New business, what are you doing?

[swyman]

Hi, I am getting into the welding and fab business and need advice. I love this line of work and want out of the factories! My backround started 14 years ago with a Millwright appenticship at Tecumseh Products and 7 years later Ford Motor Co's Maumee Stamping which will be idle by '08. With only 7 years it didn't look go for a transfer anytime soon and within reasonable distance so I took the buyout. I tested and was accepted in Local 1393 Millrights and Piledrivers out of Rossford, Oh. but work is slow so I tool a position in maintenance at Gobal Engine in Dundee, MI. I bought my families farm shop that is 5400 sqft with 3-phase and a overhead crane. All the tools and metalworking equipment stayed so I'm ready to go. I have an old Hobart mig, Airco stick and just bought a Hypertherm 1000 plasma. I want aluminum capabilities and think a tig machine offers the most versatility and was going to buy a Dynasty 300DX tig runner but now am going to wait on the new 350DX. I like the fact of the better duty cycles. I really want out of the factories and want to make a living out of my new investment. What should I do for work? I was going to start off by hitting up the local co-op's and possibly some stone hauling businesses and offer to weld their cracked aluminum dumps. Was even thinking of approaching some local manufacturing facilities and offering welding and fab services. What else can I do? Am I on the right track? One other struggling area is what do I charge? I was thinking along the lines of $50/hr. What are you folks charging, by the job or hour?? If by the hour, how much? Any advice will be greatly appreciated!

Thank you in advance!
Shane Wyman
Modern Metalworking

[MetalCrafter]

Newbie

I usually charge $125 to $150 an hour for repair jobs.

[mattf]

I have a friend who does spring & chassis work on trucks. Seems like a nice business. Most of his work comes from truck rental companies and the State. In the winter he does a lot of weld repairs. Most of the state repairs are on the snow plows. He charges $89 an hour here in CT. But most of the time he charges by the job(much more profitble).

[MMW]

#1 thing is to make a business plan. This is what your starting to do with figuring out who your customers will be. Then make a list of ALL your expenses. Rent/mortgage, heat, electric, insurance (liability, health, truck), trash p/u, fuel, truck payments, equipment payments, etc. Then you need a paycheck on top of that. If your thinking you already have the building & equipment well the building will need maintenance & equipment needs upgrading/replacing eventually. This should come out of the business not out of your paycheck. Say you buy a welder for $4000 & it has a life expectency of 2000 hours. You would have to add $2 hour to your rate just to pay for that one welder. I'm not trying to be discouraging but a large percent of small start up businesses fail within the first two years. Put a lot of thought into first. Most places I know of are in the $80 to $100 hr range.

[JonnyTIG]

It's not much different than running a rig. --ALL costs plus income--. The going rate for a rig around here is $80 - $90 /hour, and up north in the oil fields they charge up to $150, plus $5 for every pressure cert. after that. Shops in town charge around $90. And, that's just for regular steel fab and welding. Add extra onto your rate if you do aluminum and stainless. Even more if you weld exotics like Inconel or Titanium. I do small jobs out of my garage with my 300DX. I generally charge $90 /hr. My machine costs about $10 to run at 200 amps for an hour.
Gas costs, filler costs, maintenance, upgrades, consumables, and every burn you get adds more to the cost per hour.

[Darmik]

What to do with your time

I'll tell ya get into truck bodys good money clean work and like you say if you have most of the toys already your half way there with no DEBT.do you like talking to customers ? do you like drumming up your own business can you just walk up to sombody and say hi my name is? when your working do you always look angry , fustrated, p!ssed off ?do you where the same coveralls day in day out for about 1 1/2 weeks straight?anyway I can go on and on but if your thinking about dump boxes and stuff like that beleave me when I say TRUCK bodies you are probably saying but everybody is doing that well you might be right but are they a millwright with welding and fab experience?I thought the very same thing. this little job that I'll show you will gross $24,500,00 not including the truck this puppy's not complete yet.

[MMW]

I'll tell ya get into truck bodys good money clean work and like you say if you have most of the toys already your half way there with no DEBT.do you like talking to customers ? do you like drumming up your own business can you just walk up to sombody and say hi my name is? when your working do you always look angry , fustrated, p!ssed off ?do you where the same coveralls day in day out for about 1 1/2 weeks straight?anyway I can go on and on but if your thinking about dump boxes and stuff like that beleave me when I say TRUCK bodies you are probably saying but everybody is doing that well you might be right but are they a millwright with welding and fab experience?I thought the very same thing. this little job that I'll show you will gross $24,500,00 not including the truck this puppy's not complete yet.

Any more to pics?

[Darmik]

Any more to pics?

Hundreds

[sjmiller]

New business, what are you doing?

What isn't clear in your post is if you plan to make a living from your work? The reason I say that is your asking how much to charge, if you can run a full functioning welding and fab shop for $2/hr and charge $4/hr and be happy - knock yourself out.

As some others have alluded to, you need to do a financial analysis of what it will take for your business to be sucessful.

Operating expenses:
Tax accountant
Legal advice
Payroll services
Rent
Utilities
Vehicle (gas & maint)
Property taxes
Advertising
Supplies (consumable)

Payroll taxes:
Employee wages
State (9% of wage)
Federal (28% of wage)
SSI (12% of wage)
Medicare (2% of wage)
SSI & Medicare are split taxes - employee pays 1/2, employer pays 1/2

Equipment costs:
New purchases (depreciable)

Payroll:
How much a year do you need to make? Add up all of the above costs, add your gross wage and divide by 1200 - that is the minimum hourly rate you need to charge. Now is that rate in line with what others in your area are charging for the same work? If is low - then charge more - if it is high, it may not be a business to go into.

The bottom line is that it really is the financial bottom line, if you aren't turning enough of a profit to pay yourself - the business will fold. Business 101.

Steve

[swyman]

Steve,
I do plan on making a living out of the business. I took the buyout from Ford and have been making 6 fig's for the past 3 years...Lots of O.T.!! Now I have a job that will get me $57k annually so what I am shooting for is to be close to that number to make it worth my while. A few things that will hurt me is that it is a swing shift, which also helps me because I have a lot of time off, we work 12 out of 23 days is how it works out, but it will hurt me for having normal set business hours. I plan on posting my hours 2 weeks in advance so people will know but I know that will lose me a few jobs because of inconvenience. I can't help that because it would be foolish to quit my factory job without a costomer base at this point. I still need to figure out how to get out and hustle some work. Hoping for a lot of farm repair to get me started but I know I can't make a living just doing that. I will do some advertising in the local papers here in the next month. I put my sign in the front yesterday so that should get people talking. Want to talk to some small local manufacturing facilities to see if I can pull some work there??? Open for ideas, you guys are really getting me thinking. Keep'em coming!!
Thanks, Shane

[On Site]

Fab and welding projects

We have a successful welding and fab business that has more projects than we can handle. I am a CPA (retired) that grew up in the farming and machinery maintenance and repair business. Look at our web site www.onsitelubetrucks.com . We may have some ideas that we will share with you that would b enefit both of us.

[glockdoc]

Have you thought about setting up for portable welding? Would you be willing to take jobs at all hours of the day/nite, say welding on a tractor-trailer rig broken down on the interstate at 2:00am on a Sunday morning. I'm guessing the more established welders are going to opt for staying in bed. It could easily complement your fixed base operation.

[Anti-GMAW]

I agree, a mobile setup can really help you alot. Especialy since you want to do so much farm equipment repair. You could also advertise online and in the AWS magazine, not to mention your local welding supplier. Advertising online line allows you to accept jobs from all over. The company I work for is shipping over 1250 chemical filtration devices that way over 1325lbs. apeice to brazil by Fed Ex.