Pricing V Carved Signs

[wberminio]

I'm trying to see if I my pricing for V-carving is in the ball park.

I'm working with a sign company that supplies me with
the sign blank-painted and masked ready to carve.
They also send me the necessary file(s).
All I need to do is carve the sign and they pick it up to finish.
Great work ,if you can get it !
My question-
I've been charging per hour of machine time
with a minimum of one hour cutting time .
$200/1st hour
$150.00/hour additional

This includes Setup of materials and files

What is the going rate?

So far no complaints-
Am I not charging enough/Too much?
I'd like to expand to other sign shops

Remember I'm in Westchester Co,NY (everything costs more here! Expect for air-At least for this week)

I would appreciate any input

Thanks

[clueless]

Sounds way high to me, but if you're getting it, good for you.

$200 per hour? If you charged me that I'd be looking for another vendor. You're doing wholesale work. If you're charging me $200 per hour, what am I supposed to charge my customer? $300? Most wholesale rates to sign shops I have heard or seen is in the $35-60 per hour range.

[knight_toolworks]

it does seem high.they may not be complaining but are they singing your praises? it may be too high to get other customers.

[joe]

I think you're right on target with your pricing.

I know how difficult pricing it is to discribe but here goes.

For a small custom shop, that seldom engages in production work, it's necessary to work on a hourly basis. At my little shop we must, must, must invoice out a minimum of $1000 a day. A day is 8 hours, not 10.

Here's why I think your within the range. On any day not all the time will be on carving. For example you will have customer time which includes discussion of project, invoicing time, no to mention cleaning up and maintenance of machine and unfortunately there will be mistakes which cut into the profit. At best you may get 4 or 5 jobs, like the one you discribed, completed in a full days work. At Best!

My eyes squint on invoices of $200 dollars or less. That's the red line. I guarantee your customer is cleaning up on your good service and price.

Joe Crumley
www.normansignco.com (http://www.normansignco.com)

[clueless]

Joe, $1,000 per day, 8 hours is $125 per hour. That's almost 1/2 of what he's charging.

I've stand by my comment, I've never seen wholesale sign work go for $200 per hour. I'm not sure I've seen much retail sign work go for $200 per hour.

[joe]

Clueless,

I full well understand your point. If you re-read my post, I don't think you can route for a full 8 hours. My point is this should include all the extra items I posted. Just receiving a job, talking to the customer and invoicing is at least half an hour not including everything else.

So, I have a question for you. How many custom jobs do you produce in a day? Remember there are lots of other chores like the phone, paying bills, ordering materials, designing, just to mention a few.

I also understand your point about your hourly rate. None of us will be charging the same. There are area's in the US that cost more to operate in. So that must be taken in consideration.

One should divide their working day by the number of jobs they can complete. For example if you can get five jobs a day and mulitply it by $100. and that allows a good profit, your right on target.

Believe me, devour low ball competiton, year after year. I seldom make invoices for less than $250 and I welcome competition that goes under our prices. Most of those are proud of how cheap they can operate. It's a loosing strategy. They struggle along and most close up in a couple of years. Although low ball pricing works for WallMart it's a killer in custom work and we encourage our competition to use that strategy.

I'm not trying to tell you what to do but for those starting out, I'd be careful with thin pricing. It will sneak up on a business and shut you down.

I was talking to Ray Chapman last week about this subject. We both agree, most everyone in the sign trade is making way too little money. Low pricing is a dangerous.


Joe

[clueless]

Joe, thanks for your input. I'm not new to the business, the business has been around since 1998, so I'm very familiar with how to price. I can tell you I worked in small job shops and large manufacturing plants, all of which had millions of dollars worth of CNC equipment. I quoted all CNC jobs for many years and I never once quoted over $90 per hour and that was on machines that cost $100,000- $250,000.

I wouldn't dream of setting my base pay rate of $200 per hour, or even $150 per hour. Walk into a Ford of Chevy dealer and see what their shop rate is. Probably $95 per hour, and I think everyone feels the same way about paying for a car to be repaired. Last thing I want is to be lumped in with car dealers.

If you can get that, knock yourself out. I've watched many a shop close it's doors, not because they were too cheap, but because they were too expensive.

I think asking for $60 per hour, wholesale, is reasonable. If anyone ever told me they wanted $200 per hour, I'd walk out the door. Charging that much is exactly what causes people to look at buying their own machine.

Again, if you can get that, hats off to you, but it's not something I plan on doing. I'm not suggesting what anyone else is doing is wrong. I'm just saying that if I charged that much, I'd have no work, and if someone charged me that much, they'd have none of my business. That's just me. You might be happy paying $200 per hour.

I know Doctors that don't make $200 per hour.

[joe]

Steve,

He starts out at a minimum of $200. No matter if it takes less than an hour.

Please consider all the associated time it takes for us little guys to do one up jobs. So once again how many small jobs can you manage in a day. That's the point.

Big shops can manage $60 dollars an hour for router work and make a good profit at it. They will invoice the art work, materials, painting, etc. seperately. Unlike a larger company you will have to shoulder more than just the CNC. So how many $60 dollar jobs a day can you manage? I can't do enough work, at that rate, to keep the doors open and I doubt you can either. If you can do 8 and gross $480 and if that works for you, you're on target.

Are you most interested in how cheap you can work, or are you interested in expanding your business to higher class customers. This is a vital question. This is not to say there isn't a place for cheepie deepie work. Wish you were closer and I'd be sending you work.

What ever works for you works for me.

Joe

[clueless]

Joe, I don't think making $60 per hour wholesale is "cheap". I do quite a bit of wholesale work and I've never been called "cheap", but what I have been called many times is "fair", which is a title I'm happy to live with. I know many of my wholesale clients had previously used the same person and they all say the same thing about him "Man, that guy is high, it kills me to take him work".

I never want that reputation.

$60 per hour is $480 per 8 hour day. That's $10,300 a month. I'll take that any day of the week. I can hire someone for $2,000 a month to do nothing but run the machine for those kinds of returns.

Again, not saying you are wrong by any means, just saying I wouldn't pay anyone $200 per hour to make me a sign at wholesale cost.

Retail, different story, wholesale? Not me.

[kevin]

There is nothing wrong with charging $150 an hour. But if you can, hide the price as a flat rate. Don't let the customer know the breakdown of the price - if at all possible.
In my shop, I'm trying for a $1,000 a day for 1 cabinetmaker apprentice and 1 helper. I don't always make it but I'm not too far off. But I would never tell a client my goal or my rate per hour.
Here is my rule of thumb: whatever you think it costs or how long it takes, charge double.
As for shops going under, I've seen it first hand in Montreal. These people were not at the skill level that they advertised. Some even came from working at a customer service job and thought it was a good idea to open a cabinet shop or custom concrete shop.
If you are like Joe who has a specialized skill, I don't think the customer would care about the extra $2000 for the job.
It's about standing above the crowd. As they say "cream always rises to the top".

[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

[John David]

Walk into a Ford of Chevy dealer and see what their shop rate is. Probably $95 per hour, and I think everyone feels the same way about paying for a car to be repaired. Last thing I want is to be lumped in with car dealers.


The difference is Ford and Chevy have a book to tell them how to proceed after the computer tells them whats wrong. We here have to use our imagination to solve problems and thats what drives some of the pricing.

[navigator7]

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
No doubt running a business requires proper leadership.
Focusing on the right stuff helps too.
Most employees I've met seem to think the employer's job to "get work" for the employees. They don't see The Customer as the source of sustenance ... they see the Boss as the source.
Employees exist to earn a profit from their labor.
Rewarding fairly those who produce and those who don't 'eliminates' the problem of paying for ****.

Yet....you bring up a previously untapped profit center idea: Install a candy machine, a cigarette machine and a pay per use internet service in the can.

[clueless]

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.

So, as a customer, why should I use your services? If you are small and need to make $200 per hour to survive, and the big company down the street has 10 people and charges $75 per hour, how's that my fault? It's not my fault you only have one person working for you. It's not my fault your work book is not full so you have to make up the hours by charging me higher rates. As a customer, none of that's my fault.

Again, let's keep this in context, we're talking about wholesale sign work, not retail, finished product.

If I need letters cut out of 3/4" PVC, and I'm providing the file, why would I pay you $200 when I can pay the guy down the street $75? It's the same material, same file that I provided.

Now if we're talking about the design process and all the elements of going through that, that's different. We're talking wholesale use of the router.

As a customer, I don't see any value added service to justify paying almost 3x the amount.

[wberminio]

What if you're the only guy down the street?

[clueless]

What if you're the only guy down the street?

You won't be for long charging me $200 per hour for wholesale work. If you can get it, good for you, but your pricing should be based on value, not based on whether or not you have higher expenses because you choose to run your business a certain way or don't have enough work to keep you busy all the time. Using that philosophy, if I just hold off and do one job a year and charge them $150,000, then I should be okay.

[wberminio]

you finally found out my secret!:)

[joe]

Steve,

Once again it's a loosing strategy to price by the hour!

Please, please tell me how you determine your hourly rate?

What kind of work are you presently engaged in. Are your profit margins where they should be?

Joe

[clueless]

Must not be too losing of a strategy, we've been in business since '98 or so and I've been here doing it for the last 4 years. We have increased our business, profits, and revenue for the last 4 years in a row. When everyone else was complaining they didn't have work, we were swamped. So if that's a losing strategy, then I guess we'll keep losing.

I'm not sure how you price it anything other than by the hour. What's your pricing model, throw a outrageous figure out there and see if they buy it? It's simple, you take your labor rate add that to your burden rate, and then add the amount of profit you want to make and you multiply that by the time it takes to run the job. If you don't have enough work to keep you busy all day, every day, then that's a problem with your business plan and the customer shouldn't be punished because you can't get more work to bring your rates down and stay busy all day.

I quoted 10,000's of jobs in manufacturing and we always quoted the time it takes by our hourly rate.

If your model works for you, as I have said about 5 times, that's great, keep it up. Our model works for us.

[signtist]

Well here's my take on this.
I do a lot of this.
I'm a 1 man shop. I enjoy working everyday!
My overhead is fairly low.
My shop rate is $60 hour. Or I figure $500 a day.
This includeds use of any of my shop tools.
Plus materials, marked up 50%+of course.

I do wholesale to other shops as well as retail.
$60 min. router service. This usually takes 20 minutes to set up - take the phone call, open a email, set up the tool path,etc.
Now I'm ready to cut. The guy comes over with his material. A few minutes chit-chat, etc.
I clamp it down. Start the router and cut it. This takes only a few minutes of actual time. (maybe 20 minutes at the most)
They can wait for it. This is an excellent time for show and tell. Or in other words "Sales Pitch" about all the other things I can offer. This has worked well for me. I sold many complete gold leaf 3D signs upgraded to something way better than just a routed sign panel. I have lots of samples on the walls!
Sometimes I guess the job may take 2 hours to cut. So I estimate accordingly $125-$150. Still I make money and they make money.
A small job for another shop often turn into a big jobs.

John www.signgraphics1.com (http://www.signgraphics1.com)

[maxheadroom]

you'd think this is a pissing contest. Was wondering why Joe responded to 'clueless'. Didn't see that till I checked the profile, so there really is a clueless. Personally I'd never want a customer associate being clueless to my business.

FYI, for those looking on: Stick with experience, look at Joe's site, look at the work, look at his suggestions and comments. Then check the other parties commenting, same thing: web site, comments, work overall. The work they produce speak for themselves.

What DOESN'T work is ' I've bid thousands and thousands and thousands of jobs, we've been in business x years and continue to grow by x each year'. Joe's work speaks for itself, he doesn't need to sing his own praises. What DOES work is the results your provide to a happy customer.

Charging by the hour does not work for people like Joe, doesn't work for others, and I'd never work that way, nor does charging by the SF. There's an old saying that if you're so busy, you're not charging enough. I'd suspect this may be in play in this thread.

Joe has provided some sound advice. Either examine it, consider it and use it or forget it. Ever consider how long he, an others like him have been in business? A LOT more that less than half a decade!!

On another note, a $ 60 k CNC is not a 'high end' machine, it's the entry level of serious machines. A high end CNC is in the area of $ 100k - $ 500k. Way more than most sign shops have need for.

In this area there are at least 7-10 shops that have machines in the range of $ 250 - $ 500k, all 5 axis, all with a shop rate of $ 60 an hour. Right sixty dollars a hour. Many times they are running the machines just to generate cash flow. READ: Cash flow is not necessarily profit, it's just working to keep one step ahead of the bill collectors.

In the last year of the apprx 10 shops, 3 are still in business. I've seen one in person in a shop that's been there for 15 years, it was the $500k machine. By the time it was installed, training and tooling set up, the bank came in and repossessed it. Never did one paying job on it.

My point: Joe and others like him want to 1. make money, making a good profit from the job, 2. provide a good service and a superior product, 3. and enjoy our family, friends and life in general, not necessarily in that order.

Like Joe, I pursue the high end jobs and have been fortunate to be successful at it, and continue to. It's all a matter of the type of work you want to do. If you're happy where your at, great. But if you want to make more, listen to experience. You'll either learn it now, or later.

Lastly, I NEVER discuss prices with my customer. All of my work consists of design and fabrication. If there are multiples involved, 3 the same or 3 different, I give a price for the whole job, I never break the job down, i.e. design, overhead, transportation, fabrication, materials, etc. I will work with them to work within their budget if possible, but never, never break the prices down. As in the case in this thread the client doesn't need to know how much you are making an hour.

The only thing that gives them is information to shop around, pitting one shop against the other, and in the last year with other friends in the business, I have seen that happen time after time. A few times even after a PO and deposit was provided. I will not provide a customer with that ammunition. Fortunately after x years in business that has only happened a few times. I'm a fast learner: get bit one time, avoid it forever.

[clueless]

you'd think this is a pissing contest.

I don't see where it's a pissing match at all. I see someone that asked for opinions on pricing and people have offered their opinions, which the original poster asked for. I've repeatedly said that if your model works for you, than great. Not sure how that's a pissing match.


FYI, for those looking on: Stick with experience, look at Joe's site, look at the work, look at his suggestions and comments. Then check the other parties commenting, same thing: web site, comments, work overall. The work they produce speak for themselves.

That's excellent advice. Belittle me and my experience and quality without knowing a single thing about me, my business, or my work. Thanks for that.


What DOESN'T work is ' I've bid thousands and thousands and thousands of jobs, we've been in business x years and continue to grow by x each year'. Joe's work speaks for itself, he doesn't need to sing his own praises. What DOES work is the results your provide to a happy customer.

I guess I shouldn't defend my business when someone tells me it's a losing strategy? I should just shut up and sit in the corner. Thanks, I thought we were having an open, friendly discussion. I didn't know some of us where not allowed to speak. Thanks for that tip. I'll keep it in mind.


My point: Joe and others like him want to 1. make money, making a good profit from the job, 2. provide a good service and a superior product, 3. and enjoy our family, friends and life in general, not necessarily in that order.

Like Joe, I pursue the high end jobs and have been fortunate to be successful at it, and continue to. It's all a matter of the type of work you want to do. If you're happy where your at, great. But if you want to make more, listen to experience. You'll either learn it now, or later.

So there you go, according to you, we should all just shut up and let Joe answer all the questions because no one else has any business experience, operates a profitable business or knows anything about what they are talking about. Thanks for that too. I'll keep that in mind in the future.

As a side note, Joe, I have a ton of respect for you and your work. This response is not aimed towards you, but rather a reply to the post by Walter.

[tappsman]

I've been watching this thread since its beginning and would like to throw my 2 cents in.
Erminio is charging a price that is acceptable to his customer and obviously the customer is able to pass it on and still make money. Price is only one of the things that people use in evaluating a vendor. Factors which are probably more important in this case are the convenience of his location and Erminio's ability to respond quickly. Remember he is cutting one of a kind items and not a production run of thousands. Convenient location and rapid response time are things that he should stress when approaching other sign shops.
Erminio is smart in not discussing the hourly charge or the time required to cut the sign so the customer does not know the hourly rate which his charges are based on. The hourly rate seems high and if his customer were aware of it, he may be tempted to purchase a router and pay for it in about 100 hours of machine time.
I agree with Joe that pricing by the hour has its pitfalls. If you charge by the hour, you're better off with slow equipment and working inefficiently. Charging by the hour and investing in equipment to become more efficient will lead to lower revenue / profit.
That said, pricing is a subject in which there is no right or wrong answer. What works for one shop may or may not work for another, in fact a shop may have different ways of pricing for different jobs or classes of customers.

[joewino]

I've come in late to this discussion and haven't read all the comments but still would like to add my thoughts.

In the fifty plus years that I've been doing this I don't remember ever telling any client (retail or wholesale) what my hourly rate is. They are buying a finished product that will enhance their image and business. They are not concerned about whether I make a profit or not, only if they can afford what I am offering....and they think that it is worth what I am asking.

I know what it takes to open my doors every day and what I need to make daily/hourly to keep opening the doors, but my product is not "letters by the pound".

Sometimes I spend more time than I should to be sure that the end product satisfies me and there may be less profit than at other times, but that is my decision. The client only knows that he got what was promised, when it was promised.

We don't do a lot of wholesale work for other sign folks but when we do it is quoted as a complete job, not something that is by the hour. If it is more than they are getting for the finished job, then they go somewhere else.

The business side of this craft is not my strongest asset, but I've always loved what I do. I've never had to work a day in my life. Somehow, I've managed to keep the doors opened and the clients satisfied, but we don't get all the signwork in town....only the good stuff.

In order to open the doors I have to average about $100 an hour, but that is not a hard-and-fast rule that over rides every other decision. If I price some work at $500 (and it's worth that) and the customer agrees, and it takes me 2 hours, then I've done well....but I'm not going to lower the price to $200 next time just because my "shop rate" is $100 an hour.

When we started using our ShopBot, the prices for our dimensional signs did not change even though we could do then much quicker and more efficiently - the customer was still getting the same quality product. We were making more per hour since much of the hand work was being done for us by a machine.

Like othes have said, not everything works for everyone. What we do satisfies me and my clients.

[signtist]

Oh Yeah.....don't ever say how much an hour you charge!
Price it to the customer by the job.

[widgetworks_unlimited]

I'm glad that Steve S. has shared his thoughts, even if he's in the minority. Fair/Profitable pricing is such a pain and open discussions about what works for others are hard to come by - even here where info on just about everything else is plentiful.


Richard Bouchard's comment about paying yourself and all the bills really hit home with me - there are sooooo many expenses to running a business that I didn't expect when I first started. Before I started, I figured profit margins would be about 3x higher than what I've found in reality.

"...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."

When you look at the whole picture like that, Erminio's pricing seems fair.

When I was getting started with CNC my thinking was much like Steve's...

"$60 per hour is $480 per 8 hour day. That's $10,300 a month. I'll take that any day of the week. I can hire someone for $2,000 a month to do nothing but run the machine for those kinds of returns."

What I've found has been quite different. Finding someone with the skills and desire to do quality work is tough! My brother has 2 masters degrees, works as hard as anyone I know, but he still has a hard time telling the difference between an up cut and down cut spiral. Finding someone to run your machine for $12 an hour - who doesn't cost you big $$$ in broken tooling, wasted material, missed deadlines because they call in sick, time answering endless "beginner" questions, etc. is a much bigger challenge than I anticipated.

Personally, I'm not afraid of charging customers so much that they decide to buy their own machines. On the surface that may seem like a simple economic decision for them, but take a moment to think about all the blood, sweat, and tears you've put into becoming a "master CNC craftsman" and creating a sustainable CNC business model. It ain't as easy as it looks! For many customers it would be a very costly mistake.

[clueless]

I'm glad that Steve S. has shared his thoughts, even if he's in the minority.

I count it a straight split down the middle. Seems about 5 people think it's too high and 5 people think it's fine. That's a tie, not a minority :)

[widgetworks_unlimited]

Fair enough Steve - just glad that you've shared your experience along with everyone else.

[wberminio]

I think I finally got the answer to my original question.
-There is no real answer.:) :confused::)
What works for one will not work another.
V Carving signs is not my principle work.Shopbot has allowed it to become
part of what I can offer.I may have to adjust my pricing structure in the future even though it may seem to work at present.
I appreciate all the comments and concerns and advice!

We are all here to learn and grow and in the end be happy making some $$$.

Again thanks to all!

Erminio

[navigator7]

I think I finally got the answer to my original question.
-There is no real answer.:)
What works for one will not work another.

Erminio

The free market is self correcting.
It is a beautiful thing.
If there are not enough hours in the day to provide a product for your customers it may be you are not charging enough for the value of your product.

If only the crickets are keeping you company...it may be your rates are too high.

It could be a zillion other things too!

The one thing local and regional operators have all over foreign competition is the ability to sell to emotion. Personalization. Custom. Expressly for you! Something you can't buy at the store or hire a home handyman to do.

A simple "Welcome" sign for example. Imported from China in cast iron. Its a generic sign. Welcome signs are selling at my local store for just above scrap value of the metal.

If you are afraid of your prices your customers will smell it on you and attack.

[bill1]

hello all,
Looking at the rates per hr. they seem high to me also, but I really don't know what is all entailed.

I have attached two 3d carvings that I have completed and perhaps some of you could tell me what to charge for things like these.

The Bull Dog "Chesty" takes 8 hours to carve and hand paint and is 5/8" x 10" x 10", the "Cardinals" take about the same to carve and paint an is 5/8" x 7" x 11" each are carved from Maple.

Sorry I could not get them larger

[clueless]

I have attached two 3d carvings that I have completed and perhaps some of you could tell me what to charge for things like these.



From the original post, that was $200 for the first hour, $150 for each additional hour, so that would be $1,250 per clock :D

[donclifton]

Steve I agree with you, In different parts of the country thinks cost more or less and you try to get what the market will bear. I have been in the sign business for over twenty years and have keep most of my customer and then their friend. I have to bring in 0 dollars a day to keep my shop open because I own all my equipment and building because of a good customer base I built from giving a fair price and a good product. I do try to get $100 an hour but evaluate the job and customer abilities to pay.
Thanks
Donald Clifton
Daytona Sign-Tech, Inc.
4axiscnc.com

[maxheadroom]

One more time: occasionally we all need to be knocked up side the head.
That includes me, it includes all of us, even in an open discussion.

Frankly I'm amazed that Joe, an others, continue to freely dispense information gained from experience: from years of practice, mistakes, and what works out to be methods that work, period.

After mulling this over a while, I believe Ermininio is spot on! NO ONE has even considered, outside of his remark - SET UP OF MATERIALS AND FILES.To do what he stated you SHOULD run a sample first to insure the bit is not too deep, or too shallow on every masked job. Run on the customers painted, masked stock, screw up a blank and it's on your dime.

Are others charging for set up of material and files, or is that a freebie??

And honestly, the smaller the job, the more problems seem to occur. Small jobs are not always easier, and don't always cost less. Charge less and your short changing yourself.

The $ 200 dollars for the first hour is right on! That would account for any additional testing and set up. Eliminate that and your providing the
set up for free. Before I purchased a CNC, I jobbed the work out. Router time ran anywhere from 100 - 140 an hour, PLUS set up of 35-50. So take 140 plus 50 and
you get 190. Ok, MAYBE Ermininio's charging 10 bucks too much. Shame on him.

I would also put a lot of weight on the fact the customer is happy with the work and product.

Steve, you do a great job of using the altC, altV, altC keys. If creative thinking was required, it would involve more than using altC, altV, altC, and provided no help for the question asked of Bill, or to help any others following.

And steve, before you take this personally, are you making as much as you'd like to? Are you completely happy with the work you do and your pricing? Are you interested in growing your company financially as well as being known for quality work, or is it just work? It's not all about you, nor is it all about me. It's about doing business that benefits each of us individually. Granted, some areas have to charge less, others can charge more because the business climate in their area permit. Is that bad?

Bill, you will never get the money from those plaques that you should.
Eight hours per plaque? That's not including painting, finishing and
clock movement.

You need to do two things: find a better machining strategy to get the
run times down. I have no idea of what software your using,but that's
too long for the size your doing. The learning curve of 3D software is NOT over when you've completed the model. The other
half is tooling strategies. After 10 years I'm still learning how to make them leaner. Listing your software and strategies here will yield suggestions that will drop those times, guaranteed.

Secondly, take objects that have long run times and run one each,
separate from everything else. Make those as masters. Make a mold
(Smooth On), cast it in polyester resin, paint and apply as an applique. The will
look the same and cost a fraction of what it takes to route. Casting is
not hard, and most materials can be purchased at any good hardware store.

Price for what you have? Do a google search for clocks and plaques,
there are a ton out there. There are sign companies in pa the will do
the plaque on the right for under 80 bucks, the clock maybe 90 - 100.
Average the two, 90 bucks. At that rate, including materials you'd only
be making minimum wages.

Pricing: there is no right answer, but we should all strive to get as much as we can. Falling short of that hurts
yourself financially first and the rest of us second. If Ermino is too high, and the customer questions it at some point
(been there, done that) negotiate and offer a lower price if possible, that's doable. Need to ask more money for the job from the customer, ain't gonna happen.

Last but not least, courtesy of Henry Ford: “If you think you can do it,
or you think you can't do it, You are right.”

Or put another way: If you think you can, or you think you can't, you're always right.

[bill1]

Bill, you will never get the money from those plaques that you should.
Eight hours per plaque? That's not including painting, finishing and
clock movement.


Walter,
Thanks for your reply-Really these take me 4-5 hrs and does include include the painting, finishing and the $80.00 - $90.00 you stated is what I do charge, and the software I use is AspireV2. I was just commenting that $150.00 per hr. seemed quite high to me.
Thanks
Bill.

[Southern]

There is a serious difference between custom works and commodities.

Using the automotive comparison.

You have lube-techs and master-techs. Masters get paid 5x what lube-techs do. Wally world changes oil for $15. The local shop does the same for $35 and some dealers $45. Does that mean that only walmart is fair, or that people will only go there for their oil change. No. People are willing to pay to have experienced people perform even menial tasks. Not all, but many.

"The screw only costs 50¢, but it will cost you $10 because I know how far to turn it."

To all of those that manufacture sign products for the public. When the customer complains that the sign shop was too expensive, don't forget about the liability factor that is involved with manufacturing a product. When they improperly install the letters that you made and then they later come off of that tall exterior wall and hit a car or a person, their lawyers will find fault with your product. What does that mean? It means buy and insurance and add that to the costs.

When subbing for sign shops. A person must include all time, travel, materials, etc. PLUS enough margin to cover any errors. I would use Erminio first because I know that at 200/hr that he can afford to replace that $450 sheet of HDU that was destroyed while on his machine. Erminio's skills are an added value that makes $200 even cheaper. The $50/60 guy cannot afford to do that and that would make me nervous. The 50/60 guys are the ones that end up losing the customer for telling them that they need to buy more material OR they end up losing their shirt on the job, which would make me wonder what they going to overcharge me for to make up the difference.

[clueless]

After mulling this over a while, I believe Ermininio is spot on! NO ONE has even considered, outside of his remark - SET UP OF MATERIALS AND FILES.To do what he stated you SHOULD run a sample first to insure the bit is not too deep, or too shallow on every masked job. Run on the customers painted, masked stock, screw up a blank and it's on your dime.

Glad you think he's spot on. As said before, it's called opinion. In your opinion, you think he's right, in my opinion (and others here), they think the price was high. Maybe you're not reading my responses because I've said repeatedly if it works for you, then great. I'm not sure how I can say "You're right" any other way that will lead to stop reading things into what I type that aren't there and belittling me, my business skills (or lack of in your opinion), or my talent.


Are others charging for set up of material and files, or is that a freebie??

No, we are so stupid that we don't start the clock on jobs until it's all setup and we are ready to hit the start button. As soon as the cycle stops, we punch out on the job and clean up on our own time because we're stupid.



The $ 200 dollars for the first hour is right on! That would account for any additional testing and set up. Eliminate that and your providing theset up for free. Before I purchased a CNC, I jobbed the work out. Router time ran anywhere from 100 - 140 an hour, PLUS set up of 35-50. So take 140 plus 50 and
you get 190. Ok, MAYBE Ermininio's charging 10 bucks too much. Shame on him.

That's got to be one of the dumbest things I've ever read. $200 for the first hour because you have additional testing and set. You're charging by the HOUR, what difference does it make if you are doing "additional testing". Did your brain work harder doing that testing? Is that the justification for a variable shop rate for set up and "testing"? Wow. Just.....WOW.


Steve, you do a great job of using the altC, altV, altC keys. If creative thinking was required, it would involve more than using altC, altV, altC, and provided no help for the question asked of Bill, or to help any others following.

I did answer Bill, the way you told me to, $200 per hour for the first hour and then $150 each hour after that. So it was $1,200, but then you come back and tell him it should be $90. So which is it? $200 per hour or $7 per hour, which is what you told him it should be based on the market. If you would stop personally attacking me, it would make this much easier and we could discuss things like adults, but apparently you have no interest in doing that, so keep calling me stupid because I am stupid and my business is failing and we give product away for free. I might as well admit it because that's what your opinion of my and our business is. $60 per hour is "giving it away for free", but you tell Bill his work should bring him about $90 for 8 hours work and you're okay with that. So we do $60 and we're stupid, Bill does it for $7 per hour and you're fine with that. At least you're consistent...okay, maybe not.


And steve, before you take this personally, are you making as much as you'd like to? Are you completely happy with the work you do and your pricing? Are you interested in growing your company financially as well as being known for quality work, or is it just work? It's not all about you, nor is it all about me. It's about doing business that benefits each of us individually. Granted, some areas have to charge less, others can charge more because the business climate in their area permit. Is that bad?


That's what I've said from the beginning, it might work for you, but it doesn't work for me. Yet, some how you say the same thing and you are a business master. When I said the same thing, I was stupid. Beautiful, way to stay on point and thanks for proving that you don't read my posts, you knee jerk react to pieces and take them out of context.

So let me see if I understand what I'm supposed to be doing here, according to Walter. If I have a wholesale job, the customer provides me the file in the proper format, and it's 1/2" PVC letters, 2 of them 6" tall, I open part works, put the material thickness in, apply the tool path, put the material on the table, hit the start button and cut the letters. I put the material up, clean the machine, 20 minutes on the maximum side. I'm supposed to tell them $200 for that?

Great news, I did just that last week after reading this thread. I started quoting all my wholesale work at $200 per hour. It felt great! Only problem is that I didn't get a single one of the jobs I quoted at $200 per hour. I guess that'll fix itself when I find someone that's willing to pay for it. For now, I'll just do without the extra revenue I had coming in each month from my wholesale work.

Let me say this for about the 10th time so maybe you'll see it Walter, IF IT WORKS FOR YOU THEN GREAT! It doesn't work for me in the market I am in. However, you don't know what market I'm in because you don't know anything about my market and what it will take or will not take.

[maxheadroom]

Pete:

Exactly!:)

[donclifton]

Here is the bottom line, If you have so much work that you can't get it all done your not charging enough or there is so much work out there that you can charge what ever you want. But if your machine is setting doing nothing and you have employee's to pay your are charging to much. That CNC machine doesn't cost much to operate, I not talking about the cost of the machine or software I'm talking about a machine doing what it does. If I have a shop that brings me in work on a regular bases and I can cut the work when my machine is just sitting then I will work for a lot less. Lets be honest here, It doesn't take a genius to make thing with a router it takes software and a good machine.
Thanks
Don

[scootie]

Pricing has always been the hardest part of doing custom work. You can't sell signs by the pound or square foot unless you are doing simple layouts with only a name change or color change, if you're doing one of a kind truly custom signs then you better buckle down and do some serious estimating and go over your figures a couple times before giving the client a price or you'll usually end up taking a beating. I'm not new to the sign business, I am fairly new to CNC but I have hand carved and painted signs for longer than a lot of you have been on earth and I still struggle with pricing because every job is different. You can add a simple border and that may add another hour or more on the job by the time you carve, prep and paint it.
My shop rate is within range of what most commercial shops are all across the U.S. There are a few high-end shops in every state that gets the big bucks for their work because of reputation and the clients they serve and God Bless everyone of them, they deserve it. The rest of us have to service the smaller markets and set our rates accordingly to stay in business and maintain a profit. I am proud to say, that I am known in my area as the shop with the highest prices, I had rather be known for doing quality work at higher prices than to be known as the one of many in the area that has to cut corners to compete to be the cheapest. There are people in every profession that only want to see how cheap they can do something in hopes of cornering the market. I have found that while they are bogged down working for nothing they are soon out of business, while I can afford to keep my doors open even through the slow economy we have out here in the sticks.
One other factor that makes a huge difference in pricing, is it a hobby shop or your only means of making a living. Many people that have a spouse with a good job that gets insurance and benefits may not realize that if your sole income is based on your own ability to produce that your rates are going to be much higher. How many really knows what their overhead is, I have had new shop owners come to me for years and when asked if they knew how to figure their overhead they would have a blank look and finally say "no". They actually thought if they had been working for someone else for $10 and hour, they could go in business and charge $20 and get rich.
For those satisfied with the shop rates that they have established as "fair" to the customer, ask yourself would it be a "fair" salary to you if that was your only income and you paid all the overhead out of it before you had money to feed the family. You cannot allow the individual customer to set your rates, it has to be based on overhead, market value, advertising value and efficiency among several other things that would take too long to cover here.
Two shops side by side: Shop A sells a simple 2'x3' V-carved sign for $300 and he produces it in 2 hours with $50 in materials. He is making $125 per hour. Shop B does the same type sign for the same price, only it took him 5 hours and $50 in materials, he only made $50 per hour. If you can work efficiently you can charge more for your time and still be competitive and that's where the profit is,,,, efficiency. So if the man charging $200 an hour can produce more in an hour that the guy charging less he deserves more. I don't charge less now that I use the CNC to hog out a background in one tenth the time as I used to by hand.
Advertising value! How many of you consider that when selling your product. Do you have a Yellow Page ad, how much is that worth when you only consider the cost of the ink and paper it is printed on? Have you ever bought a newspaper ad, same thing, the ink and paper is of little value but you'll pay a high dollar for the advertising value. Even though the ad may only be read by a few people and forgotten by the time the paper goes out in the weekly trash you still paid for the ad value. Most signs have an ad value that makes them more valuable than just the time and materials they consist of and if you're not adding for this in the price of your work you're leaving money on the sales desk. $500 for a sign that will last 10 years is so economical when spread out over the life of the sign that it only costs the customer about 14 cents per day to have a custom piece of advertising, the same $500 spent on radio or newspaper is gone and forgotten in a few days but that sign is out there 24/7 for years to come.
I have written several articles on my website that covers much of this and a chart that breaks down the cost of different type signs over their life span at www.elliott-design.net (http://www.elliott-design.net)

[wberminio]

Hey guys

Here is the sign that started it all!

9846

[scootie]

Nice sign Erminio, the gilding really sets it off on the medium/dark green. I estimate the size to be about ? 3'x7', judging from the posts. The price range in this area (rural Tennessee) would be $2000 to $2500 with posts and installation.

Larry,,,,

[wberminio]

Larry

Thanks!
Your close!The size is 3x6.
All I did was layout and Vcarve the letters.:)
It was supplied to me painted and masked.
The blank is HDU foam.

I charged 200.00 to just Vcarve.I'm not sure what he got for the sign,but if it was any where near that cost-(probably a bit more)
I think he got a fair deal.

[maxheadroom]

Erminio,

nice job!

'I think he got a fair deal': Absolutely!

[joe]

Me too, I give it an A.

The gilding takes this panel up to another level. It's amazing how that happens.

One little detail I would like to have seen. A thin black pin stripe around the gold would increase the brilliance.

Hope to see more of this kind of work. A little brass tag, at the bottom, with the artists name on it is diserved. I have mine made at the local trophy shop.

[scootie]

Erminio,
At $200 he got a very fair deal, and unless that particular shop is doing several of these a month they cannot afford to own the equipment and hire/train someone to operate it to do it themselves. If you sold the job, layed it out, set it up and v-carved it in an hour you work very fast.
Based on my shop rates and my estimated time of 1 hour and 20 minutes from start to finish the final cost is very similar.
Price Est. Time
Sales/Customer Time = $20 10 min.
Layout = $30 12 min.
Create Tool Paths = $25 10 min.
Set Up = $10 5 min.
Machine/Rout = $65 35 - 40 min.
Clean Up Tools & Work Area = $10 5 min.
Sub Total = $160 Apr. 1hr 20 min.
20% Profit = $32
Total = $192

I try to estimate for all hidden and unforseen time in every project, I may miss a few but from experience I know that when the customer brings the material and returns to pick up the job, you'll have a few minutes in helping unload and load, and then there's the sales time of discussing the job and maybe a few minutes spent doodling rough ideas, and on and on. This time builds up fast and if not careful that "one hour" job turns into a 2 or 3 hour total.

Just a few years ago when I was hand carving everything, the cost would have been three times that much and the labor would have been about 7 to 8 hard hours of back breaking hand work. So, it makes it very economical to be able to produce something wholesale at a good profit and the customer marks up your labor 100% or more and he still looks like a champion to his client. The sign is cost effective in its advertising value for the client because it makes a statement of being a professional business person, and the cost of the sign spread out over the next 8 to 10 years is less than a piece of candy per day.

You did good, keep it up, you'll be working when the lower priced shops have to close for not being able to pay their overhead.

Larry,,,,

[maxheadroom]

Erminio,

I think you made the right choice, and believe your pricing was good, especially in light of your comment "V Carving signs is not my principle work". A good reason to make sure your time is covered, as you're doing something out of the norm, and open to mistakes more than work you do on a daily basis.

A job well done.

Bill, I'm glad you were able to get your times down from the original 8 hours each to 4-5, that makes a tremendous difference. A price of $ 90 per unit is what you'll see others asking for that type of work online, not what you should be selling them for. Not taking materials, paint, maintenance and overhead in to account, which should always be included, for 5 hours each of labor is $ 18 an hour. If it's a hobby you may be fine with that, if that's for supporting a family finances would be a little tight in many parts of the country.

[wberminio]

Thanks to all for you input and kind words.

Remember no matter what happens "BOT ON"!

[marysvillesign]

Far too many variables involved to give any advice on pricing,
but I do like the sign.

[robredick]

Here is 1 1/2 cents.

The best advice is to charge what it cost you to make a living. Bid the job and never the time that someone else thinks that it should take. There is always someone cheaper and the most likely someone with less experience who is better. If you can not make a living you have no business doing the job. It is better to go broke sitting at a black jack table than working yourself to death without a profit. Be honest and do the best that you can to enjoy what you do.

I and many other Interior Sign Makers go for Square Inches to figure the price. Always bid prices for 1-9 or 10 and up for small things.

Here is a good example. We are cutting 1/4" thick letters in varying sizes that cover a wall space of 430" by 63". 27,090 x .12 = a $3,250 set of letters. The material is 7 sheets @ $16 per sheet, but we throw that out the window unless the material that costs over $75 per sheet. For every $25 over $75 on the material I add 1 cent (.01) to the formula. We also add for letters smaller than 3" and charge 10 cents more for metal studded 3/4" stemmed letters. There are many other variables. BUT...

Always always remember, If I can do it, you surely can....

[rob_sekeris]

Well here's my take on this.
I do a lot of this.
[snipped for brevity]
They can wait for it. This is an excellent time for show and tell. Or in other words "Sales Pitch" about all the other things I can offer. This has worked well for me. I sold many complete gold leaf 3D signs upgraded to something way better than just a routed sign panel. I have lots of samples on the walls!
Sometimes I guess the job may take 2 hours to cut. So I estimate accordingly $125-$150. Still I make money and they make money.
A small job for another shop often turn into a big jobs.

John www.signgraphics1.com (http://www.signgraphics1.com)

I like the cut of your jib, John. I deal with my customers exactly like that.
There are exceptions, of course. One of my clients is a high-end, very creative sign artist. He has the marked cornered. He gets 5-10K per sign all the time. He used to pay a guy $400-500 to sandblast a 4'x8' sign. He would then spend an inordinate amount of time cleaning things up, carving 3D, then paint and gold-leaf.
I give him paint-ready, 3D stuff that takes me a day to cut. I create my own files from his sketches. A basic sign gets me around $ 1000.00, BUT... takes me all the live-long day. $ 100.00 per hour is nice money for a one-man low overhead shop... when I get lucky, $125.00 per hour. I never quote my hourly rate. I guesstimate a lot. Sometimes I make out great, most of the time I do okay. I sleep well at night.