Charles Dugan is the president and owner of American Image Displays. “From floor to ceiling, everything you’d see at a trade show is what we provide,” said Dugan. The company distributes things like personalized floor covers, displays, and banners for corporate clients attending trade shows and events.
Why did you start the business?
The business was started over 30 years ago by a husband and wife. I was a customer of theirs. I had a sales rep business focused on aerospace sales for over 25 years. We got sort of tired doing the same thing all the time with the same people. We attended lots of trade shows during the aerospace years. I happened to hear that the business was up for sale and thought it would be a good fit for me in terms of having a lot of experience at shows and a lot of experience in sales. I thought it would give me an opportunity to deal with a broader range of companies rather than the ones that were just in the local area.
Having emergency cash on hand can be your key to managing cash flow.
How did you finance the company at the start?
It was a combination of personal savings and a small business loan. We worked with a local bank that provided SBA loans. Our timing was horrible because we bought the business in March 2008. The recession hit and tripped us up. We saw sales drop by over 50% for more than a year. We used all of our remaining savings to get through that and we were able to borrow money from one of our business’ suppliers. Our business is a non-stocking distributor. We’re selling displays and graphics that other companies produce. Most of the manufacturers in this industry don’t sell to end-users; they sell through distributors like us. In this case, there was a company that was personally owned by someone who had a relationship with the prior owner. We struck it off well, too, and they felt like the circumstances were horrible, so they loaned us some money to get us through our first year and a half.
What’s the biggest mistake you made when starting out?
Starting out without expecting the recession or anticipating how deep it was going to hit, we were a little bit more lax on accepting jobs from government agencies and schools that wanted to pay after they received their stuff. We found ourselves carrying short-term debt, which piles up fairly quickly. We needed to revisit those practices and revise them so that almost everybody pays when they place an order.
Managing the Business
How do you manage cash flow?
We use QuickBooks. We have a lady working for us who’s been a CFO at a couple of major international companies. Now, she works part-time for us, so we get the aid of her expertise. She helps us forecast. Most of the business we do is paid upfront when someone places an order, which helps facilitate cash flow. We encourage people to pay by bank wire, EFT, or ACH if they can to avoid the credit card fees. Summer is very slow for us, so we also plan for that.
What’s the most difficult thing about running the company?
The hardest part is that the sales team needs to learn different products from a variety of manufacturers. Any type of display, there might be a dozen different competing designs from a dozen different manufacturers. It’s challenging sometimes to learn all the differences and when you would want to use one over the other. It limits the pool of salespeople we can pull from or requires 3-6 months of training.
What’s the most rewarding thing about running the business?
When everything works perfectly or when you get an email or a picture from a client saying, “Here’s our display. It looked great at the show and we did a ton of business. We’re very, very happy!”
What advice would you give to a new entrepreneur?
Make a plan. I don’t like making plans myself and tried not to do that, even though my M.B.A. said I should have a plan. It really does help to make a plan and figure out how you’re going to track how you’re performing to the plan. It makes the whole process work much more quickly because you can identify problems and fix them before they get out of hand.
What’s next for American Image Displays
We’re working to go full e-commerce. A lot of our competitors have. We have sort of dabbled with it and offered some products with a capability to buy online. Most of the displays start at about $1,000, and a large display can go up to $20,000 or $30,000. I wouldn’t buy something that expensive without calling and talking to someone about it. That might just be my age. We’ve resisted going online with our store, but now we’re doing it, though the consensus seems to be from our competitors who have gone full e-commerce that they still don’t get many sales that way, but people still expect to see that functionality.
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