Print
Solutions June 2005
Cover
story
Proforma
— #1
Leaders
in a Crowd
Proforma
aims to become the industry’s
first billion-dollar distributorship.
Focused on winning major national
accounts, it edges other firms
to claim the No. 1 spot.
BY
DARIN PAINTER
When
Greg McCurley helped a Proforma
franchise owner bid on a 3-year,
$10 million contract recently
and win it after a reverse auction,
the deal was a triumph but not
a surprise. While at Standard
Register, McCurley grew and managed
the major direct-seller’s
largest sales region, which accounted
for more than $30 million annually.
Since
McCurley joined Proforma last
year as its chief business development
officer for sales training, sales
coaching and North American/major
accounts, he has helped the company’s
franchise owners close more than
20 major deals, including ones
with Toyota, Infinity Broadcasting
and Yamaha. His ability to ink
big business has helped Proforma,
a Cleveland-based network of more
than 650 independent distributorships,
rise to the top of Print Solutions’
Top 100 Distributor rankings.
The firm reported fiscal 2004
sales of $276 million, edging
out distributorships Allied Office
Products, Clifton, N.J.; Workflow,
Norfolk, Va.; and American Solutions
for Business, Glenwood, Minn.
“We’ve
made improvements in selling to
national accounts, and we’re
now better equipped to take business
away from the major directs,”
says Greg Muzzillo, co-CEO of
Proforma, which he founded in
1978. “Deals with big companies
are out there in spades right
now, and our North American Major
Accounts (NAMA) program is in
place to help owners capture great
business.” Proforma aims
to win contracts for commercial
printing, print and forms management,
promotional products and online
company stores.
Proforma’s
franchise owners make autonomous
business decisions, including
vendor selection and product and
service offerings, and rely on
the company’s Worldwide
Support Center in Cleveland for
marketing materials, sales training,
supplier information and referrals,
finance and accounting capabilities,
technology tools, credit insurance,
better pricing from suppliers
and other benefits.
In
addition to a monthly service
fee that’s based on the
amount billed to customers, each
owner contributes 1Ú2 percent
to 1 percent of sales to a cooperative
marketing fund. Previously, Proforma
used the marketing fund mainly
to create and distribute brochures
and other sales tools for owners.
Today, half of the $2 million
fund is earmarked for information
gathering—data to help owners
target new accounts and penetrate
existing ones. An account analyst
at Proforma researches organizations
and identifies solid local prospects
based on ZIP codes and other factors,
then reports on how much money
those businesses spend on printing
services. A telemarketing team
then helps owners set up appointments
with ideal prospects. Additionally,
Proforma employs NAMA account
identifiers who pinpoint prospects’
key decision-makers and learn
about their upcoming requests
for proposals. “There’s
no other company in our industry
bringing that kind of intelligence
to empower distributors to be
ahead of the curve,” Muzzillo
says.
Proforma
includes three types of owners—ones
who understand the nuances of
franchises and compare Proforma’s
system to others’ (Proforma
calls this group “traditional”
owners); ones who have printing
industry experience but not as
owners (“industry-experienced”);
and ones who own existing distributorships
but don’t want aggravations
associated with billing, marketing
and other non-sales tasks (“conversion”).
Part of the company’s strategic
plan is to recruit 250-300 new
franchise owners annually from
within the industry. “If
you talk to most distributors
today, they’re on their
own and all alone,” Muzzillo
says. “People might look
at franchising and say, ‘You’re
giving up your independence.’
But if independence is about the
ability to freely perform a wider
range of activities, franchising
does the reverse—it allows
people to become more independent.”
Muzzillo
expects Proforma to reach 1,000
franchise owners in a few years.
It’s one-third of the goal
he calls “1,071”—1,000
franchise owners, 70 percent of
business through Proforma’s
250 preferred vendors (called
“PLPs” for “preferred
limited partners”), and
$1 billion in owners’ combined
sales. “I’m proud
that Proforma is No. 1, but I’m
frustrated that our growth is
not as fast as I’d like
it to be,” he says. “We
really should become the first
billion-dollar company in our
industry.”
This
year, Entrepreneur ranked Proforma
No. 1 in the business services
category and No. 76 overall in
its Top 500 list of franchised
businesses. The magazine based
its rankings on financial strength
and stability, growth rate and
size, years in business, start-up
costs, percentage of terminations
and other factors.
Darin
Painter is managing editor of
Print Solutions. Email him your
comments at dpainter@PSDA.org.
