Monday morning news: Oil prices are shooting up even higher.
I filled up my shop SUV last week when the price of gas was 2.07 per gallon. Last time I looked it was 2.39 and climbing. My tank is getting low!
While its easy to see I'm spending more and more money filling the car, I have not been watching the rate of climb in prices on signfoam, dibond, vinyl, dumpster services, power, natural gas, and everything else affected that impacts directly on a sign shop expenses.
For as long as I can remember I have been charging a base rate of $65 per hour, at least thats what I tell every customer that asks. However, if a job takes 1 hour or under, the minimum has really been $95 + materials.
The same is true for a job that takes 3 hours, we figure it uses up a whole morning so we charge 1/2 day or four hours. If a job takes 6 hours, we charge for a whole day or 8 hours. When it comes to bidding on jobs, I seem to be losing every one lately to low ballers.
Also, I have not been so ready to jump in the car when a customer calls to go out and bid work, to cut down on travel expenses. I try my best to get them to come to me to show me the job, or fax, or e-mail it.
I notice we are starting to multi-task when we need to go out and get stuff: as in, "Can I deliver that sign on the way, pick up mail at the PO BOX, and pick up screws we need at the home center, instead of making 3 trips like we are so use to doing.
Even these adjustments don't seem to be helping enough. I'm suspicious that my efforts to offset expenses and increase production isn't enough any more.
What are your thoughts?
What are you doing?
Posted by KARYN BUSH (Member # 1948) on :
i have no problem delivering a sign if i'm going that way...or checking out a job early in the morning when i go to get my latte....but after i get back...i aint going back out...they have to wait til the next day. being a one person shop i have to be very careful with my time...and lately i tend to do what best fits into my schedule...if thats not good enough then they are free to check out other companies. i do alot of email...i love email...i don't have to look at someone...i don't have to hear their voice...and best i can read it when i have time.
i'm all for customer service...but i'm not into wasting my time on tire kickers. i letter alot of my vehicles during the weekend or after hours. i prefer that...less traffic and i don't have to chitchat with anyone...just go do the job and leave.
my truck cost $48 to fill up...so the days of picking up a banner to change a date are over unless i happen to be going right by and they can throw it so it lands in the back of my truck while i drive by. something has to give when its just you...you can't be everything to everyone everyday. i do my best at juggling things but i'm done checking out jobs that require a few 12x18 aluminum signs for joe cheapskate...they can describe that in an email or fax...we have digital cameras too. email a pic. i know this might come across as arrogant but i have to make money to pay my bills and the little crap thats takes more time than its worth isn't the kind of work i want anyway.
Posted by Todd Gill (Member # 2569) on :
Gas IS a factor for sure....and this is a great post.
I have to believe that costs of doing business have gone up due to the rise in oil prices, and I too, am curious how that has affected vinyl, shipping charges, and many other aspects of the biz.
I just did a van job for a guy this weekend and consciously added another $10 to his price, thinking that I probably paid more for vinyl [due to the rise in gas] than what It cost me last summer when I did a job for him.
I have a copy of Estimate now...but haven't set down and plugged everything in yet...but plan to soon. And I hope that helps.
PS - You must have a smaller tank than me Karyn - or else your Toyota gets better mileage - I just filled up yesterday and it cost me $59...OUCH Posted by Doug Fielder (Member # 803) on :
I raised my prices, the oil companies are making record profits by having the prices up so high, so I have raised mine to afford to fill my tank.
Posted by Steve Luck (Member # 5292) on :
Hi Dave, Down here in southern Illinois (across the river from St. Louis,MO) gas prices are $2.28 a gal for Regular Unleaded. It cost about $38.00 to fill up the mini van about once a week!
I'm with Karyn on no unneccessary trips out of the shop. Email or Fax the information if possible. We schedule appointments after getting the information over the phone. This Gas thing gives me a headache every week. The whole country is watching it and it does change the way we are doing things. I have noticed that vinyl prices have increased this year as well as aluminum and MDO boards. Banners seem to go up each year too but not by much. It's time to seriously evaluate our prices. Thanks for the reminder Dave! Sign-cerely, Steve
Posted by Kimberly Zanetti (Member # 2546) on :
I filled up my car at COSTCO the other morning and it was $2.75/gallon - so you all can quit complaining! LOL Cost me $45. Up in Northern California it's much worse. Sure glad we're not driving to Jill's!
Posted by Kissymatina (Member # 2028) on :
I've seen my edge vinyls increase 2 or 3 increases just this year. Those are announced across-the-board increases. Everything else has been slowly creeping up too. Every invoice I receive gets entered into my accounting software AND EstiMate at the same time to keep up with the increases.
Posted by old paint (Member # 549) on :
i posted this under MONEY & THE SIGN BUSINESS, JULY 27, 2005: more people with plotters doin signs cheaper and cheaper....one put his 18x24 road sign 2 blocks from my house....seen 3-4 new NEED A SIGN? call 000-0000 I WONT BE UNDERSOLD... guy with a print shop doin 2'x5' banners for $25....on the other side material cost have gone up(all vinyls increased)gas prices almost doubled of what it was in 2004....coffee cost more, plywood was $15 a sheet is now $26 a sheet,MDO was $38 is now close to $70, aluminum sheet was $40...now is close to $60.....
Posted by Rick Beisiegel (Member # 3723) on :
I am looking out the window at our next door neighbor, a high volume filling station, (Speedway) They just raised their price to $2.55 for regular. Something's gotta give. Fuel cost me twice what it was just 18 months ago.
Posted by Mike Pipes (Member # 1573) on :
It may cost me $40 to fill up my 2.4 liter minitruck but at least that lasts me a week or more whereas the $40 to fill up my jetski only lasts 2 hours... yet I still spend it.
As much as people like to complain about the cost of gas it must not really be an issue for them because they sure don't want to give up their gas guzzlers. If there wasn't such a demand for gas in the US with people buying Hummers and huge SUV's for regular family grocery getters and never even using the "Sport Utility" part, you guys wouldn't be spending 2.39/gallon and us on the west coast wouldn't be spending $2.75-$3.00/gallon.
Supply and demand.
Drive less and spend less if you don't like it. Get a smaller more efficient vehicle, unless you're pulling race car trailers or 40ft boats you just don't need a diesel powered dually truck.
Charge trip fees and fuel surcharges, UPS and FedEx do. Why not?
If customers can't realize it's not just the gas but your time out of the shop too, they just need to find someone else. Why should you run out to a customer's place for free, when you *could* spend that same time in the shop doing work for PAYING customers?
I live in a small town, it's only 6 miles end to end, but it's crammed with 50,000 people, stop signs at almost every corner and traffic lights where there aren't stop signs. If I have to drive through the main part of town, say if I'm just running to the bank, it's a ONE HOUR round trip. If a customer wants me to "drop by", it's going to be while I am already planning a trip out. If they don't like it, they can pay a trip charge of one hour minimum. I don't mind driving, hell I love driving, but I hate breaking up my day, destroying my focus on a project, for the sake of some piddly little piece of crap job. Not to mention it's just a complete waste of time to run out for something that won't bring in much $$$.
Posted by Dave Sherby (Member # 698) on :
I just lost a job because I got tied up at the shop and missed the meeting I was asked to attend for a new small town museum. The sign was up the last time I went by. A whopping 12" by 18" aluminum sign, 2 sided with Alph Museum on it, no border, no shape, as basic as it gets. I'm so happy that I didn't drive to this museum and spend an hour at their meeting for a $45 sign.
I got a notification from my vinyl supplier that vinyls were going up 10% to 15% as of August 8.
I set a record the other day. My full size basic Chevy pick up drank $72 worth of gas in one fill up. I'd love to charge for trips, but I live in a town of 2,000, with a major market 30 miles away. With about 7 other sign shops in that area, I'm sure a lot of my customers would just do business with a local shop to avoid the extra charges. So I'm doing the best I can to batch trips whenever possible.
Posted by Jon Aston (Member # 1725) on :
Good points Dave (and all).
Has anyone else out there seen The End of Suburbia? Very sobering documentary about the coming impact of rising energy costs. Strongly recommend it.
Not intended to hijack this discussion...
Posted by Raymond Chapman (Member # 361) on :
I filled up my Trail Blazer this morning and it cost more than the first car I bought - a '53 Ford that had a blown engine (broke, not like with a blower)for $35.00. My, how times have changed.
At that time gas was .18 a gallon. But I couldn't afford gas back then either.
Posted by Mike Pipes (Member # 1573) on :
Jon, thanks for the link. I'll have to see if I can find a local rental.
Posted by Stephen Deveau (Member # 1305) on :
Well folks try $1.05 a litre, Canadian in the Eastern provinces.... Now remember 4.5 litres to our gallon. That makes it $4.75 per gallon.
So what do you think about that price?
Posted by nicola mcintosh (Member # 5371) on :
just about on par with us in the uk 92 pence per litre...and its away to go up even more,and i only get 25 miles to the gallon..
nik
Posted by Dave Sherby (Member # 698) on :
You can't compare U.S. prices with other countries. I read an article claiming that some taxes that we pay seperatly are built into the gasoline tax in other countries.
The bottom line is that no matter where we live, gasoline is too much, a small group are reaping tremendous profits, and the internal combustion engine should be obsolete. It's going to take running out of oil to switch to an alternative fuel / propulsion method.
Posted by David Harding (Member # 108) on :
Stephen,
There are 3.785 liters to a US gallon. $1.05 Canadian is about $.865 US, which comes out to about $3.275 per gallon, US. That's not quite as bad as $4.75, but it's still awful, nonetheless.
Whatever happened to the windfall profits tax?
Posted by Jean Shimp (Member # 198) on :
I called a company to get some basic information on installing a water feature to add to a sign structure. He wanted $50 to go to the site for a consultation. He said the $50 would be deducted from the final job if I place an order. Now, that's a great idea. Next time I get a call to go 20 miles out on a "whim" I'm going to suggest the same thing to my would-be client. I've wasted enough time and gas on jobs that never come true.
Posted by Bobbie Rochow (Member # 3341) on :
I can't count how many times I have run to the customer, instead of them coming to me, because I live on a back road away from everything. What hurts is when you find it is a "piddly job" & wasn't worth the run. I learned. I was driving my husband's Chevy 4x4 up until a month ago, & it was a guzzler.
I am pretty careful now, I run when I get several things I need to do at once, I don't just run at the drop of a hat for anybody who calls. Those days are over.
edited to add:
I also do a lot of work through e mails & it helps a lot, you just have to be careful they don't steal your design & take it elsewhere... it's happened!
[ August 08, 2005, 08:37 PM: Message edited by: Bobbie Rochow ]
Posted by Kent Smith (Member # 251) on :
As you all may know, we do job costing regularly and the price of fuel to us is only the tip of the iceberg. I just had to use that metaphor since it is 102 here today. All of our supplies are delivered by truck, many of our materials are petorleum based including vinyls and paints. If you have not been keeping track, most sign supplies have gone up around 17% each of the last 5 years. Anyone charging only 65 per hour in this economic climate is probably losing money. The only way to mitigate this is to have 5 or 6 employess working on revenue jobs each day and spread the cost of operating over that many bodies and then it is possible to reduce the hoiurly by a factor related to each added person. Realizing that most of us like working alone in production, we must charge more per hour for our type of custom work. 95 is probably not enough either for most of us, certainly not for me. The way we calculate our hourly is not equated to other types of businesses though because we include many more items in overhead than a piecemeal parts and service enterprise. Our customers, yours and mine, also pay for talent which is less quantifiable but worth more than even graduate educated professionals. Bottom line, even at $3 or more per gallon, the cost of fuel for your vehicle is still not the most important cost for you to consider in determining your rates. You are.
Posted by Dawud Shaheed (Member # 5719) on :
quote:Originally posted by Stephen Deveau: Well folks try $1.05 a litre, Canadian in the Eastern provinces.... Now remember 4.5 litres to our gallon. That makes it $4.75 per gallon.
So what do you think about that price?
LOL I remember the first time I was in Toronto and It was time to fill up. I hadn't quite figured out the whole money exchange thing yet, so my wife was like " hey look how cheap the gas is!" I said, Yeah, lets go fill up before we go back! Well ,I asked did he take american Money because I didnt exchange that much and I wanted to get rid of some of the American money, It was like $65 or something like that!!! My wife and I looked at eachother like ...Oh, no, somethings wrong.
Posted by Dawud Shaheed (Member # 5719) on :
I know it has nothing to do with the topic, but,I absolutely hate when customers checks bounce. they always have some sad song and dance. I mean, It only happens every once in a while. But I hate it, Nevermind trying to collect your $35 bounced check fee, What about the money they owe you....Burns me up
Posted by Ray Rheaume (Member # 3794) on :
"Can you come over and have a look at where the sign is going?'
Heading out on a site means $$$, more so than ever. Over the last several weeks, I've been a real stinker to customers about travelling out to do jobs when I have a shop right here that's better equipped for the task.
Supplies have taken a rise as Kent pointed out. With the winter months approaching, fuel costs for heating the shop are going to be noticalbly higher, and raising prices isn't just a good idea, it's going to be necessity for many.
I've made it a point to in the past that much of what we use is oil based. Vinyls, squeegees, paint, clear application tape...and the list goes on. Combined with the rising costs of lumber and other substrate materials, there's one thing everyone will have to agree on...
...it costs more to make a sign these days than ever before.
my 2 cents... Rapid
(edited for spellink, Colonel Klink!)
[ August 08, 2005, 09:31 PM: Message edited by: Ray Rheaume ]
Posted by Jon Harl (Member # 4427) on :
I don't check any job site until I've got an agreement with the client about the job. Quite often they can give me a rough idea of the needs and location of the sign and I can give them a rough estimate to qualify the buyer. More often than not I'm selling a logo first plus other collateral to go with it. The sign is just the icing on the cake. But I've eliminated the word "SIGN" out of my name and use "DESIGN" instead. Our hourly rate starts at $125.00 and all the time I get more profit. So I price the job Time, Material, and Profit which I figure at about 10 to 20% of the total cost. I just add that to the bottom line. I add 10% if the price is over say $2500.00 and 20% if not. I know this sounds abritary but I've got a pretty good feel about what the client will bear and I price accordingly.
Posted by Rick Beisiegel (Member # 3723) on :
Some of the big guys charge for a "site survey" I have seen charges rangign from $125-150 to drive to a site, measure, and make verbal reccomendations. Hmmmm....maybe us little lower profit guys can get in on the gravy?
Ya right! let the whinning begin!
edited to say: many good ideas and pointers here, thanks!
[ August 09, 2005, 08:31 AM: Message edited by: Rick Beisiegel ]
Posted by Mike Pipes (Member # 1573) on :
Try this some time.
Call a plumber and tell him you have no visible plumbing problems but you would like him to come over anyway and do a detailed inspection on everything to see if he can find anything that might need fixing in the near future.
Call an electrician and ask the same thing of him.
Take your perfectly running vehicle to a mechanic and ask them to go over it with a fine-toothed comb.
Then tell all these people you do not wish to pay them for their time when they do not find anything to fix.
See what kind of response you get!
You want me to drop everything (even if it's just sittin watching TV) to run out into the blazing 115 degree heat to "take a look" at something, for free no less, on the off-chance (speculation) it's going to pay off? Forget it!
The $60 fee that gets "absorbed" into the cost of the job is a good idea, as long as you *BUFFER* that extra $60 onto the price of the job. If a 4x8 normally goes for $500 (or whatever you charge, I dunno I dont do 4x8's) it doesn't do any good to deduct $60 from that for the trip fee unless the $500 already includes that trip fee in the first place. If the $500 is the regular cash and carry amount for the 4x8 without a trip to the client's, it should be $560 with the trip out.
Posted by old paint (Member # 549) on :
my local sign supplier charges $2,50 for each delivery!!!!!!!! its right on the bill...
Posted by John Largent (Member # 4606) on :
Ray touched on it, but nobody really got to the crux of our problem . . gasoline prices go up and occasionally down . . BUT, Almost everything those of us in the sign business, and more particularily in the automotive side of it, buy or use are petrochemical based . . . and in the last 5 or more years, everytime the oil industry gouged us in the A** with gas prices, the cost of all that we use went up, not marginally, but greatly . . . and when gas went back down . . did our paints, reducers, etc?
Not a chance . . A particular reducer I use for airbrushing Base Coat cost a little over $11 a gallon a couple of years ago now costs over $58 . . The other day I bought 2 ounces of a special pearl color for a customers design panel and it cost $210! That was one of the three colors it took to get to that color! . . And of course you pass it on . . but how long can the customers continue to afford this? A 12" X 18" Demo Panel cost the customer over $400, plus the cost of the design drawing!
![[Eek!]](eek.gif)
![[Mad]](mad.gif)
![[Bash]](graemlins/bash.gif)
![[Cool]](cool.gif)
![[Smile]](smile.gif)
![[Applause]](graemlins/applause.gif)
![[I Don t Know]](graemlins/dunno.gif)
![[Rolling On The Floor]](graemlins/rolf.gif)