People are idiots with their money. We've had 4 wide format operators quit and start their own business - AFAIK they never had a side business before they quit, it was before my time - and maybe thats why my place is so open to letting people have a side business... If someone wants to, they're going to...May as well keep them happy and on staff vs having to find and train someone else. Around here... 90% of the shops are from people who decided to go out on their own, I'm sure 90% of the owners on here are the same - Whether its taking over a family run business... or they just wanted more for themselves. Most sign shops are run by previous sign shop employees!
3/4 are out of business because as you said, people are idiots and suck at managing money. They see dibond costs $20 a sign, material costs $10, and you sell it for $100... that's $70 profit for 10 mins of printing and 10 mins of laminating! Then they start their own business... then after a year when they do their taxes, they cant figure out why theyre in the hole. They dont realize taxes are 30-40% (Canada sucks, I know), rent isn't just rent... You have internet, phone, cell phone, electricity... There's ink cost, you've spent 10k on repairs on your printer... And that $100 sign is now a $10 profit, and you're making 10% of what you thought you were making. Then next year... its the same thing, untill they end up in a hole they cant dig themselves out of, and they go out of business.
I think for the first year of my side business, I probably didn't make a penny because I was still learning and money was being wasted on everything. I have like 15K of material on my shelf still because I had to buy every all the reflectives, holo, metalics...window perf when I dont even do installs...etc! It is a learning curve, for sure