Welcome to The Forum, Tina.
Gesso&Bole wrote:PRICING FOR PICTURE FRAMERS
This is one of those never-ending questions . . . . .
I hope that my explanation of how I work out prices might help you price your frame hamishfour, but it may also provoke some responses from colleagues who have different opinions, and perhaps know better . . . . .
Sorry it’s a bit long, but its an important subject.
Under-pricing is rife in the UK picture framing market, so I suggest that you DO NOT look at what other people charge, and undercut. You will just end up earning even less than they do, and believe me, your customers won’t thank you for it – if you are too cheap, they will just assume you are no good!
The real answer is to look at the true costs associated with you undertaking the job, and earning a living. Spend a couple of hours working out the true financial make-up of your particular business, and then you will know that you are charging the right price to get you where you want to be.
There are 3 broad components to my pricing model.
Cost of materials
Overheads
Resources employed (time)
Cost of Materials
This should include the actual cost of the moulding, glass, boards, etc, and an allowance for the pins, glue, wedges, tape etc.
It should also include wastage. This includes the materials that you have had to purchase in order to do the job, that you didn’t actually use – say you ordered in a special colour of mountboard, and only used half the sheet – charge for the whole sheet. If it’s a standard stock colour, then charge for what you used, or rendered unuseable. So if you are left with a couple of millimetres less than half a sheet, count it as using 3 quarters of the sheet. A 2ft length of moulding left over is useless (next batch might not match exactly) so charge it in the framing cost.
Be ruthless with this – you will end up with 100s of feet worth of off-cuts that are great for the wood-burning stove at home, but nothing else because you will never get time to turn them into ready made frames. MAKE SURE YOUR CUSTOMERS HAVE PAID FOR THESE within the price you charge.
Finally include the cost of carriage (or the time and petrol if you pick up your materials).
Overheads
This will be very different if you are using your dining room table, as opposed to working from a High Street Shop, but the principles are the same.
1st make a list of all your outgoings which will be, inter alia, as below;
Rent
Rates
Utilities
Insurance
Telephone/Broadband
Website
Marketing/Advertising budget
Accountancy/Book-keeping/Govt red-tape
Bank Charges (inc credit card processing)
Cost of Finance (if you are in the lucky position where you have paid for all of your equipment, shopfitting etc etc, then I would still include a figure representing the notional cost of financing the amount of money you have invested in your business) – say equivalent to a bank loan for that amount repayable over 10 years – if that’s how long the equipment will last.
Staffing costs (inc NI etc) – don’t include yourself at this stage
Memberships and subscriptions
Equipment maintenance/blade sharpening etc
Then add it all up, so you have got a figure that represents what it costs you to run your business, and supply your service to your customers for (say) a year. Just for an example, let us assume that a retail outlet including the cost of 1 member of staff, all of those overheads came to £100,000 per annum. (This does not include an income for the business owner yet).
Once you have this total figure, you will need to work out how many productive hours you will be able to achieve in that year.
So, you might look at how many working weeks, and how many days per week.
This might be 52 weeks – 6 weeks holiday = 46 working weeks x 5.5 working days = 253 working days a year.
Here you also have to add in the productivity of (any) staff employed, as well as yourself.
So if you had a member of staff working 8 hours a day, he or she would probably be productive (actually framing work for customers) for about 6 hours a day, whereas I would be surprised if you, as the owner of the business could be productive for more than 5 hours, unless you are working much more than you should.
‘Un-productive’ work is absolutely necessary – and includes, serving customers, cleaning up, ordering stock, keeping records, mending or maintaining equipment, advertising campaigns etc etc etc etc. There is nothing wrong with it, and it needs doing. But for the purposes of working out an hourly rate it is important to be honest with yourself – I personally recon I can do 5 hours absolutely focussed framing work in a 9 hour working day.
So, let’s say you had yourself, and 1 full-time employee;
253 x 6 hours for employee = 1518
253 x 5 hours for owner = 1265
Total productive hours per annum = 2783
Now, let us assume that you have enough work to keep you busy for all of your productive hours (if not – you MUST be realistic and reduce staff hours – DO NOT let them become less productive).
For each hour of framing, (based on the figures above £100,000 costs / 2783 productive hours) you need to be charging £35.93 per hour (let’s call it £36) just to cover your overheads.
Resources
You haven’t paid yourself yet!
Here you need to decide what you are worth . . . . . again, a big pitfall for many business owners.
In this example above, I am going to suggest that someone running a retail outlet 6 days a week, and employing a member of staff, has got to be worth a minimum of £40,000 per annum – but insert what you feel you are worth.
To earn £40,000, the business must charge (40k/2783= 14.40) another £14.40 per hour.
So our hourly rate is £36 + £14.40 = £50.40
PRICING
So here we have it. The price charged should be.
Materials + Wastage (inc carriage) + HOURLY RATE multiplied by HOURS TAKEN + VAT if applicable = PRICE
So using the above example, a framing job that takes 1.5 hours to complete would be charged out at
Materials and wastage (say) £25-50
Hourly rate (14.40 + 36) £50.40 x 1.5 £75.60
TOTAL COST £101.10 + VAT
Work out the cost of power/phone/rent/rates/tea/coffee/biscuits. Omit nothing. Then how many hours you are likely to work per year. Remember that there is a lot of dead time that can't be billed directly - paperwork and general admin - sweeping the floor....etc.
