spyder

Hi folks, I am retooling an existing screen printing and embroidery business. We have a reasonable amount of volume but we are not profitable. I wondered if there were any simple formulas to calculate burden rate? I have a years worth of financial statements for information. To keep things simple we have our garment costs, add our burden rate (overhead), then we add on profit. we have grown about 20% this year and our screen printing volume is around 1.2 million. I have seen threads that talk about if 1 gallon if ink costs "x" and the screen costs "y"... but it seems to me, much of my overhead is all ready captured on my income statement. We are in a very competitive environment (who isn't) and it seems like every dime added to in price becomes an issue. Couple that with my salesman gets paid based on the profit of a job, (margin added to the cost of goods plus burden rate)

Sorry for the long question but any sage advice will be appreciate.

Thanks

 

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Epic Graphics

Estimate software has a built in profit manager that takes input data for all your overhead costs and supplies and then spits out an hourly rate you should charge. Its kinda cool.

But a word on screen printing profit.

Problem - Screen printers don't charge enough for their work, PERIOD. We are busy undercutting the competition and end up not making profit at all but just breaking even. Offer prompt service and charge for it. People will come back because of how you treated them- price is a factor but after all is said and done, it is not that determining.

So, I set my shop up like this.

Shirts are ASI priced for orders below 48. For my shop this is the most common amount. I discount the shirt price there with 1.7 1.6 1.5 and 1.4 multipliers. THIS IS THE ONLY THING I USUALLY DISCOUNT !!!

Ink is $1.5 for one color, one side. $.50 more for additional colors, +$.25 per pull for light ink on dark shirts cause they are 2 pulls. At this rate I make $60/hr in production time.

Screen Fee - we are $20 here for a screen and that just breaks us even.
Setup - this is based on how many colors because that determines time in setup. 1 color - $20, additional colors +$10 more.

There you have it. All the markup on our shirts are BONUS PROFIT away from a $60/hr production.

PS - I live in a "poorer" community as well.

Service, Speed of Service, and more Service.

 

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spyder

Thanks for your help. I really appreciate the response.

MP

 

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