Family matters

Family matters

Lana Siewert-Olson builds ideal printers for next generation

by Liz Wolf   Though she was only 15 at the time, Lana Siewert-Olson remembers well when her father, Howard Siewert, left a lucrative job at a big printing company in 1979.

“He always said he felt like a small fish in a big pond,” she says. “He’d bring in a job that was $200,000, but it would get bumped for something bigger. He got really frustrated working for a large company. He wanted to make a difference. He was 40 at the time, and he started rebelling a little.”

Siewert went out on his own, buying a small print shop in North Minneapolis and calling his business Ideal Printers Inc. Siewert-Olson’s mother, Rhoda, joined the company, and Siewert-Olson and her younger sister Joan helped out with filing, folding and binding on Saturdays and summer vacations.

She says her father did his homework before launching the business. “He never believed in the ‘build-it-and-they-will-come’ philosophy,” she says. Siewert was confident several companies would give him an opportunity, but he also knew he was up against stiff competition, Siewert-Olson says.

Being the new kid on the block, everyone had him beat with newer equipment, better buildings and more clients. One company that took a chance on him, however, was Honeywell. Ideal only had one-color equipment at the time, but after doing good work on what Honeywell considered “nuisance” jobs, it gave Ideal bigger projects.

 Honeywell played an integral role in Ideal’s growth throughout the 1980s, providing the momentum to move to larger facilities and purchase two-color and four-color presses. By 1986, sales flourished to $1.5 million.

Despite Ideal’s success, Siewert-Olson never considered the company as a career option for herself. She had her heart set on becoming a physical therapist. She discovered in college, however, just how much she disliked chemistry.

“My dad said, ‘Have you ever thought about the business?’ It just clicked then,” Siewert-Olson says. “I had never thought about a career in printing, maybe because it’s such a male-dominated industry. Even today when I go to Printing Industry of Minnesota meetings, they serve prime rib and baked potatoes, and there are maybe two other women in the room.”

She graduated from Concordia-Moorhead College and worked for another local printer for two years. “I wanted to get a little background somewhere else,” she explains. “It was important to see another environment.  I got to feel out the industry and make connections.”

Siewert-Olson started as a customer service rep at Ideal in 1988, moved into sales and eventually became sales manager. In 2002, she took over as president of the 65-employee company as her father stepped down into semi-retirement. (He still comes into the office regularly, but enjoys not having to deal with the day-to-day responsibilities, she says).

It was a tough time to take the reins, however. Not only has the printing industry faced major hurdles the last few years – including pricing challenges, technology changes and the fallout from the Internet — but the economy was in the tank. Siewert-Olson had tough decisions to make.

Although Siewert-Olson, 40, doesn’t describe herself as a risk-taker, she made bold moves to help sustain and now push Ideal, a medium-sized, sheetfed commercial printer, to the next level. They include investing in more efficient equipment, beefing up the sales staff, freezing salaries, adding more value-added services and spearheading the development of a new 55,000-square-foot facility in St. Paul.

The changes are paying off. Sales in 2003 were $8.5 million and Siewert-Olson expects sales to be closer to $9 million this year. “We’re on pace of 5 percent over last year,” she says. “We’ve really been working on improving efficiencies.”

Experts say improving efficiencies is crucial for printers today, because the industry has seen major sources of revenue cut.  “Ideal has experienced much of what the rest of the industry has since 9/11,” says Jerry Ostergren of Carlson, Lundquist & Co. Ltd. in Brooklyn Park, Ideal’s accountant and adviser.

“It’s been a tough economy and the printing industry struggles with excess capacity and changes in technology. Their primary challenges are updating equipment and competing with other forms of media. The Internet, television and radio all compete with print. They’re also competing for jobs and pricing because of excess capacity.”

Ostergren says Ideal is doing many things right. “They’re controlling costs very carefully,” he says. “They also have an excellent, experienced employee base and a good core group of customers.”

After Sept. 11, Ideal laid off two people and froze salaries for nine months. “Many printing companies had to lay off a lot more, so we felt good that we were able to maintain,” Siewert-Olson says. “Our accountant said we’re doing great if we can break even and get through it, and we’ll be successful in the long run and be profitable again.”

The Internet has eliminated some big accounts for printers these days. For example, Ideal had two clients that conducted auto auctions, and every other week the companies sent out printed information featuring cars going to auction. Ideal earned about $10,000 a month from each client. In 2000, both auctions went to the Web. In a flash, Ideal lost $20,000 a month.

“Another big way the World Wide Web has affected us is that now buyers can sign up for a service on the Web where their bids go out to literally hundreds of printers,” Siewert-Olson explains.

 “This service is free to the buyers, and the printing company pays to be included in the mix. We did this for a year and would get 30 to 40 projects a day to bid on, and our competition was spread out over the whole country. We won a couple bids, but not enough to pay for the service and all of the time we spent estimating.”

Also affecting printers today is the fact that companies can print from their own computers. For instance, Ideal used to print millions of invoices annually for its biggest client, Great Clips. Gradually, the stores began printing all of their own invoices.

Pricing is another challenge. “Competition is driving pricing down, and oftentimes, we find our pricing has dropped from what it was five years ago,” Siewert-Olson says. “Some printers figure it’s better to have something to cover the overhead even if they’re not making anything extra, so they’re lowering prices.”

Since the recession hit, a number of Minnesota printing companies closed because they were too top-heavy, says David Radziej, president of the Printing Industry of Minnesota, a trade group. “If they were heavily leveraged or not efficient on the administrative side, they cut or closed.” Meanwhile, others merged either as a survival or growth strategy.

“It’s a pennies game,” Radziej says. “The margins are so thin that you’re in or out real quick. Everybody’s looking at costs. We’ve seen national reports that say average profits today are 1.7 percent. Profit leaders are at 1.9 percent, so it’s tight.”

The biggest cost is materials, he says. Paper alone can be 20 percent to 30 percent of the total cost of a job, plus equipment and ink. A company’s payroll is around 25 percent to 30 percent. “You’ve got selling expenses and what’s left is 1.7 percent.”

Radziej says technology is another challenge. “For a company to survive, it has to chase the newest printing equipment and research it worldwide,” he says. “Successful owners understand technology is a friend and you need to keep adopting technology and educating employees.”

Ideal has been investing in newer, high-tech equipment. In September 2003, it made the move to direct-to-plate. “The direct-to-plate system makes proofs and plates directly from the computer without having to create film,” Siewert-Olson explains. “We may not be the first to get the top-of-the line, high-tech equipment, but there’s a reason. We wait until sales can support an advance to the next level. We’ve always been pretty conservative, and our debt-to-equity ratio has been much lower than the industry’s national average.”

Ideal leases the direct-to-plate system, because technology changes in the prepress department so quickly that it makes more sense to lease, Siewert-Olson says. In 2004, Ideal purchased a stitcher-trimmer and a high-speed shrinkwrapper in order to offer more services in house.

“For financing equipment that’s less than $30,000, we use our line of credit at our bank,” she says. “We go to the bank for loans on our larger press equipment.”  

Last year, Ideal purchased a press and discovered just how much prices have dropped on used equipment. It's very common for printers to buy used presses. "Seven years ago, we paid $1.2 million for a six-color press. Six years later, we bought a five-color press for $500,000, and it was newer and had more bells and whistles," Siewert-Olson says. Because the economy has been so bad, companies going out of business are trying to get rid of equipment.

Despite industry obstacles, Ideal has maintained revenue and is now seeing growth. To help achieve that growth, Siewert-Olson increased the sales staff from three to eight.

“Lately, we’ve been growing about 5 percent a year, and we need to grow more. We feel we need to be a $10 million company to support our building and not have to be on pins and needles every month. That would be above our break-even point.”

Ideal has eight salespeople in addition to four family members who sell. Siewert-Olson’s husband, Andy Olson, joined Ideal in 1993, bringing with him Great Clips. Ideal provides all the printed needs for the company’s corporate office and its 700 franchises across the United States.

Siewert-Olson’s sister, Joan Siewert-Cardona, joined Ideal in 1996 in sales and also assumed HR responsibilities. Her husband, Francisco Cardona, came on board in 1998 as information technology manager. Siewert-Olson and Siewert-Cardona own 50 percent of the company. Their parents own the other half.

Siewert-Olson says business growth has primarily been the result of significant involvement in the sales effort at the top management/ownership level. “It’s important that all the family stays in sales,” she says. “You know they’re not going anywhere, and you’re not paying commission. Forty-five percent of our sales come from family members.”

To enhance sales, Siewert-Olson brought in a consultant to train the staff. “The printing industry is rampant with commoditization,” says Thom Winninger of Winninger Resource Group in Edina, a strategic planning company hired by Ideal.

 “There’s a lot of price pressure and it’s difficult to differentiate yourself in the business,” he says. “Everybody uses the same presses and prints on the same paper. The question is, how do you become the Starbucks of printing? I believe it’s not what you sell, but what customers buy.

“The minute you move to why a customer uses your service, then you can move to differentiate yourself. You have to understand the changing needs of the customer. A customer isn’t buying printing, it’s buying image, design or communication.”

Winninger helped Ideal define what the print customer wants. “We discovered they want three things: No surprises in the billing process, to know where the job is at before it’s done and help in making their printing different.”

Based on these factors, Siewert-Olson has been adding value-added services to distinguish her company. “We’re offering clients direct department contact and timeline flexibility — if we take your job, we’ll meet your deadline. We’re offering 24-hour estimates, customer alteration guarantee — that means no surprises on your invoices — and cheerful delivery service,” she says.

Something else Siewert-Olson has done since taking over is set up an on-line ordering system for larger clients. She initiated sales quotas in the once very informal company. She implemented standard operating procedures. She initiated more employee involvement and started quarterly employee meetings. She also started holding weekly family meetings “so nothing has time to fester.”

One quality she thinks she brings to the table is her ability to listen. “I get more people involved, and I like to consult with them. I’ll make the final decision, but I like to get input.”

Siewert-Olson says her biggest motivation for these changes is to keep the family business alive and well. “The percentage is not high for family-run companies making it through the second generation and even less making it through the third generation,” she says. “I really want Ideal to continue to succeed and don’t want to fall into the category of companies that don’t make it.

“People ask why we don’t just sell the company, as we have had plenty of offers. If we did, I wouldn’t be able to provide the opportunity for my kids that my parents provided me.”

Only 30 percent of family businesses survive into the second generation, 12 percent into the third and 3 percent into a fourth generation, according to Boston-based Family Firm Institute. Experts say family businesses face challenges that non-family businesses do not, including problems of succession and inheritance as well as the challenges of mixing personal and business matters.

“So many people cannot believe that six family members can work together and still enjoy each other’s company outside of work,” Siewert-Olson says. “We definitely don’t agree on everything and there are times one person isn’t thrilled with another or thinks we made the wrong decision, but we don’t go home angry. We can leave that at work.”

Cheryl Karpen, owner of Anoka-based Gently Spoken Communications, is impressed with Ideal. She’s been a client for seven years.

“I interviewed several printers, and the reason I chose Lana was she asked for the order,” Karpen says. “No one else had asked.” What’s kept her is Ideal’s service and integrity. “Lana cares about our product. I don’t feel like just an account. I feel like we’re business partners.”

Siewert-Olson’s father is pleased with his daughter’s accomplishments. “She’s willing to try new, fresh ideas. She brings a higher energy level and is more persistent in the face of rejection than I am. I think she’s tougher-minded. She’s never overwhelmed, no matter how much is on her plate,” he adds.

 “I’m from the old school. I had the luxury of devoting most of my time to work knowing that the family was taken care of. Lana has to squeeze it all in — work, family, church — and she does a good job.”

Siewert-Olson’s achievements caught the attention of the Minnesota chapter of the National Association of Women Business Owners, which named her 2004 Young Woman Business Owner of the Year.

“Lana is a pretty amazing woman, and Ideal Printers is an amazing company,” says Bonnie Russ, NAWBO co-president. “It’s been successful in spite of having to weather tough times suffered by the printing industry. Not that the company was struggling, but Lana turned the ship a little.”

As for her leadership style, Russ describes Siewert-Olson as having a “calm confidence. She’s not an in-your-face, aggressive person. Her energy is high, but it’s a quiet, calm energy. She’s unflappable.”