My first business about killed me. I took a year to lick my wounds and look at other options like insurance, multi-level marketing and solar, but did not feel, with my limited capital, I could create cash flow fast enough. I was sure I did not want to be part of the sign industry. However, that was the business I knew. Those were the contacts I had made. I had a little family with mouths to feed. What was I to do?
I did the unthinkable. I started another sign business. This time I did it in a very different way. No big factory, no fancy office, no salesmen, no union employees. Just me, a truck and a helper. A true shoe string operation. I learned to do everything myself including sales, estimation, installation, and service. While the old business was 65/15/10/5 , the new business was 22/0/5/73 on installation and 55/0/5/40 on retail projects.
|Cost of Signs / Labor||Sales||Overhead||Net Profit|
|Sign Business #1||65%||15%||10%||5%|
|Sign Business #2: Wholesale||22%||0%||5%||73%|
|Sign Business #2: Retail||55%||0%||5%||45%|
Don’t get me wrong, it was still hard, but there was a tangible reward for my efforts. I soon realized that the sign industry was a physically demanding trade, but I was young and strong. Going up and down ladders all day even helped me improve at my favorite stress reliever, basketball. I found that some kind of outlet was essential to keeping a mental balance.
I found a niche! In addition to the resurrecting a few retail accounts, I placed ads in trade magazines and started permitting, installation, and warranty service for national sign companies. Sales were now coming in without much effort or time. I started to treat the major sign company installation coordinators as my top priority. I provided them great service and strove to make their job easier. I never tried to compete with them or steal their customers. The payoff was that I no longer had to find jobs, jobs found me.
The home business is truly a mixed bag. I really had no other choice; I could not afford to pay for a shop. The commute was short though, down the hall and through the family room. I would start and end the day in my home office and work in the field most of the day. Sometimes it was hard on the family to not interrupt me and I am sure my wife did not love the housekeeping tips. It was also clear that neighbors did not appreciate our cluttered driveway and all the large delivery trucks that blocked the street. At one point a policemen even came to the door because he saw a large Taco Bell sign looming over the fence. We showed him evidence we were going to install the signs and the officer eventually believed us. All in all, the home office did work for me and my small business.
My mentor beamed with pride of my accomplishments and offered to help any way he could. I didn’t need much help though, things were looking up. I continued to build up that business and hired another billable employee. I was able to be part of the family again and even started vacationing with my family. As busy as I was, I still pursued my hobby of searching for new business opportunities. Though I had found some success, I knew this was not the end goal.
Keys to Success
- Shoe string businesses can work
- Make everyone billable…wife, kids, dog
- “Strategy” is largely about choosing what you will NOT do. By not getting into manufacturing I was able to work with national sign companies leary of local competition
- Mentor quote, “Generating first $100,000 investment capital is the hardest, 100,000 to 1,000,000 is much easier.” I certainly hoped he was right.