Graeme Lipman: Why Diversification is the Key to Long-Term Viability

Print Monthly speaks with Graeme Lipman, an insolvency, restructuring and corporate finance advisor at Begbies Traynor Group. Lipman talks about his glory days in printing and publishing before entering the world of advisory and insolvency, and why diversification and exit planning are key to securing long-term success.

Tell us about your professional background in printing and publishing before starting your career in insolvency

I started a printing company at the age of 23 and ran it for 24 years, after selling it in 2011. I had family in printing, so I naturally had gained a lot of experience about it. The company had a turnover of £7m and employed 52 members of staff.

Tell us about your transition into the world of insolvency

I had acquired some businesses through Begbies Traynor, so I had some contacts there. When it was time to sell, they asked me about my future plans and introduced the idea of working in advisory insolvency.

While my immediate reply was that I didn’t know anything about insolvency or advisory, they said having operated your own business for 24 years, you’ve probably got all the attributes you need with a bit of fine-tuning.

I trialled working for Begbies in Cornhill for around 18 months as an insolvency, advisory, and refinancing consultant, similar to what I’m doing now. I also support limited company directors with business finance through Real Business Rescue which is part of Begbies Traynor Group.

What are your specialities?

As a print specialist, I have a strong association with BPIF (British Printing Industries Federation) who I’ve advised and work extremely closely with to support their members.

Other sectors that I’ve picked up experience in over the years include construction, automobile, retail, engineering, manufacturing, and many others.

Can you share any key advice for printing and publishing firms struggling under the current climate?

Keep a close eye on your finances and performance. Make sure that you do forecasts that you regularly check against and adjust accordingly. It can be quite easy to fall into the habit of leaning solely on your accountant, but it’s important to engage with someone who specialises in printing and publishing.

Keep an eye on future developments, such as production, investments, and market activity. If you spot areas of growth, buy relevant equipment to help enter these sectors.

What lifelines are available for printing businesses on the brink of insolvency?

The key is early intervention, always. Come to us at the earliest possible point as that typically means more options will be available. Make sure that you’re open and transparent about the true position of your business if you know it, as if anything is hidden, this can cause serious knock-on problems.

Make strategic decisions in a calm and collective way. This could mean developing a future for your existing business or through a new company following an insolvency process.

What’s the importance of using an insolvency or finance provider that specialises in the print sector?

If your provider specialises in a niche sector, they understand the business and its assets. They value them better, finance them better, and they understand the revenue streams and financial systems within the printing company to be able to support it.

If you need to sell equipment, we have the contacts and experience to deal with this. If staff need to be made redundant, we can recommend other businesses in the printing sector that may take on some staff. If it’s a merger or acquisition, we’ve got the contacts to be able to do this.

It’s the same with refinancing. The people I deal with specialise in printing, whether that’s a bank, invoice finance, or asset finance company – they actually know printing machines inside out so we can get the best value.

Can you share a case study which demonstrates successful business turnaround?

I worked with one company that got into trouble during the pandemic, which printed training manuals. As all face-to-face training had been cancelled, consumer demand dropped, and they lost a core revenue stream.

After Covid-19, their clients adjusted their strategy for buying printing and publishing materials so there was less demand going forward. The printers had to adjust their costs because of lower demand and productivity which we helped them with.

We held their hand for eight months and left them in a really positive position. They made a couple of redundancies, acquired some equipment and improved their reporting analysis for the bank we were referred by.

How can the print industry remain profitable as consumer demand shrinks?

Change your approach by evolving into new sectors where revenue can be increased. It doesn’t happen overnight because you need to buy equipment and source capital to fund it, so this is where asset finance can usually help.

Whether it’s the cosmetics industry, logistics industry, or a newly emerging trade like Amazon fulfilment, develop and implement a short- to long-term strategy to convert your printing company from what it historically was, to what you want it to be now.

How important is exit planning in the print and publishing industry?

Whether it’s printing, publishing, or any other sector, you should have an exit strategy which ultimately only works when the business can continue operating without you. This is what a lot of proprietors find really difficult.

If you don’t have an exit strategy to plan towards, what tends to happen is a lot of printers, particularly SMEs, come to the exit and find that the value of the business is nowhere near what they expected as the business is highly reliant on them.

If you switch this the other way around so your business is not heavily affected by your retirement, it can stand alone without intervention. Having an exit strategy ultimately brings the best value for the business, yourself, directors, and shareholders.

In real terms, this involves delegating responsibilities, rather than attaching them to one or two people. This works when the business is thriving, but when it’s time to exit due to retirement or ill health, the business will have a sudden impact which can be devastating as you’re the only one who can fix this.

What exit strategies are popular with printing and publishing companies?

Management buyouts are popular. Long serving staff understand the business and have helped make it what it is today, so they could be the ideal people to step in and provide continuity of management going forward.

Mergers and acquisitions are another one, given what’s happened in the Autumn Budget. Many printers are disillusioned and lacking confidence knowing costs will increase which they can’t pass on to their clients. Some of them will be bringing exit strategies forward as a result.