When to just let go

I have a sign business, part home based, part in a rented garage.
Locally, I do OK, not great, but have earned in the mid-upper $20's
per full year since I opened in late 2000. The truth be told, I worked
for 8 years in the industry and in 2000 had my best year in the
business as an employee with about $26,000 in wages. In 2001 my
employer discovered I had been "moonlighting" for six months and fired
me on the spot.
I average $3,000-3,200 a month (low side in the winter, high side in
the late spring/early summer) in sales. July 2002 was about $6,000. A
fluke. One that despite many attempts, it has yet to be repeated. I'd
describe business as not good or bad, but at least it is consistent.
Actually October 2004 was my worst month since 2001, around $2,500.
November 2004 is shaping up to be about the same, and this makes me
nervous. I'm down about 10% with local business and down 95% with
online business.
One thing I had been doing was selling on eBay and with Google
adwords. March 2003 to May 2004 this worked well for me, $500+ extra
per month. Now eBay I don't even bother with, perhaps 2-3 listings a
month, perhaps one sale per month.
I used to be able to sell a 2x6' banner for $35, which is/was very
cheap. There are clowns on eBay selling them for $20 and less. This is
ridiculous. Looking at completed auctions, I see very few get sold,
even at give-away prices, so I don't believe the typical buyer is
looking on eBay. I can't spend $12 in materials, eat $2-3 in
eBay/PayPal fees and spend 30+ minutes making something I'm going to
earn $5 on! I let the dregs of the biz fight over the dregs of the
biz! So while eBay let me down by late spring of this year, Google was
good to me until about Labor Day. I could pay 25-35 per keyword, get
into the top 10-12 positions, and get thousands of hits with a CTR
around 3%. About 25% of the people that hit my website made a
purchase.
Today, those same keywords at 75 don't get me into the top 30!
Thousands have been replaced with dozens. I'm hesitant to go over $1.
My CTR is about 1.2% for October/November. The slide began in
September with a CTR of 2%.
I think I'm just going to stop online marketing. It is worthless at
this moment. I'd be better off knocking on doors and picking up the
phone with local customers, trying to shake a job out. I generally do
a mailing in February and April/May. I think I'll do a modest postcard
mailing this week. Have not done one in November since I opened in
2000.
Have any of you also found that low-ball marketing by very desperate
people has hurt you? My guess is this ridiculous pricing on eBay and
these people willing to pay $1 to ? (who knows $5?) per click for
something that sells for only $30 and will only make them $20 a bit
much.
I attribute this to the "new economy", forcing American workers to
open their own businesses and compete over literally nickels and dimes
with 3rd world style competition. Thanks to all the jackasses who
voted to keep those aiding and abetting the massive job loss and "3rd
worldization" of the American worker!

In article <cnaoq201ldh@enews1.newsguy.com>, pesto
<pestobesto@hotmail.com> wrote:

> Have any of you also found that low-ball marketing by very desperate
> people has hurt you? My guess is this ridiculous pricing on eBay and
> these people willing to pay $1 to ? (who knows $5?) per click for
> something that sells for only $30 and will only make them $20 a bit
> much.

If you really want to see this in action, take a look at the airline
industry. They have some airlines flying in bankruptcy, and they
are under-cutting the ones who are not bankrupt, and driving them
into bankruptcy. There is no way someone can pay the interest and
debt on their airlines and fund pension plans when someone else
is running in bankruptcy after shedding their debt and defaulting
on their pension plans. The government shouldn't let this happen
unless the business is a matter of national security.

> I attribute this to the "new economy", forcing American workers to
> open their own businesses and compete over literally nickels and dimes
> with 3rd world style competition. Thanks to all the jackasses who
> voted to keep those aiding and abetting the massive job loss and "3rd
> worldization" of the American worker!

Well, this is an attitude issue that you are going to have to shake.
There are always going to be people who are desperate to work for
sub-par wages. In my lifetime, it was Japanese, then the Koreans,
then the Mexicans, then Malyasia, then India, and now China. Next,
it will be countries in Africa and the fromer Soviet Union.

The fact of the matter is that some businesses work, and others don't.
If something doesn't work, you try something else. It shouldn't take
7 years of running on fumes to know that something isn't going to
take off. You don't have that many periods of 7 years in your
life when you are young and able to do stuff like this.

The bottom line is if you are happy. I know some folks who cannot
life on less than $250K a year. I know others who have rich low
expense lifesytles where they are happy on $1200 a month. If you
are happy doing what you are doing, then keep doing it. If not, you
have to find something else to do with your self, and perhaps keep
the sign business as an after-hours hobby, so long as it doesn't
interfere with your daytime work.

-john-

--
================================================== ==================
John A. Weeks III 952-432-2708 john@johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ==================

>
> Well, this is an attitude issue that you are going to have to shake.
> There are always going to be people who are desperate to work for
> sub-par wages. In my lifetime, it was Japanese, then the Koreans,
> then the Mexicans, then Malyasia, then India, and now China. Next,
> it will be countries in Africa and the fromer Soviet Union.
>
> -john-
>


Absolutely agree. My business and the business of the company I am starting
is directly affected by the "comoditization" of information workers.
However, if this were not happening, I would have no hope of being able to
afford to start my business. While it may make my full time job far more
tenuous than it otherwise would be, it is also allowing me to start a
venture and follow a course that may wind up being far more lucrative.

Change is not good or bad. How you adapt to it is.

--
--
Patrick
www.covot.com
small business tools

"I have a sign business, part home based, part in a rented garage.
Locally, I do OK, not great, but have earned in the mid-upper $20's per
full year since I opened in late 2000. The truth be told, I worked for 8
years in the industry and in 2000 had my best year in the business as an
employee with about $26,000 in wages. In 2001 my employer discovered I
had been "moonlighting" for six months and fired me on the spot.
=A0=A0I average $3,000-3,200 a month (low side in the winter, high side
in the late spring/early summer) in sales. July 2002 was about $6,000. A
fluke. One that despite many attempts, it has yet to be repeated. I'd
describe business as not good or bad, but at least it is consistent.
=A0=A0Actually October 2004 was my worst month since 2001, around
$2,500. November 2004 is shaping up to be about the same, and this makes
me nervous. I'm down about 10% with local business and down 95% with
online business."

Response:

Micro businesses have to react fast. Generally the easy way to know when
you let it go (let it go meaning you make significant adjustments) is
when your new profit ratio for one average peice shows an unacceptable,
non-seasonal dip for the second quarter...

Chances are at a 10% local slip, your just feeling the economy... which
your area may be more insulated against. Sounds like you live near a mid
country metropolis.

As all of us here know all too well, 80% or so of Businesses cut promo
to tighten the belt, as backwards as that may be. But don't count on it.
You could have some real problems headed your way.

Here are a few marketing related 'beams" that must be laid into the
foundation of any sustainable enterprise... dig out your business plans
(even if they are on old napkins) and add these:

1) Define what you do by HOW you do it, and the type of results you
bring customers (SERVICE), not the technical aspect of your work nor
what you physically make. Narrow definitions ... such as "signmaker"
don't merge well with innovation, and innovation is a must for the
contemporary entrepreneur.

Innovation is the savvy to cope with change with a proactive and
profitable mindset.

Many a business has gone belly up by missing the boat of change because
they had a myopic, or excessively narrow view of their role in the
market place... They defined themselves by product, instead of by
SERVICE. Big blue comes to mind, and how they defined themselves as
computer makers for big businesses instead of being in the business of
helping humans process information. This limiting definition made them
miss the personal computer age and locked their wheels of innovation --
until too late. Billions in market expansion were lost.

I don't know... Perhaps you are in the business of outdoor advertising
instead of signmaking. How can you redefine for innovation?

2) Take a line from the NBA. Anticipate in advance (and chart on
spreadsheets) the likely product life cycle for every product you put
out... even if you have to do some guesswork.. just don't be totally
blind-sided. This is fundamental to growth as competition enters your
arena. The basic stages of the life cycle are something like (time
frames are made up in this case):

Bobs Bakery:

Yr- 0 - Product Development stage (product A)
Yr. 1 - intro stage A...
Yr. 2 - growth A...
Yr. 3 - critical mass A... Prod. Dev. product B
Yr. 4 - competition A... intro. Prod. B
Yr. 5 - decline A ... growth product B
Yr. 6 - obsolecence A. critical mass product B
Yr. 7 - Competition prod. B
Yr. 8 - Critical mass prod. C Prod. Dev. prod. D etc...


What the above shows is that Bobs Bakery had a star product A, the
"elephant donut". ... but never became totally dependent on it. In year
four for example, he is battling competition and his price points are
dropping... but the loss is being compensated by new gains from the
increasing new product sales from his "Hawaiian Bread Croutonz". By
keeping his ear to he ground he anticipated trends... he and his wife
started developing another star product while he was yet riding high in
the saddle, even before his good horse fizzled. While he was building
out his line through his new product, he also released a few reports
showing how his competition didn't use quality standards for donuts,
calling attention to the poor packaging. This made his declining product
hold out as long as it could before dropping off the radar.

By building his line perpetually, he managed to keep doing well. Bottom
line - he changed before he had to. When he first planned his business,
his brother told him to call it BBDB. Big Bob's Donut Bakery. He said
"nope, I see myself as being the KOSHER CLEAN bakery. thus, he bought
a VERSATILE oven and emphasized purity and quality.

If he had not layed this as a ground 'beam", can you see how hard it
would be to add this in later? If he had not planned his marketing
properly from the start, He'd be too overwhelmed with day to day
operations to carve out dreamspace (or money) for innovation, let alone
research and development. Can you work with this concept?

3) Attitude. Those other guys are right. While blowing off a little
steam may be good, It's a waste of energy to blame the customers or the
competition for soft sales. The customers job is to get the best value,
your competitions job is to run you out of business, and your job is to
get customers. Everyone is doing what they are supposed to do. Welcome
to the game, my friend. It was someone elses' grief when you entered the
market as well, so the circle completes .
Competition is good for the soul. And it's why your gas does not cost
$3.00 per gallon. Well..... bad example there .



Also:

There are a few other things you can do though.

What I'm about to say is controversial...

But in a case like this, you have got to depend on your hunches... and
your hunches had darn well better be correct. Try to inform them with
research.. but time is short.
Look honestly at where you are. Look at who your customers are. Look at
the trend "implications". Intuitively project in your mind where the
market for your enhanced services (notice I didn't say signs) are
headed. Dream and shower times are especially useful for this. Now...
mentally reposition yourself in the two paths of the customers emerging
needs. ( I used two because two baskets are better than one in this
case). Check your hunches again with other operators and industry
reports. Implement the transition. This is where the big opportunities
come from. eBay could force you to be a millionaire....



While I was writing this, as fate would have it, I had your million
dollar idea! LOL. No Kidding!
I decided to delete it from the post.
Post again. If you like the idea... I'll even consider helping you
implement. Expensive but worth every cent.

-------------------

Another response is to hire out this task to a firm (Market research).
Have them put together a trend analysis report. While they are busy
scouting out the battlefield, alter your marketing to make the most of
what you have to work with... the goal here is to slow your decent.

To transition this way, adjust your cannons... diversify your client
base and initiate consumer advocacy marketing reports (find a weak point
in your competitions strength to exploit.. such as perhaps the letters
on signs that are not polyurathane coated--how they peel off after the
rain.. or whatever is the actual case.. you did say the products they
make are inferior correct? That's a direct clue to initiate a consumer
advocacy campaign... this means including a ::WARNING REPORT:: with each
of your sales contacts, and stressing your Guarantees and credibility.
This works best if you are really miffed about your beloved industry
going to the dogs. Bundle it with value add-ons if you have to, to slow
the your erosion down a tad until the marketing calvary show up with
your new and improved focus.

Keep he faith.

~zion~

"pesto" <pestobesto@hotmail.com> wrote

> I average $3,000-3,200 a month (low side in the winter, high side in
> the late spring/early summer) in sales.

Pesto,

I can certainly relate to what you're going through, as I am in the IT
business and most all of the work moved East. Meaning to the Far East, of
course!

How many hours do you actually work? You live, apparently, on what you earn
from this business. If it doesn't suck up all of your time, keep the part
time income and look for something else to do.

What other interests do you have?

Mike

First, don't give up. You just need to change your focus. Forget the
internet. There are nothing but bargain hunters there, and they will simply
go to the next guy if the price is a penny lower. I don't waste my time with
them. Service, service, service. That's the answer. Don't low-ball either.
You are only cutting your profits for your hard work. Are there other sign
shops in town? Are they mom & pops or franchises. If they're franchises,
that can be a marketing advantage.

I actually used a franchisors words from their own ad in my ad:
"What do an accountant, a teacher, a truck driver, and a mechanic have in
common? They are all printing franchise owners. When you need quality
printing a graphics services, don't go to a truck driver, come to Sensible
Graphics with over 25 years of experience..."

Get some friends to do some "shopping" at the competition and find out what
they are charging. Then target your prices within that range... or even a
little higher. Yep! I said higher. Depending on your competition
(franchises?), a slightly higher price can position you above them in
perceived quality and service. Be sure to back it up with outstanding
service. Make the customer feel like a king. Think about the difference
between a Nissan and an Infinity. One particular Nissan is identical to its
sister Infinity, except for badging. So why do people pay $5,000 more for
the Infinity? Because they get their ass kissed by the Infinity dealer for
that $5,000. It's not the car, it's the service.

Option 2:
Do you just do vinyl? If so, you might align with another sign shop. I put
two friends together a few years ago. They were both in the sign business,
and quite frankly I was a bit nervous about recommending people to them
because I was always afraid of hurting one or the other. One day I asked
about a vinyl sign for someone and was surprised to find out that one of my
friends actually hated doing vinyl. He was a master at very high-end and
ornate signs. He just did vinyl to accomodate his customers. My other friend
did vinyl and volume silkscreen, like real estate signs, and hated the
high-end stuff. I introduced the two and now "A" sends all his vinyl work to
"B", and "B" sends all high-end referrals to "A". Actually that was a
couple years ago, they are actually under one roof now. Still two
businesses, but under one roof. Great for them, even better for their
customers who don't have to search for the correct signmaker.

Bottom line: don't give up... ADAPT! If you are making ends meet, then it's
a short jump to being comfortable, and a short jump from there to being VERY
comfortable.

Best of luck to you!