Any concerns that the American entrepreneurial spirit may be waning are dashed after spending an hour with Dru Riess and Ray Salinas of McKinney-based Popular Ink.
These two have taken a flexible-graphics printing company that was sinking fast and transformed it into a burgeoning success in just five short years. Working from a 10,000-square-foot warehouse in a quiet patch of McKinney’s northern reaches, President/CEO Riess and Executive Vice President/CFO Salinas have authored a remarkable rags-to-riches story.
Flexible-graphics printing, the eye-catching art on sports drink and nutritional supplement packaging, and much more, is a $29 billion industry in the United States alone. And Riess and Salinas have mastered a method that positions them to get a nice slice of it, with several Fortune 100 clients now in their stable.
“We could write a book about this,” says Riess, 29. “It’s crazy.”
In 2007, the company, then known as Flex-Pac, was turning about $35,000 per month in sales while mired in $400,000 in debt. Today, the Popular Ink team has stabilized the business and positioned it for significant growth for years to come.
Salinas majored in biomedical engineering at Louisiana Tech, with core concentrations in both mechanical and electrical engineering. Riess has a business administration degree from the University of Cincinnati. He majored in entrepreneurship.
Derek McAllister, 36, Popular Ink’s first press operator and now Director of Printing, says Salinas and Riess make a formidable team. “Dru goes after it aggressively and Ray kind of analyzes it. You need those two types of minds to build a business.”
The Move To Texas
Riess first heard of the struggling company through Salinas when they were roommates in Colorado, working their first corporate jobs after college.
Unhappy with corporate life, they started a software business on the side. Salinas decided to move to North Texas for another venture when he met Flex-Pac’s owner in McKinney. The owner asked Salinas if he knew anyone interested in saving his failing company and Salinas referred him to Riess, who was intrigued.
After research and meeting with the owner, Riess guaranteed him a turnaround and offered to get the company out of debt in exchange for ownership.A “sweat-equity” deal, signed on a napkin.
Why was Riess so sure? “I saw the books,” he says. “There was no reason why it should go from [$18 million in sales] to 11 to 7 to 1 to nothing.” Riess had also seen the names of prestigious former clients.
With no printing background, Riess visited prints shops around Dallas-Fort Worth and across the country, even touring China, Singapore and Thailand, where much of the industry’s technology originates.
By May 2008, Riess had convinced Salinas to join him at Flex-Pac in a straight 50-50 ownership proposition.
All Flex-Pac employees, except McAllister, were let go the first year. Early on, the company survived on credit cards. “At first, it was pretty uncertain,” McAllister says. “You didn’t know what was going to happen, but you took it one day at a time.”
“We started kind of huffin’ and puffin,’” Riess says. “It was Derek and the two of us. … We didn’t have enough sales to cover our overhead, electricity bills, anything.”
Cots were set up in the office and Riess and Salinas slept there – for weeks at a time. Work weeks ranged from 80 to 120 hours.
Once, while they were painting the factory area, sprucing up for a big client, Salinas looked at Riess and said, “Man, you’ve got to go home.”
“My nose was bleeding,” Riess explains. “I had been up for like 72 hours.”
Riess’s sister Karen, 24, came on board as Administrative Manager last year, after foregoing law school, for now. “I thought they were crazy,” she says. “Now, I’m glad I came.”
When Riess first took over, he had one client – hanging by a thread. He flew to Salt Lake City and convinced them to stay in what he calls “the Game Seven of my life.”
“I even shed a tear,” he says.
“What we tell any purchasing managers who want to work with us,” Salinas says, “is, ‘You’re not talking to the salesmen. You’re talking to the owners. So if you need something done, we can get it done.’”
To wit: When a malfunctioning press knocked them off schedule for a Wisconsin delivery, Riess and Salinas loaded a pickup and drove all night to make the promised drop-off.
Salinas once put $9,000 on his personal credit card when a vendor wanted pre-payment for materials for an order that was critical to make payroll. Salinas also waited tables for 19 month at the former Poppy's in downtown McKinney to make ends meet.
"The position we found ourselves in is we had a nice balance of clients," Salinas says. "We had a few mainstream, well-known brands, and then at the same time we did a lot of business with multi-level marketing companies. What usually drives [things] in a down economy is multi-level marketing companies, because people are looking for ways to supplement their incomes."
“We have not felt anything from the economy,” Riess says. “We were just in the right place at the right time. … We’re not that smart.I think everything just happened the way that God intended it to happen for us.”
Speaking of God, they once received a $6,000 check from a client for no apparent reason. Riess tacked it to his wall to sort out another Day. Months later, as another payroll crunch loomed, Riess eyed the check.
Calling the client, whom he’d never met, he learned they’d sent a check early, while finishing some late artwork, thinking it would speed the process later. “Somebody was helping us throughout this whole thing,” Riess says. “What are the odds?”
The two designed their own quoting and cost formats, and trust them completely.
“We know the cost of every latex glove [employees] put on,” Riess says. “That’s how we built this company. We started with one account and we started building our cost structure from there.”
A 2010 incident proved their formula to be solid. A large account wanted an art-design change and claimed another company could do it for less. Riess and Salinas didn’t see how, but stuck by their numbers.
A month later, that client called to say the other bid was erroneous and asked to come back. “That testified to the point right there that we know our business,” Riess says.
Salinas notes they’ve built in minimal profit margins to grow business volume and keep their machines running. “If our machines are running, we’re making money,” he says.
A Full Board
During a factory tour, Riess explains the company’s so-called “J.I.T.” flow: “We’re just-in-time. Our material shows up, we produce it and we bill for it. We’re not sitting on inventory, tying up our cash flow.”
The production schedule board, once listing one job per week, is now booked full. The plant runs around the clock – three shifts, six days a week, with Sundays off.
Automation is key to Popular Ink’s speedy two-to-three-week order turnaround.
Environmentally safe, water-based inks are kept fresh and color true with pumping systems. Up to 10 colors are used on a variety of packaging, from stick-packs and stand-up bags, to pouches and shrink-sleeves. The material used depends on what’s going in it – a liquid, powder or gel.
All raw materials used by Popular Ink are manufactured and purchased in the United States.
Riess says he and Salinas hope to build Popular Ink into a national brand. With 13 current employees, they plan to add 15 more in the next two years. They also foresee subsidiaries budding from the “Popular” brand.
Their new 24,000-square-foot McKinney facility at 2040 Redbud, near U.S. 75, features a 32-inch press – twice the size of their current machines – which will allow Popular Ink to tap a new market segment.
Riess and Salinas offer this advice to struggling entrepreneurs: “I would not look at the ‘big picture,’” Riess says. “If you’ve got $400,000 in debt, don’t stare at that. That’s not going to help you today. What is it you’ve got to do today to make sure those lights go off and, tomorrow, they come back on?”
Salinas adds, “I would ask, ‘Do you really believe in what you’re doing?’ Don’t sugarcoat it, because if you do, it’s not going to make it.”
Visit popular-ink.com to learn more.
About the Author: Rick Atkinson is a former U.S. Marine Corps helicopter pilot and commercial airline pilot who lives in McKinney with his wife of 23 years, Debbie. He is a freelance writer and cartoonist.