What Would YOU Do?

What would you do if you had a deadline and you didn't know who could really help you? How would you make sure that the promise of "On Time Delivery" is kept for real? How do you make sure it is not just a way to win the order and you have no room for mistakes?

The Beginning of the Story

On December 16th, one company came to visit us with these exact questions in mind. They presented us a very ambitious project: the delivery of 6 LED screens within the end of the year. This is 5 working days from the moment of order.

In the two weeks before, they have been evaluating several alternatives both in Italy and in Europe but - according to their own version - after a bad experience they had in the recent past, they could not find a supplier they trusted completely.

They spent the next 3 days visiting our facilities and meeting our people. They were trying to understand if they could really trust us. They studied not only our answers to their questions but also our body language, to find clues of our real intentions.

Like a Student Taking a Test

They asked very precise questions to our technical department team. Then they asked to meet everyone, from the Manufacturing to the Administration. It felt like the entire company was taking an admission test for a top MBA program. Luckily we were prepared.

After all, I would have done the same thing in their shoes. Can you imagine how much pressure they were under? Choosing the right Company to supply 6 digital billboards in just 5 working days with no room for mistakes and with the risk of loosing lots of money? Not easy.

Watch What You Wish For, It Just Might Come True

On the last day, just a few minutes before they left I was taken aside by the owner who smiled and told me: "I think we found the right one, Fabio. We'll place the order tomorrow as soon as we are back home." - Wow!

Of course, I was very happy while wishing goodbye. Then, the moment the gate closed behind their backs, a thought struck me... Now we really had to keep that promise! 6 screens in 5 days?!? We had to start immediately.

So despite our policy, we had a meeting with everyone involved in the project: we informed everybody that we most probably won the order and that now we had to hurry up to meet the deadline.

You Can Feel the Speed

Within one hour the logistic team was ordering the missing components, forcing our suppliers to work afterhours. The technical department was preparing the screens' control boards and the Apple Mac Minis. The manufacturing started to assemble the metal frames. The administration was working on the packing list and related documents.

Now, our company policy is pretty clear about what an Order is: "An Order is not when the Customer says he takes it, but when the bank confirm the down payment was received." Not very romantic, I know, but I'm sure that any savvy entrepreneur knows it is the right policy. So we took a risk by starting without a confirmed order, but it was the only way to possibly deliver on time.

On December 22nd the Order was confirmed - even according to our policy. Since that moment our Manufacturing and Technical departments and our Administration have been working non-stop. We all took a day off only on Christmas.

When You Absolutely, Positively Need the LED Screens Delivered

So now I would like to thank all the men and women in our team: they renounced to their well-deserved holiday break without hesitation. With their commitment and positive attitude they made this delivery possible. Yes, because I'm glad to inform you that today we packed 5 of the 6 electronic billboards. The last one will be packed tomorrow morning, together with spare-parts and accessories.

Everything will be ready for pickup on December 31st at 14h00. As promised.

UPDATE - December 31st

Everything is packed, ready for delivery.

Digital Billboards Franchising

Digital billboards franchising became somewhat popular in Europe in the early 2000’s where it is offered as a form of “long term rental”, that allows to test the business model for a few months and with a fairly limited amount of initial capital.

Let’s just take a quick step back: what franchising is exactly and what are the main advantages?

Franchising is a business model that allows you (the franchisee) to open your own company by using the know-how of another company (the franchisor). There are several advantages in the well-known formula of franchising, when it is well organized by the franchisor:

Advantages of Franchising

• Tested Business Model: opening your own franchise it means to open your own private business on a model that has been already tested (hopefully successfully) by many other entrepreneurs and that therefore should bring no bad surprises.
• Lower Start-Up Costs: franchising allows you to reduce the start-up costs any activity has, for example by being able to exploit the reputation of the mark without having to invest in advertising. With the support of a parent company, you can also avoid all the costly mistakes made by those who open a new business and that are often the cause of the failure within months from opening.
• Turnkey Solutions: since you're opening a business already tested and where the details have already been studied, the new activity will be delivered to you in a "turn-key solution", that is (for example) with the furniture already defined, forms and contracts already drawn etc.
• Continuous Training: big franchising companies will provide adequate training on both the management practices of the business and sales techniques - while the promotion and marketing are usually handled by the parent company. In successful franchising programs, the training starts even before you open the real business and it continues at regular intervals (e.g. once or twice a year) for the entire duration of your business.

Well it seems the perfect activity. Why then there are not just franchising everywhere? Not only in the digital billboards industry, but in any other sector? Because, unfortunately, the practical implementation of the franchise can hide many serious drawbacks:

Disadvantages of Franchising

• Lack of Support: most of the big franchise companies (like McDonalds® for example), offer extensive training on procedures, a lot of support during the start-up phase and unlimited access to the resources provided by the mother company.
  
  But smaller companies may not be as prepared and professional in this sense, being more interested in selling franchises rather than in the success of the affiliate (i.e. the franchisee / contractor).
• Low Standardization Industry: franchising is applied most successfully in areas that have a high level of standardization, for which can be identified a "formula" for success. Taking the example of the chain McDonalds®, the popularity of this franchise depends on the repetitiveness of the food preparation and standardization of cooking procedures.
  
  In areas with low standardization however, this formula simply can not exist and therefore there can be no guarantee of success (no matter what the franchisor tells you). The low standardization industries are those where the human component is more important, such as those where required customized services are requested by the end user and where, therefore, the preparation of a seller and the availability of the company make all the difference.
  
  Like in the advertising industry, for example.
• Fake Potential: with franchising electronic billboards you are often sold the idea that by entering into the franchise, you become part of a national network of LED screens, where you can share your available advertising space with other entrepreneurs in network and therefore earn on sales made by others.
  
  Unfortunately, the advertising LED screens are a very local business, that targets advertisers within a radius of 10-15 km (maximum) from the installation site of the screen (whether it is in franchise or not).
  
  In fact, Customers who pay to their advertising on a LED screen are typically restaurants, real estate companies, car dealerships, hardware stores etc. So it is very unlikely if not impossible, that a typical advertiser will wants to broadcast his advertising on a LED screen located 200 km away.
• Not a Real Business: inexpensive franchise are often a real hazard. According to Mr Abel E. Malcolm from the American Business Law Journal “most abuses occur in the smaller franchise operations, which sell at less than USD 100.000” (about 70.000 EUR at the moment of publication). You can read the entire article from Dott. Malcom here: http://www.allbusiness.com/legal/618192-1.html
  
  The fact that a business offers a franchise, that doesn’t mean that you will be successful. In some cases, the franchising is the only real business: the franchisor is only interested in selling to more and more Customers and the fact the single franchise is successful or not, it is totally irrelevant to them.
  
  In case you are shown an annual report, keep in mind that it is not the financial success of the franchisor which is important to you, but rather the profits of the other franchisees in the system.
• Unrealistic Promises of Profits without Effort: it is a common practice among franchisors to make a verbal estimate of the profits during the negotiations with the perspective Customer. In some cases, however, these perspectives are totally unrealistic because they promise profits with only six or seven advertisers.
  
  Now, anyone with a modicum of experience in the field of LED billboards will tell you that to be successful in this industry you need at least 15/20 paying customers in order to repay the cost of the screen and get a good return on investment.
  
  By the way, promises of profits without effort are always unrealistic.
• No Government Protection: in most countries there are not effective regulations for franchising. In most cases these regulations do not require disclosing the risk factors of the investment before the franchise is sold to the public.
  
  Unfortunately, many franchisees have unrealistic expectations that the law will protect them from fraudulent franchisors, which is not often the case. In fact in most cases, once signed the contract you are not legally protected in any way.

Franchising as Business Model

To summarize, the great majority of franchisors are serious businesses that really want to develop a successful model, but as in any other industry there are people who are just looking for an easy way to make money.

So they create a “franchise” that looks great but has no substance and absolutely no support or training. They usually target inexperienced people that are so willing to believe in the easy profits that they fail to make a proper appraisal of the business being offered.

How to Purchase a Digital Billboards in Franchising

If you really want to purchase a digital billboard in franchise, I suggest you to contact one of the franchisee already in the network and investigate if he would be interested in selling his business. It is better to buy a “used” franchise, because you can see the annual reports of the business to understand if there are any real profits.

Once established the first contacts, mention your interest in acquiring the asset and carefully assess the reaction of the affiliate: if he is really making profits with his business, he should not be interested in selling his company, unless you make him a very high offer.

On the other side, if the franchisee appears to be immediately interested in your proposal and willing to sell his company (maybe at even less of what you could purchase it from the mother company) then this could be a sign that his business is not going very well and that he can not wait to get rid of everything.

Digital Billboard Franchising: Tell Us Your Story

I'd say it's all for today, but if you've tried the LED video wall franchising formula, tell us your experience (good or bad) and share with our readers by filling in the comment section below. We look forward to hearing your stories.

Dedicated Proprietary Control System. Wow, it actually sounds very professional. But this fancy denomination hides some serious drawbacks that nobody ever tells you, until it's too late.

• The first problem is about transparency: even if the LED billboard has 2 years warranty (or more), the Control System has a 12 months warranty, as written in the sales contract (please, always read it carefully!).
• The second problem is about costs: what happen if control system brakes down after 13-14 months from the date of shipment? You are forced to buy a new one from the supplier… and you do not have any control on the price, which will be very high, as you can already imagine – usually around 7.000,00 EUR.
• The third problem is about freedom: by using such control system you are inevitably tied to the supplier for the entire lifetime of the screen. In fact, you do not have any other option: either you pay again or the screen will not work.

To avoid all this issues, EuroDisplay adopt an Open Plug-and-Play System based on the Apple Mac Mini. Basically EuroDisplay’s LED video walls are like huge DVI monitors that visualize anything you can show on the PC.

The Open Plug-and-Play System allows you to replace the Apple Mac Mini at any time with any other computer with a DVI output, like those you can easily find in stores.

I have heard countless stories of entrepreneurs like you that purchased from companies providing a "Dedicated Control System" and then were held hostages of their suppliers!

They were forced to pay huge amount of money to avoid having their screens shut-down for weeks... it goes without saying that their investment was not so successful in the end. Now you know, so please don't make the same mistake.

Some “manufacturers” promise you they are using 100% Nichia LEDs... but be careful because some of them could not be totally honest with you.

Nichia is one of the leading companies in the LED industry and surely the most awarded... that's why some suppliers try to take advantage of this brand. Here’s the whole story:

The main reason why you should be suspicious is because on the electronic billboards, there are 3 colors – Red, Green and Blue, the primary colors.

So the first question you should ask the potential supplier is: are ALL the 3 colors provided by Nichia, or only one of them?

Indeed, when they tell you they use Nichia LEDs, usually what they actually mean is that they use Nichia for the Green, Cree for the Red and Opto Tech for the Blue.

In order to protect yourself from this fraud I suggest you to take the following steps:

• The first thing to do is to ask the supplier to provide you a proof of purchase of the LEDs from the LED manufacturer. Such document should include the number of order, date of issue and quantity.
  
  In case the potential supplier find any excuse not to provide you with this document, please start to evaluate the situation very carefully.
• The second thing to do is to have Nichia’s experts to perform a test to prove whether you received what you paid for or not. The test has an indicative costs of a few hundreds Euros and you can expect results within a couple of weeks.
  
  You can reach Nichia Corporation’s laboratories at the following contacts:
  
  Nichia Chemical Pte Ltd
  78 Shenton Way, #05-04,
  Singapore 079120
  Tel : +65-63248218
  Fax : +65-63245756

This is the first article of the series titled "LED Screens: Top 10 Tips for First Time Buyers". So if you are considering the purchase of a LED screen for advertising, sport or events, stay tuned.

The next article is about the "Dedicated Proprietary Control System": it actually sounds very professional, but this fancy denomination hides some serious drawbacks that nobody ever tells you, until it's too late...

IF you are considering the purchase of your first LED video wall, then keep reading.

When you face the LED Screen industry for the first time, you are most probably overloaded with technical information, promises and ideas that are passed to you as hard facts.

The series of articles described below will explain how to avoid the most common, painful and expensive mistakes people make when buying a LED screen.

Here’s the summary of what we'll discuss in the next articles:

1. Nichia LEDs… or Not?
   Some “manufacturers” promise you they are using 100% Nichia LEDs... but they are promising the impossible. Here’s why they are lying and how to recognize them..
2. Dedicated Proprietary Control System
   It actually sounds very professional, but this fancy denomination hides some serious drawbacks that nobody ever tells you, until it's too late.
3. LED Screen in Franchising
   Very interesting proposal. If you are a novice in the industry, the low initial investment can be very tempting… but not all that shines is gold! Here’s the nightmares stories of entrepreneurs that already tried it before you.
4. Resellers: Watch Out for their Conflict of Interest
   On the market there are several options if you want to buy a LED screen, but not all are manufacturers... Here’s what you risk when buy from a reseller that has a conflict of interest in providing you the best equipment and how to recognize them..
5. Air Conditioning: How to Solve a Problem at Your Expenses
   Sometimes you might be told that you need to install the air conditioning on the screen, at any cost. While this makes sense in tropical areas, it is un-necessary for moderate climates… so why insisting? Here's how they are trying to solve their problems at your expenses.
6. Prices Drops Dramatically before Closing the Order
   Of course it is normal a little discount to seal the deal, but sometimes you‘ll see prices drop dramatically (over 30%) when you are pressured to close the order. Here's why they are surely cheating you.
7. Best Quality at Lowest Prices, Thanks to Big Volumes?
   Someone claims to use the best components on the market, and still be able to provide the lowest price on the market. Of course this sounds so tempting, and you wish it was true. But when you think about it rationally, this does not make sense. Here’s why it's not possible.
8. The Photo-Book
   This is a classic “hard-sell” technique, used in many Industries. When visiting a supplier, they will show you a photo-book where there are several nice pictures of what they claim to be their product and some ugly pictures of what they claim to be their competitor’s product.
   
   Since this strategy can be counterproductive, it is used only with Customers that are considered less competent, since they won’t notice some incongruences… that we'll explain into details.
9. “I Am the Real Supplier”
   Some companies might claim to be the “supplier” of the company you are dealing with or – as a variant – they might claim (1) to have the same control system, (2) the same software, (3) to have “Italian Heart Inside”, or (4) even to have shares in the competitor company. Here's how to recognize them.
10. Are You Getting the Same Product You Were Shown?
    This is not a selling technique but a real scam, and you could take legal action against it... but prevent is better than cure. Here's how it works: you could be shown (and then purchase) a digital billboard with a smaller resolution than declared. For example, you could be shown a pitch 6/12mm and told that it is a pitch 8/16mm... Here's how you can make sure to get what you saw.
11. BONUS Tip – If YOU Are the Reseller
    In case the reseller is you, be careful and never disclose the name of your final customer until you signed a Non Disclosure Agreement that protects you. Otherwise you risk that the supplier contacts directly the final Customer and you loose the business… This can happen especially in two circumstances: here they are.

Here’s the 10 tips to avoid costly pitfalls that you could regret for a long time. Please stay tuned as the followig articles will go deeper in each of them. If you can not wait, please come and see us or call at +39/011-954-1015 for further info.