Expand offerings - or limit focus?

[Warmoth]

Hey all, I know everyone's business is very different, and point of views will vary, but I hope this will spark some discussion.

While looking over sales breakdowns (for the year), I joked - "Wow, look at all the worthless things that hardly contribute anything". Referring to the bottom 75% of items. I started to think harder about it, and maybe it's true? Things like canvas prints, or posters technically turn a profit, but are they breaking our focus? Should we cut those things off the menu so we can dig deeper into our bread and butter? Or should we intentionally put more focus on those items? Our top spending customers only purchase from the top 8 items (out of the 38 listed). But perhaps the low revenue items hold more value than can be measured (bringing people in the door, bolster our appearance/capabilities)?

We're in a time that people can get things quickly and easily, from a variety of outlets. Do people still care about the all-in-one shop? It's hard enough to compete with banners.com, let alone stickers.com, yardsigns.com, posters.com, and a plethora of other highly specialized imaginary examples. Is it worth it to try?

I'm curious, do your breakdowns look similar to ours? This year, the difference was particularly staggering.


We've invested in a flatbed printer for the new year. I've meticulously run the numbers, and if sales remain consistent with the past year, it will pay for itself in 12-16 months by way of savings on media, and the hefty tax write-off. (However, the goal is to increase the sales for those flatbed capable items...) But now we're faced with the possibility of adding new, flatbed specific offerings to the mix. Is this a good thing? "Sure we'll print on phone cases", or "No, we are gonna print the hell out of yard signs from open to close"?

How do you guys approach your "menu"?

Some chart explanation. "Printed Decals" being anything printed on vinyl, sold as a sticker. "Cut Decals" anything cut directly out of vinyl, sold as a sticker. Items named like '24"x32" Steel' refers to realty frames of various sizes. Disregard the colors divisions, they effectively mean nothing for this topic.

 

[victor bogdanov]

I read somewhere that 20% of what a business offers will bring in 80% of their revenue. The other 80% of products/services/whatever a business offers will bring in only 20% of total revenue.

You chart seems to fit this, I know it is also true for my business.

I think it is a good idea to test out different products sparingly to find the next "hit" product but staying focused/getting more efficient with current best performers will have better roi

 

[Vassago]

It's called the Pareto Principal - 80% of sales comes from 20% of products.

Its one of those things though that some random customer can bring the outlier though. It's all down to your company. Are you stretched doing those other things? For the things that make money - is there a bigger market to bring more in?

Being too focused also brings risk - make a point of understanding your company and staff - work out what makes the most sense. If you're not overworked, then I'd say do the other 80%..,, If you are overworked - focus on what makes money.. Either way - The aim is to make money, but it's not the only currency. Publicity can also bring money in. So, a cheap job could make more in the long run.

 

[John Miller]

Do the small items (minus) the first 9 make enough profit to necessitate a dedicated person even part time? That would allow you to focus on the big fish.

 

[Texas_Signmaker]

Some of your stuff goes with supporting the larger items. 080 and 063 are the same thing, "ridged signs". Doesn't cost anything offering 080 with 063. Artwork / expedite. Don't separate the different steel.

You could be expanding installation category, that's where $$ can be made.

 

[JBurton]

080 and 063 are the same thing, "ridged signs".

That's what I was thinking. I'm seeing prints RTA, prints applied, and subbed products. Cut vinyl is no different than printed vinyl in the end, pricing structure is different, and required equipment is different, but it's apples to apples. Applied vs ready to apply is also not much of a distinction, but it's there.
The micro breakdown here is great, but it doesn't have the info we're after. Warmoth, lets see the same chart either by customer, or by customer within categories based on amounts, 0-50, 50-150, 150-500, 500-1500, 1500-10000.

 

[netsol]

Some of your stuff goes with supporting the larger items. 080 and 063 are the same thing, "ridged signs". Doesn't cost anything offering 080 with 063. Artwork / expedite. Don't separate the different steel.

You could be expanding installation category, that's where $$ can be made.

that's where $$ can be made, but, also where much of the annoyance can be found.

 

[Bxtr]

With the addition of the flatbed printing, I think you will become more efficient with 4 items in your top 10.
That will allow you to focus on other items to weigh out the profitability. For some customer it isn't always about price, it's easier to come to you for 500 coroplast signs, 2 pair magnets and a name tag.

We have been able to double our output with one less body with just the efficiencies from two pieces of equipment (Flatbed printer, digital cutter)

 

[Signstein]

Replying so I can keep an eye on this discussion.

This question is timely for me. Although I'm running an internal shop where the sales figures aren't applicable - the time factor / focus vs. expansion question sure is. I was the first person with sign experience hired to run this shop and I quickly fell into the trap of taking every request simply because people were thrilled that I knew how to do it. My instinct was to expand and do as much as possible, but I've recently started learning how to say no.
I've only turned away a few projects in the past couple months, but it has already afforded me the opportunity to finish more impactful, larger-scale projects.

 

[Warmoth]

I appreciate the feedback, all. The Pareto Principal is interesting. This isn't the first time I've seen the 20/80 ratio at play.

Texas_Signmaker, you're right. The list is a little convoluted with items that could be merged. I think seeing it that way had even had myself thinking there was more going on than there really is. And while some rigid substrates are produced virtually the same, they can require additional storage considerations when it comes to keeping inventory (sheets and drops). I've been on a mission of declutter and staunch organization lately, and seeing a stack of multi-colored .040" pieces really irks me. "I've got it - lets just throw them out, and stop offering that thickness!", lol. Knee-jerk and stupid.

As for installation, I'm CERTAIN we don't charge enough. In 2025, we're bumping our base fee up. One aspect of the installations, we RARELY go on site. It's mostly vinyl vehicle graphics, in our bays or lot. That's due to our small crew. A dedicated installer could be in the cards, it's something we've talked about.

JBurton, I have always had cut vinyl separate from printed vinyl because for us it's almost 2 different departments. I like to see how they compare/perform against each other. Also, I'd like to reconfigure the chart for you, but I'm not clear on what you're asking to see.

John Miller, yes those small items added up correctly, could equate to a part timers wages. And that could be a good way to relegate those momentum slowing tasks.

 

[Warmoth]

Replying so I can keep an eye on this discussion.

This question is timely for me. Although I'm running an internal shop where the sales figures aren't applicable - the time factor / focus vs. expansion question sure is. I was the first person with sign experience hired to run this shop and I quickly fell into the trap of taking every request simply because people were thrilled that I knew how to do it. My instinct was to expand and do as much as possible, but I've recently started learning how to say no.
I've only turned away a few projects in the past couple months, but it has already afforded me the opportunity to finish more impactful, larger-scale projects.

My father can NOT say no, lol. It's been a strength and a weakness for a long time. I think we're finally in a place that saying "no" won't hurt us. And if we're lucky, soon we'll be able to actually pursue the jobs we want. We live in an industrial area. TONS of potential clients that don't currently use us, but we're so busy we don't have time to reach out to them.

 

[Texas_Signmaker]

I appreciate the feedback, all. The Pareto Principal is interesting. This isn't the first time I've seen the 20/80 ratio at play.

Texas_Signmaker, you're right. The list is a little convoluted with items that could be merged. I think seeing it that way had even had myself thinking there was more going on than there really is. And while some rigid substrates are produced virtually the same, they can require additional storage considerations when it comes to keeping inventory (sheets and drops). I've been on a mission of declutter and staunch organization lately, and seeing a stack of multi-colored .040" pieces really irks me. "I've got it - lets just throw them out, and stop offering that thickness!", lol. Knee-jerk and stupid.

As for installation, I'm CERTAIN we don't charge enough. In 2025, we're bumping our base fee up. One aspect of the installations, we RARELY go on site. It's mostly vinyl vehicle graphics, in our bays or lot. That's due to our small crew. A dedicated installer could be in the cards, it's something we've talked about.

JBurton, I have always had cut vinyl separate from printed vinyl because for us it's almost 2 different departments. I like to see how they compare/perform against each other. Also, I'd like to reconfigure the chart for you, but I'm not clear on what you're asking to see.

John Miller, yes those small items added up correctly, could equate to a part timers wages. And that could be a good way to relegate those momentum slowing tasks.

You do a lot of parking signs? I don't really mess around w/ 040 080... just throw it all on white ACM and be done with it. Only need to stock 4x8 sheets and they cut easy. I order 080 precut when doing parking signs though... it holds up better. But print on ACM.. those special colors don't last much longer than the paint on metal anyway. I could be totally wrong though.

 

[signheremd]

You are going to love the addition of the flatbed printer. It let's you print onto signs up to 4x8 (or5x10ft) without having to layout and apply the individual graphics. Fast. We do a fair number of Real Estate and Lot signs on ours. If they are going to be up for just a year, then we don't laminate - longer use, we put a cast UV laminate on it. About those segments that don't make you money... Grocery Stores called them loss leaders, but for signs the principle is to see your company as the solution to a variety of sign/display related materials. So, drop things once you are big enough that doings so frees up time that you need and does not damage customer relations. But focus your marketing efforts on those things you do well. My 2 cents