Discussion Average pay

[FatCat]

Your so right! When I was working for someone else and realized I was really only making 25% of my added value, I knew I was done right then and there. Sick thinking someone else was keeping 75% of my money. Making 100% of your value is well worth the risk.

Well, I don't believe thats entirely accurate - or a 100% truthful statement as I've been on both sides of the coin. It is true that as an independent installer you can make more money working for yourself IF you are really good at what you do AND have enough contacts to keep you busy year round AND don't mind having lulls or slow times where you have nothing to do and aren't making money. Oh, and did I mention you can't screw anything up or else you eat the cost to reprint or remake what you are installing? (Not to mention the free labor you donate when you re-do the job, or the gas or wear and tear on your vehicle to drive back to the install location, etc.)

Also, (and this isn't meant to be disrespectful) keep in mind that other 75% that was "your" money went to pay for things like materials, equipment, taxes, insurance, rent, electric, phones, internet and a hundred other things to boot. So its not like the owner or CEO pocketed that 75% and laughed while you worked for him. As an employee you work your hours, you collect your paycheck, go home and enjoy your weekend and thats the deal. As an owner or independent you are guaranteed NOTHING. There are weeks you make money and then there are weeks you make NOTHING. Lots more risk, lots more headaches, lots more hours, lots more stress, lots more to worry about and THAT is why if you do well you can make more - but again, nothing is guaranteed.

All in all, you can paint the picture any way you want - but its really the same for an independent guy as it is for a shop with a couple or even a hundred employees... You're never going to have it easy. There will be jobs you make money on, jobs you lose money on and jobs you break even on. The end result or "average" over the course of a year after figuring how many hours you worked, how much cost was involved and what you had leftover is how you rate how you'd doing. I was an employee for 16 years and I've been an owner now for 8. There are days when I wish I could go back to just being an employee, and there are days its good to be the owner. But as they say, the grass is always greener...

 

[MichaelWilson]

Hello everyone, i have a question that i am sure most people are interested in knowing. If you have been in the sign industry for 9yrs. And you are well experienced in all aspects of sign making, installations, wraps, printing, prepress etc. What should someone with that much experience be paid on an hourly full time basis? And do sign shops usually take advantage of people with this much experience? Why?

It will depend upon experience, knowledge and talent of the one. If I talk about Florida then one should be paid between $10.35 - $20.88. Rest you can give walk-in or telephonic interview and get an idea about the estimate of salary paid to the experienced and professional sign makers.

 

[Texas_Signmaker]

In markets with high costs, the rate will be high, in small towns it'll be low. In general for 10 yeasr experience, it'd be right at the average income level for the graphics trades +-10%. If the person has additional skills that benefit the business they may skew higher. US data by county is at the link below, select the year, search Industry for sign manufacturing. If there is no labor reported the county will not show up.

QCEW Data Views

Payscales are directly related to the performance of existing businesses as a mathematical model in their market. Simply put - pay is based on what local sign businesses can afford, not what an employee wants to earn. Larger sign firms are usually more specialized (market niche) and efficient. That niche flows to the shop's labor needs. So these shops usually pay more, whereas a smaller shop is more likely to be a catch all of work types and not as efficient. (Think race car vs minivan).

The rule of thumb I use is based on SBA and SCORE classes for bank funding. The business goal is to keep direct labor's share of gross sales below 30%. So an employee at bare minimum must produce at least 3x their gross pay including employer costs, benefits, and contributions - which in reality is closer to 5x their take home pay for them to understand it best.

Keeping labor at 30%, and cost of goods at 20%, keeps the business in the minimum performance zone for a bank to loan to it. The 50% of gross remains to cover overhead, ROI on the initial business investment, taxes, interest, depreciation, growth, and pay the owners' salary.

Pay is always negotiable, but it helps to know what the average worker in your area makes, and how it relates to a generally accepted business model, both for employers and employees.

I understand you and I know I don't speak for everyone. If an installer messes up and makes less, he or she is still making 100% of what they output, albeit it's less because they messed up. If they mess up an entire job and it costs them $$ in the end, guess what they are still earning (or spending) what they did.

I think the "security" of a steady paycheck is over rated, and is less secure because you have one individual that can say, "our fired", vs many many many different "bosses"

I know all people don't see it that way, but I really see the risk reward and the reward FAR outweighs the risk in my view.

 

[equippaint]

"The rule of thumb I use is based on SBA and SCORE classes for bank funding. The business goal is to keep direct labor's share of gross sales below 30%. So an employee at bare minimum must produce at least 3x their gross pay including employer costs, benefits, and contributions - which in reality is closer to 5x their take home pay for them to understand it best.

Keeping labor at 30%, and cost of goods at 20%, keeps the business in the minimum performance zone for a bank to loan to it. The 50% of gross remains to cover overhead, ROI on the initial business investment, taxes, interest, depreciation, growth, and pay the owners' salary."

Not doubting you but if this is their threshold, then not many would be able to get a loan or many are making a boat load of money. We have an SBA loan and dont get near this. With this standard, on 1.5m revenue, we should have 700k (after I back out the mortgage and insurance) in EBITDA. We dont buy much so say 50k in equipment (which is quite rich) sec 179 leaves 650k EBIT. Lets take out 50k for utilities and misc stuff so 600K EBIT. So youre saying that in 10 years I could have $6 million sitting in the bank off of 10k sq ft of space and 7 employees with 0 growth?? Sign me up!
No wonder employees think business owners are loaded...

 

[ikarasu]

I understand you and I know I don't speak for everyone. If an installer messes up and makes less, he or she is still making 100% of what they output, albeit it's less because they messed up. If they mess up an entire job and it costs them $$ in the end, guess what they are still earning (or spending) what they did.

I think the "security" of a steady paycheck is over rated, and is less secure because you have one individual that can say, "our fired", vs many many many different "bosses"

I know all people don't see it that way, but I really see the risk reward and the reward FAR outweighs the risk in my view.

Not everyone is cut out to be an owner though. It's not as simple as buying a machine, or learning how to install and buying a business license.

Theres people who have been at the shop I work at for 20+ years... They can do most anything, but if they were asked to find a customer / deal with a customer, make a sale, or price a project... They'd be dumbfounded.

Theres more to having a sucessful business than just knowing how to do stuff. Take a look at craigslist... At least in my city theres about 5 sign shops selling their business every week.

You need to know financing, need to be smart enough to tuck some money away for rainy days / emergency funds, need to know how to win bids, be personable, etc. It's hard work, which is why everyone doesn't just go off and do it. For some people that stuff comes easy... I respect any owner who has had a business for more than a few years and stuck with it.

This past week, we've told the owner of the company I work at the $60,000 printer is at its end of life, our Seal laminator needs replacing (It's like 14 years old, but still!) theres another $6K... We've had techs come in to check out our CNC machine, theres $700 in repairs, and he wants to replace our $3000 controller. Our alluminum washer needs a new motor, theres another grand or so... and it just keeps going and going.

Our stuff usually never breaks down... and then this month it all hit at once. can you imagine being in the owners shoes, having to deal with all these bills? Sure, they make enough money to cover it.. But it probably destroyed the profit margins for quite awhile.

Being an owner is stressful, some people choose to follow along and get a guaranteed paycheque rather than risk everything they own and going off by themselves.

 

[TimToad]

You have to be busy or it will kill you. We do a lot of sub contracting 1099 action as it's hard to keep these caliber of people busy and happy all the time.


Sent from my iPhone using Tapatalk

If your "worker, laborer, installer, independent contractor, insert preferred label, etc." is responsible for paying all of their own taxes, filing their own long form tax returns, taking deductions for travel, materials, etc. deductions than maybe that rate applies in some locations. You also have to be very careful about not telling them when to come in, how to do their job, make sure they have proof of insurance, etc... Especially on the worker's comp end of things. If you tell them what time to show up or leave, give direction on how to do the job, have them use all of your materials, they are employees, not independent contractors.

The IRS is pretty clear on the distinctions between an "employee" and an "independent contractor"

I remember working for a shop in Eugene, OR when I first moved to that state in 1989 where the owners kept a posse of about six sign painters strung along as "independent contractors" just to save on taxes and worker's comp insurance. Each Monday morning, we'd all have to come in a half hour apart and actually bid on the week's work to see which jobs each of us would get. Some wouldn't get any, some would get more, but they never took talent or productivity into account, only price.

Needless to say, I put up with that routine for about two weeks and found a legitimate, full time job in Portland in one day just walking into a few shops with my portfolio and resume.

 

[TimToad]

Your right. It didnt cut it for me too so I went out on my own. Now I make $60-$100+/hr.

You gross or net that amount? Or is that your shop rate?

 

[Texas_Signmaker]

You gross or net that amount? Or is that your shop rate?

Shop rate is between $75-$125. My "average" net pay counting all the hours I work in a month is around $50-$60. That includes driving, working my finances, anything time devoted to furthering the business.

 

[TimToad]

Shop rate is between $75-$125. My "average" net pay counting all the hours I work in a month is around $50-$60. That includes driving, working my finances, anything time devoted to furthering the business.

Wait, the shop rate is between "$75-$125" how does that work?

Variable rent payments on the shop?
Variable material costs?
Variable Utilities?
Insurance?
Lease/purchase payments on equipment?

How does one calculate a variable shop rate? Good days and bad days?

We use the overhead calculator that comes with our SignCraft magazine subscription once or twice a year and it doesn't really have variables built into it.

If we take your high mark $125 per hour and multiply it by 40 hours per week over 52 weeks per year, That's $260k per year gross. At $60 per hour for a 40 hour week x 52 weeks is $124,800.

So you expect us all to believe that you are NETTING that on $260k in gross? Did you inherit the shop space, equipment?

 

[Texas_Signmaker]

I built a shop on my home property and have one part time employee. Overhead is very minimal as all utilities were already there. Im not a large operation. Paid cash for everything so no lease payments. You asked my shop rate and yes it varies on how busy I am.

 

[TimToad]

Gotcha.

I built a shop on my home property and have one part time employee. Overhead is very minimal as all utilities were already there. Im not a large operation. Paid cash for everything so no lease payments. You asked my shop rate and yes it varies on how busy I am.

You are aware that you are the rarity and exception, not the rule?

Most full time, brick and mortar shop owners have far higher overhead costs and liability exposures.

I still don't see how a person varies their shop rate and still be taken seriously as a professional entity. If I come to you in December and you are slow, the cost of my sign is calculated at $75 per hour, but if I come to you in July during the height of the busy season, that same sign will cost me the equivalent of $125 per hour?

That must take some serious rationalization and explanation to the clients who might receive pricing on those two extremes over the course of the year.

 

[Texas_Signmaker]

Maybe you should try it. Some shops around here lose business and tick off long standing clients being 1-2 months out, why not raise price? Your customers may want to pay more for you.

Dynamic pricing is everywhere. Think a gallon of gas should be same all the time? What about hotels on the beach in the winter? Ever fly during Thanksgiving? I though hey, why not signs?

I know I'm small and have to balance my time more carefully then a larger shop, but I think this method may scale even with a larger shop who might otherwise lose clients. There is a franchise sign company in our town that has been shedding large clients for months now. I picked up a school district and hospital last month from them. Both customers said they had been using them for as long as they can remember but it had gotten so bad (2 months turn-around) that they went out looking. I would bet that if they raise their overall prices that they would shed some jobs and make more on the ones that are not as price sensitive. More $$ on less work sounds good.

I do have "regular" prices on my staples like 4'x8' ACM and Banners, but I discount them during slow times and raise my more "custom" bids when I get busy. To head-off any problems in the future I would say, "Hey, this is an off-peak month for us so we're offering discounted prices right now. We appreciate your business!" Not saying this would work for all shops and maybe there are problems with this way but it seems to have been working for me so far....Just an idea I wanted to share.