Profit is not a dirty word… repeat that… profit is not a dirty word. This is a mantra that smaller, independent framers should consider. It seems obvious, but in addition to our passion for framing, we’re running a business to make money. Employees are depending on us for their livelihood, and part of being a good employer is ensuring financial stability in our business.

I love my job at FrameReady, and I especially enjoy talking with framers from all over the world. Collaborating with our clients and helping them learn how to set their profit margins are my main responsibilities. During our pricing consultations, I typically ask, “What profit margin would you like to set for moulding, glass…etc.?” The response is often an awkward pause, a few crickets chirping, followed by the sheepish answer, “What do you think it should be?” I die a little inside when I’m asked that, because I worry that this lovely person and talented artisan is undervaluing their hard work. I’m not judging, I struggled with trying to determine what my pricing should be in my own businesses. My reply usually is: “How much are your customers willing to pay?” That is what your profit margin should be.

I received wise counsel from a successful pioneer in the framing industry, “If your customer doesn’t groan or gasp just a little when you tell them the price of framing their artwork, you are pricing too low.” If you are swamped and busier than you’ve ever been, maybe it’s time to raise your prices. Are you charging what you are worth?

Here are some things to consider when you are calculating your profit margins:

1. Know your "break even" point

Just like calculating your household budget, to be profitable, savvy business owners analyze their fixed and variable business costs in order to project a realistic budget for the upcoming fiscal year. It is important to know how many sales you need monthly to meet your operating expenses. Budgets help keep you on track, and just like at home, it’s a good idea to set aside some extra cash for emergencies. FrameReady is a great investment and makes it easy to track sales, inventory, and anticipate what financial challenges the upcoming year will bring. There are many good online calculators that can help you determine the cost of running your business.

2. Determine your average sale

My reply usually is: “How much are your customers willing to pay?” That is what your profit margin should be.

Work Order Reports make it easy to calculate your average sale, and track employee performance. Using those numbers, you can determine how many pieces you need to sell to pay the bills. For example: If my break-even point, including rent, utilities, salaries, etc. is $3000 and my average sale is $300; after deducting my cost of goods, ($100), that leaves me with a $200 profit. If I divide $3000 by $200, that equals 15 pieces over $300 that I need to sell each month just to keep afloat. If I could raise that average sale just $50, (upgraded glass) I would only need to do 12-13 pieces, if I raise the average sale $100, (a fillet) I would need to do 10-11 pieces. Raising your margins, and teaching your employees how to upsell will help your business not only stay afloat, it will enable you prosper.

3. Check your competitors

Play James Bond and be a spy for an afternoon. Take some artwork to your competitor and get an estimate or two. It is vitally important to know who your competitors are and what they are charging. You can learn a lot from other shops. Find out what services they offer; maybe they are missing a niche that you can fill in your area? Big box stores often have size restrictions on oversize pieces. Give their frame shop managers your card and tell them that your shop can do the big stuff…or printing… or engraving… or restoration.

4. Know your customers

If you’re located in an upscale metropolitan area, you may be able to charge a bit more than a framer in a rural farming community. Your local chamber of commerce or small business organizations may have helpful information regarding demographics in your community. You can also use the internet to find out valuable intel about your neighborhood; including average household income. Take into account your community’s age range, cultural preferences and styles, then cater to it. Thanks to a friend who owns a comic book store, I found a wonderful niche market of millennials who love comic book art. Our customers delighted over the extra creative and funky designs we did. It was fun to be creative, and as these young customers mature and become more sophisticated in their artistic choices, they will come to us for future higher-end framing. FrameReady’s customer contact file makes it easy to track customer tastes and preferences.

5. Value your work

Craftspeople are notorious for undercharging for their expertise. There is an old fable that tells of a customer walking into a gallery and balking at the $5000 price tag on a vase. “That’s outrageous! I bet it only took you 30 minutes to make that vase!” The artist calmly replied to the customer, “Yes, it took me 30 minutes to make that vase, but it took me 30 years to learn how.” Look around your shop. How much have you invested in training and equipment? We put our blood, sweat and tears into each piece we frame, and that artwork will hang on our client’s wall for the next 50 years. A $500 charge for a framed piece of art is $10 a year, less than $1 a month to preserve something precious. Definitely good value for money.

6. Track your progress

This will help you set realistic goals and prepare for leaner times throughout the year. Use FrameReady’s sales reports to track daily, monthly, quarterly and yearly sales. Compare sales from where you were the previous year. You may want to make side notes on sales reports detailing inclement weather, road construction, holidays, etc. so you can do an accurate comparison. (Maybe you had record sales in January last year, but this year your sales suffered because of severe winter storms.) As you get more data, you can compare your sales to see when business is typically slow; then plan if you need to use your surplus funds to augment expenses. You can also track the success (or failure) of any promotions you offer to determine the return on your advertising dollars.

FrameReady offers our clients a myriad of training materials to help you adjust your pricing. In addition to our regular help and support, we are happy to meet with our customers annually for a free, one hour pricing consultation. Email us to arrange an appointment. If you prefer to do an in-depth analysis of your pricing, we offer custom pricing consultations for an extra charge. FrameReady has the tools to help you maximize your revenue. Remember that you can be an honest, reputable owner while still focusing on increasing your revenues daily. You owe it to yourself and to your employees to make money; remember, profit is not a dirty word.

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"Mind Your Business", by Sheila McCumby, February, 2023