It’s a subject that is near and dear to every business. It’s the life blood that sustains our businesses and families, yet we rarely discuss it openly. Financial security can change our moods drastically. Some of the worst arguments we ever have are over money just as some of our happiest moments are the result of financial gains or windfalls. I hesitate to discuss this topic, but some of my recent experiences with supposedly reputable and large national companies compel me to share my experiences with you.

 

Through the years that I have been in business, I have granted most of my customers a 30-day credit period. For the most part, this has worked just fine. Occasionally I would have to place a call to remind a client that they were over the 30-day limit, but I never really had a collection problem. For the most part, I make signs for reputable businesses and most businesses understand the importance of cash flow. I have had collection agencies contact me many times through the years wanting to help me collect my delinquent accounts, and it gave me great pride and joy to inform them that I didn’t have any delinquent accounts and didn’t need their services. In fact, I haven’t gotten but a few returned checks through the years. I seem to average about one returned check per year. (Knock on wood!)

 

As my business started making higher-priced projects, I found it necessary to require a 50 percent deposit on orders over $1,000. This helped ensure that the finished product didn’t sit around gathering dust and, for the most part, covered my material expenses. Projects over $1,500 also were to have the balance paid upon completion, with very few exceptions.

 

These policies helped me keep finances on an even keel through the years. As a small sign business, I wasn’t getting rich or making the Fortune 500, but I made a modest living and supported my family. For the most part this was done making signs for the real estate industry and small businesses. Most signs I sold were signs that were made in my shop.

 

Only a couple of times through the years did I buy equipment that had to be financed, and I learned early to pay for materials when they were purchased. Having a low overhead has contributed to peace of mind through the years. There’s nothing worse than spending all your money and then having bills come due for materials that have already been used.

 

I have had a pretty good ride through most of my sign career until the economic crash at the end of 2007. As the real estate industry crashed, so did my business. I had to get creative in order to survive. I’ve told the story here before, but I’ll briefly tell it again. I had to switch the focus of my business from the real estate business to doing electric sign service and installation. I had a bucket truck and had done this type of work through the years, though it wasn’t my favorite kind of work. It was a matter of survival, and I intended to survive. My best source of jobs was www.signsearch.com, and I managed to survive and flourish doing this kind of work. My work ethic served me well, and I seem to keep all the work of this type that I can handle.

 

I started doing mostly service work, replacing transformers, broken neon letters and installing channel letters and raceways. As time went on, I was asked to do larger and larger projects. I installed pylon signs that required digging foundations and using cranes to lift the heavy signs into place. I took jobs that required me to hire a window washing company to remove and install a new raceway seven stories in the air because it couldn’t be reached with a crane and access by lifts was not possible. I used cranes with personnel baskets to repair signs 10 stories above ground. To make a long story short, I was continually pushing the limits of my expertise and doing well. Each success brought me more work from repeat customers and built my reputation as an installer.

 

My ego finally got the best of me and I took on a major job for a large national company that would be quite a feather in my cap and bring me more large projects. The project was for a large chain of clothing stores in the southeast. The initial job entailed changing the identity of about 60 stores, including the flagship store in the chain, which happened to be at Crabtree Valley Mall in Raleigh, N.C., where I’m located. I wanted the job in the worst way to prove that I was capable of handling such a project, and I aggressively pursued it and won the bid to do the work. The handling of this initial series of stores would determine the ability of this large national sign company to retain the project and get the remaining 200-plus store updates for the chain. My store consisted of six exterior letter sets with 8' tall direct mount channel letters and logos, five sets of interior mall letter sets and various other related interior letters and many parking lot signs.

 

The kicker was that it had to be completed by Oct. 12, no excuses. The grand unveiling of a multimillion dollar media campaign was to coincide with the unveiling of the new logo and look of the chain at the store I was responsible for. The new look was to be kept secret and we had to cover the new signs with banners to keep them from view of the public until the unveiling. The unveiling on Oct. 12 was to include the mayor and dignitaries along with television coverage of the event.

 

I planned my strategy and bulked my installation force in preparation for the upcoming project. To say I was nervous about this project would be a gross understatement. I stayed in touch with the project manager and kept asking when we could start. A project of this magnitude was going to take some time, even with the crew I had assembled. The deadline was getting closer and still no product to install. 

 

By the time we got the first shipment of letters, we had less than two weeks to finish. Seems the large national company had bitten off more than it could chew and they had placed me in a difficult situation. The six sets of exterior letters arrived one at a time, for the most part, and left me only able to use half of the assembled team most days. As crunch time approached, the company I was working for brought in their own guys to assist. Crabtree Valley Mall manager Bobby Medlin bent over backward to let us get the job finished, lending his personnel and equipment to the effort. With a last push late into the night and early morning, we finished the project. 

 

There were days that my crew sat in the parking lot waiting on the letters to show up for more than five hours and had to work into the night to get the letters installed. All said and done, the project was a success. I had gone above and beyond the call of duty to look after my customer’s best interest. This has been the basis of building my business and has served me well. The rest of this story is where my tale of caution comes in.

 

The company I was working for was grateful for the work I had done and rewarded me with two more locations. The last location was awarded to me the day before it was due to be completed because another contractor had backed out at the last minute. I took the job, which had to be completed in one day, which turned out to be a day with heavy rain. Again, I came through for the company.

 

In all fairness, I asked and received $6,000 in advance of the initial project in order to cover some of the extra labor. As it turned out to be a $30,000-plus job, this was insufficient to cover my labor expenses. The contract from this company was for payment within 60 days of completion of the project, and I would just manage to cover all my obligations until the payment came. 

 

One of the drawbacks to working for other sign companies in our industry is that many of the larger ones have a policy of paying on a 60-day schedule. They are larger and can give an installer a lot of work, but you are required to play by their rules. As a general rule, most companies abide by their contracts and you know going in whether you can live with their terms or not. Unfortunately, this was not the case with this project. 

 

I started calling ahead of time to make sure I would be getting paid on time and in talking with an anonymous source within the company was told of how getting paid would go. This source told me that I would be confronted about the expenses and then told that they only paid twice a month and my invoice had missed the cutoff. Checks would be cut on a Thursday, and by the time they were signed they would be sent out the following Tuesday. These predictions came true and 60 days would be closer to 90 days, and this in appreciation of an outstanding job. The first check was not honored by the bank, and so on it went.

 

This is not the only bad experience I’ve had with a large national company lately. Another large company here in North Carolina that I’ve done a lot of work for has recently had financial problems and last week I had to threaten to place a mechanics lien against their client because $3,500 was owed to me and was approaching 120 days. Calls to accounts payable were not being returned until I was going to place the lien. That check was put in the mail the same day.

 

It’s a shame that you can’t rely on companies in your own industry, but that’s the way things are in this economy. You will all have to make your own policies and decisions about who you’re going to do work for, but as for me, there are two large companies I won’t be doing work for any time soon. Other companies that have a 60-day pay policy are receiving a closer look by me this year as well. Until next month, may your collections be plentiful and on time.