Ask any sign shop owner what they struggle with most and pricing will sit near the top of the list. How do I quote this wrap? What is the right square metre rate for corflute? Should I knock $500 off for a mate? The questions never stop, because the maths underneath them is genuinely complicated, and most of us got into this trade to build signs, not run spreadsheets.
You do not need a business degree to run a profitable sign shop. Plenty of successful operators learned the hard way. But you do need to understand a handful of numbers cold: your true material cost, your labour burden, your overhead, and the break-even point that ties them all together. Without those, every quote you send is a guess.
This is the foundation. Get this right and the rest of your pricing strategy, the templates, the square metre rates, the calls on when to walk away, starts making sense.
Stop Discounting. Seriously.
Before we get to the numbers, the single most important habit shift: stop discounting your work.
When a customer says "I can get it $500 cheaper down the road," the temptation is to shave it. Do not. Discounting tells the client one of two things:
- They can push you around because you do not know your numbers, or
- You were marking it up frivolously in the first place and they have caught you out
Neither is a good look. Coupons and promotions have a place if you understand the strategy behind them, but ad-hoc discounting on individual jobs erodes margin and trains your customers to ask for it every time.
The only way to confidently hold your price is to know exactly what that price is built on. Which brings us to the numbers.
Know Your True Material Cost (and Mark It Up Properly)
Start with materials. Not the invoice price from your supplier, the true cost including waste.
A good baseline markup on materials is 100%. On some products that is rich, on others it is not enough. The point is you need a deliberate number, not a vibe.
Build in drop on everything. No matter how tight your nesting is on the router or how good your plotter operator is, you are losing roughly 10% to offcuts on most jobs. If you are not accounting for that in your quote, you are eating it.
A few practical moves:
- Keep a live spreadsheet of material costs by SKU. Update it when supplier prices move.
- Review your volumes annually with your major suppliers. If you have grown 25 to 50% year on year, ask for a better rate. Most will sharpen the pencil to keep the volume.
- Keep your stock organised so you actually know what you have got on the shelf. You cannot cost what you cannot count.
If you are a broker who does not hold stock, you still need this discipline. You just apply it to the finished cost from your trade supplier rather than raw materials. Either way, you need to know what it costs you before you add a cent of margin.
Labour Burden Is Not the Hourly Wage
This is where most shops underquote. The $25/hour you pay your designer is not what it costs to have them at a workstation.
Labour burden is the wage plus:
- Superannuation
- Payroll tax (where applicable)
- Workers compensation insurance
- Public liability and business insurance allocated per head
- Leave entitlements (annual, personal, public holidays)
By the time you add it up, that $25/hour employee is probably costing you $55 to $65/hour to have on the floor. That is the number you build your shop rate on, not the wage.
Once you have got the burdened rate, add your markup. If your burdened cost is $60/hour and you want a 65% margin on labour, your shop rate is around $100/hour. Some shops run $120 or higher. The right number depends on your market, your overhead and what your work is worth, but it has to start from the burdened cost, not the wage.
If you do not have a tool for this, a free labour burden calculator will get you most of the way. Sit down with your accountant or bookkeeper once a year to sanity-check it.
Fixed Costs, Variable Costs, and Your Break-Even Point
Two categories matter here:
- Fixed costs stay roughly the same month to month: rent, insurance, software subscriptions, owner salary, admin staff
- Variable costs move with the work: materials, consumables, contract install labour, freight
Add up your monthly fixed costs. That is the number you have to clear every month before you have made a dollar. If it costs $30,000 a month to keep the doors open, you need enough billable hours sold at your shop rate to cover that before any profit shows up.
That is your break-even point. It is the most important number in your business, and most owners could not tell you theirs within $5,000.
Once you know it, everything downstream gets easier:
- You can set realistic monthly sales targets
- You can tell whether a quiet month actually lost you money
- You can decide, with real information, whether a discounted job is worth taking
When (If Ever) to Take a Discounted Job
Here is the nuance. If you have hit your break-even point for the month and you have still got capacity, taking a job at a slimmer margin is not automatically wrong. Every billable hour above break-even is contribution to profit.
But be careful. Custom sign fabrication creates bottlenecks fast. A discounted channel letter set for a good client might tie up your designer and project manager for a week and push next month's profitable jobs out. The discount you gave away in March becomes a missed deadline in April.
Before you say yes to a reduced-price job, ask:
- Have we genuinely hit break-even this month?
- Does this job fit in current capacity without bumping anything?
- Is the client worth the goodwill, or are we training them to expect it?
- What is the real opportunity cost? Could that production slot go to a full-margin job next week?
Your default answer should be no. The exception should be deliberate.
Build Templates to Speed Up Quoting
Once you have nailed your material costs, burdened labour rate and overhead, quoting gets a lot faster, especially for repeatable products.
Square metre pricing works well for:
- Vehicle wraps and wall graphics
- Banners and mesh
- Corflute and other rigid board signage
- Pull-up banners and other display work
Build templates for these so a project manager or estimator can knock out simple quotes quickly, freeing you up for the complex fabrication jobs that genuinely need studying. Channel letters, illuminated signage and custom builds will always need a proper take-off, but you should not be hand-pricing every roll-up banner that walks in the door.
If you outsource your printed components to a trade supplier, your templates get even simpler. You are working from a fixed trade price, adding your markup, project management hours and any finishing or install. That makes products like corflute signage and pull-up banners straightforward to template, because the input cost is fixed and known before you quote.
Frequently Asked Questions
What labour burden multiplier should a sign shop use? There is no universal figure, but a common starting point is 2.2 to 2.6 times the base hourly wage once you load in super, workers compensation, payroll tax, insurance and leave. A $25/hour employee landing at $55 to $65/hour burdened sits in that range. Work out your own number from your actual on-costs rather than borrowing someone else's multiplier.
How much should I mark up materials? A 100% markup is a sensible baseline, but treat it as a starting point, not a rule. Higher-turnover commodity stock might carry less, specialty or low-volume materials might carry more. Whatever you choose, build roughly 10% drop into the costed figure so offcuts do not quietly eat your margin.
Should I ever discount a job? Only as a deliberate decision once you have already cleared your monthly break-even and have genuine spare capacity. Even then, watch for bottlenecks in custom fabrication, because a discounted job that ties up production can cost you a full-margin job the following month. As a default position, hold your price.
How do I work out my break-even point? Add up your total monthly fixed costs, the spend that exists whether or not a single job comes through the door, then divide by the billable hours you realistically have available across the team. That tells you the minimum you need to bill each month before any profit appears. If you cannot state your break-even within a few thousand dollars, that is the first number to nail down.
Do brokers and resellers need to do this too? Yes. You may not be costing raw materials, but you still carry overhead and project management time, and you still need to know the markup required to clear break-even on each job. Outsourcing print to a trade supplier simplifies the input cost, it does not remove the need to understand your own numbers.
Key Takeaways
- Do not discount by default. It erodes margin and trains clients to push you. Hold your price unless you have made a deliberate strategic call.
- Material cost includes drop. Budget around 10% waste on routed and cut work. Mark materials up around 100% as a starting point, then adjust by product.
- Labour burden is wage plus super, insurance, leave and payroll tax. A $25/hour employee likely costs you $55 to $65/hour burdened. Build your shop rate on the burdened number.
- Know your break-even point. Total monthly fixed costs divided by billable hours available equals the minimum you need to bill. Without this number, you are guessing.
- Distinguish fixed versus variable costs so you understand what moves with sales and what does not.
- Templates speed up simple quotes like wraps, banners and corflute. Save the deep analysis for custom fabrication.
- Discounting once you have hit break-even is not automatically wrong, but watch for bottlenecks. Custom work creates downstream capacity issues fast.
- Use an accountant to validate your numbers annually, but you can build the spreadsheets yourself in the meantime.
Let Us Handle the Print Side
Pricing and quoting is hard enough without also worrying about whether your printed components will land on spec and on time. Mediapoint is a trade-only printer working with sign shops, resellers and designers right across Australia. Corflute, banners, mesh, labels, pull-ups and more, produced to trade specs so you can quote with confidence and focus on the sale, the design and the install. Request a quote on your next job and put the production side on autopilot.
