Pricing Chart Cheap to buy (just a few pounds) Prone to error
Can be difficult to update (unless on a spreadsheet) Can only
change the total price charged and not individual elements Rather
unprofessional looking!
Slide 7
Pricing Software Modest price (200 to 300) Far more
professional looking Consistent pricing less errors Easily updated
Can sometimes be developed further by yourself Usually a database
with easy access to previous records Customers tend not to question
the price it generates
Slide 8
Visualization/pricing software More expensive (1000 +) All the
listed benefits of pricing software Large pictures can sometimes be
a problem to photograph Compatibility problems with some
computers/cameras Some customers see it as a toy to play with!
Colour problems? (brightness/contrast etc) you may end up having to
show chevrons to your customer
Slide 9
Its been estimated that currently approx 60% of all framers in
the UK are using some form of computerized pricing programme which
implies that 40% are still using pricing charts or worse still
guesstimates!
Slide 10
Pricing structures
Slide 11
There simply isnt one pricing structure which is suitable for
all framers A survey of 1000 framers in 2008 found that the prices
charged for framing the same sized watercolour, using the same
materials, bought at the same price ranged from 30 to over 100
which is why there are as many different pricing structures as
there are picture framers.
Slide 12
There are lots of business books which will go into great
detail about what formula you should use to work out what price to
charge your customers - and to a certain extent they are quite
right!
Slide 13
They will talk about such things as ..
Slide 14
Fixed and variable costs Non productive time (or downtime) Non
productive days Labour/hourly rate
Slide 15
Fixed costs These are the fixed costs of running your business
irrespective of whether youre busy or not (Rent, rates,
electricity, water, sewage, insurance, telephone rental, car tax
and MOT, National Insurance contributions, employees wages
etc)
Slide 16
Variable costs These are the costs that are directly related to
how busy you are the busier you are the more youll spend on such
things as materials.
Slide 17
Non productive time or downtime Framers often under-estimate
how much time is non productive - time when youre working but not
framing. (Taking orders/talking to customers, wrapping their
pictures, taking payment from customers, answering phone calls,
making phone calls, talking to reps, writing invoices, placing
orders with suppliers, unpacking deliveries, sweeping the workshop,
stock taking, returning faulty goods, book- keeping, answering
e-mails etc) These jobs although non productive still play an
important part in the running of an efficient business
Slide 18
The percentage of non productive time in a week will be in the
region of 25% or put another way ..
Slide 19
10 hours per week or 1.25 days per week
Slide 20
Non productive days or Days when youre away from work! (Annual
holidays, bank holidays, sickness days, going to the dentists,
doctors, opticians, going to trade shows, family funerals, family
weddings, going to see the bank manager or your accountant
etc.)
Slide 21
Any time away from work is going to be non productive (i.e.
youre not getting paid) It will vary from business to business but
it could easily be from 4 to 8 weeks per year unproductive/unpaid
time. (I take 15 days holiday + 8 bank holidays per year = 23 days)
plus sick days/funerals/doctors etc. Which means that I only work
for approx 46 weeks per year of which 11.5 weeks will be non
productive time (talking to customers/phone calls to
suppliers/doing invoices etc) = 34.5 weeks per year at my workbench
(66%)
Slide 22
Labour charge or Hourly rate
Slide 23
Most framers tend to undervalue their time
Slide 24
You should be charging a minimum of 30 per hour
Slide 25
Most framers tend to undervalue their time You should be
charging a minimum of 30 per hour (I charge 38.25 per hour)
Slide 26
Electricians, plasterers, plumbers, car mechanics all charge
anything from 40 to 80 per hour
Slide 27
Dont be afraid to charge a professional price for a
professional job
Slide 28
So, just how much CAN you charge?
Slide 29
This will depend on.
Slide 30
Your market position and
Slide 31
Your market position and What your market will stomach (or the
going rate)
Slide 32
So, what is the going rate?
Slide 33
This will depend on .
Slide 34
LOCATION
Slide 35
Of the most expensive framers half were found to be within 60
miles of London with most coming from the well to do towns and
villages in places like Surrey. The other half were situated mainly
in prosperous county towns and cities such as Bath, York and
Chester.
Slide 36
Of the most expensive framers half were found to be within 60
miles of London with most coming from the well to do towns and
villages in places like Surrey. The other half were situated mainly
in prosperous county towns and cities such as Bath, York and
Chester. Not one came from the midlands!
Slide 37
Check out your competitors prices to find out the going
rate
Slide 38
(But it must be a direct competitor i.e. the one that youre
existing customers would go to if you werent around)
Slide 39
Two most popular types of pricing structures Cost of materials
X a multiplier and (Cost of materials + mark up) + (time taken X
hourly charge)
Slide 40
Cost of materials X a multiplier An across the board multiplier
tends to make large frames too expensive and small frames too cheap
so some framers use a sliding multiplier scale (e.g. very small
frames x 10, large frames x 5) Doesnt work if theres a large labour
element to the job
Slide 41
(Cost of materials + mark up) + (time taken X hourly charge)
Youll be getting a return on your materials used and also on your
labour which assuming youve done your calculations correctly will
be sufficient to cover your fixed and variable costs as well as
making an allowance for your non productive time
Slide 42
Need to increase your prices? You need to justify it in some
way to your customers Become a qualified GCF (The only qualified
framer in the area etc) I only use only conservation materials
Improve your business logo/style of adverts I only use wood from
sustainable resources I have the only drymounting press in the area
Move to a better part of town ? May have to slowly increase your
prices over a few years
Slide 43
A few tips Discounts from suppliers if you dont ask you wont
get! Wastage allowance for your materials (33%) Ask for long
lengths of moulding from your supplier Try to minimise the length
of your end of stick pieces Add a surcharge for ready stretched
paintings If youve got a specialism add a surcharge Only give
artists discounts to individuals not a groups Always charge for
even the smallest of jobs (time is money) Be more efficient in
dealing with customers (time is money)