job estimating

Look at it as if you were going to purchase all the equipment and supplies, rent a shop, hire a pressman/bindry person, and a manager. If you did all this, you would wish to cover your expenses and make a profit.

You will be the pressman and manager and clean up guy. What do you wish to pay yourself per hour? You probably are using a part of your home or garage so you will not have to pay commercial rent. Do you wish to be compensated for the space?

Treat the equipment cost as if you took a loan from the bank for the total cost. Rather than consult interest and amortization tables, just lump in $150 to the cost and figure you will pay it all off over three years. Figure loan cost per month.

With no employees, you will not have to pay payroll taxes, insurance, workman’s comp., etc. You will have to figure an amount for electricity, solvent, rags, etc.

Don’t forget the cost in your time and gas to get paper and supplies and for delivery if you make delivery.

Unless you just want to play and do work for friends for the cost of the paper, you have to have a good handle on your costs. This certainly includes all of the above, but particularly your labor. Once you have figured your cost per hour, figure out how many pieces you can turn out per hour and you can complete your estimate.

You see that no fixed formula will work as your costs and expectations of pay and mine will be different.

There is a formula for making a small fortune in printing. Start with a large fortune.

Get some ink on your shirt.

There are some quick ratio you can deal with. They may or may not make you profitable. 1/3 paper 1/3 overhead and 1/3 gross profit.

So if the paper cost $20 then bill $60. This may work if your paper cost are not to skewed.

This is not a end all answer really but you may find it would work on most jobs.

Another is to take all cost related to the job. Paper, type or graphics and labor and mark them up 20% to 30%.

Good luck.

To estimate properly you need to have a handle on not only cost of goods sold and what you intend to mark them up, and other fixed costs, like supplies, and utilities, but more importantly, the exigencies of each job you are looking at tackling.

E.g., you may be able to feed a light form for something like a business card at a rate of 1500/h. If the job is 2000 cards and you charge $35/h for your time, that’s $46.67 for presswork. Just the presswork.

But what if it’s a heavy form on a fussy paper that means you have to run the press at half speed, and double, or triple ink the form? Suddenly your press time triples. Now you’re running 500/h. That’s a $140 job for presswork.

Clearly this is where experience comes into play in realistically estimating. You need to be able to project in your mind all the different operations you’ll be going through to deliver a job, from start to finish.

I recommend starting an Excel spread sheet as a “project estimator” with each project on its own row. Enter in estimated costs, and when complete, actuals to begin to develop a sense of all the parameters around a job, from how long it takes to set the type, compose forms, do lockup, presswork, wash-up, paper cutting, material costs, etc, etc.

Keeping an accurate record will help you gain an understanding of all the myriad aspects of running the business, not just the easy bit that is feeding the press.

Good luck,

mjb
interrobang letterpress

Lobster Shift et al

In my country the govt. offers small-business courses; it is said that >75% who do not do the course fail within a couple of years, while 90% who complete the course survive; this is because, after doing the course, some decide that they cannot manage a business successfully after having had it explained to them what is necessary. But if it is at hobby level, go ahead!
I saw a small business fold within a month, not a printery.
Australian tax laws also cause a problem to those who are not aware of them; they should have taken a tax adviser’s advice. One of my friends did well in his first (tax) year selling real estate, then made a substantial donation to a charity (tax deductible) which meant he paid less tax, enough that he came out ahead; it’s a quirk of our tax laws. And don’t forget inflation, i.e., money loses its value steadily under normal economic circumstances.

Alan.

All good advice. I definitely have a better feel for cost now than I did 6 months ago! But I do still have a questions.

Excel—I’m not super familiar with it in terms of writing formulas etc. but I would love to know how to do this. This way, I could just input details of a job (eg number of inks, one sided or two, total quantity, etc) and the program will spit out a price, right? Is that what you mean, interrobangon? Or, are you running a spread sheet with criterion like estimated hours, estimated paper, estimated cutting time, estimated clean-up time, etc and then filling in the actual info after the job?

Does anyone have suggestions for how to program Excel so it does spit out a final price?

When just starting out, how much of a profit percentage should be figured in?

If you’re also doing the design, how do you consider that?

I’ve had the opportunity to work on several job quotes over the past couple of months, and while I think my pricing is more than fair (based on the research I’ve done), I’m still not getting the jobs! I’m wondering if this is because people have no idea how much letterpress is and they are experiencing sticker shock, or if I’m charging too much. But, I follow my formula and I feel like I’m cheap.

Thank you!

Letterpress is certainly not a high tech process. Until you get very busy and successful, you probably should not try to use and program a computer to do your pricing. Just run your time and costs with a pencil and yellow pad.

You can lower your prices and get more volume. Unless you have a very good handle on your prices and a fair value for your time, lowering your price will probably only serve to put you out of business. The exception to this is to offer a low price for starters and hope to get a client that appreciates the work and your fine service. Then you work the price up on future jobs to what it should be for a fair profit. If that seems harsh, consider the harshness of continuing to work for less than a fair price for you.

If you are doing design work or spending time holding the customer’s hand, you have to charge a fair price for your time. For the design work, you should be very clear and open with the customer that you need to charge for your time. Tell the customer that you charge $X per hour and you estimate that it will take so much time.

Yes, the customer must be educated that letterpress may be more expensive than offset or copy shop printing.

This is something I still struggle with. I lose SO many jobs after I give the initial quote.

I hear a bunch of people say things like “lowering prices will just put you out of business”, but in my experience I’m faced with the option of making LESS money on a job or NO money at all on the job because it will just go elsewhere if my price is too high.

Faced with those two options I’d rather have a little money instead of none.

mega,
When quoting on a job that you know is going to make the client go ‘gulp!’ I would suggest offering a somewhat scaled back alternative along with the initial quote.

Rather than setting yourself up to work for low pay in order to get a job it may be that their three color job could be two or they don’t really need their business cards printed on both sides.

Get them in conversation rather than just scaring them off. Of course you want the job. And they want your services. It’s great to hand off printing when neither party feels they got screwed.

Daniel Morris
The Arm Letterpress
Brooklyn, NY

Mega hurt.
most people that specify letterpress for their job usually know what they are asking for and the process limitations .
The ones that dont know are the problem and tend to think its as quick as litho and have no understanding of the makeready times etc . It is almost your responsibility to explain what is involved and the time scale to do the job , as for losing money you have to look to why you feel you cant keep the cost down .
Having spare sets of rollers for white, yellow and varnish jobs to reduce the effort of drastic colour changes will speed up some work .
Keep pre cut packing sheets ready for use , you need to become mega efficient ,always have selections of carefully ordered waste to run up on , it doesnt matter what you use but wasting job material is a killer , having to buy extra reams for setting up the job on will soon rob your profit .

k

Yes, good points about stream lining your work as much as possible, and suggesting several price options to a client along with what they asked for. Does anyone also educate potential clients in some way? For example, the popularity of letterpress is causing people who aren’t really familiar with the process to seek it out (and then get sticker shock!). I even had a designer recently contact me about printing her client’s wedding suite and, thankfully, I asked to see a jpg before accepting the job. She had made a design with 6 colors on it, and type that changed density of color (eg the letter “W” would have three different shades.) I suggested changes that could be made, including doing some litho printing and some letterpress….and then never heard from her again! I had another potential client who was already working with a designer and wanted me to print her job. The designer refused to send me an illustrator file! So I lost that job too. Anyway, education….?