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Snapshot of the Sign Industry 3rd Quarter 2006
By Johnny Duncan
While this small sample does not represent a scientific study, it does give us a starting point in determining how the sign industry in the United States is growing. We specifically wanted to find out three things:
It has been stated that some people use statistics like a drunk uses a lamppost: more for support than illumination. We are not including obscure percentages nor are we including charts and graphs to impress in this series. We simply talked to some folks who are manufacturing, selling, and installing signs and asked them some general questions about their business in order to give our readers a feel for what others are experiencing.
At the end of this article, you will find a contact email to give your input, if you like, about your business growth, obstacles, challenges, as well as any trends you see or predict that will come in the near future. We will use your responses in upcoming articles for this series.
We asked five companies from different areas of the country if they experienced more growth in the past year.
Bill Ewbank, Director of Operations for American Signcrafters, Bay Shore, New York, states that his company has seen a growth in business in the past year. “We are up about 200% in national sign programs and bank merger conversions.” American Signcrafters is a national sign company that offers full manufacturing, design and installation. “Large NYC developers are also up about 100% in renovations and re-branding sign programs. Local small business percentage remains unchanged.”
According to Randy Souther, General Manager of SignArt, Charlotte, North Carolina, business is growing there as well. “Our business has grown about 15% over the last year.” And Brent McKinnon, General Manager of Graphics House Imaging, Muskegon, Michigan, says that Graphics House goal was to experience a 25% growth in 2006 and they are currently on track.
MaryJane Shackelford, of Barnes Advertising in Zanesville, Ohio states, “We have seen a positive growth in our business within the past year. Our gross sales are up about 7% over last year!”
Scott A. McDaniel, President of Cajun Signs, Ville Platte, Louisiana states, “Due to two hurricanes that hit Louisiana last year we have been extremely busy. It has been kind of hard to gauge, but we have experienced some growth. We have taken on new clients and expanded our product line with new items. We also hired new personnel to handle the overflow. We are looking to 07' to be a banner year for us. We expect to purchase some new equipment which should help in speeding up our delivery time.”
Not all areas of our industry are experiencing growth. Many factors such as location, business model, unmarketable products, labor resources, etc. affect growth potential.
“We have not had to deal with this issue yet this year. However, there are a couple of areas that are looking at re-doing their zoning codes. It has been my experience that when zoning codes are re-worked, it is never good for the billboard company. This is why we always try to maintain a relationship with the zoning entities in each of our markets. By developing relationships we can at least have dialogue. This dialogue helps maintain a presence in each of our markets and allows the governing entity to regulate but not eliminate outdoor advertising,” states Shackelford.
Bill Ewbank as seen “very minimal impact except for an increase in time spent for the permitting and variance processes, research, etc.”
Brent McKinnon sees it a different way: “The tougher they get the better we do on the digital side of our business. In the age of tough sign ordinances, TIVO, & satellite Radio, businesses are looking for alternative forms of advertising. On the digital side we are producing more vehicle wraps, mobile billboards, and banners than ever before.
Digitally printed flex is continuing to grow, and commercial signs are more creative and the impact is full because of the tough ordinances. In general, we feel business owners (our clients) are starting to be more conscious of their signage than ever before. What should be there primary form of advertising is starting to get the respect it deserves.”
“We are located in a small town in the south; we really have no ordinances to speak of. Only when we install in larger nearby cities do we run into any sign regulations and so far it really has not presented any problems to speak of,” says Scott McDaniel
Some sign companies are able to manage their projects well by factoring into the cost of the job the hassles created by adhering to sign regulations. Some, like McDaniel, are not bothered by sign ordinances because of the location of the business and where the work is performed. To Randy Souther of SignArt, “This really has not been a factor.”
In addition to sign regulations, sign businesses are sometimes struggling to find and retain a good labor force. Finding qualified employees, which includes a good skill set for the position, good communication skills, and reliable, dependable people, is becoming a major challenge for many sign companies.
Randy Souther is “having difficulties finding new experienced young employees,” but for Brent McKinnon, “the labor pool is vast. We have had very good luck finding talented people.”
To Scott McDaniel, “Our labor force had been a BIG problem for us. I never realized how many people out there cannot even read a ruler. We have a large problem with a lack of skilled labor or trainable labor. They are relatively no sign industry experience personnel available in my area. The last time I advertised for a position I had to put an ad out nationally and hope I could find the right person who was willing to relocate to my area. I foresee this trend continuing for some time to come.”
“We are a Union shop, so our requirements and standards remain pretty constant; it is sometimes difficult to fill positions from the labor pool available,” adds Bill Ewbank.
Finally, MaryJane Shackelford says that they continue to struggle finding individuals who are willing to work outdoors in the elements as well as high off the ground.
Higher energy prices have also caused slower growth in some businesses. “Higher energy prices have increased our prices for service calls and some of the products we sell or use in producing them. The higher prices have made our prices increase and have had a few clients beg off new or retrofit and put them off until later,” says McDaniel.
In regards to the higher energy prices, Randy Souther said, “We are trying to buy more in bulk just to save some money.”
The other companies said that the increase energy prices have had little or no effect on them.
“The Digital Display will definitely have the biggest impact on our business in the next five years,” notes Shackelford.
Bill Ewbank believes that “LED technology will continue to push neon aside, and digital technology will take on ever more importance,” and Brent McKinnon thinks that, “the alternative advertising coupled with the amount of digital printers will just increase the market. Energy cost will continue the growth of Flexface sign and that LED will be as common as a light bulb.”
Randy Souther says that his company is “looking more towards purchasing a large format printer or flat bed printer” and creating their own trend toward growth in the next five years.
And McDaniel says, “Improved Digital printing is in my view going to be a large factor in the coming years. I think it will force a large number of smaller shops to upgrade or purchase one for their shops or be force out to be able to compete. Also, we are taking on more and more production type work for takeovers and mergers and are in the process of retooling to accommodate that increase in business.”
The future looks bright for these folks as well as the thousands of other sign companies that work hard day in and day out to cut a path for profits now as well as future success. This is but a small snapshot of the state of the sign industry, but gives hope to those just starting out and inspires the veteran to keep on trucking.
For more information on the companies included in this article, you may contact them at:
American Sign Crafters, 631-273-4800 firstname.lastname@example.org
Cajun Signs, 337-506-2091 email@example.com
SignArt, 704-597-9801 firstname.lastname@example.org
Graphics House Imaging, 800-678-4041 email@example.com
To submit your business growth, obstacles, and challenges, write to: Johnny@signindustry.com
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