How does one bill for your experience

How does one bill for your experience

1 Classie Africa

3D fabricated sign by SignForce

Selling ‘products’ is a relatively simple business model. One simply has to purchase your ‘product’ at the best price possible, calculate the cost of your fixed and variable costs to ensure you sell a sufficient quantity of your product and add on a markup – traditionally 100% – so yo can make a PROFIT on your sale.

The same basic process is required when selling a ‘SERVICE’, except that when selling a service the COST of the service can be a lot more complicated to value.

Lets look at two simple examples.

Example 1 – selling a product.

Cost to buy product – 100 (this value is obtained from supplier’s invoice)

Markup (100%) – 100

Selling price – 200

Example 2 – selling a service.

Input cost of service – 100 (**)

Markup (100%) – 100 (except more often than not prospects and clients will go mad when they believe the supplier is intending to make a profit)

Selling price – 200

(**) The input cost (equivalent to cost to buy product when selling products) is more difficult to calculate as it must cover all expenses including the time, cost and effort from attending the University of Live, as well as all other input costs – include the cost of training, experience, cost of any equipment used to provide service and insurance to name but a few of the input costs.

As the person responsible for keeping our small business alive and afloat, the task of costing can often be daunting and overwhelming, because among the many balls being juggled are (a) ensuring the continuity and sustainability of the business so the team keep their respective roofs over their families heads and food on the family tables, (b) keeping the cost low enough for the prospective client to find it attractive – especially in a difficult economic climate where it almost always seems prospects are more interested in cost than quality – and (c) making sure ALL input costs (including but not limited to those listed above) are accounted for – and with some prospects also ensuring there is sufficient wiggle room to give a discount they are compelled to negotiate.

With all these factors to take into consideration, how does one explain to the price over sensitive prospect that your offer, while possibly requiring a higher up front investment – would be in their best interests in the long term. And always keeping in mind that we don’t know what we don’t know – and this includes who we are competing against, which can influence no less than product, price and relationship.

At SignForce we tend to give the advise for free. It may be built into our costing but if so this is not intentional, because we are all about educating our clients and prospects so that they get the best signage to suite their stated objectives.

If you are in the market for signage, calling SignForce may be your best move yet.

Contact SignForce now on info@signforce.co.za or call +27 (0)11 440 7525 or WhatsApp +27 (0)82 558 6413

Find out more about SignForce at http://www.signforce.co.za

What is the VALUE of PEACE OF MIND

At Height Work

Working safely at height

Is there a price for PEACE OF MIND?

Lets talk about everyone’s favorite topic, INSURANCE, the commercial phrase for PIECE OF MIND.

I once heard a person say if you want to break up a party, simply walk in to the largest group and tell everyone I SELL INSURANCE! If you are lucky you may get as far as asking what they do before there is no one left to talk to.

While the story may not be entirety true, it does have some relevance, as does insurance, the major grudge purchase businesses have to buy.

Why do businesses need insurance – well mostly because of those pesky things called accidents, also sometimes referred to as black swan events, or simply unplanned – and unplannable? – events.

Accidents happen, and how prepared you are for them may have a massive impact on the future of your business, and possibly on your future too. Why, because if your business suffers a catastrophic event, and you do not have sufficient cover – whether it is money in the bank, insurance or a friendly banker – not only can the event destroy your business, if you are financially reliant on the business for your income, if the business has to close, your source of income will most likely immediately dry up as well.

Hence we purchase insurance.

Now what does INSURANCE have to do with signage. The answer is both A LOT, and NOTHING – yes, extreme contradictions.

Insurance for signage can relate to both insurance cover – as in the type of insurance you pay for to cover your sign in the event your sign gets stolen, or falls down in a severe storm and needs to be replaced, or the insurance you take out should your sign at the top of the building that was shaken by a storm, fall ON someone and injure or kill them. This is ALL insurance taken by the OWNJER of the sign to cover potential accidents.

There is also the second type of ‘insurance’, that is the insurance gained from having PEACE OF MIND. Peace of mind is the ‘insurance’ one gets when using a reputable supplier who you feel you can trust to get the job done without any issues – delays, accidents, errors, or any of a number of potential issues that could you upset as a client.

Here is a story that is a great example of where peace of mind could be seen as insurance. SignForce were recently asked to quote to remove a number of signs from a five story building. Most of the signs, even though they were high, looked to be simple. There was however one LARGE (estimated 6 x 3 meter) sign that was in poor shape which could pose some safety risks, mostly as a result of the sheer size off the sign. The last sign however posed some potential visible threats. This sign stood about 6 meters high, going up from the third story of the building and the steel as visibly rusted. Now the rust may have been superficial which would mean it is not an issue, but when removing a large vertical structure, one would be ill advised to ignore such visible risks.

Now that you have the background, when the SignForce sales person followed up on the prospect to see if they were going to go ahead and use SignForce to remove the signs, the representative was told in very un-Christian terms that SignForce had quoted WAY too high as the prospect could get the job done for about 4% of the quoted fee. The prospect informed the representative that this impressive (potential) saving would be achieved by finding unemployed people looking for piecemeal work and giving them some rope (the cost of the rope was not included in the perceived, supposed 96% saving). One could argue about the time value of money in finding people who would be happy to do risky fork at less than minimal rate, but this blog is not about the wide range of competition SignForce faces.

Now it is probably true that using the unqualified, inexperienced , homeless people the prospect would exploit he would have a 90% chance that he would have been able to do the work at 4% (excluding the rope and anchors) of the quoted fee. He would have been happy and would later be able to recount the savings he made.

However, life being life, the unknown 10% – the possibility of the rope breaking (which could happen if cost saving, incorrect rope is used) or the sign falling (which could happen if rope fail or rope is not correctly secured to the wall anchors or rope is not correctly secured to the sign – this is an art that the qualified ropers are taught – or someone falls off the roof or the ladder or whatever lifting equipment they are using . . . the possibilities are close to endless.

IF the 10% happened the perceived 96% saving could vanish and be replaced by HUGE hospital costs, MASSIVE legal costs, EXORBITANT medical costs and laborious labour issues that no landlord wants to face. This is the PEACE OF MIND ‘INSURANCE’ that comes from dealing with reputable suppliers who are responsible, are qualified and have every intention of working safely to feed AND SEE their families on a daily basis, even it if the price to client is slightly higher than reasonable, similar competition.

While the SignForce quote may be perceived as high, it is all relative to what the cost is being compared to. Yes, SignForce cannot compete on price when comparing us to unqualified homeless people who are prepared to work for a meal, and SignForce do have the added costs of ensuring that the equipment we use and the suitably qualified people we send to site ensure the work is done in a manner which is safe manner so everyone can sleep peacefully at night.

If you are in the market for signage – whether to design, manufacture and install, or to maintain or remove, SignForce is available to assist.

Contact SignForce mow on info@signforce.co.za or call +27 (0)11 440 7525 or WhatsApp +27 (0)82 558 6413

Find out more about how SignForce can serve you at htttp://www.signforce.co.za