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How many of you could leave your shop behind for at least a month and not have any issues?

Discussion in 'General Chit-Chat' started by WhatsYourSign?, Jul 20, 2019.

  1. WhatsYourSign?

    WhatsYourSign? Member

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    Some of you know my stories, others do not.

    I purchased a sign company 16 months ago that I added as a division to my pre-existing marketing agency.

    In the past 16 months, it's felt a lot like drinking from a fire hose between learning the industry, hiring the right team, and trying to scale the business.

    We have limited data to work with but our year-over-year sales have been 3-4x what they were a year ago, and even more so compared to the previous ownership. A lot of this I attribute to having the right team in place and improving our service delivery (getting jobs delivered faster has allowed us to do more jobs in a month).


    With that said - I'm a long way from being able to walk away from the business for a month without things suffering. Currently I'm responsible for all pricing, 70% of sales (I have one rep who splits his time between marketing and signs), project management, and about about 60% of customer service.

    I have three full-time employees plus two freelance designers who we've trained to be able to design signs and vehicle wraps and create production files.
    • A designer who can do production when necessary
    • A production person (everything after design and before install) who can help with installs
    • An installer who can help with production when needed
    The above setup allows each of them to take vacations when needed, which is critical for us.


    With that said, while we've gotten much better, I really want to focus on building out the right systems and processes so I can bring somebody in to manage things on a day-to-day basis so that I only need to check-in periodically.


    For those of you who have successfully been able to pull this off...how long did it take you to get to this point and what were your biggest obstacles to overcome? Any breakthrough moments worth sharing?


    I realize some of you may look down on me because I'm purely involved with the business side of things and not a true artisan. However, this is an industry I've grown to love and even though I'm not an artisan, I have a deep respect for the work that goes into things by all of you and the folks on my team!


    As always - thank you in advance for any wisdom you are willing to share!
     
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  2. Texas_Signmaker

    Texas_Signmaker Very Active Signmaker

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    I don't look down on you for not being an "artisan".. but I do look down on you for wanting to leave for a month and only being a year or so into this business. Small business takes a huge commitment to work, and I couldn't dream of leaving for a month when you're so new in the game. Why are you wanting to leave this business so quick? To me, this isn't going to breed success, especially with the knowledge of how far you are right now...still asking very basic sign questions.

    You have an inexperienced team, lead by an inexperienced new owner...and you're already talking about leaving and getting someone in there that can run the day-to-day? Terrible idea unless you hire a miracle worker.
     
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  3. WhatsYourSign?

    WhatsYourSign? Member

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    I don't want to step away from the business, but I do want to be able to buy another shop in a neighboring location that will add to our capabilities (in terms of what we can do in-house). I won't be able to do that until I've gotten this original shop to the point where it is self-sustaining.

    By far the best thing I've done for the business so far was to hire somebody with 10+ years experience in the industry. When I hired her, my volume of questions on here dropped significantly and my knowledge has grown significantly. However, even she has knowledge in specific areas of the industry.

    I want to replicate that by purchasing other sign companies who have more experience in commercial fabrication. That will not only add to our capabilities, but it will also continue to accelerate my level of knowledge.

    In a perfect world, a sign business school would exist that I could go to but such a thing doesn't exist, so I need to be able to surround myself with people who know more than I do so I can learn from them.


    I expect to be 2-3 years into things before that's a realistic option but I won't ever be able to get to that point if I don't start putting in place the right systems and processes now.
     
  4. equippaint

    equippaint Very Active Member

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    Theres absolutely no reason in this business to have multiple locations unless they are states away or you have a walk in retail type model. Learn and hire
     
  5. equippaint

    equippaint Very Active Member

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    To the OP, good luck. Post this question on every single industry based forum and I bet you get the same answer. You want to walk away for a month? Buy income producing real estate.
    You can always tell what small businesses have an absentee owner, they’re always a disaster and don’t last.
     
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  6. WhatsYourSign?

    WhatsYourSign? Member

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    I wouldn't be buying the location as much as the equipment and the people.

    If I want to make that decision for my business, does it really matter to you?

    I'm just looking for some guidance from those that have been able to build a true business out of their sign shop (that doesn't rely on their constant input).

    I became an entrepreneur to build a business, not to create a job for myself.
     
  7. WhatsYourSign?

    WhatsYourSign? Member

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    I disagree with that wholeheartedly.

    I may not know as much about the sign industry as most of you on here, but I know a thing or two about business in general.

    If you haven't read it (twice) already, I highly recommend you pick up a copy of The E-Myth.

    My goal is absolutely to build a business where I have people I trust (and who are compensated well) who can run the business for me.

    Heck, our biggest competitor locally is setup like this. He's built a great business for himself and it's run nearly 100% by the leadership team he's developed.

    I don't understand why that would be something you'd have an issue with somebody striving toward.


    If you can't separate yourself from your business, you'll never be able to sell it for anything more than the value of the equipment.
     
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  8. rossmosh

    rossmosh Active Member

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    You're not going to find too many absentee owner sign shops. It's just not that common in the industry and if they do exist, they aren't posting on a sign forum most likely.

    If your goal is to become essentially an absentee owner, you need to hire people to replace you, which means lowering your end of the year profitability. In business, employees are generally considered revenue generators, but you can't expect revenues to increase if you're doing a like for like swap. Based on what you've described, you're looking for an employee that will likely make around $50-80k a year depending on volume and location. I'd consider that person a management level person, but not "senior level" management. You need to add on another $10-25k to get them to take on the responsibility of an owner. My guess is that eats a majority of your profit, if not all of it.

    So as a marketing guy and owner, you're going to be left with figuring out what's the next step. The biggest thing to monitor is capacity vs profitability. Often people think the answer is to bring in more work, but if you're bringing in more work that results in efficiency dropping and cost of labor increasing, you may end up doing 20-30% more work but the profitability being way down on said work.

    Either way, you need to hire good people and monitor them regularly. Taking a month off is unrealistic. Not being involved in the day to day but being in regular communication with management and senior management level positions, is realistic if you can pull it off and generate enough profit.
     
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  9. equippaint

    equippaint Very Active Member

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    What are you talking about? Tell me what you gain from more than one location vs scaling what you have? Double overhead is it. You’re not selling beer and cigarettes.
     
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  10. rossmosh

    rossmosh Active Member

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    I just want to correct this statement. Let's just assume a 3-4 employee sign shop bringing in $500k in sales where the owner/operator brings home about 90k. They're only bringing in 90k because they're the owner AND the operator. If you decided to shift the business around to become an absentee owner model, you could do so by asking certain employees to do different tasks or hiring different employees + someone to replace certain duties of the now absentee owner.

    Regardless, of that $90k, some of it is straight business profit and the rest is salary as an employee of the business.

    I will say you are right that too many small business owners do not look at these things and are often simply buying a job.
     
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  11. equippaint

    equippaint Very Active Member

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    Not in a million years will you find someone capable of running a business with 4+ employees reliably for 50-80k/year with an extended owner absence. Our painter makes that with no responsibility. 100k minumum and even that will be tough.
     
  12. WildWestDesigns

    WildWestDesigns Major Contributor

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    Until you can get your original bought location in order, I wouldn't personally suggest getting another location (or even if it's just equipment and workers).

    It sounds like there are still trials and tribulations 16 months in due to this:


    To me, have to have your house in order first, before trying to branch out even further. Running before learning to walk. Sometimes one has to run in order to fall down and realize that they have to walk first, however.

    One should get what they can do now down pat before they think about bringing in even more functionality that's also different functionality. Something else that they are going to have to learn about and make sure how to do efficiently and with quality.

    As far as taking a month off, even when I'm on vacation, I'm still doing work. That's the price one pays for being an owner. I certainly wouldn't even begin to think about taking a month after after just acquiring a business 16 months ago that I had no previous knowledge of how to do things in that business. I know I certainly didn't even consider an extended weekend 16 months after I started my own business (many moons ago).

    To me, one has to make sure that the current house is in order. It's along the same lines as those people that want to franchise. Their are consumed with franchising before they even have their original (essentially concept) location in order as a demo to package and ship to potential customers of the concept. I know you aren't wanting to franchise (at least not that I'm aware), but the overall concerns of the two situations are the same for me.

    Just my opinion on the matter. Take it for what it's worth.
     
  13. WhatsYourSign?

    WhatsYourSign? Member

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    Me asking the question, "How many of you could leave your shop behind for at least a month and not have any issues?" was not intended to be an implication I was planning to do this in the immediate future.

    I was simply trying to ask how many of you have built your businesses to the point where you're able to do this.

    It may take me 2 years, 5 years, or 10 years...but that doesn't mean this isn't a major goal for me.


    Based on the math of $500k revenues/$90k take home (between salary and profit) + having to pay somebody $50-80k, it sounds like somebody would need to grow things perhaps to $1M in revenues for this to be a realistic...but that doesn't mean it can't be done.


    I have zero doubt that there are sign shop owners who have grown their businesses to the point where they can pay somebody to run the business for them. They may not be on this forum but I know that this isn't some impossible thing that's never been done before.


    The idea about buying another sign shop is something I'm considering to be able to expand our capabilities. That may or may not be something I do, but based on what a sign shop veteran (and the closest thing I have to an industry mentor, though he's a vendor), this is the smartest next step vs. trying to go out and buy a bunch of expensive fabrication equipment and hire people...he's suggested buying a company who has these capabilities already is likely an easier way to accomplish the same thing.

    I'm willing to accept that this may not be the best idea. My long-term vision is a business that runs itself, how I get there is up for debate.


    With all of that said - are there any concerns within the industry that being an absentee owner is so incredibly difficult? What does that mean for those you guys closer to retirement who want to sell your business one day? From what I can tell, the sign game is dominated by folks older than me (I'm in my mid-30's), and a lot of you should be looking to retire. If you've put in 20+ years, you should be able to sell your business for more than just the value of the equipment but it seems like that may not be the case for many of you.

    You deserve better guys, I know how much hard work has gone into your businesses.
     
  14. ikarasu

    ikarasu Very Active Member

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    It can be done. Theres a few ways... Look at all the sign shop franchises. It all depends on what you're doing, and what your specializing in.

    Sadly startup costs for a sign shop is cheap - I could (And did) go out and buy a 8K printer and 4K Laminator and produce the same quality prints / vehicle wraps as you do.

    Now lets say you hire a guy to watch after the shop for you. he gets to know all the clients and build relationships with them... He gets to set prices and see just how much profit you're pulling in... Whats to stop him from doing the same? Cheap equipment + Contacts and loyalties from all your customers... He could pull in double what you're going to pay him with less effort than it takes him managing your company... So whats to stop him from doing that?

    So yes... There are certain situations where you can step away and be an absantee owner... But most of the time it doesn't work out. 99% of the time, you're training your replacement... Your customers aren't going to be loyal to you and stick with your shop, they'll be loyal to the guy who's been taking care of them for xx years.

    It's the nature of the business... Now if you had hundreds of thousands invested in equipment, or were in a niche market where equipment wasn't so available... it'd be a different story. But this type of busy is easy enough to start... Thats why so many fail. Anyone can open up a shop.. it's the shops that know what they're doing, how to do it properly... And care about the business enough to stick around that prevent you from being one of the 9/10 shops that die within a few years.

    If it was a family business and you had a family member or someone to "Co-own" It'd be possible... but IMO, as a single business owner... while you may be able to take a 2-3 week vacation (While answering a ton of calls, and keeping in touch with the business) Being an absentee owner is a difficult task.
     
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  15. equippaint

    equippaint Very Active Member

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    You dont even know what youre doing with what you have.
    Youre citing hypothetical math. Youre not walking away from a $1-2m/ year business for a month I promise you. You are also not finding a manager capable of what you want for 80k.
    Youre citing very elementary business basics - work on your business not in it - as if its some sort of advanced secret you have unearthed. Youre naive. Small businesses are not worth much, theyre hard to sell and take more knowledge and effort than most are willing to put it. This is why they are often sold for assets. Those with the $$$$ have better ways to use their money than buying your headaches. Those that want out, are ready to go and not waiting for the right person to come along and pay some inflated price. Put what I said in your back pocket and come back in 20 years, after you actually have some experience, and argue with me that Im wrong.
    Another thing, people write books to sell them. If people wrote the dirty truth, noone will buy it.
     
  16. WhatsYourSign?

    WhatsYourSign? Member

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    This was a good response and I appreciate you taking the time to think it through and write it out. Thank you.

    So it seems I either need to make some big investments to heighten the barriers to entry (this is part of the thought with buying another shop...commercial sign companies have millions invested in equipment) or I need to dive deep into a niche to build out processes so we can play the volume game and make it difficult for others to compete on price.


    I have 20-30 years to figure out how to grow this thing from a small sign shop into a real business with value that I can sell somebody (or give to my kids if they want to be a part of it).


    What I can say with certainty is that I'm not going to listen to the naysayers who say it can't be done. I'll figure out a way forward and when I do, I'll help others in the industry so they can as well.
     
  17. WildWestDesigns

    WildWestDesigns Major Contributor

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    I would think in terms of niche equipment (either hardware and/or software) more then just out purchasing with what's out in the wild.


    Niche processes (even tools that are developed in house) can be a huge boon.

    I personally would be hesitant to solely think about competing on price personally. I'm not much older then you are, but have been doing what I do for a very long time starting out working for family. Competing on price wasn't the thing. We had found that when you compete on price, the customers don't tend to be quite as loyal. That's just our experience.

    Now, this could be small shop thinking versus big business thinking.


    There is always something to be gleaned, even from the naysayers (your probably thinking I'm one of them as well, I wasn't totally a naysayer, just make sure your house is in order and still not learning the ropes with what you have before adding more to it), the trick is gleaning what you can use and leave the rest.

    Always something to be learned.
     
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  18. Texas_Signmaker

    Texas_Signmaker Very Active Signmaker

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    The fact that you're even thinking about it this soon is a red flag to many business owners here.
     
  19. WhatsYourSign?

    WhatsYourSign? Member

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    How do you reach your goals if you're not planning for them well in advance? Leave it up to luck?

    I make big plans and then I put in the work to reach them...but I've got to know what I'm working toward if I'm ever going to get there.

    You guys are fun and I appreciate the challenge. It motivates me to show people these things can be done (even if people say they can't).
     
  20. Texas_Signmaker

    Texas_Signmaker Very Active Signmaker

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    100% true. I learned how to get into the sign industry and basically ran the shop while the owner spent less and less time in the store. I learned what worked and what didn't work and I started my own shop with a leg up on what to do. Never went after any of the customers that I serviced there for years, but when they shopped around and heard me answer the phone at my new business, my reputation preceded me.

    You can't keep someone talented enough to run the shop and do (almost) everything an owner does and see what he/she is REALLY worth and go out and get it themselves.
     
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