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We've got two recent college graduate sons that are in the job market. With them I realize that there is some or alot of jobs that are starting at $30 to $50,000 a year. It's really easy to figure an hourly wage by dividing those figures by 2000 normal working hours a year. The gov't figures 2089 hours. So divide up that starting figure of $30,000 and you get $15. - $50,000 gets you $25. and hour. So....If we were to figure shop rate at $50. per hour and silly us, work as a husband and wife team, then we each would make $50,00 a year ( not uncommon for 15 or 20 years working) but then nothing left for overhead. The question then is, for you husband, wife shops how much do you think you make, do you have any reasonable way to track your income, or is it, "let's just see at the end of the year?" Personally I'm sure we are just as bad or worse than most. We would like to make more money. Right now we think we are trying to work smarter.
-------------------- Tom & Kathy Durham House Springs, MO Posts: 655 | From: House Springs, MO | Registered: Apr 1999
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Yesterday I did a small retouch on one of the big murals here in town......it took me about 5 minutes to do the repair.....the bill is $100 for my services.....
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There's a world of difference between your 'shop rate per hour' and your personal wage.
I charge out at $100.00 per hour... and figure after all soft costs can easily clear at least half that. On contracts I generally do better.
Materials are always extra and marked up. Other costs such as travel & special tools are factored into each job.
For employees I triple their hourly wage as a minimum. Aditional wage benefits take 15-20 percent of that. Equipment & other costs take another chunk. The company needs to buy tools & make a profit & I need to personally make money by them being there, or else I will do the job by myself and be better off.
Janis & I each take an equal salary from both our companies... if we don't make good wages now after 30 years in business... when's it gonna happen??
All this being said... when times were slow or things went badly on a job, we were the last to be paid... and only got what was left over...
-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: 8764 | From: Yarrow, B.C. Canada | Registered: Nov 1998
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$50/hour seems pretty low for an hourly rate. What do plumbers, electricians, etc, make per hour in your area? you should be at LEAST as much as they are. They all have similar amounts of overhead, etc.
-------------------- :: Scooter Marriner :: :: Coyote Signs :: :: Oakland, CA :: :: still a beginner :: :: Posts: 1356 | From: Oakland (and San Francisco) | Registered: Mar 2001
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People raise eyebrows, moan, grunt, blow, snort, and wheeze after hearing my hourly rate (presently $40hr.). Just recently, a customer (HVAC serviceman) did that after just finishing his explanation why he charged $40hr for his services . One of my clients, an electrician, charges $25hr. But....the lawnmower shop down the street charges $45hr. and $60 hr for "rush jobs". The largest plumbing company in town charges about $25 or $30 per hour.
-------------------- Wayne Webb Webb Signworks Chipley, FL 850.638.9329 wayne@webbsignworks.com Posts: 7405 | From: Chipley,Florida,United States | Registered: Oct 1999
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Regardless of your overhead, you should always charge (exactly) NO LESS than the best other shop in your area. that is IF your work is just as good (or better).The customer deserves to (and should) pay the same rate for the same level of work whoever does it.
This is currently (and probably) around one dollar per minute minimun.
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Tom&Kat, Here is another way of looking at it.
2 Qualified people work faster and provide a better service to the customer. A 2 person shop should earn $100,000 to $150,000 base min. that should com from the overhead as a paycheck it can also be divided up into retirement money before taxes. When you start doing things like saving for retirement and have savings acounts, buy equipment with cash and have time and money to go on vacation, being in business is a lot more gratifing.
I always figured a 1100 billable hr. year and like lawyers Dr.'s and other professionals anything over those 1100 hrs. is pure gravy. Don't forget every job estimate needs a profit margin on top of the shop rate, use the total for a guide and then sell the sign work for it's value, go read Cam's post about the site sign for a good example.
You guys do exceptional work and have put your time in, now is the time to get your rewards! Work smarter not harder! Then set some money aside and come see us in Vacationland.
-------------------- "No excuses!.... No regrets!..."
Your shop rate is not your personal income, your personal income should be added into your formula to figure out your shop rate!
Below is a screen capture of the Excel worksheet I built for figuring out overhead and projecting a realistic shop rate. The numbers in the worksheet are not specific to my expenses, but are there to show you how numbers work out.
The first thing you should notice is that I have included both business expenses AND home/personal expenses in the same worksheet.
The next thing is in the "Staffing" section, the shop owner is treated as an employee, thus the owner's wages/salary are figured into the overhead just like everyone else's.
Here's the sweet part.. underneath the staffing section you'll see "Take Home Pay" - this is basically saying "I want to take *this* much money home each month, for me to do with whatever in the world I could imagine."
Now keep in mind all your home/personal expenses have already been accounted for in the top of the worksheet, plus you decided to pay yourself a $25/hr wage/salary.. now you want to add another $2,000 per month for play, savings, retirement, etc.. Since your personal finances are already accounted for, the $25/hr and 2,000/month are ALL YOURS.. 'cept for taxes of course.
Take all the overhead and divide it by the number of billable hours you can realistically put in, I use 50% productivity.. you get about $50/hr..
But that's where most people stop and cheat themselves.. you need a profit margin on labor cause at $50/hr you're only breaking even. I used 30% for example, and this is really close to what I run on labor profits in my business... so you add the 30% profit margin which brings your shop rate to almost $74.
Of course you can make the numbers work any way you like, but I made mine work this way essentially paying YOU (the person, not the business) 3 times.. the biz takes care of your personal bills (it's gotta cover those expenses anyway, right?), you get an hourly wage, AND you get.. let's call it.. benefits/savings/retirement.
Then let's say you want to change your wage to $40/hr or you add another $6/hr employee, that bumps up the overhead thus bumping up shop rate which also bumps up the profits your business sees on the labor - a win-win-win situation.
-------------------- "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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I don't charge by the hour except for designing. I charge by the job....and if I am fast....all the more time I get to sit on the beach.
Posts: 3729 | From: Seattle | Registered: Sep 1999
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Thanks for all the input especially to Mike for the spread sheet. Now we know our overhead and what we want to make but how about tracking each one of those jobs. Personally I work on several jobs at the same time. Cut or paint a background, design another job, maybe weed some vinyl for another job and talk to customers....all in the first hour. How much time for each?......Good guess. We usually rely on what we think a fair market price is for our work but I would really like to know if we are judging the price right.
-------------------- Tom & Kathy Durham House Springs, MO Posts: 655 | From: House Springs, MO | Registered: Apr 1999
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tracking time is a tricky one when you're batching jobs like that, the only thing I could tell you is that past experience on similar jobs can give you a good starting point for estimating time.
If you could spend a bit of time writing up a spreadsheet of the jobs you do in a day.. or during a week, and use that spreadsheet to track the time that might give you some labor tracking. You could carry the spreadsheet and a stopwatch all day and each time you go on to another job, start the watch. When you switch to another job, record the time you spent on the spreadsheet and reset the watch and do it again. Eventually you can add up the time and figure it out.
-------------------- "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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-------------------- Pierre St.Marie Stmariegraphics Kalispell,Mt www.stmariegraphics.com ------------------ Plan on knowing everything before I die and time's running out! Posts: 4223 | From: Kalispell,Mt 59903 | Registered: Mar 2000
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Working "smarter" and "Specialization" is working very well for ME! Tarket marketing...(high end work) is my goal. For examples...... Instead of using MDO that I will have to prime both sides,& finish coat both sides. I will use Aluma Core prefinished from the factory Saves me paint time AND give my customers a BETTER product! Pinstriping on Hot Rods,Motorcycles,etc. Is NO material cost! Same with Wall Lettering and Murals. Oh Yeah I have also learned to say NO!!!!!! which opens the door(time)for fewer jobs at higher prices. I don't need MORE customers. Rather, I need BETTER PAYING customers. I don't make any more MONEY,but......my down time has more quality to it.
To me,this is PRICELESS!
-------------------- PKing is Pat King The Professor of SIGNOLOGY Posts: 3113 | From: Pompano Beach, FL. USA | Registered: Nov 1998
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How much do I make an hour (shop rate) or how much do I bring home from that? Seems like the bring home always hoovers around 30% of gross. If I want to bring home a $20 I need to charge a $60 and get it done in an hour. What percentages do others find? Do you have the expenses of liability insurance? workers comp? health insurance? payroll? bookeepping? sales tax? property tax? heat and light and sound? These things usually comprise the second third and supplies the rest.
-------------------- The SignShop Mendocino, California
Making the simple complicated is commonplace; making the complicated simple, awesomely simple, that's creativity. — Charles Mingus Posts: 6812 | From: Mendocino, CA. USA | Registered: Nov 1998
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When I quote a job, I start out by using my shop rate as well as putting a mark up on materials (it costs money to order, recieve, and store materials, and then there is spoilage and waste). THEN I add for the perceived value of the work to the customer. As we all know, a banner has a lower perceived value than the typical board sign, but can cost the same to produce. I once had a business advisor tell me, "charge as much as you possibly can", that is, what the market will bear. I always keep that in mind. That's why I don't sell $40.00 magnetics. I don't sell many magnetics, but who cares? I'm too busy doing the profitable work.
[ June 01, 2003, 12:34 AM: Message edited by: Tim Whitcher ]
-------------------- Tim Whitcher Adrian, MI Posts: 1546 | From: Adrian, MI | Registered: Mar 1999
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