Sign-service work helps the bottom line.
By Susan Conner
Typically, most sign companies make most of their money fabricating and installing new signs, but sign maintenance contributes significantly to the bottom line in both good and lean times. In good times, the sheer number of new sign projects produces a glut of service/maintenance work, and, in leaner times, repairs help maintain signs and also keep sign/service companies afloat.
Large-volume builders, auto dealers and shopping centers frequently hire or subcontract sign companies to fulfill long-term service contracts. Regional/national chains tend to use national service agencies, or large electrical contractors, instead of sign companies; thus, electric companies that provide service might seek work from local businesses, property-management companies and “mom-and-pop” stores.
The 54 companies that responded to our Service/Maintenance Survey thrived or endured during the economic downturn by increasingly turning to service work, pricing jobs more “competitively,” at a smaller margin, or even removing signs from failed businesses.
The downturn in the economy spurred ST to see if service/maintenance work had provided some ballast in the storm. Bill Dundas, ST’s former technical editor and now the International Sign Assn.’s director of technical and regulatory affairs, contributed his more than 20 years of sign-service work to reviewing, and adding to, the survey questionnaire.
Who answered
The questionnaire was emailed to 332 of the companies that advertise in ST’s Sign Erection and Maintenance Services Directory (SEMSD). Of the 54 that responded, 42 (78%) offer electric signs, 26 (62%) render maintenance/installation services, and eight (15%) produce non-electric signs. Nine (17%) specialize in maintenance/installation, and 10 (19%) provide maintenance and electric signs; six (11%) checked all three categories.
To compare variations, we sorted the 50 respondents’ sales volumes into four groups: 19 (38%) reported up to $1 million; 13 (26%), $1 million to $1,999,999; 11 (22%), $2 million to $2,999,999, and 7 (14%), $3 million and more. The majority (five of nine) that performed only maintenance/installation fell in the “up to a million” category, while none of the $3 million+ companies exclusively rely on maintenance/service.
One respondent said, “I checked both electric signs and maintenance because we do mainly wholesale installation/service work for national sign companies, although we still fabricate to a small extent. In the distant past, we were a wholesale fabrication shop, but eventually morphed into the present niche market.”
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