Unlike most of these Shop Talk articles, which usually cover hands-on techniques of the sign business, a few months ago I took time out to talk about some of the business aspects of running a commercial sign shop that to me seem to be really important. Not being an expert on the business end of the sign industry, or any other, I did that article with some degree of trepidation. 

 

But, realizing how very important the business of “running a business” really is, and having certainly learned my lessons the hard way, there are a few more things I would like to share in hopes of encouraging those who are earlier in their career as a sign company owner/operator, and in a small way help them stay on a straight track to success every step of the way.

 

No one can succeed in business with the tools of success. It took us a while to acquire most of the equipment we needed, but there were times when we hesitated too long making needed purchases.

In that previous article, I talked about the imperative of focusing your business, finding the right niche and not trying to do everything that walks in the door. A targeted sign business will be a more profitable business. Also, we briefly took up the subject of hiring the right types of workers, and how to motivate them to produce for you and for themselves, as well as how to recognize the kinds of work that will consistently improve a sign shop’s bottom line.

 

This time we’ll look at a few really big subjects, subjects that are vitally important yet often not the center of our attention nearly enough or early enough (ask me how I know). 

 

First, let me admit how much I realize that being self-employed and running your own company, whatever it is, is a daunting task and involves a lot of decisions and a lot of risk. This is especially the case with a commercial sign business. But, I chose to be in it, perhaps you did too, and now there is no looking back, and not much time for hesitation either.

 

These tools of our fabrication shop are all good, American-made pieces of equipment, and now our attitude is once we realize we need something, the next step is to find a way to get it.

The first thing we have to admit is to succeed we have to have the tools of success, in our case literally the tools to do the job. I mention to those who take my seminars that once we have identified a device, tool, or machine we need, and we know the importance of it, right then we should start coming up with a way to get it. 

 

We have never added to our sign-making capacity by buying a piece of equipment that I later regretted. In fact, some of these decisions and purchases we tended to put off too long. So to that I say, get over it and get on with it. I did not say risk the farm, but anything short of that, just do it. Digital printer, computer software, router, laser engraver, panel saw, metal shear, welding and fabrication equipment, once you know you have to have it, you should start the ball rolling.

 

Now, what’s the biggest tool at the disposal of any commercial sign shop owner? Well, I guess it’s not exactly a tool, but in a sense it is: your physical location. The shop. The roof over your head… over my head. Oh how I wish I had understood what an important asset my location was 30 something years ago.

 

The shop above was the first one we actually bought, and only then after being pushed into action when our lease was doubling. The shop to the right is our main location today and fortunately does belong to us.

I’m sure there is room for disagreement on this, but from experience I know that if one is going to be in business for the rest of their career, owning their own location is a very important step indeed. I found this out some years ago when my new landlord, to me a less-than-ethical real estate broker, was able to buy our place when we never knew it was for sale, then doubled the cost of our expiring lease on the day he took possession. Then I realized what a slow study I really was, but I got motivated fast. The location we bought within one month was one of the best investments I ever made (though I admit to not having made very many). 

 

This was our fun, young crew a few years back, but what’s wrong with this picture? Our sign company was way too dependent on the old guy to the left.

Like many small-scale entrepreneurs, it was always very hard to set aside enough funds in an IRA to amount to much in retirement, but each month I am going to make our building payment. And in time, and more predictably than mutual funds, our commercial real estate becomes a significant long-term investment. And, as an important bonus, it gives us more control over our business future. 

 

Of course, the future, at least eventually, is that we are going to retire and sell out, simply close the doors, or maybe even leave our business to our kids. A course of events along one of those lines is certainly going to happen. But let’s assume we plan on selling.

 

I am no expert at all on selling a small business, but I have tried to learn something from a few people who are and the common sense things they say will make a business sell-able, or not. First, the business must be manageable and consistently profitable, and you must have the documentation to prove it. (In the sign business, the “manageable” part is by far the hardest, which underscores the importance of focusing the business and not taking the “shotgun” approach.)

 

Many sign businesses over the years find that they can do well and expand their opportunities by “growing sideways.” Our perspective in the local business community led us to try starting a new company only slightly connected to the sign business. This shop is the facility we built for that new venture.

Second, when you go, a staff must be left behind who can do the work, and mostly run the business even when the owner isn’t there. The business must not be so tied to the owner that it suffers irreparable harm when he or she leaves. Once I started to sell part of my sign business, but all my staff wanted to go with me, which made the deal totally impossible.

 

Thirdly, the location of the business needs to be an asset, and a secure one. This is made much more likely by your owning it and being able to offer it with the business, or at least being able to provide the new owner with a safe and reasonable lease. This can be very important and perhaps a deal maker or deal breaker.

 

A few of us may sell our company, or even keep it and grow our business sideways. What do I mean by that? Well, just that it is not uncommon, from the perspective of a sign business owner to see avenues of business opportunity in a somewhat different direction than we ever planned to go in, and that can be a good thing. It may be a venture related to the commercial sign business, e.g., large-format digital printing, wholesale or retail, industrial signs and markings, engraving, erection work, lighting maintenance, wholesale screen printing and other related ventures. Or it may be something that because of being in the game, in the small business game, we see some side venture that has potential. 

 

Some of the work at our sister company is sign related, but our CNC cutting and powder coating services are mostly targeted to the local manufacturing community.

But, the reason the opportunity presents itself is that we are involved in business already, and don’t go around with our eyes closed. For us, about two and a half years ago, we started a new company across the highway from our Rick’s Sign Co./Oilfield Signs of Texas sign business. And that company is in business to provide CNC cutting and powder coated metal finishing services to local area businesses and manufacturers. What an optimist I must be! But, after barely surviving 2009, and going forward from there, it looks like next year our gross sales at WPC may surpass our sign company revenues after just three years of operation. 

 

So, you never know. As I mentioned, an owner/operator of any small business, especially a sign business, takes on a lot of risks and must make a lot of decisions correctly to really succeed. But, that is exactly what we want to do, and step by step it can be done in this free enterprise environment we fortunately live in. But nothing is easy, and nothing is guaranteed. If it was, I guess it wouldn’t be very interesting, would it?  

 

I hope that some years from now we look back and see most of the decisions we made were the right ones, and I certainly hope the same for you. I’ll let you know how my business is going, and would love to hear about yours. 

 

Best wishes for your success—Rick