Wrap it up

Wrap it up

Entrepreneurs by Mark Gordon | Managing Editor

Sign Zoo was the first into the water wrapping boats in colorful signs. That now accounts for a growing portion of the company's business.

Bradenton native Larry Cavalluzzi was living the dreamy life of a Colorado ski bum in 2000 when his childhood buddy Todd Stuart woke him from his slumber.

It was time to get back to work, and Florida. Stuart suggested he and Cavalluzzi open their own sign business.

Cavalluzzi didn't need much prodding: He had just been turned down for an executive promotion at Bradenton-based sign franchisor Signs Now, where he and Stuart had worked in various management positions for most of the previous decade.

"We thought we'd be in the quick turnaround sign business," says Stuart, "like everyone else."

But seven years later, Cavalluzzi and Stuart's company, Sarasota-based SignZoo, is well past the local sign shop phase, both in sales and geographical reach. The company had $4 million in 2006 revenues and has grown about 50% every year since it was founded. It has about 20 employees and was a finalist for the Sarasota Chamber of Commerce's Small Business of the Year award in 2005.

And SignZoo long outgrew its 1,700-square-foot office and shop a few miles from downtown Sarasota; pulling out the drop ceiling last year and adding a loft only delayed the inevitable for six months, Cavalluzzi says. The company is now scheduled to move into a new 8,000-square-foot facility it had built a few hundred feet away later this month. But even that building is "already too small," says Cavalluzzi.

Finally, the company has gone from a strictly local, one-day turnaround sign shop to one where more than two-thirds of its customers are national. Its niche is in producing and installing wraps - colorful ads, designs and slogans for businesses with fleets of cars, trucks and most recently, boats.

Still, despite SignZoo's growth and plans for even more growth, a hey-dude attitude permeates the company's culture. With his wavy long hair and bright orange SignZoo T-shirts, for example, Cavalluzzi doesn't look like the stereotypical $4 million company president.

Indeed, he and the other 20 employees don't even go by titles. Says Cavalluzzi: "People just know what they are supposed to do."

And Cavalluzzi's number one company growth goal is similar in its feel-goodness. "Our goal is to make every employee a millionaire," Cavalluzzi says. "If that happens, we must be doing something right."

Certified installers

The company's road map to doing something right is national, despite only having the Sarasota location to work from.

Cavalluzzi says the company grew outside of Sarasota mostly due to necessity. Based on the Signs Now experience, he and Stuart knew their growth path would only work if they came up with new products marketed to a broader audience and sold at lower prices - the staple of any good startup.

But when they first opened SignZoo, they realized many trucks and vans in the area were already plastered with signs, making the market difficult to penetrate. The first step was to market and network with national groups and associations overseeing service industries, such as plumbing, contracting and heating and air conditioning. "Those are the systems that need fleet wraps," Cavalluzzi says, "and we do fleet wraps."

The partners then capitalized on a technology called Large Format Digital Imaging, which allowed them to create big signs on vinyl with more design options, such as vivid colors, graphics and pictures.

Signs Now had been one of the first sign companies nationwide to use the digital imaging process, in the early 1990s, but it was costly. Some of the machines and equipment ran more than $1 million.

But by 2000, the prices had gone down and Cavalluzzi and Stuart bought their digital machine for about $250,000. The partners then worked on going national with the product, increasing SignZoo's non-local revenue by 10% every year since 2000.

What's more, the company's national expansion has taken on a new dimension the past year, as it seeks to find installers, and eventually dealers, it can trust outside Sarasota. So far, the SignZoo process has been to send its own crews to the clients to do the work, whether that's as close as Tampa or as far as Texas.

Stuart is leading the company's national expansion. He says he's looking to find people to do the work that can do it the SignZoo way, which means not skipping a step in the installation process and providing stellar customer service. He's found a retiree in Pennsylvania, for instance, who has taken on some projects, as well as a former fire chief in Missouri looking for a career change.

The company isn't at the franchise stage - yet. So far, Stuart is only looking for people he can rely on and certify as SignZoo installers, which has proven to be a bit of a struggle. Says Stuart: "It has been a challenge to find installers that can both do the work and understand our standards."

Optimizing profits

While Stuart runs the national expansion and installation side of the business, Cavalluzzi is in charge of the local and day-to-day part of SignZoo. True to the company's culture, Cavalluzzi is the company president, but he says that's for paperwork purposes only.

Two aspects of the company Cavalluzzi has worked on improving recently are marketing and the structural parts of the business that have little to do with signs or wraps. On marketing and advertising, the company is focusing its strategy on the Internet more than ever before.

SignZoo had been spending $12,000 to $14,000 a month on print ads in newspapers and trade magazines, as recent as late last year, Cavalluzzi says. But he recently took half of that allotment and put into the Internet, both in ads and in updating the company's Web site.

What's more, Cavalluzzi hired an outside company to perform a "search engine optimization" for the Web site, www.signzoo.com to figure out ways the site can get more quality hits from Google and Yahoo search users. "We went at it like a science," Cavalluzzi says, adding that he and the outside company are narrowing the difference between mere Web site hits and a "quality visitor" who is there to either make a purchase or do research that will lead him there.

Cavalluzzi says he's not shy about asking for help when the task is outside his comfort or knowledge zone. In addition to the Web site consultant, SignZoo recently hired a part-time, consultant-based chief financial officer to manage the books and future budgeting process.

"We rely on professional advice for all aspects of our business," Cavalluzzi says. "We know what we know - we know how to wrap cars and make signs."

By the Boat

Entrepreneurs in any competitive business are constantly looking for the intangible edge separating them from the others.

Larry Cavalluzzi and Todd Stuart, co-founders of Sarasota-based sign company SignZoo, found their edge four years ago in an unlikely place: The Gulf Coast waterways. The business partners were watching a fishing tournament in Sarasota and came up with the idea to wrap boats in ads and slogans - not just vans and trucks, as they had been doing.

"We were the first do it," says Cavalluzzi of the boat wrapping practice that has grown nationwide in popularity the last few years. SignZoo now charges between $3,000 and $7,500 to wrap a boat, depending on the wrap and the size of the boat. It takes about 10 man-hours for each boat wrap.

But like any useful product innovation, boat wrapping didn't come together without its struggles. Racing boats and even many fishing boats can travel as fast as 90 mph, Cavalluzzi says, so the wrapping formula has to be specific - and tight. Says Cavalluzzi: "We used to wrap boats and cross our fingers."

And back in 2003, with the concept being so new and untested, SignZoo's suppliers for van and truck wrap products balked at backing it. So Cavalluzzi and Stuart mixed a variety of melding and other materials on their own, experimenting until they came up with a recipe that stuck. The finishing coat is the key to making it work, says Cavalluzzi.

The formula works for sales, too: Boat wrapping represents about 25% of the company's $4 million in annual revenues and the division has doubled its sales each year since 2003. Cavalluzzi says boat-wrapping revenues could even triple in growth this year.

REVIEW SUMMARY

Business. SignZoo, Sarasota

Industry. Advertising, sign installation

Key. Company has increased its national customer base by 10% every year since it was founded in 2000.