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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. Vics stuff
    Joined: May 24, 2014
    Posts: 377

    Vics stuff
    Member

    I have been in business for over 30 years in the fabrication industry as a side business. Working out of my home garage . I picked and chose what jobs to take on that I could do by myself and not taking up a lot of time. Meaning days. I started working out of a 1 car garage. Worked my way up and saved to afford a 6000 square foot shop which I built out of cash from decades of saving.
    I am retired now from my main job and puts out of my new shop. Working on my projects as well as picking up side jobs. This has taken pressure off me to beat the bushes for work and able to work on my own projects. I still make a few bucks but do not feel married to my business.
    Vic
     
  2. gimpyshotrods
    Joined: May 20, 2009
    Posts: 18,672

    gimpyshotrods
    ALLIANCE MEMBER

    Get a business license, and learn what a mechanic's lien is.

    There are guys out there who will tell you that a good shop never takes deposits. They are wrong.

    I, twice, ended up with most of my workspace and parking taken up by customers who vanished for extended periods of time. I had to lawfully acquire (costs money, takes time) and sell-off (takes time and space) several customer cars when they disappeared off of the face of the earth when they owed me money.

    For a small shop, make the customer buy all of the parts, or pay you to do so (bill for ordering time, too). Have them pay weekly, for the work expected to be done in the following week. That is the one-week deposit.

    Follow through. Keep your word. If you are unable to perform that work in that time, offer to give that week's money back, or apply it to the next week's work.

    Charge a storage fee if they don't show up to pay, as the presence of their vehicle on your property blocks working space. If they repeatedly don't show up to pay, inform them that you will be pushing their car off of you property, and follow through.

    Yeah, it sounds harsh, but it only takes a few bad customers to totally ruin a small operation.

    I am not saying that you are guaranteed to have a worst-case scenario, but you need to have a contingency for that, in case you do.

    Imagine that you have the smallest unit of working space (say a 1-car garage), and my worst customer, who showed up 277-days after breaking contact, expecting to pick up his Continental.
     
    Last edited: Aug 15, 2021
  3. TRENDZ
    Joined: Oct 16, 2018
    Posts: 310

    TRENDZ

    I had a friend/ retired co worker that I would do hotrod stuff for. He had a nice 57 that he had me install a Chevy ramjet350, do some wiring, make custom brackets and exhaust etc... the car was a nice driver/ show car that I was proud to be part of. Then he bought another car because it was cheap. I hated everything about it from looks to style to quality of build. I would work on it with distain. I told him not to bring it back and didn’t want people to know i ever worked on the car. This really hurt his feelings and our friendship suffered.
    My advice is not to push someone into working on something they are shying away from. It doesn’t go well.
     
  4. All I'll add is that the vast majority of customers always add or change things to the original agreement. Or can't make up their mind on certain aspects of the build. Once me and my customer agree on a total cost, i require a 30% deposit. Any work that is added by the customer after that is at my shop rate of $48 per hour plus materials. I always do what i say i will do, i can't control the customer changes and hold ups on parts and the like.
     
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  5. Ziggster
    Joined: Aug 27, 2018
    Posts: 919

    Ziggster
    Member

    Interesting perspectives. I tell my two teenage daughters the future is for those working for themselves. I believe if you start a business today and provide a quality product at a reasonable price and on time, success will come because there is just so many crappy products, people, and businesses out there. The youngest wants to be a doctor, but that is a different story as a university degree is no longer a meal ticket to a comfortable life. A few weeks back, I was at the bottom of my driveway working on some gravel that I just gotten dumped off, and a guy comes up in his CASE skidsteer. We start talking and he tells me he lives just over on the next road (we live in the country on a lake). Never heard or seen him before. Tells me he just does construction work around the lake. Tells me he does no advertising and had enough work to keep him busy, and make a decent living. I asked him what his going rate for excavation work was and he said CAN$350/hr. I almost fell over. Not sure what the going rate is, but seemed high to me.
    A couple years ago I was talking to a vendor who had metal fab pieces on display at the Jalopy Jamup in Rockton, ON. Asked him if he was doing it full-time, and he said yes. He said he had more than enough to keep him busy, and was serving customers from all over southern Ontario. Didn’t ask what his shop rate was, but I was surprised that he had enough work to make a living at it considering hot rodding isn’t as pervasive in Canada like it is in the USA.
    My late wife’s best friends husband started working for a construction company doing renovations about 15 yrs ago. Had no experience as a carpenter, but learned and worked hard. He started taking on side jobs in his spare time. Business took off. Again, no advertising needed. Only word of mouth. Eventually he went off on his own, with the blessing of his former employer. Made a ton of money, and asked me several yrs ago if I wanted to join at a starting wage of CAN$80.00/hr. That was substantially more at the time than I was making at my govmt job with a mech eng degree.
    I would say your guy would first need to start off out on his own, if he can’t do that, then he will never have it in him to be successful even with a boss managing him.
     
    Last edited: Aug 15, 2021
  6. Tickety Boo
    Joined: Feb 2, 2015
    Posts: 1,402

    Tickety Boo
    Member
    from Wisconsin

    Since I retired, I call my younger wife that is still working my Sugar MaMa ;)
     
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  7. squirrel
    Joined: Sep 23, 2004
    Posts: 49,802

    squirrel
    Member

    No argument with that.

    The thing is....you also have to be one of the small percentage of people who are capable and willing to do great work for a reasonable price, reliably. Most folks seem to be the other type, as you note in your last phrase
     
    5window likes this.
  8. Quote and bill by the Job, EG: $5000 to chop a top. then there is no/less confusion.
     
  9. gimpyshotrods
    Joined: May 20, 2009
    Posts: 18,672

    gimpyshotrods
    ALLIANCE MEMBER

    What do you call your older wife, and do the two know about each other?
     
  10. gimpyshotrods
    Joined: May 20, 2009
    Posts: 18,672

    gimpyshotrods
    ALLIANCE MEMBER

    I would never write a quote.

    I would always write an estimate! If you write a quote, that's the price. That can lead to misunderstanding.

    You never know what you will find when you cut into a car.
     
  11. Gofannon
    Joined: Feb 8, 2007
    Posts: 712

    Gofannon
    Member

    Jordan Peterson nails the type of dilemma I live in. Creative people need to be creative or they die, yet it's almost impossible to monetise it. I work in the tiny shed in my avatar, mostly full of my own projects. Every now and then money would get tight, and I'd have to go and get a job on wages that would inevitably destroy me. Now I have a part time job that gets me out and about, and gives me a little cashflow. There are different ways of doing things, just whatever works for you. There are easier lifestyle choices. I could buy a bigger shop if I borrowed money, but that would create my own prison!
     
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  12. AccurateMike
    Joined: Sep 14, 2020
    Posts: 184

    AccurateMike
    Member

    Maybe, rather than start a custom shop, start out by fabricating something that you can sell "mail order". This can pay the bills. Eventually allowing you to pick the custom work you want to do. If the custom work is keeping the lights on, you are likely to take work you'd rather not. Think of something you can build and sell. It doesn't even have to be automotive. When you are taking in a mortgage payment or so, pick work you want to do and do it T&M. Bill monthly. Often the customer is happy to get a monthly progress report and only pay for what has happened. Paying that way can also help them afford/budget the project. Good luck ! Mike
     
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  13. stanlow69
    Joined: Feb 21, 2010
    Posts: 5,731

    stanlow69
    Member
    from red oak

    Not picking on anybody personally, but it`s interesting getting opinions from people who have never been self-employed. Getting the work and doing it is the easy part. It`s all the other crap you have to deal with. Your biggest cost will be health insurance. If you are in business long enough, you will understand what I`m talking about.
     
  14. gene-koning
    Joined: Oct 28, 2016
    Posts: 2,548

    gene-koning
    Member

    There seems to be this misconception from many current self employed people that they can charge people without doing any work. The idea that if you don't work, you don't get paid is something that somehow think doesn't apply to them, is incorrect. If you choose to stand around and BS with someone for 3 hours, being self employed gives you that option, but you can't bill someone for that time. Then to add to that, if you told the customer who's job you were suppose to be working on during those 3 hours you were caring out the BS session that their job would be done tomorrow, you get to stay at work those extra 3 hours (or however long it takes) to get the job done. And guess what? you can only bill them for the time you told them it would take to do the job. You don't get to bill them for the 3 hour BS session.

    Parts delays are parts delays. If you can't get the part, you can't get the part, call the customer and tell them what is going on, most are pretty understanding these days. But, if you tell them the delay is a parts delay, it better be a parts delay, and not a delay because you spent 3 hours in a BS session. Customers have a way of finding such things out.

    I agree with the concept of doing one job at a time. It tend to keep you honest. If you have your only work space tied up with the only thing that pays you, you tend to get stuff done quicker and better (you really can't afford to do something over if you only have one work space).

    I discovered a small work space can be a life saver. I can't work on someone else's job if my work space is tied up, and I can't stand around and BS if they want me to work on their stuff next. It is really effective when you have to book stuff 3 weeks out. To do that successfully, you really need to have a rock solid plan for those jobs with dead beat customers, I promise you will run into a few.

    Another thing I just get around is the inability of some shops to have a grasp on how long a job will, or can take to complete. In the 28 years I ran my shop, I can't remember many customers that didn't want as least a ball park cost before doing the job. I would base my estimate on what I thought would be a worst case scenario and would take the time to teach the customer why the cost could be that high. I would contract them based on if everything turned to carp it would cost this much, but if things went as planned it could be a smaller amount, based on the shop rate. In the early days, I did more then a few jobs at less then the shop rate to keep the cost within the estimate. You get really good at determining what is going to need to be done. On really questionable jobs, we would set a look into it and see what we have price, the call the customer once I knew what I was up against and price it out from there. You want happy customers? Give them a worst case estimate of $1,000 then give then a finished job bill of $800! Or give them a bill on a project that was really bad for what the worst case estimate was, especially when the time card showed more time then the bill covered. Guess who will be coming back, and who will be telling all their friends? The few times I ended up working for 1/2 the shop rate always paid off in return customers and a lot of new word of mouth customers. Gene
     
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  15. gene-koning
    Joined: Oct 28, 2016
    Posts: 2,548

    gene-koning
    Member

    He is correct, health insurance for a self employed person is very expensive!

    I was fortunate, my wife had a great job where she could buy really good health insurance through her job that covered me (and the whole family in the early years) pretty cheap. If you don't have an understanding and supportive spouse, your business is doomed!

    It should also be noted that nearly every start up business won't make hardly any money the first 2-3 years, and it will take 3-5 years before it will be making enough to provide you with very iminium income, certainly no where near what you think you are worth. Most new businesses fail because the owners think they can have everything they want right off the start, but in reality, you will be doing nothing but working really hard, for nearly free, the first 3-5 years your business first starts up.
     
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  16. TRENDZ
    Joined: Oct 16, 2018
    Posts: 310

    TRENDZ

    I am fortunate enough to have a decent paying day job with generous benefits, I used to take any job after work that I could get my hands on for “toy”money. That was burning me up. I came up with a puller specifically for the diesel industry. One weekend of labor a month stocks me with product that i sell with a somewhat predictable supplemental income. This took a lot of undue stress from my “perceived” needs.
    Leaves me 3 weekends of casual work for extra cash or just pleasurable work.
    I realize it is a temporary ride, but the formula of “solve a problem and they will come” seems to be a nice formula for my needs.
     
  17. 2OLD2FAST
    Joined: Feb 3, 2010
    Posts: 3,513

    2OLD2FAST
    Member
    from illinois

    To pick up on what @gene-koning said above , I mostly retired 8 years ago , it was the middle of June before I'd have the years overhead payed off , just health insurance for my wife & I was nearing 20k per year for a " just get by" policy . In order to bill 2000 hours per year , you'll put in 3-3500 ,billing , inventory control , material sourcing & gathering , sub contractor scheduling , estimating , customer relations , bookkeeping , etc burn a tremendous amount of your time .
     
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  18. Ziggster
    Joined: Aug 27, 2018
    Posts: 919

    Ziggster
    Member

    Geeze. I can’t believe how much health insurance costs you guys. A buddy works in Chicago and told me a few years ago that it was “only” US$8K for him and his wife. Thought that was a crazy amount, but then here in Canukistan, my overall income tax rate is an outrageous 53% along with a sales tax of 15%. I would love to move down to Texas if I could.
     
  19. gimpyshotrods
    Joined: May 20, 2009
    Posts: 18,672

    gimpyshotrods
    ALLIANCE MEMBER

    When I had my shop, I had to go without health insurance. It was not an option.

    I have pre-existing conditions, and back then you could be outright denied a policy. If a company would be write you one, it may have been excessive in price, and would exclude your conditions.

    I looked into it, and it would have been $32,000/yr, with a $10,000 annual deductible.

    Now you cannot be denied coverage for conditions, but it is not cheap.
     
  20. ekimneirbo
    Joined: Apr 29, 2017
    Posts: 2,098

    ekimneirbo
    Member
    from Brooks Ky

    I think the biggest reasons for failure are poor money management and not "toughing it out" when things aren't going your way. A good friend of mine has seen the ups and downs first hand. The industrial company he worked for closed and he started a small body shop. His wife divorced him. He is a talented and personable guy, and he plodded along. Opened another small shop that went under. Started working out of his garage. I once had to lend him the money to pay his electric bill. Then he got some good Corvette builds and things started looking up. He had remarried and was renting a new building and had lots of work. Decided it was time to build a new house and one of his customers fronted him some money for some future work. They had become close friends (so he thought). Turns out that the guy was seeing his wife on the side and she liked the money he had. When they got him financially constrained, they sprung the trap on him. The guy wanted to be president of his company and his wife was to be CEO or something. At that time he had several employees and his wife kept the books. He would simply be the "Shop Forman" with no ownership. After a court battle he was divorced again and the backstabbers had control of the business and possession of everything but his basic tools. Without his expertise, the shop quickly folded. The exwife remarried the customer and bled him dry and divorced him.
    Meanwhile my friend persevered. He met a very nice lady and she believed in him. She retired from her job and drew out all of her 401 retirement. They bought some land and built a small shop on it. Gradually it blossomed as he still had a good reputation. He built more buildings and hired a few guys to work under his direction. He also had a few "serious" health issues along the way, but he never gave up.
    Last time I talked to him he was driving an almost new Corvette and his business was humming along with about a million dollar a year gross.
    Mistakes are made along the way in everything people do, and you have to learn from them. I think if someone has the talent, then the other thing they need is perseverance.............

    Even Boyd Coddington went thru a bankruptcy.
     
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  21. stanlow69
    Joined: Feb 21, 2010
    Posts: 5,731

    stanlow69
    Member
    from red oak

    There are hundreds of reasons why business`s fail. Even thou they still have plenty of customers and work to do.
     
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  22. 5window
    Joined: Jan 29, 2005
    Posts: 8,361

    5window
    Member

    Let's look at it from the other way around. What do you need to make? Let's say you want to net $50,000 US a year. That won't let you into really nice house or a new pickup, but you can live on it. There are roughly 50 work weeks a year at 40 hours a week or 2000 hours a year. To get there, you'll need to get $25.00 an hour in net profit. An average net profit for a well established small business might be 10% , probably less getting started, but let's be generous. Do you see where this is going?

    You need to gross $250.00 an hour to get your 10% to get your $50K net to live on. And that's if you use after hours time to make phone calls, answer mail, restock, make estimates, clean the shop and all the other non-billable stuff.

    If you have equipment and a space and time, you could do okay as a part-time supplemental gig, especially if you're main occupation pays your health insurance. But, I don't think you can easily do a start-up and survive.
     
  23. fastcar1953
    Joined: Oct 23, 2009
    Posts: 2,622

    fastcar1953
    Member

    That's about where I'm at. net about 65,000 a year. Cheap living in my area. Humble life style but fun. Have what I need get what I want.
    Cash not credit.
     
  24. trollst
    Joined: Jan 27, 2012
    Posts: 2,068

    trollst
    ALLIANCE MEMBER

    Yeah, See? Lots of opinions, lots of experience, free advice given, take it.
    My trade is that of an equipment operator, life long, seen many buy iron, gonna make their first million in three months, buy a new pickup, spend money they don't have, eventually the pickup and machine go back to the bank. Why? Well, because the guy they worked for made money hand over fist, at least thats the way it appeared, so why not buy a machine and make huge money? Because of the ton of hours unbillable, chasing money, answering the phone, dealing with the tax man, paying a guy to manage the money-taxes at the year end, being run ragged by stupid people who think your time is worthless, not me. I worked for someone else my whole life, built hot rods with my spare time and never repaired a piece of iron in my working life. I'm not cut out to run my own show, I know me, I tried to run a shop to pay for my hobby, but the extra shit got to me, so I stopped.
     
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  25. stanlow69
    Joined: Feb 21, 2010
    Posts: 5,731

    stanlow69
    Member
    from red oak

    I get really irritated when I go into a business and see an employee texting. Lets say the shop rate is $60 an hour. Or a more specialized shop with a $120 an hour shop rate. Doesn`t sound to bad. But look at the $60 an hour is $1.00 a minute. The $120 is $2.00 a minute. Now you know why I get mad.
     
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  26. F-ONE
    Joined: Mar 27, 2008
    Posts: 2,877

    F-ONE
    Member
    from Alabama

    ^^^
    This
    The OP mentioned the guy has a wife and what? 4 kids?
    When a man has a wife and 4 kids it's not about hobbies, dreams, skill, business ambitions all that baloney, it's about what ever is necessary to keep a roof over their heads, food in their belly and shoes on their feet.
    That's a man's job. Period.
    A wife and 4 kids that is the dream, that is the accomplishment.
    If it means 8-10hrs a day of digging ditches or plucking and gutting chickens...so be it.
    I raised up mine and did what was necessary. He needs to do that same whatever it may be.
    "When I was a child I spake as a child and I acted as a child. Now that I'm a man I have put my childish things away."
    The best advice I can give that guy is...
    be a man.
     
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  27. 57JoeFoMoPar
    Joined: Sep 14, 2004
    Posts: 5,068

    57JoeFoMoPar
    Member

    This is a tough one to nail down. I have a good buddy who works for a VERY high end shop, and their shop rate is well in excess of $100/hr. Paint jobs probably start around $25,000, assuming there is no major metal work that needs to be done. A build is going to be well into 6 figures. Clearly, this is well out of reach for the average individual, or even above average individual. They have a very exclusive clientele and business rolls in.

    On the other hand, it seems lately every Tom, Dick and Harry has a "custom shop" with an instagram page. I'm inherently distrustful of people who say they're car builders. I'd venture to say 90% of them are full of shit. You could totally hit a home run and find a local guy who is immensely talented, who can do very good work for a very reasonable price. I think you'd be more likely to find a wannabe with questionable build quality, marginal skills, and sub-par tooling undercutting legitimate shops who have to answer to higher quality control.

    All I can say is ask questions, get it in writing, and above all, check references. Like, actually check them. Make the calls and do your homework before you invest the money.
     
  28. indyjps
    Joined: Feb 21, 2007
    Posts: 4,390

    indyjps
    Member

    My brother does remodeling and painting. Different business but when he bids, he adds what he calls a bitch tax, if they talk about HGTV, or don't know what they want, the price goes up because the job will change direction several times.

    Sometimes you have to set the rate based on the customer.
     
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  29. twenty8
    Joined: Apr 8, 2021
    Posts: 443

    twenty8
    Member

    Yep, I call it the DH tax............................think about it, you'll work it out...........:rolleyes:
     
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  30. GasserTodd
    Joined: May 15, 2009
    Posts: 435

    GasserTodd
    Member

    May 21 8.jpg

    Im having a car built down here, and the current rate is $85 per hour + tax. Small fab shop, out in the country and on the guys home property.

    So far he has about 1200 hours of labour in chassis, body and guards. Im thinking all up, the car will be north of $175,000 when done.

    Its within my budget and Im very happy with the quality of the workmanship.
     
    Last edited: Aug 17, 2021
    57JoeFoMoPar likes this.
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