Why are small business owners so fixated on revenue over profit? Is it that high revenue numbers create the impression of success? Or is it that revenue indicates a company’s market share or dominance over a competitor? Maybe since it’s impolite to talk about how much money we make, quoting our revenue instead of our profit keeps us courteous?
There’s an old business quote that says, “Revenue is vanity, profit is sanity and cash is king.” The author is unknown, but it makes you wonder if he came from the sign business.
I occasionally get a chance to speak with new sign franchisees and one question I pose to them is, “How many of you would be happy with a store that sold $2.1 million and took home 10%?” After the show of hands, I ask, “So, which is more exciting to you, the $2.1M in revenue, or taking home the $210,000 profit?”
I find it interesting that when owners first start their business, they always answer with $210,000 net profit, but once they’re up and running, they tend to focus more on growing revenue rather than concentrating primarily on growing profit.
Let’s look at a revenue focused shop verses a profit focused shop and compare the differences. The revenue focused shop sells $2.1M and makes 10%. The profit focused shop is a $700,000 business making 30%. Both stores show a net profit of $210,000, but which store has fewer employees with less equipment, debt, risk and stress? Which owner feels like they’re making more money?
A more impactful way we can look at the net profit % of two shops is to understand what it would take for each of them to earn $100,000 more profit. Assuming their financial ratios stay the same, the 10% net profit store must sell an additional $1,000,000 in signs to take home $100k, but the 30% store only needs to sell an additional $333,000. They can make the same amount of profit, with a third less work.
Broken down even further, the 30% net profit store can take home $100,000 more a year with just an extra $1,300 a day in sales. This probably wouldn’t require any more space, employees, or equipment. The additional $1 million in sales needed for the 10% net profit store would certainly require more employees, and possibly more equipment and more space. This additional $1M of work would certainly add more risk, not to mention more stress and possibly more debt.
The factor that impacts net profit % the most in a retail sign shop is the balance between in-house and subcontracted products. We call this Product Mix. You can bet that a 30%-40% net profit retail sign shop makes almost all their products in-house. But if this shop starts to sub-contract a large percentage of their business, they’ll find their net profit % declining and will have to increase revenue to make up for the lost profit.
When you think about it, a retail sign business is essentially two separate operations. The first operation, the products we make in-house, is super profitable with very little risk. Cost of Goods is super low, with most in-house products having markups of 5x to 10x. The best part of this business is that its team members can run the majority of the day-to-day without the owner’s involvement.
The second operation consists of the products we sub-contract. These projects come with significantly more risk and much lower margins, with markups usually averaging around 2x. Since shops have little control over the quality and timeline with subcontracted projects, these jobs can create super stressful situations if products are made incorrectly or if deadlines are missed. Because of the higher price tag of most subcontracted work, the owner often feels the need to personally oversee the projects, resulting in less work being delegated to their team and more work for the owner.
Subcontracting too large a percentage of their sales will usually cause a retail sign shop to struggle with low profitability. If 50% of their business is subcontracted, they’ll water down their overall margins so much that there often isn’t enough cashflow to consistently cover wages and expenses. In many cases, a store could turn down a large portion of their subcontracted jobs and actually take home more profit. Especially if they focused their sales efforts on higher-profit, in-house customers, they could often work less, have fewer employees, and take home more money. Isn’t this really the goal of a small business owner?
When I do this math with sign shop owners, I find that the vast majority won’t give up subcontracted revenue to ultimately pursue higher and easier profits. They forget what excited them when they were brand new and will give every reason why an in-house focused business model that generates 30% – 40% net profit just wouldn’t work. It’s like someone who won’t give up a luxury car lease to become debt free. Just as the luxury car is a measure of success, the million-dollar revenue, the large shop, the cool equipment and all the employees can feel like a measure of success as well.
As entrepreneurs, we know the risks involved with starting a small business and that high-risk investments should generate high returns. If you’re just looking to just earn 10%, a good mutual fund might be a much easier route. So, which will you choose, vanity or sanity?
Roger Robinson has owned Signarama North Dallas for 23 years and teaches the brand’s Profit-Focused Sign Shop Master’s Class as part of Signarama’s Masters Academy.
This article was originally published by Wide-format Impressions
Though it might sound like an Italian bakery, Cannoli Kitchen Pizza is a newly franchising fast-casual pizza chain based in Florida with six locations. Since announcing franchising last September, the company has signed eight franchise agreements in Florida, Alabama, Michigan, and Georgia with 30 total in the works.
Cannoli Kitchen Pizza is part of United Franchise Group, a family of affiliated brands and consultants. Cannoli Kitchen Pizza is part of UFG’s food division, Big Flavor Brands, which also includes Graze Craze and The Great Greek Mediterranean Grill. Cannoli Kitchen began franchising under UFG-affiliated company, Accurate Franchising Inc.
“The franchise brand is transforming Italian take-out and delivery to a super-fast-fresh experience,” a representative for the brand said. “For nearly 30 years, Cannoli Kitchen Pizza has been creating fine classics like baked pasta, calzones, salads, garlic rolls, and pizza by the pie or by the slice; this is the place where grandma’s lost recipes can finally be found….This concept offers a unique opportunity in a booming industry with an affordable investment, multiple streams of revenue, and complete support provided by UFG.”
The next franchises to open will be in Boca Raton; Macomb, Mich.; and Greenacres, Fla. The company has also signed three new franchise agreements in Dallas.
The overall average check is $25.75 with an average location size of 1,200-1,600 square feet.
This article was originally published by Nation’s Restaurant News
Expanding into a multi-unit franchise is a significant step for any franchisee, and understanding when the time is right is crucial to success. In this Q&A, A.J. Titus, president of Signarama, shares his expert advice with StacheCow on the signs that indicate readiness for expansion, the importance of ensuring stability in your current location, and how to navigate the challenges that come with managing multiple units.
StacheCow: What signs show a franchisee is ready to expand into multiple units?
A.J. Titus: There are several key indicators that suggest a franchisee is ready to expand into multiple units. While gaining customers from a particular area or spotting opportunities in neighboring markets are positive signs, there are additional factors to consider.
Consistent financial performance over 2-3 years is crucial, demonstrating stability and growth potential. Operational excellence, including streamlined processes and a well-trained team, indicates capacity for additional responsibilities.
Strong leadership skills are also essential for managing multiple locations effectively. Market demand, particularly in areas outside the current territory, can signal expansion readiness.
A positive relationship with the franchisor, characterized by active engagement and adherence to systems, is important as well. Additionally, franchisees should have a clear expansion strategy and necessary resources, both financial and human capital, to support growth.
StacheCow: Why is it important for a current location to be stable before expanding?
Titus: A stable location serves as a solid financial foundation for growth. It provides the resources needed for expansion and acts as a safety net during the challenging early stages of a new unit.
The cornerstone of this stability is your staff. You need to ask yourself: Do you have the right team to run your existing business in your absence? A capable, trustworthy team is crucial because expansion demands your time and attention elsewhere. Your current location must operate smoothly without your constant presence. This means having employees who understand the business, can make decisions, and maintain the quality of service your customers expect.
Stability in your current location, anchored by a competent team, is not just important — it’s fundamental to successful expansion.
StacheCow: What challenges come with moving from one location to multiple, and how can they be handled?
Titus: Expanding from one location to multiple brings significant challenges, but also opportunities. The primary hurdle is scaling your processes effectively. What works for one unit may not seamlessly translate to multiple locations. You need to ensure your operational systems, management strategies and quality control measures can be replicated without losing efficiency or consistency.
Another challenge is maintaining distinct operations while leveraging shared resources. Each location should operate independently to serve its local market, but you can benefit from economies of scale in areas like marketing, purchasing, and administration.
To handle these challenges, focus on standardizing your processes and creating robust systems that can be easily implemented across locations. Invest in technology that facilitates communication and oversight. Develop a strong management team capable of running each location semi-autonomously. Finally, regularly review and optimize your shared services to ensure they’re benefiting all locations without compromising individual performance.
StacheCow: What factors should be considered when deciding if now is the right time to expand?
Titus: When considering expansion, you’ll want to first assess the current market conditions. Is the economy growing? Are there opportunities to acquire new locations at favorable prices? A challenging economy might actually present unique prospects for those prepared to invest.
Equally important is evaluating your leadership team. Do you have capable individuals ready to take on expanded roles? Your current team’s strength and readiness are vital for successful growth.
Also, consider your financial position and access to capital. Expansion requires significant resources, so ensure you’re on solid financial footing.
Analyze the potential new markets. Is there demand for your services? What’s the competitive landscape?
Lastly, reflect on your personal readiness. Expansion demands time, energy and focus. Are you prepared for these increased responsibilities? Remember, timing is critical, but so is your comfort level with the investment and your confidence in the team leading the expansion.
StacheCow: How can a franchisee assess their ability to manage multiple locations effectively?
Assessing your ability to manage multiple locations effectively is crucial before expanding. I strongly advise franchisees to leverage their most valuable resource: the franchisor.
Don’t hesitate to reach out to your franchisor with questions. We have extensive experience guiding franchisees through expansion and can provide invaluable insights. Ask about the challenges other franchisees have faced during expansion and how they overcame them.
Utilize the resources at your disposal. Many franchisors offer tools and training programs specifically designed for multi-unit management. Take advantage of these opportunities to develop your skills and knowledge.
Additionally, conduct an honest self-assessment. Evaluate your time management skills, ability to delegate and comfort with letting go of day-to-day operations. Consider shadowing a successful multi-unit franchisee to gain practical insights.
Ultimately, effective multi-unit management often requires a shift in mindset from operator to leader. Your franchisor can help you navigate this transition successfully.
Every great franchisee had help buying a franchise. Want to learn more about how 1851 helps franchisees find the right franchise opportunity? Visit www.1851growthclub.com and start your journey.
This article was originally published by Stache Cow
West Palm Beach franchise makes the 2024 Inc. 5000 and others celebrate record-breaking sales.
Signarama, a sign and graphics franchise, announced significant achievements and record-breaking sales for its franchisees in the first half of 2024:
Bob Chapa, owner of Signarama Metro Detroit, has achieved multiple $1 million sales months in 2024, building on his record set in 2023 for the most sales in a single year by a single-unit franchise owner.
Under the ownership of Sami Qureshi, Signarama of Philadelphia, Pennsylvania, has also set a new benchmark, reporting $2 million in sales in a single month.
Chapa’s Detroit location and Qureshi’s Philadelphia, Pennsylvania, location are among 85 franchises that have qualified for Signarama’s 2024 Circle of Excellence, an accolade earned by achieving $1 million in yearly sales, marking the largest group of qualifiers in the brand’s history.
“We are incredibly proud of the outstanding achievements of our franchisees in the first half of 2024. Their record-breaking success not only reflects the hard work and dedication of our owners but also emphasizes the strength and resilience of the Signarama brand,” said A.J. Titus, president of Signarama. “As we approach our 38th anniversary as a brand, we’re excited to build on this momentum and continue providing innovative solutions that empower small businesses across the country.”
West Palm Beach makes Inc. 5000
In addition to record-breaking success, Signarama is proud to announce that its West Palm Beach franchise has madethe 2024 Inc. 5000. With three-year revenue growth of 87%, owners Mike and Lino DeFeo have earned a first-time spot on the prestigious ranking, solidifying their position among the fastest-growing private companies in America.
“This recognition is an incredible honor for our team at Signarama West Palm Beach,” said Lino.
“We’re grateful to our loyal customers who have trusted us with their signage needs as well as our partners at Signarama corporate whose ongoing support enables us to grow,” added Mike.
Signarama Masters Academy
Signarama will continue to introduce and implement programming and strategies that aim to fuel ongoing growth for franchisees. The company recently unveiled plans for its next Masters Academy. Designed to help Signarama franchise owners amplify efficiency, drive sales, and increase profit, the on-location training provides two days of peer-to-peer learning in an immersive, collaborative atmosphere, with the next series slated to take place this fall.
“The Masters Academy is just one example of our ongoing commitment to franchisee success. We’re continually developing new programs, enhancing our corporate resources, and leveraging our industry partnerships to provide our franchisees with a competitive edge,” explained Titus. “From marketing support and operational guidance to cutting-edge technology solutions and vendor relationships, we’re invested in every aspect of our franchisees’ businesses. Our goal is to empower each Signarama location to reach its full potential, and the record-breaking sales we’re seeing are a testament to the effectiveness of these efforts.”
This article was originally published by GRAPHICS PRO
Celebrating women who have made a difference in advancing the wide-format digital print industry.
Broomfield, CO – The Digital Frontier, a full-service commercial and fine-art printer specializing in large-format and digital print solutions, congratulates owner Sara Schaeffner on her recent win of Big Picture Magazine’s 2024 Women in Wide Format Awards. The awards were announced at the 2024 PRINTING United Expo, which took place from September 10-12, 2024 in Las Vegas, Nevada.
Schaeffner was one of six winners announced by Big Picture—the leading resource for the wide-format digital print market—as part of their ninth annual awards ceremony. The awards celebrate women who have made a difference in advancing the wide-format digital print industry, and included Allison Kast Eichenberg, owner of Signarama Chandler; Maggie Payette Harlow, CEO/owner of Signarama Downtown; Kelley Mattingly, owner of Signarama; Shirley Dyson, owner of Signco; and Kim Howell, VP/director of operations of Tiny Mammoth Graphics.
“As a relative newcomer to the industry, I’m delighted to be listed alongside the other winners of this year’s awards and to support women-owned businesses in general,” Schaeffner said. “In my case, this award belongs in part to the excellent team that I get to work with every day, and who bring over 200 years of collective experience and an overall joy for the industry to our business.”
Before purchasing The Digital Frontier in 2020, Schaeffner held executive leadership roles in a range of industries, including manufacturing, healthcare, and IT. She’s brought that enterprise experience to the print business, building on her team’s experience and knowledge to become a full-service printer with four specialized divisions: The Digital Frontier for commercial large and small format print, Photo Craft Imaging for gallery-quality fine-art prints, Rosario Custom Framing for beautiful and functional art displays, and Show & Tell for tradeshow booths and event graphics that attract attention. Operating out of a 20,000-square-foot production facility in the heart of the Rockies, they make digital dreams meet printed reality.
“At The Digital Frontier we combine big vision with big printers,” Schaeffner said. “The business has operated for 30 years, printing on paper, metal, vinyl, wood, glass, acrylic, and PVC—producing any print product you can imagine. Our work is displayed everywhere from art galleries to office buildings to sports stadiums. I couldn’t be prouder of everything we’ve achieved, and everything we’re still achieving.”
This article was originally published by What They Think
These young leaders have been identified as the best and brightest, emerging from a record pool of nominees for the coveted honor.
Another record number of nominees have been considered, and PPAI judges have completed the difficult task of narrowing them down to 12.
This year, 220 submissions were made by promotional products pros, far surpassing the previous record of 170 set in 2023. Truly, the 2024 class emerged as the best of the best, joining almost 200 past recipients of the honor.
The 2024 PPAI Rising Stars have been selected for their achievements, leadership, volunteerism and potential for even greater impact in the years and decades to come. The same judging criteria in place since the program’s 2010 inception was used, except for the first time a true age limit was imposed. No candidates over age 40 were eligible.
In late September, the group was honored at PPAI’s Leadership Development Conference, which featured an Emerging Leaders educational track designed to arm the Rising Stars and their brightest contemporaries with skills to grow in the promo industry.
Many candidates received multiple nominations, including seven of this year’s honorees. Read on to meet the new class of Rising Stars.
“At a young age, Mikas has been very active in the promotional products industry throughout North America. [He] spearheaded a tech overhaul from a legacy system to a modern tech stack and developed and created the Akran Gift Program, passing down supplier incentives to Akran clients.”
“Alex is a Rising Star through his work ethic, commitment to his customers and the industry, and his ability to follow up. He is President of GAPPP. He has grown his territory every year, participated in LEAD in 2024 and LDW in 2021, 2022 and 2023. Recently, due to his success he was awarded with an increased territory. His professionalism, hustle and ability to connect impress me.”
-Brian Deissroth, Edwards Garment
Lindsay Bons, 24 Senior Business Development Manager, IDLine
“She is constantly thinking about what’s next? This forward-thinking mentality is really how good things get done in today’s world. As we’ve all learned in our own careers, these are often difficult traits to teach or train; but we know them when we see them.”
-Christopher Duffy, Signature Group
Brittany Frase, 34 Vice President of Sales, Hirsch
“Her strategic focus on expanding the company’s national footprint through innovative marketing and sales initiatives has been pivotal in Hirsch’s growth. She has also played a crucial role in product development and establishing valuable brand partnerships, further enhancing the company’s market presence.”
-Malik Hemani, Graphic Stylus
David Geiger, 36 Vice President & General Counsel, Geiger
“Simply having your name on the building doesn’t equate to being valuable to the organization. It’s the dedication and effort that count. David Geiger exemplifies this through his commitment to the organization and its stakeholders. He consistently puts the company first, whether it’s through extensive travel to drive our ambitious M&A strategy, implementing health and wellness initiatives, or spearheading product safety efforts.”
“Jason has transformed Charles River Apparel’s company culture by initiating and leading quarterly town halls and team-bonding events. These efforts have improved transparency and communication, fostering a more inclusive and engaged workplace.”
-Maria Yaitanes, Charles River Apparel
Natalie O’Leary, 38 Business Development Director, BAMKO
“She is always posting about ideas for her clients to take from, and that to me is a prime example of growing the industry. Additionally, she’s impressed me by her ability to create relationships. Our relationship started with a cold email from myself. She didn’t have to engage, but she was open to learning what I had to say and committed to being creative.”
-Ben Drysdale, Raining Rose
Brian Roney, 30 Senior Director of Product Design, Proforma
“He has brought valuable insights into professionalism, management, go-to market strategies, and enhancing Proforma’s value proposition to the industry. Some examples include overseeing the rapid rise of ecommerce during the pandemic and successfully leading our internal efforts, doubling the size of the ecommerce team, enhancing service levels by 80% and creating new industry leading features and functions of Proforma’s ProStores platforms.”
“He has taken a company from one order in 2021 to what it is today in only three short years. If you look online in the promotional products Facebook groups, Anthony is always mentioned when someone needs custom lanyards. His reputation is rapidly growing as a leader in the industry.”
“Over the course of the past four years, under Shivani’s leadership, CompanyStore.io has grown its team, capabilities, solutions and business to a best-in-class provider within India. She ensures that her team is equipped with the knowledge, skills and tools that are required in the modern world of sales and customer service, providing the world’s leading brands and level of service that is unsurpassed within India.”
“As a young president and the son of the CEO, Andrew faced a lot of headwinds related to preconceived notions of nepotism and doubts about his leadership capacity. However, Andrew quickly earned respect by presenting a clear vision and plan and inspiring the entire organization to execute it. He has proven to be a strong and decisive leader, well beyond his years, and has been highly instrumental in driving our success.”
-Kurt Tempelmeyer, Fully Promoted
Dominique Volker, 33 Vice President of Sales, Whitestone
“Dominique has been a star for years! She has spoken at industry events, skucamps and skucons. She was an ASI Sales Person of the Year finalist. She has helped integrate companies we’ve acquired. She has led our company from $1 million to $20 million in sales in her tenure. She is wise beyond her years, polished and experienced. She leads by example, manages with grace and has helped develop countless professionals in our industry.”
