What they learnt: Saeesh Dhond, The Impression Group

In the newspaper industry, there are fixed clients and there no walk in clients, unlike digital and offset. We are in the newspaper printing business, the entry and exist cost in this industry is high. 

 

Here we have to tie-up with a publication before setting up an entire plant, which is a very crucial decision in business. This is where we went wrong. 

 

A reputed publication promised to give us the business for South West region in Maharashtra. Additionally, we had two other leads from other publications who were interested in giving us business if we setup a plant there.

 

Without thinking much, we went ahead and invested in a newspaper production plant. Keeping in mind that there were three clients in our kit, we invested in high-speed machines that could print one lakh copies per day. Also, since we thought that investment in real estate has good returns, we purchased land in the area and built our plant. 

 

The problem started when after a year the publication decided to stop the circulation in that area, since the market response was low. The circulation of the publication plummeted and the business targets could not be met and it ran short of funds. The other two publication leads never materialised. 

 

\We had to close our operation in the area and shut the entire plant. Plus, the client defaulted on payments worth Rs 50 lakhs. We have filed a legal suit against the publication to recover the due payment, but there is no relief in sight yet. 

 

The fact that we relied only on one client was a mistake. We should have ensured we have a commitment with other two clients as well.

 

Probably, if we would have studied the market before the investments, the business decision would have been different.

Also, since the land in which we invested was not in an industrial hub, the land did not appreciate. All this resulted in dead investment.