How to determine fair and equitable rates?

How do you all determine what to charge someone for welding work?
I have someone that wants me to weld some new floor pans into their
Jeep.
I will have to cut the old ones out, fit the new ones, and weld them
up. He will bring the Jeep to my shop.
Where does a newbie start?
Any help is appreciated.
rvb
--
As Iron Sharpens Iron,
So One Man Sharpens Another.
Proverbs 27:17
Reply to
Rick Barter (rvb)
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Start with an hourly rate for your labor. Don't be afraid to simply charge straight time + materials. I do fabrication for a living now and I tell prospective clients I don't bid jobs, I give estimates.
If he wants to know ahead of time how much it will cost then tell him it will probably take most of 2 days at $50/hour (or whatever your rate is).
Grant
Reply to
Grant Erwin
Be very careful to charge enough, or you'll end up losing money. How much that matters depends on how much this is now your job, or is a sideline, but it still sucks to lose money, or "make" all of 50 cents per hour.
Are you adequately educated about welding around cars (gas tanks and fuel lines, particularly) to take this one on? Are you going to be adequately insured? Folks get away with neither often enough, and then again they don't get away with it, sometimes.
Figure the stunning hourly rate you'd like to pay yourself.
Now add self employment tax on top of that (7.5% or so). If you are going to get all dimwitted at tax time, add the cost of an accountant here, but not being dimwitted is a good thing in more ways than one. You do need to keep records, but it's not very complicated.
Cost of power and consumables to do work. Electricity, gas, wire or electrodes, grinder wheels, brushes, respirator cartridges, etc...
Cost of equipment (spread across work for lifetime of equipment) - welders, grinders, leathers, mask, gloves...
Cost of the shop space (rent or purchase price spread over lifetime of building). Also operating cost of the building (heating, water, anything of that sort not included as a consumable).
Cost of insurance (homeowner's often specifically does not cover doing work at home - plus you may want liability coverage for work done.) Are you covered if you get hurt while working? Are you covered if a thing you weld fails and others get hurt?
Fudge factor for costs you forget (ie, gas to run the truck down to the welding store and pick up more stuff, ads to get more business)
If you run the numbers and your reaction is "that's way too much", ask yourself some dumb questions like "what does my car mechanic charge" - in my case, that was $65/hour the last time I had work done, and might well be $75 today. The mechanics don't take that much home, but the *business* needs to charge that much in order to be able to stay in business and pay the mechanics - and THAT (running a business, not just collecting wages) is where you are operating when you start doing work for other people.
Reply to
Ecnerwal
Labor rates vary around the country so you will need to judge what you think your time is worth. Don't underpay yourself. Take the time to figure out what it costs in time to set up and put away your tools. This will be pretty much a fixed cost that will be added to each job. You also need to figure out how much it costs to weld a certain length with certain consumables. For example .035 70S2 wire costs so much per pound and will weld so feet per pound at a certain wire speed running a straight bead. The electrical and gas costs will also need to be figured out. I know it takes some time to figure this out but then you can use all your data as known costs. Then you can use the fixed costs per job and add your labor. After a while a lot of it becomes kind of second nature. ERS
Reply to
etpm
I handle this by carefully explaining how HE can cut out the rust and fit the new pan.
Is your sig evidence for ancient hardened steel files?
Reply to
Jim Wilkins
I think the hardest part will always be estimating the required hours. Materials, overhead, insurance, etc, is much easier to calculate.
I can only recommend breaking the job down in to as many small steps as possible, and estimating the time for each step. If you look at a job like this and just guess a total, you will usually be low. It seems to me that guessing the fastest possible time to complete each task, and doubling the figure is most usually pretty close, if you want to be realistic.
Reply to
Maxwell
That's how I do it. I usually end the job within 5-10% of what I quote. USUALLY. You will loose your ass on some jobs; just mark it up for experience.
I charge $60/hr shop rate and $75/hr in the field. This figures in consumables unless I'm running a process that uses and excessive amount of them (heavy OA cutting, high deposition welding, etc...).
The number you come up with will probably look high. You'll get used to that. Don't starve.
Reply to
johnnytorch
What do you mean 'ancient'? I use files all the time. :)
-- As Iron Sharpens Iron, So One Man Sharpens Another. Proverbs 27:17
Reply to
Rick Barter (rvb)
When was "Proverbs" written?
"The Odyssey", written before 800BC, compares the hot stake in the Cyclops' eye to a blacksmith quenching a tool. I'm looking for the first references or artifacts of hardened carbon steel, as opposed to meteoric iron which was used at least 6000 years ago. King Tut had an iron knife and a saw (?) blade fragment was found in the Great Pyramid.
Jim Wilkins
Reply to
Jim Wilkins
If you are self employed you pay double that amount for social security. e.g. 15%. You don't have an employer (that's you) to pay the other half.
Ivan Vegvary
Reply to
Ivan Vegvary
In article ,
However, when _comparing to a job for an employer_, you only pay 7.5% _more_ as a self-employed person - the first 7.5% you pay either way, so it's the same if you get paid $20/hour or contract for $20/hour - but the extra 7.5% applies if you contract, so (for just the self-employment tax piece) you need to contract for $21.50 to get paid the same as a wage-slave at $20. And then there are all the other pieces, some rather large.
Reply to
Ecnerwal
Some of the 'large' pieces are purely in your head. Convincing my wife that those checks she gets from clients are not all hers to spend takes some real discipline.
Ecnerwal wrote:
Reply to
RoyJ
That's a fact. Requires more math to correctly split the take, than it does to figure the job.
There is a lot of good folks still making monthly payments to the IRS, long after they have had to close their doors. Manage it wisely.
Reply to
Maxwell
I once informed a customer who thought my price was too high, "If I'm gonna starve to death I"ll do it sitting at home, not working." Did not get the job, kinda glad because the guy who did do it had to put up with alot of crap to get his $$.
Jim
Reply to
Jim C Roberts
This was a tough one for me when I first had my business. Then one day, I started looking at it like, "What's that worth?" Both parties has to ask themselves this. Ferinstance, it might not be good for you to bid low thinking it won't take that much time, then spend a week on it. For him, it might not be good to take it to a shop and pay $50-$80 an hour for a few days, as the Jeep may not be worth it. What's it worth?
After you have spent literally thousands on equipment, rental space, etc, etc, etc, is it fair and equitable for someone to come to you and say, "It's only going to take you ten minutes, what will you charge?" Most shops I have been in just have a sign with one hour minimum and a hourly or minimum charge after that. Then they say leave it.
If a man brings in a problem that you know will take ten minutes to fix, but you have to stop what you are doing, or pull someone off what they're working on so you can get this guy on the road in ten minutes, what's it worth?
Always remember that you're there to make money, and people who want you to work free or cheap either do or don't have a clue.
Know whut uh mean, Vern?
Steve
Reply to
SteveB
You know, you bring up a great point. At the welding school, the owner/instructor would take jobs at cost of materials for us students to weld on. Now, if the customer didn't want students to weld on their stuff, he'd do it, but charge them more. Most of the time they were fine with the students welding it. :)
But, you reminded me of something he said too. If someone came in and was pissed about him wanting to charge them $40 for something that would take him 10 minutes (usually prefaced with 'I've done some welding, but don't have machines, blah blah blah), he'd offer them the use of his equipment and say if they'd like to weld it up themselves he'd give it to them free.
Right about that time they would stutter and mumble and say, 'naw, but $40 is too much'. Then he'd make a judgement call and either come down a bit or send them on their way. He always said to remember that there are some people who will complain about anything and always want something for nothing. Think about how much time and effort you put into developing your skill/art. What's that worth? If a guy wants it for "nothing", let him go to school and learn how to do it.
Anyway, I'm rambling.
-- As Iron Sharpens Iron, So One Man Sharpens Another. Proverbs 27:17
Reply to
Rick Barter (rvb)
My shop is one hour minimum. The only exception is if I am doing a job & their part needs a tack or two. Then its $20-30. I won't fire the machine up from cold for less than an hour's pay. You have to have a thick skin about that stuff. Some folks will have a slick line of shit about how they can buy a new widget or get it done elsewhere for less. I politely tell them to pound sand.
Don't feel you have to tell them about overhead, as its really none of their business. The bulk of your customers will be those who appreciate your time & craftsmanship. Anyone else is wasting your time.
Reply to
John L. Weatherly

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