How do you make sure that your LED Screen supplier is as reliable as they say they are? This is a very important question, which anyone considering to purchase a LED Screen should ask themselves. Here are two true stories from LED billboards owners which you can learn from:

The Story of Mr Nikos from Cyprus

A few months ago we received a request from Mr Nikos from Cyprus. One of our best sales representatives (who is in charge of that region), started to follow-up the request, providing advice and support as per our standard.

Despite all our efforts, at first Mr Nikos seemed not to trust us and we couldn't understand why. When his order arrived it was a great moral satisfaction despite the fact we still didn't know why he was so sceptical at first.

We only discovered the reason behind his doubts when he sent us the feedback-form which all our Customers fill-in one month after the product has been shipped. From his answers we finally understood the reasons for his scepticism…

Send the Money Now Because Tomorrow We Are Broke

We learned that, at the time of our first contacts, he had a hard time trusting any LED video walls supplier on the market because 5 months earlier he had ordered a LED screen from a company only to discover - after he made the down payment - that the company had closed due to the economic crisis (you can read his entire review in the "Clients" page).

When you lose thousands of Euros (10.000, 30.000 or even 50.000) with a down payment to a company that 2 weeks later files for bankruptcy, I'm sure anyone would have a trust-issue.

Is It that Much Better if they Close after 6 Months?

But what happens if the supplier manages to deliver the screen to you, but then closes after 1 month, 6 months or even 1 year? Will this make you feel much better?

Chances are that you will not be so mad because at least you got the LED screen, but you probably won't be thrilled either. Who will provide you with technical support from that point on? Where will you find the spare parts for the LED screen? What if there is a problem that your technician can not resolve on his own?

Buying Expensive Products Is Like Choosing a Spouse

When you purchase high value equipment, such as an LED screen, you are not just buying a product. You are also choosing a partner company. It's almost like a marriage, so you'd better make sure that your partner will be there for you when you need him.

Would it have been possible for Mr Nikos to predict that his supplier would go bankrupt? How could he have avoided wasting his money? Is there a way for you or anyone to avoid the same, disastrous pitfall?

Luckily governments of most Countries put several tools at the disposal of potential Customers that want to check the reliability and solidity of potential suppliers before they make their investment, in order to avoid unpleasant surprises…

The Story of Mr Antonio

A few days ago I met a couple of potential Customers that came to visit our facilities. I was introducing them the Company, but after I said only a few words, one of them, Mr Antonio, stopped me and said:

"Fabio, please don't waste your time and mine as well. I studied EuroDisplay's annual report and those of your competitors well before planning this visit. There is nothing about the Company that you can tell me that I don't already know".

"The reason why we are here is because you have the best annual report among Italian suppliers and your productivity-per-employee is approximately double than other Italian suppliers. So don't waste time to describe me the Company and let's talk about the deal instead."

I was quite shocked by the sincerity of his words and accurateness of his analysis… so I didn't ever mention a single word about the Company anymore that day.

How to Make Sure Your LED Screen Supplier Is Healthy

Now, my guess is that if Mr Nikos from Cyprus would have had the chance to look at the annual report of his supplier before he made the down payment, he probably would have noticed that the company was not healthy to survive the economic crisis. He would have made a more informed choice and maybe he would have considered another supplier - saving thousands of euros.

How to Get the Annual Reports of Your Suppliers

Let's say that you now want to check the reports of several potential suppliers. Would you know how to do it? Who do you call? Where do you get them?

It's a Public Document, Not Covered by Privacy

The easiest way is simply to ask your potential supplier to provide you with his annual report. It doesn't get simpler than that!

In fact, the information found on an annual report is of public domain by law, at least in Italy. So if you hear excuses such as "Oh, ehm… I can not send it because it is protected by privacy regulations", than start to wonder why they don't want to send it to you.

The law does not force companies to make their reports available to Customers (unless they are traded in the stock-exchange), but if they had a good annual report, they certainly wouldn't have any problem forwarding it to you. Actually why wouldn't they show it to anyone who asks for it if they had nothing to hide?

In case your potential supplier is not so collaborative - and in case you still want to work with them - the official way to get the document is by contacting a Chamber of Commerce in the Country of the supplier.

How to Get Any Annual Report from the Chamber of Commerce

For example, if you are evaluating an Italian supplier, you can contact any branch of the Chamber of Commerce or simply follow these 3 simple steps (valid for Italian suppliers only):

• Download this form, print it and fill-it with the information required
• Make a bank transfer of EUR 4,50 to:
  
  Intesa Sanpaolo Spa
  IBAN: IT68 I030 6909 4006 1524 6092 056 / SWIFT: BCITIT33100
  Beneficiary: Camera di Commercio Industria Artigianato e Agricoltura di Milano
  Causal: Certificates
• Send the form and a copy of the payment via fax at the number: +39 / 02-8515-4733

Information Empowers You

If you don't want to waste your money, next time you consider purchasing a digital billboard, make sure you invest in the right supplier. Don't listen to a salesman that tells you how good they are and how bad the competition. Take the time to look at the numbers.

Use the procedure above to request all the annual reports of your potential suppliers and compare them, side by side. And if you have any doubts on how to read the data, ask your accountant to help you out - I promise it will be well worth it.

With EuroDisplay It's Even Easier

As a further tangible proof of its ultra-decennal commitment to Total Quality and transparency, EuroDisplay makes its annual report publicly available for free to anyone who will request it. Just fill in this form and send it to us via fax at the number +39 / 011-954-1017. So you have one less report to ask for.

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.

New Products and Services for 2010

Dear all, sorry for not writing in the past few weeks, but I've been extremely busy working… for you! Yes, because in the past couple of months we've been developing the budget for 2010 based on the feedback you provided us with the questionnaire we sent in November to over 300 among our current and potential Customers.

Analyzing the huge quantity of data required a significant amount of our time but provided us with invaluable insights on what are the next trends in the ever-changing field of outdoor digital advertising.

Your Feedback Was Priceless

Based on this information, we had countless meetings - some of which were very passionate.

Through these discussions we designed several new product solutions and services for the next year. So in the next weeks we'll be launching several new options that you'll find very interesting. I can't tell you more at the moment but - as the saying goes - stay tuned!

Since I did not have the chance to do it before, I would like to thank each one of the respondents who provided us with their feedback in exchange for a little benefit ;)

Closing Dates

I would like to close with a service communication: the company will be closed from December 24th until January 6th included. For all the orders to be delivered instead, the production dept and the logistics offices will remain always active except on days December 24-25-26-31 and January 1.

Latest LED Screens Installed

While waiting to see you January, here’s a few pictures of our recent installations. My team and I wish you a happy holidays and we look forward to seeing you next year.

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.

Dear all, I really hope that you are on holiday and that you will not read this post until you are back...

But in case you are still working, I want to infom you that EuroDisplay's offices will be closed the two central weeks of August - from Monday 10th to Friday 21st.

All orders on delivery within this week, will be shipped on Thursday 6th. The shipments have been anticipated because on Friday 7th big trucks are now allowed on Italian highways (due to the heavy traffic expected for the weekend).

For any urgent communications or life-threatening matters, don't hesitate to contact me via email (fabio.aversa@eurodisplay.com) or on my mobile even during the next two weeks!

In September we'll start with a powerful article titled "All the Dirty Little Secrets of the LED screens in Franchising - Revealed by a Franchisee". If you are considering the franchising, don't miss this or you might regret it later...