INDEPENDENT APPROACH

Oct 1, 1997 12:00 PM, Katherine O'Brien

"Nobody likes change," claims one industry pundit, "except a wet baby." One graphic arts company, however, has been thriving on change for 19 years. ProForma, a network of more than 255 independently owned printing distributorships, had a humble start. In 1978, it was essentially a man, a plan and an apartment in Cleveland.

After graduating from college, founder Greg Muzzillo was working as an accountant for a year when he decided he wanted a change.

Muzzillo got into the printing business with a bankroll of $200 and the help of his roommate who worked for a print broker. He says he was attracted to the printing industry "because people keep running out of what you sell them and they have to order more. Your ability to make money isn't limited by the number of hours in the day as in an accounting or consulting practice."

The idea to franchise printing distributorships grew out of Muzzillo's realization that smaller trade brokers could work together to eliminate inefficiencies and pool their marketing resources.

"It struck me that thousands and thousands of smaller organizations had a lot of duplicated overhead tied up in phone systems, receptionists, accounting systems and that kind of stuff. They needed better marketing tools and better buying clout with trade printers so they could be as efficient as possible," explains Muzzillo.

With this in mind, Muzzillo expanded ProForma in 1985 so that distributors could concentrate exclusively on selling. Franchise owners do not own any printing equipment. Printing is supplied by a national network of vendors, while administrative chores are handled out of the firm's Cleveland support center. Services handled by 60 employees at the support center include answering phones, telemarketing, training, sourcing, negotiating group purchasing discounts and developing newsletters, marketing brochures and direct mail pieces.

To help ProForma owners compete in a rapidly consolidating industry, the company recently reduced its pool of vendors from more than 1,000 printing and promotional manufacturers to approximately 90. Also, some ProForma owners are now acquiring other distributorships with the assistance of the home office.

"We're both a marketing cooperative and a buying cooperative," says Muzzillo. "Because we're a large organization that brokers a lot of printing, we deal with printers that offer us great pricing. But our franchise owners are in charge and they make their own choices."

New owners typically start out by spending one week attending training courses in Cleveland. Additional support is provided by a Development Agent Program that encourages established owners to assist newcomers.

Many franchise owners have industry sales experience. "We have people who join us that formerly were salespeople selling printing for somebody else," asserts Muzzillo. "Some of them are tired of being told their territory is going to change or their commission structure is going to change or wondering if they are going to get fired tomorrow or even wondering if the company they're working for is going to be in business tomorrow."

A changing work environment is exactly what prompted Linda Palmer (Mission Viejo, CA) to seek out ProForma. She worked for almost 10 years as a printer's account rep when her top client moved out of state.

"I was left with two choices," recounts Palmer. "I could stay with my employer and start over from scratch, or I could go into business for myself."

Palmer is convinced she made the right choice. "I like the independence as well as the ability to control my level of success. My purchasing power has grown--I'm a single source supplier. That's something I always wanted to offer my customers, but I was never able to until now."

Like Palmer, John Vento (Verona, NJ), joined ProForma after his job changed.

Vento took a year off, but he was restless. "I had too much energy to do nothing, so I looked for something else and ended up with ProForma."

Vento values his independence, but appreciates the support provided by the franchise. "Cleveland handles the clerical functions much faster and less expensively then we can," he asserts. "Our time is spent on more significant things."

Vento's sales exceeded $3.5 million last year, making him the top producing franchise for the seventh consecutive year.

Some distributors ran their own businesses before they signed on with ProForma. Felecia Gibbs, for example, had 10 years of experience as a sales rep for an offset printing company when she established her own printing brokerage firm in 1990. Four years later, the San Francisco-based Gibbs joined ProForma.

"Just being a small company, we didn't have the capital to take on larger size jobs," she explains. "A $50,000 job would scare me to death because I probably would have had to mortgage my home just to put down a deposit with a vendor."

Although she came to the franchise with years of industry experience, Gibbs credits ProForma with expanding her sales perspective. "Before, we were just doing commercial printing. I didn't even consider business forms or labels or advertising specialties."

Joining a national network also provides Gibbs with access to marketing resources she didn't have when she was on her own. "Although I'm good at sales, my marketing skills and materials were a little lax. That's really changed now. I get a lot of prospects calling me because they've seen our quarterly newsletter."

Gibbs has increased her sales from $300,000 in 1993 to $650,000 this year.

Dan Mack spent several years with a business forms printer before leaving to become a partner in a local commercial printing operation. "We had two retail locations, 19 employees and our own equipment," he remembers.

But Mack found himself swamped with clerical and administrative duties and decided he wanted out. "Selling is my strength," asserts Mack.

Mack adds that not owning any press iron has changed his sales approach. "Every once in a while I'll call on a new customer and he or she will ask me, 'Why do I need a middleman?' I provide a great perspective on that," reflects Mack. "When we owned our own equipment, no matter what the customers' needs were, we were going to produce it on our own equipment. That was totally the focus of what we did. Now, I can go out and get jobs printed the best way, and customers gain in the long run because their jobs are done in the most efficient way," he concludes.

The cost of owning a ProForma franchise varies according to the individual's experience and background. For an industry experienced salesperson, the initial franchise fee is $4,500. The fee is $9,500 for those who have sales and marketing experience, but no previous printing experience.

"There's no upfront cash required," explains Muzzillo. "We'll finance 100 percent of the initial franchise fee. If you already own your own business as a printer or broker, there are no upfront fees at all. We're not here to make money before our owners do."

Owners aren't assigned sales territories or quotas. Once owners have determined the scope of their operations, they work with the support center to identify prospects. The Cleveland support center schedules sales calls with qualified buyers for distributors.

Andy Perkins admits that he was skeptical at first about the support center's ability to generate solid sales leads.

"I tried to do that with a service before and it never worked well, and I couldn't imagine anyone setting appointments for me. But, several of my top clients were acquired that way."

ProForma's distributors are quick to point out that the business isn't for everyone. Good sales skills are essential, especially for those just starting out. "If we don't sell, we don't eat," is the frank assessment of one new owner. For many, however, joining the franchise clearly has provided a means not just for surviving change but for thriving on it.