Pricing Your Work

[Fred Weiss]

Let's talk about pricing our work. Both the theory and the reality. The good, the bad and the ugly. The nuts and bolts.

Regardless of the joy we may feel in practicing our craft, we are still doing it to earn a profit. Pricing can be like walking a tightrope. We want to sell the job for the best price we can get ..... but we don't want to be so high that the client goes elsewhere and we lose his or her future business.

Your responses and content become the property of Signs 101 and may be used in constructing tutorials or included in a knowledge base topic.



:signs101:

 

[ChiknNutz]

Not trying to use this as marketing, but since you offered the thread, here's what I've done on the matter...

My pricing calculator spreadsheet

I've had several good reviews from other users on another forum.

I used several elements to get what seems to be pretty darn accurate pricing. I used the Sign Contractor's pricing guide, input from other sign makers and then a touch of my own experience (albeit limited at this point). I guess at the core of it, the method I use is to price things is by the square foot or square inch using the cost of materials, labor per unit and then a markup.

 

[THATgirl]

Good Mooorning Mister Weiss.

I don't like to be one of the first to reply being I am the shy type. but....... I have been using Mark Roberts price guides now for a couple of years. I take them along to make quotes, I have one in my car, one by my computer and one in my color chart folder. People like to see the numbers in writing. I used to feel bad charging what I should because a lot of my customers have been ordering signs for a long time. And I did lose a couple of customers when I raised my prices, but they were the pain in the a$$ type who just wanted the lowest price anyways. But now that I have become older and wiser I see how the pricing guide has helped. I have even priced way off the book if some job seemed harder than normal or isn't my favorite. Pick and chose. Nuts and bolts. oh yeah....be sure to add for the nuts and bolts.




A+ for me.

 

[bob burns]

The FIRST thing I do is to NEVER give a price, ballpark or otherwise, over the phone.
If they can't come to my place of business, or me go to THEM, screw it! People who call for "prices" want the lowest price they can find. I try to shoot for "higher end" customers. FACE TO FACE with SET prices work best for me. I make it as simple for the customer to understand, as possible. EVERYTHING is "a la carte", like scanning, renderings, sample print-outs, etc. I price my work by the square foot PLUS SUBSTRATE (marked up 50%). From this basic start, I add for shading, outlining, extra colors, etc. I work with just vinyl......NO PAINT! ......DESIGN....QUICKY STICKY......GET THE MONEY.....OUT THE DOOR! I also do a fair amount of digital and large format which is a whole other structure, but similar to what I've just stated. I try to remeber the 3 RULES:
GET the job....GET the money....GET the hell outa there!

 

[Fred Weiss]

I want to avoid getting too much towards the marketing side of all this (which is a topic for a different time), but do any of you use three tier pricing?

For those not familiar with the concept, you have a basic version, an upgraded version and a deluxe version of the same sign. This allows the client to save face and select the combination that best suits their needs and their budget.

 

[THATgirl]

I do sometimes Fred. Mostly with designs tho.

 

[Fred Weiss]

We sometimes use a database pricing system we wrote ourselves which acts as a calculator similar to Chris's spreadsheet approach. We use a database application called FileMaker.

It, like the printed pricing guides, helps to establish to the client that you're not just pulling prices out of thin air and tends to reduce negotiation (which is a good thing).

We even built in a little bit of math to adjust the square foot price upwards as the sign size got smaller.

 

[ChiknNutz]

Fred, not trying to use this for marketing, really. Since I have spent a lot of time on this in the past several months, I thought this was a good place for me to describe the approach I've taken. I initially made my calculator for me, but then realized others might like this too.

My Logos/Graphics section uses a tiered pricing structure that starts out at $.38 per square inch for very small stuff (under 15 sq. in.) and then goes to $.04 for large stuff (above 1500 sq. in.). I currently have 9 steps in the pricing structure. This helps to take into account that your time involved is not that much different for larger stuff compared to small stuff (weeding and taping). I don't currently do that for actual signs, but maybe I should. Seems like a good idea.

 

[Fred Weiss]

Chris, my marketing reference wasn't directed at your mentioning your spreadsheet ..... it was in reference to 3 tier pricing which is more a marketing technique than a pricing method.

Signs 101 does not, at the present time, carry paid advertising. Banner ads at the bottom are displayed as a reciprocation for articles and other contributions made by you and others in the past.

Once we begin to run banner ads, an adjusted policy will be forthcoming. For the time being, I have no objection to your mentioning of your spreadsheet.

:signs101:

 

[Deadhead]

on the per square inch thing...

I don't do enough real "Signs" my work is 95% stickers and graphics. My "little" stickers (5x7 or equivalent) are $8 that works out to like 23 cents. Next size up is 8x10 for $10. Considerably bigger - I use a flat ten cents.

What bugs me about that pricing thing is that a 5x7 Betty Boop sticker can take a half hour to weed & tape for $8 while a 36 inch Chevy Bowtie can be weeded in 30 seconds with your eyes closed and cost a Bunch More .

But if you are talking about doing lettering for a van, you can get over 1000 square inches in a hurry. Over 1000 I usually use 8 cents or maybe 7.5 depending on difficulty. If I have to include substrate in the job, that's added on with a 50% minimum markup.

When people flinch at my prices I can tell they haven't shopped around at all.

 

[Rick]

Since I mostly design I try too get my hourly rate. It ends up being a flat rate, based on amount of hours. I don't tier price when I make a sign, I do with design, depending on if it's a logo, which is worth more, compred to a banner layout, which is not really design.

Rick

 

[Baz]

The way i price my stuff is pretty much based on my experience and my thoughts on what my local market is.

I respect anybody who uses a formula to figure out their quote and is sucsessfull with it ( be it per square inch or foot). My feeling on it is there is to many variables in my work to base it on. I can see myself spending as much time calculating the job with a spreadsheet and thinking on how to adjust it to the specifics of the work compared to just looking at the job and writing all adown and adding it up ( I guess you could say i got me a spreadsheet in my noggin).

This method works fine for me because im a one man show. I know how long it will take me and can estimate the material cost pretty accuratly. On the other hand i also know that once i start having employees things are quite different. What takes me a couple of hours to do can take a young apprentice the whole day. So then some kind of fixed prices should be considered.

My prices are material costs plus 30-50 percent markup, estimated time on production at 35-50 bucks an hour and installation has also markup on materials but hourly rate is estimated at 65 an hour.

This is what i base myself on, now some jobs you get way more and others unfortunately ... less.
For example, ive done large banner jobs that i ended up making 125 an hour just because im experienced and fast .. but then sometimes i will do showcards and because of my pride i end up putting 2-4 hours on one and charge 75 bucks for the card (LOL!).

Spreadsheet formula or quoting by hand to me it doesnt matter as long as once the job is done you can say to yourself ... that was worth it! ... If it wasnt, think of the money you lost as the cost of learning your trade.

 

[MAB SIGNS]

I have used POS Activity, Quick Books and now E2. The first two were based mostly on square ft. where E2 is more of a per part type set up. I do like E2 very well but it takes some time to set it up. I have used the good, better, best, philosophy which seems to work well. I used to concern myself more with competitors pricing now I just try to know the materials and type of sign products to offer. I'm no longer in a sales position but I estimate for sales reps so I must continue to grow in all areas especially pricing. I think using the software or a spreadsheet is a great idea to prevent under pricing but like others have said you have to adjust accordingly for special circumstances. The diversity the sign business offers makes it the most exciting biz I could be in, also making it challenging and fun.

The only other thing I'll add is, lose the frame of mind that ya gotta lower prices or lose biz to the guy down the street, its a lie and creates a predictable personality trait customers pick up on. Your the sign professional!!

 

[sign chick]

Here's a new technique that I've been using that seems to be working pretty well.

First, I get a "per sq ft" vinyl price. Example, intermediate vinyl costs about .25 per foot. Add in the transfer tape and it's about .30 per foot. Then I figure how much the retail price should be, taking into consideration how long it will take to cut, weed, tape & apply. I've come up with $4.50 per foot retail for intermediate vinyl.

Second, I take the substrate and figure the retail price. If a 4'x8' sheet of 4mm coroplast is $7.00/sheet, I figured the retail to be $40/sheet = $1.25 per sq foot.

Third, I figure up how much material it will take and add the vinyl price and material price together.

Example for a single sided, 2'x3'x4mm coroplast, white, 1-color
Vinyl: 6 feet (on average) x $4.50 = $27
Coro: 6 sq ft x $1.25 = $7.50
$27 + $7.50 = $34.50 retail price

Sometimes it needs adjusting but seems to stay in the ballpark pretty regularly.

I've figured up a retail price for several different types of vinyls and materials. Makes it pretty easy 'n' quick to give quotes.

When I get all the numbers plugged in and print out a price book, I want to come up with 3 sets of prices for everything: a retail price, a "friend" or "good customer" price, and a wholesale price.

 

[Ocean Designs]

Hourly Cost

Being at the NBM show seminars, I have learned the value of proper pricing. Time, material and expected margin is a great method. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-comfficeffice" /><o></o>

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The down side to that idea is ... without the right price for your time, the formula is incorrect. <o></o>

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I will be putting together my corrected pricing using an hourly rate that is inclusive of my actual cost in running my business.<o></o>

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Even though I already have Estimate, it was never used to its fullest ability. There is a free download called profit watch, which is a basic formula to this theory. It could be worth it to check it out, even if you don't use it.<o></o>

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None the less, I have learned the difference of being paid for my work, and having to pay for my work, which I was doing a lot of. <o></o>

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If I learned only 2 things at the show, it will be the pricing aspect, and the truth ... All of our customers come to us because of the same reason ... We can do what they can not. We might as well be paid for it, right? <o></o>

Profit watch download at http://pricingmadeeasy.com/estimate/products/profitwatch.php

vince
oceandesignsinc.com

 

[Fred Weiss]

I would add to this that you have to develop an overview of what you need to bring in for your business each hour. This would apply to not just pricing the work you are doing based on your precalculated shop rate and the cost of materials with markup ..... it also looks at the final selling price in terms of what you need to bring in at the right margins in total sales per hour to meet your income and growth requirements.


For example, you might determine that $50 per hour is an appropriate shop rate and that the total gross sales produced each day for your business needs to be $800. This then is effected by whether or not you employ others or are doing all the work yourself. If the latter, then you can't spend all day on an install with none of your own produced graphics involved since you would only bring in $400. Similarly, you might spend all day working on low cost per foot work like coroplast signs or banners. At the end of the day you might only have $600 in billable work done.

The answer, while staying competitive in your marketplace, is to do a good enough job of marketing to produce a sales volume sufficient to afford an employee(s) and/or to do enough higher rate per foot work to exceed your hourly/daily gross sales requirements.

Learn to think in terms of perceived value. Sell your design and signmaking capabilities. Up sell into better materials. For example, we do a lot of aluminum signs. We have no problem selling on this substrate in the $10 to $15 per square foot range. Coroplast starts sounding overpriced when you reach $6 or $6.50 a foot. Yet the difference in cost for a 4' x 8' of each material is only $21 to $22 or less than 70¢ a square foot. A 54" metal shear from Harbor Freight Tools costs less than $1000 including shipping and inside delivery.

We currently go through about 4 sheets a month of .040" aluminum. It brings in an extra $6 per foot average gross profit over coroplast. That's about an extra $750 profit per month return on a $1000 expenditure for a metal shear.

The same is true for upgrading people to PVC foam board over coroplast.

 

[ChiknNutz]

Excellent points Fred - so much is about "perceived" value. If you only charged by true material costs plus labor, then seems like you are leaving money on the table in many cases. And it's not that you are being shifty to the customer, perceived value does have a real value associated with it. Thanks for pointing that out!

 

[Ocean Designs]

Great vocab

Fred I second that. After the NBM show and the presentation given by Brian "the Brush" from SignGold. I have made the phrase "precieved value" a important part of my thinking.

Even though the hourly is developed, there is still a sliding scale for different margins. A lot will depend on what and who the progect is for.

vince
oceandesignsinc.com

 

[OldPaint]

when asked "how much for a sign" i tell em..."iam only limited by your pocketbook!" now what do want, thats within your price range of X$ to X$!
coro signs seem to be the bottom end of this market. i got some shops here doin single sided 18"x 24" for $10...and they give you the wire stake. i do simple one color FOR SALE for $12.50, 2 sided $25 and i sell a stake that cost me $1.50 for $3.00.as the detail goes up so goes the dollar cost. but the top end of a coro yard sign is $50 for a double sided with art work or multicolor. you go much past this and they wont pay it. most other signs are $7 sq.ft. intermediate vinyl, $10-12 sq.ft. HP. vans, trailers, trucks, i still sorta figure by sq.ft. measure the area your gona letter on a van, and you can get a base price for it. art work logo setups start at $50 and can go up depending on time invested.
walls, windows, painted $5 sq.ft. plain....again art work and logos add to cost.

 

[bob burns]

And dont forget to add that 20% for a**holes!