Jump in with both feet

[10sacer]

Hello all,

Been a lurker on these forums for awhile and gotten some good advice from a couple of posts and personal emails, so thanks for that.

Here is where I am at - recently saw my position disappear due to the economy so am in that fun space of reinventing a career in early 40's. Joy.

Have a unique opportunity to either invest with existing digital graphics company or open new place of my own. Existing company is very tied to certain NASCAR teams that you all see every weekend on TV. They have a first-class facility, people and equipment and all I would do is purchase a flatbed and add to existing arsenal and bring in my sales rep that is still garnering accounts that we are currently outsourcing.

There's obviously a lot more to this, but it would be an even longer posting... so here's my question - would like to know what early headaches you existing business owner's encountered during startup phase of your shops. Things like bad equipment decisions, marketing directions taken, estimating packages that worked (or didn't), accounting advice and anything useful you can think of that worked or definitely should have been avoided in the early days.

I have about $300K in capital to put towards this. Obviously moving in with existing company GREATLY lowers my exposure because of the wealth of equipment they already have. Paying franchise fees does not appeal to me and I am not looking to buy anybody out. We have a book of business that is waiting for us to land and we just want to avoid landmines along the way.

I used to work for DuPont selling wide format UV equipment - I have a fair command of available equipment and know who makes good stuff and who doesn't. I have been in graphic arts starting from screenprint in college all the way to offset printing prepress, graphic design, dealer channel management and equipment and wide format print sales for over 25 years and am at that stage where its time to take control and stop letting others determine the future.

Any advice would be greatly appreciated.

Thanks,

Sean

 

[Edserv]

10sacer,
If you know what you're doing, and have some cash, and know you're market, you may want to just "go for it" and open a new company from scratch. I've taken some criticism on this forum (probably because I sounded too "cocky,") but we started our company 18 months ago knowing absolutely nothing about the sign/banner industry. However, I did have 15 years experience in the print industry and in starting and growing small companies. I am market and sales intensive, and we started Lets Go Banners on the Big Island of Hawaii having only lived here for 90 days. We knew no one, had no contacts, and as mentioned, didn't even know what a wide format printer looked like.
With the low cap. cost of entry into the wide format industry, you could put 20k into equipment and be off and running, using the additional 280k as a nice buffer/savings. We hired several sales people and put some cash into marketing. 18 months later, we have over 400 customers, a national ranking website, and are now trying to go back and put the fires out (finish building a world class team, revisit our strategies, and go at it again strong in the next 18 months.) Our website will probably be the focus of our major push, but we are interviewing for marketing and bookkeeping positions currently.
If I were you (free advice, bla bla bla,) I'd preserve the cash and go for it. I've not had the best experiences with partnerships, and I'm with you, punt the idea of franchise fees, you don't sound like you need that route!
Good luck!
C.

 

[iSign]

investing in the existing company does sound like you mean a partnership of some sort, but i wouldn't go that route. I see two opportunities that both look better if kept separate... Finance the flatbed equipment as a purely profitable investment, with no other strings attached (no required tie in with you working there, their profitability or any of that... who else will help them but a flatbed & what will those terms be? ..they will be profitable terms with no strings! ..and so should any chunk of cash you lay down for someone elses company!

Second, get a sweet deal to work for them.. and hope it can grow & maybe become a partnership... but let that evolve in time... not in a rush to buy equipment... for now, realize that you may need to walk away from this, so you should leave that door open in your negotiations.

my 2 cents!

 

[BobM]

"Very tied to NASCAR Teams" doesn't mean you get a share of that work nor does it mean that the NASCAR work is profitable.

With your background I would go for it. Do a solid business plan that includes a major sales pitch and go for it. You will be far better off in a new diverse business than counting on a piece of someone elses business.

Good luck and let us know what you decide.