of zero. While we would all love to produce a profit of $XXX dollars or a percent of 23% or more, the break-even calculation tells you the very minimum of sales you must achieve each month in order to survive, pay all your bills (including your own salary) and not report a loss!

    So Exactly What Do You Need

    Exactly what do you need to calculate break-even? First, you will need a current profit & loss statement, preferably at least a 6-month statement.

    Second, you will need to separate and total all your fixed expenses from your most current statement. Fixed expenses are typically, but not always, those expenses listed under general overhead expenses. Generally speaking, fixed expenses like rent, utilities, insurance and leases are those expenses that remain pretty much the same each month regardless of sales.

    Real fixed expenses are those that cannot simply be reduced or eliminated just because your sales are down! They are, as the term implies, FIXED! What about depreciation? Depreciation is generally considered a fixed expense as well, but for the purposes of calculating a “real world” break-even we will not include this figure in our calculation.

    What about payroll? Payroll tends to be far more of a fixed expense than a variable! You will need to total $$$ figure required to cover your total payroll expenses, both direct and indirect. That figure would include FICA expenses, workman’s comp, health insurance, payroll processing costs and all other benefits paid on behalf of all employees.

    Do You Include Owner’s Salary?

    What about a salary or wage for the owner or spouse? Yes, you would include that figure as well. The same would be true for an owner. Include his or her salary and benefits as well. To exclude this figure, would be to assume that the owner, in terms of calculating his or her break-even sales, is willing to forego his or her salary in order to arrive at the lowest calculated amount of sales that must be achieved in order to pay all expenses of the business, both fixed and variable.

    The above scenario, speculates that the owner is saying to himself (herself), “I need to calculate the bare bones break-even for my company, and I am willing to forego my salary for a couple of months in order to calculate exactly the minimum sales I need to achieve in order to pay all my bills as well as cover my current payroll. What do those sales need to be?”

    Checking out Variable Expenses

    Variable Expenses are next! While the fixed expense calculations noted above are looking for dollar ($$$) totals, for variable expenses we are looking at ratios or percentages in terms of sales. Most variable expenses are expressed as a percent of sales. Most of those variable expenses appear on your profit & loss statements under “cost of goods.” These are expenses that generally vary directly with sales. In theory, if you have $0 sales you have 0% of cost of goods. Sometimes, however, variable expenses appear elsewhere on your profit and loss statements so you will need to check carefully.

    Examples of variable expenses on a typical P&L would be paper costs, digital copier clicks, outside services, outside purchases, repairs & maintenance, shipping costs and other materials. If you have minimum service costs that are paid in addition to meter clicks, these costs would be included under fixed expenses, not variable. Once again, we are looking for a ratio or percent representing the total percent of all variable expenses required to operate the business.

    Some Real World Calculations

    After gathering the above, we should end up with two entries:

    • Total Fixed Expenses in dollars ($$$)
    • Total Variable Expenses expressed as a percent (%) of sales

    Break-even Formula – The formula used to calculate break-even is as follows:

    Break-even sales = Fixed Expenses in $$/inverse of variable expenses*
    *(If total variable expenses is 45%, the inverse would be 55%)

    Using actual sales and ratios from two sample breakout from the NPRC 2019-2020 Financial Benchmarking Study, and the formula noted above, we will calculate the break-even sales (annual) for two different firms, one a low profit firm and the other being a high profit firm.

    Low Profit Firm: Reported sales $1,448,004 and Owner’s Comp of 5.4%
    Fixed expenses: $927,557 (64% of sales)
    Variable expenses: 30.6%
    BE Sales formula = $927,557/.694
    BE = $1,336,537

    High Profit Firm: Reported sales $1,037,417 and Owner’s Comp of 19.4%
    Fixed expenses $469,525 (45.2% of sales)
    Variable expenses: 29.0%
    BE Sales formula = $469,525/.71
    BE = $661,302
    (Note that in both examples cited above, payroll expenses were treated as fixed expenses. You can re-calculate by treating payroll costs as variable expense instead and your BE figure will be different. However, as noted previously, payroll tends to be far more of a fixed expense than a variable expense.)

    General Conclusions & Comments

    General observations – Note that the above are actual quartile ratios and expenses from our Benchmarking Study. Note that the low profit firms don’t have a lot of wiggle room when it comes to reaching a break-even in sales. If they lose approximately $111,000 in sales they will already be at break-even, meaning 0% profit.

    On the other hand, the high profit firms, because their fixed expenses in terms of raw dollars as well as a percent of sales are so much lower, their break-even is much, much lower. With their current fixed and variable expenses as stated, they could weather an economic crisis such as Covid-19 so much better. They could lose approximately $376,000 in sales before dropping below 0% in terms of profits or break-even.

    Remember when making calculations to account for the period you are using. If you are using quarterly figures, then your formula would reveal the break-even for that quarter, not a month. You can and should calculate break-even sales and convert to a monthly sales figure. It is also worth noting that your financial statements ought to conform or follow what is suggested per NPRC’s suggested chart of accounts, thus making it easy to extract fixed and variable expenses.

    One last comment – If your financial statements do not automatically include ratios (expense as a percent of sales) for each entry on your P&Ls then you ought to fire the bookkeeper or accountant who is preparing them. This not a topic of debate but rather a statement of fact. If you’re not being provided with the proper information, find someone who can.


    100+ Words to Avoid in Email Subject Lines

    NPRC sends out upwards of 30,000 or more emails each week. Most of our emails are designed to promote industry studies, research surveys and general articles about the printing, mailing and sign industries. We learned early on that half the battle in getting folks to open and read our emails is based upon the “subject lines” we create and use. In fact, we often spend more time writing and re-writing a subject line than we will spend on the body of the email.

    If you achieve open rates of 15% or more you are doing quite well. Pat yourself on the back! If you’re not getting open rates that high, then you might consider avoiding using one or more of the following words or phrases since they are likely to trigger spam filters at your recipient’s end and place your email in a spam or trash folder rather than in your customer’s “in-box.”

    We know it’s hard sometimes, especially when you are emotionally close to the subject at hand, to avoid some of these words. Nonetheless, you need to avoid many of the words below if you want to boost readership. Sometimes it seems like every catchy word or phrase you want to use appears in the “no-no” list below, but don’t give up. On the other, try to think out of the box!

    Other email subject-line tips offered by the experts… Avoid exclamation marks, using all caps, subject lines longer than 5-6 words. Be careful with attempts at humor, they can definitely backfire. We messed up big-time one time many years ago with a promo for our printing firm. The subject line? “A special offer for Doctors & Dentists.”

    Did you catch the mistake? Dentists are of course doctors, and half the dentists that opened the email were offended to one degree or another by unintentional slight in our subject line!

    Common email spam words and phrases to avoid

    #1 $$$ 100%
    Act now Action Additional income
    Affordable All natural/new Amazed
    Apply now Avoid Be amazed/your own boss
    Beneficiary Billing Billion
    Bonus Boss Buy
    Call free/now Cancel Cash
    Casino Certified Cheap
    Click here Clearance Collect
    Compare rates Congratulations Credit card/check/offers
    Cures Deal Dear friend/somebody
    Debt Discount Direct email
    Don’t delete/hesitate Double your income/cash Earn
    Extra Expire Fantastic
    Free access/money/gift Freedom Friend
    Get it now/started/paid Great Guarantee
    Hello Income Increase sales/traffic
    Instant Investment Junk
    Limited Lose Lowest price
    Luxury Make $/money Medicine
    Money Name No credit check/experience
    Now Obligation Offer
    Only Open Order now
    Please Presently Problem
    Promise Purchase Quote
    Rates Refinance Refund
    Remove Request Risk-free
    Sales Satisfaction Save
    Score Serious Spam
    Success Supplies Take action
    Terms Traffic Trial
    Unlimited Urgent Weight
    While supplies last Win Winner