June '21

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A W A R D S & C U S T O M I Z AT I O N 6 2 G R A P H I C S P R O J U N E 2 0 2 1 G R A P H I C S - P R O. C O M Y O U R L A S E R A T W O R K | B O B H A G E L PRICING YOUR LASER SERVICES AND LASER ENGRAVED PRODUCTS T here are many different types of businesses re- lated to laser engraving. You may have a hobby that has turned into a side business. Your busi- ness may be designed to produce a full-time income, yet be located in your home. The business may be full- time, and you rent or own a shop with a showroom. Whichever it is now, or is planned for the future, all the various aspects of pricing are important to consider. Making major pricing changes for established cus- tomers is difficult to do, especially if the result is a large increase. You want as much consistency in the beginning as possible yet you still need to make money. WHAT IS PROFIT Profit is a misused word. For instance, TV pro- grams or ads might suggest that buying a home for $200,000, fixing it up for a cost $60,000, then flipping it for $325,000 produces a profit of $65,000. Wrong! The time you spent finding, plan- ning the work, and actually working on the house is work that is worth a salary. Let's say a salary to cover that time is $20,000 — your profit would be $45,000. Profit is the dollars left over when all the expenses are paid, including a reasonable salary for the work you did. Profit is payment for the risk you take. Not all risks you take produce a profit. That's why they are called a risk. So, think of your business producing a fair salary for the owners and a reasonable profit related to the money you put at risk. Another way of looking at it is that profit is the interest you earn on the money invested. Perhaps if this is a hobby-turned small side business, you don't con- sider the cost of your laser (and other equipment) as an investment. Yet, the percentage of time used for business is considered an investment. If your business is a fulltime adventure, consider a fair salary and a return on your investment. You will want to target a profit or interest on the in- vestment you are making in your business. What is a fair return for the money you are investing? PAY YOURSELF A FAIR SALARY Determining a fair salary to use in calculating pricing when you start a business is challenging. You may be able to find out the wage paid to a local laser operator or similar job such as a machine operator at a shop or factory near you. This is a good starting point. These displays were for a custom order of 200 vintage doorknob displays for an old 1800s Virginia hotel converted to apartment condominiums. The displays were given to investors and early buyers. The design time could be spread over 200 pieces, making it an economical project for the devel- oper. (All images courtesy Bob Hagel) The customer provided these wood plaques. My lasering charges had to include the more com- plex layout to engrave the text and graphics over the six plaques and all the graphics work.

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