I have been doing my own fab shop for the last year (officially). And I am losing my ***. My fab rate is 60$ and hour, but I am very methodical almost **** about the quality of the work. So it can take me a long time to do some stuff. For example this weekend I did a hybrid bolt in/ weld in roll bar and mounted a Sparco in an M3. I bet I have 40 hours in this thing. Charged the kid 1000$ Instead of doing my labor rate plus time, I quoted him 1000$ up front. Thought I was making out like a bandit. Have a couple of hundred in material the rest is labor. I have had similar incidents lately.

Don't have a decent basis for proper estimation and it is killing me. Plus I feel bad when I hand a guy a 500$ bill for some relatively simple welding, that just takes a long time. Maybe I am not being a big enough ***, or maybe I am worried about keeping customers.

Just venting today.

Oh yeah, I will never do a waiter again. Customer drops off car and I will be done when I am done. Customer still bitched about how long it took.

Thoughts.

 

Guy walks in with an M3 and you only get him for $1000. Shame on you

It's tough to find people that are willing to pay for perfection. There is always someone who will do it for cheaper.

Sorry don't have an answer, I like venting too

Gabe

 

you would be suprised of how much you can charge ppl and get away with it.some mechanic shops charge $500 to swap an axle, takes me an hour lol, 2 if im lazy that day. but thats how it is with cars u gotta pay to play, and the customer walks in the door knowing that.

 

i do maybe 95% of the fabrication work in the our little speed shop in honolulu. when i first started out i would under quote the customer but after a while i could figure out about how long something would take. and now days i always over quote unless its something routine like welding a BOV flange or something simple like that, and at our current rate of $100 an hour it scares off alot of customers but thats the game, and at the same time i dont want to do it if they dont pay what i want.

 

you know i think alot of it is good location. i live in shitty north dakota and i can tell you there is leteraly a hand full of guys with turbo hondas. now i can and have made soem nice manifolds/ fab'd. but there is NO business in this area.

unless i moved south i see no way of ever having a fab business here.

i still don't see how ppl make enough to stay in business.

 

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by turboteener &raquo;</TD></TR><TR><TD CLASS="quote">Plus I feel bad when I hand a guy a 500$ bill for some relatively simple welding, that just takes a long time. </TD></TR></TABLE>

If it was that simple he'd do it himself right? Customers are paying you for your expertise, knowledge, skill, machinery, etc. Sounds like you just need to get better at estimating your actual time.

If you quoted the M3 guy $3000 he might have been taken back, but if you explained that what you do isn't 1/2 assed and it was worth it he probably would have payed. If you did a great job he would have told his friends about you and they would bring in $3000 for the same thing. Now his friends will expect you to do the same for their M3 and only want to pay you $1000. That's the real shame in quoting too low. If you try to charge them $2500 now they will thing you're ripping them off.

 

Yeah, I think I am going to really start overshooting my estimates. Then I look better when I actually come in under.

 

The easiest method for estimation is work history. As you do jobs like this, keep a detailed log of of your time. If the job took longer then expected, detail the problems encountered. The next time when you are approached to do a similiar job, you can pull up the log, and estimate from experience versus guessing.

If it's a new type of job, estimate it best guess - when you approach the billable time with hours left to go, stop work, call your customer and fill them in. If they want you to continue, they will understand where you are coming from and why you are billing them what you are.

The key to staying profitable is billable hours. If you don't bill all of your billable hours, then you will have difficulty. If you are doing $65/hr, you should be able to generate $8-10k a month in revenue for one welder. When you become more established, add more welders. I think the biggest mistake people do is raise their rates hindering growth.

For example, we run $50-$60/hr welding/fab {all tig} rate and run 3 seats full time. Our profit margins for fab are maintained at 67%, with 3 seats, typically 160-180 hours a month per seat. For us thats around $28-30k billable, $18-20k profit. I have 14 months of hitting these targets with 2 welders, 4 months hitting these with 3. If I had decided to raise our rates to say, $85-$100/hr (typical in our area), instead of maintaining them and adding seats, we would have probably experience a third of grown which would have been more like 16-18k billable, 8-10k profit over a period of 2 years. Our estimation processes are far more complicated then logs as is our ERP tracking, but the same principles apply.

 

Teener, I know exactly where your coming from, trust me. I'm a fair guy by nature. I negotiate with the best, and can talk people out of their house and home and have them pay to move my stuff in, but when it comes to charging labor I have conflict.

The one issue, is I am a personable guy. I talk and use my people skills to get business, and to continue business. The customers I have are dedicated like no other, but when it comes to charging those customers I have conflict. I will do jobs that should charge90+/hr, but end up charging nowhere near that sometimes for many reasons. Sometimes its fear of losing business, sometimes I figure make some versus none, it's probably my worst quality to be openly honest.

I too need to just stick to a set of guidelines. I've been recently considering just putting the billing and quoting in another persons hands. I will quote hours and still maintain personable relationships, but when it comes to quoting work and billing, I may be better served by hiring a female and having a seperate dept. They can deliver the quote and collect payment, all with no emotional attachment. Plus, guys aren't gonna act like broke hotheads to some young hottie...lol.

It's these theories that I've come up with out of desperation to stop cutting myself short. It's extreme, but I honestly think it'd work...lol. I think it comes down to truly evaluating what you feel your worth and posting signage (sp?) stating your labor rates clearly where customers can see it. This allows half of the talk to be taken off of your shoulders. Just quote the hours, quote accurately, and let the posted rates speak for themselves.

I'm just like you, in that I am too damn picky. I take long on jobs because I want perfect fitment, perfect welds, perfect presentation, etc and I sometimes kill my hourly rate because of it. I've been forced lately to just trust that my work is worth it, and let it speak for itself, while at the same time, I'm pushing myself to get jobs done faster yet maintain the quality. It's a constant balance/battle, but it's what has to be done to make it...period. Stop being soft, or go get a job and hang it up...that's how I see it.

 

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by RC000E &raquo;</TD></TR><TR><TD CLASS="quote"> Plus, guys aren't gonna act like broke hotheads to some young hottie...lol.</TD></TR></TABLE>
YES! that is actually a great stratedy, i know it would work on me for sure. I don;t own a busniess but everytime i do something forsomeone i know tha ti should be charging money for i either do it for free sometiems (if its somethign ridiculously simple) or some crazy low rate, I feel like such an ******* if i were to charge them fullprice. definitly getting a seperate dept. for that if i open up a business..

 

1000$ for a hybrid cage in an m3 plus a seat install!!!
cage fabbed and installed 1500$ ( add for hybrid extra pain in the ***) at least 250$ for custom seat bracket. thats just my quick estimate off the top of my head.

you just cant be so nice to people. i like to gain business from some people, if you think this would be a good person to help bring you new customers just tell them to keep that price to themself, and they got that price because you are hoping they will send you more clients. then charge their buddies the correct price yuo figured out too late for the first guy

 

Under promise over deliver = money and return customers. Your skill is not theirs, your time is not theirs. How much money they have and how they make it (and what they need it for) is none of your concern. This is how I work unless it is a very close friend or someone I am working with (joint venture, sponsorship, etc).

 

One thing I didn't get from reading your post is whether or not you always have a job waiting. If you are open 5-7 days a week and are constantly working then you have a problem with underestimating as people of said. If you are trying to pay the rent (so to speak) but have a lot of downtime between jobs then you have a marketing problem. In this case, the internet is your friend. See if you can develop a generic part with a wide audience then you can market it over the internet. Catch cans for example. Another route to take is to develop a product that either 1) requires maintenance or 2) has to be replaced at regular intervals (i.e. brake pads not that you can fab those). These will help bring in a steady stream of income.

Don't forget your support group when venting

 

In the beginning it was a marketing and underestimating issue. Now it is more of a underestimating issue. I am also building missile parts for a contractor, so that is filling in the gaps. I have been trying to figure out how to place my business and where I want it to go. Working on a website and some business planning. Lately I have been really busy, but it will probably slow down a little shortly.

I have been thinking about some product that can be made in addition to my normal custom fab work.

 

1. diversify. don't just rely on car stuff, get into the industrial field. that is where there is money to be made. i only do the car stuff as filler work.
2. learn to read people. when someone walks into your shop, you should know inside of 5 minutes what they will be willing to pay for something... aim high and if they scoff, then explain to them what materials cost, what your shop rate is, how long it will take you and they may appreciate your price.
3. learn to read cars. some cars are not well looked after and are a pain in the *** to work on... this is the reason i don't like to work on cars, but just do fab work for them and let the owner install it. charge more for the poorly maintained cars because it is going to take you longer to do.
4. search for cheaper materials, piping, flanges, etc. it might not seem like much, but will add up over time.
5. know what your materials cost and add 20% on top of your time cost.

 

depends on what your niche is. most guys out here charge 60 - 125 per hour depending upon a certain job.

for custom stuff, and if your good 80 /hr should do it. but then again you need to look the part as well.

 

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by MrParks &raquo;</TD></TR><TR><TD CLASS="quote">but then again you need to look the part as well. </TD></TR></TABLE>

I think fabrication is one of the few jobs that doesn't require you look the part, only your work has to. I don't care how much you look like a fabricator if you can't weld you don't mean ****.

 

I spend more $$ on buffing pads and flap discs then anything else, and they seem to get more and more expensive each time i buy them.

 

i'm 90/hr and 30% on parts (well at least i try to get 30).

work is work. you try to speed up, but you'll get to a point where its going to take a certain amount of time. if you can't make a decent amount of money on your fastest time don't do the job.

simple looking jobs will bite you sometimes. for instance, i will never build seat rails (except race car). anyone who has done them will probably agree. you usually have to do them twice. i also won't do lambo doors.

ill take jobs on to get new experience and i might dicount for it, but the average run of mill stuff, i could care less.

if its too expensive for one customer, who cares. even with my margin and hourly (which i do bill hours that it actually takes most times), i'm still too busy.

make your time worth it.

turning customers away doesn't mean anything. they'll go somewhere else, get it hacked together and end up back at your shop, especaially if you do good work. these usually arn't bad senarios because other shops will really screw some stuff up, so a lot of times you can add new parts in.

you pay for what you get.

don't ever discount your hourly rate. if anything cut time off the bill or discount parts. once you give someone a special rate, they are usually locked into that rate. customers don't know times, so if you didn't charge enough one time, they don't know.

don't worry about being competative unless there is competition. just becuase buba at the muffler shop can weld, doesn't mean you match that price.



Modified by manifoldmiketyson at 1:38 AM 4/10/2008

 

i was referring not a personal look (yourself) but the envoirnment in which you work in.

im not going to pay someone 80 an hour when the shop looks like a storage unit.

has to be clean free from all sorts of crap around the work area etc etc.

if i wanted to get fab work done in a pig styi, i would go to my local muffler shop.... lol

 

In everything I've done I've found that going after the bottom of the market will only screw you. When I was a kid I'd do jobs for the sake of doing them and learning, now I charge even my friends for 'shop costs.' If you take the time to explain to someone what you're doing and why it's worth what it is, they will either pay and appreciate your work, or they'll find someone to do it for bottom dollar. That bottom dollar person won't be around for long. Some people just won't pay for quality, it's why we have wal-mart.

Cold calling and looking for business is hard, do you have any contacts in related industries where you could find work? It sounds like you're trying to do things the right way so keep at it, find good customers and you'll make it.

 

My shop is a little messy but as soon as I get some time I am getting it cleaned up and re-organized, but I don't think that is as much of a problem. There is enough of my work out there that people know it by now. (I think)

 

my shop is pretty messy and i try to keep it clean, but you have to remember that if the shop is messy, it sometimes means there is a ton of work going on.

busy shops are good shops.

i get a little wiery about a shop thats too clean.

just my 2 cents...