In the last few months I've been moving equipment , carport , and stuff to Mountain View AR . Today I altered the mounting config on a supercharger for my neighbor , the first paying job in the new shop . I think I've found a niche here , as far as I know there's not another "odd job" machine shop in the area . The neighbor have given me an in to the local fast-car crowd ... that first job is altering a Jag supercharger for mounting on a Ford 5.0 motor . Hey , I always wanted to be involved with building fast cars and bikes !!
I think there's a good chance that between the shop and doing handyman type work I can do pretty well . It helps that we have basically no bills - the mortgage on the Memphis property and day to day living expenses come to just over $1500 per month - and everything else is paid for . . And the wife , working at WM righ now , is trying to get a teaching position here . And hey , if it gets really tight I can always go work at WM myself .
I grew up (ages 5-1/2 to 12-1/2) on LRAFB and in North Little Rock. When we moved to CA, I happily left about half my allergies behind. When I moved to OR, I happily left another 35% of them.
Excellent. That should get you some interesting rides.
As far as shop rates go, you might check the going rates at machine shops and auto repair shops to come up with what the market will bear.
Whatever else you do, be sure that they're enough to cover upkeep and taxes on the machines and buildings, and consumables and all that. You don't want to price yourself so low that you just slowly sink into the ground.
Yup. If you are going to go there, go there seriously. Sometimes this may lead to not going there, otherwise it leads to a greater liklihood of success. It's far too easy to go low and go out of business.
When calculating my shop rates, I include:
My "wage" not ever to be confused with the shop rate.
Self-employment taxes.
Fudge factors for retirement and health care (while "the day job" may pay that now, the first can always use more and the "moonlight" job should contribute, and the second is good to build in for the eventuality of the day job going away, or the shop becoming the day job.)
Utilities and land taxes.
Quite possibly some business-specific liability insurance. Can be surprisingly affordable. May never be needed. Good to have if ever needed.
A "profit" for the shop over and above these. Construe it as depreciation on equipment & building if that works better for your head. Or account for those and still put in a bit more for the shop over those.
I also sanity check by looking at what the shop rate is for an auto mechanic in the area, since that is very easy to find posted on the wall. If you come in under that, go up. Alternatively, start there, round up if not a round number, take away until you see what your hourly "wage" would be, and then see if you want to adjust.
All good advice , and all right in line with what I learned in night school ... way back in the eighties . Seriously , I've been in business before , contract labor , been doing the handyman thing off and on for years . This is not a whole lot different from building a fence - direct costs , labor , indirect costs and taxes . Biggest difference I can see is that I don't have to drive to work anymore . Oh , and I talked to a friend who runs a car resto business , he's at about the same price point I am . This is an economically depressed area , no industry but tourism . But hey , the locals got hobbies , and stuff breaks . BTW , the guy liked what I did with his supercharger mount . He's already describing how he wants the mount plates made , plus a split collar mount for belt tensioning . Next one for him will be a press-on collar to repair his oilless compressor . This might just turn out well ...
In the last few months I've been moving equipment , carport , and stuff to Mountain View AR . Today I altered the mounting config on a supercharger for my neighbor , the first paying job in the new shop . I think I've found a niche here , as far as I know there's not another "odd job" machine shop in the area . The neighbor have given me an in to the local fast-car crowd ... that first job is altering a Jag supercharger for mounting on a Ford 5.0 motor . Hey , I always wanted to be involved with building fast cars and bikes !!
In Stone County Arkansas it's a bit lower than that . A good friend runs a car resto business , he gets $35/hour , the Chevy dealer is at $47.50 . Folks up here don't have a lot of money , but then the COL is lower too . My rates are going to be around $35-40 , depending on what and who .
By "one off" I was intending to mean jobs where someone wants to make (or repair) a whatsit as opposed to a manufacturing job where you cost the material, cost the electricity, cost the machine operator's cost, cost the resale of the scrap, and so on.
But if shop costs are $65 than how much is the machinist's salary? We used to figure that we had to charge at least twice the salary to cover salary, and overhead such as annual leave, tax, insurance, etc., profit was on top of that.
In California..machinest wages run from $10-30 an hour. Most small shops the guys make around $15/hr, in bigger shops like Boeing etc etc..it runs to the high end and a bit beyond.
So those numbers fit into your formula nicely.
The guy that charged my client for fixing his turret last week, charged about $65 or so per hour. That includes all the machinery, materials, etc etc and all the insurance etc etc.
I don't know if you're aware of it or not... but supercharged engines use low compression ratios. My supercharged cars ran 7:1, and my turbocharged car ran
6:1. If this 5.0 "Highly Modified" engine was designed to be normally aspirated it "could" have a compression ratio in the 11:1 or 12:1 range. It would detonate & destroy itself within minutes if you made any significant boost at full throttle.
Bob , it ain't my car ... that said , this guy has been building motors for years , been down the turbo road and didn't like the lag . I'm pretty sure he knows what he's doing . His latest build is supposed to be able to turn something like 14,000 RPM's - I didn't know a V8 could spin that fast !
That's the "Loaded Labor Rate", when they figure in all the costs of having the employee work for them - social security and other taxes, Union Dues and the companies cost of dealing with the contract talks every four years, the retirement plan and 401K and ESOP contributions, Medical & Dental, uniforms and cleaning, water and soap in the bathrooms, vacation pay for the worker and the cost of the Temp taking their place etc. And the portion of the Supervisor's and Foreman's and Department Clerk's wages allotted to keeping the worker working and handling all that paperwork.
The worker might be clearing $20 "Plus Bennies" - it costs Ford $65 for them being there. But even though they cost a lot, they get a lot more done in that same hour to make up the difference - they are pulling a complete car off that line more than one a minute, without a lot of rework or failures.
Manufacturing tries to run to low-wage countries like Vietnam and Bangladesh - The worker clears $2 an hour no bennies, and the loaded rate is $20 or $25 - Much higher supervision cost percentage with lower skilled workers.
Unfortunately the productivity is much lower which means the product really isn't that much cheaper, and the reject and failure rates on the products are going to be higher.
Often the companies have to run a testing center in the US and do 100% QA checks on the imported products before they ship to retailers - because it's far easier and cheaper to deal with a 25% failure/rework rate at the warehouse where the repair bench is. Otherwise they have to pay shipping the defective unit both ways, and deal with many irate customers. (Cough-Fanon-Courier-Cough) Especially when the replacement is defective too...
Ford/Boeing/Chevy etc are special cases. They are union. And Unions only make up about 7% (today) of employees. The $65 an hour is one of the reasons unions have been in decline for 50 yrs.
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