Side interests grab sign makers’ attention
Robert L. Holton is happiest in the paint-spattered studio behind his One Day Signs shop in Anaheim, making the paint-dribbled pop art that is his true passion.
If he could, Holton says, he’d devote all his time to Drizzle Studios, his fledgling side venture. But Holton feels a duty to stick with the sign business until his son, Trevor, decides whether he wants to take over the family operation. Trevor, 27, runs the office and owns a 5% share.
“I’m torn between the two,” says Robert Holton, 50, who started the business in a garage with his own dad, Pete, in 1983.
Last year sales were flat at about $400,000. The company sells custom indoor and outdoor signs, banners, vehicle wraps and design services for Walt Disney Co., Ford Motor Co., wholesale printers and trade show firms.
The elder Holton has had to use up his bank line of credit and borrow from friends to fund the four-person shop. It’s frustrating for the small-business owner, who has kept the doors open for 26 years. One Day Signs has a reputation for fast and accurate turnaround on difficult jobs, Holton says, but he has had trouble turning that skill into higher sales.
The company still hasn’t recovered from a major hit about six years ago when its largest client set up an in-house print shop, taking two of Holton’s workers and most of his sales.
Holton had to lay off nearly all of his 18 employees and watch his annual revenue, which had hit $1.5 million, sink to about $250,000. The reversal was especially difficult because it followed the deaths of his parents a few years before.
Then, in April 2003, his wife, Alicia, lost her battle with breast cancer. It was almost too much.
“I really just put my head in the sand and I neglected things at work,” Holton says.
The British native turned to art, a long-denied passion, for solace. He prints photographic images on stretched canvas, then embellishes them with brushed and drizzled paint.
People began to respond to his work. A woman bought his painting of the Santa Monica Pier because she wanted to live in the city one day. A Seattle lawyer commissioned an image of the old Starbucks logo to remind him not to overlook opportunity. He’d passed on an early offer to join the operation in its start-up stage.
These days, Holton sets up at art shows as well as at business trade shows to persuade companies of the benefits of having their products or logos given the energizing look of the drizzle art treatment. Heineken USA is already a client, Holton says.
Holton acknowledges that he spends about 80% of his time on his side business, which had sales of about $60,000 last year.
Meanwhile, Trevor Holton, one of his five children, handles invoicing, purchasing, work flow and other office matters at the shop. The younger Holton likes to work with clients but abhors sales.
Holton and his son butt heads over strategy and the time the elder Holton spends in the studio. Robert Holton would like to devote himself full time to his art, but he doesn’t want to burden his son with the business if his interests lie elsewhere.
“This was my dream, but is it his?” Holton asks.
Trevor Holton’s passion is coaching high school sports, but he doesn’t want to teach full time.
To break through their impasse, the men have to take action, says veteran family business consultant Ernie Doud. The key is to increase sales. He sees two options: They can do more selling themselves or hire a commissioned salesperson.
Business as usual “is an eventual death sentence for the business” and their dreams, says the consultant, who is a co-founder of Doud Hausner & Associates in Glendale and a frequent writer and lecturer on family business topics.
After meeting with the Holtons at their shop, Doud came up with recommendations to help the pair build the business to the point that it could support the dreams of both.
They need to actively pursue new sales so they can increase revenue by one-third, figure out what makes their business attractive to prospective clients, learn how to get that message across and meet regularly to discuss progress.
It’s too early to decide whether Trevor should own and run the firm, Doud says. For now, father and son need to focus on leveraging their strengths -- the long history of the business and its reputation for quality and responsive service -- into higher sales.
“I hope they can get passionate about making their dreams come true,” he says.
His key recommendations:
* Develop a revenue target and timeline. Prodded by Doud, Holton and his son decided they needed about $600,000 in annual revenue so each could afford to devote time to his nonwork interests. Doud suggests they give themselves two years to reach that goal but set 90-day interim sales goals.
“If people are going to start down what could be a rather long path, they need some way to track progress,” Doud says. “That gives you a chance to make mid-course corrections when you need to.”
* Decide on the company’s value proposition. The pair need to make a list of reasons their customers buy from them and use it to communicate with customers.
If the Holtons met with the company’s 20 to 40 active clients and asked them why they did business with the sign company and what they might like to see changed, they’d be a long way toward compiling that list. Just the act of contacting the clients is likely to bring new business, Doud says.
* Collaborate on sales strategies. Neither of the men likes active selling, but Robert has such an outgoing, friendly personality and a passion for design and service that he could feel authentic about selling potential customers on the company’s benefits, Doud says.
His motivation would be to expand sales to the point he could step back and do more painting.
Doud recommends that the men look critically at their pricing, with the thought of raising prices. He doesn’t see the company competing on low pricing but rather on its technical skill, speed and flexibility.
The pair also need to develop a cohesive marketing strategy that includes following up on leads. That’s a step Robert Holton admits he often skips.
* Plan to hire a salesperson. The pair should calculate what level of sales they would need to support a salesperson and work hard to get there. Trevor Holton will never be comfortable in sales, so the business needs to plug that gap as his father eventually moves out.
* Meet regularly. The pair should meet every 90 days to formally assess their progress, evaluate their strategies, fine-tune their tactics and create their next 90-day sales plan and revenue target, Doud says.
Formal meetings with a set agenda make it easier for family members to act in a businesslike manner. Meeting more frequently to decide on tactics and divide up the work to be done would also make sense for the two, who too often find themselves avoiding or blowing up about work topics.
Robert Holton says he realizes he’ll have to put his art on hold, or at least ease up on the hours he devotes to it, to be a salesman for his business for a year or so until he can afford a salesperson. Increased sales will help get his business back on its feet and free the Holtons to pursue their passions.
“I just don’t want to wait forever,” he says. “You never know when your time is up.”
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Signs of progress
COMPANY SNAPSHOT
Business: One Day Signs is a visual communications company in Anaheim that specializes in quick turnaround of custom indoor and outdoor signs, banners, vehicle graphics, laminations and logo designs. Owner’s side business: pop-art drizzle paintings.
Owner: Robert L. Holton
Employees: 3
Revenue: $400,000 in 2008
Founded: 1983
Start-up funds: $10,000 in personal savings, family loans and credit card charges
CHALLENGE
Increase sales while devoting time to side business of painting, showing and selling pop-art pieces
GOAL
Enable owner to spend more time on his true passion, painting
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Meet the expert: Ernie Doud
Ernie Doud is a veteran family business consultant and president of Doud Hausner & Associates, a Glendale consulting firm. Doud writes and lectures on family business topics such as succession planning and balancing business goals, family harmony and personal well-being. Doud is a certified management consultant and fellow of the Family Firm Institute.
