• I want to thank all the members that have upgraded your accounts. I truly appreciate your support of the site monetarily. Supporting the site keeps this site up and running as a lot of work daily goes on behind the scenes. Click to Support Signs101 ...

Shutting down a sign shop, thoughts and lessons learned.

mark in tx

New Member
Just wanted to share some lessons learned about recently shutting down a sign shop.

Making the decision to shut down or sell your shop should be made as dispassionately as possible.
After a few years you can tend to forget to make a business decision, you start to think about how the business is running in emotional terms ie. "I have put my heart and soul into this", "I bet my future on my shop", etc... instead of "I have had 2 quarters of 40% sales decline and the attempts to increase sales have not been successful." "At the current monthly Net I will be dipping into savings to meet payroll within 2 months" "Losing my biggest wholesale customer has cost X amount per month and the newly acquired 3 wholesale customers have not filled that gap."
Don't be afraid to get outside opinions from other business owners, accountants or even SBA.

If you are leasing or renting your shop space and you decide to sell your business, it is only worth the equipment and supplies you have on hand.
Unless you have contractually obligated production sales your customer list does not guarantee the new owner will be liked or trusted or given the time of day by your customers. Even contracts can be broken by enough lawyers.
The equipment is worth what people are willing to pay, not what you think it is worth.
Your lease may not be able to be taken over.
Until the money has changed hands and the sale contract is signed, buyers can and will change their mind the day before or even the day of the anticipated sale of the business.

The wonderful company that sold you the equipment originally may not buy equipment at all.
Suppliers will give you absolute bottom dollar for your equipment. That is a good thing to know though as it helps your knowledge to true market value.

Don't mess your employees over! Take care of them.
Move heaven and earth to get them that last paycheck. Call the other shops around town and let them know you have good people that would make a good fit for them. If you had 401k, or any other benefit programs for your employees get them the information and the contacts they need to handle those benefits.
Also, you just might have an employee or a group of employees that might be in a position to buy the business!


Utilities, insurance, alarm service, internet, subscriptions, credit card machines, etc...
You can't ignore them. They want to get paid and they will come after you to meet contracts.

You are not alone!
You might be surprised at how many people will offer moral support, you will need it. You might be surprised at how many people will try and work with you, nobody wants to see your dream die. Leasing agents, insurance reps, merchant services, suppliers all will try their best to help you if they can, just be honest with them.

Sometimes just moving out of a retail space and setting up in your garage can cut the bills enough to continue the business.

Even if you have to put all the equipment in storage and get a job at the liquor store, you still have options.

Life goes on, doors close and open.

At least you didn't open a restaurant and lose 3 million dollars, am I right?
 

TheSnowman

New Member
All true. Almost 12 years ago I bought my business from my grandparents who ran it for 25 years before that. Most of their customers disappeared and I had to find my own groove and business relationships to survive. The first 7 years were touch and go at points, and I think I probably paid too much for the existing business, but it worked out in the end and we're still going.

All that stuff hit the nail on the head though.
 

klmiller611

New Member
Thanks

Great post Mark. Sorry you had to close down, but sharing your experience may save someone else from agony.

It is applicable to any business, not just a sign shop.

Good luck
Ken
 

T_K

New Member
All true. Almost 12 years ago I bought my business from my grandparents who ran it for 25 years before that. Most of their customers disappeared

I would think in this scenario - selling to family - that you possibly could have arranged a transition period where the existing customers got to know you and were used to working with you. When my boss was transferring the management role over to me, he would start a conversation with the customer with me beside him, then pass them off to me for the actual order. This built up my confidence (getting praised in front of the customer) as well as inspiring confidence in the customer that I would take care of them like my boss.

Of course, I'm making assumptions, since I know nothing of your transition when taking over the grandparents' shop. But that transition time can make a big difference with retaining customers.
*Not meant to be criticism - just thinking about my experience taking over as a manager.
 

TheSnowman

New Member
I really didn't think of it as an option until I realized I wasn't really happy where I was then, and I found out my grandparents were ready to have a conversation with another company in town buying them out. They were still around daily for probably a year, and it stayed in the same place, so it was as smooth as a transition could be. That being said, they also had a reputation for being the cheapest person for the job since they were just retired, and they always felt like they could charge what they SHOULD charge.

It ended up being good, because I was able to keep the good ones, and most of the nickle and dimers quit coming by. But yes, in an ideal situation, I would have worked there longer and been involved in more conversations. I just kind of jumped in at the last minute.
 

visual800

Active Member
the largest sign co in Montgomery shut down in 2009, it has 3 owners, 2 bailed and left one holding the bag. He called me to see if I could help "liquidate" his company he would pay 10% of what I sold, in 09 I had nothing else to do

it was a huge shop, with 5 trucks and over 25 employees at one time.
When folks would show up to collect from owner he would bail and hide instead of facing them. I was there selling stuff so they would unload on me and I had no idea of their dealings. Coward in my opinion.

Stuff went out the door pennies on the dollar, nothing was worth anything because the market was flooded with sign companies closing up. Another company came in and bought their old phone number, that is all they wanted! Makes perfect sense!

Thanks for the post OP you are correct in everything you say and have experienced, best of luck
 

Jwalk

New Member
Hats off to any one who operates a business with a lot of overhead. I have never ran a business with much over head really none.
I work out of my basement and have a reasonable advertising budget that works and get me enough business to operate. I have minimal to no employees, basically a one man show with part time help when needed.

Print shops and restaurants scary thing. The only up side is I guess it puts a fire under your ***.

My biggest investment so far is my used van.

A salute to all.
 
Top