Bryant Gillespie: All right.
This is Bryant and welcome to the inaugural.
Fantastic, better sign shop podcast.
My co-hosts Peter.
Karuna's the sign shop Yoda.
Peter Kourounis: Thank you for pronouncing my last name.
Right?
I appreciate that.
The other
Bryant Gillespie: cohost, Michael Riley, the baby sign, shop Yoda,
Michael Riley: baby Yoda,
Bryant Gillespie: the baby Yoda.
What is what's your latest nickname?
Do we, do we give you another one or no,
Michael Riley: we just want to, we never gave me another one.
Now we need to, we need to brainstorm on that.
Bryant Gillespie: I saw that you put.
That, that article that you put up on your blog had me as sign, shop Yoda as well.
So I feel like we need to get like clear on who's Yoda and who's
Michael Riley: not w we need to expand and like other Saifai universities as
well, get to get away from star wars.
I'll be spots.
I'll be this online shop Spock.
Nice.
Bryant Gillespie: Today, we're talking pricing problems.
Boom.
As Peter says, let's jump right into it guys.
Peter, you're the only one that still has a sign shop.
What's your number one pricing problem.
Peter Kourounis: Mike, am I the only one I don't have manage?
Well, all right.
All right.
Well, yeah.
That's all right.
So, okay, so I'll, I'm the only one with the sunshine.
That's interesting.
Fucking great.
Well, anyway, here, listen number one, number one, most common problem that
I go through right now is not really knowing if, how much profit I'm actually.
Right.
And whether I'm too cheap or too expensive, I mean, this is, I'm sure there
are many side shop owners out there, many prayer and shop owners out there that,
that tend to have the same, same problem.
But when I give out a price, what is the, what is the backbone behind that price?
What is the knowledge behind that price?
Is it.
Am I neglecting the customer's needs by not asking additional questions.
Is it, is it a matter of just get them a price so that they can say yes or no?
Am I really taking the necessary time?
There's a lot impact a lot to unpack, excuse me, in that topic
there of whether or not my price is too cheap or too expensive, but
that to me is the biggest problem.
What are you guys?
Well, let's, let's
Bryant Gillespie: dive into the first one, right?
Is it too cheap?
I can tell you from experience in my old shop, we were always, always,
always busy and it felt really good.
You know, you get to the end of the day and there's 20 jobs that you've had.
But when you start to look at the actual numbers are at the end
of the year was a good example.
Like you look at all that work that you've produced, and then you
start looking at your profit and loss and you're like, shit, man.
Like we were really busy, like where where's this money at this?
You know, it felt like, okay, being busy is really good, but as far as the
P and L like the numbers may not, they weren't really translating to what.
Like all the work that we actually produced.
Peter Kourounis: That's a great point.
I mean, I, I tend to think that the profit and loss really dictates
whether or not you're too cheap or too.
I don't know if it will dictate if you're too expensive, but it will
certainly dictate if you're too cheap.
When those percentage points come back, whenever you're reviewing your
financial statements, you can see like, Hey, you know, I'm really low here.
You know, what's a good way to re increase.
These percentages is increased sales increase pricing, re take, but most
people, most people will tend to look at something like that and immediately
think they have to cut costs.
You know, cognitive costs will also increase those percentages,
but may not be the right decision.
Does that make sense?
Yeah.
I feel like that's like,
Bryant Gillespie: at some point it's like the like just drink
less lattes kind of argument for like your own personal budget.
Like, ah, Hey, if I just cut out lattes and I use this as an example, because my
wife and I drink like $12 worth of coffee at the coffee shop every single day.
And like, you look at it and it's like, Sure.
That's like 400 bucks a month that you spend on coffee that like, you could
just buy like the K-cups and yeah, it'd be fine, but yeah, like we enjoy it.
We could spend it.
Why not?
But yeah.
Expenses, Mike.
Sorry to interrupt.
Michael Riley: Oh, no, no, you're you're fine.
So yeah, like when you say you look at your P and L.
Because Peter, what do you mean by that?
You mean, you know, I need to reduce overhead.
I need to like, get sharpen my pencil with my vendors.
Peter Kourounis: Yeah.
So let's, let's, let's put up a metaphorical profit and loss
statement in front of you, right.
Let's just argument.
And a really say you sold a hundred thousand dollars in sales for that period.
If your gross profit margin is.
40% let's say, but then you take a look at.
Your overhead and you're at your you're at your bare minimum
on those percentages, right?
How do you increase your net profit?
You increase your net profit by either increasing your sales or cutting expenses.
When I was saying is most people would look at like a hundred thousand dollars
and say, that's all I was able to produce.
And if that's all I'm able to produce, then I have to cut calls.
There's a, it's just a mentality.
It's a way that most of, most of us tend to think a little bit.
Pessimistic than optimistic.
So when you look at your profit and loss and you say, Hey, I can increase
my net profits by drinking less lattes.
Right.
I can, instead of saying, I can increase my net profits by penetrating this.
Going into more costumers raising my prices and increasing
those percentage points.
That way I tend to be more top heavy, you know, glass, half full kind of guy,
you know, thinking if I, if I did 500 grand or a million dollars in sales,
how do I reach 1.2 million, 1.5 million.
I'm not looking to increase my bottom line by.
Making those cuts which is often a problem that I've seen in the past.
Even with, even with, you know, owners that I've met with, you know, they, they
look at like, Hey, I only did 30,000 and I can't afford my rent this month.
So now I can't afford them getting anybody.
Right.
And I
Bryant Gillespie: got to get out there and sell more.
And that's the case and that,
Peter Kourounis: and that's like cutting the head off of your operation.
You know, like I can't invest the money into, into new sales coming
in because I need to pay my rent,
Bryant Gillespie: the marketing budget, you know, that's to me,
like, I I've always like saw people in that scenario of like, Hey, I
can't afford to run ads this month.
And it's like, Like to find that somewhere else, man.
Yeah, like, like the other part or the other problem with it, like looking
at it from the expense side is like, there's, there's a, a floor there, like.
There's a limit of what you can actually cut and obviously, like it's not going to
be a lot of fun depending on what you cut.
Yeah.
Depending on how much fat you've got in the budget, but
let's say you're a reasonable, reasonably smart business owner.
You probably already optimized your budget really well.
Or at least to a certain point that you're happy with it.
Peter Kourounis: Yeah.
I mean, when you're, if you're a new.
Person.
I'm sorry.
If you're a new business owner, new person, if you're a person that's
looking to get into this business, you've probably been educated to like doing
a forecasted projection, a proforma.
If you will, something that's really going to give you some substance
to what you're about to enter into.
So you have to factor in.
Labor, overhead marketing budgets, you know, and get all those pieces
together so that you know, that this is what you have to do and what are
you going to, and this is how much you need to invest to get to that level.
Now I realized the topic of this question is your pricing.
How do I know if it's too cheap or too expensive, but it really does.
It's a very big topic that impacts a lot of things.
A lot of decisions that have signed shop or a print shop owner needs to come.
Unwrap right.
If they're not looking at their financial statements, well, there's problem.
Number one, numero UNO at the top of the hell.
And that's your biggest concern.
Let's use those financial statements to make decisions on
the day to day of our business.
Right?
And, and that, that to me is something that I preach.
I coach I consult with that is the number one thing that a business
owner needs to be focused on in my mind is their profit and loss.
Being able to dictate.
Day-to-day decisions that they go, that go on in the shop, like raising your prices.
Bryant Gillespie: What's the.
Mr.
Coach expert consultant, like what is the, what's the number
one thing on the profit and loss.
Like you pick up my profit and loss for my shop today.
My theoretical shop, as we've established, like, what's the first thing you're
going to look at or what's what do you put your finger on and say like,
Hey, this is your pricing's off.
Or like, Hey, you need to, like, the sales are too low.
Like, what are you, what do you put your finger on first?
Peter Kourounis: Yeah, that's a great question.
Everything's stems from sales, right?
So what did you, what were you able to do with all first look at your sales
for that, for that period of time?
If it's no matter what the number is, the correlated major categories
of your profit and loss need to have the proper percentages in order to.
Justify those cells.
So in other words, if you did a hundred thousand dollars, I'm looking
for something, your costs of goods to be anywhere from 22 to 30%.
Of that number.
If it's higher, we that's, that's going to be a red flag.
You know, you're spending too much on material for the
prices that you're selling.
You know, you're not charging enough for the raw goods that you're buying,
you know, so if you're, if I'm seeing a number that's 40 or $50,000 in cost of
goods, and I'm seeing percentages that are 40 or 50%, that's going to stand out
right away before we even go to the next.
Portion of your profit and loss.
You know, we'll look at labor is labor making up 25 to 30% or in these
days it probably could be higher than 30%, but is it making up the proper
percentage of what you're producing?
If not, well, now you have a you have a labor issue, you know, you have.
Maybe you're paying your employees too much.
Maybe your, not, maybe you need to cut back on hours, but again, just like I
said earlier, I've mentioned the word, just cut this out, just there, you know,
it all goes back to the number one thing.
What did you do in sales?
What did you do?
And I tend to live on that, that top part of the equation.
You know, what is.
The answer to really fix your problem is more sales.
How do you get
Bryant Gillespie: that?
Yeah, I can't imagine going to an employee and just like, Hey Mike,
we're going to cut your salary because we didn't do enough in sales.
How's that going to
Peter Kourounis: go over?
Usually that usually what happens is that that, that conversation
really doesn't happen in the world.
But what does happen is the owners.
Mike's not performing the way I need, so I need to kind of dip into my pocket
to invest into that business again.
So now it's costing me more money until I get busy again.
And then I put that in quotes because that's what a lot of people do.
Like get busy means we're making sales.
It doesn't always mean that you're profiting on your sales
when you're busy, by the way.
Like, I like people that say that they're busy, but good.
Busy is better than bad.
Busy.
Yeah.
Bryant Gillespie: Yeah.
That brings to mind a story.
Like one of the first consulting clients that I ever took on years ago.
Really nice guy had a small sign and print shop, kind of a, a remote area.
It wasn't in a large market, one of the quotes, and we did like a discovery,
you know, talk to a bunch of his people.
They were doing probably, I want to say it was like 450 $500,000
a year in sales, which is.
It's a common starting point for a lot of people that may be listening
to this, or just in the industry as a whole, for a really small shop.
He had like three or four people working for him.
I still remember like this quote that I pulled out from our conversation and
put into this report, I wrote for him, he said it plain as day on the call.
He said, I feel like.
All I own is a job.
Like I'm working for my employees.
Like they make more money than I do per hour, just because we're
so busy and I'm spending 60 hours a week working in the shop.
And if you, you know, and he did the math.
Like it, his salary plus the profits that he was taking home as, as the owner
on a per hour basis, we're like $5 less than what he was paying his highest paid
employee per hour, which I'm not sure how you'd feel about something like that.
But as a business owner, like if you're not making a profit, like
why are, why are you even doing it?
Yeah.
If I can't create the lifestyle that I want for my family out of
it, you know, why, why, why punish yourself for 60 hours a week?
Peter Kourounis: I would not know what to say to that sign, stop owner of yours,
but what I probably tip toe around the, the obvious statement is that he bought
himself a job instead of a career.
Right.
And.
You know, I, I, I, I think that this industry, whether you're
in a printing industry, whether you're in the sign is your street.
It's got a lot to offer.
I mean, we've all been there.
We've all operated in shops.
You know, what it offers us is a sense of being human.
We, we literally are individuals that are designed to help other
businesses in our community.
That's what we, that's what we get into this business for, you know, it's it
offers nine to five business hours.
Monday through Friday, you get weekends and holidays off.
It's a really great industry.
I mean, I can, I love it.
I I've made my entire career in this industry because of these
because of what it's allowed me to do as a, as an industry.
Spent it allowed me to have the time to meet my wife and to develop my
family and be moved closer to my family and have those relationships
with friends and family that are crucial to our everyday normal life.
Right.
But if you're that type of owner, that's putting in 40, 50, 60 hours a
week and you're 30, 40 hour employees making more than you because.
Your you can't afford to hire more help or what not, it's, it's a matter
of stepping away from your business.
That would be my first key advice is you have to step away.
You have to step away to get fresh eyes on what you need to do.
Whether that's a week, two weeks, I don't know if you could shut down for a month,
but what you're doing is not working, what that person is doing is not working.
Mike.
Michael Riley: Yeah.
Yeah, no, I, I agree.
I mean, I think everybody is, at some point in their trajectory in this
industry will fall into that trap.
I know I did.
When I first started out and had my shop, you know, you, you, you're
afraid to lose jobs, so you price them.
So that you get the work, right?
I mean, I think, I think especially new people in this industry, they priced to
get the work is they're afraid of that customer turning around and walking out
and spending that money somewhere else.
There's a psychological barrier.
There, there's some
Bryant Gillespie: little thing in your head.
That's like this person is in front of me and they're wanting this particular job.
And you just like.
Eh, okay.
500 bucks.
Yeah, that sounds good.
Yeah, let's go with that.
We're like, this is
Michael Riley: my portfolio, right?
This a little great on my website when I'm going to lose my ass on this job,
just for the bragging rights to say I did the job, like I've done that.
Everybody does that in this industry.
It's a, it's a dangerous trap to fall into, you know, cause once you start
doing that, it's really hard to break that habit and get back out of it.
And I I've seen people that have been in this industry for 2030 years.
They can't figure out why they're not profitable.
It's because they're still doing that because they're
afraid of losing the customer.
They're afraid of losing the job.
So they price it low, or they're looking at what their competitor,
you know, Jimbo's lawn care and yard signs down the street.
We'll do the sign for half.
What I can do it for, you know, every, every town has one and he's working
out of his spare bedroom with a cricket and he gets crappy work, but
he'll undercut everybody in town cause he doesn't have an actual business.
Right.
So many people fall into the trap of trying to compete with those guys.
And that's just, you know, that's super dangerous.
I, I see a lot of people making the mistake of comparing their pricing
to their competitors, trying to base that on what, what they charge anyway,
which is dumb because your competitors don't have the same overhead as you.
They don't have the same brands and employees and payroll
and burn rate that you do.
So why are you trying to price according to.
Their business model, which is entirely different than yours.
And then that's how you fall in the trap, or it's a one big way of falling into
that trap of having a very expensive job that you have to go through every
day that pays you less than you make it.
Talk about it.
I don't usually.
Breaking that cycle.
Bryant Gillespie: That wouldn't be bad.
I do.
I mean,
Michael Riley: I'm not saying that there are times I'd rather work at taco
Bryant Gillespie: bell.
What's your go-to at the taco bell.
What are you, what do you mean at the taco bell?
Michael Riley: Oh, man.
I mean, it depends on what, what what's in season.
Like if you've never had their nacho fries, let me tell you.
They don't have them all the time, but if they've got the nacho
fries, you gotta get on that.
They're they're amazing.
Otherwise just give me a plain old bean burrito, buddy.
That's my go-to.
Peter Kourounis: I used to be a fan of their Mexi melts
before they got rid of them.
Like I was like, why did you get rid of your myth and your mix?
If you're new,
Michael Riley: you remember.
That's oh God, those were so good.
They gave me a little plastic container with the bubble
and like the red sauce on it.
I mean, those were mind-blowingly good.
And they got rid of
Peter Kourounis: when, when, when you're, when it's late night and you're working
in the shop, there was nothing better.
I, when it comes.
I'm just going to straight.
I'm a straight, like three tacos, maybe, maybe a chicken and cheese case idea.
My wife likes the cheesy gordita crunch, but when you're like every,
when you have your staff and they're all like, kind of working to beat that
deadline, there's nothing like a, oh, you're like one of those big boxes
of tacos to get everybody motive.
Michael Riley: So it was, yeah, it's the best man.
And I don't eat meat.
I'm the taco bell.
Bryant Gillespie: Yeah, we can get them to sponsor the next episode.
Like what did they find some tacos for taco bell break.
Peter Kourounis: That's a great title signs and tacos and profit and loss.
Michael Riley: We should all be eating tacos while we talk here.
So we have a set.
Oh, go ahead.
Oh, I was just going to say like that.
I think that's, I've seen that trap that so many people
volunteer I've been guilty of it.
I'm I'm sure everybody on this call, I've been guilty of it before in the past.
And I think that's one of the psychological barrier of being
afraid, price something the way it needs to be priced.
So that it's profitable for you is really a hard thing for people to overcome.
It's a terrifying thing to overcome.
It's scary to hand a quote to a customer that you know is high, right?
Like if you, if you've got a customer getting three or four bids and you know,
your price is going to be on the high side of that, therefore you're running
the risk of losing that job, like partying in that customer, that bid with any
confidence that, you know, but at the same time, I'm like you have to have
competence in your price that you're.
You're not pricing to get the job.
You're not pricing.
You can put a three, you're paying to put food on your own table and
make sure that your employees get a paycheck next week, first and foremost.
And that's, I think what a lot of people fail to take into
consideration the equation.
And then, you know, talking about your P and L on what red flags jump out at you.
I mean, there's an old metric to that, you know?
I can't remember the exact number.
You should be only, you know, getting, you know, roughly
half the coach put out there.
If you're getting, if you're getting too many quotes, if your prices
are too low, if you're getting, you know, if you're wanting to do too
few bids and prices are too high.
So that was one that I always used to use as well.
It was like if I'm winning every bid, I'm putting out there.
Every quote that I send out comes back as a paying job.
Like I shit, that's a big problem.
You don't want that.
Cause every one of those jobs is under priced and then your, your margins are
thin and you're working for you stole
Bryant Gillespie: the thunder dude.
I was getting ready to come in and say like Peter, what's the number
one thing that they, the people listening, their pricing too low.
Tell them how right now look at the conversion ratio.
How many quotes do you send?
You send 10 quotes.
You get nine of those quotes.
You're way too freaking low.
Peter Kourounis: That's interesting.
That's an interesting, yeah.
I'd like to, I never quite thought of it that way.
To be honest with you, I've been doing this awhile.
That is something I've never quite thought of.
I would just think that if I'm winning all these coats, they
like who I am as an individual.
They like me as an owner.
They like me.
So everything closed because they want to work me.
But I guess also be thinking, Hey, my price might be
Michael Riley: too low.
That sounds really funny to say it out loud, but it's true.
I I've so many shop owners that are, we get every bid that comes through the door.
Like, it's great.
We're not profitable, but it's great.
I'm like, why are you getting those bids?
Like, they, they, they fucking love us, man.
I'm like, I don't, they don't, they don't give a shit about you.
They're saving money with you.
That's all they care about that.
Yeah.
I, I, it, that plays into the ego too.
And he'd go, I mean, this is, this, isn't a sign industry-specific thing,
but ego is a big thing that drives a lot of business owners in it's easy
to conflate is people love me for.
I'm just whoring myself out and they love that.
And there's a big difference between the two and it can be really difficult
for a business owner to recognize which is which, which one of those,
you know, that they're actually in.
No
Peter Kourounis: that's really interesting unit the religion, cause I
would never know how to figure that out.
Right.
I would say to be in that court, in that rock between a rock and a
hard place, if it's me or if it's my pricing that they like me or there's
my pricing too cheap, like that.
That's gotta be a big question for, for many sign shop owners
out there that are wrong
Michael Riley: with how to find the answer.
It totally.
And there's nothing wrong with liking your customer, your customers like you.
Like I had a lot of customers still do.
I sold my business nine years ago.
I'm still Facebook friends with two, three dozen my customers and still
talk to them on a regular basis.
You know, I consider them.
I consider them friends.
I'll call them places or peers.
You know, that relationship.
I mean, it's a very fine line.
That relationship you walk in business with, with, with with the client or these
really truly my friend, are we doing, why am I, these people really like me?
And you know, the flip side of that, do I really like them?
Or do I like their money?
You know?
So it's, it's, it's a dangerous, slippery slope to let that muddy.
The pricing equation.
And a lot of people do a lot of people let that factor into how much
you're charging and that's really dangerous because then you're,
you're, you know, frankly interjecting personal feelings into something
that's very black and white mass.
That'll screw you in the long run for sure.
Peter Kourounis: Yeah.
You know, while you guys talk, you know, something must came to mind and
I'd love to hear your thoughts on this.
And, and I might throw a monkey wrench into what we were talking about here.
Just a moment, but you know, one of the bigger hurdles for me, even throughout my
entire career is timing with a customer when a customer, if a customer comes in
and you guys mentioned like, you know, Looking at your competitors' pricing
and, and, you know, trying to stay better than what they're offering you.
I don't have time to call my customers or call my competitors and say, what are
you charging for this so that I can be.
In the ballpark.
I don't have time for that.
I don't think I've ever done that.
You know, I do it in a different way, but if a customer comes in and they're
ready to buy, you know, you know, those moments where you get somebody
to walks in or calls you or, and is really like, I need to move forward.
I need to do this to tell you all the right things.
I need to get a price.
Can you get me a quote today?
I need to have this by the weekend.
You know, you got them by the, by the, on the ropes right there at that
point, you know, th that the rattle timing, I got them on the ropes.
got them on the ropes.
They're ready to buy.
You know, they start asking buying questions and that's usually a telling
sign of like, okay, this guy needs to get an estimate out right now.
And I need to find the urgency to get them a price and because they're ready to buy.
And I, and I think that that plays a part into the logic of
too cheap or too expensive timing.
It, you know, it's a very interesting piece because I don't
have the time to do my research.
I don't have the time to evaluate competitors call vendors because
persons urgent immediate right now that they need to move.
A lot of times, my self even would rely on prior experiences
to give this customer a price.
Even though the is not being followed, I'm not calling any vendors.
I'm re I'm going back to old habits myself, because this customer is telling
me that they want to move forward.
They need, they need that sign up by the weekend.
They need it in a week.
I need to get a price from you.
So that, that typically totally do
Bryant Gillespie: that in the past.
Like, especially if like somebody came in the shop, they're standing right in
front of me and they say right in front of you, like, Hey, this is what we want.
Like the pressure there to close that sale then.
And there is huge.
Yeah.
Peter Kourounis: Are you really, really willing to let that guy walk out the door?
Are you really willing to let them walk out the door so that you can do your
research and get them a more accurate?
That's a, that's a ballsy moment and I never let that pur I tried my
hardest to never let that person leave.
I mean, that's like sales 1 0 1.
They, they want to buy this at the time.
Bryant Gillespie: Let's pause for a moment because it, like, I used to
do that same, like shortcut of like, ah, like, okay, like, Hey, this guy
wants some lettering on his truck.
Like it's going to be, you know, let's say like six feet by about two feet.
By the time we get done with his logo, like we just did one, three
weeks ago for X, like, okay.
It's X here's the price.
Yeah.
And it's like, I think it's just like, in that moment, you don't
want that sale to go to waste.
So to say, or like, you, you want to close that right then and there,
but you, I dunno, you got to give yourself some kind of space there
to like get out of, I don't.
Yeah.
I don't know.
Peter Kourounis: You might get an emotional
Bryant Gillespie: reaction for me sometimes, you know, it's,
it's almost like the customer.
Have you ever had a customer do this to you, Peter?
Like you're saving there in that same situation and they give
you, you give them the price.
And they're like I was thinking probably like, $200 less or $300.
Let's say it's like a thousand dollar job.
And then they're like, well, like so-and-so quoted me 700 bucks.
They're like, yeah.
Like what does that, does that like hit you right in the gut too?
Or are you like you
Peter Kourounis: passed that?
No, no, no.
That doesn't actually know that the truth is, is that, that that
is a, that is, that happens a lot.
And what it typically means is that we're off base.
1500 bucks and they get, they tell me they got a quote from $700 and it's,
and they like what I'm presenting.
Typically this person is either not telling me the truth,
that there is nobody else.
That's giving them this price for $700, or I'm just simply not hitting
the mark where they see that.
And that's where I would shift the conversation.
This could probably, I could probably do a whole video segment or two
on value propositions then whoa, how to produce that kind of value.
What questions to ask, to allow yourself to put in, to be putting
into place, to, to assert value.
But yeah, when I get somebody that comes into me and says your brewery $400 over
price, it's I say over based off of.
Nobody else designed the same time as, as I just did.
You know?
And, and, and if they all are a few hundred dollars over me or under
me, you know, I typically will.
I, I switched, I have, and I say, it's called change the variables and
changing the variables means how do I, if they, if they just told you
what, what budget they want to be in.
So how do you make it fit in that budget?
I'm just not going to say yeah.
Because they said, oh, I got a quote for $500 less.
I'm going to say, okay, well maybe we can, I can get you there.
If we change the variables of whatever the sign is.
Maybe if it's not, I don't know.
Maybe it's a different thickness.
Maybe it's a different size.
Maybe it's instead of painting the posts, we're just leaving them white,
you know, whatever, whatever the case is.
But.
Dictate a compensation of getting a value for what they're buying.
Yeah.
And that's what
Michael Riley: totally, totally agree with that too.
You, I mean, it's, that's a big, it's a rule of thumb that I always use
at my shop as well as if somebody comes in and they say, Hey, I got a
price for X down the street and it's.
$500 cheaper, you know?
Well, chances are, you're probably not comparing apples
to apples in that case as well.
I mean, if you're, you know, if you're talking about a thousand dollars sign
and somebody is $200 cheaper than that's a 20% price difference, that's,
that's a, that's a lot, I mean, $200.
Isn't a lot of money, but a 20% difference is a lot of money, which
means that there's something that's not the same between those two quotes.
And I've seen so many people just say, oh, okay.
Yeah, cool.
Well, whatever they're doing it for a hundred bucks.
It's 200 bucks.
You got whatever I want your business as well.
Then, you know, that 20% it just took off.
Was there a higher profit margin of Bob without changing variables of it?
Like you said, so educating your customer and dissecting that
other quote and saying, okay, this is what they're quoting.
Three mil Diaba versus six IJ, 35 versus IJ 180.
You know, they're giving you a three-year sign.
I'm quoting you in seven years time.
Hence the price difference.
Now, if you want me to match that price, I can quote it exactly the way
they quoted it and I can get you there.
But I think that's a part of the equation in that a lot of people,
miss is what are you, what are you quoting against this other customer?
You know, if you're just looking at numbers only, I mean, you might as
well just give them the sign for free.
You're not even charging for it at that point because you're, you're
gonna make the sign for free.
Anyway, if you're not actually dissecting what you're quoting, why
Peter Kourounis: you're quoting it that way, and you want to know.
Why are they talking to you if they've already gotten the price?
Michael Riley: Exactly.
Right.
I think that's, I think that's the most, that's the biggest underlying issue
is if that price is so good and that company is going to give them everything
they want and they love that price.
Why did they not buy it there?
Why are they coming to you?
And you guess what?
They're also going to go to everybody else in town for the exact same
conversation, until they can find somebody who was dumb enough to say, yeah, I'll
match that price without giving them a second thought that customer knows
what they're doing and walk right into
Bryant Gillespie: the gut punch.
Peter Kourounis: Right.
Yeah, exactly.
Yeah.
I'll take it.
I'll take it right in the chin.
He gave it to me.
Give it to me straight now.
I liked it.
I'll put that right back on the customer.
That's a great price.
Why didn't you go with that?
And then be quiet.
Don't
Michael Riley: say that.
I can't answer that either.
Yeah.
They'll, there'll be they'll they'll him on notable stutter
for an answer on that one.
Cause they can't tell you.
They just know, well, I'm just going to keep working until I can get a
better, you know, and then it's.
Peter Kourounis: That's what customs do you want to, but you want, but you
want to know something that customer did walk in and there, and that's,
that's more back to my point is that they're willing to buy right now.
So are you, are you going to just bend over backwards to accommodate their
request that this is their budget?
That's just what they want and cut into your profits.
I I've told you I've, I've done that before.
I think we're all, like you said, we're all guilty of it, but it's that
timing piece because you are, you re like with Brian said, are you really.
Willing to turn down money cashflow that's cashflow of money in the bank
today to do a project, you might even already have the material to do to
keep your, to make payroll, to keep your employees working, to keep the
engine running, to turn that down.
And most people aren't, you know, I would say if I pulled all of my sign shop
owners, I've spoken to they'd all stay.
I'll do whatever I gotta do to make that.
And that's not always the right, the right choice.
Michael Riley: Yeah.
Bryant Gillespie: You want to make that easier for us was appointment only.
We a.
We used to have a small shop on main street.
We had a large format printer, puke, its guts out it.
This was before the CT.
Now mine, we didn't.
So we were convinced we were going to buy the CT.
We didn't have room for it.
We built a 6,000 square foot box, just a steel framed metal building.
Boxed just production facility just had all the toys over there.
And then like, we were then like appointment only.
Like if you wanted to come in and talk with me about pricing on a
rap, like, do we set up a call?
Like it was all scheduled out.
So that like any of those, like walk-in jobs, like, Hey.
Joe, and I just bought this 20 foot boat and I need some bladders for my boat, so
I could get it on the water this weekend.
You know, like that stuff, like I no longer had to make those decisions
because like, they just, they didn't, they didn't come over to the shot.
The door was always locked.
Like any customers that were coming over, I knew who it was and was,
was prepared for that situation.
So I didn't really put myself in that situation.
Michael Riley: Yeah, that's a, that's a good point.
We did that.
We kind of did that too at our shop and we, we didn't lock the doors and
tell people to go away if they didn't have an appointment, but we, we had
a nice show room, but we didn't have office hours and we didn't advertise it.
And we, you know, if somebody walked in and looking for boat numbers and shit like
that, we would refer them to fast science.
Cause we don't, you know, that's, that's what fast.
Sorry,
Peter Kourounis: Peter, excuse me.
Sorry.
Michael Riley: First of all, local fashion was four.
Maybe, maybe
Peter Kourounis: it gets a bad rap man, bad rap.
Now everybody thinks that we do.
Michael Riley: And we had a fast line in our market that, that that's all
they could do was the small stuff.
And that was like, basically if we get every shop in the area, it was like, no,
you need to go to fast signs for that.
Like, we, we get a fast signs and business, honestly, but no,
I mean, that's a good point.
I mean, if you're, if you're operating in a way where anybody and everybody can
walk in up the street in demand and your time and expect your time right now,
you've almost set yourself up to, you know, in a way where you have to do that.
You can't not take those orders on, you can not take those jobs on.
And, and generally speaking in the sign industry, walk in customers aren't
necessarily the most profitable ever.
You know, if you're looking, I mean, I guess it depends on what kind of market
you're in, but if you're trying to sell real signage, nobody will walks in off
the street to buy a $30,000 monument sign.
That isn't how it works.
Right.
You know, it's rarely anyway, people walking up the street.
$50 set about numbers.
And, and, and that creates a whole other level of pressure that
you just, you got to figure out how to overcome from a pricing
standpoint, Peter shaking his head.
Yeah.
Peter Kourounis: I was just thinking, I was just thinking about
that best signs in your market.
I'd love to be them.
If you're handing me all this business, I'd love it.
All the.
Michael Riley: But letters, but lettering and race card.
Right.
That makes me
Peter Kourounis: that's what you want to do
Bryant Gillespie: just to me, like, yeah.
Like I was like, do it all got yeah.
Like, and when like the sign production and like the, the
office that everybody came in.
And you know, we were kind of unique.
We did like ups shipping.
And, and stuff like that as well for the community which
is I wouldn't advocate for it.
I wouldn't recommend like doing any of like that office, like ups store
type situation, but it's something that we did and yeah, it's just like
being right around the corner, running.
Yeah, I large format printer.
You got $3,000 worth of signage, just, you know, wrap coming off of that printer.
And then you step around the corner to take your eyes off of it, or whatever else
is in your queue to sell $50 boat letters.
So you could have just referred to the fast signs down the street.
Just wasn't a good use of time, but Peter is willing to take the $50 boat letters.
That you and I don't want hypothetically, since we don't have all day,
Peter Kourounis: all day.
All day, every day and twice on Tuesdays.
Michael Riley: Now, are you, let me ask you a question, Peter, have you
ever audited those jobs and looked at how much time you spend with the
customer designing and proofing and invoicing and waiting for payment?
Are you actually making money on those?
I mean, I know it's a legitimate question.
I'm not, I'm not, I don't mean to sound accusatory.
Like, dude, you're losing your ass on it.
I'm curious.
Are you actually making money on it is a profitable or is it like a loss leader?
Peter Kourounis: Well, first of all, there is there's the, let me, let me,
let me be specific with something from boat lettering or boat numbers, whatever
you want to call it is it's definitely something that most shops will do.
Simply because they have the means to do it, but I do have a minimum order
amount, so I won't do it for $50.
I don't really do it.
I don't really do nothing.
I don't really do anything in my shop for $50 because of what you just said there,
like the times you speak to the customer, it could take 25 minutes to speak to
them or even put vinyl into the plotter.
So I'm certainly not, I'm mindful of the, of the, of the time allotment there.
Our shop has a $200 minimum.
So if it, if it's a boat members and maybe they got that, this is something
that maybe we could do another.
Call on another, another podcast on, but it's more of if they meet the minimums.
Great.
I'll sell that for $200 and I'll interrupt my entire day for that $200.
Cause I know it's good money that's coming in and it's profitable money
that's coming in at that price.
Right.
If it's three inch, four inch letters and it takes 25 minutes to
weed mass cut hand, while they're waiting, I would absolutely do that.
And I would stop whatever I was.
I was working on for the $200 sale.
Now not many shops would say what I just said, but it also, because it also
depends on the type of shop that you have.
If you're a fabricating.
And you're doing a lot of like outdoor trade show, like signs, channel
letters, things of that nature.
Probably not going to stop your operations to do that.
Maybe you'll get to it when, when you can, but if you're a vinyl shop and
I, and I, I do decipher vinyl shops from production shops very often.
You know, the guys like specimens, like what you're saying, right?
Like.
That's what my shop is.
It's a 1500 square foot facility printer cutter plotter.
I mean, why wouldn't we be able to do that job and get banging it out really quickly?
It's like that quick banner, that quick vehicle magnets, that
all it's in that same category.
If I can get the number that I'm looking for and it heat and it meets
the minimum and I can bang it out quickly, I'll absolutely do it.
Michael Riley: You get a lot of pushback on your minimum,
Peter Kourounis: you know, not nearly as much as I thought.
And then that's something I did this year, by the way.
I, it used to be $50 minimum.
Now it's two, a $200 minimum.
That's just kind of something we did to, I like that.
It's two.
Bryant Gillespie: And most of the shops that I talk to are like
a hundred bucks, 150, but like 200 feels substantial enough.
And like, at that level, like I probably, you know, I don't, I don't know how many
of those, I don't know that I would have like, stopped and like knocked over.
At that point, but like $200, like that was probably profitable
for us back in the day.
I it's just like, like one of the things I, I talked with I can't tell you how
many shops I talked to you at, at shop box, like being in that environment.
Like you, you get to actually look at some of their numbers or like if
you're helping somebody put pricing into the system, like you get an
actual look at the pricing and as.
I seen a lot of people that like, get that, that type of job mixed up with in
the, in the same queue or are blocking like a $3,000 job or like a $5,000 job.
You know what I mean?
If you've got 20 of those small jobs that are getting in the way of a larger job,
you know, that could be a big problem, or maybe it's not depends on how fast
you could get it out the door, but.
Michael Riley: It definitely depends on the type of shop it is to like, like Peter
said, I mean, if you're more like a retail vinyl shop, like a fast signs, you're
going to have a specific production.
Flow set up.
If you're going to be geared more for that, where like, like you said, you're
more like a fabrication, electrical shop where your vinyl cutter is used to cut,
you know, translucent vinyl for backlit faces, not necessarily for knocking
out boat numbers and stuff like that.
Like yeah.
Even a $200 boat number job is even less about the profitability of that job.
It's a massive inconvenience and it's a huge interruption to
workflow when you've got to stop.
Your bread and butter to do something else.
I mean, that, that becomes a major issue as well.
But I'm glad you've got a substantial minimum order.
I mean, yeah.
Like, you know, my time at shot box too, like I would see
the same thing all the time.
People will, one of the, one of the features in shot boxes, you can set
up like a minimum price on an item or something like that, or, you know, line
charger, but I'm going to charge and.
I can talk to me.
How many times, how many shops I talked to you were like your
minimum order was 25 bucks.
You know, the thought process behind that.
Okay.
I'm going to set a boat numbers.
We'll keep beating on boat numbers here.
Yeah.
Like a buck 50 and material in a, in a set of boat numbers, you know, between
the vinyl transportation, you know, in 20 minutes to cut it and we didn't
tape it and send it out the door.
Right.
So that's what, that's what people are seeing.
But you know, it goes back to that upfront time.
I mean, it still takes time to.
Stand there and talk it out with the customer, figure out what they want, zine
it, create your file, get it through them.
Bill it, receive the payment.
And that's where it's so many people don't take into consideration
is just that ancillary time.
It takes to just write up an order and get it to the production floor.
It's not about the dollar 50 and material you have in it.
And the 15 minutes you got a.
You know, you're pulling on our employee or we didn't tape it.
It's, it's, it's all the other time that it takes up.
And it's all the other stuff that it puts on the back burner while you're
producing that set of boat numbers that you're not making that $3,000 job to.
Yeah.
And that's where people feel that I don't know
Bryant Gillespie: the reason people price too cheap.
Peter, why did they price it too cheap?
Peter Kourounis: The fear of losing a sale underestimate.
Now fear I was right here wrong.
That's the way it goes.
Bryant Gillespie: Okay.
Maybe number two.
So there's probably a list of these, but underestimating your time like
Mike is talking about is one of the biggest things that I've seen.
And I've talked to a lot of shop owners.
Michael Riley: I would say the same thing.
Like, yeah, like the fear is big loo the fear of losing a sale.
I'd say it's probably a close second, but.
If there's any like one common thread that I could, I could draw between the vast
majority of shop owners that I've worked with over the years, it's the same thing.
It's that they don't a, they undervalue their own style and they
don't, they don't really stop and think about how much time they have
into a job outside of the actual.
Producing the tangible object.
They don't think about all that other time outside of that, in that I think
that's where so many people fall short on pricing is they don't recognize that.
And then the shops that I've ever seen that are truly profitable, then, you
know, we can talk about the 10, 15, $20 million a year shops, the big guys.
Those guys understand what their time is worth.
And they're not afraid to ask for that, that amount of money.
And if you're not willing for a time, the left the out the door or won't think twice
about, and that's what separates those big shops from the little shops right there.
I mean a mountain above and beyond anything else.
The $20 million shops know what their time is worth.
And the $200,000 shops have no clue what their time is worth.
Well,
Bryant Gillespie: when you go back to the fear thing, Like you, you kinda know
you're working with the fear, right.
But let's say you're, you're not factoring in like the admin time or
the setup time to just throw a cut lope in a file and throw a cut line on it.
Like, if you're not factoring that in when you're pricing, like
you're working with flawed logic.
So like, you know, the fear, like I can, I can like acknowledge the fear, but like,
if, if I don't know what, I don't know, like I, if I've just not factoring that
time in, I'm just like shooting myself.
In the foot before I even get started.
Yeah.
Michael Riley: Well, fear is a powerful motivator, right?
In fear is, you know, something that motivates all of us all
day every day, whether we're consciously aware of it or not.
I mean, everything we do is motivated by fear in some way, but you're right.
Like how do you channel that fear?
And are you using that fear correctly?
And I would say that if somebody is the fear of losing a job is
pushing somebody to just quote the job cheaper, to win the job.
You're misdirecting that fear.
Or you're aiming that fear of the wrong thing, that fear should inspire you to
dot your I's and cross your T's and make sure that you're charging appropriately.
Not I'm just going to drop my pants, get the job because
I'm afraid I'm gonna lose it.
Because if you do that, you're going to lose money or the way you might as
well lose the money and not have to pay an employee for it, lean into the
fear, but don't run from it, I guess.
Bryant Gillespie: Lean into the fear,
so, wrapping this thing up, guys really enjoyed this first episode.
Peter Kourounis: Yeah.
Meet someone better.
This definitely went better than I thought it would.
Bryant Gillespie: I think there's all three of us, right.
Peter Kourounis: All right, the next one.
Bryant Gillespie: Yeah, pricing too cheap.
If you're doing that now look at your quotes, right?
If you're winning 85, 90% of your quotes, you're probably too cheap.
If you haven't updated your pricing because of COVID and supply issues, if you
haven't updated your pricing in the last year or two, you're probably too cheap.
What else?
Peter?
What am I.
Peter Kourounis: Audit your time, your financial, oh yeah.
At the top of the list, audit your time, audit your time, pay attention
to your financial statements.
They tell a story.
But very interesting story.
Bryant Gillespie: Perfect.
All right guys, that's a wrap.
Peter Kourounis: Alright, awesome.
Michael Riley: Peace out,
Peter Kourounis: please.