I remember back about 10 years ago at the California shop I use to work at. My boss was teaching us (2) how to quote jobs. One thing I remember is that he mentioned trying to keep material costs around 25% of what the job sold fore. Now I know you should have a shop rate and, I do but, the reason for posing this question is such... I quoted a job $1800. This was figured after marking up my aluminum that I bought, vinyl and how many hours I plan to spend busting this job out. Well after I buy the vinyl and aluminum, I have spent $650.00. That is over 35% material costs!!!!! Is this typical? Should I find my price and then find a separate price of my material X4 and then find a happy medium in between the 2 prices????????
Curious what you have to say.
Posted by Bob Burns (Member # 268) on :
Check out the "survival" postings!
Posted by KARYN BUSH (Member # 1948) on :
simple...no....i think you have to keep in mind certain jobs may be more in materials than others...take vehicle lettering...my material is minimal might be 15% tops..but then the next day i do some wood/hdu or corian signs...my material could be 30-35%...i know when i do my year end my cost of goods is about 33% of my sales...i wouldn't be overly concerned as long as you are making a decent hour rate for your time.
[ May 02, 2003, 12:34 PM: Message edited by: KARYN BUSH ]
Posted by J & N Signs (Member # 901) on :
jimmy chatems got a copy of that program for sale...he won at the ft myers meet. i do all my signs a $$$$ per sq.ft. if i paint on a window, wall, or truck the lowest price is $4 s.f. as i add material to the jobs, sheet of alum, mdo, corplast,alumilite plexi, i figure what it cost me per sq.ft. then add that to the price.as for markup, the more expensive the materials the more i add.
Posted by TransLab (Member # 470) on :
Here's a spreadsheet I created for pricing.
Plug in your own values for material costs, margins, shop costs, etc... any yellow cell can be user modified, green cells may contain formulas and are not to be mucked with. Any questions ..give me a shout
[ May 02, 2003, 02:36 PM: Message edited by: TransLab ]
Posted by bronzeo (Member # 1408) on :
It's difficult without knowing what you are doing with the sign to have any idea what it should cost. If all you are doing is pasting vinyl to prepainted aluminum, in most cases that markup should be more than adequate. If you are having to weld up and paint a steel signframe and set it to hang the sign on, then that is a whole different deal. 650.00 in Canada should probably buy 5 pieces of Dibond, and 4, 10 yard rolls or vinyl, or thereabouts. That is a lot of sign, if that is the correct material list or even close.
First you need a material price list.
Then you need a reasonably correct estimation of completion time. Take that figure times your shop rate, which you should have already established.(Your entire overhead of expenses, including a reasonable salary for yourself.) In the US it typically ranges from 30.00 to 60.00 per hour depending on how large your shop is, but you are in CAN. It is much harder trying to figure a true shop rate than a job price, and an accountant could probably do it for you.
These 2 added together tell you what you can do the job for. This is your "Survival Rate", and one you should get to know very well.
The next question, and a very important one....... Do you want/need a profit on this job? A more important question is, Can I get a profit on this job? Getting a profit on a job should be directly proportional to your expedience, and quality of output. All shops and craftsman are not created equal, or rather don't appear to be. Are you the fastest and best at what you do, over all your competitors? This is the defining "Profit Potential".
In many cases you will just be wanting to get your foot in their door. In most cases you will be bidding against someone else that is hungry for the work. I usually make this call, considering how much I really need to fill in the worktime. My profit line will usually run from 0 to 30% of the total job, but typically about 15%. As you get more established with customers, you can get a better profit line, but first you have to get your foot in the door.
This pricing method is very easy, and will land you a lot of work. In todays economy, concentrate on the "survival rate". 4 out of 5 shops don't make it past their 2nd year here in the US, and I'm pretty sure it is similar there.
Posted by Rick Sacks (Member # 379) on :
Formulas might help you establish what it costs you to make a sign, but not what it could sell for. The potential value of the sign is more intuitive as you consider the type of business and market. Charge as much as you can and diligently apply yourself to try and give everyone their moneys worth and then some. Always do your best and try a little harder. With competitive bidding you'll find incentive to cut corners. The corner you cut will be yours in the end.
Posted by Cam Bortz (Member # 55) on :
Sure, it's simple. Charge way too much and keep the money.
Posted by Bob Burns (Member # 268) on :
I like the way you think, Cam
Posted by jerry jaran (Member # 524) on :
Hi, I use Jim hingst formula that was in Signcraft a few years ago and is like Bronzeo's explanation. Time(based on shop rate plus materials (marked up 10% if you wish) then divide that total by your chosen profit markup of .9 or .8 or .7 or .6 etc. These being 10-20-30 and 40%. This gives a higher result. The result is the selling price plus tax. I'll then divide that into the square footage to see where that falls and maybe even then minus out the materials and divide by my shop rate to see how many hours result. If all these calculations jibe the price is right. I got sent an e-mail from Signbluebook.com a new pricing guide. has anyone bought this and can comment on it?
