In a small sign shop is 50% enough for materials to start working on a job? or is labor a added invisible cost? Overhead not figured correctly? I often see money being grabbed from another job to finish another job and that worries me. If it's not enough money what can be done? If it is enough what is being done wrong? Most of these jobs are channel letter jobs which require metal sheets and acrylic sheets of material, leds, trim cap etc.. Plus install. Some are pole signs that require the purchase of pipe and holes dug and so forth. Does this question need more info? Thanks for anyone who can shed some light on this.
-
I want to thank all the members that have upgraded your accounts. I truly appreciate your support of the site monetarily. Supporting the site keeps this site up and running as a lot of work daily goes on behind the scenes. Click to Support Signs101 ...
50% Downpayment
- Thread starter cwb143
- Start date
ThatGuy
New Member
RULE OF THUMB
50% of total charge for an illuminated sign usually covers all materials and assembly labor. The other half is installation (labor) costs and profit. This is a very rough estimation and is correct about 90% of the time.
No one can tell you how much to charge for a sign. You have to account for your company's expenses. With that said (typed), if money is being used from job B to pay for job A, "Houston, we have a problem...."
50% of total charge for an illuminated sign usually covers all materials and assembly labor. The other half is installation (labor) costs and profit. This is a very rough estimation and is correct about 90% of the time.
No one can tell you how much to charge for a sign. You have to account for your company's expenses. With that said (typed), if money is being used from job B to pay for job A, "Houston, we have a problem...."
ThatGuy
New Member
Don't take this wrong. How can you know if what you charge is correct without job costing? The problem, if one exists, could be anything from material waste to labor miscalculation. We don't do cost checking for every sign anymore but I usually check end cost periodically to make sure I am not missing anything.
We do regular printing, screen printing, and small signs. So our sign jobs don't typically tie up thousands of $ in materials, so your situation may be a little different. For me the 50% deposit is as much a measure of good faith and a promise to complete the job as it is anything. It's not about covering the costs, because once you factor in labor and overhead 50% isn't enough for that, anyhow. And once I complete the job, there's no way that I'm settling for just 50% of the money. For us, 50% deposit helps us weed out the price-shoppers and tire-kickers. If they're serious about the job, then they'll put down the deposit. If not, then we figure it out quickly when they come up with a reason to not put down a deposit.
It seems the boss has it all figured out. Granted he is good with the cost and figures. and granted we had some setbacks that weren't his fault. Expenses that needed to be paid. So with a slow winter and unexpected expenses and that I think is why some money got used where it shouldn't have. I just hope they can break tha
---------------------
It seems the boss has it all figured out. Granted he is good with the cost and figures. and granted we had some setbacks that weren't his fault. Expenses that needed to be paid. So with a slow winter and unexpected expenses and that I think is why some money got used where it shouldn't have. I just hope they can break that cycle of using money from Job A for Job B. and somehow create a surplus.
---------------------
It seems the boss has it all figured out. Granted he is good with the cost and figures. and granted we had some setbacks that weren't his fault. Expenses that needed to be paid. So with a slow winter and unexpected expenses and that I think is why some money got used where it shouldn't have. I just hope they can break that cycle of using money from Job A for Job B. and somehow create a surplus.
GaSouthpaw
Profane and profane accessories.
Yes, the "robbing Peter to pay Paul" method of financing production costs is the proverbial "slippery slope." And a good indication that you might want to find a new employer.
I also think it becomes an even bigger problem when your company doesn't enforce the 50/50 outlined in most every shop's contract.
Example:
Worked for a shop that had a customer that developed multi-family residential properties. Despite the fact that the customer was 120+ on something like 75% of their invoices (to the tune of something like $90K or more), that shop continued to allow them to order signs with no down payment- and produced, delivered, and installed new orders.
Their answer, when I pointed it out at a sales meeting and offered the opinion that it needed to stop and wondered if they thought a bank would let them skate four months plus on the mortgage without a payment without starting foreclosure proceedings? "They're a big customer."
Uh, no- They're not. What they were/are is a drain on profit, and screwing the company by taking advantage of the fact that they're getting free products and an interest-free loan- not to mention the corrosive effect on the sign company's morale, because this same company cut out all vacation/PTO because "times are tight." (I left the company.)
At a couple of the shops where I was worked (including the one in the example above- they did a lot of stupid shit) they'd take the deposit (as agreed), do the fab work, get the sign installed, then... nothing. When I was the one who scheduled installations at the first shop where I worked, the first question I'd ask once the job was ready and the customer said "I'd like to get it installed on Tuesday" would be "okay, and would you like to pay for that with a credit card now- or will there be someone with a check for the balance of the work on site that day?" No payment, no sign (decal, print, channel letters, whatever). My installers were under instructions not to even begin work if they didn't get payment (if the job wasn't prepaid). Yes, there were a few customers that didn't have to follow this "rule"- but they were established customers who paid their bills within 10 days of the work being completed.
I also think it becomes an even bigger problem when your company doesn't enforce the 50/50 outlined in most every shop's contract.
Example:
Worked for a shop that had a customer that developed multi-family residential properties. Despite the fact that the customer was 120+ on something like 75% of their invoices (to the tune of something like $90K or more), that shop continued to allow them to order signs with no down payment- and produced, delivered, and installed new orders.
Their answer, when I pointed it out at a sales meeting and offered the opinion that it needed to stop and wondered if they thought a bank would let them skate four months plus on the mortgage without a payment without starting foreclosure proceedings? "They're a big customer."
Uh, no- They're not. What they were/are is a drain on profit, and screwing the company by taking advantage of the fact that they're getting free products and an interest-free loan- not to mention the corrosive effect on the sign company's morale, because this same company cut out all vacation/PTO because "times are tight." (I left the company.)
At a couple of the shops where I was worked (including the one in the example above- they did a lot of stupid shit) they'd take the deposit (as agreed), do the fab work, get the sign installed, then... nothing. When I was the one who scheduled installations at the first shop where I worked, the first question I'd ask once the job was ready and the customer said "I'd like to get it installed on Tuesday" would be "okay, and would you like to pay for that with a credit card now- or will there be someone with a check for the balance of the work on site that day?" No payment, no sign (decal, print, channel letters, whatever). My installers were under instructions not to even begin work if they didn't get payment (if the job wasn't prepaid). Yes, there were a few customers that didn't have to follow this "rule"- but they were established customers who paid their bills within 10 days of the work being completed.
Texas_Signmaker
Very Active Signmaker
Orders less then $1000 I get paid 100% up front. (Few exceptions for the established Net30 companies) Anything over 1k and I'll do the 50/50 deal. 50% usually covers all my costs and maybe usually some profit.
printhog
New Member
Check www.signcraft.com/sign-pricing/.
.. look for "determining your hourly rate" link.. you can use to figure out the hard costs and how they come down to hourly rate.
If the shop is floating deposits to other work they're in danger of failing. Best solution is to get accurate hard costs, accurate labor costs with all deductions and benefits, and know the numbers. Cost Accounting is a small part.. it's a snap shot of the past. But It's better to know the future needs at the time of sale.
Most franchise shops operate on a multiplier.. typically 5 x materials to keep cost of goods near 20%. I can't see any reason to not follow that model. They're expert at keeping those stores open in high priced retail locations, so they've figured out the line in the sand on invested money.
its only a freaking sign!
.. look for "determining your hourly rate" link.. you can use to figure out the hard costs and how they come down to hourly rate.
If the shop is floating deposits to other work they're in danger of failing. Best solution is to get accurate hard costs, accurate labor costs with all deductions and benefits, and know the numbers. Cost Accounting is a small part.. it's a snap shot of the past. But It's better to know the future needs at the time of sale.
Most franchise shops operate on a multiplier.. typically 5 x materials to keep cost of goods near 20%. I can't see any reason to not follow that model. They're expert at keeping those stores open in high priced retail locations, so they've figured out the line in the sand on invested money.
its only a freaking sign!