How to Start a Sign Business

Part 1 - How to start a Sign business - Background

From business street signs to vinyl prints for local events, sign businesses manufacture and sell custom-made signs to the public. Some customers provide their own creative design. Others come with a vision, relying on the manufacturer’s artistic background and knowledge regarding images, placement, and size. Since signs can be manufactured a number of ways, most sign businesses specialize in a couple different methods, outsourcing the rest to trade-only suppliers.

Our guide is in 3 parts:

• Part 1 - How to start a Sign business - Background
• Part 2 - Our planner tool to see if this idea is the right fit for you
• Part 3 - Action plan to get started

What are the costs involved in opening a sign business?

Many start-up sign business owners choose to work out of their homes until the company has realized significant growth. While this does offer a significant savings, experienced professionals warn against making this decision hastily. Make sure you have enough space to work and that your shop design allows for efficiency. Your workspace must also include an area to collaborate with current and prospective customers.

Once you’ve set up a workspace, you’ll need a few tools to get started. Specific tools required vary depending upon the types of signs you choose to manufacture in-house. Minimum estimated amount of initial capital needed is $5,000.

A basic shop needs the following:

• Sign plotter – $1,500 to $3,900

• Computer – $1,500 to $3,000

• Software – Graphic design software averages $200, while sign making software can run upwards of $5,000.

• Vector graphics – There are free graphics available, but many choose to subscribe, to ensure top quality images.

• Substrates – A list of basic substrates every sign shop should have on-hand can be found here. Prices vary depending upon manufacturer, size, color, and thickness. $500 should be enough to get started.

• Insurance – Approximately $800 annually, depending upon your specific needs.

• Marketing materials

• Website – While your site doesn’t have to be fancy, it should offer a portfolio of your work and answer the standard questions most new customers need to know.

Experienced sign makers recommend dedicating a good amount of time and money to your marketing strategy, particularly if you choose to work out of your home initially.

What are the ongoing expenses for a sign business?

Ongoing business expenses are fairly minimal. You will need to keep some materials on-hand at all times, but most will be ordered on an as-needed basis. Additional associated costs include:

• Website maintenance and hosting

• Marketing materials and time spent implementing your strategy

• Routine maintenance on equipment

• Business insurance

• Monthly software and imaging fees, which vary depending upon your needs

Once your business has grown to the point where you need a storefront, you will incur standard overhead expenses that come with that. Your insurance needs will change and you may want to consider adding a team member at this point as well.

Who is the target market?

Your ultimate goal should be to serve the needs of anyone who requires a sign, banner, or billboard. Since you will most likely not manufacture all of these things in-house, however, this will not happen overnight. Start out targeting the specific niches you wish to be a part of. Once you’ve built relationships with individuals you can outsource work to, then you can begin to add to your buyer personas.

How does a sign business make money?

Each client will require something different from the next, and are charged according to time spent on the project, material costs, and services rendered.

How much can you charge customers?

Industry leaders suggest applying the labor + material method for determining price. First, you’ll need to determine material costs associated with said project. Multiply that number by two. Determine how long it will take to create the sign and multiply that by your hourly shop rate. Standard rates in the U.S. are $50 to $60 per hour. Add these two figures together for project rate.

How much profit can a sign business make?

Most sign entrepreneurs report very high profit margins in this industry. Profits range anywhere from 50-95%. Your company’s profits will be defined by the amount and type of work you take on and how skilled you are at figuring labor costs when quoting a price to customers.

How can you make your business more profitable?

The most effective way to maximize profits is to offer sign installation as part of your services. Be sure to check with your state and county before doing so, as this often requires a special construction license.

For long-term success, it is suggested that you remain on top of the latest trends and try to never limit your business. By pigeonholing yourself into one niche, growth will be very slow and will eventually suffer, as customer needs evolve. Many sign businesses offer additional printing services, including coffee mugs/cups, stickers, and t-shirts.

Day-to-Day and Growth

What happens during a typical day at a sign business?

In addition to routine administrative duties, a standard day in a sign shop includes the following activities:

• Meet with current and prospective clients to discuss their needs, questions, and vision

• Create design and layout of signs

• Manufacture product for client

• Ship out necessary design, instructions, and paperwork for outsourced work

• Network with suppliers and outsourcing manufacturers

• Reorder supplies when necessary

• Plan and execute marketing strategy

This industry is continuously introducing new techniques and technology, so it is important that business owners strive for innovation for long-term success. The International Sign Association is a great resource for business ideas, industry research, and networking.

What are some skills and experiences that will help you build a successful sign business?

Prior knowledge and experience in the industry would prove beneficial for short and long-term growth. This offers a unique opportunity to learn best practices, network with suppliers and manufacturers, and get a feel for the various business tools that are on the market. This experience will also assist in identifying which facets of the industry you’re most skilled at or would generate the most profit.

When involved in a creative profession, it’s easy to lose sight of the fact that you’re running a business. Strength in marketing and running a business are critical for the owner who plans on handling that aspect of the business. Motivation, drive, and a positive attitude are what will set you apart from the rest.

Whether you plan to complete the work yourself or hire an employee for the creative work, this industry requires an artistic eye and attention to detail. Much of your work will be done collaboratively, so strong communication skills and the ability to work with people from all backgrounds is also an important skill.

What is the growth potential for a sign business?

Industry leaders indicate high profit margins and stability are two great advantages to being a part of this profession. Technological advances afford greater opportunities for expansion, with marketing and growth opportunities only limited to your goals and drive for success.

What are some insider tips for jump starting a sign business?

Insider tips from successful sign makers include:

• Make sure you and your customer are on the same page by preparing written prices and instructions for every order. With everything in writing, you’ve covered yourself against any future issues or grievances.

• Take pictures of your successes and share them in a portfolio. This not only shows the quality of your work, it can also inspire new customers who are considering their design needs.

• Carefully consider the layout of your shop to ensure efficiency.

How and when to build a team

Unless you choose to only accept projects that you can do the work on, outsourcing companies will, in essence, be a part of your team. These outsourced projects are a great opportunity to build your business both locally and nationally, but only if you partner with the most reputable organizations. For in-house work, most entrepreneurs choose to complete the work themselves, which eliminates the need for Worker’s Comp insurance and costs associated with payroll.

If accounting, marketing, and/or business isn’t your strong suit, it is suggested that you add a professional to your team or seek out additional training to maximize profits. Most can be hired on a freelance basis, keeping costs at a minimum.

Part 2 - Is a Sign business the right fit for you?

Part 3 - Action plan to launch your Sign business in 90 days