2005 Economic Survey

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2005 Economic Survey
Exhibit Designers Producers Association Annual
Convention December 1, 2005 Presented by Cam
Stevens Duncan Callam
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Participation Overview

• 52 companies, representing all size ranges
• Primary business is designing/building custom
  exhibits(also may offer other products/services)
• Data pertains to calendar year 2004 or fiscal
  year-end 2004
• Confidentially compiled by an independent
  accounting firm
• Typical survey uses / reasons to participate
• Set pricing at competitive levels (and prove it
  to clients)
• Benchmark and control your expenses
• Track your growth rate compared to similar-sized
  companies
• Provide realistic financial ratios to lenders

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5-Year Sales Growth by Size Range
1.6M1.1
2.8M3.1
5.0M16.5
8.1M17.2
14.1M20.5
38.2M15.6
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Sales Distribution
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Trends in Exhibit Selling Prices
From Highest - 12.4 From Lowest N/A One
Year - 4.1
Inlines (perlinealft.)
69
From Highest N/A From Lowest 22.2 One
Year 0.7
Islands(persq. ft.)
26
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Trends in Labor Selling Rate
From Highest N/A From Lowest 14.7 One
Year 7.5
LaborSellingRate
9.41
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Trends in Productivity
From Highest N/A From Lowest 43.6 One
Year 2.5
SalesperEmployee
57K
From Highest -10.9 From Lowest 9.7 One
Year -2.8
SalesperPayrollDollar
0.66
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Operating Statement
2003
2004
2002
Labor
13.8
12.5
13.3
Materials Subcontract
44.8
47.1
43.1
Manufacturing Expenses
14.9
14.4
16.4
73.0
Total Mfg. Costs
74.5
72.8
27.0
Gross Margin
25.5
27.2
Sales Marketing
8.3
8.7
9.2
Design
1.6
1.6
1.6
GA, Depreciation Other
15.0
11.2
14.8
24.9
Total Expenses
21.5
26.2
2.1
Profit Before Tax
3.9
1.0
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Warehousing Scenario
10
Warehousing Scenario
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Operational Questions

• Strategic Planning Questions
• Leadership
• Do you have a successor for yourself (owner) and
  key managers? What planning should you do for
  your/their eventual exit, even if it is many
  years away?
• Environmental scanning
• Do you keep a close eye on external forces that
  could affect your business, such as what is
  happening in clients industries?

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Operational Questions

• Objectives, desegregation of objectives
• Do your salespeople pursue projects that match
  your companys business plan and ideal client
  profile? Do you have a business plan and ideal
  client profile?
• What could be done to incentivize your management
  to maximize sales per dollar of payroll?
• Corporate Culture
• Is your corporate culture adaptable to your
  chosen strategy?
• Resource planning
• To balance growth and service over the long-term,
  do you successfully alternate growing your number
  of employees with growing your sales?

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Operational Questions

• Differentiation
• Are you taking full advantage of basic
  differentiators like on-time delivery when you
  sell into other markets?
• Core Competencies
• Do you know what makes your company unique what
  do you better than everyone else?
• Financial Structure
• Has your current capital structure raised your
  break-even point too high? Could you recapitalize
  quickly if necessary?

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Operational Questions

• Risk Management
• In a slower economy, do you resist the urge to
  accept too-risky projects, to diversify too far
  outside your core business, and to make similar
  reactionary decisions?
• Do you have a disaster plan?
• Partnerships
• Do you have international relationships in place
  to facilitate servicing your clients on any
  continent?
• Planning, control and feedback
• Do you (the owner) and your key managers spend
  sufficient time focused on your business not
  just client projects?

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Operational Questions

• Marketing Questions
• What new sources of revenue can you identify,
  using your current competencies, that could
  produce overall higher margins and a more
  favorable product mix?
• What new opportunities can you identify at your
  current client companies which could be
  additional sources of revenue?
• Is your portfolio of customers representative of
  the industries that will provide the growth your
  company requires for the foreseeable future?
• Do you set prices based on cost, or based on what
  the market will support?

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Operational Questions

• Sales Management Questions
• Does your sales compensation plan reflect how
  your products are sold and your customers are
  serviced today?
• Does your sales compensation plan include a gross
  profit component? Does your plan account for the
  support costs of account management?
• Is someone calling on previous major customers
  who were lost in the last five years?
• In order to grow sales, it is said that you need
  "trappers," "skinners," and "farmers. Do you
  have all three?

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Operational Questions

• Human Resources
• Performance Management Questions
• Do your managers have margin targets for their
  respective areas that they are expected to
  attain?
• Are your most expensive people your best people?
• Are you attempting to impose incentive
  compensation plans on people who may not be
  motivated by those plans?
• Do you have policies and procedures in place to
  help protect you from liability in case of issues
  arising such as Health Safety, Employee
  Substance Abuse, Violence in the Workplace, or
  Harassment?

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Operational Questions

• Operations Management Questions
• Are your best craftsmen being optimally utilized
  by employing new production techniques and/or
  outsourcing when appropriate?
• Are you optimally utilizing the space in your
  physical plant(s)? What changes should you make
  to prepare for the next five years of planned
  growth?
• Do you manage your entire vendor base so that you
  always have options when your usual go-to
  vendor(s) can not complete the work or would
  assess rush charges?

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Operational Questions

• Accounting Cash Flow Management
• Do you know how much margin each area,
  department, or profit center of your business
  contributes?
• Can you calculate true profitability by client,
  including all direct and indirect costs?
• Are you waiting for new build jobs to be closed
  before invoicing, when the invoiced amount should
  be the sum of the original quotation, plus any
  change orders?
• Would the standardization of inbound and outbound
  activity be beneficial for your customers and
  allow for faster billing?

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Operational Questions

• Accounting Cash Flow Management cont
• Is there someone in your company responsible for
  collections on a daily basis, other than sales
  people?
• Is everyone who touches a job being charged to
  the job somehow?
• Is your management information system giving you
  the information you need every day? Is it working
  for you, or are you working for it?
• Are you aware of the amount of staff time that
  each client program requires? Is your company
  being compensated accordingly?
• Are your clients obligated to pay 50 up front on
  production work, and make advance payments for
  shows?

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Operational Questions

• Accounting Cash Flow Management cont
• Are your financials structured in a way that
  thoroughly and easily illustrates your companys
  performance?
• Do you have a precise understanding of how much
  you can discount a price before it becomes no
  longer worthwhile to get the business?
• When choosing expenses to cut, do you perform a
  careful analysis first, to ensure that it will
  not actually cost you more in the near future?
• Does your annual budget include a cash flow
  budget and a balance sheet budget, not just your
  income and expenses?

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Operational Questions

• Accounting Cash Flow Management cont
• How reliable are your budgets? Can you explain
  variances? Is there accountability for budgets
  not met?

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Operational Questions

• Time Management
• Do you manage your day or does your day manage
  you?

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Consider Participating

• If you would like to participate in the EDPA
  Custom Economic, the Portable, or the
  Compensation Survey that is prepared annually,
  and receive vital data in the operational
  analysis of your companys performance against
  that of the industry, we want to hear from you.
  Our survey currently represents over
  500,000,000 in Sales between the participating
  companies and gives a reasonable and practical
  look at how your company is performing.

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Consider Participating

• Some Benefits
• Provides industry benchmarking
• Helps with industry comparisons when working to
  help your bank understand your business
• Provides key competitive information for
  employers for compensation
• Provides job description access for 35 industry
  specific jobs, along with a salary analysis of 25
  of those positions (all 35 for 2006)
• Participation is free, and if you participate,
  you receive an exclusive copy, only available to
  those who participate (in the Custom Economic and
  Compensation Survey)

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EDPA 2005 Survey Contest

• Participation in the Surveys entered you into a
  draw for one of the following prizes
• One FREE attendee registration for the 2005 EDPA
  Annual Meeting in Tucson, Arizona
• 500 off EDPA membership in 2006
• Website banner ad on www.edpa.com for 3 months
• Ad in the 2005-2006 EDPA Membership Directory
• THIS YEARS WINNER IS

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CONGRATULATIONS!!!

• Derek Gentile
• Exhibit Enterprises

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Exhibit Designers Producers Association2005
Economic Survey