How Should I charge???

admin

Hello, I am sure you all hear this a lot, I am trying to figure out how to charge for my welding business I want to make sure that I don't lose money? what should  I figure into the cost other than the obvious? Oh I am in northern NM area.
Reply:Define the "obvious"? Usually it's obvious costs that get overlooked that cause you to loose money.Insurance: Vehicle, general liability, medical,  etc...Overhead: Shop rental, phone, electric, accounting costs etc...Vehicle costs: registration, upkeep and maintenance, fuel, tolls...Taxes, workers comp, permits, licenses etc...Consumables: grinding disks, tungstens, collets, mig tips, drill bits, saw blades etc...Equipment: Welders, saws, drills other tools, fork lift etc, and maintenance on all of these things...Then you get to materials, wire/rod, gas, hardware, paint, packaging etc...and finally salaries, and profit.I can go on and on. Unless you figure in all this stuff, then it will end up coming out of YOUR pocket. Usually it's some or all of the above that gets forgotten..No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we'll ever see on this earth! Ronald Reagan
Reply:Don't forget to account for material handling too.  DSW listed a lot of key elements.  Look around on this site to see what others have written about the same topic.  Talk to an accountant.-AaronJet 17.5" Drill Press1942 South Bend 16x84 Lathe1980s Miller 320A / BP --- 2013 Power Mig 2562012 Jet 7x12 Horizontal BandsawVictor O/A Setup
Reply:And don't forget to figure in what the accountant costs.  I figure you have to multiply all your labour by three to even break even.  Mac
Reply:Driving cost me more than any other single item. Mostly because it eats time as well as fuel and insurance, etc. That trip to HoDe because you forgot something usually costs a LOT more than the thing. One of my guys left my battery drill in the shop, I got to the job site and couldn't install. It was cheaper to go buy a $169 drill than it was to drive back to the shop. Best advise I can think of is to bid every job including every expense you can think (time, materials, fuel, permits) of and multiply by 2 and you will be close.
Reply:Iam not sure on what to tell you to charge. Is this a part time hobby type deal? The 4 before me all have many important things they listed. Shops in my area nw ia.charge from 65 to 95 per hr depending on type of welding.For materials I add 20% to my cost I do not know if this is correct but seems to keep me paying bills anyway.
Reply:Originally Posted by DSWDefine the "obvious"? Usually it's obvious costs that get overlooked that cause you to loose money.Insurance: Vehicle, general liability, medical,  etc...Overhead: Shop rental, phone, electric, accounting costs etc...Vehicle costs: registration, upkeep and maintenance, fuel, tolls...Taxes, workers comp, permits, licenses etc...Consumables: grinding disks, tungstens, collets, mig tips, drill bits, saw blades etc...Equipment: Welders, saws, drills other tools, fork lift etc, and maintenance on all of these things...Then you get to materials, wire/rod, gas, hardware, paint, packaging etc...and finally salaries, and profit.I can go on and on. Unless you figure in all this stuff, then it will end up coming out of YOUR pocket. Usually it's some or all of the above that gets forgotten.
Reply:Get in the habit of writing everything down.  Every single imaginable expense down to the last sheet of paper for the copier, pens, stamps etc.There are some good programs out there that can help you out with things like this. I know a couple guys who use Quickbooks to help track costs. I haven't yet gone that route yet, but probably will as soon as I can find the cash.I have a paper account book and every single thing I buy goes in that book. I also have one card that is strictly for business expenses. I can pull up the list of charges at the end of the year easily that way.If you are running a legit business you can write off all sorts of expenses...Office supplies: paper, pens, postage, your computer, etc.Work clothes: Laundry services, work boots, any PPE, prescription saftey glasses, outer wear, etc.Any advertising costs: business cards, letter head, ads you may run, website costs.Entertainment expenses: Do you take clients out to dinner to talk over a job?Any legal expenses related to the business.Rent: which can include part of your mortgage if you have a dedicated home office or shop.Any travel expenses if you work out of town for some reason.Water and sewage costs if you pay those on your shop.Depreciation on vehicles and new equipment.As a few others have suggested, get a good accountant who knows accounting for small businesses. If he's good, he'll find more than enough deductions to save you what he's charging you. You can help by keeping good books. I suck at office stuff, but I sit down at the end of the year and sort out all the receipts and write them in the correct categories in my account book. Then it only takes maybe 30 minutes at the accountant to sort out my taxes at the end of the year. The government keeps making it harder and harder for new small businesses to do things legit and your accountant can help you thru all the tax pitfalls and show you where you can save money..No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we'll ever see on this earth! Ronald Reagan
Reply:Quote "if someone wants me to build something by breaking something else down (that stinks)" Rusty junk hacked up to make something else is a money loser for you. I put alot of new steel into anything I do any more as it is essentially ready to weld without a lot of prep work.One of my neighbors is notorious for this, meaning building/rebuilding boat trailers to fit different size boats. I always quote those high enough so he could have bought a good used trailer in the first place. Which usually he does.Same thing with the Snow Plow truck guy and the Dump truck guy.I always use new material when they show up with a "Hack-Job" as it is the time in prep that is a money loser as they already have a pre-conceived notion as to what the "Fix" will cost.