INDUSTRY TIPS / JOE ARENELLA, SIGNTRACKER Three tips for quoting Every company deserves to make a profit, and that includes your sign shop. The best way to preserve your profit is to avoid errors in the original quote, learn to predict obstacles in the field, and don’t give in to the pressures of bargain-hunting clients. Any one of these mistakes can lead to thousands of pounds left on the table. HOW TO AVOID LOSING PROFITS ON A JOB: 1. Utilise quoting tools and resources The easiest way to reduce anxiety over producing consistent quotes is to use tools and resources that ensure you don’t miss the important parts of pricing your jobs. Start by calculating your labour burden – what it actually costs to cover your shop and field rates. This requires you to do a little homework. When I owned a sign shop, I created a labour calculator with my CPA (certified public accountant) to help me examine all the costs needing to be covered per labour hour. Rent, lights, insurance, etc. all have to be calculated along with the hourly salary rate per person, then additional markup for your profits. I would review this with my CPA at least a couple of times a year to make adjustments as needed. Once you have a solid hourly shop rate, you can calculate your cost of materials, equipment usage, and the time it takes to complete the job. At first, one of your experienced fabricators or installers might be able to help estimate the amount of hours needed to complete the job. As you grow however, hiring a dedicated estimator will help ensure your jobs stay profitable. If you have good relationships with your suppliers, ask them to help you calculate the amount of materials needed for a particular job, or how long it will take to run the printer or router to complete fabrication. This data will help you as you learn to gauge this for yourself. QUOTING TIP: Another helpful way to test your pricing is to order signs from wholesalers. It is important to have relationships with quality wholesale shops as a backup to fabrication bottlenecks anyway. If a banner costs $100.00 (£82.45), you should be able to double that amount and divide it by the number of square feet to get a solid retail per square foot price. Electric signs might not be able to be doubled, but you can ask your wholesaler for a detailed estimate to help ensure you quote their products correctly in the future. Lastly, whether you use a spreadsheet, accounting software, or sign quoting software, it is important your method is consistent. Again, you deserve to make a profit, so make sure you have the right tools to understand your costs and markups. 2. Get the details right the first time No one likes a change order. An email request for a sign often fails to take into account the hidden but necessary components of fabrication and installation, such as detailed site surveys, hours of design and engineering, permitting research, colour samples, and so on. If you underestimate the process, your shop will be forced to either honour an underbid quote or convince your client to sign a change order because you missed an important detail. A QUICK EXAMPLE: A few years back, my shop installed a channel letter sign using bracing that was designed to be bolted to the backside of the parapet wall. I failed to measure the depth of the wall to the deck correctly, a mistake that cost our company over $10,000 (£8,000) to build new bracing from the deck. This involved cutting the roof membrane, on-site welding, and getting everything reengineered. In other words, it was a nightmare that could have been avoided had I asked for a set of detailed drawings from the architect before presenting the quote – a rookie mistake that my client refused to pay for. My shop blew all the profit on the job. These mistakes aren’t limited to large electric projects. Miscalculations can hapIf a banner costs $100.00 (£82.45), you should be able to double that amount and divide it by the number of square feet to get a solid retail per square foot price 30 US-based Joe Arenella, founder of SignTracker offers his insight into how to protect and boost your profit with a better quoting process Joe Arenella founded two sign shops before launching SignTracker, a software program that helps sign shop owners track their jobs, quote more consistently, and provide their team a birds-eye view into what’s going on in the shop. www.sign-tracker.com February / March 2023 - Issue 245 www.signlink.co.uk
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