The Pitfalls of Starting a Sign Business, Part I
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2015 Ad & Sign Shanghai China March 11-14, 2015


The Pitfalls of Starting a Sign Business, Part I

The sign industry is probably one of the most stable businesses to get into. You are not selling widgets, but rather a custom made product that fits the needs of your client. Like any other business, the sign business has its ups and downs and is affected by the economy, weather conditions and location along with many other factors.

By Daniel A. Keegan

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.

2015 ISA Sign Expo in Las Vegas Nevada April 9-11, 2015

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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
    The most crucial part of starting any business is to have a plan. Without one the old adage comes to mind, "Failure to plan is a plan to fail." Doing the best research into the business, planning your marketing, startup costs, time until you can draw a paycheck and sources for buying equipment and supplies are just a few of the many items that need to be in your business plan.

    Capital
    It takes money to start any type of business, whether home-based or storefront. Stop and think about what is needed, such as: equipment, software, computers, supplies and marketing materials just to name a few of the items. Realistically, a home-based operation can get started with a few thousand dollars, whereas a storefront operation takes more. We will go more into depth on this subject later.

    Artistic Ability
    I believe that everyone has some artistic ability, whether they use it or not. In the sign business a person is not always typing in a simple line of text. There will be many times at which you will be required to re-create a piece of artwork or develop a work of art from scratch. You have to be able to listen to the clients needs and translate that into an idea and then onto paper for the client’s seal of approval. Having the ability to visualize, in your head, a project from start to finish is a great asset.

    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
    How are your skills at dealing with others? If you are looking into starting a business, then keep in mind that you will be interacting with all types of people with a variety of personalities. A smile goes a long way with a potential client along with being attentive to what they have to say. Not everyone has these skills, but they can learn. How you present yourself can make or break a deal. You might even want to perform a test run on family or friends. Get their input and try to make improvements wherever possible.

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    Business Sense
    As a small business owner you sometimes have to be an accountant, marketing director, production manager, secretary, designer, sales manager, supervisor and lawyer all in one. You will need to develop your skills in each area if you plan on being successful. Profit margins are critical to any business, including home-based operations. You have to set goals for the growth of your business. Where do you want to be in five years? Can you deliver the finished product on time? Can you produce a quality product? Most importantly, was the client satisfied?

    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.

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    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
    The world revolves around, “how soon can I get it!” The need for speed has made computers a necessity in our lives, which includes the sign business. You will need to have a very good understanding of computers and software. Typing skills, along with accurate spelling skills are a must. The one and two finger typist can manage, but time is money. So the longer it takes to type a layout, proposal or invoice, the less time there is to work on other projects.

    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
    Patience is another plus in the sign business. Since a majority of your products will be based around die-cut vinyl, somebody has to weed that vinyl. Intricate designs and small text with serifs seem to take forever to weed. You might get the impression that certain items take just a few minutes to produce. Think again! Even the simplest of things usually take two to three times longer than you would expect them to. Rushing a project usually creates mistakes that can cost a loss of profit.

    A willingness to learn
    Above all else, if you have the willingness to learn, then the above listed items can be overcome. Even those that have been in the sign industry for numerous years learn new tricks of the trade as time goes by. They could not get to where they are today if it was not for the ability to learn more about their profession.

    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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