- Ronni Sayewitz
- Staff Writer
CARROLLTON -- Gary Salomon and Robert Schanbaum were ready to take the signage industry by storm in 1985 when they launched what would become a trailblazing business.
Three years later, Schanbaum's doctor ordered him never to return to American Fastsigns Inc.
Schanbaum was dying of cancer, Salomon recalls, and it was progressing rapidly. He died on Jan. 4, 1989 -- exactly six months after his diagnosis.
"It happened very fast. One day he was here, and the next day he was out of the business," Salomon said. "It's an experience I wouldn't wish on anyone."
He's not just talking about the loss of his close friend. Salomon had to hire a lawyer to deal with sticky issues like buying Schanbaum's equity and getting him life insurance.
"We were good friends, so we hadn't handled the paperwork at the inception of the business as completely as most partners should," Salomon said. "It caused a tremendous amount of complications."
Even worse, Salomon was left running a retail company that had lost Schanbaum's retail expertise overnight.
Breaking new ground
Salomon and Schanbaum had launched their first Fastsigns store in Dallas to provide yard, parking lot, building and vehicular signs for businesses and individuals. Fastsigns also produces banners, custom lettering and trade show displays.
The two partners envisioned a company that would stand out in the fragmented sign making industry as the first national chain of stores managed by businessmen, not artists. Salomon and Schanbaum were also among the first to take advantage of a computer-aided sign making technology borrowed from the textile industry.
With this technology in hand, the two realized, Fastsigns could perform the previously unprecedented feat of filling signage orders within a day.
"Even today, most sign companies are very crafts-oriented, and they view new technology as a threat," Salomon said. "For years, the traditional side looked at us as a fad -- the red-headed stepchild."
But consumers jumped at the chance to do business with a fast, reliable maker of quality signs. The industry "stepchild" grew up into the largest signage company worldwide, with 415 franchise stores and systemwide sales of $140 million last year. Salomon expects American Fastsigns to reach $165 million in 1998.
It also got a major cash infusion earlier this year when Salomon sold nearly 80% of the company to Chicago-based Jordan Industries Inc., a $3.5 billion portfolio management firm.
No changes will be made to American Fastsigns, Salomon emphasized. But its new strategic partnership has given it the capital and experience it needs to achieve Salomon's next goal: Acquiring well-managed companies in other sign making niches.
"Jordan Industries doesn't get involved in businesses that need to be turned around," Salomon said. "They buy well-managed, highly profitable companies, give you capital and advice and then leave you alone to run your business."
Uncharted territory
But back in 1985, neither Salomon nor Schanbaum was ready to exchange their steady incomes from established businesses for an untested sign making venture.
Instead, they hired a temporary staffer to manage their pioneering Fastsigns store and split the overhead responsibilities down the middle.
That meant Salomon, who ran a direct mail business in Austin, handled financial, administrative and marketing matters, while Schanbaum, who owned a chain of shoe repair outlets in Dallas, oversaw the retail, site selection, architectural and construction aspects.
The 1,440-square-foot test store grossed $260,000 its first year and jumped to $350,000 in 1986, Salomon said. That same year, American Fastsigns established two more retail outlets in Dallas and Mesquite.
But a timely lesson from a heavily financed competitor convinced Salomon and Schanbaum they shouldn't open any more company stores.
A successful Burger King franchisee had also realized the need for a chain of fast, reliable sign making stores, Salomon explained. But to Salomon's surprise, his wealthy competitor had a difficult time getting his start-up company off the ground.
"We thought they were going to beat us like a bad habit because they had so much money," Salomon said. "But while Bob and I had our hearts and souls in our business, he was hiring other people to run his.
"It taught us that money doesn't always make magic. It's focus and commitment that make things happen."
But Salomon and Schanbaum couldn't maintain their heart-and-soul commitment at all of the 900 stores they eventually hoped to open worldwide. To Salomon, the answer was obvious: franchise sales.
"Our first franchisees were real entrepreneurs because we didn't have the financial statements or track record to say this would be a guaranteed success. All we could offer is our strong commitment to make them successful, and I think that's really what made us fly."
Going it alone
But the wings of their fledgling business got clipped two years later with Schanbaum's diagnosis.
Salomon was forced to close his direct mail business and move from Austin to Dallas. He'd developed a basic understanding of site selections from watching Schanbaum, and he taught himself to develop architectural plans with a Macintosh software program.
But he was ultimately pushed to expand his corporate staff sooner than he had expected to fill in some of the knowledge gaps left by Schanbaum's unexpected departure.
"There were some things I just had to immediately do because he wasn't there to do them any more," Salomon said. "You'd be surprised at what you're capable of when you just have to dig in and do it."
Salomon has since brought other significant players on board. Earlier this year, he asked Don Dozier to replace him as president of the company. The plan was for Dozier, who joined American Fastsigns as a field support representative in 1990, to take over the day-to-day growth of the business. That freed Salomon, whose title changed to chairman and CEO, to focus his attention on the bigger picture of harmonious acquisitions.
Salomon further delegated his responsibilities by tapping Mary Ryan and Larry Lane as chief financial officer and vice president of franchise development, respectively.
It's a structure that Salomon had been working toward since he announced his plan to promote Dozier at a franchise meeting in 1996.
"Franchisees do not like change, so I wanted to approach this slowly," Salomon said. "But it just got to the point where I had too many people reporting to me."
Salomon also wants to continue to build more brand awareness of American Fastsigns.
"Signs are not a luxury commodity. Businesses would rather cut out image-oriented advertising before signs that draw customers to a place," Salomon said. "I look at some of the things we are able to do today that would not have seemed possible just a couple of years ago and it makes me wonder, `What's next?'
"I just wish Bob was here to enjoy what we've accomplished."
