Sign of the Times

Sign of the Times

STRATEGY by Dave Szymanski | Tampa Bay Editor

Creative Mailboxes and Signs does more signs these days, preparing its workers for the transition.

A mailbox used to be a metal box mounted to a wooden post. Today, it might be a metal box hidden in a plastic dolphin or manatee.

This was the business former banker Jaime Hardin and business partner Larry Morgan, former CEO of Tires Plus, bought at the peak of the real estate boom in August 2005 from a husband-and-wife team in Tampa. Creative Mailboxes and Signs' main job was making and installing mailboxes.

In buying Creative Mailboxes, Hardin wanted a management team that could train him and his partner. He learned the business in four to five months.

They also wanted a business that could capitalize on Florida's growth. Residential and commercial construction was attractive.

But Hardin wanted to accelerate revenue growth.

Today, Creative Mailboxes is in a new headquarters and production building near Tampa's Westchase neighborhood. It moved from 26,000 square feet in four buildings to 44,000 square feet in one.

That gave it room to grow, a chance to be more efficient in production and a way to gear up its commercial sign work.

With the downturn in the housing market and slumping demand for unique mailboxes, the company needed to adjust. Although it still installs about 200 mailboxes a day, the core of the business has declined.

It cross-trained employees so they can work on making mailboxes or signs. And it opened offices and showrooms in Venice and West Palm Beach to capture residential and commercial business in southwest and southeast Florida.

There was no sales management process in place. So Hardin established one and hired sales people. Tools were in place. The mailbox side of the business did not have a lot of competition. Signs is a fragmented business.

The management lesson he put in place: Be prepared for an adjustment. That's why Hardin insisted on the cross training. It also tightened up its workforce and bottom line, not filling positions when some employees left.

The private company has been growing about 20% per year the past two years. This year, revenues should be around $12 million to $15 million, with 70 employees.

Signs of growth

These days, the sign side of the business is growing more quickly. Sign revenue has gone from representing between 10% and 15% of the company's sales to about 40%.

It just did a highway sign for the Florida Department of Transportation, a 30-foot wide by 20-foot tall aluminum sign that was assembled in a number of pieces.

It has also done signs for hospitals, Tampa International Airport, the Orange County School System and Florida A&M University.

It is designing some signs for the University of South Florida and the Florida Aquarium.

The sign-making business isn't flooded with companies, but there is a fair amount of turnover, said Okey Ferrell, graphics manager and designer for Premier Signs in Temple Terrace who's worked in the business 25 years.

Part of the challenge is a lack of repeat business. Once you have a sign, you don't need another. Another challenge is time. Some signs take up to 10 different proofs. Premier did 25 different versions of a trade show poster for a client.

"A lot of companies come and go, unless they find a niche," Ferrell says.

Premier's niche: Flexibility and speed. It does work that other firms turn down. What helps is having good salespeople who can speak the technical language of sign design, he says.

Hardin and his management team felt Creative Mailboxes should adopt a professional sales approach. Most sign companies wait for you to come to them. Hardin wanted to go out and get customers.

"We know how to prospect," he says. "There are some big players, but they may not do everything for a customer."

Its delivery model: Be a good manufacturer. Make it in-house, or partner with someone. Most customers want someone who can project manage. It also wanted to keep installing signs and mailboxes to capture more business instead of subbing it out.

Mailboxes down, not out

Hardin's father was a colonel in the U.S. Air Force. A graduate of Florida State with a degree in finance, Hardin worked for the old NCNB (now Bank of America). He and his wife lived in Tampa from 1990 to 1999 and enjoyed the city so much that they were dedicated to coming back.

They now live in Beach Park in South Tampa, with their three children.

When he bought Creative Mailboxes, no one saw the real estate market on the verge of tanking. Even when it was clearly happening, the fall in home sales dropped off more quickly than anyone expected, Hardin says. In hindsight, the company should've reacted more quickly and sold more signs, he says.

Still, the mailbox business remains a significant part of the company.

Creative Mailboxes enter into contracts with communities, such as Fishawk Ranch, east of Tampa. The company has 1,000 such contracts around the state. It installs an average of 200 mailboxes a day in Florida, with a sale of about $200 per mailbox. It makes them out of wood, pvc pipe, aluminum, stucco and plastic.

The manatee and dolphin designs are plastic. The company has 10 different mailbox heads, four different poles and 15 different tops in a variety of materials and colors.

About 90% of the management team came from the company before Hardin arrived. All of the employees have kept a can-do attitude despite the organizational changes. "That's been very rewarding for me," Hardin says. "I'm very pleased."

The company is well capitalized. It brought in Kelly Crandall, a partner on the operations side. She is director of sales and a minority investor.

In the next five years, Hardin wants to see the company's sales grow more in southwest and south Florida. He also wants to establish its commercial sign business.

It wants to do less bid work and more consulting, working with architects to come up with ideas on signage.

"We want to be more of a relationship business than bid centric," Hardin says. Now, bids make up about half of its business.

More than 95% of its business is in Florida. It is talking to companies in the Carolinas about selling Creative Mailbox products. It would like to set up distribution hubs there, as well as in Texas and Atlanta.

Hardin's says that if you give people the right tools and training, they will positively surprise you.

"I'm moved. They've done a great job," Hardin says. "Treat them with respect, they will step up for you. It definitely builds teamwork."

REVIEW SUMMARY

Company: Creative Mailboxes and Signs

Industry: Tampa-based mailbox and sign manufacturing and installation company

Key: Shifting more to signmaking because of the impact of the housing market.