Quick Study

Twelve years ago Tom Carns knew nothing about the quick-printing business, yet today his PDQ Printing boasts sales and margins that dwarf industry averages. How did he do it? He listened. He learned. And he leveraged his most valuable asset: an outsider's perspective

Twelve years ago Tom Carns was a furniture retailer in Lynnwood, Wash., about 15 miles north of Seattle, and the recession of the early 1980s was taking its toll on his business and his life. Though just in his early forties, he decided to liquidate what was left and look around for a change of scene.

His wife, Carolyn, a native of San Diego, suggested someplace where the sun might on occasion show for more than one day at a time. Carns ventured to Hawaii, where he found the recently arrived residents less than receptive to outsiders. He considered California, but that seemed too crowded. His wife then blurted out that she really wanted to move to Las Vegas. Carns replied, "Nobody lives in Las Vegas." They moved on April Fools' Day, 1980.

The move didn't exactly solve Carns's problem of what to do with the rest of his life. After taking a couple of months off, he enrolled in card-dealing school and completed the six-week course that would enable him to facilitate the separation of gamblers from their money. But then it dawned on him that inhaling other people's cigarette smoke and venomous airs as their money ebbed in the direction of the casino's coffers wasn't exactly his idea of fun. On the day he was to report for his first shift of duty at a local casino, Carns simply didn't show up.

By then his mind was turning over another possibility. He knew a few people who ran quick-printing shops, those ubiquitous hole-in-the-wall places where photocopying equipment hums day and night, and the pungent smell of ink hangs in the air. The work was unexciting but steady. Carns, a man with a placid facade that conceals a churning interior, had developed high blood pressure up in Washington, and his doctor had warned him that if he wanted to keep on living, it might be a good idea to slow down. Carns thought that maybe starting a quick-printing business would be a good way to ease into the slow lane.

In June 1981, with $25,000 in working capital, he opened PDQ Printing in a 1,100-square-foot space off a busy Las Vegas boulevard. After netting $82.56 that first month, he worried that maybe he should have taken a nearby 900-square-foot space instead. After all, he wasn't reinventing the wheel. There are some 40,000 quick-printing shops in the United States, and up to 25% of those are franchise operations. The average shop grosses $265,000, with net margins hovering around 8%.

Carns has done somewhat better. This year PDQ Printing will gross $5 million, or about 19 times the industry average. Sales in 1991 rose 18% from the prior year. The last quarter of 1991, a traditionally slow time of year coinciding with a deep national recession, was the best in the company's history. PDQ's net margin now approaches 20% -- or 2.5 times the industry average.

That kind of performance has made Carns a guru of sorts among fellow quick printers looking to learn his secrets so they can turbocharge their businesses. They fly in for intensive two-day meetings, for which Carns charges $3,500. (In 1991 he did 40 such consultations.) He also holds seminars for people who want to get started in the business and bypass the franchise route. This year Carns has 16 seminars booked across the country. He also will be speaking in Australia and the United Kingdom.

So how exactly did all this happen? How did Tom Carns, looking to put the brakes on his life, walk into a low-key, me-too kind of business he knew nothing about and build it into a smooth-running $5-million operation that now clears a cool $1 million a year?

Identifying The Market

A need for custom manufacturing, not commodities Tom Carns owes part of his success to luck. He arrived in Las Vegas when it was just another mildly booming Sunbelt town. Today, a decade later, Las Vegas has 800,000 people, making it the fastest-growing American city of the 1980s. Beyond good fortune converging with better demographics, PDQ owes its rise to the fact that Carns was an outsider who came to his new calling with a fresh perspective. He was a savvy businessman, walking into an industry dominated by craftsmen. That offered him insights many of his established competitors never had. "I did not come up in the printing business," says Carns. "My paradigms are not the same as those that are consistent in this industry."

But fresh insight wouldn't be worth much without some attendant energy, which Carns indubitably has. At 54, he is a thoughtful, persistent, and quietly driven man. "Tom's a very dynamic, aggressive marketer. He watches trends, and he tries new things," says Buzz Warren, owner of Buzz Print, in Overland Park, Kans.

"Tom has this energy level that always keeps him going forward. He knows how to get to the people who will help him get things done," adds Patrick Leamy, a friend of Carns's who heads EconoPrint, in Madison, Wis. More to the point, Carns is thorough. He leaves few stones unturned. When he set about getting into the quick-printing business, he immediately immersed himself in the industry to learn its nuances. To become a successful quick printer, Carns knew he had to be a quick study.

Before he got into the trade, Carns went out and "shopped" every quick-printing shop in Las Vegas -- all 70 of them. He walked into each, looked around, and made copious mental notes. "I watched how they treated their customers, what the business looked like, and how good the quality was," Carns recalls. And he liked what he saw. "Most shops were dirty and disorganized. The people were sloppy dressers. They played loud rock music in the back of the shop. They were definitely lacking in customer service and commitment."

Carns happily concluded that the field was crowded with people in ink-smudged smocks who cared to do little more than apply ink to paper. "This industry is dominated by craftsmen who are not business oriented," says Carns, adding, "there's one thing I know how to do, and that's read a financial statement. There was definitely a place for a sharp, aggressive businessperson." Carns reasoned that the upper end of the market, where professionalism and customer service were important, was wide open.