How to Estimate or Price Signs and Graphics

Pricing or estimating what to charge for a sign is a task that you will be faced with on a daily basis. It is imperative that you become proficient at it. The good news is that it is not difficult. You do not need a fancy program or a college course to price signs. The first step in learning to price signs is to understand a little bit about pricing in general. Once you understand how things are priced then pricing signs will no longer be a mystery.

In economics 101 you learn that price is a function of supply and demand. The price of anything is basically the intersection of supply and demand for that particular commodity. If you charge too much you will not sell signs. If you charge too little you will not make a profit although you will have plenty of demand. That is where the economic theory becomes a reality. I mention this economic theory because it is the basic building block of capitalism and is what actually sets prices. It keeps everything in check.

The first method I want to cover is the labor plus material method. This is a simple method and can be used to price any sign. All you really need to become good at is estimating the time it will take you to complete the job. The materials plus labor method involves taking the total of the materials to be used for the sign and applying a markup. Some sign makers double the materials and some use a smaller multiplier. I normally double mine. (material cost x 2) Once you have this number down you simply need to estimate how long it will take you to make the sign. You need to use a number that would reflect the time it would take an average experienced signmaker to make the sign from start to finish. As you make signs you should record the time for each type of sign. If it takes 30 minutes to create a basic single sided 2 x 8 banner then you would record : 2 x 8 single sided banner – 30 minutes. Once you have estimated how long a sign will take to complete you apply a labor rate to that number. It will be your shop rate which is normally around $50-$60 per hour. As a simple example, lets do an estimate on a 2 x 8 banner. The banner cost and vinyl will be around $20. We double that to arrive at a materials charge of $40. The time to complete is about 30 minutes. The labor charge would therefore be $30. The total for the banner would be $70. Some people wonder why the labor rate is so high. Keep in mind that it is not just your labor the customer is paying for. It is your computer and vector cutter labor as well. Also, as you price this way and record your prices you are establishing a data base that you can use for an even quicker pricing method called rule of thumb pricing.

Rule of thumb pricing is a quick way to price signs mostly in your head by using a square foot price derived from the materials plus labor method. For example, the 2 x 8 banner we priced was 16 square feet in size. If you divide 16 into $70 you get $4.38 per square foot. When the next customer comes in and wants a 2 x 8 banner you simply take 2 x 8 = 16 and multiply it by $4.38 or $4.50 if you round up. If the next customer comes in and wants a 3 x 8 banner you take 3 x 8 = 24 and multiply that by $4.50 for a price of $108. This will work for most standard sized signs. I use $5 per square foot but you can use any number you choose. (Remember that the market actually dictates how high you can go.) As a sign gets smaller this method can become skewed and your prices can get too low. Also, intricate signs can be under priced. All you have to do on these type signs is revert to the materials plus labor method. An example of this would be a 1 x 2 banner with 10 words on it. If you price by the square foot it would run $10 which is way too cheap. Material plus labor would be much higher. Probably around $40. This is not often an issue but just keep it in mind as you price.

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