Better Sign Shop Podcast

Learn how to build a better
sign and print shop from a few

crusty sign guys who've made more
mistakes than they care to admit.

Conversations and advice on
pricing, sales, marketing,

workflow, growth, and more.

Your listening to The Better Sign Shop
podcast with your hosts, Peter Unis,

Michael O'Reilly and Bryant Gillespie.

All right.

All right.

All right.

Welcome back to another episode
of the Better Sign Shop podcast.

I'm your host, Brian Gillespie, as
always joined by sign Shop Yoda himself.

Peter Unis.

What's going on, Brian?

How you doing?

My man?

Hey.

Dude, this has been forever,
since we have laid down any tracks

in our respective studio here.

How are you?

I've been busy.

I've been busy.

We'll start out with, uh,
my twin girls are here.

Uh, so, and, and enjoying
every day of that being a girl.

Dad, I know that you are a girl,
dad, and you have given me a lot

of pointers along the way, but.

It's been, it's been one hell of a ride.

You know, just kind of doing
and experiencing everything that

you would normally do with a
newborn twice at the same time.

Uh, so for those of you that are,
that have twins that are out there,

uh, you know what I'm talking about.

I.

Because it's feed, double the
feedings, double the baths, double

the diapers, double the crying, double
the whining, double the everything.

And I already had two kids
under, under four years old.

So we're, uh, my house is a little
bit, uh, it's fun, it's exciting,

chaotic, and I often say surviving is
the way that I feel survival on any,

on any given day, but in a good way.

In a good way.

Of course.

Uh, my wife does a really great job.

And, uh, shout out to her because I
couldn't do what I do without her, uh,

her support and her being a great mom.

Um, as far professionally as
professionally, you know, I've been in

very involved in the sign bus, in the
sign field, in the sign shop owners field.

Uh, I've currently taken on a lot
more clients across the country.

I'm now on the west coast with a
couple of clients, uh, in Canada

with a client here on the East
Coast and, uh, obviously Canada.

A Canada a yeah, and, and
learning a lot more from.

From their perspectives as
to what their struggles are.

And we're gonna get into some
of that here today, I think.

Yeah.

Well, congrats on the twins.

Thanks man.

I see you.

You still have hair, so
you're doing well there.

Yeah, I'm losing some right here.

I'm losing it like I've had
to change hairstyles lately.

Uh, that's another thing that,
that's gone that I've done.

This past few months is, uh, I went
back to my twenties haircut, like the

haircut that I had in my twenties.

Uh, it just didn't look good
on a man that's about to be

in his forties body style.

Um, I, I looked a lot thinner and
leaner in my twenties for sure, where

that haircut was kind of amazing.

You know, the, the high
and tight, if you will.

Uh, try.

Tried to hide away the fading
hairline there, but went back

to my, uh, my forties hairstyle
here about a couple of weeks ago.

Well, you, you saw my
experiments with, with hair.

I did.

What's up with the braids man?

I think you enjoying the
girl dad life too much.

Yeah.

So I call it a crime of opportunity.

We, uh, we did Disney.

Uh, couple, uh, it was last month
and, uh, we went with a, another

couple that we're friends with.

They've, like, our daughters are best
friends, so we've got five girls, two

couples at a resort down at Disney.

We actually went to, uh, it's
the, the Hilton Signia down there.

It's not Disney property,
but they have a shuttle.

If you're going to Disney, that's where
I'd recommend, 'cause you could cash in

all the Hilton points if you've got 'em.

But aside from that, uh, we're
walking down to the pool and

there's a, a braid station there.

And my buddy Mike, not the sign
burrito Mike from the podcast, but

my buddy Mike is like, Hey, why
don't you get your hair braided?

And I was like, that is a fabulous idea.

You know?

So I'm like king of.

Of making my wife aggravated,
making her sweat a bit.

Uh, I sat there and got my hair braided.

Little did I know that she was planning
on using the pictures from the next day

at Magic Kingdom on our Christmas card.

So I, uh, I was in hot
water there for a bit.

You have absolute balls of steel.

I, I just couldn't do,
I just couldn't do that.

I couldn't do that.

Wondering what my wife would think,
wondering what my friends would think.

I mean, if a friend suggested
I should get my hair braided,

I, I'd question our friendship.

Uh, like we, yeah, it, I, I think it's
like when you're with your friends,

like you're instantly transported back
to like 13 or 17 where you're just

like, especially on vacation, right?

You're like, oh, hey.

Eat that or like, so it was one of those
trips, but you know, my wife ended up

liking it, um, you know, worked out well.

Uh, I actually got a lot
of compliments from folks,

if you could believe it.

Okay.

I, I, I, I can't believe
it, but I trust you.

I take your word for it, but
that's pretty amazing stuff.

Yeah, man.

Uh, other than that same man, busy.

Uh, as you've now experienced like
girl dad, life is, uh, a bit different.

Lots of, lots of emotions, lots of crying,
lots of hair and makeup and all that

stuff you've got that to look forward to.

I can't wait to catch you on
the podcast in a full makeover.

Yeah.

Blush and eyeshadow and lipstick.

Yeah.

We'll, we'll, uh, that, that
will be the day mark this episode

down, that that will not happen.

And if you ever see that happening, um,
that's when I've completely given up.

It's there that when you give up,
that's when you get the minivan.

Oh, we're on our way to
the minivan right now.

I think

it's the most practical choice.

Let's dive into some practical rules
that, uh, that we're gonna talk

about for this episode and maybe
another episode as well, don't you?

Uh, yeah.

Set us up here, Pete.

Yeah.

This is, this is something out
of your consulting practice.

Yeah.

Absolute.

Absolutely.

So here we are at the time of filming
this, uh, this episode here, it's,

it's quarter four of year 2024, and a
lot of sign shop owners out there are.

Looking at their numbers, and maybe
they're thrilled, maybe they're happy,

maybe they're not happy, maybe they
start questioning, you know, how,

what's that push towards reaching
our financial goal that we set

forth at the beginning of the year?

A lot of emotions can be running
wild through your head right now,

uh, especially in quarter four.

When you start looking at,
okay, where did the year go?

You know, and, and, and what though my
numbers look like and where, where did

I go wrong throughout the year or where
did we go right throughout the year?

So one of the things that has become
abundantly clear with, uh, my cl, my

sign shop owner clients, uh, who I
consult with on a, on a weekly basis is

that there's no true North star to the
numbers that they should be looking at.

And I completely, and 100% have
disagreed with that sentiment.

You know, some people would say, yeah,
I think, uh, you know, like 30 or 40%

of, uh, you know, labor cost is okay.

It's just what we've always been doing.

And, and, uh, you know, I'd look
at that and, and cringe and we

need to kind of take a deeper lot
deeper look into what those, uh.

What those KPIs, what are those
mastering of the financial

foundations of your sign shop?

What, what do you need to do to
become better going into the latter

part of the year and obviously into
the early part of the next year?

Because like anybody knows, the end of
the year is, uh, is a strong push towards

the finish line, like, but the beginning
of the next year, January and February

are notoriously slow for the industry.

Uh, it's a slow part of the industry
and the, and the shops that are are

busy are typically the shops during,
or that are busy at that time, that

are handling a lot of the overflow
projects that were not completed

in the latter part of quarter four.

So in what I thought would be
important as to, as a way to kind of

come back into this with a bang come
back into this podcast with a bang,

is to do a two part episode here.

We're not gonna be able to get through
all of these inside of one episode,

but we'll, uh, we'll certainly stick,
you will definitely wanna stick

around to the part two of this, uh,
of this podcast episode here that

we'll be dropping here next week.

So, uh, or in the upcoming
weeks, I should say,

but down from the
mountain calms Peter with.

The 10 Sign Shop Commandments.

Yes, that's right.

That's what I call them.

I call them the 10 Sign Shop Commandments.

Now, in order for you to master the
financial foundation of your sign

shop, these 10 commandments are
what's going to be your North Star.

Now, are we going to get a.

Like a, like a full
accounting degree here.

Like what are, what are we talking about?

You're talking about financials.

I know that's usually like a, it,
it's like a squishy subject for a

lot of owners that I've talked to.

It's like, it, it's important to know
the numbers, but as you mentioned,

a lot of them may not know what
numbers they're trying to hit or

what numbers they should be hitting.

Exactly.

And you know, I, I guess for,
for starters, I'm speaking to

the sign shop owners that are, I.

Diligent with reporting on their numbers.

Not ones that are talking to
their accountant once a year

and saying, you know, how did my
business do at the end of the year?

Or, you know, let's, let, get me all
my bank statements and let's start

reporting on all my financials, you
know, towards the end of the year.

Or, you know, come tax season, I'm talking
about that sign Shop owner that pays

attention to their profit and loss, pays
attention to their balance sheet monthly,

if not bi month, uh, twice a month.

That's the type of sign shop owner that
I choose to work with in my practice.

That's the type of sign shop owner
that I feel like I can help the most.

Because when you're not in that world,
when you're not in that world of knowing

your numbers, knowing the pulse of your
finances, knowing the pulse of your

business, I mean, what are we really
getting up every morning and doing?

You're, you're a type that I would say
that you're the type of owner that's

involved too much in your business if
you're not looking at your numbers.

You know, you're the one that's going
out meeting the clients and you are

the one that's project managing.

You are the one that's coordinating
installs and speaking to your vendors

and possibly maybe even the one in
the truck installing signs or making

the signs or designing the signs.

And that's not I.

That's not my client.

My client's the one that knows
that, you know, I can't be the

owner in working in the business.

I need to be on the business.

And, and working on the business
means you need to know the numbers.

You need to know your finances, you
need to know your percentage points,

and you need to hit some, you need
to strive to hit those targets.

So let's, let's shoot
right outta the bang here.

Uh, right outta the cannon.

Let, let, let's get, yeah,
let's get right to it here.

Uh, we'll shoot right out of the cannon
and we'll talk about gross profit margins.

Okay, now.

For those of you that don't know
what your gross profit margins

are, that's your gross sales,
minus your cost of goods sold.

Okay?

So your gross profit margin.

Now, I'm not necessarily gonna give
you the first commandment here in

terms of dollars, but I am going
to give it to you in a percentage,

'cause I'm a percentage kind of guy.

Brian, you know.

I would invest heavily in, in a business
that was, you know, if you're doing $5

million and you're not hitting these
market, your markets, your markers,

and you are netting 5%, I'd rather
invest in the company that's doing

$500,000 and netting 20% or 10%,
you know, so, makes a total sense.

I mean, we talked to a lot of guys that
just want to grow and grow and grow,

but if you're not hitting the numbers.

What's the difference?

Like, hey, if I eke out just a, a penny
in profit and doing 10 million in revenue?

Yeah.

I mean,

sometimes, sometimes people get caught
up in like the, the accolades of

what your nets, your gross sales are.

Oh, I'm a $10 million shop.

I'm a $9 million shop,

and

just because you're doing 9

million, that's.

That's why all these are in percentages.

That's the,

that's why the most of
these are in percentages.

Yes, because it's, it's for everyone.

So let's start with the first one.

Your gross profit margin should
equal or exceed 60% of your sales.

So that means if you did a hundred
dollars, you need to profit

$60 after the material cost.

That's, that's kind of where that is.

If I can break it down to a simple number.

If you sell something for a hundred, you
know, you want your, you want your profit

before your office expenses and your
overhead expenses to be $60 of that 100.

So you want about at least anywhere
from zero to $40 being your

material cost on that project.

Okay?

So that's what I meant by when I say gross
profit margin should equal or exceed.

60% of your net sales.

Any comments on that?

I, I like that number, but where did
you, where did you pull this from?

Where did I pull this from?

That great question.

Where did these sign 10 Sign
Shop Commandments come from?

Bryant.

I, I mean, I'm not gonna tell you
that, I'm not gonna tell you that.

They, they, they come, they
come from years and years of.

Profit and loss management, multiple
different profitable sign shops.

Uh, it didn't come from Moses.

Is that, if that's what you're asking?

That's, that's, that's where most of
the pricing comes from for the majority

of, of, oh, hey, what's the price?

That feels fair.

No.

Yeah.

It didn't come from thin air either.

It didn't come from thin air.

You know, we're talking about looking at.

Dozens, if not hundreds of profit and
losses in my career for sign shop owners

across the country and coaching and,
and learning from some of the best

franchise systems in the country on
what they're looking for in terms of

their units and their unit economics.

60% is a really great, healthy number,
but it could equal or exceed that.

So it can be better, uh, but you
don't want it to go below 60%.

That's the key there.

So when you take a look at
your, your first primary KPI,

it's, what did you do in sales?

What did we do in cost of goods
and what is that percentage there?

And that is sign shop
commandment number one.

One.

So when you mosey on down the profit and
loss here, what's after cost of goods?

Typically, in most, uh, profit and loss
architecture format, you're kind of

looking at next would be labor, right?

So now you, you have material and
now you mosey on down past material.

And we're looking at, okay, how much
did it cost in labor to produce?

So this is a very simple,
uh, very simple one because.

We're talking about physical wages here.

We're talking about the designer,
the sign maker, the installer.

We're not talking about in this
particular KPI, we're not talking

about any type of support labor.

We're talking about direct labor, so KPI
number two, at commandment number two.

We should have like some sort
of like angel noise when Yeah.

Like

there you go.

I dig it.

Commandment number two, direct labor
should not exceed 20% of your net sales.

Okay, so let's, let's go back.

What is direct labor?

What is direct labor we're talking about?

People in your business that are direct,
that are directly connected to, to

the sale, to the, to, to the product.

Okay.

We're not talking about CSRs, we're
not talking about project managers.

We're talking about people that
are directly connected to the sale.

I'm all, some people would put
salespeople in this category, and I

feel like there's about a 50 50 split.

Of, um, of people that
would put salespeople like

territory sales, outside sales.

Mm-hmm.

Um.

Personally, I'm on the fence on this,
but I would lean on not including

that in this percentage point.

I'm talking about your designers.

I'm talking about your production guys,
your installers, your electrical guys,

you know your welders, your painters.

Yeah.

The resources that you are using to
build the actual product that you sell.

Correct.

Now, we'll get into the rest of those
people in, in a minute here, later,

uh, later on in, in, in, in part two.

But in part one here,
commandment number two.

Direct labor should not
exceed 20% of your net sales.

So if we go back up to that
a hundred dollars, right?

We've got $40 or 40 bucks in
cost of goods, labor should not

exceed $20 of that a hundred bucks

right?

Now, remember, remember, do not
exceed because you can be 10% cost

of goods, 20% cost of goods, but
you shouldn't be more than 40%.

Okay?

So that's what it's saying
there, and you shouldn't.

Be exceeding 20%.

So your direct labor costs
could be less than 20% too.

Uh, if you take a look at your p and
ls everyone and see if that's what's

what you got going on, but it shouldn't
be more than 20% of your net sales Now

com sign Shop commandment number three.

We're kind of moseying through this here.

I'm moseying through this year.

Let's go back to.

Commandment number one, we talked
about gross profit margins should

equal or exceed 60% of net sales.

And we kind of referenced
materials minus what that is.

That formula there is sales
minus materials, but what

should materials really be?

So materials and parts.

Okay.

Uh uh.

Some people, if they're using
shop box, they call it parts, uh,

materials in general can be anything
in your shop that is used in.

Your business from transfer tape
to banner tape, to grommets,

to substrates, inks, um,

electrical accessories

should not exceed 17% of your net sales.

Okay, so we're saying now that.

When you populate all of those
expenses, you go to your supply

house, you're going to Grim Co.

You're going to your local supply house.

You're ordering materials every day,
every week, whatever that looks like.

Vinyls, inks.

Yep.

Make sure that you're classifying
those purchases correctly.

Because you can skew this
number pretty easily.

I'll give you an example of
one of my clients that has

skewed this pretty easily.

They would do a weekly
order with their supplier.

I believe they use Grimm Co.

And they would order everything under
the sun because of where they're located.

They only do Grimm Co.

Only does like a once
a week delivery truck.

Yep, yep.

Been there.

So when they send, set out
an order, they're ordering

substrates, they're ordering, um.

Supplies like exacto, knives, blades,
cleaning, flu, uh, application

fluid adhesive remover, you name it.

Right?

They're, they're, they're
ordering everything.

But what what's interesting here is
that they're also ordering things that

like, uh, perhaps inventory in bulk.

Okay?

Uh, which is not a profit in loss item.

That should be a.

Balance sheet item.

We'll, we will talk about
that in a later time.

But the proper accounting here, if
you are purchasing materials in bulk,

it's not a purchase that goes on
your p and l, it's a purchase that

actually goes on your balance sheet.

'cause it's not yet tied to a job.

So it's an asset for your business,
not necessarily an expense.

Uh, another example of
this would be mixing.

Materials with other items.

Like if you're going to Home Depot and
you're buying things like, uh, screws and

hardware for a project, but you're also
buying garbage bags and you know, cleaning

supplies for your office or toilet paper,
paper towels, whatever it is, right?

And you're doing that on a
consistent basis, well, those items

are not really cost of materials.

Those are office supplies, and
that's an overhead expense and not.

A cost of materials expense.

So some of this might sound simple,
but you can easily screw up if you just

look at the total number on an invoice
that you paid at a Costco, a Lowe's, a

Home Depot, wherever you're buying your
materials from and saying, oh, yeah,

I, I took $500 and I spent $500 here.

Well, maybe only $300 of those
items were cost of goods.

So you have to actually look at
the line item on the receipt.

Classify it correctly, and the shops
that actually are doing this well are.

Understanding the accounting part, and
they're breaking apart their orders

into, these are my material orders, these
are my office supply orders, these are

my cleaning supply orders, and they're
checking out with one vendor, but

they're processing the order separately.

So they're breaking it down into three
separate invoices for easy reporting.

Yeah.

Uh, which you know, is just a couple
of extra steps because when you're

in that type of sign shop that is.

Always on the rush, always on the move.

I gotta meet these deadlines and,
you know, it's always that you're

always moving at a speed of a hundred.

It could be easily forgotten
these particular steps.

Yeah.

You know, well

it, it's all about prep
work as well, right.

That you've gotta have, you gotta have
the, the foundation, you gotta have

all this stuff set up to, to codify it
correctly, to make sure that like the you,

you can actually get to the point where
these numbers are actionable for you.

Right.

So, uh.

Yeah, so I, I, I've seen a lot of
QuickBooks over the years, uh, for

shop owners and, uh, I can tell
you that like, no, like chart of

accounts is the same across the board.

Uh, but that is a very important step.

It's, uh, you know, you need to take
the time to really sit down, go through

it with your accountant, or they,
somebody who is, who is knowledgeable

about that, and figure out where you're
gonna code these things at and, and

what those accounts are gonna be.

Yeah, for sure.

You know, as many of our
audience members know, I come

from the franchise world, right?

So when you're in the franchise, the
franchise supplies you with, this

is the franchise chart of accounts.

There is no deviating from it.

We've thought of everything and
everything has got a little chart

of account number that can assign
the little list things to it.

But when you're mixing, uh, when,
when, when you don't have that value,

when you don't have that value of
becoming a franchise and you don't

wanna be in going down that path and
you have to do your own bookkeeping.

One of the best things for you to
do is really to have a, a constant

communication with your bookkeeper
about similar like expenses.

So if you're making material expenses
on the regular, inform your bookkeeper,

like, no, this is a cost of goods.

Anything, anytime you see this vendor.

Charged on my debit
card, charged on my Amex.

Anytime you see a check written
out to this vendor, you know, that

is a typically going to be 98% of
the time, a cost of goods expense.

However, when you do run into that
situation where, okay, we just

spent $500, but a hundred dollars
of that is an office supplies and

toilet paper for the bathrooms and
you know, soap and hand towels, and.

Scented candles.

You know, just for the typical shop
office, you have to notify that bookkeeper

of yours and say, Hey, look, I just
made this $500 expense on November 15th.

And a hundred dollars of that
is going into office supplies.

I just wanted to let you know,
uh, here's the receipt and that's

how you should be communicating
with your monthly bookkeeper.

And if you don't have a monthly
bookkeeper, I personally

strongly advise you to get one.

Uh, because if you should, you should
not be an owner, uh, without one.

You should not be in owning a sign
shop without a monthly bookkeeper.

They're not expensive.

$200, $300.

You could do this remote.

You could do this with a, you know.

Someone in the Philippines, or even
someone in your local market if you, if

you even want, but they're not expensive.

Uh, but it is important for
you to have accurate numbers.

All right, so just to recap,
10% gross profit margins should

equal or exceed 60% of net sales.

That's number one.

Number two, direct labor should
not exceed 20% of net sales.

Cool.

Got that Number three.

Materials and or parts should
not exceed 17% of your net sales.

Okay?

We often get in this industry, I know I
did for the explosive profit margins and

the materials and parts reason is one
of those reasons why it's so amazing,

you know, uh, what, how much money you
can make off of a $10 sheet of Carlas.

You tell me.

You know what I mean?

Like it's a, yeah, like the mark you got.

Some have always been

good.

You got some really great explosive profit
margins here in the sign shop world.

Okay, number four, sign, shop
commandment, number four.

Okay, so we're moseying on
down that profit and loss.

Now we got sales, we got cost of
goods, we got materials, we got labor.

Now we're gonna talk about.

Overhead with the the mosey thing.

Like, Hey, T, I'm thinking commandments.

I'm thinking Moses.

Oh no,

mosey on down.

It's kind like, just like
perusing, like giving a walk

down, Jo, down the know I got it.

No, I got it.

All right.

Sign Shop commandment.

Number four.

Number four, operating expenses.

Now every shop here is very different.

Brian.

You know that there's big shops,
there's small shops, there's two

man shops, there's 20 man shops.

Okay.

Every sign shop, no matter what, is
going to have different expenses.

And this my friend, you
and I know this very well.

This is the reason why pricing is off the
charts different from one shop to another.

Okay?

When we talk about pricing and products
and being priced out of the market, this

my friends, is why pricing is different
from shop to shop operating expenses.

Sign, shop commandment.

Number four, your operating expenses
should not exceed 48% of net sales.

Okay?

Should not exceed if you're doing okay.

If you're hovering 48%, maybe
you're doing 49, 51 month, and then

you're at 44 some months, you're
probably having some cashflow issues.

You gotta really look
at your expenses here.

You gotta take a strong look
at your overhead, your phone

bill, your utilities, your rent.

What are the bigger, what are the hammer?

The bigger hammers here is rent.

Okay.

Mm.

And, and surprisingly, one of the ones
that I actually love the most, and I

know you know this, but there are a lot
of shops investing a lot more money than

that they spend in rent in technology.

Okay.

Like RIP software,
graphic design software.

Mm.

Yeah.

POS software, Zapier, they're, you know,
field management software, company cam,

things like this that are just adding up,
you know, you gotta look at all of that.

Yeah.

Uh, as some of your
bigger, heavy hitters here.

If you have, um, if
you part of a, that was

gonna be my question is like, if we
back up like what, you know, you've

mentioned these things, but like
what goes under operating expenses?

I.

So that's gonna be your typical people
can, uh, call 'em overhead expenses.

People call 'em operating expenses.

Uh, people call 'em business expenses.

You know, your tip, everyday run
of the mill expenses that you're

gonna have in your business.

So rent cam charges, perhaps
you're paying taxes on the

building that you own or every,

everything that goes into
keeping the light on whether

you make the first sign or not.

Yep.

Credit card fee, merchant fees.

Um.

Let's see.

Let me think of a couple.

Your phone bill, your electric bill,
you know all of your utilities.

If you have a lease, a printer, lease
payment or insurance that you're paying.

Car insurance, gas, uh, you're gonna
look at all of these expenses and

classify them as an operating expense.

Now, we talked a little
bit about this, okay?

Just a little bit, but.

You're gonna also, you're what a
problem that I also see here is that

for the support labor items, uh, okay.

You're clairvoyant.

That was, that was my next question
is like, does labor go in here?

Not

correct.

You know, there's a lot of people
that mess up their p and l statement.

You know, when they look at their p and
l statement, they're putting labor in.

Operating expenses, your designer
salary and, and things like that.

And, and, and the reality is,
is that you should not, okay.

If you're not, if you're not
classifying direct labor, then the

next type of, there's only two other
types of labor categories that should

be listed on your p and l support.

Labor is the first, that's
gonna be everyone else that's

not related to the project.

Or a signed sale, you know, maybe
if you have a bookkeeper or a

controller or a CSR, your sales staff.

Okay.

Maybe you have an inbound sales person.

Uh, maybe you have a, maybe you
have like, um, operations manager.

Yeah, like a foreman or, yeah, an
operations manager or, or I was gonna

say like a general manager here.

I'm trying to think of some others just
in case that somebody has somebody here.

Uh, field supervisor would be another.

If you have any of these types of people
that necess their ru, their job is to

make sure that the job gets done, but
they're not necessarily swinging a hammer.

They're just more upper management or,
you know, maybe even in, in, in a sense

of running your business or just running a
department that's gonna be support labor.

Bookkeepers, if you have an, if you
have a train, we, we've had some people

on this podcast that had trainers
on their full-time staff, right?

So these are all support labor line items.

And then the second one, or
in this case the third one.

'cause you have direct labor as well.

I.

Would be, you know, owner salaries.

Where, where is your salary in this and,
and is that gonna go under support labor?

I don't recommend it because you are,
some days you're paying yourself,

some days you're not, some days you're
taking a bonus, a significant bonus.

Some day, some months you're not.

So you should absolutely
be breaking yourself down.

Uh.

Outta that labor as well.

So owner salaries maybe
that you have partners.

So you gotta really kind of break
down like, this is my salary, this

is this owner salary, et cetera.

Um, so definitely break that
down to direct labor, support,

labor, and then owner salaries.

I.

So now the first, I think where you
were going with that is should any of

this be considered an operating expense?

And, you know, some shops, some shops can
put that support labor in that category.

Okay.

Um, personally, I'm not,
I'm not all for that.

I'll, I'm always breaking
down labor separately.

Okay.

I, I'm looking at operating expenses as.

Things that you need to make that business
run, whether you're operating or not.

You know, you have these expenses
every month no matter what.

Uh, so like I said, those should
not exceed 48% of net sales.

Now, getting to the last one here.

Sign shop commandment number five.

Okay.

I think we could talk, I think I left
it number five for a reason, because

I feel like almost every single
person I talk to about this has.

No clue what their percentage is.

Um, it is the one that we talk about
a lot in my, in our coaching sessions.

It's the one that fluctuates the most.

I.

Uh, it can be expensive
then it could be zero.

Zero the next month.

Yep.

Yeah.

Yeah.

So it's the hardest one to keep track
of because I'm not gonna lie to you

here, Brian, and maybe our audience
won't like this, but a a, a large chunk

of sign shop owners out there are lazy.

Are lazy, or this is

a mic dropping there.

Bam.

Yeah.

Well, uh, I'm able to say
it because I used to be one.

Yep.

Okay.

And so I can acknowledge the
fact that as a sign shop owner,

I did not fully understand this
fifth sign shop commandment.

Um, I knew that I needed it.

I knew that we needed to, uh, have it.

I didn't know how much I needed to spend.

I thought it was, uh, fluid.

I could just guess and take a stab at it.

Boy.

Oh boy.

Years have gone by.

I've learned from some.

From some of the best.

So, sign, shop, commandment
number five here.

Your advertising budget.

Okay.

You're also known as your
marketing budget, okay?

Yeah.

Should not exceed 11% of net
sales on any given month.

Okay.

So advertising, sign shops,
advertising, like marketing, what?

Yeah, yeah, yeah.

I have, um, at this current time,
I have seven sign shop clients.

I actually can't take on anymore.

Uh, not yet, at least
not until the new year.

I did a, I had a feeling we would
talk about this coming into this

episode and I won't name them.

I won't name who they are.

Okay.

But I will give you the number
out of those seven, four of

them do not advertise a dollar.

Yes.

Okay.

Four of them do not
advertise their business.

They know who they are.

That's what percentage

to that

they know who they are.

It's

57%.

57% of my clients, which is,
you know, just in a vacuum.

In a silo here, okay?

There's thousands and thousands of
sign shop owners out there, but out

of my seven who are very good, you
know, I have from 500,000 to 5 million

is are what my sign shop owners do.

My clients do.

So they, I, I have some heavy hitters
and I have some, you know, guys that

are just getting started out here.

Z four out of the seven, right?

I said four.

Four out of the seven.

Yes.

Do not spend a dollar on advertising.

And I will also say.

That the one person that does 4
million is one of them and doesn't

spend a single dollar on advertising.

So I'm just gonna throw that
little carrot out there.

Now I am in the, I hope
I'm in the majority here.

I hope I'm in the majority
because I believe that in order

for your business to succeed.

You need to advertise, okay?

Yep.

You need to forecast revenue.

You need to be able to forecast the amount
of opportunities that you're going to

have in any given month throughout the
year by looking at history, by looking at

budgets, by looking at dollars and cents
and percentage points, you should be able

to forecast how many opportunities your
business will get in any given month.

But most sign shop owners,
Bryant, they, they don't care.

And this is in my personal opinion, and I
think you and I have had a lot of offline

conversations about this in my personal
opinion, this is where companies like

Corbridge and Shop Box, and I know you're
going through your POS school right now

and kind of going through all of this.

Mm-hmm.

But.

This is where I feel like most
of these shops, uh, pieces of

technology have dropped the ball.

They have completely and utterly
forgotten about marketing.

They just say when the job, when
the, when the lead comes in,

well, where'd the lead come from?

How did you get the lead?

Yeah.

When the lead comes in,
enter it into your workflow.

Great.

That should be awesome.

Where are the leads?

Where do they come from?

Do they just magically appear?

Do they just come into the pipeline?

They, they just,

you just manually put them in there.

Oh, oh, I know.

They just fall out of the sky.

No, I, I agree with you.

Oh, I

know.

Oh, I know.

They shop box guarantees you
X amount of leads when they,

when you buy their software.

Right?

And that's, that's how it works.

Like No, no, it doesn't work that way.

So like, how do you operate a business
not knowing one who your customer is?

I feel like that's a part of this
process that we need to also discuss.

But how do you not spend
a dollar now I'm gonna.

Say that those four shops
that aren't spending a dollar,

I'm not singling them out.

'cause I really feel like there
is a lot of you out there.

No, that do not.

There's

a hundred percent, there's the majority.

Like if you looked at the p and l, let's
say a hundred sign shops right now, like

marketing and advertising would probably
be like one of the more minimal expenses

correct.

On

there.

And what do you think, what do
you think is the first thing that

they cut when cash flow is tight?

I.

The marketing budget because
hey, we don't, we don't need it.

Or the, the work is coming in.

Right?

But yep.

The, the laws a pipeline dictate
like, Hey, hey, the, the stuff that

you're bringing in now took time to
develop and time to bake, and time

for somebody to say, oh, hey, I, I've
seen this sign shop a thousand times.

Oh, I actually need this thing now.

Right.

Cutting off the marketing budget.

What are you doing?

You're chopping your arm

off, cutting the head
off the snake, right?

Cutting the head off the snake.

But you know, to your point, when that
huge job that you're working on gets

done and you get paid, what's next?

Where's the next, where's
the next one coming from?

You know, it's when I explain
marketing, when I explain

advertising, there is a, a lot of.

I don't need, I don't need customers.

I don't need customers.

Um, we stay

busy enough.

We've got plenty of work.

Yeah.

My, my word of mouth.

Word of mouth.

Mm-hmm.

Word of mouth.

I've been here for 30 years
and everybody knows who I am.

I don't need to advertise.

That's typically the rhetoric.

And if you're one of those shops that
are lucky enough to say that, great.

I'm, I'm not really talking to you.

What I am talking about is just
having a marketing budget, because

most of your businesses, if
not all of you guys out there.

Wanna grow your business, you wanna
scale your business, you want to,

you might be stuck in the mud,
you might be doing 2 million and

saying, how do I get to 5 million?

Or how do I get to 4 million?

Or how do I get to two and a half million?

Or you might be a $500,000 a year shop
and you have a marketing budget and

you might be saying, well, my marketing
was just an expense 'cause I only did

$700,000 this year instead of 500,000.

You know where you are in.

Sign shop lifespan.

This conversation is
different for everyone.

Okay?

Sure.

However, we'll go back to your, uh,
well, my original observation, if

you make a hundred dollars Oh, what
I am simply saying is that $11, no

more than $11 should not exceed.

$11 need to go into paying
for that $100 that you got.

Okay?

So if you're spending
$5, $6, $1, whatever.

It just can't be over
11, 11% of net sales.

So let's put an extra zero to that.

If you did a thousand dollars, 110
bucks to make that a thousand dollars

is what you can't spend more than, okay?

And that could be really looked
at with a magnifying glass.

We can look at that in a week.

We can look at that in a month.

We can look at that in a day
and say, what did we spend?

And how many leads did we generate?

Yeah, I I, I like the way that you've
structured these and like, should

not exceed because like, you know,
I, the things that I've heard over

the years and seen is usually like
a, hey, you should be spending a

percentage, this percentage of sales.

Uh, but I, I like this format
because, you know, I could always

spend X percentage of sales.

To, to, to get a new lead, right?

Whether that you say that's 4%, 5%,
whatever it is, obviously, like you,

you always want to decrease this
number as a percentage of net sales.

But there you do have to be spending
some money to, to have that percentage,

which is an interesting segue, uh, into.

Uh, I, we'll, we'll, we'll pause here
'cause we have another five to go.

And we're gonna, we're gonna save
that for part two of this podcast.

But before we go, before we go, I
have, uh, is it, I'm gonna, I know

you like to go into the mailbag, but
I actually have a mailbag question.

I.

Okay.

That, that, that came in just the other
day and I thought relative to stopping

on, on sign shop commandment number five
around the marketing and advertising

expense, that this was a really
great mailbag question to start with.

Okay.

So I have a, I have a question here.

Okay.

Hold on one second.

Let pull it up.

Lemme pull it up.

All right.

This is a good way to cap this one off.

So I have a, I have a, uh.

I have a question here
from Jason in Idaho.

Idaho.

I have a client and I have
a sign shop client in Idaho.

So this is, this is actually
really good and it's not, this

is not my client, by the way.

My client is not named Jason, and
he says, what are some marketing

vendors out there that are working
for the sign shop industry?

And as a part two to
this question, he writes.

Will they work in Idaho.

Okay.

Okay.

Um, I don't know much.

They work in Idaho.

Yeah.

So this is an interesting, I have a
couple of answers to this, is that,

can we do the second part first?

Is that like a, like will they
physically work in Idaho or like

does their technology or their
platform or whatever work in Idaho.

I'm sorry, Jason.

Sorry.

So Jason, I feel your pain.

I am gonna answer part two
of your question first.

Uh, I have a little bit
of a horse in this race.

Okay.

So I have a sign shop client in Idaho.

Okay?

Not in a major city of Idaho,
either, uh, like Boise or

Meridian or anything like that.

Like, no.

Uh, so if you are in Boise or
Meridian, I think that this answer.

Is different.

Idaho is a very interesting
state in the us.

Like this is how
interesting it actually is.

I have come to learn that Amazon
only makes like once a week

deliveries to certain parts of Idaho.

Yeah.

Oh, okay.

That deliveries are actually
really hard to get in Idaho, that

even companies like Grimm Co.

They like, no, we're gonna ship it to you.

We we're not, we're not making that drive.

We don't make that drive at all.

Uh, we don't send a
truck out, uh, this way.

So I've actually, uh, heard from
my, my client in Idaho that like,

yeah, it's, it's, it's challenging.

We have to order like once
every, once for two weeks out.

Just to have enough inventory and
geez materials and, you know, to

get that, to get that here in time,
we actually have to order in bulk.

So I feel your pain being in Idaho,
um, not necessarily encouraging you

to move to another state, but, uh, I
do understand why you're asking the

question of will it work in Idaho?

All right, so part one to that
question is what are some.

Marketing vendors that I could use.

And what has anybody
basically had success with?

Um, Bryant?

Now I know you and I are
are keen in this area.

I actually have a couple of new sign
shop vendors in the marketing world that

I, they they have no, they have not.

Uh, I will mention them,
but they have not, um.

Paid to be on this podcast.

They have not, uh, sponsored this episode
or any way or not, it's just, I think

we've had a lot of success with a couple
of these, uh, marketing companies here.

So I'm gonna mention them.

And, um, if you're watching this podcast
on like YouTube or, or anywhere, we'll

probably put the links for these,
uh, these vendors here in the, in

the, in the, uh, description below.

So Jason.

I feel your pain, but maybe some
of these sign, uh, sign shop

marketing vendors can help you.

We'll start with one that
I am so in love with.

Okay.

The name of the company is
called Ride the Wave Info.

Right.

And I The wave info, correct?

Yes.

Um, so some of you may not realize
this, but I'm a huge twi, uh,

X user Twitter, Twitter user.

Uh, I have a, I'm on it actively, and
I came across an individual, um, named

Brian, and he is in his thirties and
started this company called Ride the Wave.

And I was like, all right,
lemme check this out.

And old.

And, and, and to tell you
the truth, I didn't believe

that it would work at first.

Um, I've, I've had no, a
number of meetings with him.

I've referred him to a lot, a couple of
my clients who've had some successes here.

Ride the Wave has a, I think they've
cracked the code on communal networking.

Okay.

What does that mean?

Uh, so we're all in
the sign shop industry.

Right.

And to be a part in the, to be a, uh,
a sign shop owner in the industry.

You have to let me go back.

You have to advertise your business.

You have to network your business.

There is no world where you're trying
to grow your business and scale

your business, and you don't have it
figured out in terms of, you know,

like, I'm gonna advertise here.

Okay.

But I've also mentioned that
sign shop owners are lazy.

I used to be lazy.

One of the biggest fears that I
had was that I had to like stand

up and talk in front of people,
like at a networking event or a

Chamber of Commerce or A BNI group.

But these are the ways that most people
are aware of how they can be involved

in their community sponsorships and new
and trade events and community events,

and being like a mayor of the community.

Yeah.

One of the best ways to grow.

Yeah.

We've heard that time and time.

Time and time again.

I, I don't disagree.

I think it's one of the best
ways to grow your business.

So there's a, another tip if you have,
if you're not doing that, you should

definitely be doing these things.

What if that's not you though, right?

What if you're, well, what if that's

not you?

Like me, like me?

Uh, and I, and I tell my clients this.

So audience, I'm gonna tell
you this about me as well.

Um, COVID has made me an introvert.

I used to be an extrovert.

One of the best, one of the biggest ones.

I would be the one the,
the, the, the party starter.

The crowd pleaser.

The guy that's gonna, this is what I do
and you know, I'm shouting it from the

rooftops, covid and staying home and I.

Away from everybody has completely changed
my personality, my, my mindset on this.

And I'm now as nervous as the
next guy to get up in front of

people and talk in front of a
room of five people, let alone 50.

Okay.

Yeah.

So when I go to my, when I, but I still
go, I still go to two BNI meetings a week.

One on Tuesday morning,
one on Thursday night.

Okay.

And I'm networking my businesses.

If you're, if you're not doing that,
I strongly advise you to do it.

But for those that are you, that have,
that are introverts like me, and you're

fearful and you're, you're just, you
feel like you've gotta spend the money,

but you can't commit because you're
always listening to your inner voice.

And your inner voice is saying
like, this is not working.

Or, you know, I'm scared.

Let's just not do it.

It's easier to just say, no, this guy
ride, this guy Brian over at uh, ride the

Wave has been able to figure out a way to.

I think he cracked the code on communal
networking, and he's using Facebook,

in particularly Facebook groups.

Okay.

To network your business, but
in a different way, in a, in a

way that I was so proud to see.

Okay.

So let me give you like the high
level of this vendor, and I know

there's a second one coming.

The, this guy has been able to say,
give me access to your social account.

I get it.

You might not.

You might be like absolutely not
right, right from the get go.

But hear me out.

If your business is struggling and you're
not a big user on social media anyway

and you got nothing, the hu give this
guy access to your social media account.

What he will do is he will join seven
groups a day that allow business postings.

Not every Facebook group will allow you
to advertise your business, but when you

think about the, the hundreds of thousands
of groups that are in your community,

car groups, school groups, craft groups.

Moms groups.

PTA groups.

I'm into a PTA group.

Now I can't, I can't listen to
these, these scha moms anymore.

Okay?

It's like when something bad
happens in the community,

everybody knows within seconds.

Okay?

You got hobby groups, you got
business groups, you got consultant

groups, you got everything.

You got sign shop groups out there, okay?

They're gonna join groups that are
in your community for you, and then.

They're going to post
about you in these groups.

Now, I said that very specifically,
they do not advertise your business.

They advertise you, which I
think is the best way to do it.

They humanize the element of.

Okay.

My name is Peter.

I've been living in the
community for 20 years.

I'm a graphic designer.

I'm married.

My wife is involved in the business.

My kids are involved in the business.

We've been doing this for.

10 years we we're trying to grow
our business and we really wanna get

involved in the community and we feel
like this is the best way to do it.

If you or anybody know of
any signage needs, you know,

please contact me directly.

Here's my cell, here's my email, whatever.

And then they take that and they
post pictures of like you and your

family working in the business.

You know, here's my son
designing the project.

Here's my.

Wife talking to a customer and
then there's like a, just a, a

family photo and it humanizes you.

It's, it's a way for people to say,
yeah, I wanna support that guy.

I wanna support that business.

And I was actually, I was actually
quite surprised with the results.

I was pleased to see it a little bit of a
different angle, a little bit different.

Not, you're not doing paper click
ads, we're not doing like social

media ads or anything like that.

This is just like.

Getting into the community.

People know you, people see you.

This farming.

Yeah.

Yeah.

It's a, I love that you said farming.

Love that.

Love the word farming.

Do some farming in your
advertising budget.

People.

That's a little tip.

Alright.

So ride the wave.

That's what they do.

Okay.

And I believe that they
will work in Idaho.

Okay.

I don't know.

I, I, you'd have to call them.

I, I, I wouldn't know, but I would think.

If you're in Boise or in a popular
city, or if you have a community that's

pretty large, it would work for you.

Uh, if you don't have a community that's
pretty large, I actually think that

that's an advantage because you become
the sign shop owner of the community

though, you know, like the baker,
the sign shop owner, the the postman.

So just because you're not in a major
city doesn't mean that you can't

develop that persona for your business.

Uh, we, we've seen that time and
time again on the podcast, like,

you know,

it doesn't have to be a
major city to be successful.

The, uh, the second vendor that I have
used and, and, and Brian, I'm not sure

if you've heard of them or not, or
used them or not, but social sponge.

Social sponge, okay.

Yeah.

These are all social sponge

new to me.

Oh.

Uh, I have seen this one.

You have seen this one?

Okay, good.

Yeah.

And not many people have heard of them.

Um, I personally was like, I.

Surprised by this because I, I'm
gonna tell you the quick story here,

Jason, and I hope you're listening.

I was in the shower one
morning and yes, that's true.

I was in the shower and I had my phone
in the shower and I'm scrolling through

my Instagram feed and some of you might
be like, what the hell are you doing

on your Instagram feed in the shower?

That's none of your business.

I was on my Instagram, so it's my,
I told you at the beginning of this,

I have four kids under four now,
so this is my only moment of peace.

Um, so I happen to have a waterproof
phone and I'm scrolling through

my Instagram feed and I get.

Tagged with this ad and says,
are you a sign shop owner?

And you make commercial signs?

And I'm like, wow,
that's very interesting.

I've never seen that.

I've never seen somebody talk to me so
directly, you know, in, in such a field.

Usually you see this in like other
areas like real estate or um, you know,

it, or AI apps and things like that.

I or sales, I'm seeing this guy
talk to me, just a random fellow.

I ended up meeting him.

Super nice guy, and he's like, I can grow.

I'm gonna guarantee I'm gonna
grow your commercial sign shop.

And I'm like.

Whoa.

That is quite a message

guaranteed.

Okay.

Yeah.

And there's a guarantee behind it.

And you know, there's like, uh, if
we don't, I don't exactly know what

their motto is, but if we don't like
it, let's just say double your profits

or increase your profit margins.

Like we, it's, it's like we'll give you
your money back or something like that.

Mm-hmm.

Um, social sponge has married social
ads, particularly those of like.

Facebook reels, Instagram shorts
and TikTok reels and things like

that, and married it with an AI
component, a a lead qualifier.

So you fill out, you, you click
on the ad, you fill out, answer a

couple of questions, and then this
thing is like running you through.

What are you looking for?

How much do you do?

You know, it's kind of
asking you all these.

Industry specific questions that
you and I know how to ask, but like

you train an AI bot to ask them,
that's pretty freaking miraculous.

Yeah.

Um, and then it qualifies
that person as a lead or not.

If it's a lead, great,
they send it to you.

If it's not, they kind of just
like send it off into your like

landing page for more information.

But it's an amazing angle because here
is something that you all need to know.

Okay.

And I know we're, we're a little
short on time here, but here's

something you all need to know.

Your customers are on these platforms.

If you don't think that
they are, think again.

Your customers are shopping
the same way you are.

Okay?

Lemme say that again.

If you are like me and in the shower,
scrolling through your Instagram feed,

so is your customer and it's that simple.

So if you're not doing anything
in this space, shame on you.

So sign chop commandments.

Let's just do a quick recap.

Yep.

And then we'll call it.

Yep.

Gross profit margin should not
exceed, I'm sorry, should equal

or exceed 60% of net sales.

Gross profit margins should equal or
exceed 60% of net sales direct labor.

Your designers, your fabricators,
your your production guys should

not exceed 20% of net sales

materials, parts, cost of goods, items
should not exceed 17% of net sales.

Your overhead expenses, your operating
expenses, your business expenses.

Should not exceed 48% of net sales.

And finally, number five of
our 10 sign Shop Commandments.

Start advertising.

Start advertising your
advertising expense.

Yes, should not exceed 11%.

11% people.

That's not a big advertising budget.

That's not a big marketing budget.

Get on but should not be

zero either.

It should not be zero.

Love it, man.

Love it.

Alright, so we'll be back with part two.

Make sure you stay tuned for that episode.

We are so back, baby.

We're back.

We're back

and better than ever.

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sure you hit subscribe to get all

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Thanks for listening.