Posted on Monday, June 4th, 2018
There’s a real pearl of wisdom in the What’s It Cost to Produce this Freestanding Sign? article in the upcoming issue of SignCraft. Rocco Gaskins tracked the time and materials on a 40-by-72-in. monument sign for a funeral home. When he itemized the material cost, he explained how he figures the Miscellaneous category that he includes in every job.
That approach may well be a key reason why his shop, Abco Signs, in Pennsauken, New Jersey, has been around for nearly 50 years. It may also be just what you need to smooth out your cash flow and keep profits from disappearing.
“Most of the items covered by Miscellaneous Supplies in the Materials list were in stock or leftovers—but they still have a cost associated with them. Here they include things like roller covers, aluminum angle, painter’s tape, small bolts/screws, partial cans of spray paint, silicone adhesive, application tape, hooks and eyes and more. I also factor in a little for wear and tear on tools, drill bits, plotter blades and such things.
“To cover these costs, I total the other materials used on the sign and multiply that by 12%. While not perfect, it’s very close on most jobs.”
Rocco isn’t the only sign business owner to stress the importance of knowing your costs and charging appropriately. Dave Murphy, Murphy Signs, Harlan, Iowa, has been in the business for close to 40 years and offers similar advice.
“Many sign people want to make pretty signs,” says Dave, “rather than making money. It took me years to figure out you have to charge enough to clear your overhead with added profit if you want your business to be successful.
“Keep track of your time and materials. Set aside a percentage of each sign you sell to help pay large bills you encounter through the year and to cover equipment failure and replacement. For large projects, borrow money from the bank rather than taking from your savings. You’ll repay the loan but replacing your savings takes more discipline.”
You’ll find a What’s It Cost to Produce this Sign? feature in every issue of SignCraft. It’s a great tool for learning your costs and improving your pricing. Don’t miss it—subscribe today.