Frequently Asked Questions

• Signs are an effective, yet inexpensive, form of advertising for the small business.
• A sign is your introduction and handshake with those passing by, identifying your business to existing and potential customers.
• Signs are always "on the job" for you, advertising 24-hours a day, 365 days a year.
• People often judge a business by how it looks on the sign.
• Many merchants increase their business measurably just by adding a good sign. Conversely, many have gone out of business because they simply were not identified well, so not enough potential customers knew of their existence.
• We live in a mobile society. According to the United States Census Bureau, 18% of households relocate each year. As your customers move, you need to replace them by attracting new customers.

Signs are regulated through the following two codes:

1. Building & Electrical Codes - The construction, installation, and operation of any permanent business sign will need to conform to all applicable building and electrical codes. Because compliance with these codes requires specialized technical expertise, a business owner should specify that conformity to these codes is the responsibility of the sign company that builds and installs a business sign. This responsibility would extend to the sign company's subcontractors.
2. Local Zoning or Sign Codes - Nearly every local government regulates the display of business signs. Such regulations are found either in the local zoning code or a separate "sign code." Most codes will contain the following provisions regarding business signs:
   1. Regulation of the size, number, and location
   2. Permit application requirements and review procedures
   3. Provision for a variance
   4. Treatment of nonconforming signs

While a combination marketing tool, communication device, and ideally, pleasing art form, signs are considered "speech," and in the United States, are legally protected as such.

The following are the four different sets of legal issues you will want to know about regarding your business signs:

1. Almost all local governments control the construction, materials, electrical, or other operating components (size, numbers, and location) of business signs. Typically, standards for construction, materials, and operation are found in local building and electrical codes; regulations controlling physical parameters and placement or display are found either as part of a comprehensive land use zoning code or in a separate sign code.
2. Business signs are considered a form of commercial speech that has significant protection from unlawful government interference under the First Amendment of the U.S. Constitution. Also, under the Fourteenth Amendment, local governments are required to provide due process and equal treatment to all applicants as part of the sign permitting process.
3. There are federal laws protecting a sign company or business owner when someone tries to copy the design, artwork, or wording of a business sign without authorization. For example, an innovative method for constructing a sign may be protected by a patent; the original artwork on a sign may be copyrighted, and a unique business logo may obtain both trademark and copyright protection.
4. Finally, whether a business owner owns or leases the sign, the sign is a business asset and receives the same tax treatment as any other tangible business property.

You have the right to display a sign that conspicuously and legibly identifies your business. Your right to business identity is protected by the United States Constitution, federal laws, state laws, and important legal principles established through litigation. Briefly, these protections include the following:

The United States Constitution

The First, Fifth, and Fourteenth Amendments

The Highway Beautification Act

This Act regulates the location and types of signs that are allowed along the nation's highways. On-premise business signs and electronic variable message signs are among those exempted in the Act.

The Lanham Act

A federal Act that deals with trademark protection. A federal appeals court in California has interpreted the Lanham Act as prohibiting a city from requiring that a federally registered and protected logo mark or name on a sign is altered as a condition of approval for a sign permit. As a result, in nine western states including Arizona, California, Nevada, Oregon, and Washington, a city or county may not force the user of a registered trademark to change the color, typeface, or design of the mark to comply with local ordinances or design criteria. However, the federal appeals court for the states of Connecticut, New York, and Vermont has interpreted the Lanham Act as allowing local government sign codes in those states to require the alteration of a federally protected mark. Outside of the states mentioned, the law is still unsettled on this issue, and a business owner who is asked to alter the federally protected mark on a sign should contact legal counsel. There are also state trademark laws that offer similar protections in varying degrees.

Copyright and patent protections

Your original ideas (i.e., logos, sign design, etc.) can and should be legally protected by copyrights and patents, as appropriate.

You comparison-shop for other products or services, and a sign is no different. There are several initial approaches, including reviewing examples of their work, speaking with their references, and doing your research.

Then, consider as you would with any vendor:

• the quality of the signs offered
• the sign company's ability to design and deliver a sign that fits your needs
• the product knowledge and experience of the sign company's personnel
• the price, quality, and value offered
• the follow-up and ongoing service provided

The decision to buy or lease is a business decision. Consider the following when determining your answer:

• As a business owner, consider all of your options, which may include cash payment, financing, or leasing.
• Some business owners prefer leasing to purchasing to reduce their cash outlay. Leasing enables you to preserve your working capital for inventory, labor, and other normal costs of doing business. A normal lease will result in perpetual monthly payments; you never own the asset. There are leasing options structured with a final large payment to "buy out" the lease and gain ownership of the asset.
• If you have the available cash, you could purchase the signs and avoid the additional expense of paying interest, and you avoid any monthly cash flow requirements.
• Bank financing, particularly if you include other assets, will result in the lowest monthly cash flow. Signs are assets that are eligible for inclusion in SBA loans.

In general

• A deposit of 20-50% of the total sign order is usually required when you place an order, with the balance paid on completion.
• You may be able to lease the sign on a lease purchase. Many sign companies have arrangements with a lease company.
• Signs are eligible for inclusion in business asset loans, including all normal SBA programs.

You can arrange for the sign to be financed through your bank or other lending institutions; however, you might need to make these arrangements on your own. Some sign companies will involve themselves with or arrange for the financing, but you'll need to ask.

As with measuring a new sign's effectiveness, evaluating your existing signs will require assessing readership. Sign companies often offer this service; however, you can also conduct simple customer surveys in which you ask your customers a series of questions about your existing signs, such as the words, colors, and size, and whether they can even recall what it looks like from memory. Open discussions like this one with your customers will provide valuable insights. You may discover that customers remember the graphic or image on the sign, but not the business name, or maybe it's the color that stands out in their memories. Listen closely and carefully because these are answers that can help you determine not only the effectiveness of your existing sign but also suggestions about what you might do differently with a new sign.

After the survey, remember to thank your customers for their time and input with a tangible item that further reinforces your business' product or service. You might extend a discount for future services, or present them with a gift related to your business (a mouse pad from a computer store, a coupon for the daily special from your cafe, or other similar item).

• Business signs are the least expensive, yet most effective, form of advertising for independent and national retail businesses.
• You pay for the sign once and it works for you 24-hours a day, 7 days a week for years. Use of other media requires paying month after month, and you never have the benefit of ownership. You also have no assurance that you're reaching potential customers.
• From a business owner's perspective, a sign should not be viewed as an expense, but as a capital investment. When you factor in your return on investment, signs are not expensive. An effective sign will most likely pay for itself many times over.
• The price for signs will vary greatly depending upon the size, design, style, manufacturer, and mounting type.

As a business owner, one of the primary goals of your signs is to create "brand" recognition for your business in the community. National companies use their signs, architecture, and logos in every type of advertising they do, thereby reinforcing their corporate image and creating a "top-of-the-mind awareness" with consumers worldwide.

To do this, use your company logo or graphic on all of your signs, stationery, uniforms, company property, vehicles, etc. Repeated viewing of your company's logo, especially on your sign, will help "brand" your business and location, and create "top-of-the-mind awareness" for your existing and potential customers.

A successful sign will communicate effectively and concisely. Therefore, here are some general guidelines:

• In as few words as possible, clearly communicate what you are selling.
• A picture depicting your product or service adds impact and clarity.
• Present the image you want to project that will attract customers and entice them to stop, shop, and buy.
• Determine the best sign type, size, colors, and placement—keeping in mind what the sign will look like from the street and sidewalk. The proper design of your sign is critical to its effectiveness.
• Crowding the sign with too many words or lines of text makes it impossible to read from a distance. Use as few words as possible. In general, not more than 5-7 words, with 3-5 being ideal.
• Don't try to sell your customers with the sign; save that type of information until they are in your place of business.

People are looking through a windshield, in traffic, day and night, and in all types of weather. Help your customers both see and read your sign easily.

We no longer live in a 9-to-5 society, and people will drive past your business location 24-hours a day. With a lighted sign, you have an opportunity to communicate with your existing and potential customer, even when your business is closed.

Large corporations create "top-of-the-mind awareness" when they constantly and consistently present their names, corporate logos, and products until their name becomes a household word and their corporate logos or graphics become synonymous with the corporation's name. With a lighted sign on display 24-hours a day, the small business owner has the opportunity to create a "top-of-mind awareness" in their local community.

This depends on your business, location, and other factors. In general, following these guidelines will increase the effectiveness of your sign.

• The best sign for your business is a sign that will attract the most customers and project the image you desire.
• Your sign must be visible and easy to read for people who are driving and walking past your business.
• Your sign must be attractive and appropriate for your type of business.
• A sign will serve to remind existing customers of your business and location, and provide new customers with a valuable visual indicator about the products or services you offer.
• Your sign should be as large as allowable for your location.

The basic concept behind copyrights and patents is providing legal protection to the inventors, authors, and creators of artistic works that ensures their right to economic benefit from the investment of their time, skill, energy, and vision of their inventions and creations. This nation's founders viewed legal protection for economic benefit resulting from one's creative efforts as so crucial to the encouragement of artistic and scientific inventions that they included it in the Constitution, and the first federal patent and copyright laws were enacted in 1790.

The basic concept behind trademarks is to prevent unfair competition. Trademark law protects the owner of a trademarked name or symbol, e.g., the name "Burger King" or McDonald's "Golden Arches," from a competitor using a name or symbol which is so similar that it causes confusion for consumers, who may be "stolen" from the owner of the trademark. For example, because the name "Burger King" has trademark protection, it would be illegal for a competitor to name its fast-food restaurants the same, or nearly the same. Similar protections are extended to unique services through "service marks."