Awards & Engraving

January '20

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Page 29 of 84

A&E JANUARY 2020 • 27 A&E JANUARY 2020 • 27 Sales & Marketing to the different products we make. Each company is unique as I said, but at the core, we want to know what our consumables and labor are, plus a few other areas like the waste, inventory costs, and overhead. If you have been in business for some time and have done a great job of tracking, this is no problem to figure out. For example, take what you paid for ink and paper over a set amount of time, then take the total square inches of jobs you produced during that time (square inch of the size of product produced, times the number of times produced) and you have your paper and ink cost. What? You did not track that? You have a business to run or you are new to this? You are in the majority, so do not fear, and honestly, you might not even need to go to the lengths above. We need to factor in everything, but as long as we shoot high, going with a rounder number will do for most of us. We are in a perceived-value industry, so unless you are trading nickels and trying to be the low-price leader, we can estimate in certain areas and still have a profitable business. A SIMPLE FORMULA Yes, each company is different, but let me share a formula I have used with my consulting clients. These numbers are real numbers, and you might be able to do better or worse depending on your company. I'll use an 11-ounce coffee mug as an example, and the assumption is we are using a popular industry desktop sublima- You never want to find out the hard way that your costs are way more than you are charging.

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