In our last installment of “Mission: Control”, we discussed the various techniques and political dance steps involved with taking control of your customers and the jobs they present.
And you, as the astute, Sign Business magazine-reading professional are now indeed in complete control of your clientele base. You rule your domain! Every job coming through your door is enjoyable, creative and best of all—profitable. And that work is indeed rolling in. It can be overwhelming at times. Being too busy in fact, can ruin your brain, business and bank account.
CONTROL THAT WORKLOAD
There’s a trap that’s easy to fall into. You don’t want to address “more work” with “working more”. It’s easy to say that working nights and weekends is justifiable when you have that much work, but think about this: If you were at a typical 40 hour per week job, you’d be paid an “overtime” differential for anything over 40 hours. Most sign and graphics shop owners are working in excess of 40 hours each week as it is, but to come back to the shop after dinner or on a weekend, you have to ask yourself two questions:
One. Are you putting in those extra hours because there was more than 40 hours worth of work to be done, or is it because you “didn’t get to it” during the course of the week, due to interruptions, lack of organization or scheduling issues?
Two. Is the job that you’re working on “after hours” paying overtime? Are you generating the typical “time and a half” labor rate? In other words, are you getting $1,200 for this $800 van lettering job? In either case, it’s obvious that you’re not running a sign shop. It’s running you. And, while “scheduling” is an easy-to-blame scapegoat in these situations, it actually can be the result of scheduling issues combined with less than stellar management of time, delegation and even inventory. Now, that’s not to say that you won’t have to occasionally put in a few extra hours to finish one of those “last minute” jobs for a regular customer.
We have a “policies” sign in our shop office that states, among other things, that “deadlines of fewer than 10 working days are subject to upcharges”. This doesn’t mean that I always charge extra for rush jobs, especially for a regular customer. But at least I can point this out to the customer if we’re really, really backed up in the shop and someone wanders in looking for “something quick and simple”. This policy at least adds a little margin to the otherwise unprofitable “quick and simple” job. On the subject of “rush jobs”, I have a steadfast policy that I will not provide rush service the first time I work with a new customer. Often, they need something in such an unrealistic time frame that their “regular” sign shop told them to take a hike. And, realistically, isn’t it usually those fast, easy jobs that most often go awry? And, a problematic quick turnaround job is no way to begin a successful business relationship.
I get into a lot of sign shops other than my own. One practice I see all too often, is one in which the shop personnel discusses the job with the customer making notes on a work order, and adds that work order to “the pile” of work orders, or to the clipboard. This would all be fine if subsequently, the allotted time for that project was added to an ongoing schedule. We have a computer generated schedule that Paulette (my wife, partner, shop manager, brains-of-the operation) keeps updated. This production schedule—generated daily or as new jobs are added to the queue—shows not only the due date, but also shows materials required, if those materials are in stock, if the job has been started, and even references of any file names for patterns, cutting or printing.
Now this all sounds complicated, but once you set up a system, whether on the computer or a chalkboard, the three to five minutes it takes to add the job to the production schedule will save you hours and even days of waiting for sheets of aluminum, quarts of paint or 10 yards of the ugliest brown vinyl ever manufactured.
While we’re on the subject of waiting for materials, let’s talk about maintaining an inventory. Every business needs to maintain some level of inventory. Plumbers need fittings, restaurants need potatoes and even doctors need to have those rubber gloves on hand (okay, yes, pun intended).
You shouldn’t have to call your sign supply distributor every time a job comes into the shop. If you’re a vinyl oriented sign shop, you need to keep, at the very least, the “basic” colors on hand. We use plenty of that sticky stuff, so we keep the common colors—red, yellow, blue, gray, black and white—in stock in 50-yard rolls. Additionally, my two biggest tow truck accounts both depend on Vivid Blue and Olympic Blue. I rarely go two months without hearing from one or the other, so those two colors are bought 50 yards at a time. Above and beyond that, we keep about 60-70 other colors on hand in 10-yard rolls. More often than not, I can produce most jobs with the vinyl I have on hand.
Another inventory concern should be substrates. We’re a busy, but not insanely busy shop. I tend to keep several 4'x8' sheets of white and black aluminum, a half dozen white expanded PVC sheets, some MDO and Nudo Board. We still hand letter and stripe almost daily, so a well-stocked 1 Shot cabinet is a must. Add to that plenty of application tape, roller covers, masking tape and even plotter blades. And Paulette insists on having two back-up ink or toner cartridges for every printer in the shop, because basic production theories preclude that ink cartridges always run dry between 4 and 5 p.m. on a Friday. Apply this theory to your own work load. Stock HDU or polycarbonate sheets if that’s what you use.
STRENGTH IN NUMBERS
Yet another great idea is buy materials in bulk, by teaming up with other shops in your area. We regularly divide up cases of Coroplast, boxes of Step Stakes and even multiple packs of gold leaf among ourselves and a few other shops. We get better deals on the products we all use, we save on shipping, and if one of us runs out prior to the next re-order; we’ll borrow a sheet or two of whatever from each other. A really nice fringe benefit to this “purchasing co-op” is that you get better acquainted with the other sign makers in your area, and it keeps you in touch with friends.
MATERIALS FOR FREE
I apply this theory in both of our shops (in addition to the sign and graphics business, we own a fairly busy custom paint shop). When I need a certain color for a motorcycle or a stripe on a racecar, I don’t buy pints, but rather quarts. Over the course of the last decade or so, I’ve built up a couple cabinets of custom colors, pearls and candies that would make most paint supply houses envious. And, the best part: it was all essentially free. I bought 32-ounce cans of some expensive product when I only needed six ounces but the total cost of the product was worked into that respective job.
Certainly, a product’s shelf life has to be taken into consideration. Doming resin, for example, is a product we use fairly regularly, yet it has a limited shelf life. Unless we have a big job that requires more, we purchase three packs of the resin cartridges. If I have to dome some lettering for truck doors and use a cartridge and a half, I use the balance of that open cartridge to dome our BrianTheBrush.com decals that we give away at motorcycle shows. Now, I’m neither wasting the leftover resin, nor am I having to open cartridges specifically to dome our decals.
The decals, by the way, are virtually free as well, as I add those to our “legitimate” print jobs. There’s no sense in having 10" to 12" of unprinted media next to the vehicle graphics we’re having printed for a customer. I guess the point I’m making is that you want to inventory the products and materials you most often use. This way you’re not losing potential production time and subsequently racing against an impending deadline because your sign supply distributor is out-of-stock of something you should have on hand anyway.
Now, when it comes to having to order the less-common stuffâ€”specialty vinyls, or an out-of-the-ordinary substrate—here’s another good idea. Referring back to that job scheduling system, Paulette will order in the specialty materials I need a few days before production begins as opposed to when the work order is written. In this way, the lapse between our paying for the materials and getting paid for the job is minimized. This may sound petty, but over the course of the year, with tens of thousands of dollars in material costs, it does make a difference in our day-to-day available cash flow.
ORGANIZATION LEADS TO EFFICIENCY
“One of these days, I’m gonna get organizized.”
I had to use that quote, as it’s my favorite “Travis” line from the movie Taxi Driver. The fact is, nothing will increase productivity like organization. We keep an exceptionally clean shop. “A place for everything and everything in its place,” as they say. We know where every can of paint and every lag bolt is. In my substrate rack, there are pieces of masking tape on the exposed ends of all my PVC, aluminum and MDO, noting what size sheet it is. If I save five minutes every time I don’t have to pull out a scrap and measure it, clear a table to work on, search for the laminate blade for the panel saw or move “junk” off the drill press, I’m saving, quite literally, an hour or two each week. And, if your shop rate is, for example, $80 per hour, that’s the same as making an extra $160 that week.
I’m not saying that I’m some neat freak, I leave a trail behind me from time to time, but I’ll make sure the shop is clean, and everything is back in its place at the end of the day.
KNOW WHEN TO SAY NO!
A fool-proof way to start controlling your workload is to start eliminating the work that doesn’t make you money. We all get that type of job coming through the door—the project that takes a few hours or less only requires $50 in materials and the customer doesn’t need it for a few weeks. Those are the jobs that we all tend to under-price anyway. We sell those jobs, convincing ourselves that they’re “no-brainers”, for $100 or so. Once you figure out the 50 percent material cost (and that’s your cost!), the paperwork you have to generate and waiting for your money, you’re netting next to nothing. And those are the jobs that you either knocked out right away, tripped over three times, moved around the shop for three weeks and ended up touching up where you dripped paint on it. Or else you dragged your heels because it was so easy, and finished it the night before the customer needed it.
Well, you were right. Taking on that job was a “no-brainer” if ever there was one. Pass on those jobs. If you’re only going to make 20 percent on a job, don’t waste your time on a $100 job; make 20 percent on a $3,500 project.
WHO’S ON FIRST?
Two things that almost all great businesses managers have in common are their ability to properly delegate responsibility and to surround themselves with quality people. Even the smallest of sign and graphics businesses can take advantage of both skill sets. In terms of delegation, that can mean anything from having someone else in the shop handle given procedures to subcontracting.
If your own strength is in design or sales; then relegate someone else to cutting sign blanks to shape or size, or coating out panels. If you employ a good designer, let them do what they do best and maybe you, as manager or owner, should be pushing the broom when need be. The same applies to subcontracting services. You may not have to contend with the purchase price, learning curve or maintenance of a large-format printer if you can outsource that work to another shop. Routing, sandblasting, gilding, and even installations are often handled more efficiently by someone who does that work more often—and let’s call a spade a spade—better than you do. Sure, you’ll surrender a few points in your profit margin on that job, but it will be completed faster and better, all while you are working on something else that makes you money.
Back to scheduling for a minute. As you’d guess, trying to stay on top of things in the sign shop as well as the custom paint shop (not to mention the clip art business, business travel, seminars, and let’s not forget my journalistic endeavors), it’s really easy to find myself scheduling four and five weeks out pretty often. While that offers a certain level of confidence and security, it’s not something that your regular customers want to hear.
A practice we started incorporating into our scheduling a few years back is to build in a hole every couple of weeks. So every second Friday, we don’t schedule anything. This eight-hour “void” allows us to accommodate those projects that come in at the last minute from our “regular customers”. When Monroe School Transportation calls (for whom we letter 50-75 buses annually), they don’t want to hear “four weeks”. They get slotted in on that alternate Friday. Otherwise, that Friday gets filled with tying up loose ends, catching up on things around the shop or going to lunch with one of my friends in the trade. (Yes, the people that you subcontract to do your digital printing, routing, and installations do indeed deserve to be treated to lunch occasionally.) And, should we be completely caught up, cleaned up, and nobody is available for lunch, we can be found at the blackjack table at nearby Niagara Fallsview Casino.
It is after all, the end of a really productive, profitable two-week span. And a person can only stand just so much control.
Keep on Keepin’ on.