Precise estimates pave the way to consistent job profitability
The task of accurately estimating your costs on LED channel letter jobs is critical. Your proposal needs to be spot on—too high and you may lose the job to someone else; too low and you may lose money. But once you get the job, then you have to make sure that you can produce what was estimated. This is usually taken for granted, but someone has to state the obvious: Your shop makes money when you accurately bid jobs and produce the jobs at budget.
Under and Over Bidding
Let’s look at the range of possibilities and consider what happens when your estimates aren’t right. If you are consistently under bidding jobs, then you are likely to win lots of unprofitable business. If you are over bidding jobs, then you risk not getting much work, but you have the opportunity to be profitable if you’re able produce at or below your budget.
Now let’s consider when your production of these jobs doesn’t match with what was quoted. If you are under budget, then you can be profitable, especially if you over bid the job. If you are over budget, then you’ll be unprofitable, especially if your estimate was too low.
If you make an accurate bid, then your profitability on the job is determined by your ability to produce the job at or below the budget. In the center of the table below, we have a job that was both accurately quoted and produced according to that quote. You bought the right amount of product and used it on the job and made a profit. That’s the sweet spot you want to hit.
Given that it is critical to your profitability, how do you create an accurate LED channel letter estimate? We can divide the approaches into two main categories – send them out and do them in-house.
Sending Out for Estimates
Most LED suppliers provide LED layouts at no cost as a service to customers, and increasingly sign supply dealers are doing this as well. Typically there is an email address and/or a web site form to submit the job particulars and artwork. Turnaround times are usually 24-48 hours, although they can be longer in some cases. You are not always in control of how quickly you get your completed layout back, but there are some things that you can do to avoid adding any more time: supply good artwork and provide all pertinent job information.
Provide Good Artwork
A blurry mobile phone photograph shooting up at the existing sign is not going to help you get an accurate estimate quickly. Strive for clean vector art whenever possible and educate your customers on what you need in terms of file formats. Standard industry formats such as PDF, AI, EPS, and DXF are the most common.
Submit All Pertinent Job Information
The more information that you provide with the job submission the better, but here are the things that are absolutely required.
Dimensions—height and width of the letters. Just one or the other may be problematic if the file scales disproportionally.
- Can Depth—this is used to determine the correct LED population density according to the supplier’s suggestions.
- Face Materials (including any vinyl graphics)—also a factor in determining the correct LED density.
- Face Lit, Halo Lit, or Both—be specific on this, especially how you want the halo lighting laid out, since there are many variations on how this is done.
- LED Module—If you have chosen a particular LED module, then list it, otherwise indicate that you want the supplier or dealer to use their best judgment based on the other information provided.
- Power Supplies—As with the LED modules, list what you want to use or indicate that you want the estimator to use best judgment.
- Retrofits—If the job is a retrofit and your company did the original job, dig up the files! If all you can get is a photo of the existing sign, then it is very helpful if you include the name of the font. And make an effort to take several good photographs, the more the better.
When critical information is left out, then it requires additional communication back and forth, causing delays. Your job may get put on the bottom of the stack. This leads to the last point: Be available to discuss the job!
The pros of sending your layouts to your LED supplier or sign supply dealer are that it’s a free service and you can be confident in the layout you’re receiving back. The cons are that you may have to wait several days, and if there are any changes or problems, it adds more time to the process.
The second major category for creating your estimates is to do them in-house. This can be further divided into three categories: eyeballing it, generic design or sign design software, and specific LED layout software.
We won’t spend much time discussing the eyeballing approach because this leads to the kinds of problems discussed above regarding poor estimates and poor matching of production costs. This is in no way to dismiss the considerable experience that many folks in this industry have in lighting letters. But it is a tall order to accurately estimate the wide range of jobs that come into a shop.
Several years ago, many of the LED modules, even across brands, were quite similar. It was common to make simple assumptions, such as “one row of LEDs for a 6” stroke width at a 5” can depth.” But now the modules are far more specialized. There are “mini” modules for small letters/serifs and shallow cans, larger modules for bigger letters/deeper cans, still larger modules for sign cabinets, some that are specific fluorescent retrofits, and in general more diffused light across the board. It is not a one-module-fits-all world anymore, and these kinds of simple assumptions can get you into trouble.
So that leaves the option of using software to help you, in-house, estimate the number and position of LEDs and power supplies. Whichever software you choose, the same rules apply as above—strive to get clean vector artwork and ensure that you have all of the job particulars. Since you are directly making the layout, you are in charge of the turnaround time and have all control and knowledge of the job.
Here is the information we are generally looking for in an LED layout
- The number and exact position of the LED modules
- The number of power supplies and how they are loaded
- The density of the modules (modules per meter and/or modules per square meter)
- The area and perimeter of the letters for additional material quoting
The goal of the layout for an estimate is to cost out the job and create a compelling presentation to your customer. When you get the job, the next step then becomes producing the job according to the estimate so that you can make a profit. How do you tie the estimate together with the production of the job? The answer is with a full scale drawing of the job that indicates the exact position of each module.
Think about what happens in the shop even with an accurate drawing – you are looking at a layout on a sheet of A4 paper with miniscule module drawings and you are supposed to figure out how to transfer that to 1200mm channel letters!
It is easy to get off kilter here. Layouts are frequently made at module spacing that is less than the “maximum” spacing for that module. You cannot just pull the modules tight around the letters. For example, you may have a module that is 6 modules per metre at maximum spacing, and this may be what is suggested for a standard can depth. But at a shallow can depth, the manufacturer may suggest populating at 8 or even 9 modules per metre.
So on this 1200mm letter, this can mean the difference between 40 modules at 6 mpm, 48 modules at 8 mpm, and 60 modules at 9 mpm. Multiply this by a set of ten letters, and you have a potential margin of error of 200 modules and a few power supplies.
How do you take this full scale drawing to solve this problem? You send it to your router and mark the module positions directly on the letter backs. Set the z-axis /depth to barely etch the material and either keep your standard bit on there or just switch to a pen.
Clearly there is no ambiguity here as to the correct position and angle of each module. And the added bonus is that this can considerably reduce your labor costs because it removes the “interpretation” of the small printed layout. Your installers can race around the letter and put the modules exactly where they are supposed to be without thinking about it.
A variant of this type of file is shown here – a continuous path with notches to indicate the position of each module. This increases the throughput since the router does not have to lift up and down to complete the module pattern.
This paper pattern shows a continuous path with notches for module placement (.25 scale).
A third option here that is also compelling is to route or drill the module mounting holes directly into the letter backs.
With this approach, knowing that you are producing what is quoted, you can focus on your pricing strategy. The margin of error is minimized considerably. Get the sales/estimating folks and the production folks in the same room at the same time and agree on the layout. Once that’s done, ideally the same layout file is used for both the estimate that is sent to the customer and the production file that is sent to the shop.
The process of creating an estimate for a set of channel letters could be construed as more of an art than a science. At the end of the day, someone has to be the judge of largely subjective qualities, such as the appropriate level of brightness or the ideal color temperature. But you need an established workflow to create a meaningful estimate and to follow through on that estimate through your production process. That and a little bit of cost accounting will help ensure that you’re doing profitable work for the long term health of your business.