The Benefits of Buying from a Family-Owned Outdoor Advertising Supplier

By Dan Hooper, Formetco Marketing Director

When companies look to buy digital billboards and outdoor advertising supplies, they have a choice between large public or private equity companies and family owned businesses. While large public companies and private equities have their advantages, the benefits of buying from an established family-owned business outshine their competition.

Owned by the same family since 1968, Formetco has been developing the most innovative advertising and signage products, while providing the highest quality service, in the outdoor advertising industry. Next year Formetco will celebrate 50 years as the longest standing supplier in the billboard industry with the same ownership. Their success as a family owned business is built in their ownership structure, allowing them to reinvest in the company, their people, the industry and their products. This has been a key secret to continued growth and sustainability throughout the years.

Matt Xander, CEO of Formetco notes that they often hear the question “why should I buy from a family- owned company like you, when there are bigger public or private equity companies with more resources?” Xander says “Family-owned businesses operate with distinct advantages, including a deep commitment to success and a long-term focus on our customers and employees. We are the only digital manufacturer who has been in the outdoor advertising industry since before the introduction of digital billboards. That means we have been serving the outdoor advertising industry longer than all other OAAA digital billboard manufacturers combined. Our strength comes from dedicated employees, with managers and sales personnel who average over 15 years with Formetco. They have helped build long standing relationships with customers and a customer loyalty that isn’t always found in large public companies.”

This loyalty effect is the number one area Josh Baron writes about in his article Why the 21st Century Will Belong to Family Businesses, Harvard Business Review, March 28, 2016. “Our experience has shown that because employees work directly with the owners, there is often a pronounced loyalty effect, which augments the important sense of mission.”

Family-owned businesses are known to take risks in the areas they know well. In the article 6 Reasons Why Family-Owned Businesses are Smoking the Competition, Business Insider, June 15, 2015, Bob Bryan points out that “on the one hand, family firms display greater risk aversion by holding less debt; on the other, they show a higher risk appetite by diversifying less and founders are especially likely to have high risk acceptance.”

Formetco has led the industry in “firsts”, recognized as the first in the industry to offer a 10-Year Brightness Warranty, a 10-Year Parts Warranty and a completely fan less digital billboard. With both the 10-Year Brightness Warranty and 10-Year Parts Warranty, Formetco guarantees their product’s performance and provides their customers with a product that will cost substantially less to operate over this 10-year time period compared to other products available in the market today. Each of these firsts show state-of-the art ways that Formetco challenged the industry while taking a financial risk to provide superior customer service and quality products.

If you deal with a company owned by private equity money, it is typically held five years. In order to improve the company, they need to cut product costs or people if the sales are declining. Customers who do business with private equity companies often find the quality of the product is inferior due to their focus being solely on profits. “Private equity firms are not sentimental. They have an ironclad imperative: buy low, sell high,” notes Jessica Bruder in the article Owners Should Know What They are Getting with Private Equity, NY Times, August 15, 2012.

 

 


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