Starting up a shop

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I need some help understanding a few things about running my own shop.  I want to be as informed as possible.  I'm wondering about pricing a job, figuring time, that kind of thing.So, how do you figure the time to do a job?I feel satisfied I can figure up how much material I need, but do I charge the customer more for the material, you know, do I mark it up?What if the customer wants to supply the material?How do you pay your help, hourly, by job, what?What kind of insurance do you carry?Do you try to keep a big stock of material?I know I'm leaving things out, and I'll have more questions.  I just want to learn from others mistakes.  If I have to make my own,  I want to be the first person to make them, not follow after others.thanks ahead of timeMatt
Reply:#1  good luck.  It takes a lot of "sweat equity" to build a buisness from scratch.  First you want to figure out where your work will come from or what kind of work you want to do.  What is available in your area?Time for a job.  Expierence helps, time and materials is what I do most.  I can guess "2 days" or an hour.  Customers keep telling me I can do it in 5 minutes.  I don't listen to them or give a pretty hefty estimate.I mark my material up.  Some do, some don't .  It depends on the job.  If I am going to sit on hundreds of dollars for days or weeks, you bet I will mark it up.  If the customer wants to supply materials, fine with me.  I am selling labor hours.I have no help. I go it alone.  Had places with employees and got tired of fixing thier screw ups and them wrecking my equipment.  Hourly pay is standard.Insurance.  I have a million dollar blanket policy.  Not much, but its what I am leagally required.I buy materiel for each job.  I buy extra if I can and hopefully the job pays for it.What do you plan on doing?  Fabricating?  Repair welding?  construction?  Specialized welding?  Production welding?  What do you have for equipment?  Have you ran a business before?  Capitol?  Location?  Do you have some kind of plan?  Do you have prospective customers?DavidReal world weldin.  When I grow up I want to be a tig weldor.
Reply:Ha Ha,  see, I knew I would leave stuff out.  Let's see, no capitol yet.  Equipment:  Miller Syncrowave 351 (once I get all the bugs worked out), Smith OA torch set, small compressor, drill press, various grinders, hand tools, plan on repair welding (lots of farm equipment around), light fabrication (hand rails, trailers, racks), Never ran a business, Live in Clinton, SC,  Trying to put a plan together.  It's gonna be a couple years away, I just want to as prepared and informed as possible when I do make the dive.
Reply:Perhaps you could start out small and keep your day job.  You will learn how not to make business mistakes.  Taxes...... Don't forget about the government, Zoning and keep good records.After a while if you are good, you will get a reputation and people will be bringing you all kinds of stuff that you wonder how you are going to fix.DavidReal world weldin.  When I grow up I want to be a tig weldor.
Reply:First of all B.C good luck and good onya,my bit of advice is to keep your prices competitive without compromising quality, be Honest to your clients and get the "rule book straight" what I mean by that is look at all the eventualties and relay that to your client,because there is nothing worse than when they come back to you and say well you only quoted for "this, that, or the other" and you end up in dispute in judge Judys courtroom, he ,hebut seriously Good name takes a while to be known, Bad name gets round a lot, lot quicker, that said I wish you good  Luck, and Happy Welding ! Regards Greg
Reply:I intend to keep my day job most definitely.  Can't afford to go without it, if nothing but for the few benefits I have.  Yeah, taxes are something I haven't thought about.  Any part time CPA's in the house that might know how to keep Uncle Sam happy?  Zoning I'm not too concerned about.  there is an aluminum foundary/forge about 100 yards to my right.  A hard wood flooring plant across the street and it's new branch/expansion about 500 yards to my left.  And I intend to make sure the customer knows that I'm the welder, and we'll do it my way or they can take it somewhere else, that's the only way I feel I can guaranttee my work.  Now, what's the average labor rate at the moment?  Anyone care to give examples?
Reply:I recently started a painting business a year ago and added welding as an extra service. I know, its a hell of a combination, but it worked for me. I am a welder by trade, but i figured out that i didnt mind painting. For me, in this area, starting a painting business would be easier. It started off very well, I got lucky with finding great customers, then I found a point where I could stick my welding part in, then that took off. Exactly what the other guy said, word of mouth. It will pass on if you have good work and prices. Hard to find those 2 things together. Good Luck
Reply:Good luck with your indeavor, repair work is abundant but can be quite messy, price should be looked at in your area, as far as inventory it depends on your budget, your ability to store it and alot on your supplier, if you can get material in a day or two there is no need to keep alot on hand. just channel and angle comes in many sizes and weights a large inventory would be a significant capitol layout."Si Vis Pacem Para Bellum"Lincoln Idealarc 250 AC/DCMillermatic 251   Syncrowave 300   30A spoolgunLincoln MP210Hypertherm 45(2) LN 25(2) Lincoln Weldanpower 225 CV(4) SA200   1 short hood    SA250    SAM 400
Reply:I thought i would throw this in.  My business is primarily repair business, and i am in a primarily agricultural are.  My main business is either farmers, or loggers.  I have over the years gotten into the industrial area now that I have built my name up.  In my opinion the repair business has a huge amount of work, BUT.....  I also believe its the worst to get good dependable clients.  All of the no payers and bums are gonna flock to the new guy because they already owe the ones in business now.  The key is find you a couple of good dependable clients and take care of them like you have no other work.  You'll be suprised at how much work will keep coming your way because of it.  As far as insurance around here one  million Liability to get into most businesses to work, but some require two million.  As far as time and materials go You'll get the hang of that the more you do it.  I will throw this in, when i first started I had to finance myself, and materials were killing me.  I would have a couple thousand tied up in materials and be waiting 30-45 days to get paid and couldn't pay my own bills.  Even now if its over $200 worth of materials I charge a material deposit, and from what i have found the only ones who fussed about the deposit were the ones who you had to run down to get your money anyway. The last thing I'll tell you is to be HONEST.  and I mean if someone comes to you in a tight and you can't get to it on time tell them you can't.  True you will probably lose the work but I will bet you that the next time they need work they will come back and try ya again.  I have built my business on the other local guys not following thru with what they claim they can.  Just somethings to think about.  ~JacksonI'm a Lover, Fighter, Wild horse Rider, and a pretty good welding man......
Reply:Originally Posted by bigcountry1009I intend to keep my day job most definitely.  Can't afford to go without it, if nothing but for the few benefits I have.  Yeah, taxes are something I haven't thought about.  Any part time CPA's in the house that might know how to keep Uncle Sam happy?  Zoning I'm not too concerned about.  there is an aluminum foundary/forge about 100 yards to my right.  A hard wood flooring plant across the street and it's new branch/expansion about 500 yards to my left.  And I intend to make sure the customer knows that I'm the welder, and we'll do it my way or they can take it somewhere else, that's the only way I feel I can guaranttee my work.  Now, what's the average labor rate at the moment?  Anyone care to give examples?
Reply:Just a couple of thoughts…I work with Stone fabricators and most have similar issues. The biggest reason that I ever hear for pricing is “Because that is what XYZ charges”. Be careful to understand your costs, and not just charge what the competition charges. I see people bid work with the cost minus 10% mentality to get the work hoping to make it up in volume! A good place to help think through this is on the Microsoft web site. They have a number of very good business planning organization templates available. These run from documents for loan application to calculating expenses and costs.Best of luck.
Reply:big country,   i'm here in charleston working welding on the side. i work for a large construction company doing everything from rebuilding buckets to fabricating ladder racks. my side business is really taking off here as of late. winter was slow, but this heat wave has brought the work to me. my steel suppliers send alot of work my way and my national welder rep sends some also. i went to my local salvage yard here and they needed some racks built. i worked a deal for steel in return for my welder and labor. this lead to all the other business cards being thrown out there office and mine only. the weekend people who go and pick up steel for repairing whatever, ask if they know someone who welds, my card instantly appears. this leads to small jobs, then they want a trailer built and so on. alot of the pricingdepends on the person and the job. The fella behind me needed some welding done. he came to me with beer, gas and 7018 rods. this went along ways in reducing his cost. the added money is nice, avg is $75/hr. which varies by job. i try to get the customer to buy the material or atleast pay for it up front. the steel prices are going up everyday. the drawback to this is, i weld all day for the man, school monday-thursday night. welding for others on the weekends. this leads to my personal projects falling behind and the wife getting more money to spend. i started working on a log splitting machine, got the frame built, axles hung and it has sit for over a month. too busy welding new floors in the elevators at the aquarium and fixing a friends trailers. shoot me an IM since were close by, i can give you my number and we can talk 1-to-1. i am tired tonight, taking finals this week."Retreat hell, were just fighting in the other direction"Miller Trailblazer 302, Extreme 12 VS, Dimension 400, Spectrum 375, HF 251D-1, Milermatic 251 w/ spoolgun  Hypertherm 1000Lincoln sp 1702000 F-450 to haul it
Reply:Hey Backuproller and Big Country, I'm between Greenville and Spartanburg in a community called "Sugar Tit", for real guys, I own and operate a machine shop where I can do milling , turning, fabrication, cutting and welding of any materials. I am a pretty good welder and machinist but my biggest problem is I'm no salesman at all and have a lot of trouble getting work other than by someone saying a good word or two about my shop. I have lost 2 big customers to China in the last 3 years so my work is down to almost nothing some days. Please if I can help either of you please give a call or email. my web site is where you can get my numbers and addresses www.hitectool.com please give me a ring or letter as I need the work and I love to travel so I can come to you.Last edited by sc6chuck9; 04-25-2007 at 11:19 AM.