I'm going to be starting a very small business, not even sure if it qualifies as a business, but I'm stumped at how I am supposed to price.
What I'm going to be doing is custom business cards. I want to offer business owners in my town (and abroad) another option when it comes to advertising on their cards. All I see in the paper (or at stores) are the same generic clip-arts (if there's any graphics at all), nothing really distiguishes them from each other. So I am offering custom hand-drawn designs.
Here are two examples of what I have already done:
Construction (http://spentertainment.webs.com/MISC/construction.png) - For a friend of mine. This card design was featured in a magazine last year.
Tailoring (http://spentertainment.webs.com/MISC/tailoring.png) - My mum's business.
(Both have a front and back)
I've called several different companies around the state asking what they charge. On average they will charge $50 for 500 cards (with color). Each company also varied with options. Some had the option for black and white or full color, others would go by how many colors you want, ie; 2 colors, 4 colors, etc... and the price goes up the more ink you use.
They all had a minimum of either 250 or 500 cards.
I'm just one person with a printer and Avery business card templates. I don't know how to go about figuring out how much to charge. At the moment I've got Ivory Matte cards that were like $6 (I think) for 150 cards. They are good quality cards, nice and sturdy. My mum found the good ones at Staples the other night and these are $14 for 200 (which is only about 6 or 7 dollars more for 50 more cards) with a semi-gloss finish.
Basing prices off the companies that I've contacted it would be around $10 for a hundred cards. I didn't get too personal with these companies, so I don't know if they would do a custom job and not use a computer for art, so I'm going to guess it would be more money to go that route if I were ordering 500 business cards with a custom design/setup.
I think that, since I'm not a big company, that I shouldn't force the customer to buy at least 250 cards, for around here, I think that would be a bit rediculous. I'm thinking of a more reasonable amount of a one sheet minimum, which is ten cards. I can certainly picture a customer calling up saying they need an extra 20 or so. I should probably have a maximum as well. 500 would probably be enough for around here.
Would $10 or $20 for a hundred cards sound correct (for either black and white or color)? Should I charge more since it is custom work? How do I base these prices?
Alright, hang on. If someone orders 500 business cards, I would have to buy three packages of cards at 200 cards a package. Each of these packages are $14. If I'm spending $42 and charging $10 for each hundred, I'd only be making $8... (what's the bus driver's name?)
This is why I need help ;)
How much time does it take you to design and draw a card?
Do you sit down with the client for an hour and hash out ideas, draw roughs, etc?
How much, in dollars, do you value your time?
How much over the standard cost of a business card is the client willing to pay?
Unless you're enjoying this, I don't think it's worth while to make $8 from a few hours of drawing and another hour of printing, cutting and packaging. I guess that's why most companies have a 250 card minimum. Given that you have an extra overall cost of the design, it's important to have a minimum higher than 10, I think. Reorders are different of course.
For your calculations: you would have a stock of card packages that you can draw from. Hence the cost to you for 500 is really $35, not $42. Plus other supply refills such as ink, which you'll probably get through quite quickly.
Speaking of ink, I don't know if you were planning to just use an ink-jet printer. I'm not sure if the ink is permanent enough. Your clients won't want your cards to smudge or transfer ink to the back of neighbouring business cards in a client's client's wallet.
But if it is ok, you should definitely make sure you're using a printer with large and cheap refills.
Sorry if this is a bit rambling... but hey, you'll never finish this project anyway :=
Hmm, yeah, did you actually think how much work is there in your area (since you do seem to be concentrated on local market)? With that aproximation you'll find it easier to decide on the price, since you have to lower prices as much as you can, you'll need to make it up by having more customers - for example doing stuff for more than 3-5 people every week.
Your expenses are - time for printing, time for designing, time for cutting and postprint jobs, prinitng ink, printing paper, the printer and computer maintenance themselves. What you charge as a service - consulting, designing and prepairing for print, ordering the materials and in the end print and post work like cutting as well. Oh, and don't forget unpaying customers and possibly scrapping stuff you printed out.
This should be your second calculation.
The trick is that you basically will spend more time trying to find out what the customer wants (but with you helping them decide what they need) and designing it. Now this is what you charge and this is where you actually make money which you may lose in other parts of the proces.
Problem is, this is a demand/expertise/competitors/image kind of thing - what's the demand (that's why you need to know this first) for your services (maybe somebody just needs a design, maybe somebody just needs to print them and want to use their design), what is your expertise (well you know that yourself, but you're just starting out), what are the prices of your competitors (prices are connected to how difficult it is to actually make a deal with them - some people don't like big companies, some people don't want to us the internet etc.).
It's hard to tell how much it should be since, bigger firms buy materials at lower costs and do have specialized people for designing (heck, most firms these days are just designers). Small buisnesses need less design stuff but still need to be professional and promote themselves - larger companies have branding issues.
...anyway, I wouldn't leave everything and do this if I was you, not at present situation anyway. As you yourself calculated, there probably isn't much money (though there probaly is some) in just doing that on such a small scale. Main thing to take away with you is - printing and materials are fixed by real expenses but time and ideas you contribute are very dependable.
We did some calculation at my college and for example some books can cost to print out about $3 (I'm just converting to show relations and it depends on the amout of copies which is not so important if you're printing it digitally but it is very if your're doing it with plates) but be sold for $12 - that is nothing compared to having something made especially for a customer - how much is a suit if you buy it at a store and how much is it when you have it custom made - not even that is close to selling somebody "ideas" and "concepts".
Basically, you calculate how much you make diferently (depending on your costs and number of cutomers) but what customers should see is a price:
-> design (since time is kind of tricky as you can do this at various speeds and you don't need to actually mind the machine as it prints, unlike in bigger printing companies)
-> now to your standard charge for prinitng say 100 pieces in b&w (this price should be good if it covered your costs, which should be lower then it would be for others to other since you should buy in bulk and thus save money). To that price you add:
+ colour (if it's not b&w) - should change in percentage to the amout you're printing, but don't try to make too much money on this just keep it in mind and at least cover a part of the costs of the ink
+ more expensive paper
+ special postprint work (ie varnish)
+ quantity - should go down in price per 1, 10 or 100 (or what you decide). Say for example200 is only 50% more expensive than 100.
If you cover your costs of production with the basic price and make it look cheap, then the design part is the extra money (well it'll be for the fixing of the printer and maybe investing or going out for a beer ;) ). But be prepeared to make up some costs out of the design part of the price, at least at first. Once you see how much materials and supplies you spend you can modify the prices.
p.s. May I ask, purely out of curiousity, what printer are you planning on using? Maybe find some machine to varnish, cut the edges or get parts embedded - that'll raise the price in a relatively easy way and adds to the overall impression.
Steve:QuoteHow much time does it take you to design and draw a card?
Depending on how long it takes for me to come up with an idea I like, it really doesn't take very long, maybe an afternoon or longer.
QuoteDo you sit down with the client for an hour and hash out ideas, draw roughs, etc...
The one I made for my friend, he pretty much left it up to me. I made a couple sketches and he picked which one he liked the best and I went with it, improving it and so on. The one I made for my mother, it was entirely by phone. I asked her for all the information she wanted on it and I asked her if she had anything in mind for the design. She threw in a couple things - like the dress form, measuring tape and old-style lettering. I came up with the idea of having stitching around the border and coloring it in sepia. She's coming over today to see it and we'll go from there.
QuoteHow much, in dollars, do you value your time?
Tough question since I had only thought of that briefly. I would rather not base a price on time, since, the client won't be there with me while I make it. It would be through telephone conversation or email. I suppose I could charge just a bit extra if I have to travel.
You're right about the minium, Steve. Having a minimum of 100 or 150 would be the better idea, and save the lower numbers, say a minimum of 10 cards, for reorders.
QuoteI don't know if you were planning to just use an ink-jet printer. I'm not sure if the ink is permanent enough. Your clients won't want your cards to smudge or transfer ink to the back of neighbouring business cards in a client's client's wallet.
I didn't think of that. The printer I'm using is an HP Deskjet Printer/Scanner/Copier. I just looked it up real quick and it looks as though there are options for different types of inks. I'll have to talk to my friend and see how those cards held up in his wallet.
QuoteSorry if this is a bit rambling... but hey, you'll never finish this project anyway :=
lol
SLoUCH!
Anian:Quote...anyway, I wouldn't leave everything and do this if I was you...
No no no. This is just something to do on the side. I'm a stay at home dad right now and figured I could do this from home earning a few extra dollars so I don't feel like such a do-nothing dead-beat.
No, nobody's quitting their job and buying the little building on the corner and starting a small business in hopes of making it to the big top. It's nothing like that.
That's why I said at the start of my first post that I'm not even sure that it qualifies as a small business. I'm going to put a flyer up at the local store and see if I get any bites. I just didn't know how to price. But with that said, don't think that I wouldn't take it seriously.
QuoteMaybe find some machine to varnish, cut the edges or get parts embedded - that'll raise the price in a relatively easy way and adds to the overall impression.
I like that idea, Anian. I'll have to search for something like that.
I like your idea and think it has potential but there are a number of things to think about.
Card Stock
The perforated business card stock, IMHO, tends to be way over priced and produces less than professional results (i.e. jagged edges, misalignments, etc).
I have gotten much better results using a 10 up layout on ordinary card stock which is less expensive and comes in a larger variety. I include registration marks / cutting guides outside the card margins and take the full sheets to Stales, Office Depot tobe sliced up on the big paper knife for about $0.75 per cut.
Printing
Nowdays full color laser copying (~$0.50) is cheaper or the same as inkjet printing at home. Also inkjet prints tend not to be waterproof. Most copy places can now print directly from a thumb drive.
Online printing costs have fallen drastically in recent years. I thinK this is due in part to the miracle of digital printing technology that eliminates much of the setup cost. For example you can get 250 full color business cards from ViataPrint (http://www.vistaprint.com/business-featured.aspx?xnav=CollageLink&xnid=aCalloutbusiness) for about $4 plus shipping costs.
I would consider doing the printing outside at either the local copy place or at a discount print shop. It has been my experience that the cost is less or the same and the results are far superior. Print shops also have a broader range of product offerings such as refrigerator magnets, post cards, posters, etc. Check out the VistaPrint offerings.
Graphic Designs
You seem to be giving away the main thing you have of value to offer the customer; your graphic designs. From what you describe someone could buy a small number of business cards from you for $10 and then be able to replicate your design in perpetuity at any printer of their choice.
Now having said all that, I still think you have a good idea and that you have something unique and of value to offer your customers; your graphic designs. Your marketing focus should be on the value you can offer rather than on the price of printing copies. For example, from what you describe and the examples you provide, a fair price for your efforts could be something like $300. From your description it would appear that your target market would be resistant to bear this cost. So the question is then how to package/market your value in a way that will be accepted by the market.
I suppose there are any number of ways to accomplish this.
I am not an expert marketeer but perhaps you could bundle your designs with a Complete Stationary Package or better yet a Complete Marketing Package. I think the marketing package works better because it represents opportunity for generating future income rather than being an unnecessary expense.
Just for the sake of discussion lets suppose that we price the Marketing Package starting at a base price of $350. This price includes $200 for your labor and $150 for your costs. So what ought to be in the marketing package? Perhaps something like this for example:
$25.00 250 Full Color Business Cards
$25.00 100 Full Color Post Cards
$25.00 200 Black & White Letterhead
$25.00 100 Full Color Business card magnets
$25.00 10 Full Color 11x17 Posters
$25.00 Shipping/Misc
================
$150.00 Total
You could have variations, maybe even a menu from which people could select the five items they wish to have in the package. There are many other variations but this ought to illustrate the idea.
You could also offer some web design and hosting.
You could try advertising yourself on craigslist.org or in local newspapers and magazines.
Maybe you'll find something helpful in my comments. Good luck with your enterprise.
Rick