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Size of Town to Sign Shop Locations?

briankb

briankb

Premium Subscriber
So my business partners and I have been considering opening an office in town. We started our business over 7 years ago and have always worked from my home office.

The estimated population in our small town is only 11,953 the surrounding and supporting county is about 67,000 as of 2006.

We have 6 sign companies plus an OfficeMax which all do some type of design/sign/printing services. 3 of those (including OfficeMax) are retail locations where you can walk in and walk back out with a banner or sign.

Our strength and core business is graphic design and marketing services. We've always provided printing services through 3rd parties to support our design services for business cards, brochures, and other print/sign pieces.

This past year we purchased a vinyl cutter, laminator, and a 44" photo printer. With just these few pieces of equipment in house we've seen design services income go up because we can give them something tangible in hand quickly. We still outsource banners and auto wraps because it's still cheaper. And also we don't have employees or training/experience to more typical sign jobs we see come through our door.

Even if we have an edge on the competition with design I'm worried we may already have too many sign shops in town.

How many is too many and what is the ratio of sign shops to population in your location?
 
S

StopSignGraphics

New Member
It's hard to say with out knowing more info about your business or the surrounding area. If you assume that only 2.5 percent of the total population will require the services of a sign shop in a year that's potentially 1975 customers. Divided between 6 shops that 329 jobs a year. That's really not taking into account internet sites or the shops in surrounding towns.
 
Rick

Rick

Certified Enneadecagon Designer
My area has about that many people and we have at least 14 sign shops.

I was hoping I would find a co-working place similar to this place (http://www.hivehaus.net/), but none exist locally...
 
Jon Aston

Jon Aston

New Member
It is difficult to say how many signshops are too many, based on population alone.

However, I would suggest you start with the assumption that the market has a balanced supply and demand. In my experience, it's not saturated.

Most signshops have what I would call a passive/reactive marketing strategy, and grow "organically", based on word of mouth received from providing satisfactory service. Chances are, that describes your competitors... if not all of them, most of them. In other words, based on your stated competitive strengths, you should have ample opportunities to win market share and further develop the market.

If you want a benchmark to work with - to estimate the size of your local market - annual revenue per employee (on average) in the commercial sign industry is about $100,000. That means that the typical shop with 3 employees is probably generating annual sales of about $300,000. If you know how many employees each competitor has, than you know (roughly) the current size of the market.

You might also find this helpful. A word of caution: Census numbers can't tell you the future - only the past. Spotting long-term trends that suggest a growing market would give me confidence about expanding, but markets are pretty volatile right now.

Unless you are busting at the seams - or unless it's working against you some other way - I'm not sure why you would want to take on the additional overhead of a new location... Have you exhausted all possible avenues for growth from your present location?
 
Fatboy

Fatboy

New Member
briankb said:
So my business partners and I have been considering opening an office in town. We started our business over 7 years ago and have always worked from my home office.

The estimated population in our small town is only 11,953 the surrounding and supporting county is about 67,000 as of 2006.

We have 6 sign companies plus an OfficeMax which all do some type of design/sign/printing services. 3 of those (including OfficeMax) are retail locations where you can walk in and walk back out with a banner or sign.

Our strength and core business is graphic design and marketing services. We've always provided printing services through 3rd parties to support our design services for business cards, brochures, and other print/sign pieces.

This past year we purchased a vinyl cutter, laminator, and a 44" photo printer. With just these few pieces of equipment in house we've seen design services income go up because we can give them something tangible in hand quickly. We still outsource banners and auto wraps because it's still cheaper. And also we don't have employees or training/experience to more typical sign jobs we see come through our door.

Even if we have an edge on the competition with design I'm worried we may already have too many sign shops in town.

How many is too many and what is the ratio of sign shops to population in your location?
Click to expand...

Brian....small is beautifull. I am in the deskjet printing business and supply consumables. My vision a few years ago was to open a whole chain of shops. I got to nine in total before I realised that bigger don't always make you more money. I am now down to five and I am selling another one in a months time.The funny thing is that I make the same amount of money with less overheads.Don't spread yourself to thin without proper quality control.That will be my advice to you without trying to be negative.Also , I live in Africa.......and that might not apply in your country.
 
W

wes70

New Member
Rick said:
My area has about that many people and we have at least 14 sign shops.

I was hoping I would find a co-working place similar to this place (http://www.hivehaus.net/), but none exist locally...
Click to expand...

That would be a cool set up... everyone could feed off each others creativity. I could see customers being enticed, just to visit and to see the different businesses in one location.
 
briankb

briankb

Premium Subscriber
Thanks everyone for your input and feedback.

We're still kicking the idea around and probably will for at least another month before we make a decision.
 
Mosh

Mosh

New Member
We are in a town or 8,000 and the ONLY shop around. Every year or two another one trys to start up, but no one but me can seem to make a go of it around here.
 
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Gino

Gino

Premium Subscriber
Our town is around 80,000 and the county brings in about 400,000. We have customers all around town, the county and nationally. There are over 65 sign shops in the area and those are only the ones I've heard of. There are quite a few underground and back yard hacks, not to mention the illegals that make signs for each other.

I don't think it matters how many shops are around you..... BUT more about what you put out. We don't worry too much about our competition, because the customers that we don't want.... we usually send their way. We bump heads from time to time, but that's called making a living and keeping you honest.

Get known for quality, dependability and competitive pricing and you should be able to set up shop anywhere/anytime..... USA
 
J Hill Designs

J Hill Designs

New Member
we got around 80000 here, and there are only like 5 or 6 actual sign shops (some basement/garage hacks too)

don't get any ideas
 
M

mark in tx

New Member
Our strength and core business is graphic design and marketing services
Click to expand...

Open up an office that does that. You already outsource most of your production, an office gives you a better appearance for a design firm.

Good luck!
 
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