Small shop rates?

[tjd10684]

I have been getting some requests from my employer to do some little jobs but I have never done any quoting or anything like that before. So what would be a good rate to charge for cnc programing setup and machine time?

[riche543]

Im no expert on this at all but i know that unless you know the guy who owns the shop, the cost will be in preparation & setup, because really once you press start , the machine is doing the work, but you then of-course have to include materials & wear& tear on machine bits, i make a few bits & pieces for a flight simulation company in the uk, & theres even competition with that stuff, I don't really make too good a money in that but it is a learning curve. good luck.


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[DMF_TomB]

I have been getting some requests from my employer to do some little jobs but I have never done any quoting or anything like that before. So what would be a good rate to charge for cnc programing setup and machine time?

shop charge rates can be anywhere from $20 to $120 / hr in the USA.
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depends on the shop and the equipment being used and what kind of job it is.
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For example a shop that has a laser than can engrave on metal. i asked how much to engrave a 4" ruler or scale pattern on a part. the quoted me $500 for setup and to do one part. they never got any jobs from me.
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i designed and made a spring loaded carbide tipped engraver and have made a 4" ruler pattern on a 2 axis cnc mill programming and doing the job easily in less than 1 hour.
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with a laser engraving job i would think it would easily be less than 1 hour work so asking $500 to me is one way of pricing themselves out of getting work.
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same shop wants $100 for each piece of laser cut plastic. i took a 4x8' sheet of plastic to a sheetmetal shear and cut it in 10 pieces in less than 5 minutes and it cost me nothing. the laser shop would have charged $1000 for 10 pieces.
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for estimating a charge rate figure 2 to 4 times what the average person's pay is. but many shops charge higher rates until they run out of work and then start quoting lower rates. risky because many customers will stop asking for price estimates figuring the price is always too high.

[WallyL7]

Seems like a strange question without much info.

Do you own the CNC mill (lathe, whatever)...?
Will you be purchasing the material (and eating the scrap)?
Will you be supplying the cutters/drills/taps, etc?
Do you own the software for programming the part?

Are you going to be paying out of pocket for plating, heat treating, or any other post or mid processes that need to be done outside?

Will you be required to do a full inspection and submit that with the parts?

Do you have machine payments and software payments to make every month?



Is your employer just asking for you to estimate time on his machine?


Think of it this way. It costs about 90/hr (maybe more) for me to get someone to work on my wife's 1998 Dodge Caravan. Add a hefty markup for any parts they put on it. Are you worth more or less?

[tjd10684]

Seems like a strange question without much info.

Do you own the CNC mill (lathe, whatever)...?

I own the CNC mill and lathe

Will you be purchasing the material (and eating the scrap)?

Yes

Will you be supplying the cutters/drills/taps, etc?

Yes

Do you own the software for programming the part?

Yes

Are you going to be paying out of pocket for plating, heat treating, or any other post or mid processes that need to be done outside?

Not applicable. if any part needs special processes (heat treating annodize ect.) i just dont do it.

Will you be required to do a full inspection and submit that with the parts?

If it works its good if not i have to modify it until it does.

Do you have machine payments and software payments to make every month?

Fortunately no I own all my programs and machines outright.

Is your employer just asking for you to estimate time on his machine?

Nope


Think of it this way. It costs about 90/hr (maybe more) for me to get someone to work on my wife's 1998 Dodge Caravan. Add a hefty markup for any parts they put on it. Are you worth more or less?

thanks for the help so far guys for your reference i attached a pdf of the part i will be making. I think I have a number in my head but if someone would be nice enough again to maybe give a general thought process into how they would quote this i would be forever grateful.

Thanks again
-Tom

[WallyL7]

Perhaps I missed something. How do you own anything and not know how much to charge for labor? (no offense, I'm serious)

On a side note...I can't imagine a more simple part to make.

[tjd10684]

no offense taken wally. i have been saving for several years and my machines are "hobby" machines i have a Novakon NM-145 for a mill and a Birmingham 1340 lathe. I have done some work for friends that i just charged them for material and my own little projects of course i dont charge my self. so this is the first "real" job i have taken on. I am more of the kind of guy that makes the chips i dont usually dont like the whole accountant end.

[WallyL7]

That is fair enough. I will point you to my earlier post regarding a mechanic on an old basic car's hourly rate.

You need to ask yourself:"Would this price support a business?". If not, then you are a sucker.



I'd take your current hourly rate and at least times it by 2.5 then add the cost of material. This should get you in the ballpark of a garage shop operation.

[drogers]

I have one policy

Bill like a Plumber

No one is going to pay your bills but you

David Rogers
Meadholmtec.com

[SmokinPRanch]

Something to be considered when starting to take on outside work is that there are a lot folks out there doing this type of work to feed their families. Taking the plunge of doing work for friends and hobby stuff to industrial type work is a whole new world.

Always be fair...to yourself, your client and your competition. Sit down and figure every cost associated with the work....power, depreciation, tooling, consumables, rent, etc. Then figure what your employer would have to pay you on overtime. Add it all together and mark it up from there for profit. Anything less and you're just practicing.

Shops sometimes have to do work at break even or even a slight loss for various reasons. Starting out you can't do that or you will get in the rut of "lowest bidder" and it will always be expected of you.

Except for special situations (i.e; maintaining a big time client) don't compete on price. Offer the best quality and service and charge for it. That will always get you more respect than just being "cheap". You may have to go a little under the competition at first...but not much. Lose a few jobs on price...then figure out what you could have offered to make that client WANT to take your bid over a lower one.

Best of luck to you,

Al

[RossMosh]

The easy answer is to call around and find out the standard shop rate in the area and charge that. The real answer is to figure out your overhead, labor rate, actual run time, insurance, and material costs and figure out how much you need to make.

This is a typical way to charge:

Say a job is going to take 8 hours, you'll probably want that job to cover 2-3x that in costs and 8 hours of labor. Meaning if it costs $10/hr to run your shop (assuming a 50 hour week) and a job will takes 8 hours, you're going to want to charge $160-240 just to cover your shop time.

Then you're going to want to charge say $25/hr for your labor. Like a mechanic or a plumber you're going to want to over shoot your estimated time. So if a job will take 8 hrs, charge for 10-12. So you're looking at another $250-300 to go directly in your pocket.

After that you're going to want to look at your material costs. Let's say it's going to cost you $150 from your supplier including shipping. You're going to want to charge 1.5-3x on the material. The markup depends on how good of a price you get from your supplier vs what's available to the rest of the world and you also want to figure in the "what if I screw up" factor.

Estimating jobs isn't easy but hopefully that's helpful.

[gmfoster]

The easy answer is to call around and find out the standard shop rate in the area and charge that. The real answer is to figure out your overhead, labor rate, actual run time, insurance, and material costs and figure out how much you need to make.

This is a typical way to charge:

Say a job is going to take 8 hours, you'll probably want that job to cover 2-3x that in costs and 8 hours of labor. Meaning if it costs $10/hr to run your shop (assuming a 50 hour week) and a job will takes 8 hours, you're going to want to charge $160-240 just to cover your shop time.

Then you're going to want to charge say $25/hr for your labor. Like a mechanic or a plumber you're going to want to over shoot your estimated time. So if a job will take 8 hrs, charge for 10-12. So you're looking at another $250-300 to go directly in your pocket.

After that you're going to want to look at your material costs. Let's say it's going to cost you $150 from your supplier including shipping. You're going to want to charge 1.5-3x on the material. The markup depends on how good of a price you get from your supplier vs what's available to the rest of the world and you also want to figure in the "what if I screw up" factor.

Estimating jobs isn't easy but hopefully that's helpful.

And everyone wonders why jobs leave the country...
If a job should take 8 hours then charge for 8.

Your material charges should never be over retail, you need to be buying at under retail, and if you are paying retail there go your profits.

Your screw up is your screw up and shouldn't be included as a standard cost.

You follow these simple rules and you will become better at estimating...
You will become more efficient at sourcing materials.
You won't screw up near as much as it won't be "standard practice."