Advice on Pricing?

[Nathan Shaffer]

270166
Greetings all,
Asking for some help to figure out pricing. the attached image is a 15.5 piece of acrylic. The customer is cutting material to size all I have to do is burn it. I can fit 10 pieces in my machine and it will take about 12 minutes to burn.

I have no overhead, to speak of. Just pay myself back on the cost of the machine and my time.
For a job like this what things should I factor in making the quote?

Thanks for your advice!
Nathan

[vic casware]

I told a friend who works from home that he should charge his work out as though he has average overheads. In New Zealand I try to charge $3 per minute laser time and $1.50 per min for everything else, setting up the job, packing, unpacking, have a coffee etc. Don't be afraid to make money :D

[Dan Hintz]

I have no overhead, to speak of. Just pay myself back on the cost of the machine and my time.
For a job like this what things should I factor in making the quote?

No overhead should be relevant in figuring the quote.

When you're done figuring the quote, then you look at overhead... if overhead isn't covered while keeping a healthy profit, you need to consider how to cut your overhead or realize the business model you have is not viable.

If you always quote for the minimum value (instead of the maximum the market will bear), you will be continually shortchanging yourself. All of your customers will come back (along with their friends) because you're willing to work your fingers to the bone for little to no profit. the only way you can take on the work is to expand your operation, but you're still not making any profit. Downhill slide.

[Tim Drinkwater]

No overhead should be irrelevant in figuring the quote.

When you're done figuring the quote, then you look at overhead... if overhead isn't covered while keeping a healthy profit, you need to consider how to cut your overhead or realize the business model you have is not viable.

If you always quote for the minimum value (instead of the maximum the market will bear), you will be continually shortchanging yourself. All of your customers will come back (along with their friends) because you're willing to work your fingers to the bone for little to no profit. the only way you can take on the work is to expand your operation, but you're still not making any profit. Downhill slide.

Spot on. Market pricing is what you should be concerned about. You may need to price a bit lower than the market to get started but that tends to be the case with many start up businesses. If your overhead is lower your profit will just be higher. You really should figure on your business paying you rent, if you ever move it to a separate location you will be and then your calculated overhead will spike.

Now figuring out market pricing is a whole different story. The difference between a localized market where the customer isn't going to shop outside of their geographic area and a customer that doesn't mind a UPS shipment can make a world of difference.

[Nathan Shaffer]

Gentlemen,
Thank you all for the feedback.