How the search for a strategic partner gave the Houston-based owner of Nicholas Earth Printing a new lease on entrepreneurial life.
To raise cash, she and her husband Bob Nicholas had already mortgaged their house three times. With payroll to meet, hefty ongoing expenses and an order from a big oil company that required her to buy $850,000 worth of paper with money she didn’t have, she realized she was at the end of the line. Nicholas was able to complete the job — luckily, the client paid up front for the paper. But it had become clear that she could not sustain her operations and would have to lay off her employees if she was unable to get a cash infusion.
One of her best clients, a woman named Hilary Sharon, who was with Bank of America at that time, had been encouraging her to secure a strategic partner. Many businesses that aim to add scale quickly take on partners who can offer both money and expertise, and firms with multiple owners do make more money. Yet women entrepreneurs don’t sign on partners as often as men do and tend to run smaller companies; 89 percent of firms entirely owned by women have just one owner, according to the National Women’s Business Council.
“We want to send you more work, but you don’t have the capital,” Sharon told her. “What you need to do is partner with someone who has what you don’t have.” Nicholas says: “We needed equipment… We only had one location, and, of course, there’s never enough money.”
Nicholas did have some leverage to negotiate a partnership, though. “We had run out of money, but we still had our customers,” she says. “They had faith in us.” But of course, being in financial straits, she was not in the strongest position.
Scoundrels and Then a Savior
Nicholas began talking to some smaller printing companies about partnering. And another type of suitor started to appear — the kind her husband Bob, a former television news anchor with a deep, rich voice, calls “scoundrels with slick schemes in mind.”
One representative of an investment group, eying Nicholas’ certifications as a women-owned and minority-owned business, offered her a half million dollars and a monthly check to simply stay home and relax. Such certifications can help attract new business, because many large companies and government purchasing agencies have programs to steer a certain percentage of their business to firms that have majority female or minority ownership. But Nicholas had no intention of becoming someone’s figurehead. “We are honest people,” she says.
Time ran out one Friday, and Nicholas shuttered her printing plant. But the next Monday, she received a miracle phone call. On the line was Robert Kashan, the chief executive of EarthColor, a much larger printing company based in Parsippany, N.J., whom Nicholas had met once at a conference. Word of the bind she was in had reached him via a brand new salesman in his organization, a man who had been Nicholas’ top salesperson until she had to shut down.
Kashan wanted to talk about teaming up and was ready to jump on a plane to Houston. He looked like a Godsend. EarthColor had a good reputation and many locations. “It had integrity,” Nicholas says. “I met with him Wednesday morning, and by Wednesday afternoon we had a new company.”
“I’ve got everything you need,” Kashan told her, she says — money, equipment and multiple locations. “It’s going be like a marriage.”
Nicholas said yes to him. “And for 13 years, it’s been just that easy,” she says. “We happened to find the right partner, and it has been heaven.”
Kashan took a 49 percent stake in their new Houston firm, Nicholas Earth Printing, and left Nicholas to run it. When she needed additional printing power to complete a large job or to the use of one of EarthColor’s locations, she could send work to there. Likewise, EarthColor could send jobs to her.
Out of Purgatory and on to Heaven
Today, Nicholas Earth Printing is humming. It does printing for a host of giant corporations, working with their marketing, advertising and design agencies and in-house printing specialists. It has four digital presses, approximately 20 employees and annual revenue in the $25 million-to-$50 million range. Each week, it sends out 300,000 to 500,000 pieces of direct mail from its in-house post office, depending on the season and clients’ promotional calendars.
This happy ending is getting even happier. About 5 years ago, Nicholas began to increase her ownership of the company — buying a little bit more most every quarter. Now she owns 62 percent.
That’s something major corporations like to see when they consider doing business with her. “They question 51 percent,” because it’s the slimmest of majority ownerships. But “62 percent demonstrates the integrity of the partnership,” she says. “It shows that our partner is really with us.”
Nicholas says she wants to keep Nicholas Earth Printing growing so she can keep hiring people. After experiencing the pain of laying people off, one of her most important goals is to create more “secure jobs.” Another wish is to continue to be able to support key charities she is involved in, foremost the Houston Ladies Lion’s Club and The Rose, a breast-health organization.
She also wants to make sure she has a strong asset that she can pass on to her children. Nicholas has two grown daughters, and they have shown some interest but they, too, want security, especially now that they have children of their own. Of course, they know well the difficult road their entrepreneur mother has traveled. “We can’t offer them anything if it isn’t stable and growing,” Nicholas says.
Posted: October 6, 2016