Starting A Shop

[J C]

I was interested in starting a small shop & already have alot of fab equipment but wanted to know how to find jobs & place bids on jobs. Any info would be greatly appreciated.

[fjk]

no offense is meant but
the first thing you should learn is how to use the search
tool on this and the hobart boards. the question comes
up about once a month and there's a lot of accumulated
answers.

frank

[MMW]

If you do a search here on starting a business you will find lots of info. Please do that & read it all. Some good advice & some not so good. Finding jobs usually comes from leads (talking to anybody & everyone about your business). Hopefully somebody knows someone who needs your services & then you need to contact/visit them. Leads come from getting a ton of cards & maybe a one page "flier" listing your & your shops capabilities, then hop in your truck & start going to businesses & drop off a couple cards & a flier. Hopefully they will take the time to talk to you but remember that most people are busy & don't want to chat with a sales guy. Be polite & don't give up. There is a lot of things to do but the above is a start. Quoting jobs comes from experience & in the beginning you will mis-quote a lot of jobs so be prepared.

[captkipp]

Finding work.

Log on to your state's govenment website. You can usually register there as a business and get yourself listed as being a state vendor. Without doing this the state bid folks will not know or care that you exist. In our state, registration is free. You just have to have a FEIN #.

[wroughtnharv]

Times are tough right now for any kind of small business. It's especially tough for welding shops. Welding is about making and repairing things. When things aren't needed to be made because things aren't needed then a sizable part of our work goes away. When things aren't breaking because they aren't being used also hurts us.

I see two common mistakes that defeat new businesses all the time.

The first one is about pricing. Everyone goes after work by charging less than everyone else in the business is currently charging. They're sure they'll be able to get their rates up once everyone sees how good they are.

The problem with that is the kind of clients they get are price customers. That means all the client wants is price when it gets down to it. So to keep them you have to keep your prices below the going rates. And if someone else comes in lower than you chances are most likely you will lose your client if you don't match the new low.

If you make price your edge then you've picked the thinnest one to dance on.

The other thing I see happening is people go in doing something that doesn't take special skills or special tools. That means the competition is greater because, well, anyone can do it and it doesn't cost much to get started.

When times are good then there is lots of opportunity. That means those who should never have been able to get a foot into the door find themselves making out like bandits. At things tighten up they are the first ones to fail. When things get as tight as they are right now for most of us even the better businesses are finding it very difficult.

It would be nice if skill and talent was all you needed to succeed in business. Skill and talent sad to say is what you need to succeed as an employee. If you look at the best weldors you will see they work for someone else. That's because what makes someone really good at welding is the very stuff that makes them not so good at doing business stuff like finding work and keeping up with the billing etc.

Invariably you find the best business owners aren't the best weldors in the shop. Welding takes concentration and practice. When you've got to solicit work, deal with your number one man's wife telling him you're taking advantage of him and he needs a raise, your own wife wanting more of your time with family and friends, and chasing down that overdue account without ruining a professional relationship. Well, chasing a puddle is fun for about a tenth of the time it should be.

I work for myself by myself. I'm sixty one years old. I could make a lot more money working for someone else. I could make even more money than that if I would just buckle down and hire people and run my business as a business.

I guess it goes back to the reason I took the parachuting class that allowed you to jump by yourself the first time out. My logic being that if I had a problem then it was my problem. I'm good at working out my problems. If the person who I was tethered to had a problem then it was our problem. I didn't want an "our" problem. It's the same for me when it comes to business I guess.

I did the jump. Ton of fun. For me the best part was after chute opened and I could manuever, all by myself.

[m.k.swelding]

IM not gonna bash your Idea. I think anyone who wants to start a new company should. When you just have a small one or two man shop alot of your work will be repairs on things that come in off the street. One thing I will say is dont plan on getting rich. The first three years are gonna be tuff. But rember this is the time that you collect contacts and make loyal customers. One thing I can tell you is your limited to alot of things. If you just have a shop you cant take on jobs that need portable work. but if all a person has is a welding rig than you also loose out on fabraction that call for shop equipment. as far as pricing on jobs its time+ materal. When I first made my hr. rate I sat down I added up the likle amount of rods, wire, gas, etc. that I would use in the time of an hr. then added the amount of money I wanted for may self for the hr. of work. I also left a $5.00 expence in the hr. rate for the cost of materal going up. On all jobs that I do I have my hr. rate and then the expence of the extra materal like metal, bolts, hinges, etc. On jobs that you bid on you have to figure on all the materal that you will need and then just set a amount that you will need for yourself add it togather and you have your bid.
Hope this helps you. good luck with your shops

[strictlycarved]

starting a business is tough. i have been working hard for a year now and finally got on with a general contractor that does county jobs and so this is my big break. its been really hard and i have made horrible decisions on bids that have cost me tons of money but its all a learning experience. good luck to you if you can do it but i have professional business friends that help with all my billing and what not or i would never get work done cause im not much of a business man.

[J C]

no offense is meant but
the first thing you should learn is how to use the search
tool on this and the hobart boards. the question comes
up about once a month and there's a lot of accumulated
answers.

frank

Thanks Frank that helped out alot.

[J C]

If you do a search here on starting a business you will find lots of info. Please do that & read it all. Some good advice & some not so good. Finding jobs usually comes from leads (talking to anybody & everyone about your business). Hopefully somebody knows someone who needs your services & then you need to contact/visit them. Leads come from getting a ton of cards & maybe a one page "flier" listing your & your shops capabilities, then hop in your truck & start going to businesses & drop off a couple cards & a flier. Hopefully they will take the time to talk to you but remember that most people are busy & don't want to chat with a sales guy. Be polite & don't give up. There is a lot of things to do but the above is a start. Quoting jobs comes from experience & in the beginning you will mis-quote a lot of jobs so be prepared.

I was wondering if stuff like that worked. My cousin told me I should hit up all the local farmers & people like that. There's only like 100 in my area. I started actually by fixing a farmers wheels off an old International Harvester & then I started getting a couple calls a week & so on. But now with my job we're working 7 days a week & I have a 5 month old & it's really making me think.

[J C]

Log on to your state's govenment website. You can usually register there as a business and get yourself listed as being a state vendor. Without doing this the state bid folks will not know or care that you exist. In our state, registration is free. You just have to have a FEIN #.

Thanks. Thats some good info.

[J C]

Here's another thing too. I have a Baileigh tubing bender & while back I made a set of tubular control arms for a guy I know & he asked how much & I really didnt care cause the guy done alot of stuff for me in the past & he bought all the material but he insisted & he dropped me a good chunk of change for the little amount of time I had in them. I want something like that. I can just make some & sell them. And another thing is how do you get into the stores like TSC & places like that? Like the gates & stuff. Somebody has to make those. I'm not saying I wanna do gates. It's just an example. Like the fab shop I worked at for years made grain distributors all year round & we did bid jobs also but they always had the grain distributors to keep them going while times were slow.

[Sberry]

And another thing is how do you get into the stores like TSC & places like that? Like the gates & stuff.

The grain stuff was likely somewhat specialized, the gates at TSC bring up a point. A small shop can make it doing some general work, or custom work or some niche they can specialize in. Trailers and other items such as gates are sold to this mass market by outfits that you couldn't compete with if you got the steel for free. They buy materials and consumables in volumes at rates half what a small outfit could even dream about, have special facilities for production usually with relatively low labor cost. They have to do this while providing the product to the vendor at a cost they can markup likely 100% or more in a product of this type (don't know the exact figures in that market) but all the while making a bunch of accountants happy with themselves about gross margins.
Other business have different deals, welding machine companies are genius in the respect they have gotten vendors to shave margins to unreal numbers but they have line of consumables and accys to follow the original sale.
Back to the gates and trlrs, if I had to buy the steel to build a conventional trailer I would buy one from outfit so competitive that I couldn't afford to build it in my own shop + the fact I can hook on and go.
Some people make living building gates but they build nice gates, custom or develop a system of specialized production and marketing, a security fence co for example.
The Muffler man buys clamps, 35 cents for what you would pay at jobber, 2$ maybe and 16$ for a muffler that vends for 60 at parts store. Parts markups so hi the labor almost becomes a liability.

[MMW]

I have heard that you need to replace 10% of your customers per year because for a variety of reasons you will lose customers. I have seen it happen where the company is booming along & to busy to go bring in new work. Then one cust leaves & it is no big deal because they are still busy. Then another one & so on. All of a sudden, where did all the work go? Now they have to scramble for work to keep the doors open. This is where "banging on doors" comes in. Unless you are so in demand, like Chip Foose or OCC then you need to keep finding work. The next guy (your competition) for sure is knocking on YOUR customers doors trying to lure them away from you so you better be keeping good relationships with them as well as trying to lure others away from your competition.

[FusionKing]

I have heard that you need to replace 10% of your customers per year because for a variety of reasons you will lose customers. I have seen it happen where the company is booming along & to busy to go bring in new work. Then one cust leaves & it is no big deal because they are still busy. Then another one & so on. All of a sudden, where did all the work go? Now they have to scramble for work to keep the doors open. This is where "banging on doors" comes in. Unless you are so in demand, like Chip Foose or OCC then you need to keep finding work. The next guy (your competition) for sure is knocking on YOUR customers doors trying to lure them away from you so you better be keeping good relationships with them as well as trying to lure others away from your competition.

This is some of the best and most true advise you can get for both the new and old businessmen alike

[J C]

I have heard that you need to replace 10% of your customers per year because for a variety of reasons you will lose customers. I have seen it happen where the company is booming along & to busy to go bring in new work. Then one cust leaves & it is no big deal because they are still busy. Then another one & so on. All of a sudden, where did all the work go? Now they have to scramble for work to keep the doors open. This is where "banging on doors" comes in. Unless you are so in demand, like Chip Foose or OCC then you need to keep finding work. The next guy (your competition) for sure is knocking on YOUR customers doors trying to lure them away from you so you better be keeping good relationships with them as well as trying to lure others away from your competition.

So back to what you said about going door to door. Should I just go to every local business in town or only certain ones?