How to Use Signs to Your Advantage

Have you considered the impact that your sign has on your business? This chapter discusses signs, what they can do for your business, and how they can be used to  your advantage. A checklist for ordering a business sign is also provided.

Introduction

Signs are one of the most efficient and effective means of communication. Signs help people find you; they reach people who are passing by your establishment; they present an image of your business. In short, signs, tell people who you are and what you are selling.

Signs are such a powerful communication medium that it is difficult to estimate the extent of their influence. Other media require the directed attention of the person receiving the message. Signs, however, can convey a message while creating a mood or feeling of atmosphere. It is not necessary for people to give full attention to your sign in order to derive meaning from its presence.

What Is a Sign?

A sign is the most direct form of visual communication available. In fact, so many people use signs without a second thought that it is easy to overlook their importance. When we cannot talk to other people directly in a given location, we tack up signs: wet paint, beware of dog, enter here, garage sales, etc. signs are the only form of mass communication directly available to everyone - they are the people's street communication system.

What Signs Can Do for Your Business

Signs perform three major communications functions for your business; they give information and direction, provide a format for street advertising, and build your image.

Signs Give Information About Your Business and Direct People to Your Business Location.

Signs index the environment so people can find you. This is especially true for travelers, new members of your community, and impulse shoppers who may be on a journey to purchase a particular good or service which you sell. Americans are mobile. Each year 40 million of us travel over 1.7 trillion miles by automobile and approximately 19 per cent of us change our place of residence. A primary source of customers for your business is the large number of people who are new to your community or who may be just passing through. Your sign is the most effective way of reaching this mobile or transient group of potential customer.

Signs can correct a poor location by substituting effective communication for poor site characteristics. If your business is located on a site which is not visible or in a building which does not not correspond with the goods or services offered, your sign can overcome this disability. For example, most buildings are not built to conform to the design needs of any particular type of tenant. Without an effective sign it is often impossible to determine what type of business is being conducted in a given building. In addition, when your site is located off a busy traffic artery or in an area which is not easily accessible your sign can communicate to people who are passing on a busy street several blocks away. If you are located off a busy freeway but far from an exit, your sign becomes your main device for directing people to your business. High-rise signs are used when a business is located away from potential customers' normal pathways of travel.

Signs Are Street Advertising

Your sign provides an easily recognizable display format for the goods or services you are selling. For most businesses the street is where potential customers are. The message conveyed on the street reaches people who are close enough to make a purchase.

Street advertising also help people develop a memory of your business name and the products and services you sell. People tend to buy from businesses they know.

Signs can build an image for your business and help you identify with the market segment you are trying to reach.

Through materials and design, a sign can appeal to a given group of potential customers. For example, some firms attempt to capture the youth market,others senior citizens, others unmarried single people and so forth. If you have a particular market segment that you wish to attract to your business, your sign can be an important means of bringing these people in.

The Advantages of Signs

On-premise signs are your most effective and efficient means of commercial communication because they are inexpensive, available, practical, easy to use, always on the job, and directly oriented to the trade area of your business.

Signs Are Effective

Your sign is an integral part of your advertising program along with the other forms of commercial communication such as television, radio, newspapers, magazines, and billboards. There are four basic criteria used to judge the effectiveness of these advertising media: (1) coverage of the trade area, (2) repetition of a message, (3) readership of a message, and (4) cost per thousand exposures of a message. Two other criteria important for the small business owner are (5) availability and (6) ease of use. Let's see how signs measure to the above criteria.

1.  Signs are oriented to your trade area. Signs do not waste your resources by requiring your to pay for wasted advertising coverage. The people who see your sign are the people who live in your trade area.

2.  Signs are always on the job repeating your message to potential customers. Your on-premise sign communicates to potential customers twenty-four hours a day, seven days a week, week after week, month after month, year after year. Every time people pass your business establishment they see your sign. The mere repetition of the message will help them remember your business.

3.  Nearly everyone reads signs. Signs are practical to use for nearly everyone is used to looking at signs and using signs, even small children. Studies have shown that people do read and remember what is on signs. When special items are displayed, sales increase for these particular items within the store.

4.  Signs are inexpensive. When compared to the cost of advertising in some other media, the on-premise sign is very inexpensive. Table 1 indicates the cost-per-thousand-exposures for various media in a given type of community. Unless your trade area encompasses an entire city or region, where you must rely upon broad based media coverage, there is no better advertising dollar value than your on-premise sign.

Before opening your business you Need to decide upon the general price Amount you expect to keep. Will you appeal to individuals
buying in the high, moderate, or low budget? Your choice of location, look of your establishment, quality of merchandise handled,
and solutions to be provided will depend on the customers you hope to bring, and so will your costs.

After establishing this general price level, you are ready to cost Individual items. Generally, the price of an item must cover
the price of this product, the other costs, and a profit. Therefore, you'll need to markup the item by a specific amount to cover
costs and earn a profit. In a company which sells few things, total costs can easily be allocated to each product and a markup
immediately determined. With a variety of items, allocating costs and determining markup may require an accountant. In retail
operations, products tend to be marked up by 50 to 100 percent or more simply to make a 5% to 10% profit!

Let's work through a markup illustration. Suppose your organization sells One product, Merchandise A. The provider sells Product A
for you for $5.00 each. You and your accountant determine the costs entailed in selling Product A are $4.00 per item, and you also
desire a $1 per item profit. What's your markup? The selling price is: $5 plus $4 plus $1 or $10; the markup therefore is $5. As a
percent, it is 100%. So you have to markup Merchandise A by 100 percent to produce a 10% gain!

Many small business managers are interested in knowing what Industry markup norms are for various products. Wholesalers,
distributors, trade institutions and company research firms publish a massive variety of these ratios and business statistics.
They're useful as guidelines. Another ratio (in addition to the markup percentage) important to small businesses is your Gross
Margin Percentage.

The GMP is comparable to your markup percent but whereas markup Identifies the percent over the cost to you of every item that you
must set the selling cost in order to cover the other expenses and make profits, the GMP shows the association between sales
revenues minus the expense of the product, which can be your gross profit margin, along with your earnings earnings. What the GMP
is telling you is that your markup bears a certain relationship to your sales revenues. The markup percent and the GMP are
basically the exact same formula, with the markup speaking to individual item pricing and GMP referring to the product costs times
the amount of items sold (quantity ).

Perhaps an illustration will clarify the point. Your firm sells Product Z. It costs you $.70 each and you decide to sell it for $1
each to cover costs and profit. Your markup is 43%. Let up state you sold 10,000 Merchandise Z's Last month hence producing
$10,000 in revenues. Your cost to purchase Product Z was $7000; your gross profit margin was $3,000 (earnings minus cost of goods
sold). This is also your gross mark for the month's volume. Your GMP would be 30%. Both of these percentages use the exact same
primary amounts, differing only in division. Both are utilized to set up a pricing system. And both are published and can be
utilized as guidelines for smaller firms starting out. Often managers determine what Gross Margin Percentage they'll need to make
a profit and simply visit a printed Markup Table to find the percent markup which correlates with that margin requirement.

While this discussion of pricing may appear, in some respects, to Be directed just to the pricing of retail merchandise it can be
applied to other kinds of businesses too. For services the markup has to pay for selling and administrative costs as well as the
direct cost of performing a particular service. If you are manufacturing a product, the costs of direct labour, supplies and
materials, parts purchased from different issues, special equipment and tools, plant overhead, selling and administrative expenses
have to be carefully estimated. To calculate a price per unit requires an estimate of the amount of components you intend to
produce. Before your mill becomes too big it would be smart to consult a lawyer in a cost accounting system.

Not all things are marked up from the typical markup. Luxurious articles Will require more, staples less. For instance, increased
sales volume from a lower-than-average markup on a certain item - a"loss leader" - may bring a greater gross profit unless the
price is reduced too much. Then the resulting increase in earnings won't increase the entire gross profit enough to compensate for
the low price.

Sometimes you Might Wish to market a certain item or service at a lower Markup so as to increase store visitors with the hope of
increasing sales of Regularly priced product or generating a large number of new service contracts. Competitors' costs will also
govern your prices. You Can't market a Product if your competition is greatly underselling you. These and other Factors May make
you vary your markup among items and solutions. There's no magic Formula that will work on every product or each service all of
the time. However, You should keep in mind the general average markup which you want to make a Profit.

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