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Technical Fabricator Rates?

Discussion in 'The Hokey Ass Message Board' started by moparjack44, Aug 14, 2021.

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  1. Budget36
    Joined: Nov 29, 2014
    Posts: 13,173

    Budget36
    Member

    I’ve only known a few guys who turned their knowledge into their livelihoods, they all built their businesses while still having a “day job”. Then made the switch.
    I envy those who can just hang a shingle and start a business and make it work.
    I know, no help. Best of luck for your friend.
     
  2. X-cpe
    Joined: Mar 9, 2018
    Posts: 1,958

    X-cpe

    In my case, you can't afford to pay me by the hour and I can't afford to work by the job.

    Good reason why its going to be difficult to make it on his own. Technical skill is not enough. He should go to the local community college and take some of their courses on how to start and run a small business.
     
    40FORDPU, olscrounger, clem and 5 others like this.
  3. Or marry someone with an MBA
    That’s what one guy I know did. 30 years in business now.
     
    jim snow, clem, X-cpe and 1 other person like this.
  4. Pricing has to be realistic for the area (cost of living, utilities, shop space, etc.) BUT keep in mind: A LOT of guys go into business with no clue how things work in the real world!!
    If he plans on "fully paying himself" as Gimpy suggested, he can't decide he WANTS to be making $150K and base his rates on that. Too many people set their mind on their 'wants' and price themselves out the market. He may have been working at a shop that charged $150/hr, and thought the shop owner was cutting a fat hog so that's what he should charge, when in reality the shop owner was covering a lot of costs, including late-paying customers, advertising, inventory, employee insurance, office overhead, etc.
    He should also consider how he can step up his game to improve his "slow" reputation, and realize (and commit to) the fact that he can't bill 8 hours a day if he's only working 5. Doesn't matter his hourly rate, if he's billing for every waking hour, $15/hr can still lead to a huge bill for the customer, then he earns a reputation for being slow AND expensive!
    Good luck to him, but I hope he knows that being a small business is a long hard road, and not for everyone.
     
    e1956v, Hollywood-East, clem and 3 others like this.
  5. The conundrum.
    It’s hard to talk to customers, answer phones, bid work, handle supplies, pay bills, stamp out fires, maintenance equipment, monitor and charge for supplies and build cars all at the same time.
    If he’s the fabricator, he needs someone to manage.
    It’s extremely hard to do both

    a fence with a locked gate with customers by appointment only is how one guy I know made it work.
     
  6. Budget36
    Joined: Nov 29, 2014
    Posts: 13,173

    Budget36
    Member

    This is so true. Being the worker and administrator of everything (even if you have a solid background in both) can turn into a 20 hour day wearing all the hats.
     
    clem, X-cpe, 2OLD2FAST and 1 other person like this.
  7. Mr48chev
    Joined: Dec 28, 2007
    Posts: 33,861

    Mr48chev
    ALLIANCE MEMBER

    Overhead costs are just as much of a factor in shop rates As ones skills. That awesome building in a prime location may have monthly costs that really eat into monthly shop rates. Payments for equipment, utilities wages and other cost of doing business expenses all factor in. Some of the guys with shop buildings thaT are paid for or weren't comparatively as expensive as that fancy building down town may pocket more net in one than the guy with a lot higher rate.
     
    Last edited: Aug 14, 2021
    gimpyshotrods likes this.
  8. squirrel
    Joined: Sep 23, 2004
    Posts: 55,933

    squirrel
    Member

    ...or marry someone with a BSME and goof off for 30 years.... :)
     
  9. That’s even better.
    I’m a semi-kept man myself
     
  10. trollst
    Joined: Jan 27, 2012
    Posts: 2,108

    trollst
    Member

    This is the most common thing you'll run across in this hobby, guys get good enough to work on others stuff but they're not good enough to make a living at it. (me), I tried running my shop, make money to afford my own stuff, I'm real good at chassis work, real good at understanding how its all supposed to work, so I turned out quality stuff, some of it found its way into magazines. I worked too cheap, not enough self confidence, never was good at tooting my own horn, I competed with guys with half my skills, but twice my ability to sell themselves, they made more money than I. I built a loyal following, worked through word of mouth, improved my confidence, and finally quit, because the fun factor left when it ate up my spare time.
    I also didn't have time for the phone, or the bills, no patience for the garage tour crowd, I thought it was all about welding and living in my shop. It isn't. Your buddy is probably better off working for somebody who needs his skills, building his own stuff at home and selling them when they're done. That was my niche, I've built and sold a dozen cars, kept the one that matters, spent some good hours in my shop, when I WANTED to, pleased myself, and didn't go out to the shop when I didn't want to. My mental health has never been better.
     
  11. Marty Strode
    Joined: Apr 28, 2011
    Posts: 8,796

    Marty Strode
    Member

    Some Sage advice right there !
     
    trollst, clem, rod1 and 3 others like this.
  12. If he needs a boss, he can't work for himself.
     
  13. 2OLD2FAST
    Joined: Feb 3, 2010
    Posts: 5,216

    2OLD2FAST
    Member
    from illinois

    Insurance , personal & business ,liability , workman's comp , billable hours vs hours worked all make it very difficult to earn a living . Another thing is being able to write an iron clad contract ! I started spring for myself when my youngest was 2 , one day a short time later , she walked into the shop & I remember doing a double take , she was 7 & I felt like I missed it !
     
  14. gimpyshotrods
    Joined: May 20, 2009
    Posts: 23,263

    gimpyshotrods
    ALLIANCE MEMBER

    Unless one is planning on living alone in the shop, there will need to be a second set of walls and a roof involved. Those are rarely free, and even farther from it when there is a spouse and offspring involved.

    I know several guys who opened up shops, only to lose the wife and kids (and later the shop).

    When I speak of paying yourself, I mean covering all of your personal overhead, too. You have to factor in both. You cannot expect a spouse to shoulder the burden of all of that, while you work 168-hours-a-week, much less the kids, too.
     
  15. F-ONE
    Joined: Mar 27, 2008
    Posts: 3,271

    F-ONE
    Member
    from Alabama

    Do you know how many “ rod shops” have opened and subsequently closed in the area of my small “southern town”?

    All Of Them.
     
  16. stanlow69
    Joined: Feb 21, 2010
    Posts: 7,348

    stanlow69
    Member Emeritus

    If he doesn`t try. He will always wished he had. Being in the back yard. Is better. Keeps the riff raff and looky see`s out. If they want work done, they will find you. Bill by the hour. And do projects in stages being paid along the way. Keeps the customer informed on what`s getting done and how much it costs. There are extra cost involved with design changes and hidden problems. You need to be paid for what you do. As for you looking at him, you are making assumptions that you don`t know the whole story. He`s slow. Have you done what he does. Maybe not.
     
    chopnchaneled, Fogger and rod1 like this.
  17. I have hired great fabricators/welders/mechanics; but couldn't keep them because of their inability to complete jobs in timely manner. I know a great body/paint guy; couldn't run his own business worth a crap. Sounds like your friend may be in that group and that is why he is not still working at that fab shop. Maybe time to look for a day job in some other field and build a few frames or chassis for sale as a side job.
     
  18. fastcar1953
    Joined: Oct 23, 2009
    Posts: 3,567

    fastcar1953
    Member

    Liking what you do helps. After 16 years I am getting burnt out though. Wife says let the employees handle it and take a vacation.
    I started out not making much but word of mouth helped. I'm also to dedicated to it.
    Customer comes first, happy customer means more work and more money.
    After ten years I was getting behind so I hired help.
    I went from 25/hr to 80 /hr. over the years plus markup on parts to cover overhead.
    I make a decent living. Built new home , wife drives new car, and 3 play toys.
    You have to be humble and realistic about your wants and needs.
    My customers know I built a new home and they paid for it. I just took 14 years before that to get there.
    They are happy for me. If I done it all in the beginning I would be out of buisness.
    Patience and commitment are key, not ability.
    Start below local rates build reputation. If your that good you will be above local rates and taking their customers in no time.
     
  19. fastcar1953
    Joined: Oct 23, 2009
    Posts: 3,567

    fastcar1953
    Member

    Working for someone else he should know what time and money it takes to be in bisuness.
    Hopefully he knows what stuff costs and consumables.
    Funds put back for slow payers and long jobs.
    Some months I make 5 thousand and some months I make 40 thousand. I average 14 thousand and most goes out before I see it.
    The bills still come at the same time each month. Make sure money is there to pay them.
    Never get greedy. Don't spend money you don't have.
    Stay away from loans and debt as much as possible.
     
  20. moparjack44
    Joined: Nov 8, 2005
    Posts: 659

    moparjack44
    Member

    I agree, great advice. This friend I have needs to work for someone else. In his own shop now, if someone comes into his shop and wants to BS for 3 hours, that is what he will do.
    No one questions his skill, he just seems to never complete a project. That is why I am trying to partner him up with someone who I know will make sure he sticks with more working and less BS with every Tom and Harry Dick that walks into his shop.
    To condense this topic, I am seeing we all basically agree.
     
  21. moparjack44
    Joined: Nov 8, 2005
    Posts: 659

    moparjack44
    Member

     
  22. moparjack44
    Joined: Nov 8, 2005
    Posts: 659

    moparjack44
    Member

    No I have not, and could not.
     
  23. TRENDZ
    Joined: Oct 16, 2018
    Posts: 386

    TRENDZ

    I love doing one off small jobs that I can complete in a reasonable time. Anytime I get the “oh could you also” my skin starts to crawl. I will never get your car done if you keep adding to the list. These people also seem to become shop fixtures that are looking for a place to hang out. Im a big proponent now of “drop it off with my wife, I won’t be home.”
    I’ll call you when it’s done.
     
  24. moparjack44
    Joined: Nov 8, 2005
    Posts: 659

    moparjack44
    Member

    :(
    TRENDZ, I am that "oh could you do this also" guy. I hate myself for it, but I am really really bad about that.
     
  25. TRENDZ
    Joined: Oct 16, 2018
    Posts: 386

    TRENDZ

    It takes all types. Don’t need to feel guilty. But... if you are afraid to ask before showing up, it feels like you were being deceptive to get in a bigger job than you may think Im open to. That is not the way to do things
     
    Hollywood-East likes this.
  26. moparjack44
    Joined: Nov 8, 2005
    Posts: 659

    moparjack44
    Member

    Totally agree with everything you said. I think those of us who are customers, expect the shop to set everything else aside til you finish what "I" want done. Humans, who the hell can figure us out??
     
    Desoto291Hemi and TRENDZ like this.
  27. ekimneirbo
    Joined: Apr 29, 2017
    Posts: 4,216

    ekimneirbo

    I think making some displays of things he can do and showing them at various shows and swap meets along with an ad in something like Streetscene might help . A lot of people may be initially turned off by having an open ended cost from a relatively unknown craftsman. Give new customers a firm price and completion date until he gets a reputation established and has return customers. Getting things done on time and within cost go a long way toward establishing a reputation. Not getting something done on time goes a long way toward trashing a reputation.

    When I was a procurement specialist (fancy name for a "buyer"), I continually got calls from people starting new companies. They promised me quick service and low prices and lada lada lada. Yes, I would like to help them, but they were not promising me anything that my current suppliers weren't supplying and they already had an established reputation with me and proven reliability. So why would I risk not using proven vendors?

    I had a project with a government contract that was expiring at years end.All purchases had to be completed by then.
    The Federal Supply System furnished a certain part for us that THEY ordered from a vendor and stocked. My contact in the Federal Supply System lied several times and told me the parts were on order but delayed. November rolled around, so I double checked with some other sources at the FSS. They told me the order had never been placed. Now my bosses didn't want to hear that and we didn't want to stop production over that part. I scrambled and found that none of my current suppliers had the capability to make this special gear. Crunch time for me........

    Somehow (Don't remember how) I contacted/was contacted by a company that assured me they could make what I needed and deliver it on time. This was at Thanksgiving. Turns out that he already made the same gear for the Air Force under a different metal spec. Since I was desperate, I took a chance. The guy redeyed the material from Cal to Florida. Called me and said it was wrong stuff. Reordered, re red eyed and got the right stuff. Busted his chops to get them done and they arrived at our site just before we shut down for Christmas.

    Well, he had established himself with me for sure, got my tit out of the proverbial wringer.........
    He was now on my "A" list of suppliers, and a NEW job came to me to be put out for bids. First thing I did was to contact his company and ask if he wanted to bid on it. Best I can remember is that it was initially about a $250K order, with subsequent orders to follow if expectations were met. When I left that job his company was still the supplier of those items for us, and I think they got the even larger government concession on them.

    Why all this.........the point is that its often hard to estabish oneself, and when an opportunity comes someones way they have to recognize how important it is to be on time and in budget...........even if you have to eat a little time to do so. Lots of talented people fail to recognize the importance of being trusted and keeping their word. I had the opportunity to help several vendors get established and steer work in their direction. The honest "keep their word" type always got more work from me. The unreliable ones went away.
     
    Last edited: Aug 15, 2021
    Fordors and TrailerTrashToo like this.
  28. Fogger
    Joined: Aug 18, 2007
    Posts: 1,804

    Fogger
    Member

    I have three friends who have run successful small shops for many years. They all use the same business plan, work is billed by the hour and only take in one job at a time. All three are specialists in their area of expertise and have solid support from their families. It can work but someone must have a solid business plan and be able to budget correctly. One of the three is a retired and always had hot rods. He used some of his retirement to lease a shop to move out of his backyard garage and take in fabrication jobs, the city kept sending an inspector who basically shut him down. He moved back to his backyard shop that he expanded and has been very successful. Takes a solid plan to be successful and do more than break even.
     
  29. F-ONE
    Joined: Mar 27, 2008
    Posts: 3,271

    F-ONE
    Member
    from Alabama

    Materials yes, but never ever ever by any means, any how, for any reason, Pay it all in advance.

    It’s just a bad idea. I don’t care who it is.
     
  30. krylon32
    Joined: Jan 29, 2006
    Posts: 9,397

    krylon32
    ALLIANCE MEMBER
    from Nebraska
    1. Central Nebraska H.A.M.B.

    I started my business part time in the late 70's charging 20.00 an hr and doing it in a 1 stall garage/shop. I continued that way for about 6 years when economic changes in my life forced me to make a decision. I decided that I could make a good living by devoting my time fully to the hot rod business. I took on a full build that helped me establish myself and remodeled an old barn into a shop. I worked at the chassis business along side the builds. In the early 90's I developed a few products that were Flathead specific and that helped my business along. I started doing a few smaller NSRA and Good Guys shows in the early 90's displaying my parts. My chassis business established a national presence when I had a booth at the 94 NSRA nats in Louisville featuring 2 of my chassis and my Flathead parts. At that time there weren't the number of chassis builders there are now so that gave me an advantage. Over the early years I did a number of customer full builds but by the early 2000's I concentrated on the chassis and parts business with the only builds being for myself designed for resale. For a 17 year period I did 7-9 NSRA and Good Guys shows a year which kept me in the public eye plus monthly ads in Street Rodder, Rod and Custom, Street Scene and in the quarterly Hop Up. Also building the 2004 NSRA giveaway car was a tremendous boost. All during this time I remained a 2 man shop and sometimes a 1 man shop. I probably should have pushed the envelope but I was comfortable with what I was doing. One thing that made my business a little different from many others was the isolated location of my shop. If a customer showed up at my place it was to do business not spectate. I've had a good run and at 76 as I begin to wind down the chassis business I am grateful to all my customers and my wife who supported me over the years. I think anyone with some talent and desire can succeed in this business if they want it bad enough.
     
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