The original quote, “Lead, follow, or get out of the way” has been attributed to Thomas Paine, who was an English-born American founding father, French revolutionary, inventor, political philosopher, and statesman. 

A slightly modified version – “Lead me, follow me, or get out of my way” – was made much more famous by General George S. Patton, Jr. during World War II.

General Patton died from a heart attack in a German hospital in December 1945, just three months after the war ended. This will become important later in this column.

Why does this column start with such a quotation? It is because you can do but three things with your label company: 1. Grow it (Lead!);  2. Maintain it (Follow!); or 3. Sell it (Get out of the way!).

Let’s begin with growing your label company. This can be accomplished in only two ways – organically by gaining new customers or by acquisition. 

Organically gaining new customers will take time and requires money, which you will have to be willing to spend. This can be from any of the following methods:

a) Incentivize your existing sales reps to work smarter and harder, perhaps paying more commission on new business (hunting!) vs. camping on old business (farming!). 
b) Increase your number of sales reps – hire those with a book of business.
c) Advertising in industry trade publications of your vertical market.
d) Direct mail   
e) Exhibit at industry-specific vertical market trade shows.

Acquisition of a smaller competitor may be a better (and less expensive) route to go. It is kind of like putting down sod vs. planting grass seed. The label industry has (too) many manufacturers since the relatively low barrier-to-entry made that possible. Some of our industry’s largest label companies began in the owner’s garage, since older and smaller label presses could fit in one. “Back in the day,” anyway. 

2) Maintaining your label company might be a route for you to go if you are happy with the status quo or do not want to spend the money or lack the energy to grow it. It also might be good for you if you are between 55-62 years old and too young to sell. 

If you are content with the size of your label company and are making enough money to take care of your family and employees, don’t do a thing!

Bigger does not always mean better. Both growing your label company or selling it take a lot of time and energy, and if that is not what you want to do, simply keep things the way they are. 

That said, this might be a good time to prep your label company for other opportunities should you decide to move in another direction at some future date:

a) Get your financials in order – make sure you get a CPA compilation at a minimum. 
b) Know what your “fully-burdened” gross margin percentage is along with adjusted EBITDA  
c) Clean up your plant and make sure your equipment is in good working order or replace equipment with newer pieces, if necessary. And spiff up the exterior, as well.
d) Eliminate or replace any non-producing employees – run things lean and mean.

3) Selling your company is a process that has been discussed many times in this column over the last year. It is a process with which you will need some help. The label industry experienced a buying frenzy from just prior to the Covid-era until about Q1 of 2024. Things have quieted down just a bit, and time will tell whether the private equity firms that paid big bucks (sky-high multiples of adjusted EBITDA) for label companies during that period will be able to exit at some point and show a return for their investors. This is usually a five-year window, which will begin in 2026. 

The process of selling your label company should begin with a valuation. Only you can determine if your proceeds will be enough to sustain your family until you pass and beyond. Some of the impediments to the sale of your label company are the following:

a) Poor financial controls (internal statements, not even a CPA compilation)
b) Unrealistic valuation expectation (know your adjusted EBITDA)
c) Outside sales reps (hopefully have non-compete agreements)
d) Customer concentration (no more than 10-15% with a single customer)
e) Woman/minority-owned (unless the buyer is the same, this will be lost)
f) Physical facility (outside and inside)

Since yours truly is certainly in the twilight of his career (turning 78 in November), I think I can get away with saying that you should not wait too long to decide in what direction you might go. 

George Patton died of a heart attack just three months after WWII ended. The 60-year-old general had led a life of adventure, fighting in almost every major American 20th century conflict. His career climaxed with World War II, where he led corps and armies from North Africa, to Sicily, to the continent of Europe. He often led from the front, and he almost always delivered victory. Does this sound like someone you know, albeit in business?

Is it time for you to be thinking about whether you would like to “Lead, follow, or get out of the way”?

Acquisition of a smaller competitor may be a better (and less expensive) route to go. It is kind of like putting down sod vs. planting grass seed.

Jim Anderson is the Founder & President of Scottsdale, AZ-based Corporate Development Associates (CDA). CDA is a boutique Merger & Acquisition consulting firm that has focused 100% on the printing industry since 1987. Website: www.printmergers.com. Contact Jim via email: janderson@printmergers.com or cell/text: 602-432-0426