PRICING WORK IN YOUR LASER BUSINESS
ฝัง
- เผยแพร่เมื่อ 14 ก.ค. 2021
- Pricing work in your laser business is crucial to your success. You need to estimate work in a way that ensures you make money while providing value for your customers. In this video we will focus on the laser business and I will show you how I estimate the producing for custom laser projects.
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I don’t get my xtool 20 watt laser for a few weeks, but your videos are so informative! I have learned so much from you. And the spreadsheet is fantastic. Thank you
I'm glad you are getting value from this.
This is so brilliant. Thank you for sharing your forumla!
You are so welcome!
Subscribed, Thank you for sharing this info and template. Keep em coming :)
Thanks for the sub and welcome to the channel. If there are project you'd like me to cover just shout at me on instagram or email and I'm happy to help out. I like to have fun too😉
Steve Makes Everything will do, thx again
Very informative, thank you
I hope it helps
Thanks for sharing.
Glad you found it useful
Thanks for the tips, it help jump the thought process. I bought them to complement my existing services with small gifts, but if people start asking for more, I know how to process 👍🏻
Hope it helps grow your business
Typically infrastructural costs are added - the cost of the laser cutter and maintenance, spread over many jobs. The cost of your workshop, fractional rent or mortgage, insurance can also be substantial.
Certainly. You can include whatever costs you need to account for. I usually add a few operational costs into quotes, but I didn't want to pollute things too much for this video. trying to keep it simple :-)
Really valuable and helpful info. Thanks for sharing👍
Glad it was helpful!
New subscriber I luv your videos
Thanks for subbing!
Thanks! I like the fact that my 55 YO eyes can easily see everything on this spreadsheet.
Ha! You are benefitting from my own 57 YO eyes.😀
Thank you for this! Pricing is so hard to figure out. Do you have a spreadsheet or something similar for more volume products that have simple personalization?
I don't but you can do this in a similar way. The only real difference would be to decide what your margin/mark-up would be. Of course all of your costs would scale t the number of items you want to make and hence the costs would come down on volume.
Great breakdown. Would you ever pricing marketing or advertising cost (as an example) to help cover other expenses? Maybe as part of you mark-up?
You would need to factor this to you annual running costs. I don’t advertise so I can’t be much help there
To the people that say "$40/hr no one is going to pay for that" that's fine, direct them to Etsy and let them find out it's more there, plus shipping
I've had customers say no, then come back
I've had customers that say OK
I've had customers say "are you sure? That sounds cheap"
My experience has been similar. A recent project I did for a customer was such a pleaser that he asked why I wasn't charging more. I told him I charge what allows me to make a bit of a profit and before he left he asked me to make something else for him. Repeat business is always much better than over-charging and getting business once.
Steve, In your line "Laser Operation," your example included only variable costs (electricity). It did not appear to include amortization of the laser itself or of any real estate costs (heating or cooling of your shop, etc). As I used to run these same kinds of cost estimates, I always included "overhead," which in actuality contained many things but could be approximated by a fixed percentage of the manufacturing costs. For a small shop, that number might be 15%, for a large organization it might be 28%.
Valid points and you can include anything that is a measurable expense in this line. I usually put a percentage in this line to cover things like wear and tear, though I don’t have real estate costs like rent
Hi Steve! Can you please, give me some tips. I want to buy a laser/cutter which can engrave in many materials . I am planing to open a small business home. Easy to install, easy to operate. Thanks so much for your good videos.
If you get a CO2 laser (regardless of manufacturer) you will be able to engrave on many materials. Most manufacturers will provide a matrix of materials that can be cut and/or engraved and that will be the same for any CO2
Hi,
If you were planning on going in laser business and stay in, what laser do you recommend for small and medium projects. I appreciate your thoughts
This is a difficult question with no right answer. I expanded into laser engraving with my Muse 3D, which was an upgrade from a diode laser. Then I have recently augmented the Muse with a second bigger laser for jobs demanding thicker or larger materials or where I need to get things done fast. If you are lying on a laser a the main source of revenue for your business you may want to have more than one of them anyway in case you have failures.
In short get the best laser you can reasonably afford that will do the things you plan to do in your business. You can always upgrade or add another laser later if you are successful in your goals.
hey steve.
really nice video as always, but in your calculation of your work, havent you forgotten tax??
i have just ordered an twotrees ts2 laser and are hoping to be able to make small jobs my self.
I didn't forget about taxes, though I purposely didn't cover it because there are so many different jurisdictions, rules and regulation, etc that impact this. I also didn't cover sales tax for the same reason. Where I live in Canada I can charge sales tax for thing I sell and subtract the sales tax I paid for the time/materials I paid to make it. It's just a very complicated topic, that is honestly better handled by an accountant.
Tax burden is definitely something you can't ignore though, so you need to determine with you want your "salary" to be net of income taxes to help determine your prices.
Yes ok i understand 🙂🙂 here in Denmark we pay 25% sales tax and our income tax is 39%
@@WorkbenchRestaurations I wish my tax rate was 39% 😆
If you are manufacturing goods for resale you should not be paying tax/vat for materials, the end customer pays vat/sales tax. In the usa they use a sales tax exemption certification form for this that you submit to all your suppliers.
@@MakerMark Yes, because taxation varies so much from country to country I purposely didn't talk about it
You times 50% of your overall purchases and mark up together including run time and all , or do you just do the purchases for the job times 50% ? Like the material and what not
Definitely cover your materials and then add on your labor costs plus whatever profit you want to make
You marked up your own labor. At first this seem odd, but now I can think of a few justifications for this. Things like employer FICA, health insurance paid by your LLC, payroll time and labor etc. Is that your your reasoning Steve?
You want to factor all of those local fees into you hourly rate. This is the rate you would pay yourself or someone else to do the work. The extra markup I do is the profit for the business and is what helps the business grow. You can what I do and markup the entire bill or you can calculate you profit separately and add it to the price.
Just something I noticed, and maybe it was already mentioned, but your Bill of Materials section is not totaling correctly. It is 0.01 off. At 3:16 in the video $36.05 + $31.66 + $20.07 + $27.60 is $115.38, not $115.37 (5+6+7=18, not 17). Not that this is a big deal, but FWIW it's wrong.
Ha, that's kind of cool. I guess there's a rounding error in Excel.
@@SteveMakesEverything There is an option in excel to round up or down. I set to 4 decimal place to round down and 2 up when usuing currency
Hello was someone able to download this file? I receive always "unable to connect" after some seconds of clicking on the download button
I just checked and the file is fine for me
@@SteveMakesEverything Hi Steve, tx for having a so quick look on this. I'm still having the same issue but my son was able to download and send it to me.
Assume you are not incorporated. Seems like you aren't taking into account sole proprietor tax etc.
Taxation is really beyond the scope of this video, since it tends to be a regional/national issue for your particular country and you will have to figure the impact of taxes to your bottom line. Where I live there is no sole proprietor tax, so any money made would just be considered personal income and would be added to your annual personal taxes (though you do get to deduct all expenses for your business, so it's not too hard to make your income close to zero). If you are incorporated then your company is usually treated like a person for tax purposes and you would pay taxes based on company profit. Either way your government is going to take your money so you'll need to ensure that your pricing doesn't force you to lose money. 😀
If you are giving a discount and expecting follow-up work just assume you'll never hear from them again.
I suggest giving a discount on their next purchase.
It’s a fair perspective, but my experience is different. If you are building with high quality and seed the customer with a decent price, they will come back. I have many customer who keep coming back because it’s more of a partnership than a business relationship