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![]() The Pitfalls of Starting a Sign Business, Part I
When you look at the history of the sign industry and you see those companies that have survived for 20+ years, you have to stop and wonder how they lasted so long. Whether we are in a recession, depression or strong economy, people need signs to promote their business or product. I have heard this more than once, but when a business starts...they need signs and if they go out of business...they need signs and when another business moves into that vacant location, the cycle starts over.
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The sign industry is not for everyone! If you intend to break into the sign industry the first thing that you have to ask yourself is WHY? It may sound easier than it really is and of course you can make an honest living at it, but there are so many things that people tend to overlook when getting started, which could very well cost you your life savings. This is true of any startup business though. Do you have what it takes to start a sign company? There are no “official” prerequisites to start a sign company. Technical schools and colleges do not teach SIGNS 101 and you must have the desire to learn as you go and to be successful. The following may provide some insight as to what should be some prerequisites before attempting to start a sign company:
Start With A Plan, Not Just an Idea
Capital
Artistic Ability Another issue that always pops up is color. You will not be dealing with just black & white. Your ability to match or get as close as possible to colors and to use various color combinations is a big plus. Some clients may be satisfied with a single color, but most will expect the pizzazz that only multi color art can provide.
People Skills
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Business Sense Do you have a niche market or are you thinking of a general client base? A business with a niche market seems to go a long way in a short period of time, but it does not last forever! Are you flexible enough to look into new ideas? How much competition are you going to be faced with? Who is the nearby competition and are you going to be able to provide a service or product that they cannot? All of this can play a big factor in your survival.
Consider this: a home-based business can generally make a greater profit margin than a store front business, due to the fact that it has lower overhead. The profits may be better, but the volume is lower too! So, would it be wise for the home-based business to drastically undercut the competitor’s price or the going rate for that area? I don’t think so. If that home-based business has plans to eventually have a storefront operation, the destruction of the market through price wars may occur. The price has been set to a new low and raising prices in the future may be difficult. So when that home-based business finally goes for the store front, it cannot make enough profit to survive because they were pricing products based upon low overhead instead of a reasonable competitive rate. Being considerate of your competitors may have its advantages to your business and you never know when you may need a favor or a job.
Computer Knowledge Because of the fact that you will be using them day in and day out, you cannot have a fear of computers. Computerized accounting and Point of Sale, design and/or vinyl cutting programs and word processors, all point to the need to possess computer skills. These days it is a must to be Internet savvy, because clients want to email files and bid requests.
Patience
A willingness to learn Start with a solid, well thought out business plan. Remember, the failure rate for new businesses nationwide is extremely high. A good business plan can point out potential problems and open your eyes to success or failure. Think things through, use caution and you can succeed!
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