Posted on Wednesday, March 15th, 2023
Most sign businesses build their pricing around an hourly shop rate. Ideally that number is based on an accurate, current assessment of their overhead. Until recently, that overhead changed rather slowly. The inflation rate was 2 or 3% for several years and rents were relatively stable.
Not so for the past two years. Inflation has been 6 and 7 percent, and insurance and rent have jumped even further. So have vehicle costs, equipment costs and wages have all followed suit.
With that in mind, we asked SignCraft.com readers to share their hourly rate, a little information about their sign business, and their comments in our 2023 Hourly Shop Rate Survey.
Over 350 participated and most had considerable experience in the sign industry. Over 80% had been involved in the industry for 10 years or more. 76% were over 50 years old.
What other shops charge:
We asked for readers’ hourly rate as a range. Most respondents fell into three ranges: $70 to $85, $90 to $105, and $110 to $125. Over half said they charge $90 or more per hour.
That’s a step up from our 2021 Hourly Shop Rate Survey, where over one-third said they charged $50 to $65 per hour—or even less. If you’d like to compare the latest survey to our previous one, take a look at “2021 Reader Survey: What’s your hourly shop rate?”
How they determined their rate:
Over half said they calculated it using their overhead and labor costs. 40% said they estimated their hourly rate (often based on what they felt the market would bear) then adjusted it to find a workable rate.
If you’d like a little help with your hourly shop rate, take a look at “Determining your hourly shop rate”. It includes an overhead worksheet you can fill out online. It can give you a handle on where the money goes.
Rates have been on the rise, too. 80% have raised their rate at least once in the past two years, and 20% said they had raised it more than once in that time. If you haven’t raised your rate in the past two years, you’re in the minority: Only 20% said their shop rate is unchanged in the past two years.
Here’s what they told us about their businesses:
Most have a shop that’s between 1,000 and 3,000 square feet…
…and most have one to three employees:
78% have a digital printer in-house, and 34% have a CNC router. 18% said they have a laser engraver/cutter, and nearly every one had a vinyl cutter. Here’s the breakdown of the type of work that they do:
The size of their market was divided fairly equally between the four categories:
When we looked at hourly rates by shop size and market size, there were no surprises. As you’d expect, shops in large cities and shops with more square footage and more employees all tended to have a higher hourly rate. Small town and rural shops, and smaller shops, generally had lower hourly rates.
Comparing the latest survey with our 2021 Hourly Rate Survey, it’s clear that most shops have had to increase their hourly rate considerably—about 20%—to stay ahead of rising costs. About half now charge between $90 and $125 per hour. That puts them on par with the national average for many service businesses, such as mechanics and appliance repair companies.
Not adjusting your hourly rate, though, means you’ve taken a pay cut. If you haven’t raised it in the past two years, it also means you need a bigger increase to catch up with the market. The advantage to more frequent increases in your hourly rate means less “sticker shock” for your regular customers. Small price increases are easier for customers to deal with.
Here’s what they had to say:
There were loads of great comments about hourly rates and pricing your work, and we’ll share a few of them here. Thanks again to everyone for taking the time to participate in the survey. We hope the information they have shared helps you take a little time to make sure your hourly rate is working for your business—and not letting profits slip away.
And remember—the survey was anonymous so if you asked me to reply in your comment, I have no way to do that. Please drop me a note so that I can get back with you.
“When we started this business we had no idea what a shop hourly rate was. It was only after stumbling, tripping, and falling on our face did we learn of SignCraft and the importance of a shop hourly rate. We use the shop hourly rate to check our job quotes to make sure we are pricing jobs correctly. I have it down to a square foot price that almost always guarantees our shop hourly rate is being met or exceeded. It definitely took time to get our numbers straight but it was well worth it to say the least!”
“My response to objections about my pricing is always this: ‘If you don’t like my pricing, I can always raise it!’ Works every time!”
“Be honest, do great work, keep your word. Do not give free designs. It will prove whether the client really wants your work and is really interested in getting a sign. Bells and whistles are great but should NEVER take the place of readability.”
“We charge the same hourly rate for design and production. Our installation rate varies based on number of people involved.”
“I also own a construction company. People with similar skills are getting much more money than people in the sign industry.”
“Our rate is $95 per man per hour. If we leave the shop within a 10-mile radius, it starts at $175, then the $95/hour. Over the 10-mile radius, we charge an additional ‘trip charge’. For tedious jobs that we’re not fond of doing (such as vinyl removal that’s been baked on for 20 years) we may charge $125+/hour.”
“I do a lot for national sign companies and charge them more than for local sign companies or local mom/pop stores. National rate (one worker in shop or in platform truck): $165; local sign companies/local mom/pop: $150. We are a small shop (mostly electrical signs) just outside of a large city. One other good question for you to ask is what different companies use for material markup. I add 65% to all materials at a minimum.”
“My father-in-law, who sold school buses, told me, ‘Sometimes the price is here, and sometimes the price is here.’ And then he would add: ‘You can’t go broke if your profit is at least a penny.’ It’s more important to get a new customer, build a relationship, then get work from them for years to come—without having to advertise, entice, or beg. It’s worked for me just fine.”
“We have had several adjustments in labor and material pricing since COVID. It’s hard to keep up with the rising material costs and payroll expenses (especially workers comp and business insurance).”
“Separate the non-productive hours from the actual time spent on a project, kinda like an attorney. They have a mechanical time clock on their desk. When a client sits down or is on a phone call, the attorney hits the start button. When the meeting is over, hit the stop button—then they apply the hourly rate. You can’t get paid for 8 to 10 hours a day unless you actually work it.”
“Don’t price apologetically. If your design and quality are premium, your prices should follow. Good design sells, and good quality lasts. Both are extremely valuable to the customer and for their marketing.”
“Do business with people that you know and trust. Never become the cheapest sign shop in town—it’s counterproductive.”
“The current state of our chaotic economy keeps me very focused on pricing materials, mark-ups and hours of production. Every month I visit USInflationCalculator.com to see the graph on where inflation is going so that I an add the current amount to all of my pricing guides. I’ve found, however, that on average, the actual amount is 4.7% HIGHER than stated. So I keep up with that and am guaranteed to make a profit. Doing this much work on pricing gives me great confidence. I don’t worry about hearing ‘you’re too expensive’ because I know my pricing is accurate. Never be afraid to decline a job over price when you know you’re right. If you NEED the job, add something of lesser value or that costs you nothing or eliminate something in your work that will allow you to ‘fit into their budget.’ My mentors warned me early on that ‘You don’t want EVERY job.’”
“Here’s one of the most valuable bits of advice I ever received: ‘Charge as much as you can, then add 10%!’”
“My shop rate is $100/hour and I add shop supplies at 5% of the bill. You have to be paid for tape, cleaners, etc. You must also get paid for design, customer adjustments and extensive time in estimates.”
“Time and materials for every job! Take the time and don’t lose your a**!”
“We use SignCraft’s Sign Pricing Guide on a daily basis with small adjustments, and it is very helpful to us.”
“I work with a pretty established customer base that I call my ‘Big 5’, and the solid majority of my work comes in as repeat business through these clients. I do, however, still have folks who call me through word-of-mouth referrals, who are looking for hand-done pinstriping and truck lettering, which is one of my biggest markets. I have a set hourly shop rate, but I do give breaks and/or perks to my repeat customers. I feel like I’m one of the luckiest people alive who gets to do what I do for an occupation, and I like to pass my good fortune on to my wonderful customers, as I wouldn’t be here if it wasn’t for them!”
“We adjust the shop rate up if it is for specialized work like hand lettering.”
“I use the SignCraft’s Sign Pricing Guide all the time. Thanks!”
“We have a shop rate of $125 per hour for anything related to making signs (removing vinyl, digging holes, general labor, etc). We charge $95 per hour for design-related work.”
“An old sign painter I worked with years ago once told me ‘Save your money!’ After 50 years in this business, his quote stands true.”
“Reminiscing of a simpler time! Let’s face it—there have been big changes since I started way back in ’73. Gasoline was 45 cents a gallon, shop rental was inexpensive as was the cost of living, which seemed more balanced than what’s happening currently. There were no vinyl cutters or any technology other than power and hand tools, lettering quills and affordable sign paints! To be competitive in today’s world you need a whole lot more, not to mention a lot of money! But there seems to be a lack of knowledge of traditional sign making, especially when it comes to effective layouts. Too much bling gets added, especially on vinyl wraps. That’s my rant for the day! By the way, I still love hand painted signs!”