There were a lot of things going down at the Digital Signage Expo both on and off the field. This post is probably going to just have a few 30,000 foot view thoughts. The show itself is maturing. This is our third show now and things seem to be calming down (expect for the industry drama which I’ve discussed a bit below). As exhibitors go, there was much of the same.
Cool Stuff
The VUKUNET concept is so cool it’ll make your brain explode. It is perhaps the missing link in connecting potential digital out of home advertisers with real buyers. The way the system integrates freely with nearly any solution in the marketplace is simply brilliant. Two gold stars for the mastermind that developed this pleasant morsel. I’ve had exposure to the system previously, but after speaking about the potential and goals for the project, it was all I could do to stop my brain from frying.
There’s probably not too much new to report on the hardware side of the picture. Standard were the glasses and glasses free 3D displays—pretty standard. The large format LED, LCD, and interactive people were present. Christie Microtiles are about what I expected them to be. Their cost is a somewhat prohibitive for many, but for those looking for ambiance in a unique way, they certainly offer that “pop” that some may be looking for. They lived up to the hype.
Attendors (Exhibitors) and Attendees
The attendance for the show certainly seemed up from last year’s event. No bare patches to be seen on the tradeshow floor. Much of this probably has to do with an economy on-the-mend. Hardware and software vendors still seemed standard. Some of the exhibitors who were of interest and seemed a bit newer to the industry included a few content providers and implementation organizations.
Overall, exhibitors at the event certainly were more honed. Smaller companies wishing to make their way within the industry have slowly been vanishing into oblivion. This fact was painfully evident at the show: more of the industry’s true players were poking around.
I was able to have some great and productive chats with some impactful industry professionals. Interesting to get individual perspectives on things and have some time to discuss future movement. While there, I also saw and spoke with some of the old Helius crew. Most of them I was unable to speak with at all because they were too busy giving demos the couple times I stopped by.
More Industry Drama
For some, following the digital signage industry is probably like watching a soap opera they cannot get enough of. For many, it’s the soap opera they cannot get away from. Those who have been following digital signage news lately know somewhat of the tradeshow and industry non-profit drama that taking place.
Regardless of whether or not you’re a part of any of the industry trade organizations, exhibit at any of the industry tradeshows, or are going at it a bit rogue, much of what has happened and is happening is a bit disappointing. I’m not one to generally point fingers.
Many of the industry’s organizations—under the guise of industry promulgation and professionalism—seem to be exhibiting just the opposite in their spirit of competition. The activity here is not in the least bit surprising, given the simply cutthroat nature of things in digital signage. Treating things like a zero-sum game exhibits a self-fulfilling prophecy-like result—wherein you receive exactly what you expect.
The changes in technology and organization within the industry are significant and will probably have a great impact on some, while others may never feel or experience any change. I’m interested to see what happens as people begin to choose sides—in organization and exhibition. I’m sure it may continue to get ugly. I’ll do my best to stay out and stay away.
We're looking forward to heading down to the Digital Signage Expo for some rip-roaring times! I'm certainly interested in seeing some of the old timers as well as some of the new visitors and technologies that will be showcased. This may be one of the shortest posts I've done in a while, but there are many more important things to do today than blog.
This list is certainly not complete without parts ONE and TWO. This list has been growing since posting, more companies popping up--worldwide. Enjoy the list.
This is all she wrote. For those of you I missed, a sincere apology. These lists should help when you're looking for people to follow within the industry.
Our twitter digital signage following continues to grow. As it does, I would like to give a shout out to all the other industry-types who spend their time feverishing posting their thoughts to Twitter. This crowd is still somewhat small, but continues to grow as I see regular increases in requests to be followed on Twitter. While Twitter can be a waste of time, it is certainly an easy way to connect with people. In addition, it is now able to take advantage of economies of scale because of how many people are now using it. It has literally become the way to connect.
As you migrate through this prodigious list of Twitterers, please do not feel left out if I did not mention you. And, if you would like, feel free to add your company or individual name in the comments box. Here they are in no particular order.
According to some semi-recent reports digital out-of-home is set to grow to $3.7 billion by 2013. Conclusively, some have argued in favor of the advertising aspect of digital signs and digital media. These arguments have stemmed from media reps and sign hardware/software providers alike. This post will do nothing less. But while cheerleaders within the industry continue to tout and shout, it's important to keep your head on straight. Moreover, growth figures such as those claimed in the Kelsey report are large enough that one cannot ignore the possible expansion of such an industry. But why the big shift? What is so special about digital? What are the leading reasons to choose digital over tradition? Why will this be imperative going forward?
1. The Dynamic Nature of the Beast
According to the report put out by the Kelsey Group, traditional out-of-home (TOOH) will only grow about 1% during the same period. What does this mean? We can make our assumptions, but is is evident that the dynamic nature of digital creates a much more effective tool. There are several reasons for this:
1. Dynamic changing content is much more eye-catching, mesmerizing, and sexy than traditional ooh.
2. Content can be changed on the fly, helping to target an audience, inform patrons, or provide emergency alert systems.
3. Dynamic can provide entertainment and not just information.
4. It can be interactive and engaging.
Compared to it's grandfather TOOH, DooH has some very unique and forward-moving advantages. As a vehicle for getting news and timely information to an audience, it certainly does the job--and does it swimmingly. Remote management of digital displays allows for all the dynamic aspects that accompany a digital sign network, to be done quick, easy, and on-the-fly. Truly, digital will not be a luxury, but a necessity in the future.
2. There is Variety in the Form Factors
Digital out-of-home is a extremely broad term. It can include digital/electronic billboards, small form-factor displays (LCDs, plasmas, projectors, laser phosphor displays, and OLEDs), and any form of media which pushes a product/service on you while you are out of your home--hence the name. Of course in the case of digital display technology, we generally think of a standard 16x9 flat-panel display. However, by the time the industry predictions meet their prophetic D-day, we'll certainly be the beneficiaries of many more sizes, shapes, aspect ratios, and mounting strategies than heretofore recognized. Think for a moment about the Christie MicroTile technology. I'm certain this will only be the beginning of the possible methods for display.
But how do technologies such as this benefit the ooh content deployer? Simple. The size, shape, and type of display means signage will literally infiltrate our outdoor lives. As this continues to take place, utilizing differing displays will not only open more avenues for deployment, but allow for venues who thought digital signage was too obnoxious to begin to embrace the possibilities of information display via digital. This expansion will further open the doors for more ooh advertising. And the vicious cycle rolls on...
3. Scalability
When we speak of scalability, we often think of it in terms of operations. We can generally think of it in the following way. Scalability: The ability for a business or technology to accept increased volume without impacting the contribution margin (Contribution margin= revenue - variable costs). In other words, when we're speaking of digital ooh, we can think of it in terms of getting the message across. Once the digital infrastructure is in place, then getting the message to 50, nay! 10,000,000 sites is done with the push of a button (that is if you've got a big enough pipe--that's another issue delving into a completely different aspect of scalability which we'll not address here). In any event, digital allows you to scale (or, benefit from decreasing variable costs and increasing contribution margins).
4. Ease and Accessibility
Similar to scalability, ease of use and accessibility are also factors contributing to the necessary expanse and use of digital out-of-home media. As sign software continues to improve and become more readily available to the layperson, the use of said software will not only become more prevalent, but it will become necessary. Why? You might ask. I can compare it to a fax machine. If the world only contained one fax machine, it would be pretty worthless. But, when nearly every office in the world is utilizing a fax machine, it becomes as necessary as toilet paper. The more accessible the technology becomes, the greater the need to jump on board and operate your own.
5. Targetability
The dynamic nature of digital signs also increases the ability for honed information dissemination--a term I like to refer to as "targetability." One of the big reasons digital has been and will continue to replace traditional is because day-parting allows content managers to display messages when and where the specific crowds might pass. In short, digital can be used in a more targeted fashion. Let's take the example of a mall digital signage network. In such a setting very different groups of people parade around, looking at the wares on Tuesday evening than do Saturday morning. That just a fact. The benefits of using digital media to target these
In addition, the increase in the prevalence of audience measurement devices for digital signage means the "targetability" will continue to grow. Such devices allow for some of the greatest advertising targeting imaginable--with the exception of online searches. Devices that track eyes, determine gender, and estimate age can offer very unique targeting when attempting to reach an audience of a particular kind. Devices such as these also can determine whether the passing crowds are actually viewing the displays. While this all may sound a bit "big brother"ish, it's certainly an excellent method for further targeting an audience--something which TOOH cannot DOOH :)
6. "Digital" is Becoming Expected
It was Charles Kettering who once said, "High Achievement always takes place in the framework of high expectation." Similarly, but somewhat dichotomously, the German psychoanalyst Fritz Perls has been quoted as saying: "I am not in this world to live up to other people's expectations, nor do I feel the world must live up to mine." It's like a Pavlovian Response to something you expect, but never comes. If 90% of the restaurants I frequent are running digital menu boards, then when I walk into a restaurant without them, I may feel a bit unsatisfied. It's like having dessert after most of my meals and then not receiving it when it's expected. I'm sure there are a whole slew of terrible examples that could be used here, but you get the idea. When something reaches the mainstream, it begins to be expected. Those who do not live up to the expectations will certainly be behind the competition--in more ways than one. This will be discussed in further detail below.
7. Your Competition Will Be Using DOOH
Not that competing businesses are the absolute reason one would do anything, it is certainly important to pay attention to how a competitor is reacting to a particular semi-new development. In this same vein, I read an interesting article a while back which stated the following about the way you may treat the competition:
Putting too much effort into competing is also an extraordinarily destructive force for a small business owner. Not only are you wasting energy and resources trying to make yourself look better by making someone else look worse, you are also closing yourself off to the opportunity to collaborate. Resources are scarce, even if you combine every small company that you call your competition into one, you would all still only represent a tiny fraction of a tiny fraction of the larger market. With so much going against everyone, you should not waste time sniping at each other, you should be spending your time looking for places where your business and your closest neighbors complement each other, and trying to find ways to use that to grow the industry at large.
Competition is a necessary evil and if you are really lucky you may one day grow a business that is sufficiently massive that you need to start worrying about it. Until then, understand that every second you spend competing is a second that could have been used doing something productive.
This, of course, would beg the question, "why worry about what the competition is doing if I am not to worry about the competition?" This is somewhat perplexing. Let's take a look at where digital signage fits into the picture here. When it comes to digital media, you are not necessarily in competition with other competing companies as a digital media company, but you are in competition for customers--and customers are often driven by increased ambiance. I worked with a client a while back who was installing some unique digital screens in convenience stores. These babies were themed, depending on which store you were to enter. Interestingly, the company not only saw a prudent sales lift, but they were also the beneficiaries of more return traffic due to the mini jumbo-tron/basketball experience they had created in the store. In this case, the nearby competition followed suit. It was interesting to watch. It was a "but the Jones family has it..."
Technology will continue to change the way we do signs--regardless of whether you are traditional or digital. In the case of digital, technology seems to have the industry by the proverbial short hairs--giving the industry little time to keep up with new developments. As digital OOH grows, we will also see a shift in what types of DooH are being used in media advertising purchases. Certainly the technology will play a role in what will be the most effective methodology here. Most importantly, those wishing to survive will need to implement some digital signage in their marketing mix. It's a DooH or Die scenario.
Launched in September 2008, Encoding.com provides a cloud-based, video encoding SaaS offering to let users host and encode user-generated and premium video. The company encodes an average of 30,000 videos per day for a variety of well-known media and technology companies including MTV Networks, WebMD, Nokia, and MySpace. To date, Encoding.com has encoded more than four million videos since its launch.
But does this type of video encoding technology make sense for the digital signage industry?
Different encoding types including h.264, vp6, mpeg2, m4v, 3gp2, m4a, asf, mj2, avi, wmv, 3gp, mpeg, mp4, and flv have certainly found their way onto digital signs in the past. And, there have been discussions about what is best for efficiency and quality. The numbers are the best indicator there, but as for the capabilities, something similar to Encoding.com may prove beneficial for encoding content on to digital signs. In September 2009, the company blog, touting their first year's encoding success, stated the following:
It’s been an incredible year since our launch in September 2008. 400+ business customers, 2M+ encoded videos have far exceeded our initial first year goals. As many of you know with your own companies, there are so many factors that can positively or negatively affect one’s ability to go from product concept to proven business model. The most important thing we’ve done to increase our chances for success has been to listen to you, the folks using our platform. “Release early, release often,” has been our mantra and your support as we continue to add features and fine tune the platform has been greatly appreciated.
In the coming year, we intend to lead the cloud-based encoding market from infancy to maturity, from novel idea to essential media work flow component. We will deeply embed ourselves in the ecosystem via hooks into the leading CMS and video platforms. And, continue to look to you for suggestions and critical feedback.
Encoding.com will eventually find a great bedfellow in the digital signage realm for a few reasons. First, they are primarily focused on the business market, currently tapping software as a service fees from over 400 different businesses around the globe. Second, the company innovates. With their "release early, release often" mindset, they will find and match ways to help our industry with content encoding options for publishing video to digital screen networks. Finally, with their intentions of embedding hooks in the leading CMS platforms is there any reason why this would not include digital signage CMS? I suggest no.
As signage software options become much more flexible, we probably will not see the need for encoding nearly as much in the future as we have in the past due to the simple fact that sign software will simultaneously support multiple formats. But there will always be the need for encoding whether online or out-of-home. Certainly doing so via the cloud is not a bad option, especially for those wishing to do it quickly and lively.
The applications for Global Positioning Systems (GPS) are vast. While most of us recognize GPS as a part of a global navigation satellite system used to aid in worldwide navigation, we sometimes fail to recognize some of the other, more specific, applications for GPS--which include digital sign integration. Part of our failure to recognize some of the extended applications of GPS is the result of ignoring how digital out of home is currently used in the transportation industry. In addition, the mobile marketing sector can also benefit by integrating with digital signage and GPS. Digital signage displays are often referred to as "place-based" media. This post will discuss how "space-based" GPS, implemented into place-based digital media, can enhance and increase your network's return-on-investment.
Digital Out-of-Home, GPS, and Transportation
When we think about transportation digital signage and the display of arrivals and departures, the venue that comes most readily to mind is the airport. While airports are great examples of providing timely information on arrivals and departures for weary travelers, they are somewhat apart from what I will be discussing here.
GPS is quickly becoming industry-standard in nearly every vehicle--especially when it comes to rentals. Those who have a deviated internal guidance system, can use the crutch of GPS to find their way in just about any environment, worldwide. For those who do an extended amount of business traveling, you may have been the recipient of a nice DOOH ad while riding a bus, taxi, plane, or boat. And, due to the increased prevalence of GPS tracking devices, these vehicles often have GPS.
The most prominent company I am aware of in this space is YaMogu of Brazil. One of their specialties is working with integration in digital signage on a number of levels, including global positioning systems. The technology for vehicle tracking and targeted advertisement display is already available, but in many instances it has been developed and utilized for different applications and industries. For instance, companies like Omnibus integrate content delivery with GPS solutions. They are a company specializing in delivering,
"comprehensive master control, automation, playout and media content management solutions to broadcast, cable, satellite and telecom operators across the globe. The company's transmission, newsroom, content management and workflow solutions address every area of television, mobile TV and IPTV related operations."
Think about the opportunities to utilize GPS and digital signage together for advanced emergency alert systems. Displays could act as wayfinding tools, directing individuals away from potential danger and hazard. Such an application for a GPS device is certainly not limited to the transportation industry alone.
Integrating IPTV-type solutions with GPS is not something that is necessarily new, but it will eventually become an industry niche that will get legs. The next question that should be on your mind is, "how would something like this benefit me as someone selling content assets on place-based media?" The FULL answer to this question will require some more detailed discussion with mobile phones and how they play a role in the madness.
Mobile Marketing and GPS
I don't own an iPhone. I do own a smartphone though. Eventually I think I'll go with Google's Android. But, all that is beside the point. Smartphones will become the norm. And with smartphones come all the applications. Want GPS? There's an app for that. With GPS integrated into mobile technology, there are a whole slew of additional options there. For instance, do you need milk? Search for the grocer nearest to you. Get directions and drive there using your smartphone as the compass. I can't even begin to talk about how honed the product promotion could be in a situation like that.
In such a situation, promotional coupons could be sent to the phone. If enough information was in the database, you could find where to get the least expensive version of the product you were seeking in the area. I can let my imagination run further, but then I may start giving away trade secrets...
Now--can you begin to see how digital signage can be integrated into the whole pie? There are a number of companies already running advertising inside of taxi-cabs where the content is controlled by a GPS device. The GPS simply tells the sign player what content to display based on which city block the car is traveling. This means that if you are a local restaurant owner trying to cater to a crowd of travelers, you can advertise to them at the precise moment they pass your establishment. Integrate that with a mobile device and you just ensured a trifecta of digital media impact. And, on a more practical level, mobile devices could be also act as a key component to emergency alerts we previously touched on. Getting yourself out of a possible sticky situation becomes much more easy when you have a guide to help.
Shipping/Packing/Manufacturing Facilities
Now, let's completely switch gears and move to something a bit less interesting. While the digital out-of-homers love to tout the power of digital signs as the ultimate in advertising tools, I like to think of the technology includes industries which are generally more stable and not rely on the advertising to feed the fam. One such industry is the shipping industry. FedEx, UPS, and DHL (or any shipping/packing facility for that matter) can find a great benefit to using digital signage with GPS. The "hands on deck" can check digital displays as products arrive and are sent, creating for a more efficient supply chain.
Additionally, manufacturers can increase the efficiency of their supply chains as well by implementing GPS tracking reports onto LCD screens. While these concepts are not necessarily new, digital signage software providers can at least liven up the content on such displays.
Closing Thoughts
When the first mobile handsets were integrated with cellular providers like Nextel, Sprint, and Verizon that was just the beginning. 2006 marked the opening up of APIs to any developer. This means that as smartphones become more prevalent, so will GPS. With GPS will come a slew of apps that we cannot, as yet, fathom. We have not even begun to jump into all the possible uses for GPS as it relates to digital media. Further creative development in GPS technology is certainly needed. As mobile phones begin to have GPS integrated en masse, we will certainly see a broad range of additional services for general and product information dissemination. Instead of thinking of these various forms of digital as competitors, it is best to look at them at close allies, ready to work for the welfare of one another. This symbiotic relationship between the retail space and outer space will be something to behold.
I've been hearing rave reviews about AVATAR over the past several weeks. Some friends and family have been raving about it over the holidays. So, naturally I had to go and see the crazy film. I have to admit, I was impressed. It certainly was the highest quality in 3D I have ever seen, including the old Michael Jackson 3D movie I saw. I believe it was Captain EO. Certainly the world of 3D is and will explode in, first in digital signage and finally in the consumer segment as well. But is all this expansion healthy?
After the movie I was speaking to a friend who referred me to the following sites. The first site is an introduction into what is called "Post-Avatar Depression." The video, put together by CNN, has some interesting thoughts from those who were so engrossed by the film, they could not stay in reality:
"When I woke up this morning after watching Avatar for the first time yesterday, the world seemed ... gray. It was like my whole life, everything I've done and worked for, lost its meaning...It just seems so ... meaningless. I still don't really see any reason to keep ... doing things at all. I live in a dying world."
Similarly, Second Skin, a movie which delves into those caught in the "gamer" world, speaks of similar problems of people who cannot live a real life because they are so caught in a virtual "skin" while they play their games for hours on end.
While the digital signage blog regularly speaks of getting into more interactivity and technology in the realm of "cool," I do believe that in some respects we may be getting a bit extreme in our expectations. While all this stuff is incredibly "cool" it certainly is not reality. We--myself included--need to be sure we're grasping reality and not seeking after some false world. In short, let's be happy in the skin we're in, take some time away from the computer and get out and see the world. That said, I'm going to stop blogging right now.
Have you ever been shopping at Amazon.com and had the friendly little widget tell you, "those who bought that also purchased these..." and then there is a list of additional items to choose from? While this type of technology is not new, its application is being expanded by a company called Cognitive Match. Recently the company obtained more than $2.5 million for real-time content matching. While this technology is somewhat specific to online shopping carts, it could certainly work for more interactive displays as digital signage makes more headway toward interactivity.
Cognitive Match combines commerce match, content match, and advertiser match for e-commerce websites. The company boasts of the ability to match specific people and demographics with specific content to increase sales and drive revenue upward. Here is a little ditty from the company website explaining how the technology works:
1. A visitor arrives at your site or page
2. A message is sent to our server. We retrieve any existing details from an anonymous cookie ID. We look at all the variables and data available, and use that data decide which content option to display
3. That decision is sent back to the page, the content is retrieved from your existing servers or infrastructure. And the visitor sees the option we selected.
Our software has been built as a SaaS (Software as a Service) solution, meaning that we host the backend processing and data we need to make decisions.
In the location where we manage content, we place a JavaScript tag. Our tags operate either just like your existing analytics tags (so our solution can pick up visitor trends), but where we manage content that tag becomes a two-way communication - allowing us to pass back a content decision. The content is then picked up from your servers, meaning we do not manage or host any of your content.
These decisions happen while the page is loading - so that the visitor is not exposed to any delay. In the case of delay or failover, we have a set of scaled responses so that at no time is the visitor left with a "hole" in the page.
While the applications are currently focused toward online retail, I can see a mushroom into other industries as well--especially as out-of-home advertising becomes more interactive and integrated with RFID technology. Think for a moment about a digital sign installation in a retail location. When someone picks up a particular product, the database could query and give suggestions based on previous purchases as to what other individuals had preference for. While the technology is not new it is certainly something to look for as an eventual application in the digital signage world.
When it comes to technology, sometimes justifying the expense is difficult--especially when an effective return on investment is desired. However, there are many times when opportunity far outpaces cost and necessary funding must be had or else we will be like those William Arthur Ward referred to when he said, "opportunity is often difficult to recognize; we usually expect it to beckon us with beepers and billboards." But for those wishing to seize digital opportunities by the horns, we have some great opportunities in the path before us. We've partnered with several very key companies in working with potential digital signage networks, both small and large for getting funding for growth. While this post may be somewhat of an advertisement, I promise it will be informative and well worth the read.
Traditional Funding Sources
Generally SMB owners utilize traditional sources for funding their business. This could include SBA loans, private equity, venture capital, or a loaded relative. Generally getting funding from any number of these sources requires differing tactics and a know-how of the proper approach to get needed clams from whatever source you choose to pursue. For most, the best option is chasing the funding source that will give the smallest rate of interest, thus giving the money you borrow that much more kick.
For nearly all applications to obtain funding in the business realm you need a specific and strategic business plan for implementation and project growth. This funding is generally necessary when you look to purchase an existing business, finance business expansion, or need funds to purchase owner-occupied real estate and/or durable equipment. This could include any number of things in the digital realm.
Once a business plan is drawn up and the business is officially "planned," the next step in the process is finding a network of SBA lenders, private equity and/or VC partners to take you to the next level of operations. But there are other methods as well--depending on your appetite for risk. Just be sure you're not crazy about it like the guy featured on ABC's Shark Tank. He mortgaged his and his family's entire future on the idea of a digital sign network--not a very bright idea.
Alternative Funding Sources
When the economy gets tough and people lose their jobs, things get tight in the funding realm. To add to this problem, people start looking for alternative routes to put their money--they want to invest in something other than the general market. In most instances, peoples' money is housed in two places: either their house (real estate) or their retirement account (401K). Real estate is good only if it's rented or sold for a higher price than it was purchased--that's the simple equation there. But, when it comes to 401K's there is a lot of untapped potential for investing in business other than what the "custodian" tells you can invest in.
Our partners have worked with hundreds of people who, when the market goes south, immediately remove their money from their 401K to take the cash and invest in things other than the general market. This is foolish. The government taxes and fees associated with such a removal can greatly null any money made from removing the funds prior to their date of maturity. It is simply foolish. In consequence of this, we have partnered with several companies who work with personal investors to transfer 401K plans to become self-directed. This gives the beneficiary of the funds the ability to invest retirement savings into business of his/her choosing without incurring tax penalties. It even gives you the right to invest in your own business using your very own 401K funds.
While this may seem more risky, I feel it a great benefit to those who have confidence in themselves and wish to take their future into their own hands. The ability to obtain traditional lending to fund your business has become much more difficult in today's tight lending economy. Entrepreneurs can now open up additional business funding capital by taking control of their retirment funds and investing in something that they know and believe in with the 401k business funding plan.
Benefits of a Self-Directed 401K/IRA
There are many advantages of utilizing a self-directed retirement program for financing business plans and business growth and development. I have listed a few of the benefits below:
Debt Free – Cash Rich. Personal retirement funds can be structured as an investment into a business. This means no debts have to be incurred to increase business overhead. Instead of spending money on interest payments, this money can be freed up to spend on equipment, marketing materials, and/or any traditional business expense--helping the company grow more quickly.
Invest In Yourself. Why do we attend college and spend all that money to put information into our heads? It's because we're making an investment in ourselves. Alternative methods allow you to us your retirement funds to invest in a business--nearly any business--where you determine the rewards. You are the one who determines the success or failure of your investment, not the volatility of the market (of course, that can have an effect on what happens to your business investment).
Lower Your Overhead. Often when starting a business or looking for funds to expand, people will tap into home equity or take out a bank loan. Using retirement funds to invest in a business of your choosing takes away some of the business overhead and expense. Rather than paying down debt, monies can be spent to help further the develop the business for future growth.
Tax-Deferred Savings. The self-directed 401K method avoids taxes and penalties that could be had from utilizing other funding sources for investing. In this way, individuals are actually able to save more for their retirement while keeping their funds safely in their retirement account(s).
Leverage Additional Funding. Utilizing a self-directed 401K plan can decrease the amount of money needed from external sources. Moreover, when additional funds are needed, the 401K funds may still be used to leverage added funding for the purchase of a larger or multi-unit businesses or franchises. Many clients use the 401K to fund the down payment necessary to qualify for an SBA loan or to purchase a specific digital media business plan to obtain SBA or other additional funding.
Some More Reasons I'm a Fan
The three companies we have partnered with to offer this service have been providing solutions like this for years. Because most financial advisors and stock brokers are motivated by commission and profits, they are not motivated to show individuals the true power in tapping retirement accounts for self-directed use. Custodial account managers are not motivated in the slightest to give clients the ability to move their funds outside of their specific portfolio(s) because they would no longer be taking a portion of the invested income. Much like the 401K plans of large enterprises, the self directed 401K for small business investing program was built to enable small, private companies to utilize retirement funds as a source of business capital.
Our generation has been pigeonholed into finding investment alternatives that would give meaningful ROI. Because the stock market's volatility makes business investments seem less secure the past 10 years have there has been a substantial increase in the number of self directed 401(k) business investing that has occurred as individuals take their retirement accounts into their own hands. In addition, I like the idea of a self-directed IRA. With it you not only can take a salary from the return on the funds, but you are required to as part of the business. With the investment funds coming from your IRA, you are also able to purchase any legal business or franchise which is of course not limited to digital signage. You can also invest the funds into multiple enterprises, giving you a diversified portfolio in the small to medium business market.
There are many more aspects of alternative funding sources we are working on to benefit our partners and potential customers. When an organization is seeking to invest in digital signage technology, one of the biggest struggles is "do you have investors?" or "where is the money coming from?" When they say, "the advertisements," I'm always a bit skeptical and wonder, "have they already sold them or are they waiting for the chicken to come before the egg?" These alternative sources can help alleviate the issue to some extent.
We have been working with a team of financial geniuses over the past several months in developing and honing business plans for digital signage and business investment strategies for every network type the digital sign market can bear. From what we can see thus far, our clients are liking it as well.
