The EstiMate Software Blog

“The biggest mistake many businesses make is to believe that price alone drives sales.” — Elizabeth Wasserman, Inc.com.

I read Ms. Wasserman’s article titled “How to Price Your Products” this morning, and if you know anything about me by now, you know it inflamed my passions.  She very accurately describes the processes required for pricing products accurately and consistently.  I think we all know a lot of what she says to be true; however, in the sign industry, our products just don’t fit the cookie cutter model of pricing – which means every time we price a job, it’s a real challenge to pull all the variables together and get our prices out the door on time.

Why are you in business?

I mentioned a couple of months ago that I was involved in a discussion on an online forum where one of the posters essentially said that he felt he was ripping his customers off if he made a great profit on his work.  This continues to mystify me because the whole reason we are in business is to make money.  Sure, we love our work, the interactions with customers (well – most of ‘em ), and the time we spend actually creating graphic arts for sale.  At the end of the day, though, our whole reason for being in business is to take home a profit that allows us to save for retirement, put the kids through college, take vacations, and ultimately secure our lives.  Otherwise we’re in business for all the wrong reasons. (more…)

Have you ever “just known” that if you were more efficient, or organized, you could be making more money from your business?  EstiMate DiamondMine takes those feelings and boils them down to math. Using EstiMate DiamondMine, you can now very easily see where the financial “leaks” are in your business and learn how to plug them, all by answering a few simple questions and generating a free report.

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Are you concerned about the economy? Is business slowing down? A recession is a scary time for all businesses, and often it is hard to see the forest for the trees when making business decisions in a difficult economic climate.

At a time like this, it’s absolutely critical to be working with the best tools you possibly can to squeeze every ounce of profit out of each job that comes your way. Estimate 2 offers you extremely powerful features that allow you to identify the type of work you do that’s most profitable, and focus on that in your marketing.

You see, here’s a secret: when you do less of your low profit work and more of your high profit work, you make more money effortlessly and automatically. Estimate 2 gives you the tools you need to identify this type of work and give it your full attention.

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In a recession, you need to make smart money decisions.

Dropping prices is one of the worst choices you can make.

It’s so, so tempting in this economy to price low in order to get what little work is going around.  It’s also the fast track to bankruptcy.

First of all, let me say that I remain convinced that this economy will rebound quickly as soon as we all get over the shock of how fast it imploded.  I predict that even if we are not back to the levels we were a year and a half ago, by summer this year we should be back to a place where credit is freed up and money is moving through the economy again.  Until then, what do we do?

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Note: This article is written from the sign shop perspective, but is applicably to any small business where time and materials are the bottom line.

The wrong hourly rate (or “shop rate”) can be like a hidden cancer for your business.

How do I know?  Because I almost killed my sign business this way in 1995. Obviously, now that EstiMate Software is my gig, I’m not making signs anymore.  I grew up in the business, though, and ran my own shop for 8 years — so I know a thing or two about how to keep it going and what matters.

One thing I know for sure is that the wrong shop rate can kill your business.  Especially in times like these. The very worst thing you can do is work for cheap.

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