Going Against Type

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By the time Hamilton Chan took over his father’s chain of print shops, the demand for neighborhood printing services was decreasing rapidly – people didn’t need to order fliers, brochures and resumes at a storefront: They could do all that on their home computers.

So the younger Chan concentrated on efficiency through cost savings and growing the business by getting corporate accounts. He shrank the number of stores from 14 to two and launched an online publishing Web site to keep the company alive.

Chan is a former investment banker and Hollywood lawyer who gave up his corporate career to try to turn around the money-losing Charlie Chan Printing Inc. By adapting the skills he learned in the world of high finance to the family business, he was able to increase revenue, upgrade printing technology and bring his father’s legacy back from the brink.

The company, headquartered in Hollywood, produces brochures, letterhead, training manuals and marketing materials for midsize and large companies in the Los Angeles area, including many of the film studios.

It was 2001 when Chan returned to the Hollywood shop where he had spent hours as a child helping behind the counter.

“I was an effective salesperson and that brought me credibility within the organization,” he said.

By combining knowledge of the printing business with his professional demeanor and qualifications, Chan was able to sell the company’s services to advertising agencies and marketing directors at corporations. In three years, he multiplied the company’s revenue by nine.

“My experience could open new doors to business that the established salespeople couldn’t,” Chan said.

Diane Kelber, communications director at the national non-profit Recordings for the Blind & Dyslexic in Hollywood, tried three local printers before settling on Charlie Chan to produce media kits and brochures. It was Chan’s business skills – and a referral – that convinced Kelber to give such a small printer a try.

“I really love Hamilton – he’s very professional and always finds a way to do what we want on a budget,” she said. “He never makes me feel like the poor relation because we’re a non-profit. He’s very respectful and does what he needs to do to keep us as a client.”

Then Chan moved from growing sales to cutting costs. A former instructor of negotiation at Harvard Law School, he drew from his own lessons in dealing with suppliers. He trimmed the cost of printing plates from $227 per box to $120 and achieved similar savings for paper, the biggest expense for a print shop after payroll.

With more sales and lower costs, the company was soon profitable again. “Whereas when I arrived, the company was losing money,” Chan said.

The younger Chan became chief executive in 2005. His father had been giving him control of the company incrementally until his retirement.

So far, the company had financed its transformation with accumulated profits. But after taking the reins, Chan borrowed to buy computerized presses and launch a Web site where customers can design and order invitations, holiday cards and postcards for direct-mail advertising.

Chan said those decisions helped the company avoid extinction.

“I believe that if I hadn’t come back, we would have closed shop,” he said.

Generational differences

After arriving in the U.S. from China, Chan’s father, Charlie, saw entrepreneurship as the best way to achieve the American dream without a formal education. He started Charlie Chan Printing in 1979.

But the father wanted a better life for his son. Pushed by his family, Hamilton Chan graduated from Harvard Law School. He worked as an investment banker for JP Morgan in New York and Hong Kong, and later became legal counsel for business affairs at MGM Studios.

But he struggled with a growing desire to run his own company and finally decided he wanted to take over the family business.

The reaction of his parents to his decision was excitement, pride – and discomfort.

“They had groomed me from a young age to be a professional, and to see their child grow up and then embrace this entrepreneurial volatility is something any parent would struggle with,” he said. “But to me the issue wasn’t volatility, it was expressing my desire to run a company.”

Ernest Doud, president of business succession consultancy Doud Hausner & Associates in Glendale, said that would be the key to a successful succession – and turnaround.

“So long as this young man came back because he wanted to – and not because he was expected to – it bodes better for the company,” Doud said. “Also, it helps that the younger generation is more comfortable with technology and has a greater tolerance for risk.”

Chan was able to change the corporate culture and take on debt because of his new status as majority shareholder in the company. But he didn’t want to take his father’s name off the business, even though it’s associated with an Asian stereotype due to the heavily accented movie character of the 1930s.

Instead, he gave his new Web site a completely different name, PaperSpring.com.

Since launching in March 2009, sales at the site have grown 73 percent per month. Chan plans to grow PaperSpring’s revenue to equal those of the printing business, a milestone he hopes to reach in two years. Eventually, he wants to spin off the site as a separate company.

Like his father, Chan believes entrepreneurship today is still the best career choice.

“I was surprised at how natural it felt and how much I enjoyed being an entrepreneur,” he said. “It was gratifying to see I liked my job from day one, and now I couldn’t imagine myself happier doing anything else.”

Charlie Chan Printing Inc.

Headquarters: Hollywood

Founded: 1979

Core Business: Commercial printing for ad agencies and corporate marketing departments

Employees: 31 (same as 2008)

Goal: To spin off an online printing division into a separate company

The Numbers: The Web site’s revenue is growing 73 percent per month.

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