I've been Asked to be a Contractor

[foreverking]

I'm in a unique position.
First off, I have more than 20 years in the sign industry, mostly in the design field. But also, vinyl cutting, printing, and installation. I've done it all in a vinyl based shop and more.
Now... I worked at a sign company that (after 4 years with this company) the corporate headquarters decided to eliminate the production part of the company and only focus on installing for other companies. I was let go.
The local current employees remaining have now offered me the opportunity of buying the plotter and some supplies (at a huge discount) that I used to use and be a contractor for them. They still need a vinyl guy to cut some things such as window graphics and someone to do the more delicate vinyl installs as I was good at it and they know and trust me and never wanted to let me go in the first place.

I've been asked to work up a price list of what I would charge for installs per hour, vinyl charges, paper patterns, etc.. This is where I'm lost, I've never priced things. I've always just told what our costs would be per square foot, but have no idea what it should cost as a contractor.
Is there any guides or formulas to figure out what average costs should be in this current sign climate?

 

[2B]

you will have to figure out your overhead (Insurance, tools, equipment, licenses) and then what you want to handle Simple to Complex
You also have to figure out how cutthroat you want to be

here is a good example of a recent install that was lost over $
* 138 s.f. of 1st surface perforated window vinyl.
* install must be done during business hours, the manager must inspect/sign off on the quality of work before payment is made
* standard window prep, there is no removal.
The winning bid was $1.95 SQFT

 

[NicMarKro]

you will have to figure out your overhead (Insurance, tools, equipment, licenses) and then what you want to handle Simple to Complex
You also have to figure out how cutthroat you want to be

here is a good example of a recent install that was lost over $
* 138 s.f. of 1st surface perforated window vinyl.
* install must be done during business hours, the manager must inspect/sign off on the quality of work before payment is made
* standard window prep, there is no removal.
The winning bid was $1.95 SQFT

View attachment 166572

$2/sq?! Was this part of a large rollout or a one off? That total doesn’t even hit trip charge minimum for us ☠️

 

[foreverking]

you will have to figure out your overhead (Insurance, tools, equipment, licenses) and then what you want to handle Simple to Complex
You also have to figure out how cutthroat you want to be

here is a good example of a recent install that was lost over $
* 138 s.f. of 1st surface perforated window vinyl.
* install must be done during business hours, the manager must inspect/sign off on the quality of work before payment is made
* standard window prep, there is no removal.
The winning bid was $1.95 SQFT

That's insane. Even as a newbie I wouldn't get off the couch for that.

 

[White Haus]

here is a good example of a recent install that was lost over $
* 138 s.f. of 1st surface perforated window vinyl.
* install must be done during business hours, the manager must inspect/sign off on the quality of work before payment is made
* standard window prep, there is no removal.
The winning bid was $1.95 SQFT

That was for install only or supply and install? Either way, I wouldn't leave the shop for that.

 

[StarSign]

So the employees want you to do this, not the owners of the company? Will there be enough work to cover the nut of the equipment? Will you start your own business and pursue other work?

 

[foreverking]

So the employees want you to do this, not the owners of the company? Will there be enough work to cover the nut of the equipment? Will you start your own business and pursue other work?

The General manager, install manager and project manager of the US location want me to do this. The corporate location is in Canada all they will know/see is the US location hired just another subcontractor, which they already employee about half dozen or so.
I would use this opportunity to start my own business and start doing other work as well (out of my home). Especially as a side hustle, or main hustle till I find a full time job.

 

[netsol]

so, you have been asked to be a 3rd PARTY VENDOR.
the word contractor, to me, has other meanings
I may be mistaken

 

[netsol]

there are complications, not being a "candian company"
years ago, i was a consultant for a company who manufactured in the usa for dibold

they had to have an office in canada, answer the phone in french,
print labels on all packages with french lettering at a specified size
obviously, this was shipping to quebecc, but, not complying incurred lots of fees added to every transaction

 

[Gino]

Cross all your 't's and dot all your 'i's and sign the necessary paperwork and get started. Not many people have the chance to get started with good equipment, a ready-made customer and work ready-to-go.

 

[ColorCrest]

The local current employees remaining have now offered me the opportunity of buying the plotter and some supplies (at a huge discount) that I used to use and be a contractor for them. They still need a vinyl guy to cut some things such as window graphics and someone to do the more delicate vinyl installs as I was good at it and they know and trust me and never wanted to let me go in the first place.

I've been asked to work up a price list of what I would charge for installs per hour, vinyl charges, paper patterns, etc..

The way this is works in my neck of the wood is the company offers the layoff an opportunity by giving the machine and materials and setting the prices they're willing to pay for services. That's the deal I would take so long as I feel completely confident to manage the time it takes to both, deliver the goods and startup a new venture at the same time.

The first thing a startup needs is a regular client, then some time and some capital and then, likely, some understanding cohorts.

Good luck. Other pricing will come to you soon enough.

 

[garyroy]

Where do you put the equipment when you buy it? Is there so much that you have to rent industrial space?
Are you familiar with that procedure and are you willing to enter into a 3 to 5 year lease?
Sounds like a great opportunity and one that's been offered to many during down sizings in different industries.
Many have been successful and have even grown like crazy. But ask yourself one honest question...are you a worker or a business owner or can you be both.
The answer is harder than you initially think. Best wishes, keep us posted.

 

[Notarealsignguy]

We have a manufacturer around the corner from us that sold their products through dealers but also direct. In order to get out of local direct sales/service, they offered one of their employees a similar setup. They leased them one of their buildings and started sending local parts, service and machine sales over to him. He seems to have done well and has a second location now.
I would do it, you can always ask them to tell you prices that would work for them and see if you can back into it. Maybe they would give you a spot to work out of at their place until you got going.

 

[JBurton]

Not many people have the chance to get started with good equipment, a ready-made customer and work ready-to-go.

Plus a customer base that knows what to expect from OP.
But OP, serious question, are you the type of person that can keep up with all the added paperwork, insurance, proofs, material ordering, production scheduling, maintenance, etc. that this would entail? If not, you may want to hunt down one of your former cohorts involved in that side of the business for a part time 'bookkeeper+' type position, and rope that into your overhead calculations.

 

[foreverking]

Where do you put the equipment when you buy it? Is there so much that you have to rent industrial space?
Are you familiar with that procedure and are you willing to enter into a 3 to 5 year lease?
Sounds like a great opportunity and one that's been offered to many during down sizings in different industries.
Many have been successful and have even grown like crazy. But ask yourself one honest question...are you a worker or a business owner or can you be both.
The answer is harder than you initially think. Best wishes, keep us posted.

I'm going to set up in my formal living room. Nothing in there right now but some book shelves and one chair. I'm going to just be cutting vinyl in there and set up a small table for weeding and taping. At this point, I wouldn't need to consider a larger place.
I guess I'm going to need to figure out if I am a business owner. It's nothing I've ever tried besides doing freelance artwork for some people.

 

[foreverking]

Plus a customer base that knows what to expect from OP.
But OP, serious question, are you the type of person that can keep up with all the added paperwork, insurance, proofs, material ordering, production scheduling, maintenance, etc. that this would entail? If not, you may want to hunt down one of your former cohorts involved in that side of the business for a part time 'bookkeeper+' type position, and rope that into your overhead calculations.

I've been doing more than half of that at my former job in the first place. Not too worried about that.

 

[JBurton]

I guess I'm going to need to figure out if I am a business owner.

If they want to sell you the equipment to produce and pay for on a per job basis, most definitely yes. From what I recall, an LLC is the way to go, though I do recall many states having different flavors of corporations that will provide different benefits or limitations. I'd say a chamber of commerce would be a cheap place to find info, or a business lawyer if you'd like to spend some money to get wheels turning faster.

 

[netsol]

If they want to sell you the equipment to produce and pay for on a per job basis, most definitely yes. From what I recall, an LLC is the way to go, though I do recall many states having different flavors of corporations that will provide different benefits or limitations. I'd say a chamber of commerce would be a cheap place to find info, or a business lawyer if you'd like to spend some money to get wheels turning faster.

accounting advice from the chamber of commerce?
while i always enjoy sitting around bulls**ting with joe from my regional chamber , (known him for 25 years)
i don't think i would go to him for accounting advice.

 

[gnubler]

I just had a meeting with my accountant about things like this. He's a wealth of information and specializes in accounting & taxes for small business.

 

[JBurton]

accounting advice from the chamber of commerce?

Not so much accounting as setting up a business, so I guess yea... What do they do, more business development than business founding?