Go Big Or Stay Home!?

[Texas_Signmaker]

I'm a one-man show running a vinyl shop from my house and doing well.

I have talked with my former boss, who grew this company to a pretty good size one in our town after I left. He invested heavily into acquiring cranes, trucks, equipment, personal and then scaled back recently for what I guess were health issues. But in talking to him I tell him how I'm doing and he wishes he would have kept small and outsourced when available, seemed like he admired my small time business.

I talked to another owner at what I think is the largest sign company in our part of the state and he envy's my small time company too...wishes he had my 75% profit margin. He recently started working 40 hour weeks after decades of working much more.

My questions is this, is growing a sign business to a "big company" worth it or not? Right now I usually work a little less then 40 hrs a week and bring home about 100k. How much more money is there in having a 500k/yr. or even 1mil - 3mil /yr company?

Just curious what your guys thoughts are. I know it can be nice to "look back at a simpler time". Should I live the "simpler time"?

 

[oldgoatroper]

My questions is this, is growing a sign business to a "big company" worth it or not? Right now I usually work a little less then 40 hrs a week and bring home about 100k. How much more money is there in having a 500k/yr. or even 1mil - 3mil /yr company?

Just curious what your guys thoughts are. I know it can be nice to "look back at a simpler time". Should I live the "simpler time"?

Stay with that. A larger operation would mean much more overhead and tighter margins as you begin to compete more closely. My experience is roughly 10% net with a larger operation. So, by increasing your company's size, you'd need at least a $million + in sales just to match where you are now.

Sooo......... why?

 

[ocondrea]

So are you saying that your sales are about 133k and you bring home 75% aka 100k? Don't touch that dial!

My 15 years operation seems to always average 25-30% profit and I blow through 40 hrs by, like, Wednesday every week.

 

[Texas_Signmaker]

Yea around 135k in sales.

 

[3SixtySigns]

I just want to know how you do your business!! 100k yes please!

 

[Texas_Signmaker]

So I'm guessing what I hear is if I grew it bigger the income wouldn't be proportionate?

 

[Gino]

Basically, when you're a one man to 3 or 4 man shop, ya can make money. Good money. When you go to 5 or 6 to about 15 or 18, you tend to just squeak by. Once you hit 20 or more people, profits seem to soar again. Nature of any business, whether you're making kitchen cabinets or building houses, unless you're a pathetically lousy business person. I know a guy who went bankrupt 3 times and still kept his same model going and now he's one of the largest construction companies in the state. Once he got past 20 people, he just went crazy..... and there are so many, just like him. Either stay small or go R E A L big. A friend of mine waded through all kindsa sh!t for 15 years, then he got an order and he had to add 25 people. His sales went through the roof and he now has over 200 people and he's a multi multi million dollar a year company. He makes rubber nipples.

If you can live on your present numbers, think about how many years you're gonna be doing this and remember, not all of those customers will stay with you. So, how do you wanna handle normal necessary growth ?? What if a good customer wants you to do something you're not capable of doing ?? He might move his whole account to someone else to get things done. Ya need to look ahead and think far down the road.

 

[Johnny Best]

I say go for the big company, Don't know if you will make it or not but you will be asking yourself that same question 20 years from now when it comes time for retiring. Put everything you can into savings or real estate for the future now since you are making 100k. Your clients will change because their needs will also change due to their business. Our business will change also, because it has in the last 20 years dramatically with new printers and competition.
Living your life in simple terms as you say does not mean growing your company big is going to land you in bad health or stressed. You sound like a good business man, go for it and quit living in fear from what others tell you.

I myself am going into the rubber nipple business on Monday with a 3D printer I just bought.

 

[tomence]

I have been staying small, me and wife for 10 years now and loving it, we have all the free time to spend with our kids in the world plus provide all the necessary things that are needed in life plus some. I went big in 2015 and before the year ended I did not waste anymore time and went back to being small and enjoy life again. Going big means that you either make it or not but at the same time you will forget what it means to be free. You will be slave to your big business, maybe you will enjoy making the big money but with that comes all other problems. You will lose friends, lose the feeling of being human, and the worse you may lose your family, I have seen so many of my friends make it big to find out later they divorce, lose their kids, lose half of their assets and so on.
It all depends what you want in life and how you want to live it.

 

[Christian @ 2CT Media]

We are actively trying to grow, but we are growing on a cash basis. We are financing equipment to build credit but paying them off within 3 months and we only buy when we have cash enough to purchase out right. We currently are a 4 man operation doing roughly $650k a year, we are looking to hire 2 - 3 more this year on top of the major equipment purchases we are doing (flatbed cutter router, uv flatbed, etc). In order to grow we are also sharpening our focus to specific markets and avoiding the time sucking jobs and low margin work.

I feel growing is worth it if you are willing to risk and sacrifice, if you are comfortable and like to be comfortable don't do it.

 

[Texas_Signmaker]

All very good points. I do feel comfortable and want to stay that way. More $$ doesn't = more happy! I know staying small I'd have to focus more on saving for retirement because I won't have something generating income on it's own.

 

[Bly]

I have one employee at the moment. Probably need another soon.
With the right equipment I think we will get to the stage of needing 4 or 5 in a few years.
Labour & cost of living here is astronomical so you really need to plan carefully or expenses can sink you.
In the last year we've moved premises and nearly paid for a flatbed out of cashflow.
There's a limit to how much you can do as a sole trader.
It's a big leap to getting that first employee but with the right person you can achieve so much more.
Like even having a day off once in a while..

 

[clsche]

Stay small and enjoy your life.

 

[tomence]

If you know how to sub out work you will do great on your own and stay small but bring in the big money. You just have to find good quality and trustworthy sources to sub out your jobs to and still make profit.

 

[Texas_Signmaker]

You hit the nail on the head. If I had a magic wand I would like to broker deals all day. I have made some of my highest "hourly-rates" subing entire jobs. Making signs myself I average $75-$100/hr. Brokering can many many times more "per-hour". I feel like there is higher risk brokering larger deals because of the $$ that's spent on something I don't have a hand in, but it's made for some very high hourly rates. I only have so many hours a day and I want to make the most $$ in those hours.

 

[Pauly]

We've got 3 people, But we use sub contractors all the time. I'm in a different printing industry than 99% of you, but the principal is the same.
We own our own warehouse (less overheads) which looks more professional when clients walk in.

Id look at buying a place to work from locally. Reason is that you'll have more space,
Also having an asset is always good.