How to charge for jobs?

[Batmanacw]

Just sayin ..................this is how I started out .Fixing/making things for neighbors , small shops etc . Charged a very small amount , sometimes nothing . It was beer money back in the day . Soon the word gets out . Machining for next to nothing . It turned an enjoyable hobby into a company and 16 hrs a day business . It was no longer fun , just another stressful job while working another full time job . Last straw for me was when I found out my neighbor was charging someone for work that I did and did for free . I closed the doors , moved the equipment up to the other house and started enjoying the machines once again .

Not saying you'll take this route , but you could . Keep it simple and enjoyable .

Understood.

 

[Batmanacw]

A minimum price depending on the customer is a good idea. Post it but let your frequent fliers know it may or may not apply to them depending on how often they drop off a jar of chow chow.


For regular pricing it’s important to keep in mind you may make good money on one job and lose your shorts on another.

You can check out my 18 month boat repair post in the other thread.

Factor in some fudge profit to compensate for the bad days.

No one wants to hear their $20 job now costs $100 because you broke a tap.

It might not always seem so but I am listening.

 

[David2011]

No horror stories to add but I had an eye opener. I showed the owner of a large machine shop the 1/2” x 1” brass Fillister head screws that I made. He said that people wouldn’t understand that they’re worth $150.00 apiece. After considering that they took about an hour and a quarter each to make I saw his point.

 

[matthewsx]

I'm simply going to pass on things that involve that much risk. I'm not remotely interested in that kind of work.

It seems simple enough to use common sense and avoid risky situations. Trouble is you’re dealing with people.

If you’re any good and priced reasonable, all kinds of folks will come knocking on your door. Turning them away because they want something dumb can be hard in a small town. I’m making an assumption here that might be wrong.

It’ll benefit you to have a good line when this happens so people won’t bad mouth you.

John

 

[projectnut]

IMHO, unless you're willing to setup a regular business payment should be calculated in liquid measurement.

Two challenges with charging for work in a home shop:

1. Liability: In the unfortunate event that something you did causes bodily or monetary harm you can find yourself in a heap of trouble. Your homeowners insurance won't cover business liability, and the lawyers will go after anything you own including your home, with the shop & tools. Don't think that only working for folks you know will protect you, if they get hurt their insurance company will be the ones coming after you regardless of if they want it or not.

2. Competition: Many places don't have any independent shops left, or the ones that exist don't want to take in small jobs that don't pay much. But.... The fact that you're operating out of your house, without employees, insurance, taxes, etc. gives you an unfair advantage. It only takes one would be competitor to turn you in to the local zoning authorities or business licensing department to also make your life more difficult than you would wish.

I know there's plenty of folks who do small jobs without any problems so it's not necessary to tell me how I'm chicken little with the sky falling. Do as you will, but I've run several small businesses and decided how to charge based on overhead, expenses and profit needed.

If you're using up tooling have your buddy replace it rather than charging if you can.

Also, $60/hr is too low....

John

In this area $60.00 an hr. would be the sweet spot. Many of the commercial production shops charge $100.00 per hour or more, but the small independent job shops are in the $50.00 to $80.00 range. The small shops in most cases bid the jobs rather than do time and materials. At one time I did some contract jobs for local car club enthusiasts. It didn't take long for the word to spread and in a matter of weeks I had more work than I wanted. The work was interesting, but also time consuming.

At the time we were doing a considerable amount of traveling in our motorhome and didn't want to be tied down to work in the shop. We would be gone for up to 3 months at a time traveling to places like Alaska, Nove Scotia, and just about anywhere in between. When the contracts were fulfilled, I decided I wasn't going to get sucked into that routine again. I now only do my own work, and a few nonpaying jobs for friends. Rather than work for cash we trade services.

 

[gard]

I recently increased my shop rate from $30/hr to $35/hr. I add on any consumables such as material, welding rods, cutting discs and ruined cutting tools. I do not charge for any tools or fixtures I build because I keep them and because they are too much fun to build. I have only old manual machines so I assume my rate is low but I also am probably slower than real shops with modern tools, CNC and Carbide. Cash is king.

Thanks for the interesting food for thought from others about insurance liability and binding arbitration.