One of the hardest things about being a small sign making business owner, being self-employed or doing contract work is making sign estimates. Assigning a value to the goods and services you offer can be quite tough. Even when you have an item with a set cost, and know all the overhead costs that come with making your product, deciding what you want your profit margin to be can deceptively difficult, especially if you are just starting out.
When a business is new, business owners have to make decisions when they are in the dark concerning a number of factors. Such blind decisions are a result of not knowing exactly how long it will take you to make a product and being unsure about how much to charge. Price too high and you won’t sell, price too low and you won’t make anything. The wrong choice leads to you, and your business to a dead end.
If you have experience making signs, or if you have acquired a vast knowledge of the sign industry you may be able to estimate the costs involved in the production of your work. However, if you are unsure of the time it will take you to make a certain product, it can be very tricky to estimate the cost of creating it.
While the cost of materials will generally hold to the same standard, labor costs will vary depending on how much time it takes you, or your employee to finish the task. Also keep in mind that on certain days production, especially if it is done by hand, will take much less time than others. We aren’t machines; hand made products depending greatly on the health and energy of their maker.
If you are faced with a project that you have no idea how to quote, consider phoning up one of your competitors and asking. You don’t have to say that you are another sign company and you want to know how they price something; you can simply ask for a quote on the same job that was presented to you. Since you know the cost of the materials involved in making the sign, deduct that number from the quote that they give you. The remainder can be used to give you an idea of just how much time the job will take. While it won’t be 100% accurate, at least it is a start in quoting your own jobs.
Networking and sharing ideas with other sign businesses isn’t a bad idea, and can save your life in a situation like this. Call one of your sign buddy’s in a neighboring town, one that doesn’t compete directly with you, and get their help in bidding the sign. If nothing else they can help check your figures and labor assumptions. They might have a better way to construct the sign that will save you money.
What tricks have you used to help you figure out how to quote jobs? Share them with our readers below.