Don’t Be Afraid to Raise Prices to Survive Inflation

HOW ABOUT THIS WILD world we’re living in? For example, the current state of our beloved industry. Sourcing raw materials in a sign company’s favorite flavors, like steel, aluminum, vinyl and paint (especially paint!) is a daunting task these days. And when you do find what you need, it’s way more expensive than it was last year.

Based on our research, last year .125 aluminum sheet was just over $3/sq. ft. Today, it’s flirting dangerously close to $8/sq. ft. Eight dollars, people! That’s nearly a 240% increase, in one year! And our guys throw 6 x 12-ft. sheets of aluminum through the router table like they’re dealing blackjack at the Bellagio! Steel has quadrupled in price (and somehow seems to have gotten heavier, too).

What about vinyl? We roll through a ton of vinyl: Wrapping 70 cars a month sucks up 25,000 sq. ft. — approximately 35 rolls of 60-in. vinyl plus 35 rolls of lamination to match. Vinyl is a scarce commodity; ordering must be done well in advance to assure enough for your projects. (And when you do get it, it costs 33% more than it did a year ago.)

I can’t tell you about paint … because we’ve been out of our regular supply of paint for two months. A once-proud, brand-name mixing station sulks in a dusty corner, patiently awaiting the time we turn her paddle mixers back on. All while we steadily cheat on her with a new, more available paint brand. (Right in front of her, too!) Course, this paint is nearly twice the cost of that paint, so yeah, I guess I can tell you about paint …

What makes all this worse, price changes can occur daily! Our proposals have always said, “Quote valid for 30 days.” Now they say “15 days.” Many of our clients are giving quotes good for 48 hours! That’s crazy! But that’s the business world we’re living in, and the reason I’m writing this column. During these volatile times, more than ever, it’s critical to the future of your company to pay attention to this rapidly changing landscape.

Do not be afraid to raise your prices. I know it’s not fun to explain to your clients, but your business must stay in business to help their business. And trust me, the vast majority will understand, because they’re doing the same thing with their customers.

Remember, this isn’t about stuffing more money in your pocket this year. Au contraire! This is about survival. This is about being able to pay your vendors. About giving your employees raises. And no piddly-ass $.50 raises. I’m talking substantial chunks that will allow them to survive this crazy time. (I mean, they’re paying $5/gallon for gas too, right?) This is a gut-check right here. But it is also what turns good companies into great companies.

So here it is: Source materials ASAP, keeping a strict eye on what they cost. Have not-so-fun conversations with all your customers — it doesn’t work if you only pass costs along to “some” — while simultaneously passing out hefty raises to all your people, so they can survive (and not leave you for another shop).

Daunting, isn’t it? Welcome to the sign bidness, y’all!

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