My son is a welder fitter with about 5 years shop and field experience. He has many tickets an above average reputation for high quality work and when his company needs TIG welding done he's always the first they call on. Now he wants to start doing a little work on the side and we need some expert help on how to charge for his time. We have a very well equipped shop with a Lincoln Precission TIG 275, Miller MIG 251, Plasm cutter Etc.
He has no intention of trying to grossly under cut local full time welders we just want to be competitive and make a fair return after covering our investment in shop , insurance and equipment etc.
This isn't exactly what you asked for; i.e. "expert" advice, but its something I feel strongly about, so I'll put in my $.02...
Your son should call around to some independent shops and get an idea of the average rate in your area and charge the same. That's what I did when I ran a shop. It was a part-time enterprise for me; I had a full-time job doing something else, and I just wanted to take in enough work to pay for my shop and my personal projects. I didn't try to undercut the pros though; for one thing, its not fair to them, and for another, you can't do that for long, because you will find you are losing money, and you will attract bad customers.
However I always bid fixed price, and I based my estimates on the time I figured it would take a pro to do the job. It usually took me longer than the time I based my bid on because of my experience level.
I'd recommend a similar pricing strategy for your son. The customers will get a good job for a fair price and he will continue to learn along the way.
There are manuals for estimating work of many types. Don't know if such is available for welding or not. There almost has to be as ALL work has to be estimable.
Why don't you check with a local accountant? Some of them probably keep books for other welders and know EXACTLY what they charge -- not that they'd tell you that a particular welder is working for X dollars per hour. Also, they probably have access to some pretty good advisers.
My Shop rates start at $50/hr for shop work, and $100/hr for location work. I have a 1 hour minimum for shop work and a 2 hour minimum for location work. Oh yeah, I do cut deals for some non-profit groups. They get $20/hr.
Best business advice ever: Talk to your customers, ask them what they think is reasonable, they will tell you what the competition charges.
If you get into bargaining, thats good, skilfull bargaining is good for both the seller and buyer, both learn from each other and you settle on the best price.
Our fixed price systems rely on standardization and in welding businesses I would think that each job is different and in a new context.
Don't worry too much about charging the wrong amount, you can always change your rate on the next job (Once you get one job, one thing leads to another as they say and after a few years you can nail up the appropriate shop rate on the wall if you prefer)
Good Luck and Happy Bargaining, Graham
(I give you good price, how much you want to pay, what is this worth to you my friend ....)
I don't think deciding what to charge is priority when you are starting out but it will be in the near future. Taking a few night school courses on how to start a business would be wise as your son develops some contacts and cash flow. Most small enterprises never get off the ground for a variety of reasons. The federal government has an interest in small business being successful. After all who else is going to finance their sponsorshop programs :')) You might try theri website for ideas and help.
Get an idea what shops charge in your area. Cut that by 15%. The idea is not to just pay for the overhead, but to make some money, too. If you start really cutting the legitimate shops, someone will drop a dime on you (rat you out) to various local zoning people, business license people, et al, and even if you do straighten things out, it is a hassle.
Consider doing tradeouts. Trade full value for full value. That is, if you would charge $200 for a job, trade it for what someone would sell for $200. Never take less, but a lot of times, you will control whether or not you consider it a fair trade, and can have the option of charging real money. Also sometimes, people will trade you something worth more than the job is worth moneywise. They may trade you something worth $300 for a $200 job.
You don't have to cut the price way down to attract business. Make good money at what you do, and if you are idle, go out and pass out cards, go fishing, or just take a nap. It is not worth it to work hard and just swap dollars. Plus, if you get a reputation as a cheapo shop, you will have all manner of con men coming in and trying to get something for nothing, or a severely reduced price. You and your son sound like you have enough experience under your belts to know what it is worth.
Another thing. When someone brings you a lawnmower handle, or something that takes ten seconds to spot weld, tell them to catch you next time. They will be a good salesman for you. Or just put a money slot beside the door and tell them to put whatever they want in there for your grandson's education. They're usually more than reasonable. And if you check after they left, and they only left you a buck, you can adjust for it the next time.
I ran my own successsful small printing equipment business for over 30 years and only lost a grand total of $1300.00 to bad debts. I base my success on asking lots of questions and being lucky enough to find a couple of very successful business people who where willing to mentor me through the tough times. However I'm not a welder so even though I can help to my son with the actual business side of things I can't help him with the in's and out's of a businees I have no experience with. The input from this newsgroup has been great and I can't thank you guys enough.
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