5 Reasons why your signage business could be losing money

Two key ingredients in operating a successful signage business are winning profitable projects and tightly managing your business costs.  Margins in the signage industry can be thin – the industry is competitive, so losses in your business are something to be on the lookout for at all times.  You need to identify them timeously and deal with them decisively.


Most signage businesses will lose money in one of 5 predictable areas, here’s how to avoid being a victim:

    1. Pricing

    The signage industry is notoriously competitive and to secure business, your offerings need to be competitively priced.  You will need to continuously be at the forefront of your competitors’ pricing, to ensure you do not overprice.  Resist under-pricing merely to win business – it will ultimately hurt your business as a result of the weak gross margins that you attain, which will ultimately result in distressed cashflow in the business.  The objective is to price competitively and back it up with service delivery that at all times surpasses that of your competitors.  Over the long term, building a solid relationship with your customer will ensure that they continuously bring their business to your door.

    1. Accounting

    Margins are continuously under pressure in any production environment, which makes control over your numbers doubly important.  Ensure that transactions are recorded on time, so that your theoretical available funds are aligned with true available cashflow and that your signage in production costs are closely monitored and maintained.  Implement disciplines such as reconciling your bank accounts monthly, review the trial balance and key balance sheet accounts.  As you become more familiar with reading the numbers, you will be better positioned to identify off-beat account balances, identify project cost overruns and ask the difficult questions of your team.

    1. Expenditures

    In most signage businesses, cashflow is distressed by project timelines not being met.  As project deadlines are not met, you will experience delayed cash inflows, placing added pressure on your working capital financing.  Ensure that you exercise discipline in your personal vs business cashflow so that at any given time, your personal spending does not encroach on your business, and vice versa.  Remember that cash is required to fund signage projects, so be frugal about spending at all times.

    1. Marketing

    Close to 90% of all procurement decisions are prefaced by an online search.  The digital world is here and now, it’s an instant gratification world that answers to online search, on demand.  The impression created by the online presence of your business has to be perfect for the first-time customer that finds you through online or Google search.  Take ownership of your website, ensure that you continuously showcase an up-to-date portfolio of your work and that your website is professional.  Share updates of your portfolio on social media and spend time cultivating your online following.

    1. Investment

    It is virtually impossible to grow any business without investing at its strategic growth points, to drive future growth of the bottom line.  Invest with preference for technologies that will reduce your dependency on human capital and will position your business to sell across your product range to the existing customer profile of your business.  Be aware of income tax initiatives, invest wisely and only on initiatives that will help your signage business to grow.

    At Signarama, we believe in supporting our franchisees through a range of initiatives to assist them in growing a successful, and profitable, business.  If you see your future in South Africa’s biggest signage franchise, we look forward to starting a conversation with you. Contact us for a confidential discussion about your future in signage.


Unit 66 Studio Park
5 Concourse Crescent, Lonehill
Johannesburg, South Africa 2062
012 285 0412

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