Start a sign business by following these 9 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your sign business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a sign business?
Many start-up sign business owners choose to work out of their homes until the company has realized significant growth. While this does offer a significant savings, experienced professionals warn against making this decision hastily. Make sure you have enough space to work and that your shop design allows for efficiency. Your workspace must also include an area to collaborate with current and prospective customers.
Once you’ve set up a workspace, you’ll need a few tools to get started. Specific tools required vary depending upon the types of signs you choose to manufacture in-house. Minimum estimated amount of initial capital needed is $5,000.
A basic shop needs the following:
- Sign plotter - $1,500 to $3,900
- Computer - $1,500 to $3,000
- Software - Graphic design software averages $200, while sign making software can run upwards of $5,000.
- Vector graphics - There are free graphics available, but many choose to subscribe, to ensure top quality images.
- Substrates - A list of basic substrates every sign shop should have on-hand can be found here. Prices vary depending upon manufacturer, size, color, and thickness. $500 should be enough to get started.
- Insurance - Approximately $800 annually, depending upon your specific needs.
- Marketing materials
- Website - While your site doesn't have to be fancy, it should offer a portfolio of your work and answer the standard questions most new customers need to know.
Experienced sign makers recommend dedicating a good amount of time and money to your marketing strategy, particularly if you choose to work out of your home initially.
What are the ongoing expenses for a sign business?
Ongoing business expenses are fairly minimal. You will need to keep some materials on-hand at all times, but most will be ordered on an as-needed basis. Additional associated costs include:
- Website maintenance and hosting
- Marketing materials and time spent implementing your strategy
- Routine maintenance on equipment
- Business insurance
- Monthly software and imaging fees, which vary depending upon your needs
Once your business has grown to the point where you need a storefront, you will incur standard overhead expenses that come with that. Your insurance needs will change and you may want to consider adding a team member at this point as well.
Who is the target market?
Your ultimate goal should be to serve the needs of anyone who requires a sign, banner, or billboard. Since you will most likely not manufacture all of these things in-house, however, this will not happen overnight. Start out targeting the specific niches you wish to be a part of. Once you’ve built relationships with individuals you can outsource work to, then you can begin to add to your buyer personas.
How does a sign business make money?
Each client will require something different from the next, and are charged according to time spent on the project, material costs, and services rendered.
How much can you charge customers?
Industry leaders suggest applying the labor + material method for determining price. First, you’ll need to determine material costs associated with said project. Multiply that number by two. Determine how long it will take to create the sign and multiply that by your hourly shop rate. Standard rates in the U.S. are $50 to $60 per hour. Add these two figures together for project rate.
How much profit can a sign business make?
Most sign entrepreneurs report very high profit margins in this industry. Profits range anywhere from 50-95%. Your company’s profits will be defined by the amount and type of work you take on and how skilled you are at figuring labor costs when quoting a price to customers.
How can you make your business more profitable?
The most effective way to maximize profits is to offer sign installation as part of your services. Be sure to check with your state and county before doing so, as this often requires a special construction license.
For long-term success, it is suggested that you remain on top of the latest trends and try to never limit your business. By pigeonholing yourself into one niche, growth will be very slow and will eventually suffer, as customer needs evolve. Many sign businesses offer additional printing services, including coffee mugs/cups, stickers, and t-shirts.
What will you name your business?
Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your sign business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a sign business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Certificate of Occupancy
A sign business is generally run out of a storefront. Businesses operating out of a physical location typically require a Certificate of Occupancy(CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a sign business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommendedto include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your sign business will be in compliance and able to obtain a CO.
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a sign business
The sign can be an exceptionally profitable business. As your work becomes more visible, word of mouth advertising will be your most valuable marketing tool. In the beginning, however, consider investing in the social media options, focusing on the local market. Many entrepreneurs have found success with newspaper ads, flyers, and cold calling. A simple, yet informative website with content curated specifically for prospective clients should also be part of your marketing strategy.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
Gaining public interest is only the first step towards building a successful business. To complete the sale, ensure positive feedback, and retain clients long-term, it is critical that you produce quality work every time. This means partnering with the very best in suppliers and outsourcing to manufacturers whose mission aligns with yours.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Sign Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
Individuals who are talented creatively and enjoy regular interaction and collaboration with the public are best suited for the sign sales and manufacturing industry. Like most business ventures, success requires hard work and dedication, but is very rewarding. Industry leaders indicate they’ve had the unique opportunity of watching long-time customers grow their businesses from small start-ups to million dollar enterprises.
What happens during a typical day at a sign business?
In addition to routine administrative duties, a standard day in a sign shop includes the following activities:
- Meet with current and prospective clients to discuss their needs, questions, and vision
- Create design and layout of signs
- Manufacture product for client
- Ship out necessary design, instructions, and paperwork for outsourced work
- Network with suppliers and outsourcing manufacturers
- Reorder supplies when necessary
- Plan and execute marketing strategy
This industry is continuously introducing new techniques and technology, so it is important that business owners strive for innovation for long-term success. The International Sign Association is a great resource for business ideas, industry research, and networking.
What are some skills and experiences that will help you build a successful sign business?
Prior knowledge and experience in the industry would prove beneficial for short and long-term growth. This offers a unique opportunity to learn best practices, network with suppliers and manufacturers, and get a feel for the various business tools that are on the market. This experience will also assist in identifying which facets of the industry you’re most skilled at or would generate the most profit.
When involved in a creative profession, it’s easy to lose sight of the fact that you’re running a business. Strength in marketing and running a business are critical for the owner who plans on handling that aspect of the business. Motivation, drive, and a positive attitude are what will set you apart from the rest.
Whether you plan to complete the work yourself or hire an employee for the creative work, this industry requires an artistic eye and attention to detail. Much of your work will be done collaboratively, so strong communication skills and the ability to work with people from all backgrounds is also an important skill.
What is the growth potential for a sign business?
Industry leaders indicate high profit margins and stability are two great advantages to being a part of this profession. Technological advances afford greater opportunities for expansion, with marketing and growth opportunities only limited to your goals and drive for success.
TRUiC's YouTube Channel
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a sign business?
Insider tips from successful sign makers include:
- Make sure you and your customer are on the same page by preparing written prices and instructions for every order. With everything in writing, you’ve covered yourself against any future issues or grievances.
- Take pictures of your successes and share them in a portfolio. This not only shows the quality of your work, it can also inspire new customers who are considering their design needs.
- Carefully consider the layout of your shop to ensure efficiency.
How and when to build a team
Unless you choose to only accept projects that you can do the work on, outsourcing companies will, in essence, be a part of your team. These outsourced projects are a great opportunity to build your business both locally and nationally, but only if you partner with the most reputable organizations. For in-house work, most entrepreneurs choose to complete the work themselves, which eliminates the need for Worker’s Comp insurance and costs associated with payroll.
If accounting, marketing, and/or business isn’t your strong suit, it is suggested that you add a professional to your team or seek out additional training to maximize profits. Most can be hired on a freelance basis, keeping costs at a minimum.