business

The paperless office isn't here yet, but Jim Flaherty, owner of an Allegra Print and Imaging franchise in downtown St. Paul, isn't taking any chances.

Flaherty has moved aggressively to turn around the struggling location he and his wife, Kari, bought in March 2007 in the Alliance Bank Center. Signing dozens of new accounts and developing promising new niches such as printing instruction manuals for medical equipment, has paid off. This year's revenue likely will reach $1.2 million, Flaherty said, five times more than when he took over.

His location is one of more than 600 in the Allegra Network, which supports the Allegra Print & Imaging, American Speedy Printing, Insty-Prints and Signs Now brands. Systemwide sales were $371 million in 2007.

Flaherty, though, isn't counting on printing alone to sustain the success he's enjoyed so far, despite the rapid growth in that side of his business. He's taking steps to offer his small and medium-size business clients marketing communications services. That would include developing targeted campaigns involving direct mail, e-mail, social networking tools and even video.

"It doesn't just have to be print," Flaherty said. "What I'm very confident is going to work for the business is gathering the right information and doing targeted marketing. We can walk into these businesses and say, 'Here's what we're going to do for you, here's the cost, here's what it's going to show you for return on investment.' That's where we're going to branch off and add to our system."

Building on growth is more important, now that his shop has become a family affair.

Working from home, his wife does the bookkeeping and accounting and takes care of their two sons. His father, Jerry, joined as production manager 18 months ago. His brothers came aboard recently, Kevin working in production and delivery and Dan in customer service and likely to handle the video and social media aspects of the new marketing communications program.

Sometime in the near future, Flaherty and his wife expect to buy out her parents, Dale and Carol Beane, longtime owners of the Allegra center in Arden Hills (where Flaherty got his start in the printing business and where his sister, Theresa, is the lead designer).

Franchise health care

The locations operate as sister stores; the St. Paul location has eight employees, the Arden Hills site more than a dozen.

Given the family connections and interest that other employees have expressed, Flaherty also is looking at switching in January to the Allegra Network's new comprehensive health care benefit plan.

Franchisee health insurance plans are relatively rare, in part because insurers typically consider each location to be a separate company, and because varying state regulations complicate group plans.

The Allegra Network, based in Northville, Mich., negotiated a partnership with Blue Cross and Blue Shield of Michigan to provide franchise owners and employees with health coverage. More than a third of the locations have signed on, according to a statement from Allegra CEO Carl Gerhardt.

"We found that interest was strong among our existing franchisees, but even stronger among folks looking to invest in an Allegra franchise," Gerhardt said. "With the current economic crisis, people are very concerned about the availability of health insurance and whether a company like ours can provide comprehensive coverage for themselves and their family members."

Everyone he interviews for jobs asks about health care and other benefits, said Flaherty, who has provided coverage through health savings accounts.

The marketing communications effort that Flaherty plans to launch in February or March is another initiative the Allegra Network is supporting.

The goal is to drive diversification and growth across the network in creative and consulting planning services, according to Allegra chief marketing officer Bob Milroy.

"While the printing industry remains huge ... it is shrinking," Milroy said.

The network has established a marketing resource center of experts to train and support franchisees who want to offer new services. Allegra's move, in part, is to fill the void left by small ad agencies and graphic design firms shuttered in the recession. "Some of their service providers are no loner available, or the service providers that are available to the small business, they can't afford," Milroy said.

Family business

At 31, Flaherty is a couple of decades younger than the typical print shop owner, but already is an industry veteran. He worked at his future father-in-law's Arden Hills location during high school and college.

Flaherty went full-time there after graduating from the University of Wisconsin-River Falls in 2001. He became the top performing account manager nationally in the Allegra Network, he said, handling $100,000 to $150,000 a month. Sales at the St. Paul location had slipped to $240,000 a year when he and his wife bought it.

Flaherty, who grew up in West St. Paul, let family and friends know that he was eager to expand, and began approaching downtown businesses. One of his first stops was Morrisey Hospitality Co., which manages the St. Paul Hotel, the Hotel Minneapolis and restaurants including the St. Paul Grill and Pazzaluna.

Flaherty's Allegra location handles Morrissey Hospitality's printed collateral, from business cards to promotional signs and restaurant menus, marketing manager Arthur Morrissey said.

"He just has a real strong commitment to doing things right and to doing right by people," Morrissey said. "They're able to handle anything we put in front of them."

The expert says: Dileep Rao, who teaches new business development and financing at the University of Minnesota's Carlson School of Business, praised Flaherty's efforts, particularly his focus on sales and telling customers what he can do for them.

"Customers do not beat a path to your door," Rao said. "You have to contact them. Mr. Flaherty focuses on ROI [return on investment] for the customer, which is what they want to know. They are not buying print, they are expecting results."

By expanding to media besides print and moving into medical equipment printing, an industry that is less sensitive to economic trends, Flaherty is "surfing on some strong waves," Rao said.

Flaherty also is expanding prudently by adding more products for existing customers and finding new customers for existing products.

"If all entrepreneurs were as on the ball as Jim Flaherty, consultants would be out of a job," said Rao.

Todd Nelson is a freelance writer in Woodbury. His e-mail address is todd_nelson@mac.com.