Gino
Premium Subscriber
I don't get this part. If you don't make any mistakes and all goes well with the order, do you reduce the price for the customer?
I don't build a mistake factor into my pricing. If we make a mistake, we bite the bullet and might lose some money on that job. Our profit from an order is figured from materials and shop rate.
Maybe it's just me, but I don't get it.
Dave
A little background. This has been a good customer of ours for over 25 years, so although she didn't give me a month and just date numbers, I.... for some reason, typed in the concert was August 24 and the raindate was June 25th. I never saw the mistake and neither did she on the proof.
So, we've been doing their trucks, police cruisers, event signs, banners, borough signs for a long long time. Needless to say, we even give them freebies from time to time and we give a sizable donation on every Police cruiser or vehicle we do.
These people get billed and pay in less than 10 days for everything we do for them. We're one of the few that don't wait 60 days. So for good pay, we offer great service. It's a win/win situation.
As for not understanding the 'mistake factor' as you put it... we call it a 'loss factor'. Each and every job, let's say over $50 or so has a percentage of the overall job attached to it. If we make a mistake, it helps cover the mistake. If no mistakes are made.... it's added to the profit line. So, if your shop or company produces $10,000 this week and let's say you have figured in about $450.00.... if you have a small hiccup, you have money already figured into your equation. Most of the time, no mistakes are made, so you have this factor building all the time.... kinda like an Unemployment fund. It just keeps growing until you need it one day. If you continually need to dip into it... you're doing something dangerously wrong.
I learned this from a real estate guy many years ago. He was looking to list the building we were renting and asked if we were interested in purchasing it. I said... heck no....... half the apartments are empty and it seems hard to keep the ones that are already here. He said, when you own a building, you always have a negative factor built in to your rental units. If the place isn't being rented, you still have reserve from when it was and the others being rented to help pay for utilities, taxes and so forth. Every business has waste. Waste of employees using too many paper towels, spills paint or ink, water hits a roll of media, someone dropped a sign and it broke....... who pays for these losses that you obviously have not figured on happening ?? You do ?? Nope, not any more. Each and every sign we ever did has contributed towards these unforeseen accidents, whether a mistake on proofing or something an employee did or I did.... it's all good.
When I first started doing this, I called it my 'Sh!t Factor', but that didn't look good on the notes in the margin, so I changed it to 'Loss Factor' and it sounds so much better.
I mentioned paper towels. A friend of mine has a very successful Taco business. He travels up and down the east coast to carnivals, fairs and other events, selling his tacos, french fries, hot dogs and sodas. He has I believe 8 huge trailers and makes a mint. He once told me..... you know, when you wash your hands, you'll take one towel, dry your hands and if it ain't too dirty, you might drape it over the sink and use it for drying something else next time. You pay the bills, so you're careful. However, an employee will wash his hands and when he hits that roll of towels it spins around like a slot machine and they waste a third of the roll while doing it. Ya know, that is so true in so many cases..........
Hope that clears a few things up.
ps.. they're re-printing them as I type.
ps.. they're re-printing them as I type.