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Please don't hate me for being too sarcstic or political, but given enough time, the dollar will devalue to where even part time shops are making 100 G's.
Seriosly though, NO. Not quite.
-------------------- James Donahue Donahue Sign Arts 1851 E. Union Valley Rd. Seymour TN. (865) 577-3365 brushman@nxs.net
Democracy is two wolves and a lamb voting on what's for lunch, Benjamin Franklin Posts: 2057 | From: 1033 W. Union Valley Rd. | Registered: Feb 2003
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$95,282 as of today. I hit 100K the last 2 years & I can not say too much about cash jobs in a public forum... but some of them are a little hard to keep track of sometimes I cruise in after 9 or 10 most days, & spend at least an hour more then I need to on this board every day... but I finished an install at 6pm & had a client wanting a rush van graphics job for tomorrow, so I met with him for an hour tonight... need to spend a few more hours tonight doing up some photo mock-ups & have to come down tomorrow at noon to finalize the design & measure his new truck. I just designed his logo & will be doing 3 trucks, but he has a photo shoot scheduled for Sunday at the beach with all his new kayaks & needs one truck lettered right away.
Sorry to drift off topic there, but my point is, I have become quite a slave to this business to do 100K in sales. I am 99% a one man shop, but my wife has helped one or 2 days a month when the weeding stacked up too much. I also pay her to come on installs sometimes to do some help I don't really need because i never see her otherwise. I'm not complaining & am pretty happy about how things are, but wanted to be honest about the sacrifices I make to hit that mark. Without a doubt, after lazy mornings, letterville breaks & other shop goof-off time, I'm sure I still average over 50 hours a week to make get that much work out.
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Doug......thats good to hear, right on. Very interesting too. Your work style is similar to mine, however I have not been spending much time here in Letterville. I spend the weekday mornings with my daugther, so I don't really get into gear until about noon. I don't have a significant other or any hired hands, other than the odd job.
I just hit $97480.00 as of today.(yes sales)I'd say we're on par.
I probably work 40-50 hours a week depending on the season.
At one point I thought 60-70 thousand would be my yield point, but every year for the past 5 years my sales have increased substantially and it doesn't appear that it will let up. The economy is good and the opportunity/potential is great.
I think I need help..........thats my next post.
-------------------- John Martin Robson Pendragon Signs & Graphics Yellowknife,NT,Canada
if it's not one thing.....it's two things Posts: 261 | From: Yellowknife, NT, Canada | Registered: Aug 2000
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I hit the $110K mark in sales a few years ago and remember well what "being a slave" felt like.
Little sleep, long work hours, and a very bad attitude by the end of the day. (Stressed out to beyond my limit.)
In the long run, despite the money, it had higher costs to both my health and personal life.
The $100K one man shop is possible if that is the goal you set, and more power to you should you achieve that goal.
For myself these days, the greater goals are to enjoy my time at work and set aside time to enjoy those other things in life that I find happiness in. (especially beatiing the tar outta my drums... )
Off playing with my inner child...bye bye! Rapid
-------------------- Ray Rheaume Rapidfire Design 543 Brushwood Road North Haverhill, NH 03774 rapidfiredesign@hotmail.com 603-787-6803
I like my paint shaken, not stirred. Posts: 5648 | From: North Haverhill, New Hampshire | Registered: Apr 2003
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""Good judgment comes from experience; and a lot of that comes from bad judgment" - Will Rogers Posts: 3486 | From: Beautiful Newaygo, Michigan | Registered: Mar 2003
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John..If you mean gross income...yes, I have hit it a couple of years ($120-140K each). As the result of a single large contract in each year.
(Thank you valued customer!!!!!! )
I don't know if I could handle it every year though. My butt was dragging for a long time after each of those contracts.
Average year for me is $60-80K.
-------------------- Dave Grundy retired in Chelem,Yucatan,Mexico/Hensall,Ontario,Canada 1-519-262-3651 Canada 011-52-1-999-102-2923 Mexico cell 1-226-785-8957 Canada/Mexico home
Some people here do this much on one invoice, it's like asking 'how big is a 2 bedroom house?'
Physical and mental stamina of 30something and a burning desire to push one's limits! How many miles of brush strokes did you lay last year? And what about all this boat lettering cash? Any endeavor has it's own set of rules and the knowledge you gain as you ply your craft becomes experience that allows you to operate in an ever more efficient manner. More important is the question of revenue generated vs energy expended.
One thing's for certain- if you are bustin ass hard enough to do six figures, you are livin with it, baby. So, then what is doable for you and how long can you live comfortably with it? For me, when a business is going warp speed, it's like a big screen display right behind my forehead, aimed at my mind's eye-- planning, planning, planning. Fatigue will set in if not managed properly- efficiency is king.
It helps to be in a market that has a supply of potential repeat customers with healthy budgets. High volume jobs can help the batting avg.
Over a four year span in the mid-90's, as a retail sign shop I estimate with cash jobs thrown in, 80-120/yr with the occasional helper. Back in late 70's my numbers were much bigger, but that included wonderful world of advertising, where one could actually be paid for design and typography. Anything was possible with a phototypositor, process camera, opaque projector and letraset catalog. but I digress...
I'll just be over here, playin ...
-------------------- Jay Nichols ALPHABET SOUP
~the large print giveth and the small print taketh away~ Posts: 176 | From: SW Florida | Registered: Mar 2002
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Been there, done that, but never again! Just not worth it!!!!!!!!
Back before computers, I was approching those numbers, (would have been well past that, with today's inflation),BUT I was averaging 15 hours a day! That's a LOT OF BRUSHSTROKES...and nearly ruined my health.
Getting up, going to work, and back to bed, late at night, is not a very good lifestyle! I thoroughly enjoy the sign biz, but I also enjoy doing other things too!
-------------------- Si Allen #562 La Mirada, CA. USA
(714) 521-4810
si.allen on Skype
siallen@dslextreme.com
"SignPainters do It with Longer Strokes!"
Never mess with your profile while in a drunken stupor!!!
Brushasaurus on Chat Posts: 8831 | From: La Mirada, CA, USA | Registered: Nov 1998
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Closet I made was 85k but I agree with the work to death Im hoping to get this new shop to around 55k to 60k a year.. Comfotable range and can screw off without feeling guity...
How about "work smarter...not harder"? I realize that this is a bit of a cliche, but bear with me...
I don't know enough specifics about each of your respective businesses or business skills...so it's important to understand that most of what I am about to say is based on general observation and experience in serving the sign industry at large.
For starters, sales of $100K per employee (in this case there's only one) is about average, in my experience. Very successful shops are typically in the $150K per employee range, but this is more rare in one-person shops. I think it important to stress that $150K per employee is a realistic goal, however.
That being stated, sales revenue is only one measure. As Rick's experience is demonstrating, you can work like the devil to grow sales --perhaps offering discounts in the hope of building volume -- and still not come out ahead. What's worse(?) is that you still have to produce all of the extra work to support those sales without gaining any benefit. Ultimately, more sales revenue is not a good reward for extra time and effort...only more net profit is.
I think the real question to be answered, therefore, is "How can I make my business more profitable". I know that -- from me -- everyone is expecting a punchline like "Get yourself a Gerber EDGE"...but even I don't believe that simply buying a new piece of equipment and learning to operate it efficiently is enough to ensure your success.
The answer, my friends, lies in strategic marketing....
The typical commercial signshop nets a profit in the range of 10-11% of sales. I firmly believe that by implementing proven strategic marketing practices, the typical commercial signshop can increase net profits by 50%...but only if the signshop owner(s) are prepared to commit to the process.
Strategic marketing isn't a "magic pill"...it requires discipline. If you don't have the necessary discipline but want the results, hire someone with the knowledge and skill to help you...a strategic marketing consultant.
Strategic marketing requires that you develop a strategic marketing plan...and a strategic marketing plan requires that you begin with establishing "SMART" Strategic Goals and Objectives.
Strategic Goals are long-term...say 3 years out (or more).
Strategic Objectives might be defined as "smaller" goals that bring you incrementally closer to achieving your Strategic Goals.
"SMART"is an acronym...
Simply stated and Measurable Strategic goals and objectives must be quantifiable to be measurable...Sales revenue in dollars, gross profit in dollars and/or percentage, net profit in dollars and/or percentage. If they're quantifiable and measurable, you can manage to them.
The "ART" in "SMART" is that these Simply stated and Measurable goals must be Attainable within a Realistic Timeline. Setting unrealistic goals and objectives defeats the purpose. A timeline is an essential discipline.
As you're developing your strategic goals and objectives, don't become too hung up on getting them right, right off the bat. Successful plans evolve. They're dynamic. They're adaptable to unforeseen change. The important thing is to have a plan, to keep it SMART, to review it and measure your progress often.
Once you have "roughed in" some strategic goals and objectives, there are a variety of proven, successful marketing strategies, tools and tactics that you can consider implementing...
Market Analysis...
Everyone's heard the term "market segments", right? Segmenting the market is a way of breaking it down into smaller, clearly defined categories (segments) in order to make analyzing (and understanding) the market easier. There's no right or wrong way to do this...as long as you are seeking to understand your opportunities or relative fit (or some other purpose...like improving your overall profitability) within certain segments.
Segments are most often groups of customers with common needs or interests but can be defined by other means such as product/market application. Segments can be analyzed (and understood) with further segmentation.
Start with what you know -- your own customers (sales analysis)
For example: You might start with classifying some of your customers as "commercial" and others as "industrial" to see if you can determine if one segment is more profitable than the other...in order to focus your resources on the target group that offers the biggest bang for the buck. Within both "commercial" and "industrial" you might segment further by the types of businesses or by the size of business (1-5 employees; 6-10 employees, and so on). Which of these segments are more profitable? Why? Which are less profitable? Why?
Good market analysis requires asking a lot of questions in order to find some direction from the answers.
Narrowing your Niche...
The first tenet of strategic marketing is that "You can't be all things to all people"...everybody's heard that phrase but many small businesses fall into the trap of trying to be all things to all people...without even realizing it. It's understandable...start-ups need to survive and will take on any work just to survive. Economic recessions often force established businesses into the same "M.O.". The problem is that it becomes habitual...even addictive.
If you're running a well-established business, you need to question the necessity of doing less profitable work...fighting competitors over business on price, for example.
Like all addictions, quitting "cold turkey" is likely to end in failure (so I'm not advocating it). What you need is a strategy for gradually moving away from less profitable work into more profitable work. Your market analysis gave you direction. Now you need to narrow your niche and focus on developing those more profitable market segments so that you can let your competitors continue to fight over the less profitable opportunities.
Micromarketing and Key Account Management...
Marketing can be defined as recognizing a widespread, unfulfilled need for products or services and establishing a means of delivering those products or services for profit. Successful marketing means doing so for the greatest possible profit...or, put another way: for the greatest possible return on investment.
Micromarketing is marketing on a customer by customer level...one customer equals one market. In practice, what it means is understanding the business goals, objectives and needs of each customer. In the case of commercial signshops, you might further define this as developing an understanding of the market communications goals, objectives and needs of the client. You may call yourself a signshop, but you're in the market communications business.
The purpose of micromarketing is to focus on developing your opportunities and maximizing sales with each existing client. The reason this makes good sense is that the cost of developing new business with existing clients (who already know and trust you) is negligible when compared to the cost of attracting and developing new clients and (even more expensive) new markets. Understanding each client's market communication goals, objectives and needs gives you the opportunity to develop and provide the most effective solutions...maximizing sales and profit with the client in the process.
Because you can't be all things to all people, micromarketing is most effective when focussed on Key Accounts...those customers who you've identified as offering you the best opportunities for growth, or who are already your "bread and butter" accounts (Sales analysis will likely reveal that 80% of your revenue comes from 20% of your clients...this is a good place to start). A deep understanding of the needs of these customers and providing them with effective solutions strengthens your competitive position and makes you less vulnerable to price-oriented competitors.
Consultative Selling and Conceptual Selling...
Sales is a function of marketing...an important function. Selling is a skill that can be learned (and mastered) by anyone.
Consultative selling is simply an extension of those sales skills...an important extension. Professional, consultative sales people may have learned certain techniques that help them lead a customer to a sales agreement, closing the sale...but there's no trickery in it...and there's never any attempt to sell someone something the don't need. In a way, consultative selling can be viewed as executing a micromarketing strategy: Understanding need and selling a solution.
How many of you get out there and make sales calls...visit customers at their locations...get a tour...look around...ask lots of questions? Consultative selling is really more about asking questions and analyzing needs than it is selling.
Conceptual selling resonates on a slightly higher level. Customers don't always know what they need or understand the alternatives available to them. The "concept" they're working with might be too narrowly defined. Help them "think outside the box" if you can and you will create vastly different opportunities for them and for yourself.
In all types of selling, your success will be determined by how well you prepare (sales planning) how well you present and how well you close. If you haven't already, go take a professional sales course or two. If you invest in your skills, hone them with practice...you can expect improved results. No different than hand-lettering or gilding...think of selling as another craft.
Value added, pricing strategies...and a better bottom line...
Anybody can make signs. Anybody can make them more cheaply, and sell for less. Anybody can provide good service. Why should someone pay more for your signs? Is there additional value (and benefit) to the customer in choosing to buy your products and services for a premium?
In my experience, many commercial signshops don't fully understand the value added they offer their customers. Without fully understanding the value they add, they can't effectively communicate the reasons that will allow a customer to justify paying a premium price. This leaves them vulnerable to lower-cost competitors and discounting that results in lower profit margins.
SWOT (another acronym) analysis is a useful tool for many things; on many levels. By identifying (in writing) and evaluating your competitive Strengths and Weaknesses, you can better understand your Opportunities and the Threats to your success.
Your competitive strengths will almost always point to value added. Try to think of them as value added "features" of doing business with you -- and list a corresponding benefit to the customer. For example...
STRENGTHS
Killer design skills -- Signs that attract attention...plus customer receives value of unique image in building their brand
Product knowledge -- Choosing the right materials for the application... customer get best value for money without affecting quality / durability
Complete the process for weaknesses...then begin to evaluate how your Strengths can create opportunities for growth and what Threats exist as a result of your weaknesses. This will help you in developing strategies and plans to fully exploit your opportunities and to "shore up" your weaknesses.
SWOT your own organization from your customers perspective. SWOT your competitors...can you use any of their weaknesses can you use to your advantage? SWOT your supply chain partners...what suppliers give you the best value? SWOT your customers...how can you help them develop new opportunities or defend against threats?
Once you've got that all in perspective, how will you set pricing? The accepted industry standard of materials costs times "X" is a BIG part of the profitability problem in this industry. Published pricing guides don't really have any relevance, as far as I'm concerned.
Offering your customers options (tiered pricing) and using a system (Such as EstiMate software...a Letterville merchant!) are -- in a nutshell -- the best approaches (sorry not to elaborate...I'm afraid that I've run out of steam...and time).
Finally, strategic marketing is an excellent foundation upon which to build your overall business plan. For example, it can help you plan equipment acquisitions with lucid vision and help you achieve greater return on investment faster.
So what are you waiting for?
If you've read this far, then some of what I've said must resonate with you. Why not get cracking with your strategic marketing plan today?
If you need help, I'm leaving ND GRAPHICS in January to run my own business as a strategic marketing consultant to small businesses. I plan to stick around Letterville and my company (MARKETING PARTNERS) will become a merchant just as soon as I can afford to. Until then, feel free to drop me an e-mail or a private message...and if you're so inclined: Wish me luck!
[ November 22, 2003, 05:44 PM: Message edited by: Jon Aston ]
-------------------- Jon Aston MARKETING PARTNERS "Strategy, Marketing and Business Development" Tel 705-719-9209 Posts: 1724 | From: Barrie, ON, CANADA | Registered: Sep 2000
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WOW Jon, What a great response!! I am employed myself, but I have seen huge numbers with shops that have employees, I worked for a truck lettering company that did 1,000,000 a year, with 7 employees, a design firm I worked at did 7,000,000 with 13 employees. One thing I noticed as that they had a niche, and worked very smart. Most one man shops have never had the luxury of working in so many places as I have, but Jon has pretty much summed thier success up in that thread, I think it's very possible to hit 100k without as much effort as has been said, if you can establish a formula for that success. Bein that I am working toward my own full time shop, I can't see doing it all by myself, but I think I can apply all these things to my new venture (if I can break away from my current job)
Rick
-------------------- Rick Chavez Hemet, CA Posts: 1538 | From: Hemet,CA U.S.A. | Registered: Jun 2001
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Thanks Rick...and good luck in making a break into your own business.
Anyone care to SWOT Bob Burns?
-------------------- Jon Aston MARKETING PARTNERS "Strategy, Marketing and Business Development" Tel 705-719-9209 Posts: 1724 | From: Barrie, ON, CANADA | Registered: Sep 2000
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Jon is right about the "work smarter not harder" principle. I think this can apply to everyone in this business.........even the "crusty diehard fundamentalists maverick letterheads".
"work smarter not harder" That is exactly what I set out to do, and you don't have to comprise quantity (hours worked) or quality (workmanship).
I really don't think I worked too much harder this year. I've just slowly changed the way I think, and then acted accordingly. And you know I still think I’m undisciplined and lazy at times.
I realized there are a lot of variables when it comes to talking strictly sales. But generally speaking more sales should mean more money in your pocket. I make no bones about it, I want more money in my pocket.
It will be interesting to see where that jumping off point will occur……….when I say “do I expand” or say ok “this is enough I can’t take on anymore” .
I bet some of you have been in this position………..yes?
-------------------- John Martin Robson Pendragon Signs & Graphics Yellowknife,NT,Canada
if it's not one thing.....it's two things Posts: 261 | From: Yellowknife, NT, Canada | Registered: Aug 2000
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Screw all that work, it would take away from my time on the river whitewater kayaking. My only advice folks is this is not a dress rehersal it's real life. Take time to smell the roses as you never know when your last day is. I had an Uncle who made millions until they found the tumors two days after retirement. He lived about three months after that. I could use more money like most but will not put aside the finer things in life. SYOTR(see you on the river)
[ November 22, 2003, 04:10 PM: Message edited by: Robert Larkham ]
-------------------- Rob Larkham Sign Techniques Inc. Chicopee, Ma Posts: 607 | From: Chester, Ma. | Registered: Apr 2002
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Hi John. I work about 40 hours a week from April to July, then about 30 hours a week August-October, then take a huge nose-dive from November to January where I am lucky to get 15 hours a week, then it picks up in February and March to about 30 hours a week again. I work from a home office & garage. Every year I increase my income. Last year I made about $29,000.00, but after expenses it was more like $12,000. I have enough the pay my household bills and buy food, but that is about it. I have credit debt because in winter, this one big factory who does not give materials deposits always orders a lot of signs. They pay on a 30-90 day basis, and by the time I finally get the money I use it to buy food. I try to bid according to the Sign Writer's pricing guide, but most of the time I feel as if I'm making signs in order to buy more vinyl. Some days I just want to throw in the towel and get a real job. I am not complaining. Working at home has enabled me to be here with my kids all the time. It's just that sometimes I think that there has to be a better way. This year I did price things out better. I learned to ALWAYS get a deposit. I charge separately for logo design now when I used to just include it as part of the job. So we will see by January if this has helped. Otherwise, I may just get a job at WalMart as a greeter. You asked! Love- JILL
-------------------- That is like a Mr. Potato Head with all the pieces in the wrong place. -Russ McMullin Posts: 8834 | From: Butler, PA, USA | Registered: Jan 2001
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obviously i have made my share of mistakes...and i know what my weaknesses are...i'm a terrible delegator...i spend too much time/stressing with tiny details that probably no one but me notices...and i work too much. with that said i'll be lucky to do $75-80k this year...call me greedy, but i don't feel that's enough for as much as i work/stress over things. and yes i know that's my own fault but i have taken some steps to making things better...such as upping my prices, and slowly learning to say no. i do believe this is a tough business to be in...mainly because there's many parts of it that are great, but there are also the sucky parts that have to get done. i also think it's hard being a one person gig because it's not easy knowing every aspect...designer, cnc router operator, edge operator, plotter operator, production person, good customer relations and bookkeeper...and doing it all at once. what can i say? somedays i love it & somedays i wonder what the hell i've done to my life.
-------------------- Karyn Bush Simply Not Ordinary, LLC Bartlett, NH 603-383-9955 www.snosigns.com info@snosigns.com Posts: 3516 | From: Bartlett, NH USA | Registered: Jan 2001
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The typical commercial signshop nets a profit in the range of 10-15% of sales i dont know where you get that figure but your way off!!!! if i was only making that profit...i would be better off flippin burgers at micky dees. iam an old SIGN PAINTER, i remember days when my expenses for material was less the 10-15% of my total income!!! also when i painted ALMOST ALL THE MONEY charged for the job....was MY PROFIT!!! i still paint...every chance i get, reason being i make MORE MONEY vs. time and materials then if i did it in vinyl!!! i just completed a job the and the client wanted it all HP VINYL, and i told him right from the get go....it was gona cost him $250 JUST FOR VINYLS. he said ok. the job took more time then if woulda painted it, plus the $250 material(i dont eat vinyl cost). i got it done and billed him for 12 hours labor(just applying vinyl)@ $30 an hour. so the total job was $610.00.(he is also a repeat client this is vehcile #3 ive done, and hes got another for me to do)i also told him i woulda painted it and had it done in 2 days, and it woulda cost him $400!!!! i worked in auto parts for 15 yrs. and they work on a base of 27% profit MINIMUM!!!! anything more is added bonus money. as ive gotten into vinyl and lookin back at my bookeeping i keep seeing my expenses for material INCREASE and the price of signs sold decrease with more competition in the market. no iam no where near 100k.....iam ok with what i do make.....but my profit margin is way past 10-15%!!!!!!!!!!!!!
[ November 22, 2003, 05:19 PM: Message edited by: old paint ]
-------------------- joe pribish-A SIGN MINT 2811 longleaf Dr. pensacola, fl 32526 850-637-1519 BEWARE THE TRUTH.....YOU MAY NOT LIKE WHAT YOU FIND Posts: 11582 | From: pensacola, fl. usa | Registered: Nov 1998
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We're talking NET PROFIT (after expenses), OP...not gross profit.
We're also talking averages...which means some are higher (congratulations!) and -- sadly -- some are lower.
Have a look at the latest Signs of the Times annual "State of the Commercial Sign Industry" report if you need to verify my comments.
It doesn't really matter whether or not you "fit" the typical average anyway.
My question is: how could you be (even) more profitable?
How could you have sold those jobs for more? For example...Vehicle graphics done in reflective will give your customer up to 40% more advertising impressions. Maybe they would have paid 40% more if you had given them that option. One thing is for sure: if you don't offer the option, they're never going to buy it.
What other graphics could you offer the same customer to help them accomplish their marketing communications objectives?
Couldn't you charge a higher rate than $30 per hour? You're (I assume) a skilled craftsman with many years of experience.
My point is that if you want better results (sales and profit), you might need to consider trying something a little different.
[ November 22, 2003, 06:10 PM: Message edited by: Jon Aston ]
-------------------- Jon Aston MARKETING PARTNERS "Strategy, Marketing and Business Development" Tel 705-719-9209 Posts: 1724 | From: Barrie, ON, CANADA | Registered: Sep 2000
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I'll net 115,000 on 200,000 in sales for the past year, one man shop, 50 hrs. week, 3 weeks vacation a year. Work smart and make every minute count, it's not that hard. That's 2500 hrs. a year, at $80 hr. gross (including materials).
-------------------- Carper's Signs 594 Union School Rd. Mount Joy, PA 17552 carpersign@earthlink.net Posts: 157 | From: Lancaster, PA, USA | Registered: Aug 1999
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My first inclination was to agree with Bob Burns..enough posting already, who reads this stuff!? Then after reading the posts that followed, I went back and read it. Great advise for any size shop.
I think we tend to want a drive-thru remedy for low profits, then whine about how others are stealing our work or our copywrites. But the bottom line is it comes from within us and our abilities.
""Good judgment comes from experience; and a lot of that comes from bad judgment" - Will Rogers Posts: 3486 | From: Beautiful Newaygo, Michigan | Registered: Mar 2003
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Allow me to clarify a bit... if you are producing 100k a year solo at 30 hrs/wk then I think that might be living large, but it's always relative- good in Wrightsville Beach, but poverty level in Newport Harbor. Jon's point about working smarter was exactly what I was talkin about... 10-11% profit is the extreme low end of the totem pole as far as I am concerned, but, along with his other numbers, are generally in line with what I hear is the 'norm' for shops these days, but I'm fairly sure I'm not normal. I'm a 'hands on' kind of person and I've always preferred controlling as much of the production process as possible because I know how I want a job to work and what I can handle myself and what I can do to get there, and wearing all the hats I care to and brokering those I wont/cant/etc in terms of serving the customer. I enjoy being a one stop shopping center- once I get a customer, I hope I can get him to call me for everything graphic forever. Before I learned about things such as 'capital investments' and other high finance dance steps, the best year I ever had was the first year I ever hired a CPA and he called me 3 days after I piled my year's worth of receipts on him (organized by month, of course) to tell me I had operated at a 62% profit margin for the year...
work smart, know which jobs make you real $$$ and learn to zing em. always remember that it is the designer's job to make it work and figure out how to do that with at maximum benefit to you- because it is business, and artistic and creative types (many on this board) can have probs in this area. big bucks come from big jobs or big volume, it's that's simple. love what you do, and make love to that job you are doing this week if it feels good for you- carve it, sand it, paint it with loving care... because that's the real fun-- the payoff of creating something from your imagination and having it come to life under your fingertips whether you are holding a quill or a plasma cutter. if you are covering your expenses and have enough to live a life you enjoy then what else? one very cool thing about this biz is the inherent self-promotional aspect of it-use that to your advantage at every turn. I personally have always enjoyed the fact that no amount of bullsh*t will make an ugly job look good. If you are a potential customer, give me a chance to prove it and you're mine!
-------------------- Jay Nichols ALPHABET SOUP
~the large print giveth and the small print taketh away~ Posts: 176 | From: SW Florida | Registered: Mar 2002
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If a "typical signshop profits 10-11% of sales" that is a sad, sad situation to be in. That means $833/month goes into the bank. That is simply pathetic and in no way acceptible, even if that is after everyone else gets their cut of it. 160 hours of work (if you only do full time) and you get $833 to show for it, OP is right, may as well get a job flippin burgers!
I personally feel a profit margin of 30% is a better target for a one-man shop. At least if you can gross $75K you'd still get to keep $2000 of it after expenses and taxes each month, which is a hell of a lot better than busting your ass to hit the 100k mark and only gettin to keep $800.
Working smarter not harder is the key.
Jill, I've been in your position, basically using up all the cashflow to get jobs out, and not having anything left.. it sucks. Think about concentrating on just design work, or outsource production so you arent forced to use the money on materials. By not doing production you're giving yourself more time to concentrate on making sales... or find a sales person and offer commissions only. A good salesperson will bring in plenty of work for you, a lousy salesperson doesn't get a commission if he doesnt get results.
On the topic of marketing, it's all about relationships.
Direct mail may work, but getting out of the shop and meeting people, building relationships and familiarity will work better. I guarantee you people will choose someone who've they've personally met, talked with, shook hands with and had eye contact with over someone that dropped a card in the mail. Get out of the shop, go into town.. browse a local store or something wearing a shirt with your logo.. pick a store where you know the owner might be working on the floor. Be seen. I have to admit it's easier for me because my targets can be found on the beach and in internet forums, but I'm always visible, always present, always approachable.. ie: I'm friggin everywhere!
Once you have a sale, it's not final until money has changed hands, and sometimes it's not final after that either - don't be afraid to attempt upselling your customers. You can add quite a bit of profit to your jobs by suggesting simple things that cost you hardly anything, like effects on lettering, but improve the job immensely. I recently nearly doubled the price of a graphics kit by suggesting airbrushing on the vinyl. It didnt cost any more in vinyl, the screen ink cost is virtually negligible it's so low, and there may have been an extra 30 minutes in production for doing the airbrushing and cleaning up. Just think, I was ready to run the guy's credit card and be happy with $180.. but I called the guy first to confirm, suggested "some really cool airbrushing" (my exact words to him) in a casual tone.. he agreed and it was not a hard sell. We're both happy.
-------------------- "If I share all my wisdom I won't have any left for myself."
Mike Pipes stickerpimp.com Lake Havasu, AZ mike@stickerpimp.com Posts: 8746 | From: Lake Havasu, AZ USA | Registered: Jun 2000
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posted
Do you people understand profit and the other points of Jon's? After you pay yourself a wage, pay for your equipment et al, then you want the extra called "profit" just for being in business. Use that for future expansion, retirement, or new toys. Profit is not what you have left over after you bought yourself a can of One Shot and a cup of coffee.
Jon, I printed out your post. Excellent thoughts and ideas. Hope your new venture works out well.
You know, it's been my experience that when someone like Jon talks, it is better to ponder and think about what he has said and how I might better myself. Of course, some just run their mouths off, on and on forever, never learning crap.
-------------------- Wright Signs Wyandotte, Michigan Posts: 2785 | From: Wyandotte, MI USA | Registered: Jan 1999
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posted
We're not a one man shop. I often work alone but also employ up to 4-5 other people when we have a big job.
But by the same token, I don't put in a 40 hour week either, week in and week out. We don't maintain regular business hours. When I'm on the road or I have a big job there's no such thing as a time clock.. we put the peddal to the metal and go! The important thing is to get home again where I like to be the most. Our new shop will allow us to do much more prefabrication at home with kless time on the road doing installs.
This type of off again/on again schedule makes my 'work' time shorter and allows me much more time to do my own stuff. It's our type of freedom.
Because we specialize in a very narrow market with little or no competition we can charge just about what we want within reason. Charging these significant fees allows us the freedom to put our all into each piece we do without the need to cut corners in any fashion. It also allows me to take on the work that appeals to me the most and simply turn the rest down. Being in demand also allows me to insist on the creative freedom I need to do my best work too!
We exceed customers expectations on each job we do. And this builds our reputation which brings us better and better jobs in the future.
By doing so we deliver excellent value to our customers and still maintain wonderful margins of profit which we need to keep in business and maintain the lifestyle we enjoy.
Depending on the type, number and size of jobs we take on in any given year we can easily earn $250,000 and up without too much effort.
I would consider this past year a great year for business ! Next year promises to be better already!
-dan
-------------------- Dan Sawatzky Imagination Corporation Yarrow, British Columbia dan@imaginationcorporation.com http://www.imaginationcorporation.com
Being a grampa is one of the the most wonderful things in the world!!! Posts: 8738 | From: Yarrow, B.C. Canada | Registered: Nov 1998
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posted
I mentioned my shops sales averaging around 100K plus some cash jobs.
What I also think is worth mentioning is a lesson I got from the a copy of the book "Rich Dad, Poor Dad" loaned to me by my daughter.
When I read how it is his opinion that "one can usually count on making more money on real estate over time, then they could ever earn on the job no matter how hard they worked" I started paying attention.
My (now) wife & I couldn't find a decent cottage to rent under $1000 when we wanted to move out of this very rustic shack we were living in off the grid. We couldn't afford $1000 anyway, so I built a loft over my office in an industrial warehouse. Slaved away building up the business, hardly saving, but investing a lot more in the growth of the business. (due to rent savings)
Anyway, after reading that book, I checked out my credit which had been terrible the last time I checked.I was literally shocked to discover that thanks to this business, (paying all old debts, & handling new ones properly) I had virtually erased 15 years of complete dissregard of financial responsibility.
$15K downpayment got us into a 1/4 acre lot with a house & cottage. I rent out the house, & pay the remaining $600 on my mortgage to live in what really is like a dream house to us. Based on an appraisel this year, & all indicatons from comparable sales, we have accumulated over $100,000 in equity already, probably closer to $150K
So, I think there might be some others out there that might benefit from taking that step.
Dan's business is a shining example of the benefits of narrowing your niche.
Doug's post is a great reminder that your business is really just a means to an end (Talk about "smart" goals!)...and that managing it well just gets you there sooner.
-------------------- Jon Aston MARKETING PARTNERS "Strategy, Marketing and Business Development" Tel 705-719-9209 Posts: 1724 | From: Barrie, ON, CANADA | Registered: Sep 2000
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posted
you all need a lesson other then listen to jon, who doesnot work in the trade other then as administrativly! mikeys right...if your makin 10-15% net profit your the ones who need to work smarter!!!! if i dont make 30% or more I DONT WANT THE JOB!!!! now yes i use INTERMEDIATE VINYL and i dont throw much away. yes i could have charged more then $30 an hour for the job i did...actually i did...but it doesnt show on the bill!!!! i billed for 12 hours....like roger said.."i hope you can do vinyl faster" to make more money.and roger you dont know what i had to to..to apply the vinyl to this truck, and if anyone person coulda done what i did on that van in less time then i coulda painted ..they must be the worlds greats paper hangers. i buy vinyl from the one who sells it to me at the best prices, i make sure i add all the vinly i use into the jobs....and make sure i tack on at least a 40-50% profit above and beyond what i will have in the job!!! you guys continue to make 100k and only get 10-15% ill make less gross but ill have 30-50% of it in my pocket.....like i said in the 1st post....when i painted only i made 60-80% net profit!!!
[ November 23, 2003, 02:22 AM: Message edited by: old paint ]
-------------------- joe pribish-A SIGN MINT 2811 longleaf Dr. pensacola, fl 32526 850-637-1519 BEWARE THE TRUTH.....YOU MAY NOT LIKE WHAT YOU FIND Posts: 11582 | From: pensacola, fl. usa | Registered: Nov 1998
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posted
My understanding of profit, at least in the corporate World, is the money left over after all expenses are paid. These expenses include all salarys and bonus' paid to the company's ownership.
I don't think Joe is considering or avoiding some important costs. Is your business supplying you with medical insurance? Is there a building fund? Would you be prepared if a government auditor walked in tomorrow?
This is serious stuff. I know from experience that lack of proper pricing and business savvy can result in working insane hours. The associated stress and financial hardships will eventually affect our health and family relationships.
I'm always talking about only listening to advice from people that have or are doing whatever your dream is. When it comes to running a profitable sign business, I'm not the guy to listen to. We are fortunite to have a few in Letterville that meet the criteria above and are willing to share what they have learned. Don't stick your head in the sand!
-------------------- Steve Shortreed 144 Hill St., E. Fergus, Ontario Canada N1M 1G9 519-787-2673
posted
I think the one factor on this topic that needs mentioning is "business image".
I have no doubt that many here have skills and experience in this trade, and, like Steve, I long felt I just didn't have a head for business.
Over the last few years, how I appear to my customers as a business person has been VERY high on my list of priorities. I've never been too worried about the quality of the work since most of my customers over the years had been very forthcoming with compliments and even the ocassional tip. I have a couple of basic principles I use that have made a marked difference this year. Several posts that were presented here on the Letterville BB are the foundation of it.
"You're known by the company you keep"...
After years of slinging paint on race cars and developing a solid base on it, I found myself "stereotyped" to a certain degree. Although potential customers liked the work I was producing, many did not call because they thought that race realated vehicles was the only kind of work I did or wanted to do.
The eye opener as to how bad it was affecting my future goals was hearing that several people simply would not call between March and June under the assumption that it was my peak season and I was not available. Those people had bigger wallets and weren't afraid to use them. It wasn't money on the table. It was money that never got to the table because the image I had developed. My niche was my ball and chain.
I raised my labor rate 25% and almost immediately weeded out the "bottom feeders", but found that those customers I had not seen before were now the ones taking the open days on the schedule...at better hourly rates and with higher end work to produce. Althogh my overhead has increased, my hourly wage has increased with it proportionately.
The other principle is..."If you build it, they will come." As has been mentioned in other posts, "Location" is important, as is travel expense.
In prior years, I would average between 50 to 60 thousand miles a year traveling out to jobsites, picking up materials and supplies, and other business related trips (never leaving the New England area). Last summer I re-fit my shop and stuck to my guns that I would concentrarte on "in house" work and lower my travelling expenses on business. A real test of how effective it would be was the spring rush of race cars. In 10 years, only 28 of the over 300 cars I've done were lettered in my shop. Less than 10% overall. In the last 2 years, 32 of the 41 cars I've done were produced here at my shop. A 60% cut in traveling time and expense. A better example of how that has effected my overhead is that nearly all my work these days is produced here at home and my current business vehicle (2 1/2 years old) still has under 50K on the odometer. (My last car is till sitting in the yard with 141K on the odometer and a blown engine!)
I do have a different look at location than a few here might. I've always felt that I could do better financially in a more metropolitan or suburban area, but those markets also have higer cost of living expenses and their own set of competitive markets. Quality work will attract customers to your location, and often they will cover the distance to hire you based on that quality. You can get the big market work without sacrificing the lower overhead and cost of living you have in more rural locations.
Your work is not "out there", but in you. As long as you can make a profit, be happy in your lifestyle and truly enjoy what you do in your "business" life...well...it could be worse.
Rapid
PS: Steve, ocasionally "heads" do pop up talking about how they run the business aspects of their sign shops. I have many of them to thank since coming here...
-------------------- Ray Rheaume Rapidfire Design 543 Brushwood Road North Haverhill, NH 03774 rapidfiredesign@hotmail.com 603-787-6803
I like my paint shaken, not stirred. Posts: 5648 | From: North Haverhill, New Hampshire | Registered: Apr 2003
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I didn't pick up on it in your first post in this discussion -- but you certainly are "working smarter, not harder"...doing business on your own terms. Your customers must have accepted the changes you "imposed" because they recognize the value of your work. From the sounds of it, you must be quite a bit more profitable now, too.
OP: ...ah, never mind.
-------------------- Jon Aston MARKETING PARTNERS "Strategy, Marketing and Business Development" Tel 705-719-9209 Posts: 1724 | From: Barrie, ON, CANADA | Registered: Sep 2000
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posted
O.P., one more try; The shops doing 10 to 15% , that means AFTER they paid themselves (like you) and there was still a profit of 10 to 15% (called net profit).
You get your share out of the gross profit, which is anywhere from 40% to 65% of the price you charged for the job!
comprendo?
Roger
-------------------- Roger Bailey Rapid Tac Incorporated 186 Combs Dr. Merlin Oregon 97532 Posts: 3020 | From: Merlin Oregon | Registered: Dec 1998
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