Labor costs?

[sortafast]

I did a run of parts for my FIL's business and am left unsure what to charge them for it. I have no idea what the going hourly rate is for machining. Don't want to rip them off (going to be doing more of these same parts at some point) but at the same time I don't want to sell myself short. Especially since I am trying to purchase a few big ticket items. So what is the going rate for garage based machinist hacks like myself? Total parts time was around 200minutes and set up, once all the tools were made and I had the process dialed, was 15minutes total. They were very simple parts, just a lot of em. Any help would be much appreciated as I need to get paid.

 

[mototraxtech]

I honestly dont know what the rate is but last time I had work dont it was between($60-$80) depending on what machines were used etc. BUT I think that home shops should charge HALF of what a normal shop charges.

The reason is big shops have a lot of overhead like keeping a large building heated and lit up even when no work is done as well as many tools and machines that cost a lot even though many aren't making money all the time(aka sitting).

The beauty of a small home shop is that you don't have these cost and can pass that to your customer. Then with how cheap you are compared to the BIG shop you will get a lot more word of mouth jobs.

With that said the big shops have their place as well. When you need BIG parts or maybe large runs and sometimes VERY specialty items as well then the big shops are there to take your money.

From my experiences big shops "generally" don't like small jobs and give ridiculous quotes to get out of doing them. But there are a few who are reasonable as long as you have a couple hundred buck worth of work and these are the ones that are listed on my phone for when I need parts made.

Just my 2 cents worth and I sure others will chime in as well!

 

[unterhausen]

car mechanics are charging $90/hr in big markets, I can't believe businesses are charging $60 for machining. But sillier things have happened I guess.

 

[mototraxtech]

Car maintance is retardedly expensive. I worked at a powersport shop and we charged $70/hour. Lets put it this way I would NEVER take a bike to a shop again if I didnt personally know the tech working on my stuff and I couldnt do it myself. The way shops charge is rediculus. For example a tech has to put on a new winch. Puts it all the way on and then forgot a part at the beginning and has to redo it. The customer pays for an extra half an hour.

Sorry for the rant but honestly they charge WAY to much. Especially since all the tools I used cost me around $300. They dont even supply them and they are still get $70/hour and then pay me $10/hour.

Ok guys, Ive cooled down.

 

[precisionworks]

In my small town, one race car shop charges $100/hr and another charges $50/hour. Both the auto machine shop & I charge $60/hour plus materials.

On portable welding, one local shop is at $50/hr, another is at $60/hour, my rate is $120/hour (plus materials & supplies). They both complain that they aren't making any money ... wonder why, as they are just barely covering their costs. All three of us do more portable welding than we want.

big shops "generally" don't like small jobs and give ridiculous quotes to get out of doing them

I quote long lead times for people that make me uncomfortable ... can't really explain that feeling, but I know as soon as they describe the job that I don't want to do it. A 90 day lead time usually sends people on their way.

My backlog is currently over 30 days, with another major project in the bid process. If that job happens, and it may, it goes to the front of the line & my backlog changes to 45 days :sigh:

Charge enough today to still be in business tomorrow :twothumbs

 

[mototraxtech]

In my small town, one race car shop charges $100/hr and another charges $50/hour. Both the auto machine shop & I charge $60/hour plus materials.

On portable welding, one local shop is at $50/hr, another is at $60/hour, my rate is $120/hour (plus materials & supplies). They both complain that they aren't making any money ... wonder why, as they are just barely covering their costs. All three of us do more portable welding than we want.

I quote long lead times for people that make me uncomfortable ... can't really explain that feeling, but I know as soon as they describe the job that I don't want to do it. A 90 day lead time usually sends people on their way.

My backlog is currently over 30 days, with another major project in the bid process. If that job happens, and it may, it goes to the front of the line & my backlog changes to 45 days :sigh:

Charge enough today to still be in business tomorrow :twothumbs

I totally agree with you if your are in business to pay the bills.

I was referencing toward a small side job make some extra cash to buy more toy type of thing but in you case I say charge as much as you can while keeping enough customers. I guess Im not sure what kind of business you are running.

 

[unterhausen]

Charge enough today to still be in business tomorrow :twothumbs

This is what a lot of business people don't understand. I deal with one guy I keep telling to charge me more; I want him to make enough to make it worth his while. I've asked people how much something will cost and had them offer me a discount. If it's my money, I usually don't explain that I just wanted to know how much cash to bring.

In the case of the fil, it really depends on whose money it is. If the costs are being passed through, then it should be priced at a reasonable shop rate. This is rarely the case, and I would hope you have enough rapport with the FIL to discuss the rate. "How much can I charge you before you're motivated to hire a pro?"

On portable welding, one local shop is at $50/hr, another is at $60/hour, my rate is $120/hour (plus materials & supplies). They both complain that they aren't making any money ... wonder why, as they are just barely covering their costs. All three of us do more portable welding than we want.
s

I wonder if they realize how much money they are leaving on the table, just doesn't make sense. My boss used to try to get me to quote $50 an hour for consulting, going rate for a Ph.D. mechanical engineer is well over $100 an hour. People who hire engineers are probably more perturbed by an outlandishly low rate than a high rate. Of course, they prefer to get the work done free, which is why I've never done it.

 

[mototraxtech]

just curious why you got a PH. D in ME. I am currently working at my ME,EE, and CE degrees right now but don't think I would ever want to get a PH. D in any of them.

The reason for all three is they are all interesting and I want to be a VERY knowledgeable person in the future of engineering. AKA I want to be the boss and have some clue of what my employees are doing and telling me.


I actually had a science professor who said that MOST science and engineering PH. D's are looked at very oddly by companies because if you wanted to be an actual engineering you would have got a job after getting you BE. Of course this doesn't account for if you go back to College after getting a job.


Just curios!

 

[sortafast]

Well, I will throw out the $60/hr fee and see what he says. I know how much this job made them and being that I like my FIL and his biz partner I don't feel that I should take a large chunk of it. But when it comes down to $2 per finished part is a number that is little easier to swallow. I do know that they talked to a couple machining outfits and they wouldn't touch such a small order, plus they would have had to come up with prints and all that crap. I just kind of came up with everything on the fly and it worked out great. Really though I probably spent 5-8hrs doing everthing, making tools, figuring out the set ups, how to run the operations and and actually doing the work. Not to mention the clean up :sick2: .

 

[mototraxtech]

just a though you might just give him the $2 per part quote first. If I was getting some work done I would rather hear them say $2 a part which seams cheap than $60 an hour which seems expensive.

As a side note I always get a FIRM QUOTE before have machine work done. The reason is a few summers ago in high school I had a shop mill some 1 inch holes in four pieces of aluminum plate that would take bearing in a press fit manner. I bought the bearing from them that I was using and handed them over to him. Two weeks later I get a call saying that it was $400 bill which I though was VERY high for the job and after I build the project I went to "press in" the bearings and they fell right though. So not only did I pay alot more than what I expected(they said maybe two hours of work) the parts were useless anyways.

So now I ask for a firm quote and decide if I am willing to pay that for it.

 

[precisionworks]

Not to mention the clean up :sick2:

The customer pays for the clean up on their job. That way, the shop is ready for the next job & the customer only pays to clean up their particular mess. Someone always pays for clean up, either the customer or the shop owner :huh:

totally agree with you if your are in business to pay the bills.

OK, let's say you run a part time "for fun" shop as opposed to a "for profit" shop.

Both shops pay for electricity.
Both pay for materials.
Both pay for tooling.
Both pay for heating or A/C.
Both pay when a machine (or tool) breaks.
Both use roughly the same time to finish a job.
Both have to clean up the mess.

The "for fun" shop doesn't have a $250/month commercial insurance premium, nor a $100/month advertising bill. Other than that, both shops have similar expenses & should charge a similar rate.

I'm not sure what kind of business you are running.

In shop welding, including general repair & fabrication. Portable welding, which covers any job that can be done with my truck mounted engine drive ... mostly mild steel or aluminum. Any job, anywhere, day or night, hot or cold ... pretty typical of a shop that offers portable welding.

Machine shop services include design work, fabrication, repair, prototype, etc. Same as any other small job shop.

I wonder if they realize how much money they are leaving on the table

I don't think they do. They both state "no one will pay more than $50-$60 per hour for portable welding", and no one will ... in their view.

To do a portable welding job involves the drive out to a job, lay out of the cables, grinding through who knows how much dirt, grit, rust and junk, etc. Then the welding itself is done. Then putting all the equipment back on the truck & driving to the shop. Usually the cables are nasty filthy dirty, so each cable has to be unrolled again, wiped clean, and rolled back up. Grinders are often so clogged with dirt & mud that I wash them first with with the water hose, blow the grinder dry & set it on the bench.


I won't put the key in the ignition for $60/hour :nana:

 

[gadget_lover]

I find it odd that people think work is worth less if done in a home shop. If an equivalent product is produced with the same quality in the same time frame, then it should have the same value to the buyer. In the case of custom work, the hand built item is often prized far above the commercially available ones.

If I do something for a friend, I reduce the price to just cover the price of the consumables. If it's something I want to do as practice, I often do it free. If I don't WANT to do something, or if it's for a friend of a friend, then it becomes a business deal and I charge about what the real shops would charge.

If you are doing this for your father in law's business, then you should consider the transaction as a business deal and charge business prices. Otherwise you are (in effect) making a gift to him of the value of your work.

Daniel

 

[mototraxtech]

I guess the way I look at it is machining is a hobby and I like to do it. So if someone wanted me to make some basic parts(meaning I would not have to acquire special tooling or anything) I would be completely flattered to get $30 for making them. I know my tooling and machine cost cant be that high as some far I have never even chipped a carbide. Of course with harder materials and other parameters it would get more expensive and would get charged accordingly.

See what I have always hated is when I ask shop to do a job that is very basic and requires minimalist tools to do it. Say chuck some aluminum in a lathe and make some spacers. The job takes 1.5 hours for all and I pay 100 in labor and $2. Then another guy has a complicated part milled that used many different expensive tools and he gets charged the same per hour.

Basically they are barely breaking even on his job and making bank on mine. I am a firm believer in pay for what I am getting. Not paying for someone else stuff. Which brings me back to getting firm quotes. If they cant give me a firm quote then they wont get my business.



While I agree parts of equal quality should be worth the same think about this. I have you make some spacers for me, say 100 of them. It takes you 10 hours to make them and 100 in materials you charge 10 hours at 60 an hour plus 100 in material adding to 700.

I call up the cnc shop and they say 200 setup fee and 100 an hour after that. It will take 2 hours to do them all and 100 in material.

So for you to make them it cost 700 and the cnc shop to make them cost 500. So should you lower your quote to match theirs.

I guess what I am saying is charge what they are willing to pay with a threshold of about half of a normal shop since a normal shop has alot more overhead.

They other thing you must thing about is a lot of LARGE shops have specialty tooling that we can only DREAM of to make their job easier and faster. So they might be charging 90 and hour compared to you 60 and hour but can make similar parts twice as fast.

 

[unterhausen]

what I've found is that even my own jobs get boring very quickly, and I just want them done. So someone better pay me enough to make it worth my while. Have to admit I would work for less in my hobby shop, if it became a real job things would definitely change. A production job is worth somewhat of a discount. For one thing, you'll almost surely learn how to make it faster

I never want to be the low price bidder, that just attracts the worst customers. They don't know what they are doing and they don't know how much something should cost them.

 

[mototraxtech]

True but in today's market it almost always seams like its the low bidder who gets all the work.

Of course I think people are starting to realize that to bid so low they had to cut corners and quality is suffering.

 

[unterhausen]

How do you get paid for these jobs? I know a lot of municipalities are really strapped for cash and if they figure out you're running a side business they are going to start nickel and diming you to death. Same with states.

 

[precisionworks]

even my own jobs get boring very quickly, and I just want them done. So someone better pay me enough to make it worth my while.

+1

I usually don't turn down portable welding jobs on Saturdays or Sundays, as $4/minute is a decent paycheck when the job averages two to three hours. Total time includes driving to the job, setting up, completing the job, tearing down, and driving back to the shop.

If the caller has any hesitation about my fee structure, I wish them a good day and hang up. If their problem isn't worth $4 a minute to get fixed right away, it isn't worth my time to debate the issue :nana:

FWIW, most people are happy as a clam to find anybody who will fix it now, and price becomes a non issue. I should probably charge more :devil:

 

[precisionworks]

One of my race engine builders stopped by today to pick up a set of Arias forged pistons. He buys them knowing the compression ratio will be too high, cc's the combustion chamber, has me mill off what we feel will be the correct amount (based on doing this dozens of times) and then cc's the modified piston.

Got lucky & took the correct amount off the first time around. Got really lucky that I didn't take too much off & trash an $800 set of pistons :huh: Took the same amount off the other five pistons in the set so that the amount removed from each one was no more than +/- 0.1 gram from any other one. Had all six done in 2.5 hours, including cleaning up aluminum chips that were thrown ten feet.

The point of this rambling? All the business from this customer is the result of one "cold call" where I stuck my head through the door of his shop & asked if he had a need for machining or welding services. Business is out there if you simply look for it and ask for it. It may not be related to making or modding lights, but it usually pays pretty well. Sometimes enough to buy a Ti light from one of the makers on this forum :devil:

 

[gadget_lover]

See what I have always hated is when I ask shop to do a job that is very basic and requires minimalist tools to do it. Say chuck some aluminum in a lathe and make some spacers. The job takes 1.5 hours for all and I pay 100 in labor and $2. Then another guy has a complicated part milled that used many different expensive tools and he gets charged the same per hour.

Basically they are barely breaking even on his job and making bank on mine. I am a firm believer in pay for what I am getting.

By that logic, the pricing should be based on it's cost to the manufacturer, not based on the value to the customer. That makes no sense at all to me. If you buy a used car from a guy who inherited it from his dad, you don't expect to get it for free, do you?

In essence, when you pay for the value of the part instead of the cost of making it, you ARE getting what you paid for.

The cost of equipment is a red herring. I joke with my wife about the $500 deck chair. The first part I made with my lathe was a new cap for the hollow leg of a chair. If that was all I made, it would have cost more than $500 in tools. In a shop that has a $10,000 lathe they will use it day in and out. Eventually, it will have earned more than it cost to buy.

There is a saying in software development. The first one that needs to cross the bridge pays for it. The rest of the projects reuse that code for free. It does not work that way in a shop.

The point about CNC is a good one. The part it does not mention is that you will go with CNC only if it can deliver on your schedule and produce equivalent parts. If the job is small, you may find the per part cost is much, much higher. Then you'll wish the manual shop was still in business.

It pays to keep good craftsmen in business.

Daniel

 

[gadget_lover]

I almost forgot to mention....

When paying for work, you are paying for the other person's
time
knowledge
equipment
consumables
overhead
lean times.

The electrician who did a side job for me bid high. I offered him 1/2 and he took it. He mentioned that this might be the only work he had this month, so he had to make a profit while he could. That's how it really works.

Daniel