Pricing V Carved Signs

[joe]

Thanks Kevin for the nice complement.

I'm so glad this topic has been posted and there's so much input.

Here's another pricing concern. When the customer is given an hourly rate, they don't have any way to figure the final cost. Even if you tell them it's going to take two hours, they don't know if it's going to run over the estimate. I've had this happen to me.
I seldom, if ever, give a client an hourly rate. I tell them the finished price up front. Customers feel comfortable with this.

Another technique I've found to be effective. When a client visits my shop for the first time I know what's on the front of their mind. It's, How much is this job going to cost. For most customers, Cost is Everything. Here's a very helpful technique. After being seated, by the customer, with a yellow note pad in my lap, I ask them to tell me as much about their project as they can so I can give them a price. Most often this will open the door. Sometimes on a complex project I'll say, " I can't tell what this is going to cost but if you'll work with me, I feel we can get it in your budget". However I try to get the pricing done quickly to save time. Sometimes a client isn't prepared to pay the price so I save time.

I think you can see why I don't like an hourly rate. It's both vague and threatening. After all we want to make friends and good signs in a comfortable way.



Steve,

What kind of router work are you doing these days? Sure would like to see your progress.

Joe

[coach]

Erminio, Like you I occasionally cut signs and other type work for a couple local sign guys.
I have figured my rate at $2.00 per minute, that includes clean up and set up.
I have a minumum of 75.00 due to guys needing 1 or 2 letters that they mess up.
Works for the guys I cut for and works for me.
David

[wberminio]

Wow
1st of all my client is very happy with the quality and the speed i have been producing for him."Saved his skin..."
He has not quibble about price-yet.
As Joe suggests,I have a shop price I have to meet to stay in business-no matter what I produce.We are not talking about production,but custom work.
The 200.00 is a little more than my hourly rate,but it includes setup time-cleanup .....what if something goes wrong? who pays?

I don't ever discuss time or rate with customer.

If I'm way out of line-then I could come down a bit.Too low and it's not worth it.

I am NOT a not for profit business and I don't believe any of us want to be.In this economy, I've had to lower my prices but tried to speed up production (Shopbot)
One can only go so low and no longer produce high quality work.Low or lower standards are not an option!
I've been in business 25+ years.I have given away work
in the past and those clients expected the same price years later.I would rather stay home and sleep than work for nothing.
Joe you're on the ball.
I was just asking if my rate for this part of the country is in range.
I don't want to take advantage of anyone,but I need to pay my bills.

Thanks for all your input

[myxpykalix]

Having relatively no signmaking experience (done about 6 so far) It has taken about 30 minutes to carve the sign but the back and forth and revisions and such is what takes more time then the actual cutting. So when i quote a sign I take into consideration the computer time also and it works out to $75.00/hr and that is wholesale to a highend signshop here.
Since we had an issue with a problem using their vectors created from god knows what program I insist that they can design it but i have to create my own vectors.

[donchapman]

Speaking from the experience of carving dimensional signs for the past 20 years, first by hand and then with my ShopBot for the past 10 years, I agree 100% with Joe.

[dakers]

Wholesale work: I think you have pricing so it is a win win for everyone.
i think if your prices are high and your wholesale customers give you alot of work eventually they will think they should buy a router when their sales volume gets high enough to support the router. That is the danger of being too high sometimes. But what is too high for the customer? when do they think it is too high? If they have no one else to go to, the relationship is good. You give them fast and reliable service, they like your work, they are making a profit and they are happy with the price then the price may not be too high or even a factor. It all depends on the client burden rate. If they can make money on the painting, designing, installing, sales effort and what they make on that could be high enough for them to make their burden rate then they may not be too concerned about your $150. per hour as much as they are getting billable hours on a project they normally would turn down.
for alot of companies it is about billable hours for their employees more than it is if they paid $350. for you to rout for them vs. $250. for a couple hours. This is especially true for larger companies with alot of employees.

it is so subjective but relationships are not based on price alone in the thinking of management. many are looking for billable hours.

However if i was charging $150. per hour i would probably offer a volume discount so as the more work they brought the lower the prices would be. Especially for one job that would take 8 hours. Sure $200 for first hour, $150 for second then spiral down. Or if they are giving me 40 hours per week in routing i would adjust the price. but if they just gave me one or two jobs a month i would stay high. Communication solves many issues to keep the customer and make money too.

[clueless]

I'm just amazed at how many people think $60 per hour is "giving your work away". I operate in a market that will not pay much more than that. I met with another company not too long ago and they had a very nice CNC router. Probably in the $60,000 range. I asked what their rates were and he told me $75 per hour. That's a small company with about 10,000 sq. ft of space and about 10 employees.

I've also met several other people that had less expensive machines and I've not met anyone that's over $90 per hour in this area. The $90 per hour person is wholesale only but their machine cost over $100,000 and it's got the optical eye on it so they can pick up registration marks from printed product and profile it.

I've said all along, if you can get it, great. I can't. The market here is full of CNC routers and high end machines as well, and they are in the same range I am. If I charged $200 per hour, all my work would move to one of the other shops that offer it for $75 per hour. You might not be in that range.

Remember, we're talking wholesale, not retail. HUGE difference.

[rb99]

You need to cover your expenses and make a profit. If you have 200 guys producing at $50 per hour you can cover everything. If it is just one guy, and you don't get to bill out everything you do then your rate needs to cover the down time. If you have a bunch of clients and they are keeping you busy so you can keep your rate down then it is ok, but once you get so busy you need to hire people, rent bigger space and equipment then you are going to find it hard to make ends meet.

I find the higher rates are just fine.

RIB

[rb99]

$75 per hour x 10 men = $750 per hour. Times 40 hours = $300,000 per week, $1.5 million per year.

$60 per hour x 1 man = $2,400 per week, and $120,000 per year. Big difference between 120k and 1.5 million. Also if you are one guy good luck billing out 40 hours per week. As well pay yourself $75k clear for you and pay rent, heat, advertising, electric, gas, insurance, accounting, legal, phone, cell phone, internet, shop supplies, bits and parts, new machinery, computers and buy all the software upgrades and new programs as they are required. Oh and if someone stiffs you for a big job?

If you hire someone, you need to now come up with and extra $75k plus per year gross just to cover their wages.

You need to think about the real costs of doing business and amortize these costs over a realistic weekly/monthly billable hours strategy.

I agree not to tell the shop rate but give a price per job.

RIB

[rb99]

If everyone working for you takes a 15 minute washroom break, once you have 32 guys it is like you are paying someone to take a **** all day long...

RIB