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Carla Lange
11-15-2005, 9:45 AM
I'm trying to put together a bid for a job. However, I haven't gotten my first electric bill. How much power would a 45 watt use in an hour? I'm trying to figure in all of the different variables, overhead, product cost, long term repairs, ect, but I'm really stuck on the electric issue. Any help out there?
Thanks in advance
Carla

Cecil Arnold
11-15-2005, 10:03 AM
Call your local electric company, they have all the information you need on electrical costs. When building a home here I had an energy audit done on the plans and discovered that 2 6X6 double glazed windows were going to require an extra ton of air conidtioning. Needless to say we did without the windows.

George M. Perzel
11-15-2005, 11:27 AM
Hi Carla;
Worst case your unit uses about 100 watts per hour = 1/10 kilowatt/ hour.
Around here we pay about 12 cents per Kw hour, so your machine costs you about 1.2 cents an hour to operate. In addition, add in your cost of operating a blower/dust collector and air compressopr if you use them. A 1/2 hp blower with 50% efficiency draws about 7 amps@115VAC or uses about 0.8 KW per hour-say 1 kw total with a small aircompressor .
Figure a total of about 13 cents an hour for everything using our rates in NY (expensive here).
Bottom Line?- cost of electricity is neglible compared to other costs.
Good Luck
george

Joe Pelonio
11-15-2005, 11:31 AM
Carla,

I agree, I tried to add it into a job that was going to take 33 hours and it wasn't worth the trouble. More important is to try and determine how long it will take to run and make sure you end up making more than minimum wage for your time! From what I've seen here $60/Hour seems to be a
popular rate.

Lee DeRaud
11-15-2005, 11:53 AM
Worst case your unit uses about 100 watts per hour = 1/10 kilowatt/ hour.

Bottom Line?- cost of electricity is neglible compared to other costs.Agree that the cost of electricity is not really a factor for pricing, but...
That "100 watts" might handle the laser tube itself, but the whole machine probably takes closer to ten times that much, what with blowers, motors, and related electronics. Point of reference: 25W ULS is spec'd at 10 amps (presumably peak) at 110V.

Joe Pelonio
11-15-2005, 12:45 PM
I'm not good at math, but looked up the formula at the time. I added the laser at 45 watts, though it only uses that much at 100%, plus the power supply. I did not add the motors, that was too hard to identify. I did then add in the exhaust fan and since it was mostly vector cutting the air compressor. What it worked out to was 7.5 cent per hour. For 33 hours that's $2.47 total cost. I wish my home furnace cost that little to run.
While I may have messed up somewhere along the line, I have found that in 19 months since getting the laser my electric bill has never been more than $5 (for a month) higher than the previous year, and in a couple of months it's been lower. That's probably weather related, I have a heat pump here at the shop.

Carla Lange
11-15-2005, 9:15 PM
Thank you all for your input. I guess I won't bother figuring that as part of my cost. I think I have most of the other stuff figured, so I should be OK.
Thanks again:)
Carla

Brent Brod
11-16-2005, 7:57 AM
The most dramatic effect on your power usage will likely result from heating/cooling the air that replaces the exhaust from the blower. In my area in the summer, the a/c guy estimates about 1 ton of additional cooling capacity to handle 500 cfm air inflow to replace exhausted air.

After I did all the complicated math for calculating cooling costs, the price per hour was insignificant. As others have mentioned, your highest risk for miscalculation is your time or perhaps the cost of your laser as an investment. I place the daily cost of ownership for my laser at about $30/day. I assumed 7% cost of capital and 50 weeks use per year at 5 days per week. So, if I only use my laser one day per week I'd need to build $150 into the cost of the work that day just to cover the cost of the laser.

Rodne Gold
11-16-2005, 11:46 PM
The easiest way to take into account actual laser costs is to amortise it over 12-15 months , IE divide the cost of the laser by 12 or 15 and work on a 20 day month. So if your laser cost $12k , then it would cost $1k a month and that is $50 a day , 7 hours in a working day , thus its about $7 an hour. There are way to many variables in any one job to actually use a single formula or some pricing program. I also find that if using one's own materials a 5-7x material cost in terms of pricing works very well as a rule of thumb and what you lose on the swings , you gain on the roundabouts For small stuff , sometimes 10x the materal cost is almost too cheap. For example 3mm perspex works out at about $35 per sq meter or $3.50 per sq ft. a 1" diameter disc would cost about 3c , 30c for this engraved is a little too cheap. Complex pricing formulae will just make you waste time in costing. Time based formulae are also a waste as I might have a faster laser and do prep work in 1/2 your time yet still have the same capital cost of equipment and overheads, however we do not go below $1 a minute for the TOTAL time it takes to do a job , setup , positioning etc and that would only be for big runs.
Clients don't only go for price as a determinant of whether they accept your quote. We place pricing as the last factor , Quality and delivery and service are more important to us and our clients. Pricing is one of the most difficult areas and in reality only experience helps. Of course you can also do what my competitors do , and that is call for quotes from another laser engrving co and then use that as a basis for your pricing. We never do that , but it happens all the time to us.

Nick Adams
11-18-2005, 12:23 PM
My pricing formula is very extensive.

It took me about 6 hours to create it and about another 2 hours to port it into a PHP script I can run from my website anywhere in the world I have access.

Main things I took Into account was

Material
Laser Cost (It is a "needed" item/tool)
Time
Cost of operation (I check monthly with my Elec, and Gas company for thier prices so that mine stay current. Takes 3 minutes to get both numbers once a month.)

Material scales in cost

Base cost x7 for most customers under 10 quanity. The formula then scales up to 10,000 in replication or 1000 for replication w/changes.

The cost per piece goes down with quanity. Always charging full for usage of a sheet.

Laser Cost

Pretty well did what Rodney was speaking of and took laser purchase over 15 months down to the minute. Always rounding up to the next full minute.

Time

Time = total production time. Total is including material placement/prep, Artwork/Layout time, and actual laser run time. All of this scales much like Material as far as cost per minute. The more they have done the less I charge per minute. Always rounding up to the next full minute.

Cost of Opertaion

Cost of operation Is per minute cost of Elec,gas (to replace heat lost due to exhaust fan) x machine run time.


Ok with all of this figured out

Material Cost + [(CoO+LC+Time)minutes of production] = Cost of Product to customer

Many variable would need to be pluged in for your own business area to make sure that you are still competitive. However this formula works for me. My spreadsheet that was ported to a PHPscript was huge. with tons of variables and such.

My first small script that I created can be accessed on

www.newtech-computers.com/scripts/sheetcalc.php (http://www.newtech-computers.com/scripts/sheetcalc.php)

Admin/adamsn to login.

I poped this one up for you guys to look at. I no longer use it because it didnt take into account overhead and such. It was only a time + material run cost calc.

I did however work for a short period when I first started out.

I could use a piece of expensive software of quickbooks to do alot of this kinda stuff. however I don't feel it to be needed.



Quality and timliness of delivery are of my businesses upmost concern. Customer satifaction is also at the top of the list. I feel that quality and delivery time = customer satifaction more then a friendly smile these days. Sadly I don't like being this way but for my line of work it is what is needed.


Are there problems with my pricing, Yes. But when I started running my first company I was told that you price to what the market will bear.

My Grandfather told me when I worked for his business that, " When we are booked solid for 2 month it is time for a 5 % price increase across the board."

In the time that he owned his businesses (all 9 of them) he increased prices nearly every year. I believe his Farm Implement business increased prices 47 times in 35 years that he owned it. I took his advice to heart not only because he was my grandfather but because he learned and knew to be successful you had to demand respect and show respect for your customers and your business.

Carla Lange
11-18-2005, 11:48 PM
Wow, it looks like there's a few more things to consider for a proper bid. Thank you all for your help. I'm just getting started, and I absolutely LOVE this forum.:)

Brent Vander Weil
05-11-2006, 7:51 PM
Anyone know of a software package that is designed to cater to the engraving industry as far as inventory, bidding, billing, quotes etc...?

Dave Fifield
05-12-2006, 4:44 AM
Carla, when you have the bid worked out by math and written up, use that as a minimum and then ask yourself the following:

a) What is the end product?
b) How much is the customer going to sell it for?
c) How much profit is this customer going to make?
d) Is there any competition (real or imaginary)?
e) What kind of car does the customer drive?
f) Where does he/she live? Are they well off?
g) etc.

Based on these largely subjective quantities, you can make an educated guess at just how much the job is really worth to them and what their pain point is. Seriously, I would 4x or 5x your calculated bid price and deliver it while calmly looking them directly in the eye, then adjust downwards from there, depending on their reaction.

Good luck,
Dave F.

Joe Pelonio
05-12-2006, 7:57 AM
Brent,

Not that I know of. I've been doing it for two years now and still adjusting. I have settled on $60/hour setup with 1/2 hour minimum for doing anything with design or manipulating the artwork, then I double the material cost and charge $1/minute actual laser time. That is meant to include not only the usual overhead but something to save toward eventual machine repair costs. Something really simple like one name
badge or 2"x8" desk name plate I'll do for $10 or less for regular customers, otherwise I have a minimum job price of $10. In the case of a really big job I'll do some discounting if I get a deal on materials. Most recently last week I had a job that took 3 4x8 sheets of 1/4" acrylic, my supplier gave me a wholesale full sheet price and cut it to 12x24 free so
I was able to pass on some savings. This was for sales at a show, and she called yesterday to say she was sold out two days before it was over and I'd better order more material because she's taking orders for lots more.

Mark Mullis
05-12-2006, 8:18 AM
Just curious Joe, what did you do to these 12 x 24 pieces of acrylic that makes them sell so good?

Joe Pelonio
05-12-2006, 10:03 AM
They were a variety of templates for long arm quilters. Engraved with her company logo and different grid patterns on the bottoms, many sizes of circles and a bunch of odd shapes that would mean nothing to us non-quilting types. They had a booth at a big Kansas City show that started Wednesday and sold out some items yesterday. What would you do with this thing?

http://us.st11.yimg.com/us.st.yimg.com/I/yhst-79070301531217_1897_18234134

Dave Jones
05-12-2006, 10:18 AM
Hmm. Don't recognize that state outline. Is that one of the states just north of Texas?

:D :D