posted
Wouldn't it be nice if the cost of our supplies didn't increase very much and we didn't have to raise our prices for several years? I just received my copy of SignCraft this week along with the 2012 pricing guide. As much as I'd like to ignore the changes in our economy, I have taken on the task of adjusting my prices.
Some things I wasn't too far off, but things have to go up or we end up working for less and I don't want to go backwards in my take home pay.
I was wondering how you handle your prices that you charge for signs. My custom work is the most difficult to price. Dimensional projects add even more of a challenge. I don't want to give my work away, but need a realistic price that will not put me out of business. I know, it's the ultimate challenge.
Have you raised your prices lately?
Sign-cerely, Steve
-------------------- Steve Luck Sign Magic Inc. 2718-b Grovelin Godfrey, Illinois 62035 (618)466-9120 signmagic@sbcglobal.net Posts: 870 | From: 2718-b Grovelin Godfrey, Illinois 62035 | Registered: Dec 2004
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Steve...I know that Si will add to this....
figure out your pricing and triple it....if the customer doesn't flinch....Yer IN!!!
Just a perspective from an old fart who made enuf to retire on.
-------------------- Dave Grundy retired in Chelem,Yucatan,Mexico/Hensall,Ontario,Canada 1-519-262-3651 Canada 011-52-1-999-102-2923 Mexico cell 1-226-785-8957 Canada/Mexico home
I was just thinking the other day we're not making enough, and pricing dimensional & illuminated jobs is very hard.
My query related to how much markup people put on things bought in-whether materials as substrates, or even outsourced digital printing- what average markup over and above cost for thses is typical?
I've generally charged about 30-40%, depedning on the size of the job, and wastage or whatever else I can think of, but lately I'm thinking I shoulkd charge double the wholesale price-partly just because of the time spent sourcing, collecting & storing it, ready for that next job... and partly because we're entitled to a profit for our funds already expended.
What are others' thoughts on this markup?
-------------------- "Stewey" on chat
"...there are no limits when you aim for perfection..." Jonathan Livingston Seagull Posts: 7014 | From: Highgrove via Toowoomba, Queensland, Australia | Registered: Dec 2002
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If vendors are raising their prices, you have options.
You tell them to sharpen their pencils and do better on pricing, or you will sharpen your pencil and find a different vendor.
Controlling costs and maximizing efficiency is the first line of defense. If a price increase is still needed after doing that, you need a way to provide additional value to your customer to offset the increase or seek out a market that affords more wiggle room.
-------------------- "If I share all my wisdom I won't have any left for myself."
Mike Pipes stickerpimp.com Lake Havasu, AZ mike@stickerpimp.com Posts: 8746 | From: Lake Havasu, AZ USA | Registered: Jun 2000
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In calculating our prices most sign shops determine their take home pay by what is left at the end - after everyone else is paid. The truth is that is our true salary, but it shouldn't be calculated that way.
We should have a handle on what it takes to run our shop. Soft and hidden costs add up. These costs include rent or payments, utilities, insurance, etc. as well as new vehicles, tools, computers and software on a regular basis. A reasonable profit for the shop should also be in this category as should nonproductive time we all experience. Add to this the salary we want to make. Divide this by the number of work days in a year and you can instantly figure out what it costs to open the doors of your business on a weekly or daily basis.
Material should be marked up as well to ensure a profit. Waste (including do-overs) and supplies for sample projects should be built into this markup. I also like to overbuy my supplies to keep stock on hand. Shipping one sheet of product is not much less than shipping an entire pallet of stock.
When we apply this simple math to the average job in our shop we are surprised to find that much of the work the average shop does really doesn't make much money. I'd rather do twenty or thirty really profitable and creative jobs each year than 500 that are only so so in both departments. We need to figure out how to do the type of work we LOVE to do rather than simply keep busy, fooling ourselves into thinking that this will make us more money.
-grampa dan
-------------------- Dan Sawatzky Imagination Corporation Yarrow, British Columbia dan@imaginationcorporation.com http://www.imaginationcorporation.com
Being a grampa is one of the the most wonderful things in the world!!! Posts: 8738 | From: Yarrow, B.C. Canada | Registered: Nov 1998
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Retirement savings should be added to the cost of overhead too in my opinion. We need to put a little away each month for that or invest in passive income to help set us for retirement years (if there is still a chance of retirement anymore ).
-------------------- Pam Eddy Niles, MI ple@qtm.net Posts: 460 | From: Michigan | Registered: Dec 2000
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We are actually in the process of re-building our own pricing guide. I'm learning excel & building the pricing guide in there, so that our prices can be flexible & will change as the cost of goods increases. Right now I'm trying to get everything at simple square foot prices in a range so that we have some bending room when giving customers quotes. I plan on adding a way to figure out & add in overhead to all the prices we give so that our quotes will be very accurate but still remain fair, but I haven't implemented those bits into the system yet & have instead compensated for that by putting a pretty high markup in on all of our materials.
posted
With the way our costs and expenses keep going up, who can not afford to raise their prices these days?
Also, as Pam noted, retirement cost should be factored into your overhead and adjusted (raised) appropriately because that cost is going up too.
To prevent the business from losing money, I check my material costs on a regular basis - at least once a month, sometimes more frequently. With the dramatic swings in gas prices, I adjust billable travel time and mileage nearly every time I fill up my tank. And overhead is adjusted on at least a quarterly basis.
That being said, I try to take Dan and Si's approach to pricing which is to charge as much as possible without losing the customer. This way I can smother them with service and quality and not have to hesitate no problem should something change.
I consider myself very fortunate though because I also have a part time job which gives me the ability to say no to jobs that are just not up to my standards, be it design, profitability or otherwise.
Havin' fun,
Checkers
-------------------- a.k.a. Brian Born www.CheckersCustom.com Harrisburg, Pa Work Smart, Play Hard Posts: 3775 | From: Harrisburg, Pa. U.S.A. | Registered: Nov 1998
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I agree with Checkers about not taking jobs that are not up to standards. We have been looking seriously at profit margin ( or if there is any profit at all in some jobs ) and design. We also have been reading past post about appointment only shops. There is so much time spent talking with the tire kickers about jobs that are less than $100. We hate to snub anyone, but with property taxes going up every year, utilities and insurance sky rocketing as well as supply cost, we just cannot spend the time on every request.
-------------------- Pam Eddy Niles, MI ple@qtm.net Posts: 460 | From: Michigan | Registered: Dec 2000
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posted
I have been working on a new price book for two weeks now and it is just about done. I was comparing our prices with the new SignCraft 2012 pricing guide and I have a question:
When the size of the sign increases, the cost per square foot went down. Why is that? I looked at aluminum, coroplast and pvc signs and it was the same on all of them.
Don't you use more vinyl on a larger sign which means you expense is higher as well as the substrate? So why charge less per square foot on a simple one-color sign? The cost per square foot on a smaller sign was considerably higher.
Does anyone have a answer for the new price guide's formula?
Sign-cerely, curious, Steve
-------------------- Steve Luck Sign Magic Inc. 2718-b Grovelin Godfrey, Illinois 62035 (618)466-9120 signmagic@sbcglobal.net Posts: 870 | From: 2718-b Grovelin Godfrey, Illinois 62035 | Registered: Dec 2004
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Hiya Steve, I no longer subscribe to Sign Craft so, I really can't say how they figure their numbers. However, perhaps the lower square foot cost can be be justified by saying it really doesn't take any more time to make a 18" x 24" yard sign than it does to make a similarly designed 4' x 8'. Sure, there is more material but just about everything else remains the same.
Havin' fun,
Checkers
-------------------- a.k.a. Brian Born www.CheckersCustom.com Harrisburg, Pa Work Smart, Play Hard Posts: 3775 | From: Harrisburg, Pa. U.S.A. | Registered: Nov 1998
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Steve, like Checkers said the cost of labor is usually what drives the pricing. Typically I find material costs average about 30% of the final bill. Labor can vary significantly depending on the complexity of the sign i.e. lots of copy, multiple colors, custom shapes. We have our pricing averages according to complexity - light, medium and heavy.
-------------------- Jean Shimp Shimp Sign & Design Co. Jacksonville Beach, Fl Posts: 1265 | From: Jacksonville Beach, Fl. USA | Registered: Nov 1998
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I just feel that a 4' x 8' sign takes longer, costs more in materials and should be priced according to the complexity and time it takes to complete. The 18" x 24" signs take me less time to make, cost less in materials and even if they are slightly complex shouldn't average over $24 per sq. ft. as indicated in the 2012 price guide. The 4x8 came out to $10.40 per square foot! To me, that just don't make sense. I was charging $12. a sq.ft. for a 4x8 with just vinyl lettering and no artwork 8 years ago. When someone wanted a design, clip art, or extra bells and whistles, we charged for it and got it.
This new guide is great with some things, but completely confusing on others. Has anyone compared their price list to the 2012 guide yet?
Still trying to understand how they got some of those prices.
Sign-cerely, Steve
-------------------- Steve Luck Sign Magic Inc. 2718-b Grovelin Godfrey, Illinois 62035 (618)466-9120 signmagic@sbcglobal.net Posts: 870 | From: 2718-b Grovelin Godfrey, Illinois 62035 | Registered: Dec 2004
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