By SignCraft Magazine
Posted on Wednesday, September 21st, 2016
Last week we asked Trade Secrets readers to help us out with a survey to find out how sign shop owners price their work. Many thanks to the hundreds who responded! We really appreciate your taking the time to participate.
The results give us all an inside look at how sign shop owners estimate and price their work, and why they think signs are underpriced. Here’s what we learned:
They were experienced.
Let’s start with a look at the experience level and the shops of those who participated. They were experienced shop owners. Most of them—86%—had been in the business eight years or more, and most handled non-illuminated signs (flat signs, vehicles, 3D signage, etc.):
58% owned commercial sign shops (primarily non-illuminated signage)
26% owned full service sign shops (both non-illuminated and illuminated signage)
The remaining 15% had either specialty sign shops or were a part-time/freelance sign shop.
They use several estimating approaches.
When asked what approach they use to estimate sign prices most often, manual estimating (calculating the material cost and estimating the time involved) topped the list. Relying on experience came in second:
46% said they manually estimate the time and materials on most jobs
32% said they relied primarily on experience
12% said they use estimating software for most jobs
10% said they use SignCraft’s Sign Pricing Guide, either in print or online, most of the time
Several of the respondents said they had developed spreadsheets that they used to estimate most jobs. Some said they had developed square footage rates for common projects.
But all said they used more than one of these approaches for their estimating. For example, 37% said they also used SignCraft’s Sign Pricing Guide, either in print or online, for some of their estimates.
Their approach varies with the sign’s complexity.
Next we asked which approach they would use to estimate a selling price on three routine projects. Not surprisingly, the higher the value of the sign, the more likely they were to estimate the project manually.
Why are signs underpriced?
When asked what they felt was the main reason signs were underpriced, 42% felt their competitors didn’t know how to accurately price their work, which depressed the market. 29% felt the problem was that customers were unwilling to pay what signs are worth. 10% felt there was too much competition in their market, which drove prices down. 10% had another reason, and 8% felt that signs were not underpriced.
They had more to say.
Many shared their comments on the subject of pricing, and we wish we had room to share them all here. (Thanks, too, for the suggestions on survey improvements. We’ll put them to work on the next one.) Here’s a sampling of what they had to say:
“I think through all steps, logging time in a minimum of 15-minute increments, being sure to include consult time, administrative time, each production step, etc. I figure delivery and installation as a separate thing, and include everything from loading the truck to setting up ladders, plus time for clean-up and putting things away. I also mark up materials, usually from 25% to 60%.”