A general "Future of the Industry" discussion

[Pat Whatley]

I've been thinking about it for some time now while trying to work out what direction to grow my business in and thought I'd toss it out here.

Where to you see the future of this business?

This is what's coming. There's a little speculation here, most of it is just looking at the facts. Look to Japan...most of this is where they are NOW.

EXTREME HIGH END WORK
-Demand will still be there for the type of work only skilled, talented craftsmen can do now however there will be more and more people developing the skill set to go after that piece of the pie. Technology like 3-D printers and CNC routers will GREATLY speed up the learning curve allowing "any hack with a $40,000 router" to compete with somebody with 40 years experience working with chisels.

TYPICAL DAY TO DAY WORK
-This market will continue to get saturated but not due to $300 vinyl plotters. Faster and cheaper wide format printers will drive production costs down to even less than they are now. With the ability to order things on the internet quicker and cheaper than you can buy them through a store it's only a matter of time before it becomes the norm for most business people to do their own design work in-house, send out the printing, and have $2.00 psf banners delivered the next day.

-Large format copiers will soon eliminate the need for a lot of typical signage. I'm already seeing a hit from them.

-Cheap, huge LCD screens are going to replace a lot of typical signage. When you can do full color, full photographic work, that you can change daily for little more than the design cost it just makes sense.

-In the next five years you're going to see $2000 48" inkjet printers hit the market. From what I hear you'll be able to feed 1/4" foamboard through them, as well. No, they won't work for long term work and won't work at all outdoors (yet) but they will take a huge chunk of the day-to-day market.


DESIGN WORK
-Mid-range design work will take the hit from hell. With the influx of "designers", the 100,000 pieces of good clipart (and millions of pieces of bad art), pre-designed templates, and ready to go layouts there will be less and less demand for "designers". A secretary can already get a free template and use it to produce professional results in minutes. The willingness to pay for custom design work for mid-range projects will be gone.


MATERIALS
-We're going to be POUNDED by the green movement.
-It's just a matter of time before we have to start paying extra disposal fees on the completely non-recyclable waste this industry produces. I've got 6 refrigerator boxes of silicone covered backing paper, PVC, and vinyl weedings that are going out tomorrow. That stuff doesn't just rot away.

PRODUCTION
Kinko's and FastSigns are just starting it but it's where I see the future. Most offices will be little more than ordering kiosks. All production will be done in regional production centers. It's a beautiful system...you can have 100 locations but only need a handful of skilled technicians who can run a CNC router, or massive digital printers, or that bank of flatbed printers. When the cost of high-end, high-output equipment is split between 30 regional locations there's no way a local shop will be able to compete. Adding new locations will cost next to nothing...the technology and skilled training investment is all in the central production facility....basically fixed costs.


It all concerns me, somewhat, though I don't see any of it killing my business. Business is all about adapting, you've just got to identify where it's going so you can figure out how to still be around when it gets there.

Where do you see it heading?

 

[Poconopete]

I'm stocking up on dollar store markers cause round these here parts they all using recycled cardboard fer signs these days.
Mention deposit for design work and they look at ya funny.
Also have to look for a defibrillator cause if I quote over $50 for a carved or blasted project...

 

[Master's Touch]

Pat- I don't have anything to add at the moment, but I just wanted to post and say thanks for this thread, as well as your well thought out perspective. It's a little unsettling in some ways, but I guess the Neandertal man felt that way when he saw the Cromagnon....

 

[Just Another Sign Guy]

Pat these are things that everyone should be thinking about and constantly thinking about for healthy profitable evolution, good post.

myself i decided a few years ago to consult with large companies both in and outside of the industry to design and prescribe the production methodology (real fancy words for plan the production) for extremely large projects where large savings can be found from sourcing materials, alternative means of production, logistics etc. or for projects that are outside of the boundaries of the average sign shop. for instance i am currently working with a worldwide tobacco company on an antique like glass sign with multiple surface treatments (glue chipped, acid etched, 4 different types of leaf..etc) that is in the 100's of thousands of pieces. there is a design team that bickers about the design(s) i give them input on the design that will make the project more cost efficient to produce and they take it or they dont,then i prescribe the method of production and then send out for bid for materials and also the production.

the savings for the company in approaching a project of this size in this manner versus the old way of designing the project and then sending it out for fulfillment is substantial.

the only other type of actual sign work i have any interest in doing is historical work (reproduction, restoration, etc) or antique like work.

i also field a tremendous amount of calls and emails from sign companies...and this is only going to grow as more people with less experience enter the industry and those in the industry expand and grow (add routers, etc)

i tell many sign shops that i talk with that there is great money to be made by the experienced shop that doesnt mind getting their hands dirty (like you'rs Pat) that is willing to go dig post holes, hang a simple sign bracket, cut or route boards into odd shapes for the multitude of quicky sticky shops around you that can not or will not paint/cut/install/dig/etc etc (get their hands dirty or do more than the computer will do...there are TONS of these shops and there will be more.

i know one man router operators that do nothing other than cut sign substrates to shape for sign companies in their city and they do not have the time to do anything else. i know many people that just dig post holes and do non-aerial installations for sign shops all day long.

there are also markets that once you get yourself established in that very few people are servicing because there is a few hoops to jump through the companies are extremely loyal and not only will they recommend you to the others in their industry those in that industry will be forced to use you because you are already involved and these are the most profitable projects i have ever been involved in.

 

[Biker Scout]

I think the technology is exciting. It makes me think creatively and outside the box. I've adapted outsourcing as a huge portion of my business model now, and I'm making more money with less headaches. Before I was selfish about outsourcing... now I just see it as extended offerings.

About the industry changing, I've always felt that if you carve yourself out a niche, rather than trying to be a "One Stop Shop" you stand greater chance of surviving industry trends. Be really good at what you do, be it one or two things... and advertise the heck out of those!

Right now, we're "Business Make Over Specialist" and it's paying big dividends. We also specialize on Design work. We don't advertise that we are a sign shop at all... it's just kind of an "oh by the way, we can make that in house" mention.

Cheap plotters have allowed really talented people get a foot in the door, that otherwise would have never been able to. And if they are any good, they are still here today, and probably thriving in a real shop with more capabilities now. Don't discourage competition, encourage it... because that only drives you to become better. Don't just sit back and rest on your laurels and think you can just cruise your fat, lazy ass into retirement because you worked hard in the 80's and 90's. I know a lot of businesses that are failing right now, that only a couple of years ago were booming. But because they refuse to adapt and make changes, they are getting left behind by the Wally Worlds and Kinkos chain stores. When in fact they actually had something the local community wanted and still needed. Just their business model needed a little bit of tweaking.

I think this is an exciting time to be in business. Because if your doors are still open, after the shit we just went through, congrats, and get ready to ride the wave of expansion!

 

[Rick]

On design work only:

You need to break that down into the different levels. My mid range might be different than yours. Apartments seem to be slowing down. My high end work took a decent hit, but my mid range is going strong. I also have a few clients gearing up their marketing so I am very busy with that. Earlier this year I had 3 very large retail jobs come to a halt. They will come back online someday but until then I have to work on smaller jobs. Quite a few malls are minimal seasonal design work. I have not had to lower my price on my clients but I can't really raise my older ones either. I was slowly trying to get into entertainment design, I probably need to ramp up more but I'm too busy to do the marketing for that and keep up inquiries.

 

[ndemond]

Being "older", and after spending over 30 years in the sign business we are finding that our business model is changing as in:

More marketing for higher end items such as LED message centers,monument signs, building ID and illuminated cabinets.

Our printing is still outsourced and we have no future plans to get into digital printing in house.

Last year we moved into a 12000 sq ft building, we now can fabricate just about anything in house.

I haven't sold a promotional banner in 6 months or so because of the garage printers (as we call them) that have moved in. That used to be a source of cash flow. To make up for that we have been mass mailing flyers informing businesses that we service signs. These days the trucks are out all morning doing service work which is profitable an sometimes leads new sign projects.

The billboard business side of our company has also taken a hit in this economy, but it has not stopped us from building two new structures this year.
Our area is flooded with billboards and other larger companies are giving them
away. We have changed our contracts now to shorter terms and offer a rotation program. Four different locations a year instead of one. It has been working great.

Hopeful to retire in 5-7 years, when the kids are finished with college. Sell everything we own and move to somewhere that the sun shines all year.

Funny that Biker said:I think this is an exciting time to be in business. Because if your doors are still open, after the shit we just went through, congrats, and get ready to ride the wave of expansion! We were just saying that today.



Nancy

 

[Stealth Ryder]

WOW, I need to think about this subject a moment...

 

[Rodi]

I am in offset, and I spent a lot of time this week just thinking from idea to plate as a completely different model than what is being done where I work. I see a few models, price and service being adjusted for each, with rules… and I think that your post Pat is great. You really have to look to the future without being all romantic. Digital takes away craft. I don't mean that it is all bad, because there is opportunity, but if you don't plan for the future, its gonna bite you right on your bottom.

 

[Steve Werner]

I used to work in the offset printing industry selling chemicals and durable products for printing presses, I made good money for years supplying printers. Many of them are now gone. There are very few business form, envelope printers or even small business card printers left. Much of that has been replaced by the computer and laser/inkjet printers. Printing Industries of America estimates printed media to continue to decline at about 3-5% per year. Many of the best offset printers in my area have been bought out by national investment firms that have been consolidating the industry. Many of the offset printers left have been gravitating to high end copiers, Igen's and Indigo's. They are also putting in Inca's, Fuji's,and Vutek's units very quickly in hopes of finding a new profit stream. I moved to selling substrate in 2000 with the thought that whatever the process there will always be a need for substrate to put ink or toner on, and so far it has proven to be true. My point is there will always be people putting ink on substrate, maybe not the way we're used to seeing it done but it will be done. LCD's certainly will eat up a lot of signage, POP displays, and printed media in general will probably decline. My company is keeping one eye on LCD's so to speak and in talks with manufacturer to distribute their product. We may have many pains in the transition but the industry will morph into something better. And above all, if you're talented at what you do you'll always be able to make a living.

 

[OldPaint]

i forsee a SPRAYCAN, that you and a sign shop design the contents of.............the sign shop fills the cans and hands em to you. you take em home, spray it on a wall, board, car, boat...........and it looks just like a wrap and will last for as long as you paid for it to. short term, medium or long time! if you get tired of it..you get a spray can of eraser

 

[Adam Bennett]

Pass that over here OP- must be some goooood sh!t

 

[bob]

This industry, if you can call it that, seems to be tracking the time line of the industrial revolution about 100 or so years later. Sort of...

Before the industrial revolution: Hand crafted individual items: Prior to the industrial revolution most all goods were hand crafted and custom made. If you wanted a pair of shoes you went to a shoemaker not a shoe store.

During the industrial revolution: Mass produced like items: With the advent of the industrial revolution most all goods were mass produced in a limited variety of fixed styles and sizes. If you wanted a pair of shoes you went to a shoe store and chose from what they had on hand. You didn't go to a shoemaker because, even if you could find one, you could buy 20 pairs of mass produced shoes for the price of one pair of hand made shoes.

After the industrial revolution: Mass produced custom goods: The next step in which civilization is even now getting its feet wet is the mass production of custom goods. You can see examples of this here and there. It can be argued that the 'custom' part of the mass production of custom goods is not really custom but the ability to specify a product by choosing characteristics from various lists of options coupled with the ability to manufacture any combination of variables on the same assembly line in the same time as any other combination.

Where does the sign business fall in this model?

Up until just a few years ago it was strictly pre-industrial revolution. When someone wanted a sign, a sign writer was engaged to create one. His work product was hand crafted and unique.

With the advent of computers the sign business skipped the 'during' cycle and moved directly to the fringes of the 'after' region. Mass production, after a fashion, of custom goods. Cut vinyl replaced hand lettering. Pity. Computers allowed, basically, for selection of characteristics from lists. Type faces, colors, patterns, sizes, effects, etc. were primarily chosen from lists of available options. Even when characteristics can be arbitrarily specified, the range is still limited by the capacity of the software.

Then digital printing expanded upon cut vinyl filling in the areas in which cut vinyl had severe limitations. Now, within reasonable limits, there was almost infinite variation available at the touch of a button.

That's where we are now. Note that regardless of the technology involved, to date creating a sign is still putting color on substrate regardless if that color is paint, vinyl, or print.

As long as the job remains the mechanical application of color you'll remain in business.

But...what if tomorrow or the next day a material was to hit the market that was as cheap as Coroplast, came in large sheets and rolls that you could cut to any size, and somehow program any piece of any size into a full color stand-alone self-contained including power source display? Hint: it already exists in as yet very primitive, limited capability, and hideously expensive form.

On that day, other than curiosities, traditional sign writing and production will go the way of shoemakers during the industrial revolution. With no mechanical implementation required, signs can and will be done strictly by designers. The traditional sign maker can now be replaced by the squads of bad complexioned troglodytes currently engaged in the video game industry. No mechanical ability nor physical dexterity required to produce a high quality finished sign other than a couple of fingers to operate a keyboard and mouse.

In any village there will be as many sign shops are there are shoemakers. There are always those with sufficient character and means to desire and be able to afford hand crafted custom goods but not so many as to support an entire industry. The only survivors in the traditional and neo-traditional sign business will be the relatively rare actual craftsmen.

 

[WDP]

Everything will be inevitably digital. So if you can't progress to that your in trouble.

 

[Farmboy]

These post are why I come here. Does anyone here ever feel comfortable with the direction they have taken? How long do you feel like our on the right path with your business only to question it and ask if your doing to much or to little? Do you ever feel like your right where you need to be? Excellent post Pat! This site makes me question how I handle and run my own business, which is a good thing. I'm hoping to someday have something profound to post...till then I'll just soak it up.

 

[bob burns]

The sign biz has become a total loser! I'm so happy i retired!

 

[Fred Weiss]

The progress of the technology will be most evident and most successful where it reduces costs. That basically translates to eliminating labor costs wherever possible, transferring content creation to the end user, and purchasing of signage systems that are not scrapped when the message needs changing.

The engraved or vinyl lettered nameplate on a door or desk will give way to an LCD display programmed on the user's PC, transmitted wirelessly or by USB cable and stored on an internal flash drive.

Conventional backlit channel letters and pan face signs will give way to electronic displays or easy to replace banner systems. These systems will be provided by landlords in rented facilities.

Vehicle graphics will lose the fleets to changeable banner systems first and smaller clients will follow as sign manufacturers shift into selling systems that can be installed, removed and installed on other vehicles as needed.

Window graphics and interior signage will give way to various changeable systems that will be user programmed or use low cost, easy to change content inserts.

The custom sign shop will be largely involved in printing submitted designs on low cost materials, and selling, installing and maintaining content display systems to fill various needs. The lower to mid-range of this business model will be taken over by retail providers such as Office Depot, Staples, Kinkos etc., along with specialty providers like auto aftermarket shops.

The market will seek it's lowest cost solutions to its various needs. Those areas where labor costs and per hour rates are highest will be most vulnerable. Those areas where custom products can be replaced with manufactured products will also be quick to fall. Good graphic design, almost always undervalued by end users, will also be an early casualty as more specialized shops focus on efficient production rather than creative excellence.

 

[Pat Whatley]

The sign biz has become a total loser! I'm so happy i retired!

Thank you for that enlightening observation, Bob.

 

[threeputt]

Jeez, did it just get a lot colder in here?

 

[mikefine]

I think the midsize, general sign making retail shop-- that grew in the 90's, is done or close to being done. Too much competition. You either need to be real big or real small -- high volume sales or working lean. Having a specialty is the name of the game. With good outsourcing.