With printer ink as expensive as fine champagne, business leaders need to look at what and why they print, print on both sides of paper, and beware of hidden costs.
Before you hit "file" and "print," consider this: The going rate on a bottle of Cristal Champagne is about $350, but if you filled that same 750ml bottle with black ink for your office inkjet printer, it would cost you roughly $1,350.
If it feels as if your business is constantly undercut by printing costs, it’s probably not your imagination. Chances are that the costs are eating into the bottom line even more than what you've already budgeted.
“Printing costs tend to happen under the radar, because so much of it comes out of petty cash,” says Steven Reynolds, a senior analyst from Lyra Research in Newton, Mass. "For example, someone from the office picks up a toner cartridge or a ream of paper at Staples and just gets reimbursed in their next expense report.”
Figuring ink into the bottom line
Printing poses a quandary for small and mid-size businesses, which rely on in-house printing but are constantly watching costs. The printer business has long been profitable for the leading hardware manufacturers, such as HP, Lexmark, and more recently Dell, largely driven by sales of custom-fit ink cartridges. But the market has been changing more recently as small and mid-size businesses have more options for printing needs, including outsourcing printing jobs, laser printers, and multifunction equipment -- the latter of which not only prints but can also scan, copy and fax from a single device. The inkjet printer market in the U.S. is expected to be flat through 2010, as inkjet printer sales decline by a compound annual rate of 4.2 percent while multifunction product sales grow by 2.6 percent, according to Gartner Inc.
Still, many major manufacturers are actively courting small and mid-size businesses, by rolling out new printer products with new features. Often, these companies are touting cost-saving features. In February, HP unveiled seven new inkjet printers for small businesses, promising higher quality color printing for 25 percent lower costs than laser printers. HP said the company said these printers could average 1.5 cents per page for black and white and 6 cents per page for color.
More options for printing can mean the potential for cost savings for small and mid-size businesses. But where can you cut the fat while ensuring that your business has the tools it needs to grow?
Tips for cutting costs
Some small and mid-size business owners get pretty creative trying to get around that ink bill. Zelda Cook, a partner with the Austin, Texas-based 9 Point Mesa Land and Cattle Company, still relies on her six-year-old dot matrix printer for all her in-house documents. “Even though I’m ridiculed by some of my more tech savvy friends, I like my printer,” says Cook, who is undoubtedly getting the last laugh. Her Epson uses a $7 ribbon that’s good for about 400 copies, adding up to less than two cents per page.
Cook's advice may not be for everyone. With the new, improved tools on the market today smaller businesses can often take advantage of tools that were once the purview of their larger brethren. Here are five steps that can help you manage costs while raising the sophistication of your business printing:
Invest in laser printers. “Laser printers have really come down in price in recent years," says Joshua Feinberg, of Delray Beach, Fla, author of The Computer Consulting Kit. "And as a general rule of thumb, they are always going to have a lower cost per page than an inkjet printer.”
Study those manufacturing specifications on both printers and cartridges. Check things like the duty cycle (the maximum number of pages a printer can handle a month). “You don’t want to overtax a device,” says Reynolds, who warns clients not to challenge that duty cycle load more than a couple of times a year. In addition to avoiding unnecessary machine downtime, look for specifications on the average cost per page on cartridges.
Set all your computers to duplex printing. You may not save on ink. But at the very least, printing on both sides will save a bundle on paper -- not to mention storage space for archived documents, says Feinberg.
Keep print jobs in-house as much as possible. It’s almost always cheaper to print in-house than to outsource most printing jobs, experts say. Outsourcing print jobs to a print shop on average runs about three times as much as printing documents in-house, according to Gartner Inc. This is especially true for small businesses, which tend to print in small amounts. It may not pay to outsource unless you need a very large quantity -- such as 500 multi-page copies or more. Top quality printers have come down in price so much in recent years that a lot of the higher-end print jobs can now be done in the office without a loss of quality. HP advises small business customers to create their own marketing materials, such as business cards or calendars, with the help of their sophisticated models for small business.
Beware of hidden costs. There are software programs available to track consumable expenses like ink and paper. But, small and mid-size business owners need to be aware of the “headache factor.” Installation, maintenance, compatibility, and lost productivity during a paper jam are just a few of the headaches, according to Feinberg. It adds up fast over time.
Most small and mid-size businesses have come along way in moving away from paper processes and relying more on email and digital archiving. But the move to electronic information hasn't necessarily cut into printing needs. “It’s a sheer proliferation problem," Reynolds says. "It’s also because of email, and the Web, they’re finding more to print… you have to look at what and why you print.”