By signcraft
Posted on Friday, October 10th, 2025
Ever wish there was an easy formula you could use to check your pricing? Here’s one we learned about from Jim Jackson of Artcraft Signs, Raleigh, North Carolina.
Early in his career, Jim worked in the corporate headquarters of a major company that sold franchised sign shops. They were looking for a simple “guideline” formula that the franchise owner could use for pricing—one that would result in adequate profits, fair pricing for the client, and also protect an inexperienced franchise owner from underpricing his or her work.
After some research, they came up with just such a formula. It’s not cast in stone, and it doesn’t apply to every type of sign work. But they found it works for much of the typical everyday sign work, and that it can be used to check estimates on many types of work.
When they reviewed the annual Profit & Loss statements of successful franchises, they found the cost of the materials they bought (called Cost of Goods Sold) was usually about 20% of their gross annual sales. This meant that on average, materials were about 1/5 of the selling price of most of their work.
The formula was simple. Adding up all of the material costs involved in making the sign and multiplying the sum by five would give the franchise owner a workable selling price. So if the material cost on a sign was $135, the selling price would be $135 times five, or $675. It’s a helpful reference tool that’s quick and easy to use.
Jim went on to own his own shop for years and used several methods for estimating selling prices for his signs. Starting with a solid knowledge of his hourly shop rate (as calculated using Jeff Cahill’s “Hourly Rate Worksheet” from SignCraft), he sometimes used the time-and-materials approach or SignCraft’s Sign Pricing Guide for estimates. He also continued to use the “five times materials” formula as a way to check his estimates for routine signage. Using more than one approach lets you use the comparisons to make sure your estimate works.
“This approach works quite well,” says Jim, “and allows for some fairly decent business financial planning, which helps me stay on track with the cash.
“Of course it isn’t always on target. Say I do a ‘Store Hours’ sign and use just a few square feet of vinyl. The ‘five times the cost of materials’ price would be too low. Likewise I would hate to go letter a window for five times the cost of materials because the labor component is driving the cost more than the cost of the materials. The same problem happens with a hand-lettered sign, where you’re using 3 oz. of 1Shot enamel and spending four hours lettering.
“That’s why I use multiple methods for my pricing, especially on more complex or custom signs. But the ‘five times the cost of materials’ method is a good self-check mechanism for routine work and fits in nicely with an actual business and financial plan.”
As Jim notes, it’s important to know that this formula is for “routine” signage. It would not be accurate for a custom sign or any sign that requires considerable production time, such as hand carving, hand lettering or complex fabrication tasks. Nor will it work on very small signs, since the material may be minimal, but the amount of time required can be about the same as a larger sign.
This formula requires that you accurately estimate the cost of all materials. If you overlook material costs, or “throw in” things like delivery or installation, you will underprice your work. Any tasks beyond those involved in making a routine sign must be added to the estimate as additional items.
There’s no doubt that pricing signs is one of the toughest aspects of the sign business. A sign person needs every resource available to make sure that they are accurately pricing their work. Pricing tools like this helpful formula, SignCraft’s SignQuote Pro and the Sign Pricing Guide help you avoid consistently underpricing your work—which sadly has meant the end of many sign businesses.
