Clear Water, No Fish

If the water is clear, no fish will survive, the sages say, meaning, if life were trouble-free, humans wouldn’t know how to survive.
An informal survey sent to Signs of the Times’ Services Directory (which comprises full-service sign companies and electric and commercial shops that offer service and maintenance) uncovered 13 companies’ basic strategies that kept them afloat in 2009 and their goals for 2010. This rugged group, which tends to survive economic flipflops, uses both analytical and makeshift solutions.
The companies were evenly split between electric and “commercial” (most who checked “commercial” said they were “full-service” companies), and one sold primarily vinyl-based products. Asked for their sales-volume projections in rather expansive categories, five said $250,000 to $1 million; five said $1 million to $2.5 million; two said $2.5 million to $5 million; and one, more than $5 million. Only one was a franchisee; the rest were independent.
Seven reported decreased sales/business volume; four said they increased, and two said income stayed the same. The highest and the middling sales-volume levels tended to decrease last year, while the lower range split between up and down.
Two companies described last year as “busy,” and one exclaimed it was “tremendous.” Two labeled it “challenging, but exciting;” two exclaimed “bloody” and “bad.” Two diplomatically summarized it as “very challenging” and “slower than the previous five years.” One said, “It was very tough to close the deal.”
The factors that companies claimed caused a sales downturn included “a lack of business startups” and “a slowdown in commercial real estate.” Hard work was cited as pivotal in staying the course.
Last year, three respondents purchased new equipment (a digital printer and crane/bucket trucks), but six bought used printers, trucks, tools and shelving/storage units. Of three that purchased new equipment, two experienced sales declines, while the other said sales increased. Such a small sample can’t nail a trend, but equipment purchases probably played a factor in surviving the downturn.
Although eight said they offered no customer incentives, four improvised such rewards as free vinyl installation, flexible payment terms and discounts on service/labor. A full-service shop proffered a free banner with a channel-letter purchase. The only company (the vinyl shop) that offered new services added inflatables.
The tight economy discouraged seeking, and giving, loans. Two respondents asked for, and received, loans – one for the purchase of a crane truck and another for a line of credit “in emergencies.”
What strategy will companies that experienced an uptick last year take next year? “Stick to the same game plan.” One company that attributed its success to “customer satisfaction” planned to maintain that goal, and another said it would continue to attract new customers. A company that stayed the course last year plans to “increase gross margins and its client base.”
Those reporting a downturn said they planned to increase sales, contain costs and stay lean. One will take an aggressive course to “take advantage of weakened competitors to grow.” To increase sales, two said they would advertise their services more heavily.
How does a company faced with a tight economy get leaner? Employ more efficient production methods and use materials more carefully, respondents advised. One company will monitor its production processes more carefully to better assess where time and money are wasted. Another cited inventory control as a cost saver.
“Owners are back to running equipment and helping with installations,” a respondent observed. “They’re not just bidding jobs, they’re actually back to making and installing signs.”
Cutting costs and staying lean entailed cutting employees for six companies, while four retained theirs. Both companies that added employees also reported increased sales volume.
Also, a rosier economic forecast engenders hope. A company that “plans to be in a position to take advantage of an improved economy” said it would “stay lean and productive.” Another said it would just “hope.”
Four foresee the same pattern as this year, with slight growth towards the end of the year. “Another year of tough going progressively will get better as they year goes on,” said one prognosticator. Another predicted customers will be slower to pay, but will demand speedier service.
The prediction that “customers will be unwilling to pay current rates” was supported by another viewpoint that “customers won’t spend anything on any signs they don’t need. Customers are even hesitant to fix their existing signs.”
Two optimists, who predicted their success from last year will continue, foresaw many new LED products being introduced. A Montana-based company that increased business last year will introduce a one-of-a-kind product in 2010, but “the economy didn’t really have anything to do with it other than make it harder to bring it to reality because of hard costs.”
He also faced an early snowfall in October.