a profitable screen-printing business depends on skilled employees who
perform quality work, as well as having easy to manage product flows,
attentive and creative customer service, and high quality control
standards. But keeping close tabs on costs and revenue is also essential
to a successful print operation.
At the start, a good way to understand how your company is faring financially is via an Excel spreadsheet. Seeing your costs in black and white enables a print shop operator to ultimately set a price per printed article and offer strong, profitable bids for large or small jobs.
Take the time to follow these basic steps for every job on which you plan to bid:
- Closely estimate the monthly upfront overhead for running your operation. Include the cost of rent, utilities, insurance, the internet, your equipment, maintenance, and salaries, even for those employees not directly involved in the screen-printing process. Don’t forget small expenses such as Thursday morning doughnuts and coffee for your employees – knowing your little costs will matter in the end.
- Next, estimate the number of items you will screen-print for the month. Give it your best guess, because volume can change dramatically from month to month.
- Then factor in expenses for the specific job. Cost of materials, such as t-shirts, labor and taxes, design and screen preparation, even cleanup, should be included.
initial Excel sheet should be set up to provide sub-totals for the job,
most importantly the overall cost per item being printed. That figure,
plus the percentage of profit you wish to earn, gives you the sales
price per item.
Use Actual Print Costs to Determine the Right Pricing
If you are being outbid for jobs, it may be time to cut back on expenses in order to lower the cost per item. Keep in mind what affect the reductions will have on the quality of your product. Maybe the weekly doughnut run waits until your shop is more profitable!
And when the little Excel table just isn’t enough, learn more about the Ordant price-estimating software. This is a wonderful tool that helps you build your bottom line. Call 1-888-861-5228 schedule an appointment online, to learn more about our application or view our free demo today.