ENX Magazine October 2014 Issue V1

VOLUME 21 NO. 10 OCTOBER 2014

Connecting People, Ideas and Products in the Document Imaging Industry since 1994

engage ‘n exchange

HP Supports Imaging Hardware with New JetAdvantage Security Solutions Creating Sustainable Opportunity The Trusted Advisor is Dead MSPs Need to Project Themselves as Outsourced CIOs

Successful Sales Strategies for Document Management & ECM

Dealer Spotlight: Nora Schulz, President of NEP Co. on Growing Up in the Office Imaging Business How to Value Your Business Valuation Methodologies Changing for the Better Business Profile

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IN THIS ISSUE

ENX Staff

In This Issue Successful Sales Strategies for Document Management & ECM

Contributors Page 22

By Scott Cullen

HP Supports Imaging Hardware with New JetAdvantage Security Solutions

Page 28

By Charles Brewer Susan Neimes Publisher & Managing Editor

Business Profile

Page 34

TSAworld

Charles Brewer Actionable Intelligence

Creating Sustainable Opportunity

Page 38

By Charles Lamb

Nora Schulz, President of NEP Co., Inc. on Growing Up in the Office Imaging Business

Page 44

By Scott Cullen Scott Cullen Editorial Director

The Trusted Advisor is Dead— Managed Service Providers Need to Project Themselves as Outsourced CIOs

Charles Lamb Mps&it Sales Consulting

Page 48

By Dave Sobel

How to Value Your Business Part 2 of 3: Valuation Methodologies

Page 50

By Jim Zipursky

Changing for the Better Ronelle Ingram

Page 58

By Ronelle Ingram

Dave Sobel GFI Max

Contributing Editor

Display Advertisers Index

Page 62

Calendar of Industry Events

Page 65

Printer Tech Tip by Laser Pros

Page 66

Rebuilding Xerox® C123 / WC-5225 / WC-5325 Style Drum Cartridges

Page 68

By Britt Horvat Christina Kim

Free Tech Help by Smarka!

Page 70

Associate Editor

Jim Zipursky CFA-MidWest

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e n x Scott Cullen

State of the Industry

Successful Sales Strategies for Document Management & ECM

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n what’s evolved into a solutions-oriented imaging industry, document management and ECM solutions represent two of the highest impact solutions within a dealer’s menu of services.

As with any solution, it’s critical to understand how to best present and position that solution to prospects. With that in mind I asked five document management and ECM solutions providers to share with me the strategies that their successful dealers use for selling their solution(s) and the mistakes dealers who aren’t successful consistently make.

What strategies do your successful dealers use to sell your solution(s)?

Thomas Schneck DocuWare

Jeff Frankel docSTAR

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For DocuWare it’s developing specialists who are focused on DocuWare rather than multiple solutions, creating a generous comp plan for sales reps, and developing a marketing plan. “It’s not a matter of size,” maintains DocuWare president Thomas Schenck, who adds that being successful or not selling document management doesn’t matter whether one is a $5 million, $15 million or $50 million dealer.

Concentrating on comp plans, Schneck contends many sales reps don’t want to jeopardize existing relationships by treading unfamiliar waters, especially if they’re only receiving modest compensation. “We tell owners and VPs of sales, be generous,” he says.

“One strategy and only one strategy successful dealers in our channel use to drive new revenue around document management is by leveraging their installed base,” emphasizes Jeff Frankel, vice president and principal with docSTAR. “If they’re not leverag-

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ing their installed base then they shouldn’t be selling document management software. It’s that simple.”

MaxxVault president Bruce Malyon has found that successful dealers keep it simple and look to discover how they can best help their customers.

“Whether it is electronic files or scanning hard copies, it’s identifying the one Bruce Malyon area of the comMaxxVault pany that has information overload. If you can figure out that, then you can qualify the opportunity.”

Hyland Software’s most successful dealers focus on subverticals within vertical markets.

“Our best partners aren’t generalists,” contends Bill Kavanaugh, channel sales manager. “They must be able to walk into a Bill Kavanaugh prospect and talk Hyland Software not just about a specific macro vertical, but how they’re experts in this field.”

That’s critical he says, offering various examples of sub verticals such as Home Healthcare, Court Case Management, and Agent Management. “Our successful partners can talk about the value of a specific integration in a niche market and integrate our solution, OnBase, into these core applications that run in those (sub verticals),” states Kavanaugh. “That’s not what a generalist can do. They talk about generic integration.”

“Our most successful dealers focus on selling the outcome they We Saw It In ENX Magazine

can provide with our software,” observes Scott Worroll, marketing manager for Square 9.

“We don’t want them saying, Scott Worroll ‘we have docuSquare 9 ment management, I think you need it, come check it out.’ We want them to take an approach where they can maximize [a customer’s] profitability while minimizing many of their back office expenses, focusing on how they can improve the customer’s business.”

What’s the first thing you tell a dealer who signs on to carry your solution?

“Be ready to invest and then be ready to be successful,” responds Docuware’s Schneck.

Besides telling dealers to keep things simple, Malyon recommends selling customers the right solution. “If we’re not a fit, tell the client we’re not a fit because we don’t just want to sell a piece of software,” acknowledges Malyon.

“They have to be flexible and trust us to make sure we’re recommending what’s right for them.” docSTAR’s Frankel goes back to his earlier comment, “Leverage your installed base, focus on one or two verticals, and invest in learning our software—the features, benefits, and how to sell it.”

“One of the first things we try to teach them, and it goes against a lot of the norm, is avoid vertical market selling,” says Square 9’s Worroll. “It’s too broad to be effective with all the various markets out there and requires way too much expertise in each market.” continued on page 24

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Successful Sales Strategies He recommends a horizontal approach.

“Focus on three or four different [applications] and become an expert on them,” states Worroll. “Order processing, accounts payable automation, employee on-boarding, and contract management.

Pretty much every business has three out of those four pieces. Sell the outcome and deliver value by being that expert.”

Hyland’s Kavanaugh wants to know if dealers have the will and the way.

“Do they want to be a partner of ours?” he asks. “Our partners are far more than resellers of our software. They not only sell our software, but implement it and support that solution going forward. A good portion of our revenue is add-on sales into our customer base. I don’t only want them to just support that solution, I want them to continue to sell into that customer base. We expect them to bring in prospects on their own and with us.

Are you comfortable with us selling with you? Because there’s a lot of value you can derive from us selling with you not just going and selling on your own. We don’t sign up partners who come to us with one deal. This is a long-term commitment. We’re investing in them and they’re investing in us.”

He also wants to know if the dealer has the resources, the bodies, the implementation team, the sales team, and the marketing team. “If you don’t have the people today, that’s okay, but do you have the mechanism to get those people or at least leverage Hyland to help you get those people?” states Kavanaugh.

A willingness to invest in training is also critical. “We have an extensive amount of collateral and content as

well as classes onsite and online that will allow our partners to ramp up and be well versed in our products and solutions,” states Kavanaugh. “This is not a passive partnership. Hyland is a growing company and we are growing on the backs of our partners, so we’re looking for partners who want to grow with us.”

What’s the best way for a dealer to start a conversation with a customer about document management?

“Risk mitigation, compliance, disaster recovery, business continuity, and productivity, those are your hot buttons,” states docSTAR’s Frankel.

“Understand your current prospects,” states Square 9’s Worroll. “Figure out what their current process is, learn the products they already use, how many employees they have that are doing this task, what paperwork is involved, how much time is spent working in this area, what’s the frequency of doing this, then focus on the critical questions. What’s your rate of growth? What’s the hourly rate of this employee doing this job? How long do you expect you’re going to be able to work with these levels [of staffing] before you need to hire? Then provide them with an opportunity for change.”

Kavanaugh suggests asking, ‘What do you use for document management today?’

“Many of our customers convert to OnBase from other applications,” he says.

“How are you storing documents electronically today? Storing is one part of the problem though. How are you routing and making business decisions today? We call that workflow. A great starter is what is your line of business application? Now

you’re immediately into that conversation around integration. Many of our solutions, and almost all of our more sophisticated solutions, are integrated to something.

Starting a conversation about something they already own is a great way for them to wrap their head around what we do.”

He also recommends talking about mobile and compliance. “We have a sophisticated mobile application,” states Kavanaugh. “Integration, mobility, and compliance are two great ways to kick start [a conversation]. A lot of what we do relative to records management will help an organization be more compliant.

We can’t make anyone more compliant, but can put them on that road to becoming more compliant.”

“A lot of our successful dealers talk about the [customer’s] business process and figure out how they can make them more efficient with their electronic data,” states Malyon. “If you can take a business process and integrate it to a line of business, that’s where the real return is.”

“Start with your existing contact – typically office manager, IT guy – tell them that you were able to prove in many companies that great efficiency gains can be achieved through document management,” responds Schneck.

The accounting department is a prime target for a document management system, which is why Schneck feels it’s essential for one’s existing customer contacts to introduce them to the VP of Finance or CFO. “CFOs are ultimately our best allies and promoters in the company,” emphasizes Schneck. “They make things happen.” continued on page 26

“Risk mitigation, compliance, disaster recovery, business continuity, and productivity, those are your hot buttons,”

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Successful Sales Strategies What questions from prospects should a dealer be prepared to answer when selling document management?

“How and will it pay off, will it disrupt my business, does it integrate with my IT, and will my people use it?” states Schneck.

“Either they ask those questions or it’s in the back of their mind. Those four things are the four biggest areas for us why [document management] isn’t a mainstream application yet. Those are the doubts we have to overcome.”

How does someone respond to a question like, ‘Will my people use it?’

Schneck suggests asking them to start in one department, such as accounting. Then, three to six months after it’s implemented and people are comfortable using it, host an internal workshop where users show other department heads what that department is doing. “That’s how we spread the application to other departments.”

‘Can it work with my accounting system, my ERP system, or my medical billing system,’ are some of the questions that Malyon hears over and over again. “They have to know how the product will integrate with various line-of-business applications. They have to understand if you have a SQL server database and what that means and how indexing information and security is set at the database level. They don’t need to go in too deep, but they need to know some of the key buzzwords so a client doesn’t catch them off guard.”

Malyon adds that an understanding of the different types of OCR is critical as well because there are differences. “We see MFP sales reps go in to sell OCR and they don’t know what they’re selling sometimes. They sell the wrong product, which won’t do structured forms, and it blows off into this hole and a big refund for the client. It’s one of those things, knowing forms processing, knowing OCR, database integration points, those are all key.”

Another question that may come up is, cloud-based or on premise? “You have to have both,” says Frankel. “If you have one or the other, you’re setting yourself up for failure.”

Lastly, he says, “Everybody talks about how great their customer service and support is, but you have to be able to walk the walk and talk the talk. I hate to use 26

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the cliché, but if your document management vendor partner can’t provide essential customer service and document it, then you’re behind the eight ball.”

“Why would I buy from you and not another OnBase partner?” says Kavanaugh.

“How do you differentiate yourself to create a go forward relationship with? I often talk to our partners about what is it about you that makes you unique? Is it your background, location (sometimes it is location), is it your expertise in a specific market, is it the fact that you’ve integrated OnBase or PeopleSoft 20 times already? Why you and not someone else?

In addition, why OnBase and not a competitive solution? We have a ton of content around competitive information and we can help with that.”

Another key question is, ‘What value proposition do you provide that another partner or manufacturer cannot provide?’

“If a partner cannot answer that they stand little chance to be successful,” observes Kavanaugh.

“There are so many questions they can have, but the one I want them to focus on is to understand the ‘why,’” notes Worroll.

“Don’t come in with ‘I have a list of these features and I think you need them because every other company sells these features so you need them as well.’ I want our dealers to understand the benefit. Explain you have this tool that can provide this benefit and help them understand the why behind it.”

What are some of the mistakes that dealers who aren’t successful selling document management consistently make?

“You need to have a focus,” states Hyland’s Kavanaugh. “The generalists often suffer. They’ll do okay, but won’t excel. In addition, it’s taking training for granted. We release two new versions of OnBase every year. If our partners don’t do the ongoing training they’re going to be ducks in the wind and we don’t want that. Partners that continually educate, attend our conferences, and take advantage of the resources we provide excel.”

For DocuWare’s Schneck it’s underinvesting in the opportunity by not hiring specialists, not making the necessary

changes to align the organization and operations, not providing a generous comp plan, and not having a marketing plan.

“The biggest mistake is just dabbling in document management,” adds Worroll.

“They need to make a full commitment to focus on it and leverage the resources that are available. If they’re not doing that, they’re not successful. They’re just finding small opportunities here and there where they can squeeze in a basic solution. If they have a focus they can go out and find the opportunity. Today’s customers are expecting you to be the expert and if you’re just dabbling in it you’re hemming and hawing and you don’t come off as an expert.”

Another common mistake is that “they don’t sell to their installed base,” states Frankel.

Not educating or training themselves on the software is another liability, according to Frankel, even though docSTAR offers a workaround for that issue. “We have two programs, a traditional partner program with a higher profit margin if the reseller wants to sell directly to the end user,” reports Frankel. “If the copier reseller wants to leverage their install base without having to spend time and resources training on the software, we offer a referral program. They need to understand their internal capabilities and how they want to invest.”

Malyon contends it takes a lot of training and dedication to sell document management. “If a dealer is only doing one or two document management deals a year, they aren’t going to have the time to become a document management expert,” he says. “One reason is because they don’t leverage the vendor relationship enough and two is sometimes they don’t listen. In a big copier deal when a client says ‘document management’ the dealer cobbles something together and throws it into a lease. Then the customer wonders what they’ve been sold. They’ve been sold document management, but what does that mean, so sometimes it’s not bundling the right solution with the right hardware.” ✦

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e n x Charles Brewer

News Briefing

HP Supports Imaging Hardware with New JetAdvantage Security

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The HP execs contend that while IT groups continue to spend more annually on protecting their networks, little is being done to protect printers.

n September 4, HewlettPackard announced a bevy of new security services and solutions at an analyst event in New York City.

Branded HP JetAdvantage, the offerings are designed to help customers simplify deploying and monitoring printers and MFPs securely while protecting confidential information as well as the entire network. Included in HP’s newly expanded secure printing portfolio are new solutions for mobile printing and print security along with workflow and printer management tools designed to streamline business processes, reduce costs, enhance employee productivity while protecting against any security breach.

Ed Wingate, HP Vice President of Solutions for the LaserJet and Enterprise Solutions group says that customers are saying they need more security, and HP printers and MFPs can deliver a new level of protection. He explains that it used to be that with a printer you could print or with an MFP you could copy, scan, or fax. Now, says Wingate, with HP’s machines, “You can protect.”

In addition to the new HP JetAdvantage security offering, HP rolled out a replacement for the HP LaserJet Enterprise M4555 MFP family. The new LaserJet Enterprise Flow multifunction printer (MFP) M630 series is based on a tweaked version of the older machine and ships with various security and workflow solutions. HP also unveiled a couple of entry-level devices at the event including the LaserJet Pro M201 printer series and the LaserJet M225/M226 series.

The Case for Printer Security “You invest in security measures for your PCs, why aren’t you doing the same for network printers?” asks Michael Howard, Worldwide Security Practice Lead for LaserJet and Enterprise Solutions. He insists that printing hardware should be “equal citizens on the network.” To mitigate the risk of a breach, Howard explains that security must be maintained across the network from the data center to desktop devices to printers and beyond.

He presented some compelling data that underscores the potential damage a breach can do. The average cost of a data breach is $5.4 million, says Howard, and 65% percent of all breaches are the result of internal negligence or business-process failures.

The HP execs contend that while IT groups continue to spend more annually on protecting their networks, little is being done to protect printers. There are a number of reasons why printers and MFPs have been left essentially unprotected. Initially, the devices were not capable of storing much data so the risks associated with them were minimal. However, today’s machines have robust computing power as well as the capacity to store a lot of data. All of the information processed by printers and MFPs must be protected because, as Wingate puts it, “Hackers follow the path of least resistance,” and often printers offer the least resistance to a breach.

According to Wingate, until the introduction of the HP JetAdvantage tools, it has not been easy to effectively protect a fleet of machines because each

manufacturer handles functionality, such as networking, differently. With the security software and solutions included in the HP JetAdvantage suite, IT managers will be able to better lock-down printing devices on their networks without adding much IT overhead.

The JetAdvantage Offerings There are a total of five new solutions and services that will be sold under the new HP JetAdvantage brand. The HP Imaging and Printing Security Center (IPSC) 2.1 provides IT managers with a policy-based approach to securing HP printing and imaging devices. It provides an automated solution that monitors the fleet and delivers riskbased reporting. IPSC features HP Instant-On Security to lockdown devices as soon as they are added to the network. It also automatically deploys and updates identity certificates to both strengthen security and reduce administrative overhead.

HP Print Security Advisory Services provide clients with insights from a security advisory that works directly with security teams to review and evaluate the client’s printing infrastructure.

As part of the service, a security workshop is conducted that brings together the system’s various key stakeholders and educates them about the risks it presents as well as building consensus around developing new secure printing strategies. Using IPSC and other tools such as Web JetAdmin, the analyst also evaluates the client’s current printing landscape in terms of regulatory compliance and overall best practices. continued on page 30

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New JetAdvantage Security Solutions HP has also released a new tool based on its Autonomy technology. HP Secure Content Management and Monitoring protects against security breaches at the device level. It expands HP Autonomy Information Governance tools so they can monitor and audit data flowing through HP multifunction devices. The HP Secure Content Management and Monitoring solution enables early detection of document security breaches and safeguards a machine’s print, scan, copy and fax functions. In addition to the new secure content management tool, HP extended the monitoring capability of its ArcSight enterprise security technology so it can collect, analyze, and correlate print-device logs and alert users to risks in the ArcSight dashboard.

The new HP JetAdvantage Pull Print functionality completes the list of new security offerings. It protects users of certain LaserJet and Officejet devices from unauthorized access to confidential documents and print jobs. HP JetAdvantage Pull Print features AES 256bit encryption to store print jobs in the cloud. Users can then access their job and pull it down to a compatible HP inkjet or laser device. The print job remains in the cloud for three days before it is deleted. HP claims its JetAdvantage Pull Print service, which is offered without a fee, is simple to set-up and manage so it takes “the complexity out of pull print for enterprises and SMBs.”

New Hardware Too In addition to the new JetAdvantage tools and services, at the NYC event HP launched the new LaserJet Enterprise Flow multifunction printer (MFP) M630 series, which replaces the HP LaserJet Enterprise M4555 MFP family that was introduced in 2011. According to HP, the units in the new A4 monochrome MFP line are designed for workgroups with 10 or more users and offer a suite of more than 200 embedded security features as well as document workflows. The machines ship with the HP Trusted Platform Module Accessory, which HP says can “help protect customers ‘out of the box.’” Machines in the M630 series are capable of printing up to 57 A4 pages per minute and are 30

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LaserJet Pro MFP M225

LaserJet Pro M201

equipped with a 100-page automatic document feeder. They also come with standard automatic duplexing.

The line is made up of four different models. The HP LaserJet Enterprise MFP M630dn is the base unit and it comes with a 100-sheet multi purpose tray and a 500-sheet tray. Like the other units, the “dn” model is based on an 800 MHz processor, however it offers only an 8 GB hard drive. The M630h machine is identical to the “dn” device except it has a 320 GB secure high-performance hard drive. HP markets optional fax units for the “dn” and “h” models and they can accommodate an additional 500-sheet tray option as well. Moving up the line, the M630f is configured with the fax and additional tray as standard accessories along with the other features found on the lower end machines. The M630z sits at the top of the line and it offers all of the features found on the “f” model along with a 900-sheet, 3-bin stapling mailbox accessory, and a heavy-duty scanner that supports single-pass duplex scanning. It also provides various workflow tools such as embedded OCR and the ability to send to SharePoint.

HP released two new replacement toner cartridges for its M630 machines.

The new 81A (CF281A) is the standard yield cartridge that the machines ship with, and it yields 10,500 pages. HP also markets a high-yield SKU for the machines. The 81X (CF281X) delivers 25,000 pages. Consumables pricing was not available as of this writing nor was pricing for the hardware.

HP also released a couple of lower-end monochrome families based on the same 26-ppm print engine although they use different supplies. The new LaserJet Pro M201 printer series is made up of two single-function 26-ppm devices that are designed to support between 1 and 5

LaserJet Enterprise Flow MFP M630

users. The M201n is the base model and it does not support automatic duplexing like the higher-end M201dw printer.

Both units offer a USB 2.0 interface along with Ethernet 10/100 connectivity.

The “dw” also provides a standard WiFi 802.11b/g/n interface. The new LaserJet Pro M201 printer series replaces the LaserJet Pro P1566 and P1606dn, and street pricing will start around $179.

The latest entry-level monochrome MFP families from HP include the LaserJet Pro M225 and M226 series, which are four-function devices (print, copy, scan, and fax). Like the low-end print-only family, there are two units in both the M225 and M226 series. All four of the machines are Mopria-certified and come with HP ePrint, and Apple AirPrint.

They also support HP JetAdvantage Pull Print functionality. The machines all feature a 35-sheet ADF and 256 MB of memory. The M225dn and M226dn ship with standard 10/100 Ethernet connectivity and the M225dw and M226dw add a WiFi 802.11b/g/n interface. The new M225/M226 units replace the LaserJet Pro M1536.

The low-end units employ new cartridges. The new printers can accommodate two replacements SKUs. They ship with the 1,500-page, standard yield 83A (CF283A) cartridge and HP also markets a high-yield 83X (CF283X) SKU for the machines that delivers 2,200 pages. HP released only one cartridge for the new MFPs. Like the 83A, the new HP 88A (CC388A) toner cartridge has a rated yield of approximately 1,500 pages.

Sparking New Interest I think that many of HP’s new JetAdvantage solutions will be welcome by businesses and they will presumably help drive hardware sales. That will be good

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New JetAdvantage Security Solutions news to HP stakeholders, given the performance of HP’s printer business of late.

At various points in the year, HP’s president and CEO Meg Whitman has allowed that shipments of her firm’s LaserJet units have been falling and the installed base is eroding. Although Whitman suggested that the declines should be expected as HP focuses on placing more units in environments with higher print volumes, the consequences have been disconcerting.

With fewer LaserJet machines operating in the field, toner cartridge sales have dropped this year. HP recently forecasted that LaserJet supplies will continue to be down into 2015.

The machines that HP introduced in New York indicate that components of the new JetAdvantage initiative can be incorporated into a range of devices from the bottom to the top of HP’s portfolio. The OEM’s latest entry-level MFPs, for example, support the HP JetAdvantage Pull Print service as do the devices in the new LaserJet Enterprise Flow MFP M630 32

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series, which sit at the high-end of HP’s product offerings. And, the JetAdvantage components are not exclusive to HP’s LaserJet machines. As noted earlier, the firm’s business-class inkjet machines including those in its Officejet Pro and Officejet Enterprise lines also support the newly-branded tools and solutions.

One new service HP released in NYC that I think will be particularly popular is HP JetAdvantage Pull Print. There are currently a variety of fee-based pull-print services, but the JetAdvantage will allow business to utilize a high-value asset like secure, remote printing at no cost. The JetAdvantage service should grab the attention of many in the SMB community, especially smaller firms that might have lacked the time, money, or motivation to implement a pull print system but would really value the service if it were easy to access…and free!

Regardless of any bullish notions I have, the response from the overall industry to the JetAdvantage news has been

fairly underwhelming. At least so far.

Poking around online after the event, I didn’t see much discussion or interest on industry websites or in the IT press about JetAdvantage other than what HP had put out. Of course, printers aren’t that sexy anymore and these are the early days for JetAdvantage. We’ll have to wait a while before we can judge if JetAdvantage has been a success. A key indicator will be if HP can start to correct its flagging LaserJet business and sell more toner cartridges. ✦ Charles Brewer is the President and founder of Actionable Intelligence. For more info, visit www.Action-Intell.com.

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Business Profile

TSAworld: A Parts Supplier that’s More than Just the Sum of Its Parts world Offerings at a Glance • Parts, assemblies and logic boards for printers • Parts, assemblies, logic boards and consumables for copiers • Parts, assemblies and logic boards for fax machines • Memory and network cards • Refurbished Printers • Printer training • Printer and copier fusers • Copier supplies and drums • Toner and toner collection bottles • Vacuums and vacuum filters • Service and parts manuals to support the technician • Tools specific to office machine repair • Toolkits and cases • Disposables such as wipes, cloths, drapes, and gloves • Chemical cleaners commonly used in office machine repair

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cores of copier dealers and resellers across the United States have discovered when they need a part and need it fast TSAworld delivers. This is a company whose mission is finding solutions for its customers—solutions that ultimately help those customers succeed and grow their own businesses.

TSAworld has a rich history and foundation based on providing quality office machine parts and solutions for the office technology industry. The company was founded in 1986 with an initial focus on cultivating typewriter dealers with an eye on the laser printer industry. It was a business strategy that has paid dividends over the years.

Today, TSAworld is known as a wholesale distributor of original manufacturer equipment parts and proven quality third-party parts, serving technicians and service companies in the office products industry. It carries a vast selection

Brian Plati President

of printer parts, copier parts, wideformat parts, fax machine parts, and scanner parts. The company is an authorized HP parts reseller and Brother distributor as well as stocking parts for laser printers and copiers for Canon, Xerox, Samsung, Lexmark, Epson, Dell, and other OEM’s. Thousands of parts are in stock at any given time.

TSAworld also has a wellearned reputation as a one-stop resource for office machine service technicians who need tools, tool kits, toner vacuums and chemical cleaners for office machine repair and maintenance. In addition, the company remanufactures assemblies for customers at a significant savings over new assemblies.

TSAworld also designs and offers specialized kits to address specific machine performance issues while reducing troubleshooting and repair times, and minimizing repair parts inventories.

Over the years, TSAworld’s offerings have grown to meet the needs of its customers. “We work with many large corporations with our complete tool kit programs,” states Brian Plati, TSAworld’s president.

Although most of TSAworld’s customers are located throughout the United States, the company also services a growing number of international customers. Customers range from small one-man operations to Fortune 500 corporations, including many of the leading OEMs in the office technology space.

In an industry where technology and training are often interconnected, TSAworld understands the necessity of continuing to innovate its offerings to keep pace

with industry trends. It’s been rebuilding fuser assemblies for more than 20 years and seven years ago started rebuilding copier fusers and is rapidly expanding this segment of the business.

“We are adding new fusers on a rebuilt basis daily for printers and copiers and adding hundreds of copier parts to our inventory,” reports Plati. “We’ve added many parts on a refurb or good working parts basis to keep our customer’s costs down on repairs of machines covered under MPS-type programs.”

Beyond the Parts TSAworld is so much more than the sum of its parts and has been recognized in the Inc. 5000 as one of the fastest growing companies in America. Although an extensive parts offering is the primary reason office technology dealers and resellers, and service techs across North America rely on TSAworld, equally important is the customer experience.

Customers who do business with TSAworld receive the added value of working with a knowledgeable staff dedicated to providing outstanding technical support to office technology technicians while also answering any questions they might have about specific parts.

“Customers know when they call us a ‘real’ person will answer the phone,” says Plati. “They also know that those individuals are well versed on our products.”

Customers can also e-mail their questions or visit the TSAworld website and submit a question and receive a prompt reply. TSAworld plans to launch a new website this continued on page 36

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e n x

TSAworld: A Parts Supplier fall, which will significantly improve its customers’ experience.

Whether dealing with technical issues over the phone or responding online, meeting the needs of its customers are paramount. And when it comes to new additions to the product line, many of those are the result of customer requests.

“We listen,” emphasizes Plati. “We’ve found our customers have a difficult time saying ‘no’ to their customers, and we do too in today’s marketplace. Our customers understand if they are in the office machine repair business, we can help them.”

Another benefit of partnering with TSAworld is that there are no minimum order requirements. This is a big plus when all a technician needs is a single part to repair a machine. For dealers and resellers who stake their reputation on timely and accurate service, this separates TSAworld from other suppliers who require customers to wait until they’ve accumulated a large order.

Customers also appreciate the company’s Advance Exchange Program. This program has been designed to provide customers with a cost-effective solution to purchase refurbished assemblies. The company refurbishes assemblies that have a high demand and parts available for rebuilding. In some instances assemblies do not have components available for purchase and in other cases there is not enough demand to set up a refurbishing process.

When a customer places an order for a refurbished assembly, TSAworld ships the assembly the same day at a significantly

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reduced price compared with a new assembly. Customers must then return a “core” for the assembly they are ordering within 30 days of TSAworld’s shipment.

The company does not accept “cores” that cannot be repaired or are missing parts. Refurbished assemblies include a generous six-month warranty as opposed to the traditional 30-day warranties of most new OEM assemblies.

TSAworld even provides customized laser printer training for large and small companies interested in offering laser printer service or MPS programs.

“We offer our customers training on how to repair and sell laser printer service,” explains Plati. “We created our own class schedule and worked closely with BTA, providing training across the country.”

Marty Farinha (Refurbishment and R&D lead) and Heather Pelchat (Technical support lead)

Still Delivering After All these Years TSAworld is open from 8:00 a.m. to 6:30 p.m. eastern time and makes every attempt to ship orders the same day that they are placed. Generally, orders placed prior to 5:30 p.m. will ship the same day.

“We have a better than 95 percent fill rate on parts and fuser orders,” points out Plati. “We also have the ability to drop ship parts from many of our vendors.”

Most parts and supplies are shipped via UPS or FedEx, although customers have the flexibility to request another carrier.

Non-refurbished products have a 30-day warranty and non-refurbished parts a sixmonth warranty. TSAworld does not warranty products that have been mishandled, improperly installed or modified. If a

Terri Sell (Receiving Lead) and Ricky Bynes (Shipping Lead)

customer needs a return materials authorization (RMA) for a warranty product, all they need to do is call, along with providing a warranty number, and TSAworld will fax an RMA confirmation.

The Perfect Parts Partner It all comes down to providing customers with the best products available in the industry. And that’s exactly what TSAworld has been doing since 1986. Whether OEM products or proven quality aftermarket products, customers can remain confident they are dealing with a supplier who has their best interests in mind. Indeed, TSAworld has long been committed to ensuring its customers get the parts they need, including parts that many other distributors don’t carry. It’s for those reasons and more that position TSAworld as the perfect parts partner for office technology dealers, resellers, and service techs. ✦ Contact Information TSAworld 3011-B Adriatic Ct. Norcross, GA 30071 www.tsaworld.com (770) 417-2323 (800) 633-6626 Fax: (770) 417-2305/(800) 635-5388 – By Scott Cullen

We Saw It In ENX Magazine

e n x Charles Lamb

Managed Services

Creating Sustainable Opportunity

E

ach month I receive calls, questions, and inquiries asking about best practices surrounding sales forecasting and driving a sales funnel that is real. It seems there is a significant challenge in trying to produce an accurate sales forecast. Our sales operation reviews find that most fall below a 15% accuracy. Another way of putting it is — the sales forecast is 85% wrong on an ongoing basis.

Now before you decide that what I just said doesn’t pertain to you and your company let me drive a deeper point of understanding. When I ask most sales leaders to share their forecast accuracy reality, their reality is always slightly inflated or presented better than the truth (Especially if I’m asking these questions with the owners present). I believe that lease renewals are, of course, part of your forecast and important. HOWEVER, our research shares that dealers typically win about 89% of their renewals and this high percentage influences and sometimes hides how your company actually forecasts and captures NET NEW BUSINESS. We always want to consider the overall sales mix and its conversion accuracy. Understanding your sales mix breakdown can be eye opening.

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We find most dealers ARE NOT typically attracting NET NEW business on a continual basis. The dealer principal must get deeply involved into the forecast process to verify they consistently attract and capture net new business.

As a matter of record, I often hear dealers share that they’re enjoying double-digit growth in revenue, but once we lift the hood, we find that the growth number has come 100% out of the account base. This may be great and mean that they’ve found their account penetration skillset, but beware; this isn’t an endless supply of business. The only healthy long-term strategy that one should employ is one that balances effective account penetration with one that also adds new clients to the fold.

Forecast accuracy isn’t just about 'did you get the deal'; it’s equally important that you got the deal WHEN you said you were going to get the deal.

Sloppy guesses at when a deal will close causes as much wasted time and effort as any other activity and can be an extreme distraction when trying to build a sustainable sales funnel.

A great exercise for anybusiness owner would be to gather up six months of forecast data, remove the renewals, and then look at the projected close dates and revenue dollars. Calculate the stats and percentages with what was forecasted to what actually closed. It may surprise you; it surprises almost everyone.

Why am I talking about forecast accuracy when the topic of this article is creating sustainable opportunity? A sales organization’s ability to forecast correctly We Saw It In ENX Magazine

helps to expose the gap or delta needed to assure sales goals are reached; this in turn exposes the amount of sales activity required to manage real sustainability.

Let’s look at some of the most combative issues that seem to work against or destroy the creation of sustainable opportunity.

It should be noted that creating a rock solid flow of opportunity doesn’t happen by accident and it almost always happens because an immense amount of activity is being done.

The biggest deterrent in creating sustainable opportunity is that the immense amount of work and the real expectations that must take place are seldom explained to the sales team. It takes an enormous amount of work to move a sales team forward and generate the momentum that will ultimately reward your sales reps with WINS. It takes a solid plan, just as any General would create when going to battle. Before he’d launch his attack, he’d have his soldiers prepare for the fight and he’d train them on the best approach to the target. He’d certainly help them get mentally prepared and physically fit so that they’d be ready. This type of preparation is what will create a sustainable opportunity.

I simply don’t see this type of preparation going on and thus the sales team isn’t prepared for the long haul. This is one of the key destructors in building sustainable opportunity. We have to share the complete vision of what we want and where we’re going and what it will take. Let me share with you how sustainable opportunity is created and continued on page 40

e n x

Creating Sustainable Opportunity connected to the success and/or failure of a sales team. The birth of sustainable opportunity is ACTIVITY (Making the assumption here that all activity is based on defined business objectives, a proper market strategy, and a marketing execution plan) and I’m not just speaking about sales rep activity. This is a companywide execution plan that must be pointed at the next most closable (DEFINED) target within your marketplace. EVERYONE knows his or her part and their approach to those specific targets. But let’s consider one of the key components; the sales reps’ activity. You must have in your plan enough sales prospecting activity to generate enough opportunity which in turn generates sales WINS. Each point of the triangle supports and is also reliant on the other. If any part of the triangle is weak, then sustainable opportunity doesn’t happen.

I have yet to see a sales organization with healthy prospecting activity followed by weekly accountability meetings (most call these sales meetings), fail.

You must create a sense of discipline and understanding within your sales team. Cull out anything that isn’t in alignment with your definition of opportunity. Do this immediately and continue the process until your entire sales team aligns and begins to capture exactly what you want. I keep saying it over and over - you can’t create sustainable opportunity without knowing how much opportunity YOU REALLY HAVE. So critique each engagement very hard, look for client

sponsorship, and listen for a prospect who wants what you deliver. If it’s not there, push it to an appropriate time and go find another opportunity that is real.

To create a sustainable flow of opportunity your sales leadership must be mature and regimented in the execution of whatever processes that drive strong activity and visibility toward what is real.

Activity leads to opportunity and opportunity leads to sales attainment or WINS. Your Company’s Required Activity – Should be to drive marketing communication to your marketplace to expose opportunity, which would execute simultaneously with all other market penetration and opportunity generating activity, regardless of what your sales team is doing.

You need to be in the business of pulling opportunity from your marketplace.

A similar activity pointed at your client base should also pull opportunity as you create owner to owner, C-Level to C-Level relationships that assure you that it’s YOU that carries the relationship and not your sales reps. Obviously you can’t do this with every account, but with any account that is IMPORTANT you should own those relationships. This, in itself, should create opportunities as these relationships are solidified.

You should be advertising your business in a very active way and that means you sat down and created a roadmap for

the activity the company will do to contribute to a sustainable flow of opportunity. Email and direct mail marketing are some of the easiest ways to connect with your marketplace and these types of communications should be well thought out and delivered automatically on a continual basis. Pulling opportunity from this type of communication is not hard and, as a matter of fact, if done consistently, can generate a nice flow of inbound opportunity. Don’t get me wrong, it’s not a post card with your logo on it, but it’s definitely a piece that shares a timely need and has a call to action.

Sales Leader’s Required Activity – Your sales leader’s position is not an easy one, as they are the human resource that has the greatest effect on creating sustainable opportunity. They must be disciplined and regimented in their daily execution while being the master of selling the sellers. Week in and week out they must be consistently “up” and driving the educational process that ultimately creates a higher skillset in each sales rep, which drives better consistent opportunity.

The Sales Leader must identify, teach, and train everything that would lead to the production of authentic sales opportunity.

That would definitely include measuring everything for results and using each deal as a training ground for perfecting a sales rep’s execution. Most owners don’t want to step back down to this position. However, if you have the wrong person in this position you may never get to a sustainable opportunity flow.

Sales Rep’s Required Activity – This is the battleground. The sales reps that are worth their salt typically don’t dance to a structured environment and yet our stats share that when you apply education, process, and discipline to the best sales reps they almost always find more, high quality opportunity than when they’re allowed to wander through your marketplace.

Danger, Will Robinson - If your sales reps are just using you as a place to make good money and if you don’t really have any control or ability to guide them, you may be in trouble. They’ll stay as long as it’s good for them and when they leave they’ll typically take your accounts with them. Find out right away IF YOU continued on page 42

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e n x

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HAVE A TEAM or just single players and as I mentioned previously, you must own every key relationship.

The sales reps are responsible for quota attainment; unfortunately it’s not that easy.

I hear business owners say all of the time, “I don’t care what they do as long as they get quota!” This is a lazy way out.

You might as well say, “I’m not really interested in managing my business.” If you have ANYONE who continually meets quota then you probably have a quota that is too low for that person. The sales rep should always be challenged and that can come in many forms. NO, I didn’t say take advantage of someone who is on your team to drive the growth of your business. I said they should always be challenged.

We Saw It In ENX Magazine

Sustainable opportunity isn’t impossible to create and it’s easier to create than one might guess. If your company is failing to produce sustainable opportunity, look from the top down for the missing activity elements. ✦ Charles Lamb is the President and CEO of Mps&it Sales Consulting. His firm delivers proven methodologies and processes that assist dealer principals seeking the shortest path to a successful transformation into the managed services space. He’s created complementary solutions including Funnelmaker, Gatekeeper, and Shield IT services. For information on bootcamps, training, or consulting engagements call 888.823.0006, e-mail him at clamb@mpsandit.com, or visit www.mpsandit.com.

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Dealer Spotlight

Nora Schulz, President of NEP Co., Inc. on Growing Up in the Office Imaging Business Who are your customers?

B2B; anyone that has a business.

SCHULZ:

Why do they like doing business with you?

SCHULZ: Transparency. Clear clean billing. Many see us as an extension of their business because we are regularly delivering best practices that are specific to their business.

Nora Schulz President of NEP Co., Inc.

I

t’s not often you meet someone who’s been in the office imaging business for 45 years who looks like they can do it for another 45. That’s Nora Schulz, president of NEP Co., Inc. in Appleton, WI. To clarify, even though she’s been in the business for more than 45 years, some of those years were spent working as a teenager in her father’s copier dealership, a dealership he founded in 1960.

Schulz worked at NEP while going to college and then after she graduated, before purchasing the business in 1986. She’s since made additional acquisitions and has grown NEP into one of the most successful office technology dealerships in the state of Wisconsin.

How’s business this year at Northeast Photocopy?

SCHULZ: Better than ever. Our new product offerings have our customers excited, not about buying a product, but about finding a strategic partner that can help them guide their business. We love doing that and we are very good at it.

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What do you attribute that to?

The NEP culture and great people.

SCHULZ:

Are certain segments of the business doing better than others?

Schulz: The MPS/Education vertical has really taken advantage of some of our newer strategic solutions.

What solutions are those?

SCHULZ: The education vertical in Wisconsin has been hit hard with budget cuts and many organizations came face to face with the reality that people would lose their jobs if they kept things status quo. We have always had a focus on helping schools but this change demanded that we step up our game. Our team got together and developed several proprietary solutions focused towards the education vertical. These solutions delivered through a strategic partnership approach save time, money, and ultimately jobs. We are now taking this strategy to the other not-for-profit and even for profit businesses and the feedback has been amazing.

We Saw It In ENX Magazine

NEP also makes a concerted effort to be a strong part of the community. As mentioned on the NEP website, “We strive to do our best to help our community grow and flourish, and we believe that every local business must do their part to create a community that we can all be proud of.”

How does NEP do that? (A couple of examples will do.)

SCHULZ: We have always been involved and financially sponsored fundraisers held by our customers. Our staff also gives back personally through areas of their own interest such as being a scout leader, singing on a worship team, teaching first responders, teaching hunters safety classes, and volunteer firefighting as well as coaching sports teams for children. Our list is varied and surprising, but the dedication is not.

What do you personally like about this business?

SCHULZ: The constant change and the way the industry has evolved.

Looking back over the years you’ve been running NEP, what change had the biggest impact on the business during this time?

And you have to narrow it down to one. continued on page 46

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Growing Up in the Office Imaging Business Wow, that’s a tough one, but I’d have to say the most exciting change was the change from black and white to color. Just like it did for the television, color opened up all sorts of new opportunities. Nobody buys a black and white television anymore, do they?

SCHULZ:

Can you explain your IT Partnership Strategy to me?

SCHULZ: Much of our strategy is proprietary so I can’t share our secret sauce, but I can tell you that our strategic partnership approach revolves around our desire to do the right thing because it is the right thing to do—being transparent in our customer relationships to hold all parties accountable, and setting up win-win strategies that align our goals with our customer goals. This has been particularly successful in education and with businesses that have sustainability, cost reduction, or lean strategies.

Is that what some people might call Managed IT? Some might. Managed IT much like Managed Print Services is often over used and vague. As an example our Managed Print encompasses much more than managing output devices.

What exactly does your Managed Print encompass beyond managing output devices?

It’s difficult to answer that question because the managed solutions vary as much or perhaps even more than our customer’s business challenges vary. We don’t like to take a canned approach to fixing business problems because it would constrain our creativity and ultimately the strength of our solutions. In today’s world we are working with customers to assist with their strategies relating to all sorts of initiatives including BYOD, cloud, mobility, document management, virtualization and asset management to name a few. These initiatives are all intertwined and it can sometimes be daunting for our customers to keep current on best practices. That’s where we step in.

SCHULZ:

What’s been the key to your success in that segment?

SCHULZ: Understanding what customers want versus what they need. Being able to explain it, implement it, and do it correctly. Totally understanding all the resources of the industry available and supporting that customer within their financial ranges and expectancies is also key.

What’s your biggest challenge?

Finding good people. Once I find them, they stay

SCHULZ:

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forever. The average tenure at NEP is long. The culture is one of great accountability and helping out the team.

What about challenges in the marketplace?

SCHULZ: Our marketplace has done a poor job of bringing value to the businesses we partner with, so at the beginning of a new relationship it is sometimes difficult to get new customers to truly understand the implications of having a partnership relationship rather than a vendor relationship.

You’ve been in the industry for 45 years, do you still find it fun?

SCHULZ: Actually longer than 45 years, much longer. It is more fun now than it ever was. Working with old school coworkers, generation X’ers, Y’ers, and Z’ers is definitely interesting and frequently fun.

An open mind is a necessity and being flexible where I can.

What’s the one task that you most enjoy doing each day?

SCHULZ: The morning greeting of all staff. [I enjoy] walking around and saying hello, seeing everyone buzzing with the excitement of the new work day; watching the new machines in plastic roll out to the delivery trucks, and the trade-ins that at one time were the latest and greatest, roll back in. That lasts about 15 minutes. I also love signing and sending the personal thank you letters for each machine sold.

What’s the one task that you least enjoy doing every day?

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Addressing e-mails.

The never ending strands of messages waiting for the delete or the reply keys. When I started working here, all communication was verbal or by fax…fast, efficient, friendly.

Now it’s read, write, and reply.

And countless “un-subscribes.”

SCHULZ:

What one thing do you know now about this business that you wish you knew when you first started?

SCHULZ: I wish I had known where it was going and what part we were going to play in it. I would have liked to become immersed in many other types of industries sooner so I could assess their needs earlier and determine how our offerings could impact their business. Also, I would have used professional industry recruiters earlier to shorten ramping time for sales reps.

What gets you excited about coming to work each day?

SCHULZ: Everything.

Knowing who is coming in to get a demo, knowing who is celebrating something special, personally or professionally, and anticipating new products/ software to be set up for trial run - learning. When you’re green you grow, when you’re ripe you rot, my father used to say. I love learning.

How does the rest of the year look for Northeast Photocopy?

SCHULZ: Fantastic. When all the right people are in all the right positions, doing all the right things, magic happens.

I like magic. ✦ – By Scott Cullen

e n x Dave Sobel

Managed IT

The Trusted Advisor is Dead Managed Service Providers Need to Project Themselves as Outsourced CIOs sold. Instead, it must be earned.

T providers love to talk about the idea of the trusted advisor. This is a bold and powerful stateWhile there are many legends ment and something that must be examined in the context of posiabout the source of this moniker tioning. It is not enough to state in IT, the one I tend to believe is that when Microsoft was building one’s position if the reality behind that statement is not true. their SMB market and targeted Second, positioning as the advismall business consultants with sor implies an external role, and a line of products devoted to the doesn’t show investment in the SMB, the design team believed that the product would be recom- customer’s business. MSPs must increase the quality of their busimended and installed by what they described as a “trusted advi- ness consulting services in order to remain competitive as cussor” rather than by an internal IT tomers come to expect more value staff member. Much of this was from their relationship with a based on the fact that it was provider beyond that of an exterbelieved that the organization wouldn’t have an IT staff. What’s nal advisor. By developing these skills and paying attention to cusinteresting about the statement tomers’ key business drivers and is that the design team never goals, MSPs can develop stronger believed that the advisor would relationships with existing cusever call themselves that, but instead would use their own brand- tomers and make their own business more attractive for prospects. ing to describe their services.

The relationship moves from an It’s then interesting that a external one of advice to one of term that was never intended for external use became the model for an internal CIO role as an extendescribing service delivery. What sion of the company’s own staff, is even more interesting is that the not only managing tools and solutions, but also providing guidance terminology is now becoming on how to best align IT investoutdated and outmoded. ments and projects with the orgaThe trusted advisor has two nization’s core business drivers. flaws in the name itself. First, By offering business consulting trust is not something that can be services, MSPs can work with

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clients to identify their unique business goals and choose services and tools that will be necessary to achieve success. These services bring closer engagements, align MSP and solution provider goals, and ultimately benefit both. With forward planning happening with business and technology goals in alignment, the customer will see faster results, innovation integrated more quickly, and higher profits.

This is a much stronger position for the solution provider to engage with. I believe that the statement around CIO is stronger, bolder, and clearer than Trusted Advisor, and thus I have been recommending it. Because trust is earned and not sold, a promise to be the CIO – focusing on business outcomes, engaging at a C-level, and delivering higher value – is a genuine, simple position statement, and leads to greater success. ✦ Dave Sobel is responsible for fostering the growth and success of GFI MAX Partners. As Director of Partner Community, he helps promote collaboration, education and innovation among GFI MAX Partners. In 2013, he was recognized for the 4th consecutive year as one of the top virtualization experts globally as a Microsoft MVP for Virtualization and was appointed Chair of the Mobility Community for CompTIA.

e n x Jim Zipursky

Exit Strategy

How to Value Your Business – Part 2 of 3

Valuation Methodologies Cap Rates are always expressed as a percentage, which means the lower the rate, the more stable the business and its earnings. Alternatively stated, the higher the cap rate, the more risky the business.

Furthermore, since all businesses are unique, the determination of cap rates is different and unique for each business. It would be a huge mistake for you to use the cap rate determined for another business to value your own company.

However, determining the proper cap rate and choosing the Asset Approaches correct earnings to capitalize are There are three types of valuation never so easy or straightforward. methods using asset approaches: But rather than bore you with a Book Value, Adjusted Book Value long explanation involving calcuand Liquidation Value. lus and some fairly complex calBook Value (“BV”) is the culations and research, suffice it equity value of your company as to say, cap rate determination is indicated on your balance sheet. no easy subject, nor is it someBV is a “pure number” in that it thing you can do without signifis unadjusted. icant training.

Adjusted Book Value (“ABV”) DFE, while a very well-known involves adjusting your balance calculation, is no easier to detersheet to account for the current Income Approaches mine than CoE and also involves market value of certain assets or For most businesses, there are significant research and the use liabilities as well as adjusting for two salient valuation methods of the Cap Rate you determined non-operational assets or liabiliusing income approaches: Capfor your business. DFE is used ties. For example, assume you italiza tion of Earnings (“CoE”) to determine the present value of took advantage of all the “bonus” and Dis count ed Future Earnings your business by calculating the Section 179 depreciation options (“DFE”).

In simple terms, CoE is value of the future income stream available to business owners over a backward looking approach (utiof your business discounted by the the past three years, resulting in lizing current or average earnings) Cap Rate to a current value (simi$800,000 of purchased long-term while DFE is a forward looking lar to calculating time-value of assets fully depreciated immedimoney except the Cap Rate is ately. While these operating assets approach (utilizing projected earnings) to valuations. used instead of a discount rate). carry zero value on your balance While determining the value As with Cap Rate calculations, sheet, certainly they are worth more of your business using CoE is no DFE involves numerous assumpthan zero. Similarly, if you pursimple matter and requires a fair tions: the growth rate of your chased an airplane for your busiamount of research and several company’s earnings, its Cap Rate, ness using a long-term loan, but critical assumptions, we can and the “terminal value” of the the plane is only used infrequently, describe the formula succinctly: business in the future. removing the asset and liability divide your company’s earnings While DFE is difficult to calmake sense for determining adjusted book value. The purpose by a capitalization rate, adjust for culate, this is a valuation method of ABV is to give you a better idea non-operating assets or liabilities, incorporated by most sophisticatand, like magic, you have the ed acquirers since it helps provide of the more reasonable or “true” value of your business. them with an expected return on equity value of your business.

I

n last month’s article, we discussed the differences between formal and informal business valuations. This month, we’ll discuss valuation methodologies and some of the ways in which you may gain insight into the value of your own business.

Formal valuations are generally based upon three valuation methodologies: asset approach, income approach, and comparative approach.

Liquidation Value (“LV”) is most often used by lenders to determine the value of your assets and liabilities if the company were to be liquidated. There are generally two types of liquidation valuations: Orderly Liquidation Value (“OLV”) and Forced Liquidation Value (“FLV”). OLV assumes the owner of the assets will have “time” to liquidate the assets in an orderly fashion. FLV assumes a “going out of business” auction price. OLVs are always higher in value than FLVs. Generally speaking, ABV is higher than BV and both are higher than OLV, which is always higher than FLV. Unlike BV, both ABV and LV require you (or the valuation expert) to make certain assumptions about the value of your assets and liabilities. Of course, assumptions are always subject to scrutiny and validation.

continued on page 52

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Valuation Methodologies their investment (“ROI”). Buyers would most likely use a “standardized” Cap Rate for these estimations. Thus, of all the approaches we’ll discuss, DFE is the one you should try to get most comfortable with if you are serious about valuing your business for sale.

Comparison Approaches As the name implies, Comparison Approaches in valuations compare your business with similar companies; that is, companies in the same industry of approximately the same size (sales and earnings).

There are two types of comparison approaches: Private Company Comps and Public Company Comps.

Private Company Comps utilize the data from completed transactions to help determine the value of your business. The two most popular approaches are Price to Sales ratio and Price to Earnings ratio. In the Price to Sales method, you find as many companies similar to yours that have been sold, determine the sale price relative to the sold company’s annual sales, and 52

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then average these to determine the ratio for your company. You can do the same calculation of a Price to Earnings ratio.

There are two inherent challenges with Private Company Comp methods: 1. Data on private company sales is not always easy to find. Unlike MLS data for home sales, private company sales are just that…private. There are databases of private company transactions, but there isn’t always data relevant to all types of businesses. The more specialized your company, the less likely there will be data from sales of similar businesses.

2. Not all information is created equally.

Back in the Dot-Com boom, we saw interesting done-deal data showing fantastic multiples for some transactions. When we dug deeper and called the companies involved in the transactions, we learned these companies had sold for 5% cash at closing and 95% stock in the private company who acquired them. A deal involving a huge amount of seller financing should sell for more than a deal with 100% cash at close. However, many done-deal data-

bases do not take into account transaction structure…or those doing the valuation using these comps do not take this critical information into account in their analysis.

Public Company Comps require you to compare your business to companies similar to yours whose stock is publicly traded. The classic Public Comps are Price to Sales and Price to Earnings. Just as with Private Comps, there are several challenges to using Public Comps to value your company: 1. Public companies are public and your company is not. There is a cost to being public. Presently, we estimate this cost at between $1 million and $2 million, annually (these costs include expenses related to compliance with Sarbanes-Oxley and other similar regulations, regulatory compliance costs, annual financial audits, annual shareholder reports and meetings, and more). Thus, if your company does not have at least $2 million in AFTER TAX EARNINGS, public comps really are not germane.

We Saw It In ENX Magazine

continued on page 54

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Valuation Methodologies 2. As shown in bold above, public companies report their earnings based on after tax profits. Most business owners of privately held companies run their businesses with the idea of showing a minimum of taxable income.

3. Size does matter. Most public companies are significantly larger than similar private companies in the same industry.

Does it make sense to compare your wholesale cartridge distribution company with $50 million in sales and $4 million in pre-tax profit with Hewlett Packard who has $22 billion in sales and $3 billion in after tax profit in its printer/ supplies division?

End of the day, these formal valuation methods are helpful in determining the value of your business, but if you are considering a sale of your company, its ultimate value will be determined by the price a buyer is willing to pay. So how do buyers of your business determine value, especially when acquiring companies in the imaging industry?

As previously mentioned, many buyers 54

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utilize DFE as a key metric. Another factor is the amount of leverage (or borrowing ability) available to a buyer for your business. Buyers use these methods, along with comparison of deal multiples, to value the businesses they seed to acquire, but they also adjust their valuations based on the following value enhancers and value detractors.

increase in customers or simply price increases? What is the likelihood of continuing with your current growth rate?

• Transferability/stickiness of your customer contracts. If you are an equipment dealer who earns a significant portion of your revenue/earnings from on-going service/maintenance agreements, are those agreements transferable… without customer approval? If not, that is a Value Enhancers/Detractors value detractor. What is your attrition What are the factors impacting the value rate on these contracts/customers? If it of your company, both positively and is higher than industry average, that’s negatively? another value detractor.

• Is yours an asset “heavy” or “light” • Approval process for transfer of dealerbusiness? Equipment dealers generally ships. Are you an equipment dealer/ have more in the way of “leverageable” distributor? If so, have you reviewed assets which may be of more value to your dealer agreement regarding change some buyers who look to use as much of control and/or a sale of the business? leverage as possible. However, cash Almost all equipment OEMs must flow buyers prefer asset-light businesses approve the transfer of your dealership. like supply wholesalers and on-line The transfer clauses in dealer agreedistributors. ments vary by OEM and can have a • Stability/sustainability of your revenues significant impact on value. We lost a and earnings. Has your business been deal several years ago because the OEM growing? Is your growth due to an continued on page 56 We Saw It In ENX Magazine

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Valuation Methodologies would not approve our client’s chosen business, so as to reduce your taxable buyer because the buyer, in the OEM’s income? If so, this can impact value opinion, sold competing products. significantly. Buyers tend to “value what they can see.” Two years ago, we • Territorial/Product restrictions impact were working with an imaging supply value. Several years ago, we were sellwholesaler. Our client was profitable, ing a client’s multi-location imaging but only when we made significant equipment dealership. Our client’s adjustments to earnings. All of the dealer agreement restricted them to a buyers we spoke to were interested but certain trade area. One buyer who made ultimately backed out of the process a very strong offer backed out of the stating, “It is just too hard for us to see process when the buyer learned about where the profits are in the business; the territorial restrictions, stating this validating all of these adjustments would hamper the buyer’s ultimate requires just too much work for us.” growth plans.

• Do you have good, clean financial and • Management depth. Buyers always operational data? Can you provide buyask, “If something happens to the ers with sales by customer by year data? owner, is the business sustainable?” If Can you tell buyers your gross margin the business revolves around you, and by product or product line for any given you are no longer in the business, there month? The better your data, the more isn’t much value to your company. you can slice & dice the numbers, the • Can you show a positive bottom-line more a buyer may be willing to pay without significant adjustments? In for your business. other words, are you using tax deferral As you can see, there are myriad factors methods, such as running personal or influencing and impacting the value of non-operating expenses through the 56

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your business. While there is no single “magic bullet” for determining the value of your company, the methods outlined above should help you get a better idea of what your company might be worth on the market today.

Next month, we’ll discuss a valuation subject near and dear to everyone’s heart: purchase price multiples and how to use them for your business. ✦ Jim Zipursky is the Managing Director of CFA-MidWest, an investment bank serving the middle market. Jim is a registered representative of Silver Oak Securities, Inc., member FINRA/SIPC. For more information visit www.cfaw.com/omaha. Follow Jim on Twitter (@jazcfane) for articles and information about M&A. For more information about Exit Strategies or Selling Your Business, feel free to contact Jim at (402) 330-2160 or jaz@cfaomaha.com.

We Saw It In ENX Magazine

We Saw It In ENX Magazine

October 2014 l www.enxmag.com

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e n x Ronelle Ingram

Service Management

Changing for the Better

L

To be the best in the industry, you need to think outside of the box and provide an original service to your clients that separates you from the others. By offering a better product, you can earn more business and more revenue.

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as Vegas is definitely not on my list of top ten favorite places to travel. Yet I have driven there at least 4 times each year for the past 40 years for various industry events. Ultimately, each trip to Vegas provides me with enough positives to make up for the long drive. Even though it’s commonly referred to as Sin City, there is a lot to learn from its business model, where the house always wins.

This year has been no different.

While in Vegas this year, I had a chance to speak with some dealers in the office technology industry.

I was reassured to hear a bit of sanity return. Many proudly discussed which items and services they are no longer offering. At long last the concept of making a profit on each section of the deal is more important than merely generating dollars that do not cover the cost of the promised services. One point that stood out was that selling products and services for less than they actually cost the dealer is a kamikaze business model.

I began to think about which office equipment businesses will be willing to provide the required products and services for the lessdesirable equipment. Who are the people that have products and need service or supplies for the non-networked printers, standalone faxes, low volume inkjets, shredders, a few left over analog machines, after hour services, network administration, mailing equipment and Windows XP? Most profit-minded dealers now have operating systems and software that can (hopefully) accurately calculate the cost of each click and each labor hour burden rate. Many have decided to simply refuse to take on equipment that doesn’t fit into their proven (sometimes narrow) range of

www.enxmag.com l October 2014

profitability. I understand and agree with the concept. If it doesn’t make a profit, don’t do it.

However, I would extend this concept to, ‘Never say NO, just tell them how much,’ then walk away. Now that dealers have the knowledge and software to accurately calculate their costs, they can appropriately price most everything in a way that can generate a reasonable profit. Rather than saying NO, realistically calculate how much you must charge for a service or product that is requested. Explain to your clients that your goal is to truly provide a one-stop shopping experience; however, a few items must be offered a la carte.

Take for instance the sheer folly of the emotional and business cost I have endured after purchasing, installing, and then reinstalling Windows 8 and Windows 8.1. I would have joyously paid Microsoft $1000 to allow me to continue to use XP for the rest of my life.

Microsoft could have had a few of their older IT guys keep Windows XP running for the millions of baby boomers who would have gladly paid an additional cost to have XP supported for a few more years.

I know dealers who happily and profitably allow their MPS clients to have equipment that is not attached to the network. They merely have a monthly minimum base up front charge of $25, plus the standard per click fee. Additionally a $35 monthly fee is charged for having to request the client to provide a monthly manual meter count. This amounts to a flat yearly fee $720 per piece of equipment, plus the click charge, to service the random inkjet printer or stand-alone fax machine. Most dealers would love to have a dozen of those in each customer’s office. That would generate an additional $8,640 dollars of revenue for a minimal cost of service and supplies.

We Saw It In ENX Magazine

In the 1980’s when we included a customer’s shredder in a CPC agreement for the first time, as a service manager I had great concern as to how we would fix a broken shredder. I was savvy enough to insist the make, model and serial number of each shredder was listed on an amendment page of the CPC agreement with a per item monthly charge. I quickly realized, if your field staff can fix copiers, they can fix shredders. Over the past 35 years our shredder service agreements have generated tens of thousands of dollars of incremental income.

We have also sold thousands of dollars’ worth of shredder oil.

To be the best in the industry, you need to think outside of the box and provide an original service to your clients that separates you from the others. By offering a better product, you can earn more business and more revenue.

This thought process has been utilized in other industries as well.

For example, while in Las Vegas I heard about and then read an article in USA Today about how the Palms Casino Resort now offers their 1,200 rooms for a full 24 hours after you check in. What a great idea for Las Vegas! No more in after 4pm, out before 11am.

Many Las Vegas casino hotels offer early check-in and late checkout for extra fees. Additionally the 11am check out time requires business travelers to pack completely up and check out in the early morning.

Late night partiers must sober-up and check out a few hours after their all night binges. Rather than adding extra charges that often irritates customers, some forward thinking businesses are offering a higher-quality complete product (like MPS), for one pre-set charge.

Chekitan Dev, marketing professor at Cornell University’s continued on page 60

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Changing for the Better School of Hotel Administration states, “Whoever determined that 4 pm was the perfect check in, and 11am was check-out time was thinking of the housekeeping shift, not the guest.

With customers becoming more demanding, and intensifying competition for market share, the hotel industry is developing standard operating procedures that are more guest-centric rather than operations-centric.”

Daniel Lee, CEO of Palms Casino Resort, commented, “This is the first time a large Las Vegas hotel has tried this.

It always struck me as a bit odd that we make people check out at 11 in the morning or noon, and we don't let them check in until 3 or 4. If you look at the car rental industry, you get a car for 24 hours. Hotels are reluctant to provide late check-outs because it poses challenges for housekeeping staff, many of 60

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We Saw It In ENX Magazine

whom work day shifts. To make the late check-out work, some of the Palm’s housekeeping staff will be working night shifts. It does require a different type of thinking and training, and we’ve undertaken that because we are trying to be innovative and creative.”

Whether you are renting rooms or providing MPS, your business goal should be to generate additional profits by providing your customers a greater value. Comparing yourself to the competition is not good enough.

Look to the future needs of your customers. Visionary companies are always looking for ways to provide positive answers to their client’s questions before the questions are asked. ✦ Ronelle Ingram, author of Service With A Smile, also teaches service seminars. She can be reached at ronellei@msn.com.

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e n x Jamex

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HP 9500 MFP C8549A refurbished by HP comes with 1 year onsite warranty. Toners and drums not included. $899.99

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New Lexmark T652 DN printer $1129

HP 6015x Q3933A printer refurbished

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New HP CP4025N w/o toner CC489A $629.99

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Industry Events & Trade Shows Below is the Industry events updates with website info.

Visit enxmag.com/INDUSTRY_CALENDAR.htm for more info.

RemaxAsia Expo 2014 October 16-18 / Zhuhai, China www.iRecyclingtimes.com

ELFA 53rd Annual Convention October 19 / San Diego, CA www.elfaonline.org

BTA Southeast Event October 24-25 / Asheville, NC www.bta.org

Executive Connection Summit (ECS) October 27-30 / Scottsdale, AZ http://ecs.mwaintel.com

ECI Connect Conference November 10-12, 2014 / Las Vegas, NV www.ECiSolutions.com We Saw It In ENX Magazine

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Printer Tech Tip

TECH TIP HP LaserJet and Color LaserJet Future smart

Firmware Devices - 99.09.XX Errors (Revised) In the August 2014 issue, ENX published an article on 99 errors for the HP LaserJet and Color LaserJet Future smart Firmware Devices. Here is a revised version of that article, which includes more detailed information for how to successfully troubleshoot these errors.

The firmware for the referenced Future smart devices resides on the Hard Disk Drive (HDD) or Solid State Disk (SSD) connected to the formatter. In certain circumstances, 99.09.XX errors are displayed on the control panel which indicates some action needs to be taken relative to the HDD, SSD, or the firmware installed on the device. The majority of 99.09.XX errors DO NOT require formatter or disk replacement but are a result of formatter or disk replacement.

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to take for the most common 99.09.XX errors on these products. ***In most cases, a USB thumbdrive with the printer’s specific firmware .bdl file will be needed***

99.09.62 – Unknown Disk This error indicates there is an encryption mismatch between the HDD and the formatter. This typically happens because an HDD was swapped into a device from another device or replaced.

RESOLUTION: If the HDD is in the device by error, remove it and return it to its original device If the HDD is desired to be used in this device, perform the following actions from the Preboot Menu “Administrator”> “Manage Disk”>”Boot Device”> “Erase / Unlock”

This item reinitializes the disk and cleans all disk partitions. This item also unencrypts the hard drive from the previous formatter.

[CAUTION:] Selecting the Erase and unlock item removes all data. A confirmation prompt is provided. This procedure may take several minutes to complete.

Turn printer off/on The system is not bootable after this action and a 99.09.67* error displays on the control panel. A firmware download must be performed to return the system to a bootable state.

“Administrator”> “Download”> “USB thumbdrive” Lock Disk Select the Lock Disk item to lock (mate) a new secure disk to this product

We Saw It In ENX Magazine

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Printer Tech Tip “Administrator”> “Manage Disk”>”Lock Disk” The secure disk already locked to this product will remain accessible to this product. Use this function to have more than one encrypted disk accessible by the product when using them interchangeably.

How to open the Preboot menu: 1. Turn the product on 2. (Full touchscreen) HP logo displays on the product control panel. When a “1/8” with an underscore displays below the HP logo, touch the logo to open the Preboot menu. For touchscreen control panels with numeric keypad, press cancel (“X” button) when 1/8 appears.

3. Use the arrow buttons on the touchscreen to navigate the Preboot menu 4. Touch the OK button to select a menu item

99.09.63 – Incorrect Disk This error indicates the expected encrypted HDD/SSD is not present. This is expected behavior when installing a new HDD/SSD in a device where the previous HDD/SSD was encrypted.

RESOLUTION: Perform the following actions from the Preboot Menu under the “Administrator” >” Manage disk” option: “Clear disk password” Turn printer off/on The system is not bootable after this action and a 99.09.67* error displays on the control panel. A firmware download must be performed to return the system to a bootable state.

“Administrator”> “Download”> “USB thumbdrive” 99.09.66 – No Disk Installed This is an error indicating one of the following: HDD/SSD is not installed HDD/SSD is not connected properly HDD/SSD has failed RESOLUTION: Perform the following actions: Ensure HDD/SSD is installed on the board Check all HDD/SSD connections to make sure they are all secure Power Cycle the printer If all connections appear good and We Saw It In ENX Magazine

error is still displayed, replace the HDD/SSD 99.09.67* – Disk is not bootable please download firmware This is an error indicating that there is no firmware loaded on the disk. This is usually the result of installing a new disk or performing a “Format Disk” command.

RESOLUTION: Perform the following action from the Preboot Menu under the “Administrator” option: “Administrator”> “Download”> “USB thumbdrive” *Some firmware versions may not properly display the 99.09.67 error and will appear to be “stuck” in the Preboot menu without an error listing – for this scenario update firmware “Administrator”> “Download”> “USB thumbdrive” This posting is valid through firmware release 5-29-2014 ✦ This Tech Tip is contributed by Laser Pros (www.laserpros.com). Email any questions to marketing@laserpros.com.

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Technical Tips

Rebuilding Xerox® C123 / WC-5225 / WC-5325 Style Drum Cartridges (Replacing the Developer and DV Pull-Seal) Xerox® CopyCentre® C118, C123/128/133 & WorkCentre M118/118i, M123/128/133, Pro123/128/133 (013R00589) Phaser® 5500/5550 (113R00670), WC-5225/5230/5235 (101R00435), & WC-5325/5330/5335 (013R00591)

I

n a previous ENX article about the C123 style drum cartridges, we concentrated on the upper half of the unit, rebuilding only the drum and cleaning section and leaving the developer station below untouched. That made sense since the drums, blades, CRUM chips and charge rollers were available in the aftermarket, while nobody seemed to have good replacement developer material for sale for this series. Well that finally seems to be changing, so it’s time to take a crack at a truly complete rebuild, including developer and the developer pull-seal.

We’ll start where the previous article left off. Once you have the two halves of the cartridge separated, you’ll want to work on the bottom half (developer and pull-seal) before you rebuild the top half (new drum, blade, charge roller, and CRUM chip). Simply put, you’ll want to replace the developer material and the developer compartment’s pull-seal.

Using the seal makes it possible to ship the rebuilt units when you’re done. Before the developer and seal were available, you could only rebuild the top half, and you would be forced to hand-deliver the cartridge. This was because turning the unit over with the developer free in the mixing area and on the mag roll could allow developer material to get out of the lower half. It could get into the drum, blade and charge roll area, and ruin your good work. It was also less than ideal not to be able to replace the developer material because the developer would eventually wear out sometime after the 2nd cycle.

When you buy a new drum cartridge, the developer is in a compartment above the mixing augers. When your customer installs the new cartridge and pulls the seal, the developer drops down into the mixing area where it can get over to coat the mag roll. You’ll need to clean out the old developer, install the Mylar peel-and-stick pull-seal, and pour the new shot of developer into the storage compartment.

PROCEDURE

1. Remove the metal toner feed shutter from the top of the rear end of the DV Unit. There’s one screw from the top which releases a spring support

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(see Photo #2 & 3). With the support off, you can remove the two springs and gently slide the shutter off toward the rear of the unit to remove it. Be very careful with the seal and Mylar under the shutter.

Photo #1 & 2: Removing the DV Top Cover

2. Next, remove the top cover which includes the developer storage compartment. There are two screws from the right, one at either end of the unit (see Photo #1 & 2). Then with the screws out, you Photo #3: Spring Support can pop the 3 clips along the right side of the top cover by prying upward.

Lift the top cover off. Be extremely gentle with the Mylar mag-roll seal blade, the two Mylar end seals, and the foam gaskets on this top cover. You don’t want to damage them or suck them into a vacuum by accident.

3. Clean the top cover thoroughly and remove any residue where the old pull-seal was adhered to the developer storage compartment. Make sure the surface where the pull-seal goes is completely clean of any residue. continued on page 69

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Photo #4: DV seal and plug

4. Install the new pull-seal. It has peel-and-stick adhesive on it. Be careful to make sure it is firmly adhered to the plastic without any wrinkles (see Photo #4).

5. Remove the plug from the front end of the developer storage compartment, pour in the new developer material, and reinsert the plug.

6. Dump out the old developer from the mixing station and mag roll area, and then remove the ADC sensor.

If you pivot the sensor downward at the front end till it clears the plastic clip at the rear end of the sensor, you can remove it from its sensing hole (see Photo #5). It’s important to remove the sensor because it is static-sensitive and can be easily damaged by static generated during vacuuming or using forced air on the developer unit.

Photo #5: Pivot the ADC sensor downward to remove it

Photo #6: Plastic shims can be used to set the space between the mag roll and trimmer bar

7. Remove the mag roller trimmer bar. Before you remove it, you will want to get a piece of plastic to use as a spacer (an old credit card or store card works well here). Just don’t use a good credit card because the magnetism on the mag roll will destroy the card’s mag-

netic strip. Try it for fit before you remove the trimmer blade’s two screws. You want to be able to return the trimmer blade to the same distance from the mag roll on either end when you reassemble the unit (see Photo #6).

Under the trimmer bar is a plastic float which lifts out.

8.Now the mag roll can be removed. You’ll need to first remove the mag roll’s front drive gear (this transmits drive from the mag roll to the stirring augers in the unit). It is “snapped” on pretty solid but if you pry Photo #7: “Pop” the front mag carefully it will pop off roll gear off (see Photo #7). Once it is released you will have enough room to slide the front plastic bearing out of the frame. Slide both the front and rear plastic bearings out of the frame and lift the mag roll out of its cradle.

9. Clean the augers and mixing area thoroughly. Be gentle with the foam gaskets and the Mylar center seal between the two stirring augers.

10. Reassemble everything. Below are a few pointers to watch for when reassembling: - Pay attention to the “keys” on the plastic bearings for the mag roll to be sure that they seat all the way into the frame.

- Make sure the mag roll front drive gear is pushed all the way back into position as far in as it can go, so it makes good full contact with the tiny idler gear under it. Use plastic shims (or the old credit card mentioned earlier) as spacers to set the space between the trimmer bar and the mag roll at both ends.

- When you put the top half (drum and cleaning unit) back on the bottom half (developer unit), turn the mag roll’s white coupling drive gear (the one on the mag roll) to make sure everything turns freely.

That’s it! Now you have a fully rebuilt drum cartridge with a new drum, blade, charge roll, CRUM reset chip, developer, and pull-seal. This one you can ship to your customer’s location with confidence. Enjoy the rebuilding everyone! ✦

Britt works for The Parts Drop, a company whose primary business is providing parts, supplies and information for Xerox brand copiers, printers and fax machines. You can find more information, including many of Britt’s past ENX articles on their website, (www.partsdrop.com) If you’d like to read more about Xerox brand office equipment, there’s also a complete listing of past articles under contributing writers on the ENX website (www.ENXMAG.com)

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Technical Tips SUBJECT:

Sharp AR-M237

Q:

Can someone tell me how to clear the DV and Maintenance Lights on this model? I'm sure it’s still 20 sub 1 and 42 sub 1 but what is the sequence of keys to get to that point?

A:

Actually this model has all the counter resets under main code 24. Then there is a menu of items to clear. To get into diagnostics: #,*, C, *.

Q: A:

: Just found out customer has an AR-M205 not the 237. Do you know the procedure for that model? # interrupt C interrupt.

SUBJECT:

Canon IR 3320 Jams in 3 Trays

Q:

Top 3 trays are jamming. Near as I can tell, they are all doing the same thing. Paper moves about half inch out of the tray and stops. The way it’s built, you can’t really see what’s going on, but tray 2, you can watch a bit.

Looks like the paper is getting to the feed rollers and stopping. The only difference I can find with the 4th tray is the feed roller is relatively bald and the rest are all new. I replaced all the rollers last call. This time I replaced 2 torque limiters but no change. Looks like the tread is the wrong way so I changed it on tray one, but no luck! Removed the feed assembly, inspected and blasted it, no change. The only thing I can figure is it’s got to be the rollers themselves.

Maybe PR sent me the wrong ones or their compatibles are no good. They told me the pickup rollers and feed rollers are the same ones, but I'm beginning to wonder about that. Any help appreciated. Thanks in advance.

A:

The pickup roller is different. The separator roller and the one above it are the same. Pickup roller: ff5-4552020. Sep and feed roller: ff5-4634-020

A:

Take the feed rollers out of tray 4 and put them in one of them that doesn’t feed. That should tell you if it’s the feed rollers.

Q:

That thought occurred to me but I didn’t want to run the risk of making the only working tray not work either. You know how that goes. I'll give your info a try, thanks.

A:

Just seems strange all the trays stopped working at the same time, especially feed rollers all at once. Have you done a dcon clear? Or tried different paper? Or tried a different size paper or direction? Also you can pull out tray 1 and look in to see tray 2 feed rollers turning. Same with tray 3—take trays 1 and 2 out to see if the rollers are actually turning.

Q:

Well, first of all, it is the pickup roller and the feed roller that are the same; the sep roller is the one that is different.

Second, I got the first tray to work by swapping out first the feed roller and then the pickup roller from tray 4. It wouldn't work with just changing one of the rollers, I had to change both.

Then I got tray 2 to work by putting in the feed roller I had removed the tire from and flipped it around and again putting a different pickup roller on.

Now of course trays 3 and 4 don’t work.

I put a whole new set of rollers in it 2 or 3 months ago so they all still look new.

I'm just going to order OEM rollers and see what happens, these PR compatibles just won’t work and I think it’s because the rubber is on backwards. I'm not going to spend half a day trying to flip them and tear up the rubber and not get a refund. Damndest thing I ever saw.

A: Q:

Funny, the OEM ones are made in China also; some Canon rollers are the same as some HP's.

Replaced with OEM, worked like a charm.

SUBJECT:

Bizhub 363 Optic Skew

Q:

I'm surprised I didn't notice this earlier; I have a Bizhub 363 that has a lead edge skew. 11 x 8 1/2 the sides (8 1/2 length) are perfect, showing the paper isn't skewing. Both drawers and LCT are the same. The book has no adjustment for mirror frame height.

Back on the analog machines, it was common to have to adjust mirror frame 2 to eliminate lead edge optical skew.

Anyone have a fix? I came back to the office and a 283 is doing the same thing, though not as pronounced. The manual has nothing on this adjustment.

Machine only has 60k on it. It came from the factory this way.

A:

This happened a lot on other series. Take the left front of the scanner and yank up. Someone probably leaned on it or strapped it too tight.

Don't even try to play with the mirrors.

A:

I've had the scanner frame get bent down on the corner but that gave me scans that had background down one side. Last time I had to adjust a scanner for skew was way back on a Di350. I fixed it by loosening the screw that secures the first mirror assembly to the scanner cable and sliding that end out of the scanner one way or the other.

Loosen the front one because it's better if the distances between the mirrors don’t change on the rear side. Good luck! I don't think there is any actual factory adjustment procedure on the new models.

Q:

You were right on! That makes total sense. The machine with 60K we just bought from a wholesaler and has been transported a few times for sure. The one in the office that had a small skew could have happened the same way. Thanks again! I'll keep that info "filed away." I'm bound to run into that some day! ✦

Tips appearing in this section are reprinted courtesy of Smarka! The Copier Tech's Info Source. Tips are randomly selected from submissions emailed to Smarka! Smarka! and ENX Magazine make no guarantees as to the accuracy of tips presented here. Email your tips to Tips@smarka.com. All tips become public domain.

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